health care

Public Option: A chance to increase competition in the marketplace

The Oregon Small business council wrote this Op-ed for the Oregonian today touching on an interesting free-market argument that explains recent health care costs and why a public option might be a good idea.

The recent increases in health care costs look a lot like what happens in a market when an oligarchy or monopoly raises barriers of entry to squeeze out competition. The reason for this may be accidental- they might all be using the best scientific statistics possible to set prices, thus making all their prices close to the same. But the end result is the same- increased cost to consumer due to a lack of choice, resulting in incredible profits being returned to stockholders, who then reward C-level executives with outlandish compensation packages.

So far, the reasoning is sound. But the solution seems to be novel: Add a low-cost/low-value public option to cover those who can't get insurance otherwise or for whom the low-cost option is sufficient, to add competition to the marketplace.

The Euphoric Drug of Profit

Should the Pharmaceutical industry be for profit? The orthodoxy is profit motives new drug discoveries, research and without it most drugs would never be discovered. But is the dogma from the profit church true?

Despite prescription drugs having a market growth rate of ~4.5% per year and total US sales of $286 billion, global $745 Billion, in 2007, the press was all aghast at the market decline and blamed it all on the lack of new products.

I wonder if you look at medicine as a product? Well, in the current state of affairs life saving compounds are.

Health Care Systems of other Nations

I want to bring your attention to a Frontline documentary called Sick Around the World. It is an interview, comparison/contrast of other health care systems in most assuredly capitalist nation-states.

Frontline allows all shows to be watched on line, in full. Journalist T.R. Reid documented an exceptional overview of other health care systems from capitalist economic nation-states. I hope others watch and we start analyzing health care policy proposals from an economics and populist viewpoint.

What astounded me is the lower costs that other nations have in comparison to the United States.

The Horizon Project

You have probably never heard of the Horizon Project or even Ralph Gomory and William Baumol and their book on Trade and Conflicting Interests..

But, these policy proposals are unique, innovative and deserve strong consideration and discussion.

The Horizon Project's Agenda:

Project members believe we need to act now - on economic & trade policy issues, education, health care and public infrastructure investment - to stave off the rosion of our competitive advantages and the loss of the nation's middle class base