Emily Lake
Might be a replicant
- Joined
- Jul 7, 2014
- Messages
- 6,464
- Location
- It's a desert out there
- Gender
- Agenderist
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- Atheist
Do consumers drive the bus, or marketers?
Do consumers drive the bus, or marketers?
No, just that their inequality cannot be assessed solely by looking at their schedule of fees.This assumes all surgeons are exactly equal
1) I was talking about the UK, which is as far from where I live as you can get without joining the space program. This description would be as reasonable as me describing the Chinese system as "your system".Your triage systems leave urgent patients waiting.
And yet, almost everyone accepts that it's a good thing for the government to set a minimum skill level and to issue licenses (without which citizens may not drive unsupervised), that depend on demonstrating that they meet that minimum skill level, both prior to being issued a license, and on an ongoing basis whereby repeated and/or severe misbehaviour may result in the withdrawal of the license.And yet, nobody says the possibility of their sister dying and leaving them with three unexpected kids is a good reason for cars to be issued to people by the government based on what car experts decide they need. In most areas of life people are expected to decide how much risk they can stand to bear, make their own decisions of how much to pay to mitigate it, and eat the costs themselves if it turns out they didn't take enough precautions.
I find the notion that surgeons are all stamped out by a cookie cutter ludicrous. Now, determining who is good or not isn't the easiest thing and you can't use fees as evidence of ability. That doesn't mean there aren't differences.No, just that their inequality cannot be assessed solely by looking at their schedule of fees.This assumes all surgeons are exactly equal
Things aren't necessarily better just because they cost more.
I really shouldn't need to point this out to a grownup, but Americans in particular seem to struggle to grasp it.
The problem comes with the ones where the urgency isn't clear-cut. Is this cancer?1) I was talking about the UK, which is as far from where I live as you can get without joining the space program. This description would be as reasonable as me describing the Chinese system as "your system".Your triage systems leave urgent patients waiting.
2) No, they don't. Really. They absolutely don't. You are being lied to by professionals, but your choice to believe them speaks poorly of your willingness to check facts before regurgitating them.
Then why did you originate it? I certainly didn't say it.I find the notion that surgeons are all stamped out by a cookie cutter ludicrous.
It isn't insurance that masks prices from the consumer; it's the provider's decision to refuse to tell. The healthcare industry is not normal insurance-based business, in oh so many ways; when I get my car repaired after an accident the fact that my insurance policy will pay most of the bill doesn't cause the mechanic to refuse to tell me his prices.The concepts behind capitalism inherently rely on a free market system (nowadays let's settle for free-enough). It relies on market forces of supply and demand to produce an equilibrium price for the good or service being traded.Generally speaking, insurance is not very capitalist at all. It's redistribution of risk, it's one of the earliest types of communistic endeavors. Everyone shares the cost up front for an essentially unpredictable scenario with very low likelihood and very high cost.
I mean, insurance in and of itself is a very good idea... I just don't think it's something that can be considered "capitalist" in nature.
If it isn't capitalist, how did Warren Buffett make so much money selling it? It's not like his customer is the government and he's paid from taxes. No, not everyone shares the cost up front. Only those who make a bargain to have their risks covered share the cost up front. If everyone paid and everyone got covered whether he wanted to or not, that would be a communistic endeavor.
It isn't sharing that makes something communist rather than capitalist. Capitalists share all the time -- it's why the portions of the capital they own and the profits they collect are called "shares". What makes something communist is compulsory sharing.
The insurance business is a garbage disposal business, like Waste Management, Inc. Economically, risk is just another kind of garbage -- it's something people have and don't want so much that they'll pay somebody who's less averse to it to take it off their hands. Just as the widget business consists of trading a widget from people who like one less than the widget price to people who like one more than the widget price, the garbage disposal business consists of trading garbage from people who like it less than paying the disposal fee to people who like it better than losing out on the disposal fee, and the insurance business consists of trading risk from people who like it less than paying the premium to people who like it more than losing out on the premium. The economic difference between a normal widget business and a garbage/insurance business is merely the minus sign in front of the price people are willing to pay for the item being sold.
Insurance doesn't work that way. Insurance disrupts the supply-demand relationship. The supply is provided by the doctors and hospitals, not by the insurer. The demand is being provided by the consumer, not the insurer. The insurer's position as a redistributor of risk results in the actual price of supply being masked from the consumer - the consumer no longer has a clear idea of what the prices of the service are. That doesn't mean it's not a good idea - the value at risk for insurable services is waaaaaay too high for an individual to bear, even if it's incredibly unlikely. It also doesn't meant that people can't make money off of it.
I contract for garbage disposal directly from a private company that competes with the county service. The competition doesn't bring the costs down but it sure as heck makes the service better. (The company picks it up at my house -- the county expects me to haul my garbage half a mile to the end of the road!)I think it's also worth noting that your own analogy seems to undermine your argument. In almost every part of the US, waste management is a non-competitive business. They're almost always municipal services, even if they're outsourced to a private company. They are monopolistic, but they're generally natural monopolies, and competition wouldn't bring the costs down.
And cue...They're also services that are communally necessary - we truly can't have a portion of citizens "opting out" of waste removal, because that presents a health hazard to the entire community.
What I said was that fire insurance is an excellent example of a product for which capitalism is spectacularly well fitted. The point was to refute bilby's unsupported claim that got us started on this subtopic, not to rathole about the specific details of how uncapitalistic US state governments have gotten. Government choosing to regulate the capitalism out of existence in some market doesn't really bear one way or the other on whether that market is something capitalism would be good at. Legislatures control markets not just for economic reasons but also because of political demands, as well as straight-up bribery. A lot of state governments directly control which black girls are allowed to do business braiding one another's corn rows in their territory -- including California until twenty years ago -- and no sane person would infer from this that hair-braiding is a service for which capitalism is poorly fitted.Agree.I also think this is one of those areas where the technical definition of "capitalism" and the functional usage of "capitalism" cause a pretty big disconnect. The academic question of who owns the means of production has very little to do with how things function in the real world.
Aaand furthermore, each state government directly controls who is required to get insurance, what the reasonable rates are, what market it can go to, and which insurance companies get to do business in that territory.
So yeah, seems a little wonky to call a completely government controlled market a good example of capitalism.
Why? Insurance lives and breathes volatile events. Insurance got its big start insuring against shipwrecks. Your house getting wiped out in a flood is small change compared to a merchant ship going down in a storm. Risks are normally uninsurable if insuring them is illegal, or if the insurance company has no way to calculate the possible loss, or no way to calculate the probabilities, or the risks are too highly correlated with its other exposures.Flood insurance is already predominantly covered solely by the federal government (NFIP). Typically, it's a separate flood policy, but even if you have coverage through your carrier, the flood portion is 100% reinsured by FEMA. (absolutely no capitalism there). The reason for this is that the insurance industry as a collective determined that flood was an uninsurable risk given the volatiliy of events.
The answer to your question was already answered byWhy? Insurance lives and breathes volatile events. Insurance got its big start insuring against shipwrecks. Your house getting wiped out in a flood is small change compared to a merchant ship going down in a storm. Risks are normally uninsurable if insuring them is illegal, or if the insurance company has no way to calculate the possible loss, or no way to calculate the probabilities, or the risks are too highly correlated with its other exposures.Flood insurance is already predominantly covered solely by the federal government (NFIP). Typically, it's a separate flood policy, but even if you have coverage through your carrier, the flood portion is 100% reinsured by FEMA. (absolutely no capitalism there). The reason for this is that the insurance industry as a collective determined that flood was an uninsurable risk given the volatiliy of events.
A Look at Uninsurable Risk
"An uninsurable risk is a risk that insurance companies cannot insure (or are reluctant to insure) no matter how much you pay. Common uninsurable risks include: reputational risk, regulatory risk, trade secret risk, political risk, and pandemic risk."
So what makes flood uninsurable? Did regulatory agencies enact some asinine rule saying if you write anyone a flood policy on her house you're required to also offer a flood policy on every other house in the same flood zone.
The reason for this is that the insurance industry as a collective determined that flood was an uninsurable risk given the volatiliy of events.
Either there are differences and some are better than others, or they are all the same. This is a binary set, you can't claim it's something else.Then why did you originate it? I certainly didn't say it.I find the notion that surgeons are all stamped out by a cookie cutter ludicrous.
Fundamentally, insurance is about averaging out risk. However, floods don't average out--typically, almost nobody floods or a whole bunch of people flood. They would have to maintain huge reserves to deal with it--it's this reserve cost that makes flood insurance prohibitive for the private marketplace.So what makes flood uninsurable? Did regulatory agencies enact some asinine rule saying if you write anyone a flood policy on her house you're required to also offer a flood policy on every other house in the same flood zone?
The answer to your question was already answered byWhy? Insurance lives and breathes volatile events. ...
The reason for this is that the insurance industry as a collective determined that flood was an uninsurable risk given the volatiliy of events.
From your own link
Therefore, when the probability of loss is too high or the claims costs are too high on a particular risk, the insurance company may consider it uninsurable and exclude it from the policy.
So, a capitialist industry decided for capitalist reasons to not insure flood damage.
But why read and reason when one can kneejerk fling blame to a regulatory agency?
And...Fundamentally, insurance is about averaging out risk. However, floods don't average out--typically, almost nobody floods or a whole bunch of people flood.So what makes flood uninsurable? Did regulatory agencies enact some asinine rule saying if you write anyone a flood policy on her house you're required to also offer a flood policy on every other house in the same flood zone?
... hence my question about regulations. No, they wouldn't have to maintain huge reserves to deal with it, unless there's an asinine rule in place forcing them to insure a whole bunch of people in the same flood zone. The rational way to deal with the "nobody or a whole bunch" problem is for each of a hundred different insurance companies to each insure a hundred homes in some valley where they're apt to flood all at once. Then when ten thousand people lose their homes all at once, a hundred companies face perfectly manageable fifty million dollar losses. But if the government doesn't like that solution and wants an easier-to-regulate market with one company insuring all ten thousand homes then when there's a flood that company will face a five billion dollar loss, and will have to maintain a huge reserve to deal with it.They would have to maintain huge reserves to deal with it--it's this reserve cost that makes flood insurance prohibitive for the private marketplace.
Earthquakes are perfectly insurable. I have an earthquake policy -- and my house is pretty close to the epicenter of a recent massive quake.Earthquake is similar--some places mandate it be offered but the insurance companies respond by pricing it at a rate far in excess of expected loss * expected chance of that loss.
Causal factors cause, even if they are not the final cause.This garbage "research" needs to be nuked from orbit.jut off of a casual google, I pulled up this:
17% of adults with health care debt declared bankruptcy or lost their home because of it. 66.5% of bankruptcies are caused directly by medical expenses, making it the leading cause for bankruptcy. As of April 2022, 14% of Americans with medical debt planned to declare bankruptcy later in the year because of it.Aug 30, 2022
It doesn't say what you think it says, it was done in a very deceptive way to make reporters think it said this.
Rather, what it really said was that most bankruptcies include medical debt, not that they were caused by medical debt.
The real number is more like 5%--and even there half of those are retirees overspending their assets, the bankruptcy was inevitable and the medical stuff was simply the straw that broke the camel's back.
... Or we could offer government based flood insurance taxes and let the overage be handled by the fact that the government has infinite capacity to absorb momentary losses and a guarantee of future.And...Fundamentally, insurance is about averaging out risk. However, floods don't average out--typically, almost nobody floods or a whole bunch of people flood.So what makes flood uninsurable? Did regulatory agencies enact some asinine rule saying if you write anyone a flood policy on her house you're required to also offer a flood policy on every other house in the same flood zone?
... hence my question about regulations. No, they wouldn't have to maintain huge reserves to deal with it, unless there's an asinine rule in place forcing them to insure a whole bunch of people in the same flood zone. The rational way to deal with the "nobody or a whole bunch" problem is for each of a hundred different insurance companies to each insure a hundred homes in some valley where they're apt to flood all at once. Then when ten thousand people lose their homes all at once, a hundred companies face perfectly manageable fifty million dollar losses. But if the government doesn't like that solution and wants an easier-to-regulate market with one company insuring all ten thousand homes then when there's a flood that company will face a five billion dollar loss, and will have to maintain a huge reserve to deal with it.They would have to maintain huge reserves to deal with it--it's this reserve cost that makes flood insurance prohibitive for the private marketplace.
Earthquakes are perfectly insurable. I have an earthquake policy -- and my house is pretty close to the epicenter of a recent massive quake.Earthquake is similar--some places mandate it be offered but the insurance companies respond by pricing it at a rate far in excess of expected loss * expected chance of that loss.
Much truth lies in that brief summaryCapitalism - Bullshit that humans made up.
Socialism - Bullshit that humans made up.