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Class Probabilities In Practice - cnt'd


Let’s now assume that the FUHC system is not forced upon companies but provided by the government with people paying no premiums. What would the graphs look like now?

Before we jump into the graphs, we need to clarify a few points.

To begin with, what is the meaning of “government provided” health care? The only political system that offered truly “government provided” health care was communism. For any intent and purpose, they don’t exist anymore. The only countries that still offer something close to this are those few with vast and unusual amounts of riches that are vanishing fast (e.g. oil) or those with leftovers from better times, going broke fast. No government in their right mind would nowadays attempt something that stupid. On one hand it would be political suicide and on the other, economic suicide. So, what is then the meaning of “government provided”? Simple, the government is the top bureaucratic layer keeping all appearances while underneath there is an army of sub-contracting company drones. The government looks good and the companies make some money. Votes for politicians and profits for companies. A true win-win scenario… or is it?

From companies’ perspective it would look like this:

 Forced Universal Health Care Irrational - Company's View

Fig 7


The Red Line symbolizes all the expenses companies have.

The Dotted Violet Line symbolizes government subsidies.

The Blue Arrow symbolizes profits.

The Red Arrow symbolizes loses.

In this scenario, everything is less forecastable. The graph above represents what the government would assume it will happen (red line) and what the government would assume it is “fair” to pay (violet dotted line). Companies have very little choice but to accept. It is mostly a take-it-or-leave-it deal. The government has a monopoly.

However, in reality, Fig 7 may happen, but what will also happen is either:

 Forced Universal Health Care Rational - Company's View

Fig 8


In which companies will reap huge above-market profits or,

 Forced Universal Health Care Rational - Company's View

Fig 9


In which companies will go broke… until the government steps in with new subsidies (Brown Line)to make those companies “profitable” again.

In either case, the situation is even worse than before since everything is now subsidized. At the same time that quality of service decreases, governments will make use of the magic “funding source” (the un-holy trinity) Tax, Print and Borrow. The only difference is that while politicians will be able to reap all the benefits of a “free” FHUC, the real, actual costs just skyrocketed. This money must come from somewhere. Where is it coming from? The capital markets. And what happens next? The economy slows down. With what consequence? Standards of living decrease. Which means? Poorer health care for everybody!!!

But the politicians got re-elected. Mission accomplished.


Class Probabilities in Practice

This is the case where a non-rational government (aka any of them) wishes to implement a full-blown FUHC. The principles are the same as described above:

  • They cover everybody
  • They cover all pre-existing conditions
  • They cover all conditions


Company or Government-Based

It is also irrelevant if this scheme is company-based or government-based because of the share amounts of money involved. Because it is now impossible to forecast anything, governments will experience huge fluctuations and unpredictability in health-care related expenses. Underneath the crusty layer of delicious and free government-doled health-care, lies a whole city of tireless private sub-contractors.

The graph looks like this:

 Forced Universal Health Care Irrational - Company's View

Fig 10


The Red Line symbolizes all the expenses companies have.

All the other dotted lines symbolize the different government payment methods, subsidies, regulations, monopolies, restrictions, conditions and whatever else the government bureaucracy can make-up just to keep their jobs.

This situation is really bad simply because it is impossible to forecast anything. Not the costs involved neither the expenses needed.


The Endless money pit

If you have heard Health Care officials’ talk in a country with such a FUHC, you will notice that they always refer to “the need for long term funding”. Why is so? Precisely because nothing can be forecasted. If budgets are set up on a yearly basis, they are too short. So, they are set-up for 2 years. Still short. 4 years? Still short. At this point, they usually hit the government election limit and can’t proceed beyond it. But why is that budgetary timeframes are never enough? Simple. They spend most of the money at the beginning and have nothing left towards the end…. When they invariable necessitate “additional funding”. This sickening process originates in the fact that since nothing can be forecasted and everything must be provided, they will do so until money runs out… and then beg for more. They know that politicians won’t refuse, since it would be political suicide.

To add injury to injury, this system is horrifically expensive. What’s worse. It is an unending money pit. No matter how much money the government throws at it, it is never enough. And since people are differential machines, each increase in spending is accepted, although grudgingly.

And then, and this is really Machiavellian, as money continues to run out, governments institute special “fees” and “one time” income deductions and “emergency” increases in gas tax or banking transaction “certification dues” and … and… and… Taxes rise. Inflation rises. Health Care quality drops.


Death Committees

Of course, eventually (and not so eventually) they run out of money. The government is tapped out (for political reasons) and so the administrators of this gigantic mess must “do something”. Then, they convene “special committees” and “advisory boards” and “work groups” and “consultancy advocates” that will “study” the “critical situation” our “health care system” has “found itself” so that they help the government to take “painful and necessary action” to save this “social capital” that belong “to us”. Nauseated yet? Hold on for a few more paragraphs…

What these bureaucrats (somebody once called them “unelected sewer rats”) are planning to do is to cut and slash spending. For that, they must cut and slash medical conditions that are too expensive to be paid for. These death committees involve themselves in the gruesome task of life accounting: “if we cut this procedure, two people will die per month, but with the savings, we can save 10.. done… next!”. And so on.



The saddest part is that most (but not all of that) is totally unnecessary. It is absolutely true that no matter which political system you choose, it will be impossible to deliver health care to everybody for everything.

It is also true that in a managed market, a UFHC is better than a tightly controlled and regulated pseudo-free market. At least in an UFHC many more people benefit, even if at a much higher price and having to endure lower standards of living. At least everybody does receive some health care.

In this sense, it would be disingenuous and a lie for us to state the contrary. However, it would be equally disingenuous for us not to point out that vastly superior results for everybody can be achieved through a true free market alone.


Lower prices every day!

We say so simply because Health Care is not an issue of universality, it is an issue of cost. The system that can provide the lowest cost wins. This is so because the lower the cost, the more accessible the system becomes. What is the point of having instant access to an inefficient and incapable system if they cannot provide you with even an average care? It is far more preferable to have a system where most people pay into it, voluntarily, and receive superb care. Furthermore, they would do so, because their wealth has been increased at the same time that health care costs have decreased. It is a true, win-win scenario. In such a system, there would always be people that would not be able to afford health care, however, there would always be more people willing and happy to donate to private organizations to care for the problem. A rich “society” is a giving society. Every fundraiser knows this, except political spin doctors playing dumb and still selling socialistic manure for their political masters.

Note: please see the Glossary if you are unfamiliar with certain words.

Continue to Health Insurance In Free And Managed Markets - Part 4


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