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Sherry Jarrell
Ph.D. in business, University of Chicago
Interests: media, corporate governance, writing, teaching, public speaking, research, consulting, and providing expert testimony in all things economics and finance, including valuation, strategic financial management, securities fraud, regulatory economics, and antitrust cases.
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Sherry Jarrell is now following The Typepad Team
Mar 15, 2010
Thanks for your thoughtful comments. Ah, politics! I am not a very politically astute person, but I do think it is absolutely true that the growing dependency of the U.S. private sector on the government is a very costly by-product (possibly "goal," as you say) of this and similar spending programs. The lack of motivation and drive, the assumption that "someone else" will take care of us.... it creeps up on us incrementally, program by program, year by year... and it is unsustainable. What I think I can add to the debate is some clarity on how markets and businesses and industries really function, and the real impact of regulations, programs, and mandates on our economy, our quality of life, and our standard of living. Sadly, I just don't see many examples where the so-called "experts" get it right. I've seen too many errors in the business press - tv, radio, print, and on-line -- about the very basic facts about supply and demand and what causes what. And I finally had one too many conversations with reporters who allow their own personal bias -- often based on erroneous reporting -- to skew their reporting. Hence this blog. I have a question for you, in all sincerity. You say that "if the true cost of insuring the uninsured were isolated and presented to the American public..." but I wonder who the American public would trust to come up with a believable estimate? Whose analysis would be trusted? Who is unbiased enough to present these numbers? Particularly on the health care issue, which seems to be as emotionally charged as any, folks seem to be inextricably wedded to their views, for or against. I've tried to comment on this issue in other forums, as objectively and as respectfully as I could, using all my training and teaching experience to try to remain factual and understandable, yet within minutes someone accuses me of being a paid operative for the insurance industry! I don't have a reason to slant my analysis, and I would hope that that would be clear from my site. If someone like me is not to be trusted, then who is? I'd love to hear your thoughts. Sherry
Hi Jonathan, Thanks for your comment. I did read the article. It makes its point about the difference between conditional and unconditional probabilities well. But that point is too narrow to really help sort out this very complex issue: it ignores the impact on the current state of the health insurance industry of HMOs, malpractice lawsuits, Medicare, and companies offering health insurance to their employees instead of just paying higher wages. And, as importantly, it ignores how insurance policies are priced. Insurance companies must make profits, in my view. Enough profits for them to remain in business. If they don't, then they go out of business, and the good or service is unavailable. Why not just have the government use our tax dollars to provide the service? Because of the lack of freedom, invasion of privacy, and the incredible political power over the individual this would involve. And government-backed access to medical care is so much less efficient and more costly than market-provided insurance; it's just harder to see the costs and easier to not "feel" the costs when they are collected in the form of tax revenues. And I'm afraid there would be just as much rescission with a public plan as with the current set-up because there are not infinite resources. The problem with the public plan is that the insured has no recourse; if your coverage is taken away, you can't go to another insurance company, you can't negotiate up front for a different policy, and you can't sue. If the government is the provider, and you don't like their decision, you are stuck. If the market is the provider, and you don't like the decision, you have options. I believe that the insurance landscape would look very different today had the government not stepped in with Medicaid and Medicare and similar programs. There would be policies available at all levels of wellness and illness and those policies would be priced accordingly. Nothing would be "given" to anyone to buy their vote; we'd all have the freedom to purchase health insurance if we valued it enough. Or, we could choose to not purchase it, and pay for medical care if and when we got sick. If we were down on our luck, unemployed, had no savings, or just spent our money on other things...well, that's called freedom. Freedom gives you the right to make your own decisions, good ones and bad ones. My two cents. Your view is much appreciated!