Monday, September 21, 2009

Scott Adams on the healthcare debate

Scott Adams offers a refreshing perspective on the healthcare debate:

A confusopoly - a term I concocted several years ago - is any industry that intentionally makes its products and services too complicated for comparison shopping. The best examples of confusopolies are cell phone carriers and insurance companies. And health insurance companies might be the most confusing confusopoly of all. I suspect that no individual has the knowledge, time, and information necessary to effectively compare two health insurance plans. And in that environment the free market doesn't operate efficiently.

Some people support the so-called Public Option for healthcare, where the government would offer health care in competition with the free market. The idea is that private companies would eventually lower prices to compete with the government's low cost option. That sounds good on paper, but the reality is that the private industry folks would use the uncertainty of the confusopoly to convince people that the government option would somehow end up killing its subscribers, e.g. "Sure, it looks inexpensive until your kidney starts hurting."

I think a better role for government would be shining a light on the existing private healthcare plans in a way that would help consumers choose the most economical option. The government did this successfully with the bank loan industry when it required all loans to have an APR, which is a single number that allows consumers to compare one loan to another. Healthcare can't be boiled down to a single number, but I suspect you could come up with a report card and some sort of average cost per subscriber. That way, consumers could shop wisely, and the free market might work the way it is meant to work.

Adams has proven himself at times remarkably analytical and unconstrained by ideology, and this argument post seems to respect both viewpoints while remaining charmingly aloof.


1 comment:

  1. ... the free market might work the way it is meant to work.

    The problem is that "the free market" is not meant to work to most people's advantage. Cf. the Gilded Age, until the trustbusters and the Progressives came along. Markets are great at efficiently directing capital to wherever people with capital think it will turn a profit. They're not good at human interest.

    I don't see what's so hard about "Hm. Europe has much better public health than us. Since we seem to be so confused, maybe we could just give their model a go and adjust from there."

    Actually, there's nothing hard about that; most Americans agree. It's just that Congress (read: Money) doesn't.


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