Looting the Drugstore
I love it when Ross gets on a tear .
I went on a little screed a few weeks ago about this very issue of senior citizens voting themselves any benefit they wish, looting the store at the expense of future generations (e.g. yours truly). It's shameful and foolish. But there's another victim which we have not yet explored: the drug companies themselves.
I have long harbored the suspicion that health insurance is mostly a huge vicious scam, feeding alternately on doctors, patients, and medical care facilities and manufacturers. Even factoring in the hideous r&d costs that are required to come up with a new heart pump, the fact that an uninsured person can go into the hospital with a broken bone and come out with a $12,000 bill is unbelievable. The web of mutual back-scratching, rebilling, and cooperative deals is the best built house of cards ever.
But there's a weak side. The Medicare reform proposal before Congress now would allow older Americans to get their drugs from Canada, where prices are cheaper. Well, great, except that Canadian drugs are so cheap because American patients and insurance companies are footing the drug R&D bill for the entire world!
Other nations, including the EU and Canada, have enacted price controls to keep the cost of drugs lower than the cost of production. Despite this wish-based economic policy, there is no way around the high cost of creating, testing, and approving a new medication. If innovation is to continue, that money has to come from somewhere, and currently it is coming from American insurance premium payers, period. The Medicaid reform package would in effect take senior citizens out of the game, further shrinking the R&D money pool and leading to higher drug prices for the rest of us. This is especially galling because seniors typically need far more regular medical care than your average 29-year old nonsmoking yoga enthusiast.
I don't claim to cry for Pfizer and Merck. They can take care of their damn selves. But their expensive American drugs are part of the Great Wheel of Graft that keeps the American medical establishment functioning. By legislating themselves a way out of the great Ponzi scheme of drug research and insurance, senior citizens and their allies in Congress are about to kill the goose that lays the little golden pills. As with Social Security, they will be taking out of the system far, far more than they ever put in, leaving us high and dry. Wonder what will happen then?
Thanks guys. Greatest generation my shiny metal ass.
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I think the boomers are
I think the boomers are putting the "Greatest Generation" up on a pedastal just to distract us from what they're doing to us.
Nutpigs, all of them.
Kind of like why the
Kind of like why the Republicans are putting the Founders on a pedestal?
ZING!
But seriously now...
But seriously now...
I'm not sure that's correct. Sepia-toned misty-eyed nostalgia is common enough-- there was a similar spasm for veterans of the War Between the States in the early part of the last century. I'm inclined to think that the Greatest Generation, Weren't Our Dads The Shit thing is just a bit of hero worship.
No, I'm pretty sure that the Boomers are doing what they're doing right out in the open, without a care or compunction, certain that nobody can stop them. Perfidous indeed.
Hey Buckethead, can you explain again why stock markets always result in a net gain over a long-scale time series? I'm skeptical again.
How many times... Doh!
How many times... Doh!
Over the entire 200+ year existence of the stock market, there has never been a ten year period where you would have lost money on a fund indexed to the SP500 or equivalent.
Since the economy is always growing (despite short term contractions), and since the market represents the economy (one big slice of it anyway) the stock market will always go up. If you look at a chart of NYSE averages over the last century, you would see a jagged line.
Actually, you would see a jagged line that generally goes up as it goes right, and when it drops, each valley is higher than the last, as is each peak.
You can lose lots of money on the stock market by picking individual stocks that go down. But the market as a whole goes up.
The big question is, what is
The big question is, what is the pay in/pay out ratio for health insurance companies? Why is this basic stat so frickin' hard to find? I believe Kevin Drum (Calpundit) pointed out recently that it's around 4 to 1. That is, health insurance companies pay out about $1 for every $4 they take in. Efficiency, my butt.
They are inefficient BY DESIGN. They create overhead out of thin air by paying cash to subsidiaries they OWN THEMSELVES, and declare it to be overhead. They hide cash every opportunity they get, and whine about lawsuits being the major problem. They have armies devoted to inefficiencies.
The more acute a medical problem gets, the more defensive and obstructionistic the insurance companies become. In this sense they are serving as a substitute market force; one that pushes down prices. I view them as a distortion. I'd rather have doctors making resource-oriented decisions.