www.stumblingontruth.com For those who do not know Cliff Asness founded and runs AQR Capital. Huge and successful hedge fund.
Long read. Can somebody summerize?
This article has several holes. often these big shots write articles to impress their friends in important places with little or no substance: 1) yes the health care has advanced but it should get cheaper not more expensive. case in point, cars have evolved and are more affordable to common man now. total bulschit point. 2) for the canadian drug point he gets into basic economics and argues that consumer should be charged a part of fixed cost. true to some extent but i a competitive industry eventually the fixed component should be phased out for you to survive. totally amateur idea. one thing i agree with him on is that health care is not a right.
Here is a summary of his points. 1) The fact that we spent more on healthcare is good . Or wait, it is bad because it is wasteful. No, it is good because it is free market. Anyways, if you don’t like go to socialist UK and wait in line, and there is no wait times for surgery/doctor visit in US (ed. average wait to see a dermatologist in US = 6 months) 2)Canada sucks, they would not have drugs without US. Thanks to free market, US pharma can develop wonderful (profitable) drugs like Viagra. 3) Nordic countries are twelve herring eating people. The end, socialism sucks. 4) Countries with higher government role in GDP suck. Somalia rules - 0% govt role in GDP 5) Insurance companies are so competitive, government option would make them disappear. Because they are so good at what they do. 6) Rationing by ins co= good. Rationing by govt = bad. 7) Health care is not a right - I am rich and don’t give a F%@k. Hippies suck
If you can believe it 'bernie_m’s summary is actually less sarcastic and rhetorical than the real piece. Nonetheless, I think it’s a fun read and does have some merit. It’s also ironic bernie_m that the same methods you use to discredit him are the ones he uses to discredit others and make his case…unless you were actually just trying to summarize, in which case I give you a B+.
for the record, Canada’s health care isn’t a socialist system
The article is worth a read. Any article that references Friedman and disses Michael Moore is great. The one thing I wish is that the politicians would start calling it socialism. Great lines from the article: • So, all considered, we should indeed be measuring our cost/GDP, and within a free system attempting to keep it reasonable through reasonable policies (like rational tax and tort policies). But a dictatorial socialist system is unnecessary for this purpose. It’s only necessary to enslave the population. • The government does not co-exist or compete fairly with private enterprise, anywhere. It does not play well with others. The regulator cannot be a competitor at the same time. It cannot compete fairly while it owns the armed forces and courts. • It is an uncomfortable truth that tough choices will have to be made. There is no system that provides for unlimited wants with limited resources. Our choice is whether it should be rationed by free people making their own economic calculations or by a bureaucracy run by Congressional committee (whose members, like the Russian commissars, will, I guarantee you, still get the best health care the gulag hospitaligo can provide). Free people making their own choices only consume what they value above price, using funds they have earned or been given voluntarily. • …Then, did you have a right to it the moment some genius invented it [a particular medical advancement]? You did not pay for the research. You did not make the breakthrough. Where do you get the right? How did it come into existence for you the moment somebody else created these things? I’m pretty sure you cannot have rights to material goods that don’t exist, and I am pretty certain that the moment some genius (or business, or even government) brings them into the world your “rights” do not improve.
Mr. Pink Wrote: ------------------------------------------------------- > for the record, Canada’s health care isn’t a > socialist system Of course it is a socialist system. 70% of health cost is paid by the government. Socialism - any of various economic and political theories advocating collective or governmental ownership and administration of the means of production and distribution of goods. I would say that 70% ownership qualifies as socialist.
needhelp Wrote: ------------------------------------------------------- > This article has several holes. often these big > shots write articles to impress their friends in > important places with little or no substance: > > 1) yes the health care has advanced but it should > get cheaper not more expensive. case in point, > cars have evolved and are more affordable to > common man now. total bulschit (sic) point. 1) There is a difference between increases in productivity for services (healthcare, etc) and goods (cars, dildos, etc). The constraint to producing healthcare for a given quality of care is the cost of the doctor’s labor. Among many other reasons, the supply of labor for doctor’s is constrained (licensing with AMA) and helps push up the value he is able to charge for his services. For manufacturing processes, the constraints are more related to technological plans and the productivity of capital. 2) You need to hold things constant. We could certainly make a car from the 50s for very little (imagine car with no A/C, no power steering, no safety belt, etc). Getting back to point 1, how would we go about providing the quality of care from the 50s? Assuming doctor’s were trained in 1950s medicine, they simply would avoid many of the more expensive tests we use today. Further, we couldn’t use many of the machines that keep people alive for so long. Interestingly enough, most of the money we spend on healthcare is from 5% of the population. In the past, those people would have simply died. 3) Basically my point comes down to this: things are supposed to get cheaper as people learn by doing. However, there are two special situations for the health care industries. Not everyone can be doctors, which limits the supply and ceteris paribus keeps wages high. Second, the quality of care has greatly changed for the better and these new technologies push up the price of care. Without those, it would be much cheaper. > 2) for the canadian drug point he gets into basic > economics and argues that consumer should be > charged a part of fixed cost. true to some extent > but i a competitive industry eventually the fixed > component should be phased out for you to survive. > totally amateur idea. > 1) The Phd in Econ from Chicago is so obviously making an amateur point that need to duck my ostrich-like head in the sand and cry for socialized medicine. 2) What he is actually saying is not that consumers should be charged a part of the fixed cost, but that firms will not develop a drug is they do not believe they can cover their fixed costs. Furthermore, the drug industry is not in perfect competition and price is not expected to equal marginal cost. The drug industry could be broken into two parts, the primary market and the generic market. In the generic market, there is perfect competition and price should equal marginal cost. In the primary market, each firm has a monopoly for their drug (suggesting they set prices so that MR=MC to maximize profit). 3) I have no idea what it means for a fixed cost to be “phased out.” Fixed costs don’t go away in perfect competition. 4) Going back to point 2, what Cliff is saying is that after you develop a drug, the costs are sunk and you may as well price at MR=MC or P=MC or whatever you can get away with. However, when a firm makes a decision about investing in new development, they have to think about the expected return they will get on their investment. Right now, the U.S. subsidizes the rest of the world by providing a large chunk of the expected return (by allowing them to price at MR=MC). If you change the decision calculus, then firms will no longer develop as many new drugs (still will develop them, just not as many).
bernie_m Wrote: ------------------------------------------------------- > (ed. average wait to > see a dermatologist in US = 6 months) I find that hard to believe considering I see my dermatologist at least 4 times a year to keep my skin beautiful and one of the two doctors is always available within 24-48 hours of me calling to make the appointment.
murders&executions Wrote: ------------------------------------------------------- > > Of course it is a socialist system. 70% of health > cost is paid by the government. … > > I would say that 70% ownership qualifies as > socialist. Funding is different than ownership, moron.
iheartiheartmath Wrote: ------------------------------------------------------- > bernie_m Wrote: > -------------------------------------------------- > ----- > > (ed. average wait to > > see a dermatologist in US = 6 months) > > I find that hard to believe considering I see my > dermatologist at least 4 times a year to keep my > skin beautiful and one of the two doctors is > always available within 24-48 hours of me calling > to make the appointment. Where do you live? I have to wait six weeks in Charlotte and have a PPO.
iheartiheartmath Wrote: ------------------------------------------------------- > bernie_m Wrote: > -------------------------------------------------- > ----- > > (ed. average wait to > > see a dermatologist in US = 6 months) > > I find that hard to believe considering I see my > dermatologist at least 4 times a year to keep my > skin beautiful and one of the two doctors is > always available within 24-48 hours of me calling > to make the appointment. Cosmetic private-pay dermatologist or HMO/PPO dermatologist?
They accept my Blue Cross insurance so I assume the latter.
Anecdotal evidence may not illustrate a trend - top specialists in dermatlogical issues that actually matter - skin cancer, etc, would probably require much longer wait. 2009 survey of physicians by Meritt Hawkins consulting: " Cumulative Average Wait Time in Days Average Wait Time Metro Area Days for Specialist Boston … 248 Philadelphia… 135 Los Angeles … 121 Houston… 117 Washington, D.C. … 113 San Diego … 101 Minneapolis … 99 Dallas … 96 New York… 96 Denver… 77 Miami… 77 Portland… 72 Seattle … 71 Detroit … 60 Atlanta … 56 Total Cumulative Average … 102.6
Like I said, I’ve been going to my derm for the past 6-7 years, at least 4 times a year, never had to wait more than 2 days for an appointment. Their waiting room is always full too so they’ve got a lot of business. I am pretty sure those numbers are either a small subset of the general derm population or they represent a very narrow field like botox or skin grafts.
Mr. Pink Wrote: ------------------------------------------------------- > murders&executions Wrote: > -------------------------------------------------- > ----- > > > > Of course it is a socialist system. 70% of > health > > cost is paid by the government. > … > > > > I would say that 70% ownership qualifies as > > socialist. > > Funding is different than ownership, moron. It is a socialist system. Here is how health Canada describes the health care system. (http://www.hc-sc.gc.ca/hcs-sss/index-eng.php) “Canada’s health care system has been a work in progress since its inception. Reforms have been made over the past four decades and will continue in response to changes within medicine and throughout society. The basics, however, remain the same - universal coverage for medically necessary health care services provided on the basis of need, rather than the ability to pay.” Services provided on the basis of need, rather than the ability to pay is socialism.
OK Rush Limbaugh, just stop talking. Based on your definition Medicare and Medicaid are socialist too - and America would be the only industrialized country in the world that dosen’t have a socialist system. In reality it just comes down to who you want between your doctor and youself; the government or a for-profit insurance company. That’s the difference between the two.
Mr. Pink Wrote: ------------------------------------------------------- > OK Rush Limbaugh, just stop talking. > > Based on your definition Medicare and Medicaid are > socialist too - and America would be the only > industrialized country in the world that dosen’t > have a socialist system. > > In reality it just comes down to who you want > between your doctor and youself; the government or > a for-profit insurance company. That’s the > difference between the two. Stop calling me names such as Rush Limbaugh and moron. Surely we can have a discussion without name calling. Of course Medicare and Medicaid are socialist systems as are SOCIAL Security and public schools. As for your moron comment, don’t worry about me, what I lack in intelligence (which is significant) I make up for in dashing good looks and razor-sharp wit.