I once worked with a fellow who told me a tale about his father the plumber and the service business. The tale went this way. The plumber, his father, was called to a home for a blocked up toilet. It was late one evening and perhaps the home owner had eaten what he should not have, but alas, the toilet presented an infinite obstacle. So into the home goes the plumber, cost being no obstacle, and in this emergency he entered the bathroom, closed the door, used his plunger a few times, and then sat back, had a cigarette, in those days you could, read the newspaper, and after an hour he emerged and presented the home owner with a bill which the homeowner gratefully paid and slept well the remainder of the night.
The moral of this tale is that a plumber is in the service business, he does not advertise, he is a small businessman, he gets paid for the "service" he provides, not the complexity of the task, and his bill may be greater the greater the emergency.
The homeowner did not have a Government supplied Plumber Care Plan, the home owner did not have some right to Plumber Care, yet somehow the plumber got paid. I would hazard to guess that plumbers in today's market net more per year in take home, per hour, than pediatricians, internists, or psychiatrists. Perhaps not as much as a cardiologist, but their crafts have a great deal in common.
Krugman in his NY Times blog makes the following statement:
"There are two strongly distinctive aspects of health care. One is that you don’t know when or whether you’ll need care — but if you do, the care can be extremely expensive. The big bucks are in triple coronary bypass surgery, not routine visits to the doctor’s office; and very, very few people can afford to pay major medical costs out of pocket..."
I dare say this applies to plumbers, electricians, even dare I say lawyers. They are all in the service business, almost all independent and you never know when you need them but when you do they better be there. He continues:
"This tells you right away that health care can’t be sold like bread. It must be largely paid for by some kind of insurance. And this in turn means that someone other than the patient ends up
making decisions about what to buy. Consumer choice is nonsense when it comes to health care. And you can’t just trust insurance companies either — they’re not in business for their health, or yours."
Well plumbing, electrical work, legal representation also is NOT sold like bread Mr. Krugman, but you as a strong liberal may not be aware of the working man.
Also you purchase auto and home insurance. You select the coverage you want. Take an umbrella policy, you get to buy one just in case your home liability is exceeded in some special circumstance. You do the same with auto. The state specifies a minimal level of liability but you almost always increase that plus if your car is not too old you add comprehensive. You never know when there is some accident. People buy their own insurance, albeit mandated in part, all over this country, and the world. In addition until the Government caused health care to be an employee "right" due to their wage and price controls, it was an individual responsibility, and did have insurance at the individual level for catastrophic illnesses. Thus Mr. Krugman's statements in my opinion are false at face value.
He continues:
"The second thing about health care is that it’s complicated, and you can’t rely on experience or comparison shopping. ...That’s why doctors are supposed to follow an ethical code, why we expect more from them than from bakers or grocery store owners."
But the plumber is the very same. You want to do your own plumbing, electrical work, legal representation. Remember the old adage "A defendant who has himself as his lawyer has a fool for a client..." well Mr. Krugman it applies to a lot more than medicine.
Mr. Krugman opens the piece with the reference to Ken Arrow, Uncertainty and the Welfare Economics of Health Care. Arrow states the following special characteristics of health care:
"A. The Nature of Demand The most obvious distinguishing characteristics of an individual's
demand for medical services is that it is not steady in origin as, for example, for food or clothing, but irregular and unpredictable..."
My simple answer is look at the plumber. Look at the lawyer. Look at the electrician. There are lots of things out there that are the same in demand as health care.
"B. Expected Behavior of the Physician: It is clear from everyday observation that the behavior expected of sellers of medical care is different from that of business men in general. These expectations are relevant because medical care belongs to the category of commodities for which the product and the activity of production are identical."
So what are lawyers, chopped liver! There are hundreds of professions, accountants to name another, where the product and the activity are the same. The definition is the personal services industry, it even has an SIC code! But this was an 1963 article, in the days of Galbraith, where economists viewed the world as large corporations against the common man! Prof Arrow in my opinion is outright wrong. I even did electrical work in 1963! He continues:
"C. Product Uncertainty: Uncertainty as to the quality of the product is perhaps more intense
here than in any other important commodity. Recovery from disease is as unpredictable as is its incidence. In most commodities, the possibility of learning from one's own experience or that of others is strong because there is an adequate number of trials."
It is clear that Prof Arrow never went to a civil or criminal trial, especially with a jury. Remember the OJ Simpson trial! Oh yes, which one?
It is not worth continuing except to reiterate the Krugman comment at the beginning of his blog:
"One of the most influential economic papers of the postwar era was Kenneth Arrow’s Uncertainty and the welfare economics of health care, which demonstrated — decisively, I and many others believe — that health care can’t be marketed like bread or TVs."
Well Mr Krugman, it is my belief that Prof Arrow may have been culturally impaired due to his lack of exposure to plumbers and electricians. The argument lacks merit and the Krugman rant does likewise.
The moral of this tale is that a plumber is in the service business, he does not advertise, he is a small businessman, he gets paid for the "service" he provides, not the complexity of the task, and his bill may be greater the greater the emergency.
The homeowner did not have a Government supplied Plumber Care Plan, the home owner did not have some right to Plumber Care, yet somehow the plumber got paid. I would hazard to guess that plumbers in today's market net more per year in take home, per hour, than pediatricians, internists, or psychiatrists. Perhaps not as much as a cardiologist, but their crafts have a great deal in common.
Krugman in his NY Times blog makes the following statement:
"There are two strongly distinctive aspects of health care. One is that you don’t know when or whether you’ll need care — but if you do, the care can be extremely expensive. The big bucks are in triple coronary bypass surgery, not routine visits to the doctor’s office; and very, very few people can afford to pay major medical costs out of pocket..."
I dare say this applies to plumbers, electricians, even dare I say lawyers. They are all in the service business, almost all independent and you never know when you need them but when you do they better be there. He continues:
"This tells you right away that health care can’t be sold like bread. It must be largely paid for by some kind of insurance. And this in turn means that someone other than the patient ends up
making decisions about what to buy. Consumer choice is nonsense when it comes to health care. And you can’t just trust insurance companies either — they’re not in business for their health, or yours."
Well plumbing, electrical work, legal representation also is NOT sold like bread Mr. Krugman, but you as a strong liberal may not be aware of the working man.
Also you purchase auto and home insurance. You select the coverage you want. Take an umbrella policy, you get to buy one just in case your home liability is exceeded in some special circumstance. You do the same with auto. The state specifies a minimal level of liability but you almost always increase that plus if your car is not too old you add comprehensive. You never know when there is some accident. People buy their own insurance, albeit mandated in part, all over this country, and the world. In addition until the Government caused health care to be an employee "right" due to their wage and price controls, it was an individual responsibility, and did have insurance at the individual level for catastrophic illnesses. Thus Mr. Krugman's statements in my opinion are false at face value.
He continues:
"The second thing about health care is that it’s complicated, and you can’t rely on experience or comparison shopping. ...That’s why doctors are supposed to follow an ethical code, why we expect more from them than from bakers or grocery store owners."
But the plumber is the very same. You want to do your own plumbing, electrical work, legal representation. Remember the old adage "A defendant who has himself as his lawyer has a fool for a client..." well Mr. Krugman it applies to a lot more than medicine.
Mr. Krugman opens the piece with the reference to Ken Arrow, Uncertainty and the Welfare Economics of Health Care. Arrow states the following special characteristics of health care:
"A. The Nature of Demand The most obvious distinguishing characteristics of an individual's
demand for medical services is that it is not steady in origin as, for example, for food or clothing, but irregular and unpredictable..."
My simple answer is look at the plumber. Look at the lawyer. Look at the electrician. There are lots of things out there that are the same in demand as health care.
"B. Expected Behavior of the Physician: It is clear from everyday observation that the behavior expected of sellers of medical care is different from that of business men in general. These expectations are relevant because medical care belongs to the category of commodities for which the product and the activity of production are identical."
So what are lawyers, chopped liver! There are hundreds of professions, accountants to name another, where the product and the activity are the same. The definition is the personal services industry, it even has an SIC code! But this was an 1963 article, in the days of Galbraith, where economists viewed the world as large corporations against the common man! Prof Arrow in my opinion is outright wrong. I even did electrical work in 1963! He continues:
"C. Product Uncertainty: Uncertainty as to the quality of the product is perhaps more intense
here than in any other important commodity. Recovery from disease is as unpredictable as is its incidence. In most commodities, the possibility of learning from one's own experience or that of others is strong because there is an adequate number of trials."
It is clear that Prof Arrow never went to a civil or criminal trial, especially with a jury. Remember the OJ Simpson trial! Oh yes, which one?
It is not worth continuing except to reiterate the Krugman comment at the beginning of his blog:
"One of the most influential economic papers of the postwar era was Kenneth Arrow’s Uncertainty and the welfare economics of health care, which demonstrated — decisively, I and many others believe — that health care can’t be marketed like bread or TVs."
Well Mr Krugman, it is my belief that Prof Arrow may have been culturally impaired due to his lack of exposure to plumbers and electricians. The argument lacks merit and the Krugman rant does likewise.
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