The problem with this idea, of getting rid of the pre-paid health insurance problem, is that it still leaves some areas of the country vulnerable. One of the benefits of health insurance is that people in both poor and sparsely populated areas have their health care subsidized whether they have insurance or not (people without insurance are even more subsidized) by those who do have insurance. Hospitals and clinics in poor or low population areas will not have as many paying patients to churn out. Even if medical facilities bring down their prices through competition, these areas will not reap the benefits of the new paradigm shift in medical cost pushback.
The most pertinent “problem” here is in low population areas. Poorer areas often already have a large retail chain within at least convenient busing distance which could easily offer health services (WalMart, Walgreens, etc). Often, the very sparsely-populated areas do not.
But then, the very sparsely populated areas already don’t have much by way of medical services, and the rural people find themselves travelling to the nearest “population center” to get all of their care, anyway. Of course, part of my plan is a means-tested program to give people money for medical expenditure. Unpaid medical service is definitely not the problem that I assume Perello thinks it is. Indeed, according to the Economic Report of the President, the US total cost of unpaid demand care was $58 billion. That may sound like a lot, but it is a paltry 3% of the $2.5 trillion in total US medical expenditure. Furthermore, if you read this post, you’ll find that before Medicare/Medicaid, doctors were giving out care to the old and poor for free (this is a point that Ron Paul has made quite often).
Think about it, a marketing push my Safeway to get you to shop there, and get their “club card”. The benefits? Two free medical checkups a year for two children, discounts on gas, and selected savings weekly. Why not package things like this?
Large cities, of course, subsidize the rural areas of the country fairly heavily already (mail, roads, electricity). But is this a trend that we would like to foster? I say no…but that is a personal opinion.
I am very far from an urbanist, like Ryan Avent. But, urban and suburban living lowers costs in both relative and absolute ways. It also necessitates greater efficiency — if you have ever read a Charles Dickens novel, you’ve no doubt had the image of a dirty, sooty London painted for you. This was a product of the old type of coal that Londoners burned before the migration to city life. The realization that more efficient (cleaner) forms of energy generation were a necessity caused Britain to find a newer (cleaner) source. Today’s dense infrastructure requires highly compact and efficient forms of energy generation and usage. If everyone lived in or in close proximity to, and urban center, a “smart grid” wouldn’t be a very big deal. In addition to this, mass transit is a more efficient way to move people. People living very close to each other and to the places they frequent creates more efficient lines of communication and retail.
One of the greatest challenges in the US when it comes to communications/broadband penetration (another of Perello’s topics of interest) is the fact that the US is sparsely populated in many places. Should the state subsidize their choice to live in a rural area? That was, of course, one of the more ridiculous aspects of the recent unemployment insurance extension bill. Pundits everywhere were decrying the fact that people in rural areas may no longer receive their local television. Should we subsidize rural couch-potatoes? And if so, should we do it in a way that hides the subsidy from them? Why not just give them the money to get cable? According to Thomas Hazlett, we pass up a trillion dollars of gain, simply so people who choose to live in rural areas don’t have to suffer the indignity of direct handout.
So the question is, should we be subsidizing people who choose to live in rural communities? And should we do so in indirect, expensive, dignity-preserving ways?
One of my favorite paintings is “The Spirit of Service“, a painting adopted by the Telecom Pioneers of America. Rural telecommunications are heavily subsidized by urban consumers.