We are developing the social individualist meta-context for the future. From the very serious to the extremely frivolous... lets see what is on the mind of the Samizdata people.

Samizdata, derived from Samizdat /n. - a system of clandestine publication of banned literature in the USSR [Russ.,= self-publishing house]

Samizdata quote of the day

All the existing [medical care] schemes, including the present American mixed corporatist/socialist model, represent a transfer from the young and healthy to the old and chronically sick (and to the medical cartel, of course). The way it’s used in practice, the phrase “having health insurance” means having the right to place oneself on the receiving end of these transfers. No honest discussion of the situation is possible until the entirely false and misleading concept of “health insurance” is dropped.

– Commenter Ivan

32 comments to Samizdata quote of the day

  • CaptDMO

    You’ve got to be crappin’ me.
    This delusion of access to socialist “health, through “Affordable health insurance” is just now being discovered?

    I’ll cede to “The Modern Health Care Maze”
    Charles Kroncke and Ronald F. White
    as seen in
    The Independent Review, v.14, n.1, (summer 09)
    ISSN 1086-1653

    Mssrs. Kronke and White are both professors at the College of Mt. St. Joseph. The piece, subtitled (aren’t they all?) “Development and Effects of the Four-Party System” is a useful “Socialist Parasites Infecting Medicine- for dummies”primer I’ve seen to date.

  • CaptDMO

    Um..wait a second…
    Um would this be the “Ivan” closely associated with
    the Independent Review?

    Am I the absolute last one to arrive at the party without a six pack, here?

  • Ivan

    No, I’m just a random semi-regular commenter here, and I have no affiliation with IR or any other institution that would be relevant for this discussion.

    In any case, thanks for featuring my quote. It’s an honor.

  • lukas

    There are some truly private insurers out there that actually offer health insurance for those that are at liberty to choose them.

  • Johnathan Pearce

    This is not the first time I have seen this argument, and it is a good one to make. As you said, insurance is fine for certain risks that are relatively remote, like fire; the trouble with many medical bills is that, unlike a fire, they are pretty predictable. We tend to use more medical care as we get older and our physiques deteriorate. This can be planned for by putting aside money into a designated fund. I think the idea of managed healthcare accounts, run by financial services or held in a wrapper like a 401k or a UK tax-advantaged portfolio, is one idea. For catastrophic health costs, insurance can work, maybe supplemented by philanthropic help for the poor unable to provide for funding on their own.

    People tend to forget that before the UK’s NHS came along, many doctors would treat poor patients for a small fee or for free; there has been a total airbrushing of pre-1945 social care in the UK.

    It should be remembered that even in socialist Sweden, private healthcare is bigger as a share of the total than in the UK. My message to the States: do not repeat the British mistake of Soviet healthcare.

  • Paul Marks

    American health care is about 50% taxpayer (local, State and Federal) funded now (especially if one includes the compulsory treatment in private ERs – the cost of which is passed on to paying people). And the rest of health care is tied up in endless regulations.

    Yet the word “reform” is never used to mean getting rid of subsidies (Medicare, Medicaid, SCHIP and so on) that have vastly increased costs (just as government subsidies for higher education have vastly inflated the cost of tuition) and is never used to mean getting rid of the regulations (such as licensing giving unions like the AMA restrictive guild power, and the regulations that make the “insurance market” no real market at all) that have so increased the cost of medical care.

    The word “reform” is only used to mean EVEN MORE government programs and regulations.

  • I have nothing to add to the discussion, other than to say I always look forward to Ivan’s comments.

  • Jacob

    I think real, commercial, private, free health insurance is possible (at least in theory).
    Young people, when buying such insurance, subsidize older people. Then. when they get older, they get some of that subsidy back.
    Insurance spreads risks, that’s what it is for.

    When government installs some “insurance” scheme, it isn’t insurance at all, but rather a wealth transfer scheme, just like Social Security.
    That is not necessarily the case with private insurance.

  • RRS

    The basic point is that INSURANCE is a transfer of risk mechanism, not a funding mechanism.

    The attempted perversions of insurances to provide funding (via spreading of risks) results in the the spreading of funding costs to those seeking risk protections.

    The perversions are fiurther exaccerbated in the U S by state government mandates specifying risk coverages that must be (or as per medigap may not be) provided.

    We finally got some useful figures today on the rate of increases in costs for “healthcare” (note: not insurance) for U S Federal employees; a government run program – guess what! Cost containment has obviously not been an issue for those benefits (covered by taxes and appropriations).

    It would be useful to learn the rate of increases in “healthcare” (again, not insurance) costs in U K, Canadian, Swedish, etc., systems. cf. advancements in procedures and treatments.

  • Brad

    No real progress will ever be made until a majority of the people believe that paying for health care should be left to free market choices rather than a State financed Right.

    The net result is that roughly the same amount of time spent on health care will just be allocated differently. It will be by bureaucratic Pull rather than an ability to pay, which represents previous allocations for having been productive elsewhere. I guess the notion of entitlement based on productivity goes out the window and entitlement based on mere existence comes in.

    As long as Pols are able to steal on behalf of the non-productive we will have one form of transfer or another. The question is just how feeble will the mechanism be, and how destructive will it be to the industry of health care.

  • Jacob

    Though I hate government care as much as anybody, I don’t get the great alarm about it.
    Yes, they’ll take our money and give some crappy gvmt service.

    People who want good health care will continue to buy it with their own money, regardless of the government care.

  • Alisa

    Jacob, I think it is an unavoidable conclusion of Ivan’s comment that only a small portion of healthcare can be financed through real insurance, even if it is private. But, that is beside the point, of course: in a free market, those who believe to the contrary are welcome to give it a shot. If it works, I’ll be the first to eat my (and Ivan’s) hat, if it doesn’t, then it doesn’t, and people will learn that the best way to provide for older age (and the inevitable health deterioration that comes with it) is through private savings.

  • Alisa

    Oh, and what Ian said: Ivan’s been absent here for way too long.

  • Eric

    I think real, commercial, private, free health insurance is possible (at least in theory).
    Young people, when buying such insurance, subsidize older people. Then. when they get older, they get some of that subsidy back.
    Insurance spreads risks, that’s what it is for.

    The insurance business doesn’t actually work that way. They only insure customers who will make them money on average. If you have a potentially expensive condition (like, say, diabetes or cancer in remission), you will not be able to get insurance, because the companies have done the math and determined they can’t make money insuring people like you. If you get in enough crashes you can’t get car insurance – why is health insurance any different?

    Health insurance works well for young, healthy people because it really is insurance, i.e. the premiums will greatly outstrip payout for the vast majority of the pool. But as you get older and/or sicker the payout approaches a certainty, so the model breaks down. There are a lot of people who are guaranteed to cost more than they can pay.

    That’s why the employer-based insurance system works, for the most part. The company is providing the coercion necessary to get the young and healthy to subsidize the old and sick. But it’s a politically unstable system, since the pressure for a government plan will build every time a lot of people are out of work.


    [editors note: you will never *ever* get a comment on this blog not held for approval… drop me a line using the e-mail link in the sidebar so I can tell you how we can fix that, but it cannot be discussed ‘in the clear’]

  • jacob

    I don’t know what “real insurance” means.
    Maybe health insurance is more akin to resource pooling. Some people incur more health expenses than others, they draw more from the pool than they put in. So, it is a transfer of money from healthy people in the pool to sick ones, but, since nobody knows in advance on which side he’ll be, it makes sense for all people to enter such schemes. Such voluntary mutual help societies did in fact exist, in the past.

  • Alisa


    I don’t know what “real insurance” means.

    The answer is in Ivan’s and RSS’s comments. But again, this is beside the point. I agree with the rest of your comment, as long as these schemes are voluntary. I believe that, for example, Kupot Holim were just such schemes, before Israel became a state and you-know-who came to power.

  • RRS


    “Real” insurance exists to transfer risks by spreading them over larger groups,incomes or assets (and time); it is not for providing “maintenance” (care). Homeowners (Property) insurance does not provide “care” for the house. Auto insurance is for the fortutitous events of accident, theft, etc. not car care or upkeep.

    The spreading of the costs of “healthcare” costs as if they were the spreading of “risks” lies at the heart of the problems for which there is no political answer – without honesty, which is currently in short supply.

  • Jacob

    Ok, you define “real” insurance as spreading only risks, not maintenance costs.
    Health care includes both – risk of a catastrophic illness and routine care, which is also not predictable and equal in amount, for all people (like it is for cars).
    I see no problen with a cost-spreading scheme or mutual-aid-scheme (if they’re voluntary). If you want to be pedant and refrain from calling it “insurance” – fine. But such scheme can, and did, exist, and it makes sense.
    As to government health “insurance” – it is no worse that other gov. welfare schemes. It’s wasteful, poor in quality, inefficient, but probably inevitable politically.
    The main point is that people will still be able to buy better care with their own money, if they wish.

  • Alisa

    Jacob, the problem with that is that the government-run scheme skews the entire market, and makes private care much more expensive than it would have otherwise been.

  • Jacob

    “makes private care much more expensive ”
    I’m not sure about that, for many reasons.
    You could get private care in gvmt facilities, or, there could be competition among private care providers, as the great masses quit the market (get care from gvmt).
    Socialized medicine tends to depress incomes of doctors and hospitals, which make paying customers more valuable.

    On the other hand, socialized medicine drives away (to other countries) good doctors and researchers. This might be the worst problem with it.

  • RRS


    50 odd years ago we belonged to a group that did spread care costs on a prepaid need basis. It covered such things as pregnancy and obstetrics normally expected needs of young coiuples.
    Various hospitals and M D s “participated,” and as I recall received regular payments for their participation, as well as fee for service.

    It was called Blue Cross/Blue shield (if you bought both forms of coverage). That format has been absorbed into the insurance market.

    What has happened to insurance policies is that state mandates now include “care” classifications in the coverages (and exclude the provision for benefits not within statutory clasifications); so it is no longer just risk spreading for a premium, it is also cost spreading for which premiums must rise to cover expanding costs.

    A somewhat similar condition might arise if every auto policy were requitred to provide maintenance and care costs plus warranty, without regard to differentiation by vehicles. Arguably good for public safety.

    Cost spreading by political edict must be recognized if we are going to deal with the problems honestly. We must understand that even though risk may give rise to some of the costs (and can be insured – as you note) not all costs arise from risks, and until those are sorted out, all programs will only go deeper in the hole (or increase in cost) whether private or “governmental.”

  • Thomas Jackson

    What a load! The American healthcare system thanks to government intervention uses the individual to subsidize the uninsured and the elderly by charging the unisured far more than they should pay to make up for the government’s mandated lowball costs for the uninsured and elderly.

    The government mandates no one be turned away from emergency rooms, evn if they are terrorists from China. The government enforces a guild rule limiting the education opf doctors and medical personnel while allowing lawyers to make malpractise into their personnal lottery system.

    If ogvernment cared about healthcare it would allow a 2,000 per person tax credit for all medical expenses (if you owed 2,000 in taxes the healthcare credit would cancel this out). Further the credit should cover preventative care.

    But this is about control and revenue so the Dhimmirats can’t wait to recreate the glories of the Canadian and British medical systems here while exempting themselves from its clutches (a porposal taxing healthcare benefits would exempt union members.) This appears to be unconstitutiuonal but why would this stop the shredding of the Constitution by the Obamanazis?

  • Eric

    [editors note: you will never *ever* get a comment on this blog not held for approval… drop me a line using the e-mail link in the sidebar so I can tell you how we can fix that, but it cannot be discussed ‘in the clear’]

    Sigh. I know why. It’s just that if I haven’t commented in awhile I forget to modify my SOP. Sorry.

  • Jacob

    Now we are in complete agreement.
    Health care insurance is possible, but gvmnt. regulations have interfered and destroyed it.
    A govmnt. health care ( like in Britain) is NOT an insurance scheme, for many reasons. No least – because such a plan involves re-distribution of income (the rich pay more).
    What Ivan’s quote says is true of gvmnt. health “insurance”, but not true in theory.

  • Alisa

    Jacob, what Ivan says is true in theory as well. You are right that free market would allow for all kinds of cooperative healthcare schemes, but only the ones that would cover accidents, unusual diseases at relatively young age and such can operate as true insurance. All the ones that are intended to cover routine healthcare, especially that which is due to older age. would be different kinds of systems.

  • Jacob

    “would be different kinds of systems.”
    They would be different, but you can call them “insurance” too.
    I don’t think that a broader definition of “insurance” doesn’t make sense.

    It all depends what “is” is.

    What are health “maintenance” costs? One person may need to see a doctor once a year, even in older age, while others need a doctor twice a week, a whole bunch of doctors. It’s not like car maintenance that you do every 10,000 miles for all cars.
    Everyone has health expenses, it’s true, but there are huge differences in the amounts of expenditure, even before catastrophic events.

  • Jacob

    There’s another thing wrong with Ivan’s remark. He says it’s:

    “a transfer from the young and healthy to the old and chronically sick”

    Yes, it is. But maybe it’s a transfer from A when he is young to the same A when he is old. It makes sense to start saving for health care when young, so you won’t be overwhelmed by costs when old. You can save in a personal account or in some insurance scheme. Nothing wrong with such “transfers”.
    Usually gvmnt. schemes involve also redistribution of income – i.e. the rich pay more for the “insurance” than the poor, for the same services. That makes gvmnt. schemes really different.

  • Alisa

    Jacob, I consider you a friend, so take it from a friend: you are the stubbornest person I ever met, except for my brother in law (and that is saying something, believe me). You turned Ivan’s comment on its head, just to avoid losing an argument. What “is” is indeed:-)

  • Jacob

    Sure, I’m stubborn.
    Ivan said (as far as I was able to understand) that there can be no such thing as medical insurance.
    I disagree. Because I’m stubborn.

  • Alisa

    No he didn’t – red his original comment, not just the quote.

  • Paul Marks

    Of course one of the reglations (one of the thousands of regulations) states that no health insurance company may offer more than a 20% discount to people on the basis of how they choose to live (a healthy “lifestyle”).

    As for insurance generally.

    A doctor in New York state tried to get past the pay-for-treatment idea.

    “Pay me X Dollars a month and we will treat you at my clinic – whatever goes wrong with you in the future (for oursakes we hope you stay in good health – but we will not change the monthly fee once the contract is signed on the basis of your health changing), and if we can not treat it we will pay for those who can do so”.

    Whether he knew it or not that was normal enough contract a century ago (for example the British Friendly Societies, who had 80% of industrial workers as members, operated on that basis – they employed doctors who were paid by the month).

    The New York State agencies went after this doctor and his employees as if they were demons from Hell.

    That should tell people all they need to know about the health care “market” in the United States.

  • Jacob

    No honest discussion of the situation is possible until the entirely false and misleading concept of “health insurance” is dropped.

    The concept of “health insurance” isn’t “entirely false and misleading” as Ivan states.
    Government “health insurance” is flawed, sure, but for many other reasons, not because it is “not insurance”.
    Health insurance did exist, as in Paul’s examples, the concept itself isn’t flawed.