Infinite Elasticity?

[questionmark]

I agree with almost all of Dr. Paul's points, however I've heard some interesting counterpoints to free market medical care. Namely the concept of infinite elasticity, which basically says that the health care market is unique, because people will spend however much you want to charge them in order to save their life, thereby forcing people into incredible debt to protect their own (or their family's) welfare.

I haven't been able to make up my mind on this, but I would love to hear some feedback from libertarians, as well as anyone with a background in economics.

[Fox McCloud]

It's interesting that you should bring this up! As I talked about this with another person not too long ago.

Basically, in a true capitalistic society, people would only invest so much money in how much something was truly worth; if you're a football player and you blow out your knee, very little to no money would be spent to get you back in the game; you're a freaking football player; you don't produce or do ANYTHING for society.

If, however, you're a factory worker/farmer/etc and you blow out your knee, it's economically justified to put money into your blown-out knee; you're producing for society (and yourself) and you benefit and add capital to the economy.

one thing (though I never thought about it before until this conversation):

people often say "you can't put a price on life" what are they really saying? While it seems innocent enough, at first, what they're REALLY saying, is that all the capital (that's TRUE money, just that crappy green stuff) in the world should be sacrificed just to save 1 life...after all.....life is "priceless".

Now, at first this sounds harsh, but it really isn't; I'm definitely not against taking out a loan if it means that the person will definitely live (for example, if you need $10,000 to get "X" surgery, which will be able to have you live normally and not die)....but if there's only a 1% chance of that person living, it's not worth sinking in millions of dollars into that person just so they can live.

Of course, in a true capitalistic society, disease would be very very VERY low; herbal and natural remedies would dominate the market, suppressed cures would come to light, and dying do to some "X" factor would be greatly minimalized....because when the Free Market works, and the GOV stays out of it (the FDA creates the monopoly and the lack of cures), things improve....when the GOV gets in it, people ALWAYS suffer.

as it currently stands now, the medical industry has NO incentive to fully cure you; it only has incentive to sustain you, so they have a life-time consumer of their products.

[mtmedlin]

Infinite elasticity is a theory and doesnt work that way. They may want to spend "any" amount but their desire doesnt necessarily match their ability to do this.

The assumption that life is priceless is complete emotional crap. For example, if there was sufficient oil in sub-saharan Africa, do you think that we wouldnt have gone in there and fixed the aids epidemic. Hell yes, we would have but because they are poor and it in no way effects our economic situation we allow their culture to continue to die at a rate unheard of since the advent of modern medicine. So where is the value of their life. Value of life changes as to how close they are to our culture. Hispanic people are treated poorly in the United States because they are the largest non-english speaking immigrant. I swear that if they spoke english, they would be accepted at a much higher level. Where is the value of their life.

I know that this part isnt in direct relation to the theory that you brought up but I caught a phrase from the second post and got lost in it.....I need to up the meds.

[linusPAULing]

You might want to look at these videos that discuss Ron Paul's views on health care, socialized medicine, and free market solutions.

http://www.youtube.com/watch?v=d-gSLt_qKBo
http://www.youtube.com/watch?v=287IQ_7Qj_0
http://www.youtube.com/watch?v=4woPtYzDEG8
http://www.youtube.com/watch?v=qoazzRDALYw
http://www.youtube.com/watch?v=ZSBWVDukUuw

[Xenophage]

I've heard this argument before. Its an interesting one...

What you're suggesting is simply a form of extortion. Would this happen in a free market system? The question we need to ask is: To what extreme has it happened already, and how has it been addressed?

It seems to me that quality of health care has gone down while prices have increased, despite further regulation of the market in the last 50 years. Large corporations are acting as middlemen between doctors and patients more and more frequently. Corporations might screw you over, but it seems unrealistic to expect that doctors themselves are so corrupt that they are going to hold you hostage over medical expenses for lifesaving intervention. If they did, I don't think they'd be very successful doctors.

This issue needs to be addressed more thoroughly by someone other than myself. I hope we get more discussion happening, because I'm very interested.

[vincebodie]

It's interesting that you should bring this up! As I talked about this with another person not too long ago.

Basically, in a true capitalistic society, people would only invest so much money in how much something was truly worth; if you're a football player and you blow out your knee, very little to no money would be spent to get you back in the game; you're a freaking football player; you don't produce or do ANYTHING for society.

If, however, you're a factory worker/farmer/etc and you blow out your knee, it's economically justified to put money into your blown-out knee; you're producing for society (and yourself) and you benefit and add capital to the economy.

one thing (though I never thought about it before until this conversation):

people often say "you can't put a price on life" what are they really saying? While it seems innocent enough, at first, what they're REALLY saying, is that all the capital (that's TRUE money, just that crappy green stuff) in the world should be sacrificed just to save 1 life...after all.....life is "priceless".

Now, at first this sounds harsh, but it really isn't; I'm definitely not against taking out a loan if it means that the person will definitely live (for example, if you need $10,000 to get "X" surgery, which will be able to have you live normally and not die)....but if there's only a 1% chance of that person living, it's not worth sinking in millions of dollars into that person just so they can live.

Of course, in a true capitalistic society, disease would be very very VERY low; herbal and natural remedies would dominate the market, suppressed cures would come to light, and dying do to some "X" factor would be greatly minimalized....because when the Free Market works, and the GOV stays out of it (the FDA creates the monopoly and the lack of cures), things improve....when the GOV gets in it, people ALWAYS suffer.

as it currently stands now, the medical industry has NO incentive to fully cure you; it only has incentive to sustain you, so they have a life-time consumer of their products.

Regarding the football player, either (a) he has an insurance policy that will pay him LOTS of money if his knee is irreparable, or (b) the team will pay for it because he is a valuable commodity to them. It doesn't relate to most of "normal" society though... And yes, I'm a football fan, though I can't stand to watch any portion of it that doesn't involve game action. The commercials and the production values are straight from the NWO playbook I must admit. However, there are a few good characters in the game, and even a few avowed RP supporters.

You are SO right though about disease rates being extremely low in a truly free and just society, where poisons could not be foisted upon us from all sides without impunity, and there were no restrictions on natural food sources reaching the market.

This topic reminds me a of something that happened with my dog a few years ago. Norton (RIP 2004) was a 140lb. RottenLab (lab/rottie mix), and one day when we were out cruising the neighborhood he came up lame when we got home. I took him to a 'conventional' vet who told me that he had torn knee ligaments and that he could operate on it for $3k with a 33% chance of success(!). Not wanting to put my beloved buddy through this, I asked around amongst my friends and got a referral to a holistic vet. He suggested that I give him three months to rehab his knee through a combination of a diet of raw chicken and herbs along with liquid ozone injections deep into the joint. His methodology was based on animals' eating habits in nature. He said that animals which are injured know what to eat, and when they have damage to a joint they will eat the bones and cartilage of what ever they kill to help them recuperate, and that they also know what other things to eat to speed up the healing process. The ozone injections were done with a HUGE syringe and about a 4" long needle which he shoved ALL THE WAY into Norton's knee. He said that the injection was like accupuncture with the added benefit of the liquid which filled up his leg like a water balloon!. Anyhow, the treatment was AMAZING, and after less than three months, Norton was fully healed and never had another leg problem!

[jclay2]

Consider this: Company A knows you will pay whatever it takes to save your life. So, they charge you a huge sum of money. Company B sees that this price is far beyond what the actual cost is and offers a lower price. Company A now has no business and is forced to lower their price to get their business back.

[Xenophage]

Consider this: Company A knows you will pay whatever it takes to save your life. So, they charge you a huge sum of money. Company B sees that this price is far beyond what the actual cost is and offers a lower price. Company A now has no business and is forced to lower their price to get their business back.

The argument is that you don't have time to shop and compare between doctors and hospitals when you're dying and its an emergency situation.

[Fox McCloud]

Regarding the football player, either (a) he has an insurance policy that will pay him LOTS of money if his knee is irreparable, or (b) the team will pay for it because he is a valuable commodity to them. It doesn't relate to most of "normal" society though... And yes, I'm a football fan, though I can't stand to watch any portion of it that doesn't involve game action. The commercials and the production values are straight from the NWO playbook I must admit. However, there are a few good characters in the game, and even a few avowed RP supporters.

I have no problem with foot-ball, and I'll admit my argument was over-simplified....my biggest problem with sports, however, is how much the players make for contributing nothing to society...no I'm not saying they shouldn't get payed, just not so much (of course, their high pay is just a product of the no credit? no problem! fiat-based currency empire we have).


You are SO right though about disease rates being extremely low in a truly free and just society, where poisons could not be foisted upon us from all sides without impunity, and there were no restrictions on natural food sources reaching the market.

This topic reminds me a of something that happened with my dog a few years ago. Norton (RIP 2004) was a 140lb. RottenLab (lab/rottie mix), and one day when we were out cruising the neighborhood he came up lame when we got home. I took him to a 'conventional' vet who told me that he had torn knee ligaments and that he could operate on it for $3k with a 33% chance of success(!). Not wanting to put my beloved buddy through this, I asked around amongst my friends and got a referral to a holistic vet. He suggested that I give him three months to rehab his knee through a combination of a diet of raw chicken and herbs along with liquid ozone injections deep into the joint. His methodology was based on animals' eating habits in nature. He said that animals which are injured know what to eat, and when they have damage to a joint they will eat the bones and cartilage of what ever they kill to help them recuperate, and that they also know what other things to eat to speed up the healing process. The ozone injections were done with a HUGE syringe and about a 4" long needle which he shoved ALL THE WAY into Norton's knee. He said that the injection was like accupuncture with the added benefit of the liquid which filled up his leg like a water balloon!. Anyhow, the treatment was AMAZING, and after less than three months, Norton was fully healed and never had another leg problem!

it's great to hear about that! I love hearing stories like that about people and animals. What's even more amazing is how it's the best of both worlds; cheaper and high quality product.

Still, what amazes is that after all these success stories, people still turn towards conventional medicine....it's such a shame.

[kyleAF]

The argument is that you don't have time to shop and compare between doctors and hospitals when you're dying and its an emergency situation.

If the socialists would stop trying to take all of our money, I have confidence that humanity tends to be pretty generous during emergencies. Just look at how much private Americans gave to the Tsunami relief efforts.

As it stands now, though, if a beggar asks me for money on the street, I say: "I already gave it to the government, you'll have to go get it from them."

[Zavoi]

I agree with almost all of Dr. Paul's points, however I've heard some interesting counterpoints to free market medical care. Namely the concept of infinite elasticity, which basically says that the health care market is unique, because people will spend however much you want to charge them in order to save their life, thereby forcing people into incredible debt to protect their own (or their family's) welfare.
This situation would only occur if you're already critically ill. If you're bleeding all over the place, you're not going to rush to the hospital, look at their billing schedule, decide it's too much, and then go search for another hospital. In such a dire situation, no health care system is going to be perfect. But I would think that the demand for emergency, uninsured health care would be so small as to be easily absorbed by private charity and people's generosity. Didn't Dr. Paul describe working in an emergency room where no one was ever turned away, regardless of ability to pay?

However, in the majority of situations, people are going to have a chance to shop around for insurance before they get sick. And the insurance companies will have all the time in the world to shop around for cheap health care providers. But in the current system, with partial government control and partial private control, insurance companies and health care providers don't have as strong of an incentive to be cost-effective, because the government picks up good portion of the tab, and, as Milton Friedman said, if you're spending someone else's money on someone else, you won't care about the cost at all.

[jkm1864]

I work to much to get sick and I am not a germaphobe so a little sickness and dirt doesn't bother me.