11 ms·

So we agree medicine cannot be managed as a business, right? It's ok if healthcare losses money, in fact it should be ok for all public sevices to operate and

by brann0 8y ago

So we agree medicine cannot be managed as a business, right? It's ok if healthcare losses money, in fact it should be ok for all public sevices to operate and not being profitable.

dominotw 8y ago
How can we tell if the loss if from inefficiencies, corruption and laziness? Case in point: Air India.
- pjc50 8y ago
  You need different metrics for that. Nobody has to fly Air India, but people don't have a choice over getting sick.
- PeterStuer 8y ago
  I'd argue that collectively the 'market' system is incredibly inefficient. Corruption needs policing/regulation just like in the 'private' sector. I'm not sure what you mean by 'laziness' in this context. Could you elaborate?
ramblerman 8y ago
You are jumping from one extreme to the other. Creating a public institution with no pressure to make profit is a disaster waiting to happen. You can certainly keep a 'competitive' environment which is regulated with incentives. And I do agree healthcare needs this, and shouldn't live purely by the free market.
- llukas 8y ago
  DARPA...
- psergeant 8y ago
  > Creating a public institution with no pressure to make profit is a disaster waiting to happen. This is the model many rich country healthcare runs on, and provides measurably better outcomes for less expenditure than the US.
  - spydum 8y ago
    I may be ignorant on this, but don't many of those countries benefit by the r&d funding happening in the US?
    - oblio 8y ago
      https://www.urmc.rochester.edu/news/story/4233/u.s.-slipping-as-global-leader-in-medical-research.aspx https://www.urmc.rochester.edu/news/story/4233/u.s.-slipping...
      - spydum 8y ago
        Interesting that funding only started to fall when the concept of Affordable Care act began to get traction? If I'm an investor, that sort of thing gives me cause for pause.
    - tscs37 8y ago
      R&D doesn't happen in non-profit government corporations either (atleast not largely). Most R&D comes from the manufacturers where the state (or relevant institution) buys the drugs from. However, in a single payer or similar systems, if a drug company decides to hike the price, the state (or institution) can swallow the cost and continue medical services to citizens until the situation is resolved (either by legislation or court cases). Since the state (or institution) is not a for-profit it doesn't matter as much if they sink a lot of cost as long as everyone can get their medical treatment.
      - Can_Not 8y ago
        Another thing is that people want to measure success in profit or less taxes paid. A proper healthcare system should have it's success measured in how many citizens are able to be productive because they're not chained down with accommodatable disabilities, curable chronic illnesses, and extreme medical debts.
      - Slansitartop 8y ago
        > R&D doesn't happen in non-profit government corporations either (atleast not largely). Most R&D comes from the manufacturers where the state (or relevant institution) buys the drugs from. IIRC, the research typically comes from state-funded academics, and the development comes from the manufacturers.
- toomuchtodo 8y ago
  You can have a competitive environment without a profit motive. You judge on results, not profitability.
  - codehandle 8y ago
    This. Bothered to login to say what you said. We talk about AI optimized to create paper clips accidentally running amok and turning the world into paper clips. Why isn't profit a similar problem? Government agencies are just AI running on meat. Give them success parameters different than raw profits. Honestly, why can't we see this as just a variant of the instrumental convergence problem?
  - mar77i 8y ago
    ↑ ... instrumental convergence problem sounds sexy! drool
  - chestervonwinch 8y ago
    OTOH, academia is supposed to be this type of meritocratic, results-driven ideal, and look where we are there. I suppose this a consequence of the measure that we use to "judge results". Do we start assigning healthcare R&D companies an "impact factor"? I know the journal impact factor is a bad example since it is criticized for being gameable, but I'm just using it to convey what I mean.
- collyw 8y ago
  Europe proves you wrong.
- DomreiRoam 8y ago
  "Creating a public institution with no pressure to make profit is a disaster waiting to happen." Do you really think that we should ask the army to be profit oriented? What about the coast guard, Justice, Child protection service? Imagine all of this public institution comming to your house and start the conversation with "You have a nice family, it would be a shame if ..." To expect results or effects is not the same as making profits.
- fsloth 8y ago
  "Creating a public institution with no pressure to make profit is a disaster waiting to happen." Why? Schools are not for-profit institutions (well, not everywhere). Police don't make a profit. Nor does the fire brigade. Or the military, for that matter. Are all of these disasters waiting to happen?
  - ekianjo 8y ago
    You have never heard of private military companies? They are extensively used byvthe US mostly for non combat situations. They are very effective, for profit, and much less costly than the regular army.
    - fsloth 8y ago
      That a private company works better at some locations does not imply logically that a public institution is a disaster waiting to happen, which was the original claim. Let's make it a bit more ridiculous and extreme. Would it be a good idea to privatize US nukes? What would profit incentive provide there? Remember, we are discussing the claim "creating public institutions without a profit incentive is a disaster waiting to happen".
    - pjc50 8y ago
      These guys? https://www.amnestyusa.org/themes/military-police-arms/private-military-security-companies/ https://www.amnestyusa.org/themes/military-police-arms/priva...
    - Slansitartop 8y ago
      > private military companies...are very effective, for profit, and much less costly than the regular army. [citation needed] My understanding is that they are more expensive than uniformed soldiers.
  - fjsolwmv 8y ago
    Your examples are all local government with local accountability to a small group of local voters. At nation-scale the story is different
- rectang 8y ago
  It's refreshing to see skepticism of both market-based and government-based solutions. Too often I feel like I am being presented with arguments which require either blind faith in the "invisible hand" or denial that inefficiency increases in the absence of competition. > You can certainly keep a 'competitive' environment which is regulated with incentives. This is my preferred approach as well. It's worst weakness is the potential for regulatory capture. I tend to believe that should be addressed by not giving corporations as much power as they currently enjoy in the US: enforcing constraints on participation in politics and requiring transparency, disconnecting health insurance from employment status, enabling clawback of executive bonuses, etc.
  - nomorenomore 8y ago
    > It's refreshing to see skepticism of both market-based and government-based solutions. This in my opinion is a false dichotomy. The government can be owned/operated by coorporations or by the people or can be an entity in itself. What I feel is missed by people leaning towards the idea of competition is that it is not a sustainable model under the current framework of ideas. If you optimise a society purely based on profitability, competition is the enemy, since it hinders individual businesses from maximising their profits. Hence the massive business consolidation we have seen in the last decade across the globe. If you want competition because you want different ideas to be tested, then we need to explain what we want entities to compete for. Focusing on optimising one variable only, i.e. profit, will not work. We need new ideas.
- GiorgioG 8y ago
  > Creating a public institution with no pressure to make profit is a disaster waiting to happen. We seem to have no problem with throwing $700 billion per year on the military and nobody is pressuring them to make a profit. Is that a disaster? No? "But that's different!" It's only "different" because that's what we've been led to believe.
  - rectang 8y ago
    The US military is spectacularly inefficient, and the US military-industrial complex is a parasitical behemoth per Eisenhower's critique. It's not like the problem is unknown; the issue is that the state has to have a monopoly on violence, so we live with the inefficiency. Encouraging a marketplace of competing militia would not a viable approach. :)
    - GiorgioG 8y ago
      > The issue is that the state has to have a monopoly on violence A monopoly on violence in what context? The planet? That doesn't seem to be necessary for most countries. Within the country itself? That's the job of local law enforcement.
      - rectang 8y ago
        "Monopoly on violence" is a term with a lot of history. I'm using it in the same sense as Max Weber, where the state is defined as the "human community that (successfully) claims the monopoly of the legitimate use of violence within a given territory." https://en.wikipedia.org/wiki/Monopoly_on_violence#Max_Weber's_theory https://en.wikipedia.org/wiki/Monopoly_on_violence#Max_Weber... All the critiques on this thread about competing authorities such as local law enforcement, the second amendment, and so on, none of them invalidate the idea of legitimate use of force defining the state. Weber accounts for all those points. The closest thing we have to an actual marketplace among authorities wielding violence is the competition between jurisdictions (one municipal police department against the one the next town over, the state police in one US state vs another US state) -- but that's not the same as a commercial marketplace. The only critique I think is relevant is the idea of mercenaries, a.k.a. private military contractors. But there again, those mercenaries are part of the military-industrial complex, which is an extremely stunted marketplace as it's largely a government monopsony. We don't use economic competition to determine who holds authority on the legitimate use of violence. As a consequence, we don't get the full benefit of marketplace competition in maximizing the efficiency of our armed forces -- but we also don't have perpetual civil war.
- ddingus 8y ago
  Use the Post Office model. When profitable, it contributes to the general fund. See my other comment here. Political hobbling and fuckery related to post office operations done to marginalize otherwise exemplary performance aside, the model has merit.
  - fjsolwmv 8y ago
    The post office has a govenrment-granted monopoly on first class mail service, and does pretty poorly when it competes for non-first-class mail logistics.
    - ddingus 8y ago
      A necessary monopoly. Without it, service would not be universal.
- andrepd 8y ago
  >Creating a public institution with no pressure to make profit is a disaster waiting to happen. Aren't most public institutions non-profits? Don't many of these work well? What makes you think that a (truly) democratically run enterprise wouldn't satisfy the needs of its constituents?
TeMPOraL 8y ago
I think it's totally ok, and it should be accepted. Public services are meant to be cost centers. If they bring in profits, they do so indirectly (e.g. better health of citizens -> better GDP -> more money in taxes). The trick is to still find ways to apply pressure so that a service gets better and more efficient in time, instead of attracting parasites that'll use it as money drain. Like a lot of healthcare-related businesses seem to do (heard plenty of horror stories from someone I know who's studying medicine and interned at hospitals, and we're talking about a country with public healthcare).
- PeterStuer 8y ago
  "parasites that'll use it as money drain" sounds remarkably like shareholders.
  - rocqua 8y ago
    The difference is that shareholders lose something (the value of their shares) when they drain a company of its assets. This might still be short-sighted, but there is at least a balancing force. In public services, where making a loss is o.k. this is just included in the loss, and there is essentially nothing that encourages the 'parasite' to not drain the system.
    - FranzFerdiNaN 8y ago
      Well, even that no longer seems to be assured. Plenty of ways to strip a company and make a profit in the short term, destroying the company in the long term.
      - ModernMech 8y ago
        E.g. Toys R Us. It was bought then saddled with debt by the new investors, and is now dead.
    - Slansitartop 8y ago
      > The difference is that shareholders lose something (the value of their shares) when they drain a company of its assets. Not if they sell before the shit hits the fan.
pygy_ 8y ago
There's a huge mismatch between the interest of the investors (sell as much drugs as possible, for the highest possible price) and those of the consumers (be healthy without depending on external input). The pharma industry should be working hard on planning its own obsolescence. The same dynamic is at work in the food industry, which is responsible for the obesity epidemics. Capitalism as it is practiced right now has catastrophic flaws. We need to change the rules of the game, yes, and not necessarily seek profit and growth at all costs.
- cies 8y ago
  > The pharma industry should be working hard on planning its own obsolescence. In an ideal word. But as you show in your mismatch "serving shareholder value" is prohibitive to this. So having then as (blue chip) for profit bizes is making sure they will NOT ever be planning they own obsolescence. > The same dynamic is at work in the food industry, which is responsible for the obesity epidemics. ...and high amount of pesticide residues, and destruction of the ecosystems, and heavy pollution on surface waters, and extreme disdain for animal wellbeing, and... (cries) > Capitalism as it is practiced right now has catastrophic flaws. We need to change the rules of the game, yes, and not necessarily seek profit and growth at all costs. To my understanding it should never be the economic model "to govern all markets", but AN economic model allowed in some markets while carefully bounded by rules and ensuring (1) best outcomes for we the people and (2) a leveled playing field.
  - pygy_ 8y ago
    The earth is like an apple pie Let's eat it and let's die Do you want some more? It's delicious... Grow theee... Grow theee... Grow the economy! More at https://news.ycombinator.com/item?id=16671373 https://news.ycombinator.com/item?id=16671373 and https://news.ycombinator.com/item?id=16718258 https://news.ycombinator.com/item?id=16718258
TomK32 8y ago
They are profitable on the bigger scale of a national economy. Sadly no one give a damn about that these days. In Germany we have the studies Betriebswirtschaft (business) and Volkswirtschaft (national economy) and the latter is loosing vital ground in politics. It gets worse if you look to the UK where a of lot public services are handed to companies, for example the merger of all social benefits Universal Credit is run by companies and in a manner that can only be called unprofessional and anti-social.
- pjc50 8y ago
  "Universal Credit" is a horrendous scheme that manages to combine (malicious) ignorance of the needs of its beneficiaries with ignorance of how to run a large software project. The idea sounds great on paper - there are a lot of different benefits, why not reduce duplication by merging them into one scheme then only asking for personal information once - but it ignores cashflow. People can be left without money to live on for weeks. It's also a classic "big bang" project which just piles the requirements of existing systems together, and hands them to one of the traditional government crony contractors: Accenture, HP and IBM. At least it didn't involve Serco.
  - coldacid 8y ago
    Sounds like the Phoenix payroll project here in Canada, except for social services. There is no way this will end well, and I wouldn't be surprised if it leads (indirectly) to the death of clients.
    - TomK32 8y ago
      Oh Phoenix is just a incomplete system rolled out too early. Universial Credit is pure evil. The person-gets-benefits-cut-for-having-heart-attack-at-appointment evil. The months-deceased-claimant-gets-invited-for-appointment evil. The benefit-cut-because-assessor-didn't-show-up-for-house-visit evil. The no-benefit-payouts-in-the-first-six-weeks evil. (those are all real cases you can find in UK newspapers, mostly the Guardian)
aldoushuxley001 8y ago
No, that's an extraordinary leap to make. Private medicine still manages to provide diagnostic services in a much better way than governments.
- nailer 8y ago
  Could you both be correct? Yes, managing healthcare 'like a business' with an emphasis of profit over results produces bad outcomes for patients. But managing healthcare 'unlike a business' with no emphasis on results also produces bad outcomes for patients. Managing healthcare for the benefit of healthcare workers also produces bad outcomes for patients. Healthcare should be managed in terms of producing results. Metrics would be a good discussion, eg "good quality of life hours added to life" "hours in acute pain reduced" or similar. Point is, we need something to measure, the primary measurement shouldn't be profit.
ekianjo 8y ago
Why is that ok if a private actor can do it better and cheaper? Most cases for public services are not really based on any good justification. On the contrary accepting that they lose money from the get go will drive soviet style inflation of resources and bankruptcy in the long run. Its been tried.
- jmedwards 8y ago
  That hasn't happened in the United Kingdom with the NHS
- tonyarkles 8y ago
  https://en.wikipedia.org/wiki/List_of_countries_by_total_health_expenditure_per_capita https://en.wikipedia.org/wiki/List_of_countries_by_total_hea... Canadian here :). By that list, our per-capita healthcare costs are about half of what our neighbours to the south pay. I don't have it handy, but I've worked out the currency conversions and things before with various tax estimators, and in my province (Saskatchewan), we pay approximately the same overall income tax (Provincial + Federal) as someone making an equivalent salary in California (State + Federal). But included in that is all of our health care and some pharmaceutical coverage.
  - refurb 8y ago
    Did you include the HST? And gasoline taxes? And the ability to deduct mortgage interest and up to $18K in your 401k? My own person experience was that taxes were much lower in the US than Canada.
    - tonyarkles 8y ago
      No, no, and no, just straight up income tax before deductions. The mortgage interest deduction would be great, no doubt, for people with mortgages. I also didn't include the monthly health insurance premiums, nor did I include the mandatory 3-week vacation pay, nor the 35-week maternity/paternity leave, etc etc. Nor tuition costs. I'd really love to see the numbers all across the board as a general "cost of living comparison" for sure.
ianai 8y ago
What about a system that provides individuals with “medical endowments”? Ie in the event you’re diagnosed with a disease the government will pay out $x to cure you or $(x/720) per month for a management treatment. People would still have the ability to chose providers. But yes, I still think healthcare needs to be out of the market, ultimately.
aaavl2821 8y ago
If the US were to make all drug R&D a public service they'd have to basically increase the current NIH budget from ~$30B to probably $150B It may be nice in theory to have government manage drug R&D, but it is not practical. It's simply too expensive
- pjc50 8y ago
  .. or a fifth of the military budget. "It's not practical of the US to maintain the most expensive military in the world, it's simply too expensive" said nobody in Congress ever.
  - Clubber 8y ago
    Eisenhower's warning of the military-industrial complex is still very much valid, nearly 60 years later. Ike then counseled American citizens to be vigilant in monitoring the military-industrial complex. https://www.history.com/this-day-in-history/eisenhower-warns-of-military-industrial-complex https://www.history.com/this-day-in-history/eisenhower-warns...
    - arca_vorago 8y ago
      It is also worth noting that the original speech called it the military industrial congressional complex. Indeed very relevant.
  - aaavl2821 8y ago
    Thats a false comparison. It's like saying "people spend $1,000 on iPhones. Why wouldn't they spend $1,000 on a pizza?" Ability to pay and willingness to pay are very different concepts
    - magicalist 8y ago
      > Thats a false comparison. All your argument was that it's too expensive. Clearly it's not. If the manner in which the money is spent (or the feelings we'll have while sending it) is actually the limiting factor, you'll need to actually make that argument.
contravariant 8y ago
Well, it's not like you couldn't make money by inventing an ideal cure, you just can't do so sustainably, but for better or worse sustainability has never been a particularly high priority for businesses. I think patents make any kind of free market approach difficult if not impossible, but it's not as if there's no monetary incentive to invent the 'best' cure.
- worldsayshi 8y ago
  I think there's a lot of survivorship bias in play here. Whatever company that makes the most money will grow the most relative to others. The big companies will always be the most greedy one's but most companies may still have slightly different priorities. Companies that survive must be long term economically sustainable. Consequentially most companies that exist will likely prioritize economic sustainability because those are the one's that survive. However, it might still be that it makes sense to start and work with temporary companies that are not long term sustainable if they do fix a problem?
ddingus 8y ago
I think it's OK too, and see those things as investments. We all benefit from the higher availability of liquid dollars present in the majority of spenders. Demand backed by liquid dollars is a resource. Demand not backed is a cost. It's cheaper to live overall. People can take risks, etc... It's worth noting the Post Office does not operate on tax dollars. It's self funded, and could serve as a model for non profit public services. There are political reasons why the Post presents financial difficulty right now. They aren't rooted in any realities, just agendas seeking to marginalize it to favor for profit works. Normally, the Post does turn some profit, which can go into the general budget. That didn't really effect the overall benefit and value to people. This suggests we could do public works, non profit in the sense of some one or entity accumulating money somewhere, to pay down other debt, and do so in an equitable, low impact way. Public works can be broken down into two types: Infrastructure. These works provide new opportunity for everyone to benefit economically. The Interstate Highway Project, for example, returned many times it's initial investment. As a nation, those greater efficiencies allow us to compete better. All good, except when tolling them is discussed. That idea turns a clear benefit into a cost, and it hurts our ability to compete. The other type is services. This is the Post Office model. I often wonder how health care, basic banking, might be improved and actually pay us all nationally using the Post Office model.
apatters 8y ago
> So we agree medicine cannot be managed as a business, right? No, we don't all agree with this. In a well-regulated and competitive market, businesses can opine about their fantasy product and scheme about how to extract maximum revenue from their customers all day, but if they push the envelope too far, a competitor will emerge and undercut them or offer a better product. The issue is that the pharmaceutical industry isn't regulated in a manner that promotes competition. It's a heavily concentrated industry dominated by just a few multinational companies, most of which originated in the United States. Like a growing number of industries in the US and elsewhere it is regulated in a manner which preserves the dominance of a few powerful firms and creates barriers to entry for competitors. The behavior of these firms naturally shifts toward milking their customers as hard as they can because governments have granted them big moats. They pay the politicians, the politicians protect them, and we get another example of late stage capitalism, which isn't really capitalism at all. Many Americans seem to harbor a curious cognitive dissonance: they don't trust their government, but they believe that more regulation of these already heavily regulated industries, devised by the government they mistrust, will fix the problem.
pbreit 8y ago
Nah. This Goldman contention is far from proven. In general, the cure is going to be more attractive in the marketplace.
davemel37 8y ago
The problem here is not business interests its the IP protections that keep the pressure from being applied by the marketplace. I dont know enough to have an educated opinion on healthcare regulation or on social services...but its disengenuous to claim that medicine cant be managed as a business when its already so heavily regulated that it barely looks like a normal business. I would agree that the current model is super messed up...but maybe managing it like a business without all the government intervention and IP laws is the better solution here... maybe not...i dont know...but you definitely cant support your conclusion from the current environment.
- orbitingpluto 8y ago
  Great argument. Would you like to buy some ED medication I made by stuffing capsules with Drano? /s
  - davemel37 8y ago
    No ones talking about drug approvals...im talking about IP protections after its approved... do you have any idea how corrupt and regulated that side of the business is? Even generic drug prices are artificially manipulated by the original IP owners. The amount of monopolistic laws in pharma driven by lobbying, etc are ridiculous...

by brann0 8y ago

So we agree medicine cannot be managed as a business, right? It's ok if healthcare losses money, in fact it should be ok for all public sevices to operate and not being profitable.

dominotw 8y ago

How can we tell if the loss if from inefficiencies, corruption and laziness? Case in point: Air India.

pjc50 8y ago
You need different metrics for that. Nobody has to fly Air India, but people don't have a choice over getting sick.
PeterStuer 8y ago
I'd argue that collectively the 'market' system is incredibly inefficient. Corruption needs policing/regulation just like in the 'private' sector. I'm not sure what you mean by 'laziness' in this context. Could you elaborate?

ramblerman 8y ago

You are jumping from one extreme to the other. Creating a public institution with no pressure to make profit is a disaster waiting to happen. You can certainly keep a 'competitive' environment which is regulated with incentives. And I do agree healthcare needs this, and shouldn't live purely by the free market.

llukas 8y ago
DARPA...
psergeant 8y ago
> Creating a public institution with no pressure to make profit is a disaster waiting to happen. This is the model many rich country healthcare runs on, and provides measurably better outcomes for less expenditure than the US.
- spydum 8y ago
  I may be ignorant on this, but don't many of those countries benefit by the r&d funding happening in the US?
  - oblio 8y ago
    https://www.urmc.rochester.edu/news/story/4233/u.s.-slipping-as-global-leader-in-medical-research.aspx https://www.urmc.rochester.edu/news/story/4233/u.s.-slipping...
    - spydum 8y ago
      Interesting that funding only started to fall when the concept of Affordable Care act began to get traction? If I'm an investor, that sort of thing gives me cause for pause.
  - tscs37 8y ago
    R&D doesn't happen in non-profit government corporations either (atleast not largely). Most R&D comes from the manufacturers where the state (or relevant institution) buys the drugs from. However, in a single payer or similar systems, if a drug company decides to hike the price, the state (or institution) can swallow the cost and continue medical services to citizens until the situation is resolved (either by legislation or court cases). Since the state (or institution) is not a for-profit it doesn't matter as much if they sink a lot of cost as long as everyone can get their medical treatment.
    - Can_Not 8y ago
      Another thing is that people want to measure success in profit or less taxes paid. A proper healthcare system should have it's success measured in how many citizens are able to be productive because they're not chained down with accommodatable disabilities, curable chronic illnesses, and extreme medical debts.
    - Slansitartop 8y ago
      > R&D doesn't happen in non-profit government corporations either (atleast not largely). Most R&D comes from the manufacturers where the state (or relevant institution) buys the drugs from. IIRC, the research typically comes from state-funded academics, and the development comes from the manufacturers.
toomuchtodo 8y ago
You can have a competitive environment without a profit motive. You judge on results, not profitability.
- codehandle 8y ago
  This. Bothered to login to say what you said. We talk about AI optimized to create paper clips accidentally running amok and turning the world into paper clips. Why isn't profit a similar problem? Government agencies are just AI running on meat. Give them success parameters different than raw profits. Honestly, why can't we see this as just a variant of the instrumental convergence problem?
- mar77i 8y ago
  ↑ ... instrumental convergence problem sounds sexy! drool
- chestervonwinch 8y ago
  OTOH, academia is supposed to be this type of meritocratic, results-driven ideal, and look where we are there. I suppose this a consequence of the measure that we use to "judge results". Do we start assigning healthcare R&D companies an "impact factor"? I know the journal impact factor is a bad example since it is criticized for being gameable, but I'm just using it to convey what I mean.
collyw 8y ago
Europe proves you wrong.
DomreiRoam 8y ago
"Creating a public institution with no pressure to make profit is a disaster waiting to happen." Do you really think that we should ask the army to be profit oriented? What about the coast guard, Justice, Child protection service? Imagine all of this public institution comming to your house and start the conversation with "You have a nice family, it would be a shame if ..." To expect results or effects is not the same as making profits.
fsloth 8y ago
"Creating a public institution with no pressure to make profit is a disaster waiting to happen." Why? Schools are not for-profit institutions (well, not everywhere). Police don't make a profit. Nor does the fire brigade. Or the military, for that matter. Are all of these disasters waiting to happen?
- ekianjo 8y ago
  You have never heard of private military companies? They are extensively used byvthe US mostly for non combat situations. They are very effective, for profit, and much less costly than the regular army.
  - fsloth 8y ago
    That a private company works better at some locations does not imply logically that a public institution is a disaster waiting to happen, which was the original claim. Let's make it a bit more ridiculous and extreme. Would it be a good idea to privatize US nukes? What would profit incentive provide there? Remember, we are discussing the claim "creating public institutions without a profit incentive is a disaster waiting to happen".
  - pjc50 8y ago
    These guys? https://www.amnestyusa.org/themes/military-police-arms/private-military-security-companies/ https://www.amnestyusa.org/themes/military-police-arms/priva...
  - Slansitartop 8y ago
    > private military companies...are very effective, for profit, and much less costly than the regular army. [citation needed] My understanding is that they are more expensive than uniformed soldiers.
- fjsolwmv 8y ago
  Your examples are all local government with local accountability to a small group of local voters. At nation-scale the story is different
rectang 8y ago
It's refreshing to see skepticism of both market-based and government-based solutions. Too often I feel like I am being presented with arguments which require either blind faith in the "invisible hand" or denial that inefficiency increases in the absence of competition. > You can certainly keep a 'competitive' environment which is regulated with incentives. This is my preferred approach as well. It's worst weakness is the potential for regulatory capture. I tend to believe that should be addressed by not giving corporations as much power as they currently enjoy in the US: enforcing constraints on participation in politics and requiring transparency, disconnecting health insurance from employment status, enabling clawback of executive bonuses, etc.
- nomorenomore 8y ago
  > It's refreshing to see skepticism of both market-based and government-based solutions. This in my opinion is a false dichotomy. The government can be owned/operated by coorporations or by the people or can be an entity in itself. What I feel is missed by people leaning towards the idea of competition is that it is not a sustainable model under the current framework of ideas. If you optimise a society purely based on profitability, competition is the enemy, since it hinders individual businesses from maximising their profits. Hence the massive business consolidation we have seen in the last decade across the globe. If you want competition because you want different ideas to be tested, then we need to explain what we want entities to compete for. Focusing on optimising one variable only, i.e. profit, will not work. We need new ideas.
GiorgioG 8y ago
> Creating a public institution with no pressure to make profit is a disaster waiting to happen. We seem to have no problem with throwing $700 billion per year on the military and nobody is pressuring them to make a profit. Is that a disaster? No? "But that's different!" It's only "different" because that's what we've been led to believe.
- rectang 8y ago
  The US military is spectacularly inefficient, and the US military-industrial complex is a parasitical behemoth per Eisenhower's critique. It's not like the problem is unknown; the issue is that the state has to have a monopoly on violence, so we live with the inefficiency. Encouraging a marketplace of competing militia would not a viable approach. :)
  - GiorgioG 8y ago
    > The issue is that the state has to have a monopoly on violence A monopoly on violence in what context? The planet? That doesn't seem to be necessary for most countries. Within the country itself? That's the job of local law enforcement.
    - rectang 8y ago
      "Monopoly on violence" is a term with a lot of history. I'm using it in the same sense as Max Weber, where the state is defined as the "human community that (successfully) claims the monopoly of the legitimate use of violence within a given territory." https://en.wikipedia.org/wiki/Monopoly_on_violence#Max_Weber's_theory https://en.wikipedia.org/wiki/Monopoly_on_violence#Max_Weber... All the critiques on this thread about competing authorities such as local law enforcement, the second amendment, and so on, none of them invalidate the idea of legitimate use of force defining the state. Weber accounts for all those points. The closest thing we have to an actual marketplace among authorities wielding violence is the competition between jurisdictions (one municipal police department against the one the next town over, the state police in one US state vs another US state) -- but that's not the same as a commercial marketplace. The only critique I think is relevant is the idea of mercenaries, a.k.a. private military contractors. But there again, those mercenaries are part of the military-industrial complex, which is an extremely stunted marketplace as it's largely a government monopsony. We don't use economic competition to determine who holds authority on the legitimate use of violence. As a consequence, we don't get the full benefit of marketplace competition in maximizing the efficiency of our armed forces -- but we also don't have perpetual civil war.
ddingus 8y ago
Use the Post Office model. When profitable, it contributes to the general fund. See my other comment here. Political hobbling and fuckery related to post office operations done to marginalize otherwise exemplary performance aside, the model has merit.
- fjsolwmv 8y ago
  The post office has a govenrment-granted monopoly on first class mail service, and does pretty poorly when it competes for non-first-class mail logistics.
  - ddingus 8y ago
    A necessary monopoly. Without it, service would not be universal.
andrepd 8y ago
>Creating a public institution with no pressure to make profit is a disaster waiting to happen. Aren't most public institutions non-profits? Don't many of these work well? What makes you think that a (truly) democratically run enterprise wouldn't satisfy the needs of its constituents?

TeMPOraL 8y ago

I think it's totally ok, and it should be accepted. Public services are meant to be cost centers. If they bring in profits, they do so indirectly (e.g. better health of citizens -> better GDP -> more money in taxes). The trick is to still find ways to apply pressure so that a service gets better and more efficient in time, instead of attracting parasites that'll use it as money drain. Like a lot of healthcare-related businesses seem to do (heard plenty of horror stories from someone I know who's studying medicine and interned at hospitals, and we're talking about a country with public healthcare).

PeterStuer 8y ago
"parasites that'll use it as money drain" sounds remarkably like shareholders.
- rocqua 8y ago
  The difference is that shareholders lose something (the value of their shares) when they drain a company of its assets. This might still be short-sighted, but there is at least a balancing force. In public services, where making a loss is o.k. this is just included in the loss, and there is essentially nothing that encourages the 'parasite' to not drain the system.
  - FranzFerdiNaN 8y ago
    Well, even that no longer seems to be assured. Plenty of ways to strip a company and make a profit in the short term, destroying the company in the long term.
    - ModernMech 8y ago
      E.g. Toys R Us. It was bought then saddled with debt by the new investors, and is now dead.
  - Slansitartop 8y ago
    > The difference is that shareholders lose something (the value of their shares) when they drain a company of its assets. Not if they sell before the shit hits the fan.

pygy_ 8y ago

There's a huge mismatch between the interest of the investors (sell as much drugs as possible, for the highest possible price) and those of the consumers (be healthy without depending on external input). The pharma industry should be working hard on planning its own obsolescence. The same dynamic is at work in the food industry, which is responsible for the obesity epidemics. Capitalism as it is practiced right now has catastrophic flaws. We need to change the rules of the game, yes, and not necessarily seek profit and growth at all costs.

cies 8y ago
> The pharma industry should be working hard on planning its own obsolescence. In an ideal word. But as you show in your mismatch "serving shareholder value" is prohibitive to this. So having then as (blue chip) for profit bizes is making sure they will NOT ever be planning they own obsolescence. > The same dynamic is at work in the food industry, which is responsible for the obesity epidemics. ...and high amount of pesticide residues, and destruction of the ecosystems, and heavy pollution on surface waters, and extreme disdain for animal wellbeing, and... (cries) > Capitalism as it is practiced right now has catastrophic flaws. We need to change the rules of the game, yes, and not necessarily seek profit and growth at all costs. To my understanding it should never be the economic model "to govern all markets", but AN economic model allowed in some markets while carefully bounded by rules and ensuring (1) best outcomes for we the people and (2) a leveled playing field.
- pygy_ 8y ago
  The earth is like an apple pie Let's eat it and let's die Do you want some more? It's delicious... Grow theee... Grow theee... Grow the economy! More at https://news.ycombinator.com/item?id=16671373 https://news.ycombinator.com/item?id=16671373 and https://news.ycombinator.com/item?id=16718258 https://news.ycombinator.com/item?id=16718258

TomK32 8y ago

They are profitable on the bigger scale of a national economy. Sadly no one give a damn about that these days. In Germany we have the studies Betriebswirtschaft (business) and Volkswirtschaft (national economy) and the latter is loosing vital ground in politics. It gets worse if you look to the UK where a of lot public services are handed to companies, for example the merger of all social benefits Universal Credit is run by companies and in a manner that can only be called unprofessional and anti-social.

pjc50 8y ago
"Universal Credit" is a horrendous scheme that manages to combine (malicious) ignorance of the needs of its beneficiaries with ignorance of how to run a large software project. The idea sounds great on paper - there are a lot of different benefits, why not reduce duplication by merging them into one scheme then only asking for personal information once - but it ignores cashflow. People can be left without money to live on for weeks. It's also a classic "big bang" project which just piles the requirements of existing systems together, and hands them to one of the traditional government crony contractors: Accenture, HP and IBM. At least it didn't involve Serco.
- coldacid 8y ago
  Sounds like the Phoenix payroll project here in Canada, except for social services. There is no way this will end well, and I wouldn't be surprised if it leads (indirectly) to the death of clients.
  - TomK32 8y ago
    Oh Phoenix is just a incomplete system rolled out too early. Universial Credit is pure evil. The person-gets-benefits-cut-for-having-heart-attack-at-appointment evil. The months-deceased-claimant-gets-invited-for-appointment evil. The benefit-cut-because-assessor-didn't-show-up-for-house-visit evil. The no-benefit-payouts-in-the-first-six-weeks evil. (those are all real cases you can find in UK newspapers, mostly the Guardian)

aldoushuxley001 8y ago

No, that's an extraordinary leap to make. Private medicine still manages to provide diagnostic services in a much better way than governments.

nailer 8y ago
Could you both be correct? Yes, managing healthcare 'like a business' with an emphasis of profit over results produces bad outcomes for patients. But managing healthcare 'unlike a business' with no emphasis on results also produces bad outcomes for patients. Managing healthcare for the benefit of healthcare workers also produces bad outcomes for patients. Healthcare should be managed in terms of producing results. Metrics would be a good discussion, eg "good quality of life hours added to life" "hours in acute pain reduced" or similar. Point is, we need something to measure, the primary measurement shouldn't be profit.

ekianjo 8y ago

Why is that ok if a private actor can do it better and cheaper? Most cases for public services are not really based on any good justification. On the contrary accepting that they lose money from the get go will drive soviet style inflation of resources and bankruptcy in the long run. Its been tried.

jmedwards 8y ago
That hasn't happened in the United Kingdom with the NHS
tonyarkles 8y ago
https://en.wikipedia.org/wiki/List_of_countries_by_total_health_expenditure_per_capita https://en.wikipedia.org/wiki/List_of_countries_by_total_hea... Canadian here :). By that list, our per-capita healthcare costs are about half of what our neighbours to the south pay. I don't have it handy, but I've worked out the currency conversions and things before with various tax estimators, and in my province (Saskatchewan), we pay approximately the same overall income tax (Provincial + Federal) as someone making an equivalent salary in California (State + Federal). But included in that is all of our health care and some pharmaceutical coverage.
- refurb 8y ago
  Did you include the HST? And gasoline taxes? And the ability to deduct mortgage interest and up to $18K in your 401k? My own person experience was that taxes were much lower in the US than Canada.
  - tonyarkles 8y ago
    No, no, and no, just straight up income tax before deductions. The mortgage interest deduction would be great, no doubt, for people with mortgages. I also didn't include the monthly health insurance premiums, nor did I include the mandatory 3-week vacation pay, nor the 35-week maternity/paternity leave, etc etc. Nor tuition costs. I'd really love to see the numbers all across the board as a general "cost of living comparison" for sure.

ianai 8y ago

What about a system that provides individuals with “medical endowments”? Ie in the event you’re diagnosed with a disease the government will pay out $x to cure you or $(x/720) per month for a management treatment. People would still have the ability to chose providers. But yes, I still think healthcare needs to be out of the market, ultimately.

aaavl2821 8y ago

If the US were to make all drug R&D a public service they'd have to basically increase the current NIH budget from ~$30B to probably $150B It may be nice in theory to have government manage drug R&D, but it is not practical. It's simply too expensive

pjc50 8y ago
.. or a fifth of the military budget. "It's not practical of the US to maintain the most expensive military in the world, it's simply too expensive" said nobody in Congress ever.
- Clubber 8y ago
  Eisenhower's warning of the military-industrial complex is still very much valid, nearly 60 years later. Ike then counseled American citizens to be vigilant in monitoring the military-industrial complex. https://www.history.com/this-day-in-history/eisenhower-warns-of-military-industrial-complex https://www.history.com/this-day-in-history/eisenhower-warns...
  - arca_vorago 8y ago
    It is also worth noting that the original speech called it the military industrial congressional complex. Indeed very relevant.
- aaavl2821 8y ago
  Thats a false comparison. It's like saying "people spend $1,000 on iPhones. Why wouldn't they spend $1,000 on a pizza?" Ability to pay and willingness to pay are very different concepts
  - magicalist 8y ago
    > Thats a false comparison. All your argument was that it's too expensive. Clearly it's not. If the manner in which the money is spent (or the feelings we'll have while sending it) is actually the limiting factor, you'll need to actually make that argument.

contravariant 8y ago

Well, it's not like you couldn't make money by inventing an ideal cure, you just can't do so sustainably, but for better or worse sustainability has never been a particularly high priority for businesses. I think patents make any kind of free market approach difficult if not impossible, but it's not as if there's no monetary incentive to invent the 'best' cure.

worldsayshi 8y ago
I think there's a lot of survivorship bias in play here. Whatever company that makes the most money will grow the most relative to others. The big companies will always be the most greedy one's but most companies may still have slightly different priorities. Companies that survive must be long term economically sustainable. Consequentially most companies that exist will likely prioritize economic sustainability because those are the one's that survive. However, it might still be that it makes sense to start and work with temporary companies that are not long term sustainable if they do fix a problem?

ddingus 8y ago

I think it's OK too, and see those things as investments. We all benefit from the higher availability of liquid dollars present in the majority of spenders. Demand backed by liquid dollars is a resource. Demand not backed is a cost. It's cheaper to live overall. People can take risks, etc... It's worth noting the Post Office does not operate on tax dollars. It's self funded, and could serve as a model for non profit public services. There are political reasons why the Post presents financial difficulty right now. They aren't rooted in any realities, just agendas seeking to marginalize it to favor for profit works. Normally, the Post does turn some profit, which can go into the general budget. That didn't really effect the overall benefit and value to people. This suggests we could do public works, non profit in the sense of some one or entity accumulating money somewhere, to pay down other debt, and do so in an equitable, low impact way. Public works can be broken down into two types: Infrastructure. These works provide new opportunity for everyone to benefit economically. The Interstate Highway Project, for example, returned many times it's initial investment. As a nation, those greater efficiencies allow us to compete better. All good, except when tolling them is discussed. That idea turns a clear benefit into a cost, and it hurts our ability to compete. The other type is services. This is the Post Office model. I often wonder how health care, basic banking, might be improved and actually pay us all nationally using the Post Office model.

apatters 8y ago

> So we agree medicine cannot be managed as a business, right? No, we don't all agree with this. In a well-regulated and competitive market, businesses can opine about their fantasy product and scheme about how to extract maximum revenue from their customers all day, but if they push the envelope too far, a competitor will emerge and undercut them or offer a better product. The issue is that the pharmaceutical industry isn't regulated in a manner that promotes competition. It's a heavily concentrated industry dominated by just a few multinational companies, most of which originated in the United States. Like a growing number of industries in the US and elsewhere it is regulated in a manner which preserves the dominance of a few powerful firms and creates barriers to entry for competitors. The behavior of these firms naturally shifts toward milking their customers as hard as they can because governments have granted them big moats. They pay the politicians, the politicians protect them, and we get another example of late stage capitalism, which isn't really capitalism at all. Many Americans seem to harbor a curious cognitive dissonance: they don't trust their government, but they believe that more regulation of these already heavily regulated industries, devised by the government they mistrust, will fix the problem.

pbreit 8y ago

Nah. This Goldman contention is far from proven. In general, the cure is going to be more attractive in the marketplace.

davemel37 8y ago

The problem here is not business interests its the IP protections that keep the pressure from being applied by the marketplace. I dont know enough to have an educated opinion on healthcare regulation or on social services...but its disengenuous to claim that medicine cant be managed as a business when its already so heavily regulated that it barely looks like a normal business. I would agree that the current model is super messed up...but maybe managing it like a business without all the government intervention and IP laws is the better solution here... maybe not...i dont know...but you definitely cant support your conclusion from the current environment.

orbitingpluto 8y ago
Great argument. Would you like to buy some ED medication I made by stuffing capsules with Drano? /s
- davemel37 8y ago
  No ones talking about drug approvals...im talking about IP protections after its approved... do you have any idea how corrupt and regulated that side of the business is? Even generic drug prices are artificially manipulated by the original IP owners. The amount of monopolistic laws in pharma driven by lobbying, etc are ridiculous...