Comment by jernfrost | Hacker News Reader

Comment by jernfrost | Hacker News Reader

Reading the denials of these people about the problem reminds me of the emperors new clothes. They don’t see what is plain to see for anyone with half an open mind.

This insane growth of bureaucrats is particular to the US health care system. While it grows in socialized medicine as well it does not do so at the same insane rate.

This is what the free market fundamentalists wont accept: that their precious private enterprise is often terribly bloated and inefficient.

I live in a country with socialized medicine and I’ve lived in others with universal health care. The most free market oriented I’ve experienced was the American one and it was by far the most bureaucratic.

In software development terminology I think it is easy to describe the issue. You got several components you want to talk to each other. In software engineering that means some central group of people create common interfaces for the components to speak to each other.

That is essentially the function of government. It is what creates the common interfaces. Except in the US this doesn’t happen because somebody is going to scream “socialism” from the top of his lunges.

Instead every component speak to every other one in a clunky manner. Through faxes, paper forms, which are never standarized.

That is what I notice most about the US. There are so often no standards for anything. People just wait for the magic of the market to create one, except that never happens and you end up with half a dozen competing and incompatible standards.

The bureaucracy is the equivalent to all the insane amount of glue code you got to write when nobody has agreed upon standard interfaces.

I present to you as a counter-argument the British private healthcare system - BUPA, Spire and friends. Prices are sane, administration is not excessive, and quality is much higher than NHS care.

My suspicion about the US healthcare system is that the governments interventions in hyper-regulating the various players and introducing partial single-payer systems like medicaid/medicare, complicating the whole system and driving a need for administrators to sort out the whole incompatible mess. The free market averts this outcome because there are no mandatory systems - players can negotiate to reduce their own burdens, where regulation is not something that can be negotiated to a point of sanity. Or in other words, it's the integrated team running a 3 amigos session versus the ivory tower architect handing down mandates.

> This is what the free market fundamentalists wont accept: that their precious private enterprise is often terribly bloated and inefficient.

> The most free market oriented I’ve experienced was the American one and it was by far the most bureaucratic.

Private enterprise? Free market? You seem to either misunderstand these terms or make incorrect assumptions about the workings of healthcare in the United States.

A necessary component of any free market is open price signals which communicate information to all parties of a transaction, before the transaction takes place (e.g. a forest fire reduces the supply of trees; lumber companies charge paper companies more; the price of paper goes up in turn; I buy less paper because it is more expensive, and no regulatory czar needed to adjust his schemes and standards in light of the forest fire for me to know to buy less paper... I didn't even need to know about the fire to have actionable information about its consequences). Prices communicate more information with greater efficiency than is possible with central planning because they communicate information without an administrative overhead.

But the US 'market' for healthcare deliberately obscures price signals for the actual goods and services involved in each transaction. How many Americans know, upon receiving a prescription, what the listed medicine will cost? How many know the costs of each medical test recommended by a doctor? This opaqueness is a result of rent seeking by some parties to the transactions. (How many know about the kickbacks their doctors receive from pharmaceutical companies for recommending medicines and tests?) Yes, these rent seeking parties are usually corporations of one kind or other, but their business is so intertwined with and dependent upon the state, its powers, and its whims that these corporations cannot reasonably be called 'private enterprises' anymore, if they ever could have been.

The US market for healthcare is not a free market.

It is a highly regulated (as in controlled) and opaque market with no downward pressure on price from consumers because no price is visible until after the transaction is complete. That state of affairs is plainly absurd (and not at all apparent) to anyone not from the US. But it's also not a free market, either as casually or formally understood.

> That is essentially the function of government. It is what creates the common interfaces.

Disagree strongly here. People create common interfaces because they are useful, then the government codifies and calcifies those interfaces and standards (which does have some utility on a case-by-case basis). PDF is not a government-created standard. Though international and governmental bodies have standardized it after the fact, it was created by a private company and even before the format's standardization you could view a PDF on just about any computer. Linux was not created by the conscious effort of any state, but it runs on myriad hardware and is used by the majority of web servers. Even POSIX and other engineering and scientific standards are usually agreed upon by private (as in non-governmental) professional associations before the state becomes actively involved, if it does so at all.

The function of government is to institutionalize the use of force in society, recognizing that force of some kind will always exist and it should be limited in some way (unless you disagree with the latter two propositions, in which case you might be a philosophical anarchist).

> That is what I notice most about the US. There are so often no standards for anything. People just wait for the magic of the market to create one, except that never happens and you end up with half a dozen competing and incompatible standards.

Can you give examples?

I grew up in America, have lived elsewhere, and 'no standards for anything' isn't part of my experience, either as an American or in comparison to other places I have lived. I would argue that maybe Americans don't wait for the magic of the state to create standards, and set about the business of creating standards and doing work for themselves. Sure, you sometimes have competing standards, but I don't see how that's a problem. A better, more robust, more useful standard is likelier emerge from that competition in-the-field than it is to emerge from the diktats and musings of bureaucrats in-their-towers.

I said MOST free market. I never claimed it operated under ideal conditions. The fact is still though that most other health care systems in the west are considerably LESS market oriented than the US.

A more free market oriented approach than today would just make the US system even worse. Health care is not a natural market. There is too much information asymetry, and wrong incentives at play.

As for standards, you seem to have a rather naive idea of how government makes standards. Usually it will heavily involve industry. It is not like government just dreams up arbitrary shit.

As for example of lack of standards. I remember when living in the US having to deal with 4 different incompatible cell phone standards. I remeber arguing with an American on how it was better to standarize on GSM. He made your point that the market would eventually produce a much better standard than GSM. Except by the time the US market got anywhere we were already moving over to 3G. Sorting stuff out in the market is often simply way too time consuming when technology moves at the current pace.

Anything with banking and finance in the US seems to sorely lacking standards. But I am sure things must have improved since I lived there 15 years ago. Then there was no standard for electronic bills, sending payment to other bank accounts electronically, simple stuff like the formatting/layout of a paper bill.

> As for standards, you seem to have a rather naive idea of how government makes standards. Usually it will heavily involve industry. It is not like government just dreams up arbitrary shit.

I'm not sure how you draw 'naive idea of how government makes standards' from my post. I specifically point out that the government mostly does not make standards... Non-governmental industry/professional organizations agree on standards and then the government (maybe, and sometimes usefully) adopts them. Often, the (admittedly bureaucratic) teams of professionals establishing standards by committee within these non-governmental organizations are merely formalizing and documenting work already done by individuals and companies. My point is that the state is not a creative (driving) force. It follows after the people who know what they are doing... if it is working well and if it needs to participate in a standardization process at all (usually as it relates to commerce). Maybe that is all naive, but your quoted sentence above is not engaging with what I wrote.

GSM/CDMA were competing standards, and their coexistence was largely an artifact of Sprint & Verizon-forerunners switching to digital systems at a time when CDMA was a newer and (debatably) better technology. Let me point out that the standardization process was corporate-led, government-following as I have described: 3GPP (created GSM) was an old AT&T/Nortel partnership which European public/private-ish telecoms eventually joined, and which governments later legislated into force as you describe.

I'll agree that American banks have (and still do) drag their feet about adopting new digital standards, though what you describe (moving money between accounts) hasn't been a problem in my adult lifetime.

I'm not sure why government needs to actively legislate the layout or formatting of a paper bill/invoice. In a common law system, a bill is just some (among other) evidence of a transaction/contract in the event of a dispute. Fraudulent bills are already against the law, and what constitutes fraud (including deceptive/hostile formatting) is extensively defined by common and case law (precedent). Bills over a certain amount (I think $500 or $600) require standardized accompanying IRS forms (further evidence of the contract/transaction). The standards are there, but maybe not recognizable to someone coming from a civil/Napoleonic law system, which is most of the not-formerly-British world, and where such things would need to be legislated in extensive detail.

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