Public-Option Newspapers, Anyone?

by Don Boudreaux on August 21, 2009

in Health

Here’s a letter that I sent today to the New York Times:

Paul Krugman alleges that a “public-option” health-insurance plan “would introduce more competition and keep premiums down” (“Obama’s Trust Problem,” August 21).

If Mr. Krugman is correct, he should also endorse a “public-option” newspaper – say, the “New York Times Two.”  Such a publication, according to Mr. Krugman’s reasoning, would introduce more competition into the newspaper business and keep advertising and subscription rates down.

Of course, Mr. Krugman might object that government cannot be trusted with a task so important as newspaper reporting and opinionating; he might legitimately worry that newspapers would become infected with the virus of politics.  But if so, why is he so confident that a “public option” health insurer would not further infect health-care markets with the virus of politics?

Donald J. Boudreaux

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David August 21, 2009 at 12:48 pm

Aaaaaaahahaha Paul,

“One purpose of the public option is to save money. Experience with Medicare suggests that a government-run plan would have lower costs than private insurers.”

How does an insurance plan save money dummy??? Sorry Mr. Jones, you’re over 60, its your time, we can’t pay for your prostate to be removed.

What a dunce.

Methinks August 21, 2009 at 1:47 pm

Medicare doesn’t have lower costs. It spends less than the true cost of treatments. It underpays doctors for procedures. The doctors then charge private patients more. Thus, medicare patients are subsidized not only by the flat tax we pay for it, but also by non-medicare, non-medicaid patients.

When people have the option to stop paying the subsidy and start receiving the subsidy (the house bill’s “public option” is simply an expansion of medicaid), guess what will happen? A rational person would always prefer to receive a subsidy than pay for it and doctors will find it increasingly harder to cover costs – especially in light of zero tort reform of any kind. The implications for supply are obvious. And what happens when demand rises relative to supply in the presence of price caps? Why, shortages.

But, according to Krugman and the Obamessiah, these are all vicious LIES. We’re not going to have rationing and we’re going to have lots and lots of competition with the entrant of this one itsy-bitsy “public option” into a market which already has 1,300 competitors.

The Nobel committee is stooping lower and lower.

Anonymous August 22, 2009 at 4:42 pm

Some obamunists will, practically in the same breath, complain about Medicare waste/fraud/abuse, AND praise its low overhead costs.

Anonymous August 21, 2009 at 1:53 pm

That’s exactly how.

And when private insurers need to save money, that’s how they do it too.

Marcus August 21, 2009 at 12:56 pm

Don’t be giving them ideas!

Anonymous August 21, 2009 at 1:14 pm

Public option news (NPR/ CPB) IMO is far superior to private commercial news so yeah it might work. Or at least maybe we should further break up the media monopolies that exist. When I grew up every town had 2 newspapers. One that represented business and one the represented labor for the most part and then we had a more informed public as is needed to properly run a democratic society.

Anonymous August 21, 2009 at 1:33 pm

So, first you’re in favor of GW Bush, or Reagan, or Nixon running the news. Then you go on to tell a story of how 2 private newspapers did the job just fine.

The Other Eric August 21, 2009 at 4:23 pm

Geoih, you are amazingly dense. The ‘public option’ of a state-run newspaper (and there would be only one for maximum ‘savings’) is an analogy illustrating why IT’S A BAD IDEA. Don foolishly did not title his example correctly– it would be called “Truth” in English.

It’s one thing to mindlessly hate people of an opposing political party G, it’s quite another to miss the point this post. Take a breath. Think before typing.

Anonymous August 21, 2009 at 6:06 pm

I think you need to reread it. He said “Public option news (NPR/ CPB) IMO is far superior to private commercial news so yeah it might work.” Then he said “When I grew up every town had 2 newspapers.” and “… and then we had a more informed public …”

I don’t know what your point is, other than you like calling people names.

Anonymous August 21, 2009 at 2:14 pm

NPR only gets something like one or 2 percent of it’s funding from the government now, doesn’t it? That’s a testament to the idea that publicly supported media isn’t doomsday – and that it’s quite possible to be weaned off government support over time. PBS is lower too now than it used to be – but I understand it still has more public support than NPR.

Practically speaking, who do we really think the government has more editorial influence over – PBS or MSNBC (now), or Fox (a couple years ago). PBS is no Russian Channel One… let’s be clear about that.

And to be clear before people read more into what I write than what I actually wrote… I’m quite a fan of private media. I don’t want more public media!!!!

The Other Eric August 21, 2009 at 4:46 pm

No Dan. That’s incorrect and beside the point. The writers of the Articles of Confederation and the Constitution never intended public funding of newspapers- the media of the day. They wanted freedom of choice without pressure from the state (in religion too). The analogy to the state “option” for a private enterprise- in this case a Pravda for the republic- should illustrate how bad the idea is, but apparently that’s uncomfortable.

So, as you put it, practically speaking: PBS gets the majority of their operating funds from taxes in the form of federal and state grants and other payments. Programming money for NPR, PBS stations, and it’s other operations also comes from several federal and state sources and also different private foundations you see or hear before each program.

From AP: “PBS chief Paula Kerger says budget numbers tell the tale of how public TV is faring under the Obama administration, compared to that of former President George W. Bush.

Kerger said that the Corporation for Public Broadcasting’s $430 million budget for this year was left intact by President Barack Obama, in contrast to the Bush administration’s repeated bids to reduce or eliminate the federal subsidy. Kerger says Congress countered Bush’s actions.” — and that’s just PBS TV.

Anonymous August 21, 2009 at 4:52 pm

Right – didn’t I say that NPR gets barely any of it’s money through federal funding (and what it does get it gets through CPB), and that PBS gets a lot more (although most public funding for PBS is from states and localities… which the Constitution does not speak to).

You misunderstand me completely if you think I was advocating federal newspapers, federal radio, or federal TV. I was merely pointing out that it wasn’t that scary, that they’re retreating from federal funding, that we probably don’t need them at all, and that it’s not something that really worries me. There are bigger fish to fry.

sandre August 21, 2009 at 7:03 pm

Why are you bringing the constitution in to the mix. Government is allowed to do nearly anything it wants under the guise of general welfare.

Anonymous August 21, 2009 at 11:49 pm

The problem as I see it, Daniel, is you make it too easy for us to misunderstand you. It seems you take both sides of virtually every issue on this board. Someone comes along to counter one side of your argument, and you respond by claiming to be misunderstood, because you also spoke highly on the other side of the argument! I don’t mean to be ad hominem, but am trying to offer some constructive advice. Have you noticed how so many of your comments precipitate long, laborious arguments, one response after another? I know from previous comments that you are very young. It is obvious to all of us that you are also very intelligent. Sometimes it appears you are trying too hard to show all of us how intelligent you are, which is a sign of youth. Again I don’t mean to be insulting, I’m just offering some friendly advice from an old guy (who admits he isn’t nearly as intelligent as you!).

Anonymous August 21, 2009 at 1:39 pm

Excellent post.

Although I doubt it, perhaps this public option could work, kind of like the post office. There is one relatively effective (albiet relatively over-priced) and “equal” government monopoly on majority of mail delivery, but decent competition for when something really important needs to get shipped.

Let us hope the same sort of thing would work for health care. I do not think it will. I would have rather tried McCain’s plan first, or let more states try different approaches before gambling with something at the national level.

Methinks August 21, 2009 at 2:03 pm

Billford, the house bill prevents hospitals from expanding and new private clinics opening without government permission. So, at first, you’ll be able to just pay out of pocket for anything “important” – like skipping the 9 month wait for chemotherapy.

Over time, as more people choose the public option, fewer independent medical facilities will be able to remain open. Doctors, who already limit the number of medicare & medicaid patients they see, will have long wait lists for their “public option” patients as they compete for the ever decreasing number of private payers. How politically popular do you suppose that will be. The next step for politicians will be to impose some system to end the priority for private paying patients. They will still pay the subsidy for the much larger “public option” crowd, but they will still be herded onto wait lists. At that point, it won’t be worth it to stay on the private option and Voila! Single payer. Under pressure, politicians will seek to end the “unfair” practice of allowing patients to pay for procedures out of pocket just because they can, thus “diverting” resources from those on the government plan.

Anonymous August 21, 2009 at 2:22 pm

Billford – make sure you read page 317 and 318 of the bill (the pages that methinks references whenever he makes this claim).

The restrictions are only on physician owned rural clinics that want to opt out of the restrictions on self-referals in those clinics. The concern (merited or not) is that if you’re a physician that can refer patients and you own the only clinic in a rural area and you tell a patient they need all sorts of tests but that they can only come back to you for them, you’re going to take advantage of the patient and overperscribe additional tests to feed your own business.

Maybe it IS a bad restriction… but it’s a far cry from methinks’s claim that it “prevent hospitals from expanding and new private clinics opening without government permission”.

Not that I’ve read the whole bill… maybe it’s somewhere else in there. But I asked methinks for a reference and he pointed me to those pages. They fall far short of what he’s claiming, and he hasn’t been able to provide me with any additional references when I asked for them after being disappointed with what I found on page 317 and 318.

A lot of opposition out there counts on people not actually reading the bill (as does, I should add, a lot of the proponents of the bill). And I suspect methinks is a victim of this as much as a propogator of it.

I have EXACTLY the same perspective as you on how we should do this billford. McCain’s tax privelege approach is where we should start… as well as a few ideas from Mackey’s list – more predictable stuff like that. And it’s great to see Massachusetts and Minnesota and places like that experiment. Let’s see what works and doesn’t work from there before jumping into anything big (one big sign from Massachusetts in my mind – mandates are terrible for cost control… then again, that should have been obvious from the start).

Methinks August 21, 2009 at 3:52 pm

The restrictions are only on physician owned rural clinics that want to opt out of the restrictions on self-referals in those clinics.

Okay, Danny. The devil, as always, is in the details. Give me the legal definition of “rural” as it pertains to this rule.

Further, if you are in a truly rural community, not as arbitrarily defined by law but as we commonly understand a “rural” community where there are few clinics and yours may very well the the only one, then to what other clinic can you refer your patients without forcing them to drive 100 miles out of their way?

Ah, but you’ll have to drop out of self-referral, so that you have the option to expand your facility. But what’s the point? To gain that right, you have to force your sick patients to drive all day to another clinic anyway. So, it’s a catch 22 and facilities cannot be expanded merely because the government says so.

The concern (merited or not) is that if you’re a physician that can refer patients and you own the only clinic in a rural area and you tell a patient they need all sorts of tests but that they can only come back to you for them, you’re going to take advantage of the patient and overperscribe additional tests to feed your own business.

That would be a concern if that’s how referrals work. It isn’t. A doctor can refer a patient to A specialist, but he can’t specify WHICH specialist. Under CURRENT LAW, the referring doctor cannot force a patient to see any particular physician.

Maybe it IS a bad restriction… but it’s a far cry from methinks’s claim that it “prevent hospitals from expanding and new private clinics opening without government permission”.

That’s because you obviously didn’t read the bill. The prohibition on hospital expansion WITHOUT GOVERNMENT PERMISSION refers to ALL hospitals. To make the decision about allowing facilities to expand, community input will be taken. While I’m sure the local garbage collector is a swell and smart guy, he just lacks the medical expertise to give meaningful input. But, it’s not really meant for him. It’s meant to give ACORN more sway.

Not that I’ve read the whole bill….and he hasn’t been able to provide me with any additional references when I asked for them

You never read any part of the bill. What are you, a child? I have to spoon feed everything to you? You’ve suddenly lost the ability to use google?

Don’t put me in the same pile as you, Danny. I realize you assume that if you don’t get something, nobody else can and if you didn’t read something, nobody else has. I read the bill with a doctor and an attorney.

Also, stop referring to me as “he”.

Anonymous August 24, 2009 at 1:56 pm

“You never read any part of the bill. What are you, a child? I have to spoon feed everything to you? You’ve suddenly lost the ability to use google?”

Please don’t call me a child. I have read parts of the bill – at your insistence. If you have any insights into how else I should interpret the heading: “REQUIREMENTS TO QUALIFY FOR RURAL PROVIDER AND HOSPITAL OWNERSHIP EXCEPTIONS TO SELF-REFERRAL PROHIBITION”, please just let me know. Or refer me to your attorney and your doctor that you read it with.

You can’t get angry when someone says “that reference doesn’t say what you claimed it says”. You can either explain why it does, provide another citation, or admit you’re making a claim without a citation. I personally don’t care which you do – I just don’t want you calling me a child when you continue to repeat something that isn’t supported at all by the citation you provided me with. I can read. I can google. What makes more sense – me searching through a thousand page bill for a provision you’re claiming exists (and clearly therefore have some basis for thinking exists), or you just telling me what basis you have for thinking it exists? I’m not under an obligation to do your leg-work.

If anyone else is interested in the passage you can find it here:

The claim is that page 317 and 318 “prevents hospitals from expanding and new private clinics opening without government permission”. See what you guys think.

And honestly, just think this through. What possible reason could they have for preventing private hospitals from expanding? What could they possibly get out of that? Some amorphous ability to “control”? To what end? How does the claim even make sense? It doesn’t – and the provided citations don’t support it.

Anonymous August 21, 2009 at 2:24 pm

Turned it on him beautifully Proffessor Don! Kudos to you.

And, of course Krugman operates on the theory that “what is good for thee is not acceptable for me”

LOL, good job!

Anonymous August 21, 2009 at 2:30 pm

Saying that the government option is a form of competition is like giving steroids and flippers to Michael Phelps and calling it “fair” as far as French, German, and English swimmers are concerned.

Dan August 21, 2009 at 4:51 pm

You may make this point in jest, but here in the UK due to the extremely poor performance of some of the more leaning newspapers, it is seriously being suggested!

aaron August 21, 2009 at 4:56 pm

What is the “Public Option” anyway?

Working for the government, I know that everything government creates rarely has anything to do with the name they choose. They also have the luxurey of defining their own terms.

sandre August 21, 2009 at 4:59 pm

Dishonest krugman will happily accept it – if government takes over that failing rag called NYT, and then make him the editorial chief of the renamed Pravda Times of New York.

sandre August 21, 2009 at 5:05 pm

The ministry of truth ( minitrue in newspeak ) is working over time

Not Fooled August 21, 2009 at 5:25 pm

If Don was choosing NPR as an example of a public option gone right, then IMO he was very astute in his selection.

Does anyone hear actually listen to NPR? It’s utter garbage. The quality is inconsistent, at best, and nonsense, at worst. They consistently leave out key facts and data for the sake of ideological positions. They are seemingly the last to report on almost everything. They have inconsistent and half-a**ed arguments that do not follow through to the logical conclusions. “Think,” which used to be such a great, even-handed show that opened my mind to some different viewpoints, is just utterly partisan and a complete disappointment now. Don’t even get me started on the Dianne Reem show, which is just a mouthpiece for the left, and rarely does she talk about professional affiliations and push lefties into corners or interrupt lefties as she does to the libertarians and conservatives. I mean, I cannot imagine what health care would be like if it was like NPR.

Anonymous August 22, 2009 at 12:58 am

Krugman is not only arrogant but silly,

In his article he states that “Clearly” its not just his opinion that co-ops are a “sham” because the “health care stocks soared” when it was announced that the “gang of six” was dropping the public option.

“Clearly” is the code word for: you are a dumbass if you don’t argree with me. This is the arrogance of lots of economists, particularly those trained in mathematical economics.

Regarding the “soaring” health care stocks, Krugman would have us believe that his story that co-ops are a “sham” is “clearly” the only one. But as a far better economist than Krugman once said: “where there is one explanation there are many.” Again Krugman is arrogant, but also silly here because of the work “sham” (meaning completely a bogus approach). What is silly about this is whether co-ops are a “sham” or not, health care stocks would have been expected to “soar” on news that the “gang of six” was considering dropping the “public option.” Look the “public option” will drive private carries out, that is the point of it (in Obama’s own words in 2003 or so this was the plan). Almost any alternative that arose to the “public option” would have sent health care stocks “soaring.”

louh August 22, 2009 at 2:07 am

Isn’t Prof Krugman a communist ? I do not mean to engage in ad hominem mud slinging but the professor is starting from that paradigm.

Anonymous August 22, 2009 at 4:26 am

It isn’t an ad hominem if it is true.

Anonymous August 24, 2009 at 1:59 pm

No, he’s not. He’s a very run of the mill supporter of markets and free trade. He simply thinks there’s an important role for government too. And yes, he does think it’s a bigger role than most other Americans think. But there’s nothing especially communist I’ve ever heard him support.

Vidyohs might know though.

louh August 24, 2009 at 3:42 pm

If he were a flaming communist would he admit it. One of the problems I have with the left is that they assume anyone who takes up the liberal fight does it with the best of intentions. And of course all conservatives are selfish despots. It seems to me the “ludic fallacy” all over again. The turkey farmer is beloved by the turkeys for 364 days, they adore his every move. Each day he comes with food in hand and asks for nothing in return. He tells them they can reap what they haven’t sowed. And then comes Thanksgiving day, and his intentions become brutally obvious.
. The governments ever present, “benevolent hand”is grabbing at our personal freedoms and places us closer to our own turkey dinner. Mr. Reich may very well be a turkey farmer, I for one don’t want to find out.

Anonymous August 24, 2009 at 3:48 pm

Ya, that’s a pretty dumb assumption.

I think it’s a pretty common human response to anyone that we identify or affiliate with, though. It’s not any more distinctive of the right or the left.

For example – look at what you just wrote. You said “one of the problems I have with the left”, as opposed to “one of the problems I have with some people on the left”.

We have a natural tendancy to homogenize and demonize those we don’t affiliate with and think the best of those that we do affiliate with. Again, it’s not something that we all do – but we all have a tendancy to do it, so some people on any side of an argument are bound to approach the disagreement that way.

louh August 24, 2009 at 3:58 pm

Forget semantics, or my poor prose. I will not give up a little freedom to gain, what the government believes, is a little more financial security. Ben Franklin

Anonymous August 22, 2009 at 12:43 pm

Paul Krugman is a moron.

Anonymous August 22, 2009 at 12:44 pm

That os true, so it isn’t ad hominem.

Newt Rayburn August 22, 2009 at 9:58 pm

We’ve already got government owned newspapers in this country. They are called “student-run media.” The government owns them, students run them, private newspapers in those towns can’t compete with them, and when the students graduate, they get a job in another field. Brilliant.

Anonymous August 24, 2009 at 1:44 pm

It always seems to come across that way because people don’t seem to understand that it’s not a contradiction to recognize the benefits of government and the benefits of the market. It only looks like I “take both sides” PRECISELY because you’re going around assuming there are only two sides. If we acknowledge that there is a logically consistent middle ground, then I’m not on two sides of an issue at all. I’m on one side – my side (and many many other people’s side… I make no claim to uniqueness!) – and yes, you can always expect me to find something to critique on the right and left of me. I actually think most people occupy somewhere in this middle ground. If a representative population commented on here there would be a lot more people like me, and perhaps you’d be shocked that they see good and bad in both the market and the government. And honestly, if a representative population commented on here you’d also probably realize how strong my libertarian sympathies actually are! I’ve always considered myself (and have always been considered by others to be) a pseudo-libertarian. A libertarian with some important exceptions. A lot of perceptions are based on your own context.

Oh… and the long posts are because I’m wordy and like to qualify everything I say – that’s all :)

Anonymous August 24, 2009 at 1:48 pm

Like take this post you just commented on.

It SHOULDN’T be that unusual to say “we’ve gotten a lot out of NPR and PBS, it would be sad to see them go, but I don’t want media to be dominated by government media and I don’t think we really need NPR and PBS, as nice as they’ve been to have”.

Is that really so crazy? It seems like a pretty mundane, non-duplicitous position. But if the fact that PBS is heavily government funded is simply INHERENTLY a problem for you, it looks like a pretty schizophrenic comment on my part! But if you think about it, it’s really not.

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