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Consumer choice: A brief response

Posted in observations, thoughts by rumin8r on September 6, 2009

In his excellent blog, James Kwak hits on a problem he has with a particular framing in the health care debate that has become much more common after the Atlantic article by David Goldhill and subsequent reverberations in the blogosphere. Specifically, he has a bone to pick with recent NPR coverage on the thought experiment of providing the expected lifetime health care costs of $1.77 million as an alternative for employees to exert their pressure as a consumer on the health care industry. From his post:

No, the missing element in this story – not only on Planet Money, but almost every time it is told – is distribution. Any health care system in any advanced democracy plays a redistributive function. [Emphasis mine]

While health care might seem like it has a redistributive function, in fact it does not. Only in a universal coverage scenario and at the extremes of poverty and high cost care would a health care program need to be redistributive.

The principle of insurance is that a large enough group of like people participate so that any one person’s misfortune can be accommodated at a small cost to those more fortunate. With this in mind, it is obvious that the ‘other side of this framing’ is meaningless. Of course the principles of insurance do not apply when everyone is handed $1.7mm as a lifetime health cushion. If anything, the idea resembles a ponzi scheme with the obvious question being ‘who’s gonna foot the bill?’ And my bet is that the additional cost to the average of any redistributive function would be marginal at most if everyone were forced to participate (thus remaining closer to insurance than social welfare).

The framing that originated from David Goldhill’s article is intended to examine an alternative that does not cut the consumer out of the process. I think we should also keep this separate from the question of whether the consumer can contribute meaningful pressure in the face of the information gap, which is a much stronger point from Kwak’s post that bears fleshing out.

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Interesting links

Posted in links by rumin8r on September 4, 2009

Until I find a personalized format, I will copy Marginal Revolution‘s style.

1. All-too-common argument pattern

2. Placebos

3. Nutrition Ignorance

What can be done?

Posted in observations, theories, work by rumin8r on September 4, 2009

I came across an interesting article:

The research shows men who spend even a few minutes in the company of an attractive woman perform less well in tests designed to measure brain function than those who chat to someone they do not find attractive. […]

Psychologists at Radboud University in The Netherlands carried out the study after one of them was so struck on impressing an attractive woman he had never met before, that he could not remember his address when she asked him where he lived.

Researchers said it was as if he was so keen to make an impression he ‘temporarily absorbed most of his cognitive resources.’

I hava always suspected this fact. They conclude:

The findings have implications for the performance of men who flirt with women in the workplace, or even exam results in mixed-sex schools. [Emphasis mine]

I doubt the implications stop there. In my own experience, the rubberneck extends largely to the sightline, regardless of who might be trying to signal or “flirt” at any given time.

What intrigues me is that we do not hear more evidence or account from the women who cause this reaction. Is this a deeper signal that the most attractive women have come to trust above others? Do men really lack a similar form of lithograph or are we looking in the wrong place to expose a similarly transparent signal?

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Thoughts [1]

Posted in aphorisms, observations, random, thoughts by rumin8r on September 3, 2009

We can learn much about the foundations on which our houses of cards are constantly scattered.

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On working (short)

Posted in theories, work by rumin8r on September 2, 2009

What are the merits of a hard day’s work? If I assume my life is like a roll of bubble-tape, then the more I chew on any given day, the less of me left over.

However, I tend to look at life as more like an economy. When the right factors are in place, the work I do now and the work I can do in the future expand my potential and increase what I am able to enjoy and accomplish. When I am neglecting an important aspect of my own well-being, I might be dipping into my reserves at a time when such an act might tip me into the next recession.

At the end of the day, I feel exhausted. I also feel the need to justify the day in terms of factors that can signal whether I am still proceeding in the right direction. Some days it is hard to look past the idea that I am just being spent up. What sorts of things could (or should) I do to ensure that what I’ve spent today is actually investment in tomorrow and not a draw-down of my life?

I feel that work is very analogous to an economy. And I would bet that I could learn more from the perils inherent in the economy than from the simple promise it holds. What is my stock trading at and who is willing to buy?

On writing (short)

Posted in observations, random by rumin8r on September 1, 2009

The most interesting thing about writing is getting such a clear glimpse of yourself. I would coonsider it, in many cases, a glimpse of my former self.

Thoughts on a page should be carefully arranged. One can take the time to deliberate over what would be the most appropriate word for the microcosm of a single spot in a sentence.

What I read later is a fascinating view of all of the forces I might have weighed in my choice of words. Better yet, I can see all of the ways in which I hoped my words might signal and be received in the best light by those I might hope most to impress. Fascinating.

I hope it is clear that my audience is well above the common denominator – my intended audience, that is.