TPMCafe
Josh Marshall's new site TPMCafe is up and looks very interesting. Se. John Edwards is guest blogging there this week, his first post is about how being poor is more expensive. I am not a huge fan of Edward's divisive populism, but the problems he points out are very real. Unlike the common liberal perception, I, and most other Conservatives, do care about the poor. We tend to believe though that the handout programs so popular with Liberals tends to exacerbate rather than diminish the problem. Nonetheless, the problems Edwards describes here are very real, and we should consider these problems and look for solutions. He links to this study which describes some of the extra expenses that poor people end up paying. I think think you can pretty much group these into three broad categories. One is medical expenses. As the study points out, the uninsured cost for a given medical treatment is often dramatically higher than the insured cost. This is not because hospitals hate the poor, most end up losing money on uninsured patients, but rather it reflects that simple fact that the uninsured are much less likely to pay their bills. If only one out of four uninsured end up paying, then it makes sense to charge four times as much for care that is uninsured, this is especially true when hospitals are forced to treat people regardless of their ability to pay. Unfortunately, this creates a vicious cycle. The more costs rise for uninsured patients the less likely they are to be able to pay their bills, and thus costs will rise even more. Exacerbating the situation is these same people are unable to afford preventive care, making their treatment more expensive than it would otherwise be. I don't have a good solution to this problem. I am deeply distrustful of socialized medicine, in fact I believe the partial socialization via Medicare and Medicaid have contributed greatly to the increased cost of health care. I am also very worried about the rationing that a socialized system would have to utilize, as well as the dangers of loss of R&D incentives. This is an issue I am very interested in, but so far I have been unable to find a solution. The second category is lack of education and failure to apply good financial planning. This is fairly common through all strata of our society, but the poor with less margin for error tend to be disproportionately effected. This problem, and the solution, was explained eloquently by Charles Dickens over 200 years ago:
Annual income twenty pounds, annual expenditure nineteen nineteen six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.We could do a better job educating our citizens about Financial planning, the actual cost of living on credit, and how beneficial it is to save. One thing we should do is make this a part of the High School curriculum. In addition, I believe that seminars on this subject would be a beneficial and appropriate use of tax dollars. Obviously improving education in all aspects would have a hugely beneficial effect on the poor, but even this more limited focus would have, I believe a dramatic effect. The third category is hinted at, but danced around, by the study. Crime and lack of Police protection. To many poor neighborhoods, especially in the inner cities, are effectively lawless territory. This makes opening a business in those areas a chancy proposition which is a double whammy on the poor. Not only do those businesses end up charging a premium to cover extra theft, vandalism and insurance costs, but the limited number of businesses willing to deal with this makes jobs rare. This probably also accounts at least in part for the higher auto insurance rates in poor neighborhoods mentioned by the study. This is something we can, and should fix. Protecting it's citizens from crime and enforcing lawful behavior is a fundamental government responsibility. From a practical stand point, it is probably a good investment as well. Rudy Giuliani's Broken Windows method shows how we can effectively combat crime. In addition, most inner cities have strict gun control laws, leaving the poor unable to defend themselves. This is intolerable and a direct cause of increased crime, in my opinion. Lastly, we should reform our drug laws. The drug laws have created a very adversarial relationship between poor neighborhoods and the Police that are supposed to be protecting them. Many view this as a victimless crime, their sympathies lie with the marijuana smoker who gets busted rather than with the cops. This makes it more difficult for the police to fight violent crime, and they are not trusted by the citizens. It also of course takes many not violent people and sends them to prison where they get a graduate course in more serious crime. It a futile and dangerous policy we are pursuing and the poor are paying for it. Poverty is something we can, and should look at. Successful poverty reduction strategies must be more than handouts or flavor of the week programs though. They must be focused on changing the environment that exacerbates poverty in the first place.
posted by Dave Justus | 5/31/2005 12:49:00 PM
12 Comments:
You make some very interesting, and very valid, points regarding this article. I wish I had more time to respond to this in full, but I will say that I agree with your sentiments.
It was once suggested that hospitals should have to compete against one another in terms of how much they charge for services. I don't know how I feel about that, but I can say that we have many examples of how this can work to favor the consumers of a service. Have you ever seen an empty parking lot at a 24 hour wal-mart?
Obviously there are problems with the health care system no matter what you do. I think that there are never enough health care professionals, and never enough money for the individuals requiring care to provide quality care for everyone. There are downsides to the system that I proposed above, certainly it would mean that health care for those with more money would be more readily available and probably of a higher quality. In socialized medicine, having enough supplies to treat everyone is a problem. In our system, many people who really need health care go without it because they can't afford it.
I don't think there is a good solution to the health care issue, but I do admire those who try to come up with those answers. It shows that deep down you have compassion for your fellow man. Maybe if we all had a little more of that, we would't have a health care issue.
the biggest thing to help crime is to provide a good education. Which that means fixing the education system (bottom up), by creating shcools that compete against one another and introducting choice
after that i think the drug laws and harsh puishments for serious crimes are the way to go (I also think this is a quick fix, but not a permant fix).
Also for crime, we need to rework the prison system, and actually rehibihate prisonors (by providing opptunites for gaining skills (provide free labor for training), making prison harder, and making it cheaper to house the prisonors)
AS the the health care system, moving to move of a frist person payer system, along with planned savings for medical expenses might help, but I am not sure on many of the ideas that are suggested on the health care front
V.F.
Good to see you again.
While I certainly agree that the current situation is a problem, for the exact reasons you describe, I don't know that the other solutions you mention are not worse though.
Certainly, problematic though it is, I prefer our current system to allowing people to bleed to death in a hospital. I am afraid that socialized medicine may be worse than our current situation as well. Sometimes, problems don't have good solutions and we have to live in an imperfect world, it is possible that health care is in that category.
My basic thoughts on it though are to try and do some things to reduce the cost, and see where we are then. One way to reduce costs is medical liability reform. Another is to get the AMA to increase the number of doctors availible. A third might be to open up certain treatments and screening to not require a Doctor, a RNA can perform some medical tasks just as safely as any doctor. Taking a good look at how medicare and medicaid are distorting the market is also probably a good idea.
If the costs can be reduced, insurance will be more affordable and the problems will be greatly diminished. I don't know if costs can be reduced enough or not. I think it is certainly worth trying however.
My father-in-law was the business office manager at a hospital in Minnesota. His advice to people who can't pay their medical bills is to call the hospital and offer to pay the Medicare rate. They usually take it.
You can also set up a payment plan.
And declaring bankruptcy improves your credit rating by eliminating prior creditors. I know a guy who did that and within a year, he had a house and a car.
The rules are changing now, though.
Maybe redefining poverty might help solve some of the problems. Under the governments definition of poverty where the lower 10 percent or so of the income bracket are considered living in poverty we will always have poverty. Few people in the USA actually live in poverty. In fact most of those who are considered by government to be in poverty would be considered middle class or even among the wealthy in some places on this earth that I have seen.
Poverty is when twelve people live in a 10' X 10' hovel and all twelve labor from daylight until after dark trying to scratch out enough to feed themselves. Poverty is NO medical care because none is even available if they could afford it.
Yes, we do have millions in this country who through decisions they have made are at the bottom ties of the income bracket. And, yes, we also have some that through no fault of their own cannot earnenough for a living. As a civilized society we have a obligation to take care of those who through no fault of their own cannot take care of themselves. It is the way government makes the distinction between those who can take care of themselves and those who cannot is the problem.
Lack of medical care? The next time someone tells you they cannot afford insurance take a look at what kind of automobile they drive. Its a matter of priorities. Did anyone ever take a look to see how many big screen plasma TVs are in the projects? I could afford one myself if I received medicade and didn't have to purchase insurance.
Edwards is not a populist. He is a socialist. He is a member of the so called elite who figure that they can run the country while ripping off those who have created the wealth he wants to share. This is a man whose main claim to fame is being a tort lawyer who won major lawsuits for people who were too damn stupid to read directions!
Since poor people are covered by Medicaid, problems of paying for health care are most severe for people who are lower-middle class but with incomes such that they are ineligible for Medicaid. With states looking to cut Medicaid as much as possible, this problem will only get worse.
I favor national health insurance on the Canadian model to address this problem ("socialized medicine", if you will). National health care would also free up employers to channel pay into salaries rather than health insurance. Rewarding jobs that pay well is ultimately the best poverty solution, in my view.
Previous generations of Americans were lifted out of poverty by low-skill jobs that paid middle-class incomes. A lot of those jobs have disappeared because of technology and low-wage foreign competition. For the low-wage jobs of today that can't be outsourced (janitors, e.g.) I would support laws making it easier for unions to organize and the earned income tax credit.
I'm puzzled by people who oppose national health insurance because of the flaws of individual people. That actually argues in favor of national health insurance. If people forego insurance, the cost of treating them will be in the emergency room rather than preventively, and will be shifted onto the rest of us more (as Vestigial Fish points out).
And the anger at people who don't have health insurance strikes me as misplaced and weird. Have you tried to buy health insurance in the private market? Before I got married and my employer covered my wife, she paid $400 a month for health insurance -- a pretty substantial amount which is tough to afford -- for a really shitty plan that hardly paid for anything.
GuyK: You are certainly correct that the poor in America are rich compared to other places. Nonetheless, we can do a better job to promote opportunity.
Honest Partisan: I don't know of many (any?) people who oppose socialized medicine because of flaws in individual people. I oppose it becuase I worry about rationing of care, poor quality health care, and most importantly, I fear it would stifle technological improvements in health care.
I hear you. I was responding to GuyK's sentiments about people who don't have health insurance but have big TVs.
Honest P: I recently sold a small corporation that employed my wife and I and five others. I offered group insurance to my employees. None would take it because of the expense although I was going to pay half. The reasoning was they couldn't afford the insurance. However, all drove fairly new SUVs and managed to come to work a couple of times a week with a hangover. My point is that as long as hospitals are required to treat people in emergency rooms regardless of ability to pay there is no incentive for a large number of people to buy health insurance. It is a matter of priorities.
Yeah, insurance is pretty damn expensive. But why should the tax payer pay when the individual has the ability to purchase insurance but refuses to do so.
DAVE: The opportunities are there for the taking for tghose who want to take them. Poor people for the most part are poor because of choicesa they have made during their lives. Substance abuse is probably one of the biggest bad decisions. Dropping out of high school, poor work records, having more kids than they can support, no self discipline and unwilling to work at a job they consider beneath them are some of the other reasons that people are poor and will remain poor until they change a lifestyle.
I resent any attempt to make me feel guilty about the mistakes of others. I have made enough of my own and don't even feel guilty about those mistakes. I accept responsibility for my errors in judgement and try to learn from my mistakes. But I will do my best not to pay for someone elses errors in judgement. Just the Rand philosophy in me I guess.
GuyK: You don't have to feel guilty about trying to help poor people to think that we should alleviate poverty as a society. One does not at all flow from the other. I want to get rid of poverty for selfish reasons: I think it will make me and my family better off in the long run: less crime, more people who can provide me with goods and services, and more people who can produce goods and services that I can choose from.
As a factual matter, I can't disagree with you strongly enough that poverty is the result of people's choices. The income and educational background of your family is a far, far greater predictor of where you end up in life than personal decisions. If someone had accomplished nothing notable in their life by age 40 and had substance abuse problems and came from a poor background, chances are they wouldn't amount to much, but if you're from the Bush family, you can end up as president. If you take a cross-section of any income group, you'll find the same range of virtuous and non-virtuous people -- the difference is that people from poor backgrounds pay a much more severe price for their bad life choices than non-poor people and a lot of virtuous people are still a lot deeper in povery than they should be.
GuyK: While there are opportunities, I think you might be overestimating how easy they are to realize. All of us make mistakes, when you are from a more comfortable background however, you tend to have a lot easier time recovering from those mistakes.
I want to turn every non-productive citizen into a productive citizen. That is better for them, and better for me. Some will refuse help, but we can and should help where we can. It is important though not to incentivize poverty. We need to provide ways up, not comfort at a non-productive status.
HP: We won't ever be able to get rid of the poor entirely. I think you can acknowledge that there are some who we can't help, because they refuse to be helped.
You do have a very good point that coming from different backgrounds gives one huge advantages. You are also correct in that the more productive we can make our citizens, the better off we will all be.
The key is to build effective programs, that help those who want to be helped, without being counter productive and making poverty too comfortable. I am very open to the idea of a safety net, too many seem to want to make that into a hamock though.
I am reading more liberal left propaganda! Blame society for the mistakes one makes. Horse manure! How is it that someone such as I from a rural poor neighborhood in the south could reach middle class by the time I was in my twentys. The same that millions of others have done it, by working, establishing a work record, not get bogged down in substance abuse ( although I am a recovered alcoholic I made it to work every day )and accepting responsibilities for ones actions.
Sure it is easier if you were born with a silver spoon in your mouth. But Bill Clinton was born poor and wound up a president. Why could he do it and other people born poor don't have this chance?
And, yes there will always be poor people in the USA because that is the way capitalism operates. Those whose production is more valuable will get more for it. And,as I stated earlier, what the federal government and the liberal left calls poverty is a for cry from real poverty.
Helping people to help themselves is one thing. Passing laws to legally extort from those who have earned it to redistribute to those who are unwilling to earn it is a crime.
Europe is a good example of what happens under socialism-which is what is being advocated by Edwards. High unemployment, high taxes, and governments in turmoil. When the socialist governments come crashing down what will fill the political and economic vacuum. If recent history is indication it will be dictators such as Hitler and Franco. Do you want this for the USA?If so support the Edwards and Dean politics.
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