Two-tier health care
Recently Konrad posted a reply to my question about a two-tier health care system. I agree with him (I don't say that likely) on many points. The idea he puts forward is almost completely sound and brings up a important topic. In the argument there is an assumption that this person is paying $1000 for heath care via taxes. How much one is paying in taxes for services is only knowable if you take the entire amount of taxes you have paid (federally for instance) and the find out the percentage breakup of the budget for that year. So, it's pretty hard to figure out how much we are paying. This make me wary since if I was to go into a private insurance how mush more would I be paying? The point is that the current tax system obscures how much we are paying for services. All we get is that the federal government is loaded and spending X billions on ... Not a good idea.
So I purpose we change the collection system slightly (on the government side). Every year at income tax time we should have a breakdown of our tax burden. So when you go to figure out how much you pay you would have the big ticket items paid directly (like on a credit card statement). For instance:
210 Health care .... 8.6% __what you pay here______
211 Private health care deduction .... 40% of the 8.6 amount in line 211
so you'd still be paying 60% of the health care cost to the federal plan. In the end you would be paying the same percentage but the deductions would be directly on the service not general revenues. This would also then inform everyone what (mostly) we are paying for. Also it would help during election time since we'd know where the money would come from. For instance when one party says we'd put more money into the military they would have to say they would either increase the military tax rate or divert funds from other revenues, but since it isn't just a big pot of money we can watch our money better. Obviously there would be a general category that would include all the smaller things and the danger is watching that unearmarked money.
This would pave the way for more two tier systems like education. The previous discussions about privatization of education has finally made sense to me. Mostly because I feel the only way parents will acre what there kids are doing in school if they pay some of it directly, except those who can't afford it. The libertarian arguments of private schools partially funded by the gov I agree with. It will most likely be a better system and encourage better education. But to ensure that everyone can go we'd need to know how much we are subsidizing the system and how much we are saving/spending. The main idea for education would be to have the parents pay the education tax directly to the school making a more free-market system (and getting those benefits) and getting the benefit of making parents more involved since they now realize they are dishing out hard cash.
This is still an infant idea so be gentle.
So I purpose we change the collection system slightly (on the government side). Every year at income tax time we should have a breakdown of our tax burden. So when you go to figure out how much you pay you would have the big ticket items paid directly (like on a credit card statement). For instance:
210 Health care .... 8.6% __what you pay here______
211 Private health care deduction .... 40% of the 8.6 amount in line 211
so you'd still be paying 60% of the health care cost to the federal plan. In the end you would be paying the same percentage but the deductions would be directly on the service not general revenues. This would also then inform everyone what (mostly) we are paying for. Also it would help during election time since we'd know where the money would come from. For instance when one party says we'd put more money into the military they would have to say they would either increase the military tax rate or divert funds from other revenues, but since it isn't just a big pot of money we can watch our money better. Obviously there would be a general category that would include all the smaller things and the danger is watching that unearmarked money.
This would pave the way for more two tier systems like education. The previous discussions about privatization of education has finally made sense to me. Mostly because I feel the only way parents will acre what there kids are doing in school if they pay some of it directly, except those who can't afford it. The libertarian arguments of private schools partially funded by the gov I agree with. It will most likely be a better system and encourage better education. But to ensure that everyone can go we'd need to know how much we are subsidizing the system and how much we are saving/spending. The main idea for education would be to have the parents pay the education tax directly to the school making a more free-market system (and getting those benefits) and getting the benefit of making parents more involved since they now realize they are dishing out hard cash.
This is still an infant idea so be gentle.
posted by Eddie | 6:34 PM
4 Comments:
"The libertarian arguments of private schools partially funded by the gov I agree with."
I hope that this is a typo. Some libertarians push that idea just because they view it as a step to the total separation of government from education. Alas, the ultimate goal is complete liberty in choosing the school your child will attend. As a side point, mandatory attendence laws should be striken from the books.
Back to the topic at hand. Health care in Canada is a huge boondoggle. The amount of government control is just staggering. Not only at the taxation and insurance level, but also concerning the regulation of professional bodies, the licensure of doctors, the funding of their training and the amount of nurses and doctors trained. It's like Konrad said, "The only things we have a shortage of are those things controlled by the government: medical care, good schools and so on." I can envision and see the benefits of the complete privatization of the education system, especially at the university level. The added benefit of private universities is that there would probably be fewer Arts students because they'd have to bear the full cost of their education and the job they would get upon graduation wouldn't warrant the cost. With the public health care system, I have no idea what the first step to reforming it should be other than the un-realistic complete dismantling of the system. I've toyed with the idea many times, and the best I can up with is, is to call the government on their bluff. Keep the infrastucture as it currently is, but de-monopolize the insurance aspect. The government would still be allowed to compete in the new system. One of the apparent reasons for the public system is that it allows the pooling of resources to attain synergies and cost savings. Well, if that is the case, the government will be able to offer the most competitive rates and maintain a near monopoly over the delivery of health insurance. However, it will allow for others to compete and offer the best price, perhaps even driving costs lower. If the government is such an altruistic manager of the public's money, let us see if they can compete against the private system. Remember, under this scenario, the government would have an advantage in that they have only to break even, whereas insurance companies need to live up to shareholder expectations. I'm not sure this even makes sense, there are propably logic holes in my idea that you could park an ambulance in. However, the fact remains that health costs aren't getting any cheaper, is it not the single biggest item in the Canadian budget?
The biggest ticket item for the federal gov: Debt servicing!! (see here).
You will never have complete liberty in choosing where to send you child unless you are among the rich. More later.
It would be nice to shift the education system over to what's known as a "voucher" system. That is, the government pays a fixed amount for whatever school you choose send your kids to. If you want a fancy private school that costs more, you have to make up the difference yourself.
So it's like medicare and your local doctor: the government funds the care, but it doesn't run the doctor's clinics. It's not a completely libertarian solution but it would be so much better than the current system that I wouldn't even care. And it's something that could realistically be implemented even in a leftist country like Canada. The main selling point is that it won't cost the tax-payers anything. Just let schools compete freely instead of having only government-sanction school boards.
For both cases the most important thing I think is to still ensure the universal accessibility. For medicare I agree with Kurt (and by transitivity Konrad) that the amount of governement control should turn to necessity regulation (min number of doctors or else import etc). But the caviate I see is (especially in a country like Canada) is that the small communities will get the shaft. In Toronto I haven't had to wait for anything since I can just go to another place (there are so many). With a parallel system big cities with big markets will get the mst attention, but what if it just isn't profitable to be in the Yukon? I'm not saying this is an added problem since the public system now in rural areas is mostly insufficient, what I am saying is that in small markets it may not make any change.
For education (below University) I think a publically funded privately run system has many advantages. My point about paying was not to say the burden should completely fall on the parents but that if we could make the parents pay the amount they would pay in their income tax for schooling directly to the school it would encourage more parents to be involved with their kids education. My view of the main porblems of the current system is with the parents (discipline, interest etc). But you can't legislate that. So I think the phsycological effect of paying directly to the schools may encourage the parents to take it more seriously. But I doubt it would be practically implimentable or even politicaly feasible. I do think it would improve the situation for some teachers. Rural teacher could ask for more since there would be a scarcity of teacher. But there would have to be good legislation to make sure grades and material are roughly equalized. Does anyone know of any country that has something like this?
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