html xmlns="" xml:lang="en" lang="en"> From the archives: Back it up.

Friday, September 07, 2007

Back it up.

My policy professor taught me that policy beliefs originate from a model of the individual. The rational economic actor is one model of the individual. The policies that you trust are aggregations of your model of the individual. In the thread below, I suspect that people are arguing about health care policy because they have very different models for what individual people are like.

You will never agree on an aggregate health care policy until you explicitly state and agree on a model of the individual. (Or housing policy, or paternalism in governance, or...) How people really act is an empirical question. It may be too varied to be summarized, or you could have two main types of individuals that should be addressed with two types of policies. Or there may be a model of the individual that you can aggregate into policy and the differences wash out. I don't know.

But I do think two things:

First, your model of the individual is very likely based on you. It is possible that everyone acts just like you, and also that you can accurately predict your own behaviors and motivations. But that is far from certain. When you argue for a policy that would work best for a country of people who are just like you, you should have some reason to believe you are the right model of the individual.

Second, before you go firing off "health care this" and "government that", please know the underlying parts that are forming your beliefs. Arguing the high level stuff with someone who has a different model of the individual is wasted effort. Please, be explicit. I'll go first.

For health care, my model of the individual:

People live in denial, do not do good risk analysis (as evidenced by my erratic use of bike helmets.) They do not conscientiously save against medical emergencies, even though they could. They do not have the capacity to compare fancy-dancy medical treatments (I should figure out what chemo regimen is best for me? I DO NOT WANT TO, because that is outside my expertise and BORING. I want to trust an expert, if it comes to that.), especially if the pain has already started. They do not have any interest in comparing not-fancy treatments. (When I broke my arm, I realized I had no information whatsoever on which of the four local emergency rooms had good reputations. None. I had never cared until it was too late.) I derive zero utility from comparison shopping for health care; I want someone else to handle it.

I figure people are roughly like me, non-savers, bad risk assessment, more than willing to delegate their health care. (I am not willing to delegate my fitness or nutrition, but that is different from disease or injury.) You know what makes good sense for that model of the individual? Government based health care that does a decent job by me. You know what doesn't make sense? For profit insurance agencies who do not have my best interests at heart.

SO. If that result seems entirely wrong, then please present your equally detailed model of the individual (that is not an ambitious task). It will probably be very different. Then, if we cared that much, we could try to find evidence about how people really behave. I don't care that much, this isn't my pet interest. But at least we would know what we are arguing about and we can formulate empirical questions.


Blogger bBass said...

One of the nifty things I've picked up from economics is how much "irrationality" is rational given certain assumptions about preferences, how one values one's time, and limited self-knowledge. It torques me a little when economists talk about how the best model we have is of rational utility maximizers. Sure, but what does that mean?

10:53 AM  
Anonymous Anonymous said...

Right off the bat your model is broken.
"People live in denial, do not do good risk analysis (as evidenced by my erratic use of bike helmets.) "

85million bicyclists in the US.
540,000 visit emegency rooms each year, of those 67,000 have head injuries, of those 27,000 serious enough to be hospitalized.

So, .6% chance of going to the emergency room, 5% of those will have a head injury serious enough to require hospitalization.

That's hardly a major risk.

Only 784 bicyclists died in 2005.

And this site estimates that from 45% to 88% of head injuries could be avoided by wearing a helmet, but it doesn't say how many serious/fatal head injuries would be prevented by helmet use. Chances are if you go head first into a car hard enough to kill yourself your helmet isn't going to save you, it's simply not designed for that kind of impact.

Here's where I got the stats.


11:10 AM  
Anonymous Anonymous said...

So, .6% chance of going to the emergency room, 5% of those will have a head injury serious enough to require hospitalization.

That's hardly a major risk.

Anectodes v. data notwithstanding, a helmet was the difference between my child being 100% ok and 100% dead. To me, a helmet is hardly a major cost.

12:15 PM  
Anonymous Anonymous said...

I'll go.

My global model of the individual is that people respond to incentives (they want the most for the least), but their discount rate is very high (short time horizon when making decisions). They are capable of occasionally thinking and planning about long-term things, but they want to make the decision once and be done with it.

(and yes, that pretty much does describe me)

Specifically for health care, people want lots of it but pay very little for it. They want to pick an insurance plan and a doctor, and call for an appointment when they feel sick or they get a postcard from their GP. They want to be able to get an appointment within a week or so for chronic stuff, today or tomorrow if they're sick. If they get really, really sick or injured, they want to go to the ER and not worry about going bankrupt. Other than that, they have better things to do with their time than think about it.

(except when Megan starts a flame war about it...then it's fun to think about)

Which is exactly how the current health insurance system works -- for those who have it. Employers pay (in my experience) 80% of the costs for comprehensive plans. For (traditionally) employed people, this is a good deal.

The problem is that it works poorly for people who don't have employer-provided insurance. Before my current employer started offering insurance, I'd been without for 9 months. I'm young and healty, so this was a good bet. If I could have spent $20-$50/month for "keep your house" insurance if I got hit by a bus, I probably would have signed up. I'm not sure that I couldn't have, actually, but the probability was low enough and the difficulty high enough that I didn't bother.

I also know people who aren't healthy, and are on 2-3 meds (probably $10-20) a day, and want/need to see their doctor every month. Cheap, comprehensive insurance is much more important to them.

So I believe that on one dimension people are like me -- they just want something that works, and they don't want to think about it. But *medically*, I know that people are different than me, and will want and need different things from their health care. I also know that people that make more money than I do, and less.

So what should we do? Government run or paid-for health care would cover everyone (+), but would likely increase wait times(-), decrease high-end treatements(-), and not reduce total cost much, if at all(=). There's also a strong argument that it would reduce private health-care R&D(-).

Another option is deregulating health-care: allowing me to purchase a true 'don't lose your house' plan, and equalizing (one way or the other) tax treatment of health-care expenses by employers and individuals would be two places to start there. People could buy as much health care as they wanted and could afford. This would let rich or sick people get top-tier medical care(+), would encourage shorter wait times(+), and reduce costs(+). Of course, if you're poor, you're screwed(--).

For a few years at the beginning of the decade, my family was poor. There are two big food programs for poor folk: food stamps and WIC, and I think the difference between these is a good analogy for what I think we could do with health care.

With food stamps (at least in Oregon), once you're in the the program you get a card that works like a debit card. It's accepted almost everywhere, and you can buy any kind of food you want. The amount you get every month is based on the size of your family and your income. It was easy to use and we could still make choices.

With WIC, you got "vouchers" that specified exactly what kinds of food you could buy, what sizes and even brands. You had to use the entire voucher at once, and only the big grocery stores accepted them. Anyone (kids and pregnant moms) that 'qualified you for WIC had to go to get checkups every six months at the county health center. It was a pain in the ass, we didn't have any choices, and it was degrading.

I could support a 'health stamps' program that worked like food stamps. If you're poor, you qualify for a certain amount of health care money every year. You could even require people on health stamps to have at least catastrophic coverage.

Another thing I could support was government medical re-insurance. Essentially, insure health insurers for claims beyond (guessing here...) $200,000/person/year.

Megan, I don't understand why you don't believe insurance co's have your best interests at heart, but a government-run program does. If you don't like your insurance company, you can switch. If you don't like your government-run plan, what do you do?


12:28 PM  
Anonymous freight train said...

I think Megan feels like private insurers don't have her best interests in mind because private insurers are for-profit entities whose profit is maximized by denying care. Care is expensive - if insurers can disqualify a claim, they fulfill their business model. One way to view it is, private insurers pay a lot of staff whose job is to find reasons to deny you care. Hell, if they can deny your urgent care claim long enough, you might die, which would keep their insurance payouts way down.

And that's inherent to their business model. That's why switching private insurers doesn't help - denying you care is a feature for private insurers, not a bug. Your best interests are not the same as theirs.

12:46 PM  
Blogger Megan said...

What freight train said.

Also, a for profit insurance agency hopes to make a profit by having a good reputation by treating people.

Far as I'm concerned, the whole part about profit and reputation is a detour. Reputations aren't very accurate in a system where the problems are far and spaced out and complicated, and where marketing sways people's perceptions. I would rather just have a system that is straight out designed to treat me. Skip the indirect purpose.

If you don't like a government plan, change it. That is what citizens get to do. (Yes. It is hard. It takes a lot of energy, for about twenty years to make a big government program change. But I don't think that finding a good insurance company is easier.)

1:01 PM  
Blogger Jacqueline said...

"I'm young and healty, so this was a good bet. If I could have spent $20-$50/month for "keep your house" insurance if I got hit by a bus, I probably would have signed up."

If Dex is a boy's name then you must not have looked very hard or must live in a weird market, because my husband and I have catastrophic coverage for $108/month, and when I was single I paid $73/month, but insurance companies charge women of childbearing age more. A single guy in his 20's or 30's should be able to find a catastrophic coverage policy (what I assume you mean by a "keep your house" plan) for ~$50/month.

"I also know people who aren't healthy, and are on 2-3 meds (probably $10-20) a day, and want/need to see their doctor every month. Cheap, comprehensive insurance is much more important to them."

You seem to be missing the concept of insurance in this paragraph. These aren't people who want insurance -- insurance is for UNEXPECTED expenses due to misfortune -- these people want everyone else to subsidize their expected $400-$700/month (or more) health care bill.

The time to buy *insurance* is *before* you get sick/hurt. An analogy to the situation you describe is crashing your car and then complaining that you can't buy insurance to retroactively pay for your crash for less than it actually cost.

1:25 PM  
Blogger Tom said...

Don't most insurance companies make their money by investing their capital, now?

1:27 PM  
Blogger Jacqueline said...

Megan: WRT to your "People do not X" statements, um, some of us actually DO. So why should those of us who DO take the time to think and plan be forced to pay for those who don't? I think people who choose to be ignorant and careless with theirs lives/health deserve what they get. I have zero sympathy for the bicyclist who chooses not to wear a helmet and dies of a head injury while bicycling, or a smoker who gets lung cancer, or a fat person who develops diabetes, etc. They did it to themselves and should pay for the consequences of their choices.

Just because most people are stupid/irresponsible doesn't mean that it's right to force the minority who are smart/responsible to take care of them.

1:33 PM  
Anonymous Anonymous said...

Right a government pays health system will never deny people treatment for any reason.

Don't they also ship people off to mental health institutions in the UK for being too overweight?

Aren't insurance companies trying to keep their pay outs down to keep their premiums down? Why do you think governments won't do the same thing? What will happen when we all start complaining about how high the taxes are for this system you'd like?


1:34 PM  
Anonymous Anonymous said...


I think we've hit the crux of the matter here -- you believe that it would be easier to change/fix a government program than a private insurer, and I believe the opposite.

Credit unions are a non-profit alternative to commercial banks that works for a lot of people. Might the same not be true for health care?

Do you have any examples where the government has successfully exercised control -- either by being the sole provider or setting wage/price controls -- over a segment of the economy? I can think of three examples -- package delivery, primary schooling, and air travel -- where the private option provided better choices/prices than the government one.

(And yes, I do realize we're heading onto well-trod ground here, and we may be at the point where we're talking past each other, but I'm genuinely curious about your responses to the above -- if only to better understand why we'll never agree)


1:42 PM  
Anonymous Anonymous said...

Oh, and as far as this model of the individual thing goes, that's only necessary as long as your goal is to make decisions for other people.

My goal is to leave everyone to their own devices. If you don't want health insurance, don't get it, if you want to bike without a helmet, go for it, if you want to take whatever risks with your own life, have fun.

I'm not concerned if some people will die from lack of a bike helmet, or will suffer from lack of health insurance. They make their own choices, good or bad.

I'm not concerned with people being irresponsible, until it affects me. You want to make every bad decision someone else makes affect all of us. Once you do that, then we'll want regulations to dampen the effects on us, and then, yes, you may need this model of the individual to understand how people will act.

But, in my world, it's completely irrelevant.


1:49 PM  
Blogger jens said...

Your policy professor was, if not completely wrong, at least incomplete. After all, our model of the individual is not found in a vacuum, it is based on observations that depend on historically implemented policies.

Your model may very well be right at the moment (in fact, I'm pretty sure it quite accurately represents your average Joe). But we live in an unbelievably safe and fairly well regulated society.

Maybe if, on the average, there were emergency rooms out there that were known death sentences, you WOULD have an idea which ER to go to?

I really believe there IS no origin. Policy beliefs -> implemented policies -> model of the individual -> policy beliefs in one grand cycle!

And why do you think decisions should be based on a risk analysis? A pure risk analysis would probably show that even pedestrians would be better off wearing helmets - but sometimes the benefit of a little added safety does not outweigh the cost of the hassle.

My own brother went biking not only without the benefit of a helmet, but of working brakes as well. When a car suddenly crossed his path, he simply jammed his foot into the spokes of his front wheel, which stopped the bike probably faster than brakes would have (although the brakes would not have made the bike somersault the way his foot did).

You wouldn't have expected him to do this twice...but he probably would have done it a THIRD time had the second not left him with an unusably bent frame (and a mildly bruised foot). Apparently what my family lacks in strength and speed (and, arguably, brains) we make up in DURABILITY.

1:58 PM  
Anonymous Anonymous said...


Hey! You're right about the catastrophic coverage -- found some for $38/month. I'll keep it in mind for next time. (file under "must not have looked very hard")

('Dex', incidentally, is a pseudonym, but male, yes)

While I agree with you about what 'insurance' should mean, that's not the popular understanding of 'health insurance' -- people want to know how they're going to pay their medical bills. While some folks will choose a catastrophic plan, others will do what they do today -- take whatever their employer is offering and take an implicit pay cut to pay for it. Psychology is a wacky thing.


1:59 PM  
Anonymous D said...

what Justin mentioned about risk sort of touched this nerve... as an individual, you have 1 in X chance of having some catastrophe. {Slipping in the bathtub, hit by a drunk driver, smacking your head on the pavement}
but your real risk is figured in your mind BASED on what happens if the event comes true. IF it happens, your odds are 1:1. How do you deal with the aftermath? That is the other component of your risk assumptions. Not to mention that going to the ER for a bike/head injury, is that much EACH TIME you ride, and most likely increases with the distance travelled.

Just because you have a low probability to be struck by lightning, do you deign to play golf during a thunderstorm? 60% of all people killed in car accidents, didn't wear their seatbelt. [it's above 20,000 a year] It's their choice. They are also making that choice for their children, often. What are they basing their risk assesment on really? Past performance? "I'm not dead yet." Um, well tomorrow is a new day.

I think that the reason people are poor riskk assessors, is that REALLY looking at it is complex. And that is for immediate stuff. The reason the slo-mo stuff bites you on the butt is that you don't see it on the horizon. When the cancer is seeable, it's too late to prevent it, though you might be able to prevent spread. This is why in 1901 the avg. lifespan in the US was 49. If you got sick then, there was often no return. Now that we can see stuff coming, lifespan and quality are increased... but at an economic cost. So what's better?

Anyway to fullfil M's requirement... as you might imagine, based on what I just wrote my individual is healthy when younger and then their lifetime piles up. It's the car theory. The older/more miles you are the more maintanece you need. A certain percentage of things break over time, and have nothing/little to do with maintanence. Some are show stoppers you must fix, others will be bad in the long run. The analogy breaks because you can't just get a new body if you trash this one. But that doesn't stop people from putting things off. Because while people can imagine the passage of time, they only live in THIS moment, so time is an illusion. Lunchtime doubly so.

That probably puts my individual view similar to M's... Though my conclusion isn't as simple. I could go with the govt. helthcare IFF the externalities of how the govt. was run, and the very size of the population didn't get in the way. Healthcare and Education are about the only 2 things that I think the community must decide on and provide to it's members, SIMPLY because they don't do well as for-profit entities. It is difficult to measure the value of a healthy individual, just like it is difficult to measure the value of a productive one. The major conflict comes from my inability to find a govt. in the world that does a decent job of any of this, on the scale we need it [indeed, on any scale].

As for heading into the well trod ground, dex, yeah. That's what irks me the most, really. We've been arguing the question for probably more than 30 years, and are we closer to an answer? The world has turned, and still nothing.

The for profit system is based on maximization, which leads to my primary care doc talking to me for 10 minutes, regardless of the fact I only go in once a year. Most of the physical is done by nurses anyway. Part of that lovely 10mins. is the prostate exam, and yeah, like I'm interested in a conversation then?

As has been pointed out elsewhere, the government is going to try and maximize too, but in theory, since THEY are US, we can figure out the best cost/benefit of that maximization.
Except for the part where we don't seem able to do that in any other government service, so why healthcare? The current government answer to lowering cost is to pay docs less, and to pay late. so there are docs who are no longer taking medicaid/medicare or any other government payout. They thought the HMO's were bad...

Fatalistic? Me? Doesn't matter how you look at the glass if it's empty... and nobody elected will take on such a contentious topic, because there are such opposing views...

2:03 PM  
Anonymous Anonymous said...

Let's do some more math.

300,000,000 people in the country
20,000/yr die in car wrecks. That's straight odds. You're not figuring in for extra risk factors, like, how many died trying to outrun a train? How many died doing something equally stupid?

And of those 60% weren't wearing a seatbelt. Well that means 40% were. And of those 60% how many would have survived even with their seat belts?

But, whatever straight odds.
20,000/300,000,000 = .0067%
60% of those without seat belts is .004%.

So, your straight odds are 1/25,000/yr, not taking into account any additional risk factors.

Your lifetime odds of having such an accident, assuming an even distribution of risk over a 90 year life is .363%. Again, hardly a major threat. And I think we can probably all agree that there are extra risk factors than simply being in a car involved here.

So, once again, we're seeing that while you may be bad at determining your actual risk, you're not underestimating it, but instead you're blowing it way out of proportion.

Now, how do you deal with the aftermath? If you're responsible for yourself, you've planned ahead, and you've put money away to cover emergencies. Or, you can buy insurance to deal with the aftermath. I'm not against you having the option to buy insurance. I'm against it being forced on you.


2:27 PM  
Blogger Marcus said...

Justin, I think all of your risk numbers are a little wacky. For one thing, something like 45,000 people a year die in car crashes, not 20,000. But on the bike accidents -- the numbers you cited in post #2 make me think that biking is a pretty darn risky, in the sense that there's no way there are 85 million serious bicyclists in the U.S. That's almost a third of the population. Maybe there are 85 million people who have a bike somewhere in their garage. The estimates I've seen of the number of Americans who bike to work are a few million at most. You put 67,000 head injuries *per year* on top of that and you're talking a major risk.

WEAR YOUR HELMET MEGAN. Even though it does look dorky and all. I always felt marked out as the boring bureaucrat commuter when I wore a helment in Midtown Sac, it's very declasse there.

2:57 PM  
Blogger Megan said...


So why should those of us who DO take the time to think and plan be forced to pay for those who don't? ...

They did it to themselves and should pay for the consequences of their choices.

Because the world is too complicated for each of us to think of everything. I don't want to handle health, I want to handle flood. Past those, though, direct threats to your health and safety include epidemics, food safety, air quality, crime, building codes,... I mean, the list goes on. You can't do a good job of all of it, so you either delegate or pretend something isn't a problem.

Not all sick people did it to themselves. Sickness and virtue are not perfectly correlated. So leaving sick people to their own consequences isn't always, or mostly, fair.


I don't want the government to exercise control over a segment of the economy. I want it to provide me services, like public schooling, fire departments and libraries and fireworks shows.


I really believe there IS no origin. Policy beliefs -> implemented policies -> model of the individual -> policy beliefs in one grand cycle!

You are probably right. But I do think that the model of the individual is a useful access point.


OK. I WILL. I have been since I switched to the fixie, because I am scared she will kill me.

3:15 PM  
Anonymous Anonymous said...

I'm glad Jens brought up the policy professor and the model of the individual back up. I'm late to the party, but I'm bothered by this view of the "individual model aggregated up to society" driving policy choices.

Surely we recognize that there is more than one model of the individual that is correct. Our society is an aggregation of many different models of individuals, over many different dimensions of beliefs and preferences. At the very least, good policy should recognize diversity in the population, no?

So, my model of the individual is not based on me. Just within my family, I have three very different ones, based on my brother, sister and the mirror.

A4, off without a helmet to ride my bike to the bar.

3:52 PM  
Anonymous Anonymous said...


Straying off-topic a bit, but you're the blogmistress, so I'll play :)

I remember visiting the Franklin Institute as a kid (fascinating place -- go there if you're anywhere near Philadelphia -- tons of hands-on science) and reading about how the original private fire departments would sabotage each other's equipment because they were paid by the fire.

I have a zoo membership that I pay for so I can go to the zoo. They have a 'free thursday' program, too. I think non-profit private libraries would work, but I don't get worked up about it.

If there was true local control over schools, I might feel differently about it, but public schools have to serve too many masters, and they're failing spectacularly as a result.

Fireworks are kind of like air pollution. Everyone gets the benefits, but only a small group
pay the costs. Without public funding, fireworks displays would be under-provided.

Which services aren't a segment of the economy?


3:59 PM  
Anonymous Anonymous said...

I'm just going with the number in front of me, multiply those %s by 3, and they're still not significant. At least not in my mind. Of course you may disagree, but then, that's really the point, you can disagree and take whatever steps to reduce the risk to a level you find acceptable for yourself.

If you can come up with better numbers, then please do. My guess for the bikes would be kids are more likely to be injured than adults. And there are far more kids on bikes than bike commuters out there. But, those are guesses.

The other important information missing is what the biker was doing when he had his accident. Did he blow a stop sign? Swerve into traffic? Doesn't the saying go something like, "A pinch of prevention is worth a pound of cure." How do we know the solution isn't to just make bikers better adhere to the traffic laws? Or ask bikers to take fewer risks, and ride in safer areas?


4:08 PM  
Anonymous Dagon said...

You need to model more than individuals (and when you say "the" individual, you're already lost).

You also need to JUDGE the models, and decide what parts of it need fixing, and which policies are likely to change behaviors within the models.

Then you need to model the individuals who will be implementing the proposed policy. Is it likely that government bureaucrat HMO administrators are likely to be "better" than semi-private ones?

My model of the average individual seems close to yours - people who plan and evaluate choices only a little, and would rather that medicine were magic.

However, I recognize that there's a very wide variance among different individuals, and I judge that allowing more of the risk and cost to flow to individuals will shift some individuals some distance toward planning and caring about tradeoffs.

It may shift them only a little, but I don't see any other way to allow people choice without forcing the more careful to pay for the less.

4:11 PM  
Anonymous D said...

so, justin... couple of things, in the way I think about the risk of things... the 20,000 fatalities were the number of fatalities who didn't have their seatbelt on. IIRC the total transport deaths is more like 45,000 but that isn't just cars, that's everything.

You compute risk in a very straightforeward way, but I can't see how that works. Seems like their would be variables... Like are you driving a mile to the safeway in a suburb where the speed limit is 35, and the streets are very wide? Would that change if you were in the city, and it was a highly travelled thoroughfare, with lots of stoplights? Would it change things if you were going out for some munchies at 2am sunday morning? What if it's snowing?

All those things seem like risk factors that change your basic presupposition. If you know they are out there, doesn't that make it prudent to get a car that takes crashes well, and wear a seatbelt? Maybe stay off the streets just after the bars close? How much risk did you just pull out by doing those things? What is the tipping point when risk keeps you from doing what you want to?

What happens when the consideration of risk paralyzes you to the point where you don't move, because there are so many things to worry over.
I think most people are like that, right up to the point where they just stop thinking about it, because they can't fit it all in.

I don't know how to run the risk numbers, because it isn't straightforward. Because the odds of you dying behind the wheel as an individual go up, EVERY time you drive. You can assess the risk statistically, but it can't take in to account the variables that exist when you start your car, in the place you are...

What's it got to do with healthcare? Nothing, exactly... except that 600,000 people die of heart disease, and 500,000 die of cancer every year. Some of them could have seen it coming, and for others, they didn't know they had a problem until they died from it.

The risk thing isn't a game, really. Regardless of how you think of death, we are talking about it. That's an absolute. THEN there are other risks that are not so grave but far more likely. What are the odds you are going to blow your ACL if you suddenly decide to learn how to snowboard? What are the odds that someone will crash into you on the slopes and blow your ACL FOR YOU? Last I heard that was $50K to reconstruct, to where you can walk on it.

So do I wear a bike helmet because I ride to work? Yup. But also because the last time I got a concussion, the doc said I was now in the zone where the next one might be brain damage...
or permanent black.

so it seems to me like there's the assessment of risk, and there's the crapshoot involved with getting out of bed in the morning. Kina alike, and kinda... not.

10:39 PM  
Blogger Justin said...

I know d, I even said we can't take extra risk factors into account, those are staright odds, if driving a car were a roll of the dice, those are your odds.

The reality is, most of you are much lower risk than that, but, even with the straight odds it's not a major risk.

My guess is Megan's biggest risk factors while biking are
1) Ignoring traffic laws, blowing stop signs, stop lights, riding in cross walks, etc.... (Remember, she's all law and order, until it applies to her.)
2) Riding with music blasting in her ears.

Outside of that she likely rides on safe streets, at low speeds, in pretty much straight lines, not weaving in and out of traffic, not taking a lot of blind corners, and not riding in very heavy traffic.

And, again, I'm not against health insurance. But I am against this crazy notion that everything is horrifyingly dangerous. Riding without a helmet doesn't mean you're bad at assessing risk. There's very little risk involved, unless you're doing things to make it more risky. Driving without a seatbelt isn't particularly risky either.

People just assume these things now. You've had it beaten into your heads that not using a seatbelt is absolutely crazy, and riding without a helmet is as stupid as playing Russian Roulette. I keep hearing people are bad at assessing risk, but really all I see you guys doing is blowing your risk way out of proportion with the reality.

Of course some people are going to die from not wearing a seat belt, or not using a helmet. But, some people are going to win the lottery too. I'm not planning my life around either.


8:12 AM  
Blogger Noumenon said...

Here's a page that gives the odds of dying in a transport accident in the U.S. as 1 in 6,050 (per year) or 1 in 78 (lifetime).

9:07 AM  
Blogger Megan said...

My guess is Megan's biggest risk factors while biking are
1) Ignoring traffic laws, blowing stop signs, stop lights, riding in cross walks, etc.... (Remember, she's all law and order, until it applies to her.)
2) Riding with music blasting in her ears.

Hmmm. I think that my risk factors are:
1) Ignoring traffic laws, blowing stop signs, stop lights, riding in cross walks, etc.... (Remember, I'm all law and order, until it applies to me.)

1.5) Getting doored. I swear to god, a door opens on me about once every two weeks. One of y'all will send me over my handlebars one day. I ride wide whenever I possibly can.

2) Riding with music...

Did I tell you that I was actually clipped by a truck a couple weeks ago? Sucked. Not my error, in that one. Wasn't hurt, though.

9:40 AM  
Anonymous Nathan said...

Risk factors are not equally distributed across a global population. Each individual must have their risk factors evaluated seperately to get an accurate feel for their risk. This risk evaluation is what makes insurance companies the "experts".

Now, for-profit insurance companies manage their bottom line by managing the collective risk from all their clients. Many insurance companies calculate premiums on an individual basis to gain increased control of the collective risk. This is why your car insurance goes up or down based on associated risk factors, i.e accidents, trafic tickets, and so on. Speeding tickets raise your rates significantly because speeding significantly increases your risk of having an accident.

When you pay your premiums, you subsidize the costs of those that had an accident, and in return, everyone else will do the same for you. The insurance companies are the gearing that allows the insurance mechanism to run.

Strangely, health insurance companies do not set premiums on an individual basis. Why? Perhaps it is because many companies buy insurance plans in bulk, and evaluating the risks for every employee isn't practical. With this type of system, when someone has surgery, the price of that surgery is equally distributed among all the insured. If an insurance company's payouts increased by 10% in the last year on account of a million of their clients gaining 200 pounds, then everyone shares the cost of a million open heart surgeries.

I don't think I should pay for someone who smokes, is overweight, isn't physically active, and has a family history of diabetes. They are engaging in those risky habits, so they should pay more for their insurance.

If the government takes over as overseer of health insurance, then the government has the capability to assign health insurance rates (or the health insurance tax) on an idividual basis. The government may do this by itself, or it could subcontract to the many insurance companies already proficient at calculating and managing risk factors. The government would also have increased price negotiating power and direct oversight of a large swathe of the industry. This would give the government--and by proxy, its people--control over the price of health care. Want health care costs to go down? Force the government to transition tax dollars from other programs (I nominate defense spending) and find ways to lower the cost of health care.

There is no reason to assume the health insurance system will be less efficient or more costly with the government at the helm. I personally would feel more comfortable with a non-profit organization overseeing the management of my health care.

The one caveat: this system would be instantly hijacked by lobbyists if the lobbying laws aren't changed, and then we'd be back where we started.

4:50 PM  
Anonymous Anonymous said...

I agree that individuals are not rational and are unable/unwilling to spend a lot of time comparison shopping. I think there’s another common trait that needs to be accounted for in health policy planning: We don’t want a single piece of bad luck to erase everything we’ve achieved through a lifetime of work and responsibility.

There are a lot of us (myself included) who avoid smoking, eat a nutritious diet, consume alcohol in moderation, and get plenty of exercise. Yet we still might be dealt a bad genetic hand, or we might be one of a statistically small group of people who ends up in the path of a drunk driver or a nasty pathogen.

Our homes might have built on contaminated land or with shoddy construction that makes them prone to collapsing, harboring mold, or otherwise becoming a hazard. We might be using or consuming products that virtually everyone assumes are safe, only to find out that an ingredient is carcinogenic (and was never tested by the manufacturer), or that the products are harmful in a way that virtually no one expected them to be (e.g., microwave popcorn). Here, too, genetics will play a role in who suffers. Existing regulations only go so far to guard against these types of things, and some companies will flout the law anyway.

I don’t want to have to go extreme lengths to protect myself from these unevenly distributed risks. I don’t want to lose my home and/or fall into a spiral of health problems that will keep me in constant pain and prevent me from contributing to society just because I was one of the unlucky ones. I’m willing to pay insurance premiums, co-payments, and taxes, but then I want the government to do something to ensure that I won’t be ruined by bad luck. (FWIW, I favor a single-payer system, which does not necessarily, as some commenters have suggested, mean that the government will be running the hospitals.)

A large segment of the population agrees with me. We think the government should provide certain things, like public education, so that a person who’s born in poverty has a shot at success if he or she is willing to work hard and play by the rules. We want a health system that reflects this.

-- Liz

9:38 AM  
Anonymous secret asian man said...

Your model of the individual may be correct.

Your model of the government is dead wrong.

What makes you think the government has your best interests at heart, or that the government is competent?

I don't think that the guys that came up with Iran-Contra and Japanese internment have my best interests at heart at all.

They have their own best interests at heart, and we have even less leverage over them than we have over private industry.

10:23 PM  
Blogger Erik said...

My model of the individual, if you can call it that, is that people are different from each other. They have different needs, wants and priorities, different ways of calculating risk, and different levels of attention span.

Because people are so different, the less personalized your insurance is, they worse off you are. This is what is wrong with our current system, but it will be much worse if we switch to a government payer system.

The solution is to put incentives in place that encourage people to get their insurance personalized. I can hear Megan saying "But I don't want to personalize my health care. I want an expert to do it for me." You have several ways of doing this. You can default to the most comprehensive plan, assuming that's what the government would provide, or you can ask a doctor, or insurance agent to recommend a plan to you, based on health and income factors.

On a side note, The government currently has a plan for a tax credit that is designed to make insurance affordable for even the poorest people in the country. It is expected to reduce the uninsured to only those who have chosen not to buy. It is simple and fairly cheap. Last I heard it was unlikely to reach the floor. You may draw your own conclusions about why.

3:41 AM  
Anonymous Anonymous said...

Megan, have you tried genaralizing from your model of the individual?

Do you believe it supports democracy, for example.

After all, if you cannot trust people to do what is best for themselves, how can you trust them to vote for what is best for others?

11:52 AM  
Blogger Mike said...

You're doing exactly the right thing wrt bike helmets, because evidence from the real world (rather than some critically flawed studies) has shown that they don't really work.

12:42 PM  

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