Markets Can Be Informed Even If Consumers Aren’t

IBD's Capital Hill ^ | 2/9/2010 | David Hogberg

[Slyscribe]

Over at The New Republic, Jonathan Cohn attacks the Medicare portion of Rep. Paul Ryan’s “Roadmap”. The Wisconsin Republican would give seniors a voucher under Medicare in the expectation that they would shop around for the best insurance and health care. But Cohn doubts seniors are up to the task:

That all sounds perfectly innocuous: Who wouldn’t want seniors taking the initiative and hunting around for the best bargains? But it’s not clear how many seniors really have the ability to navigate the world of health care with the sort of sophistication to really hunt down the most cost-effective care, even if, as Ryan promises, they’d have more information at their disposal.

[Slyscribe]

Cohn’s underlying premise is that seniors are not very well informed on health care. That is true but also irrelevant. Markets do not lower the prices and improve the quality of goods and services because consumers are generally well informed. Markets do those things because of marginal demand.

[wastoute]

Typical nanny state logic from so called progressives. Just let the gummint take care of you. Let’s don’t look too closely at WHAT the gummint provides when it does.

[1rudeboy]

Not to mention that Cohen's assumption is mildly offensive (to seniors). For cripe's sake, the local Chinese buffet has a discounted Seniors' lunch on Wednesdays. It's never advertised, as far as I can tell. The seniors have found it just fine, and pack the joint.

If they can do that, they can shop for health insurance.

[achilles2000]

This is the key to understanding the second-rate intellectuals who call themselves liberals. They have a driving need to feed their sense of self-importance. Because they typically can’t achieve much in the milieu of private transactions, they manufacture “narratives” about how others need to be guided by their superior intellects, and because those who so dearly need intervention by the great liberal minds often don’t recognize their need to become wards of their betters, it is necessary for there to be a government with broad coercive powers controlled by liberals.

“Free will”, “choice”, and “responsibility” all have to be described by liberals as “myths” because if they were to admit that these things exist, there would be no need for their “services” and their egos would be destroyed. Never forget: liberals seek power to feed their egos. All of the rest of their blabber is just deceit in the service of their pursuit of ego gratification.

[mcashman]

There are actually even more mechanisms at work to drive competition, which work directly against Cohn’s premise.

- Competitors who find that their health plans or health plans in general are too complex will create simpler products and those competitors who don’t will counter with more education or tools to help seniors understand their more complex plans.

- Most people don’t know how cars, houses, or appliances work; nevertheless, price and key features help them navigate the complexity.

- Government always produces a “one (or two)size(s) fit all” solution, which almost certainly will be a mismatch for 80% or more of the population. The creative ferment of free markets offer thousands of solutions. When the result of that ferment is too complex, aggregators, wholesalers, brokers and other middlemen come into existence to help consumers navigate complexty or large numbers of choices.

Like most liberals, Cohn is clueless on how free market economic systems actually work. He can only understand a system where he can point to a person (or king) and say “he makes this work” (Hope and change... !@$%$)