Today, in Joseph Wharton Hall, Roderick presents a paper to the Old Ivy Political Economy Club. A note on the venue: Old Ivy College has no affiliation whatsoever to Joseph Wharton or the Wharton School of the University of Pennsylvania. The Trustees of Old Ivy simply thought Wharton was a smart fellow, and dedicated the Political Economy building to his memory. On his way to the lecture hall, Roderick pauses to read a plaque in the lobby:
Wharton lobbied successfully in Washington, D.C. for tariff laws protecting U.S. manufacturing. He was a defender of large business and evolved into a staunch Republican. He successfully lobbied for the use of nickel in the U.S. coinage, but his lobbying for nickel tariffs was only partially successful, probably because he had a virtual monopoly on production in the U.S."Wow," thinks Roderick, "an exemplar of rent-seeking."
Wharton became widely known as a leader of the Industrial League of manufacturing concerns, and the main lobbyist and President of the American Iron and Steel Institute. Wharton successfully lobbied for a bill in the Pennsylvania General Assembly supporting Limited Partnerships to allow more participation of capital in enterprises with risk.
Wharton wrote extensively on economic matters, including protective tariffs and business cycles. In 1881 Wharton donated $100,000 to the University of Pennsylvania to found a "School of Finance and Economy" for this purpose. He specified that the Wharton School faculty advocate economic protectionism, as he had when lobbying for American businesses in Washington.
The lecture hall is packed. Roderick prepares his notes backstage while Lily Chang addresses the crowd with a few announcements.
"Now it's time for today's paper. I would like to introduce Roderick Smith, second-year student, who will deliver Part One of his paper on "How to Fix Health Insurance."
Roderick steps onstage and shakes hands with each of the three panelists, officers of the Old Ivy Political Economy Club, who are seated to the right of the podium. Last, he shakes hands with Lily, who wears a stunningly low-cut yellow dress.
"I'm not wearing any underwear. See me afterwards," she whispers as he drops his notes on the podium. Roderick thinks about what he's doing after the presentation: some logic problems, help Molly with Rhetoric, study for the Political Economy test, call Mom and Dad, call Mr. Smiley, visit Megan. Lily's lack of underwear is intriguing, to say the least, but so much to do, so little time.
He taps the mike. "Hello!
"Today I'm going to talk about how to fix health insurance. To begin with, I'd like to stipulate two things: I don't know a thing about how to prevent disease, cure the sick, help people live longer lives or improve life expectancy, which is the ultimate end of health care. This is simply a discussion about health insurance, or how to pool risks and pay for health and medical treatments.
"The second thing I'd like to stipulate is that while we conventionally speak about health care as if it is a single class of goods and services, it is actually several different sets.
"The first class of goods and services I will call urgent care: that which is necessary to keep someone alive. This includes such things as treatment for gunshot wounds, victims of natural disasters, terrorism and the like, as well as treatment for medical emergencies such as heart attacks, strokes and so forth.
"The second class of goods and services I will call medically necessary care: treatment that is medically necessary to cure or ameliorate a defined condition, but does not need to be applied immediately to save the patient's life. An example of this would be a surgical procedure to clear partially blocked arteries; the patient's long-term survival depends on having this surgery, but there is some discretion about when to schedule it.
"The third class of goods and services I will call discretionary care. This includes a range of medical treatments, from cataract surgery to hip replacement, that improves the quality of life for the patient, but the patient can live without it.
"In public discourse, it's customary for advocates of a government role in health care to speak about market failure in health care, and to lump all health care goods and services together and treat the entire category as a public good.
"Now I grant that it's difficult to speak of a market for emergency services. When you're hit by a car, you don't ask the ambulance driver to check prices at several hospitals before choosing where to take you. Arguably, there is a public interest in not having patients bleed to death just outside the emergency room simply because they don't have insurance. In any case, it's a matter of settled Federal law that emergency rooms must treat all patients, insured or not, including non-citizens.
"At the other extreme, purely discretionary care, there is a robust market for treatment such as laser eye surgery, plastic surgery, sports medicine, and so forth. These treatments are rarely covered by health insurance, but providers compete aggressively for business and prices are relatively low.
"Even in the middle ground of treatment that is medically necessary but not urgent, the experience of the Amish -- who have a religious objection to insurance -- shows us that it is certainly possible for groups to shop around for medical treatment and negotiate aggressive prices.
"So the first thing we need to do when we think about solutions is to stop talking about treatment for gunshot wounds and sex change operations as if they are the same thing.
"Next week I'll talk about solutions." Roderick steps away from the podium, to generous applause.
Later that evening, Roderick snuggles against Molly, and thinks about Lily with no underwear. He rarely thinks of Molly with no underwear, because she never wears any.
