Members of the Old Ivy Political Economy Club stop babbling to one another as Lily Chang steps to the podium. Per usual, Lily is impressively hot in her daringly low-cut and tightly-fitting bright pink cocktail dress. This morning, Lily added a chapter to her book in progress, How to Succeed Through Hotness.
"Just a few announcements before we start." Lily ruffles through her notes, pausing to display some cleavage. "The Annual Christmas Party will be here, in this room, next Saturday the fourteenth. Jews are welcome to attend if you refrain from whining about Christmas music or mentioning pogroms and the Holocaust. We already celebrated Hanukkah last week, so just shut up about it already." She pauses, and glares at a fourth-year student in the front row. "This means you, Joshua."
"Okay, okay!" says Joshua. "I was only kidding about the pogroms."
Lily continues. "We will celebrate Ramadan whenever that is. Kwanzaa is on the holiday break, so you can celebrate that at home. If anyone is offended or feels left out, you are welcome to organize your own religiously themed holiday party." A hand shoots up in the back of the room. "Yes, Albert?"
"What about atheists?"
"You are welcome to organize an atheist holiday party, although so far as I know there are no atheist holidays."
At Old Ivy, there is no competition or conflict over allocation of student activity fees, because there are no student activity fees. Each club charges whatever it likes for membership, and students who want to organize a party may do so and fund it however they like, including admission fees.
"Moving along...," Lily shuffles her notes again and shows a little more cleavage. "...there will be another "overflow" presentation of papers this coming Wednesday at noon. Roderick will deliver part four of his presentation, and Willard Fong will present his paper QE2: WTF? There will be a free lunch."
There is a general hubbub in the room as members of the club look at one another in confusion and consternation.
"Okay, that was my little joke. There's no such thing as a free lunch, it will be ten bucks."
Audible sighs of relief, and scattered applause.
"Now I'd like to introduce Roderick, who will deliver part three of his long thing about health insurance."
"Thank you, Lily," says Roderick, stepping to the lectern. As he passes Lily, she whispers something in his ear that he doesn't quite catch, but it seems to be an invitation and includes a word that sounds like "duck".
Roderick launches into his presentation. "You may recall from the first session that we discussed a three-part categorization of health and medical services: emergency care, for which it is difficult to speak of a "market" per se; services that are medically necessary but not urgent; and discretionary services. Today, I will outline policy solutions for urgent care and discretionary care, and on Wednesday I'll outline policy solutions for everything else.
"We begin with urgent care. It may surprise you to learn that this category accounts for just two percent of all health care spending. Under existing law, emergency rooms must treat all patients regardless of ability to pay, and most states offer subsidies to hospitals to fund free care. The quality of emergency care in the United States is excellent.
"It seems to me that emergency care is comparable to police and fire services: there is a reasonable case to be made that these services are a public good and should be made available to anyone regardless of ability to pay. Like police and fire, emergency care should be funded at the state and local level, since states and municipalities are best able to monitor quality and compliance, and to determine appropriate levels of service. There is no compelling reason for a Federal role in funding emergency health services, except to provide research grants, support emergency medical training and education and to assist local jurisdictions with capital spending.
"Since the Federal government already does these things, the appropriate course of action is to do nothing."
There is a murmur of approval in the room.
"At the other extreme, discretionary care, the policy options are also easy. There is no reason why anyone should be forced to subsidize breast implants, sex change operations, laser vision treatment and so forth. Discretionary care is also subject to moral hazard, and not an insurable risk. Those who want these services should pay for them out of their own pockets.
"Now, some might point out that it's not fair that wealthy people will be able to afford breast implants and psychotherapy, but poor people will not. They will seek to form an alliance with those who provide these services -- plastic surgeons, psychotherapists, acupuncturists, chiropractors, massage therapists, "past lives" counselors and the like -- that these services are all medically necessary. To which I have two responses: first, there are many things in life that are not fair; wealthy people have nicer homes and cars than poor people, and send their children to private schools. It's not possible for everyone to have the same share of the wealth, and in most areas of policy we don't even try.
"My second response is simply that risks are either insurable or they are not insurable. Discretionary medical spending is not insurable due to the moral hazard; this is true whether the insurance is underwritten by the government, by charities or a for-profit insurance company. European-style government-run health insurance programs do not cover discretionary health care expenses for the simple reason that they can't afford to do so. In this country, Medicare does not cover discretionary treatments, for the same reason.
"So, unless you are a Communist I think you will agree that discretionary medical spending is best left to the free market, and the Federal government should do nothing.
There being no Communists among the membership of the Old Ivy Political Club, the audience responds to this line with heartfelt applause.
Lily steps to the lectern and whispers to Roderick: "Nice presentation. Would you like to squeeze my buttocks?"
Roderick does so, and departs.
Later, in the Dining Hall, Roderick sits with Molly and Megan.
"I delivered the third part of my presentation on health insurance today," he announces, "and then I squeezed Lily Chang's buttocks."
"Really?" says Molly, raising her eyebrows. "How do her buttocks compare to mine?"
Roderick thinks about his response, recognizing this to be a trick question. Truth be told, Roderick has never actually squeezed Molly's buttocks, though he has seen them and snuggled against them many times.
"Your buttocks are the best," he murmurs, an answer that seems to satisfy Molly.
Megan chimes in. "I have lovely buttocks."
Roderick can't disagree with Megan on this point. He has observed Megan's buttocks at close quarters many times, and her buttocks are right up there with Molly's, maybe a little nicer, but he would never mention that last part in front of Molly.
Later, Roderick calls Mr. Smiley.
"Hello?"
"Hi, Mr. Smiley, it's Roderick."
"Hi, Roderick."
"Whatcha doing?"
"Oh, you know, the usual thing for a Sunday evening." Roderick understands this to be Smiley code for "nothing".
"I delivered the third part of my paper on health insurance today."
"That's nice."
"And at dinner we discussed buttocks, and the squeezing thereof."
Mr. Smiley isn't quite sure how to respond to this. Smileys, as a rule, do not squeeze one another's buttocks, nor do they consider it polite to discuss any body part "down there". Mr. Smiley understands, however, that Roderick can't be expected to comprehend Smiley ways. He thinks about happy cows, and smiles.
"That's nice."
