Competition in health care?

Sheldon Richman explains why more competition would be good in health care.  He writes:

Competition is the universal solvent: it dissolves all kinds of problems. (I refer to competition in its broadest sense, including what goes on in the unrestricted marketplace of ideas.) The reason competition is so effective at enhancing public welfare is that no person or group has a monopoly on knowledge and wisdom. These are scattered throughout society, and we cannot know who has the information or vision that is exactly what some or all of us are looking for. With goods and services, knowledge comes largely in the form of prices, which communicate supply and demand conditions and give entrepreneurs clues to how they can satisfy hitherto unsatisfied consumer demand and thereby earn profits.

Everything in the previous paragraph applies to medical care and insurance. The dogma that such services and products are outside the scope of economics is merely self-serving nonsense.

He then goes onto explain how competition is currently “curtailed”:

The practice of medicine (physicians, nurses, etc.) is licensed by state governments. The medical-facility industry is largely governed by state certificate-of-need requirements. Medical schools are subject to government-linked accreditation. The insurance industry is ruled by 50 state governments in cahoots with insurers and, since 2010, the national government; the Department of Health and Human Services defines basic coverage, criteria for acceptance, and price rules. Drugs and medical devices are the domain of a government bureaucracy, the Food and Drug Administration (FDA) and patent law. Individuals are mandated to have insurance. This only scratches the surface.

I know it’s very, very tough for people to imagine a world where doctors are not licensed by the state government.

Who will make sure they are any good?

The same people who do now. Us.

Anecdotes prevent licensing from going away. It only takes one horror story of an unlicensed doctor to get most people to think, “See! This is why doctors need to be licensed.”

Yet, even with licensing there are horror stories. Nobody asks, “How did licensing let this one through?”

The straw that is breaking the camel’s back in retail itself isn’t killing off retail. One simple, sleepy innovation is: Free 2-Day Shipping.

Yes, it came from and it requires to back it up. But, before Free 2-Day Shipping, I rarely ordered stuff online unless I simply couldn’t get it at a local store.

Free 2-Day Shipping was the game changer for that.

It made me realize how much I didn’t like going to stores. The parking lots are a pain. You have to walk lots. People are weird. They manage their cashiers so tightly to save costs that you must always wait in line to check out. And, the big boxes often do not have what you want.

What is legal vs social norm

I think this argument that United Airlines was within its rights is well-articulated.

I also think the author misses that there are sometimes a big difference between what is contractually legal and social norms. A reason the United Airlines case is receiving so much attention, most of it against United, is that it grossly violates social norms whether or not it violates the law.

The speed limit is 65 mph (what is legal). People often drive 70 mph (social norm) without fear of being pulled over. Do people receive tickets for doing 70 mph? Yes. Does that stop us from breaking that law? No. Have we all driven past a police officer while going 5 mph over the speed limit without getting pulled over? Yes. Lots of times.

In the United Airlines case, social norms are saying that paying for a ticket should not carry the risk of being forcibly removed from the flight.

Social norms are also saying that airlines, not its customers, should pay a fair price if the airline decides it needs to remove passengers.

Maybe articles like the one I linked to will help change social norms.

I hope not. I’d rather that the pressure from social norms cause airlines to rethink their overbooking policies to come up with something more agreeable with social norms than converting paying customers into trespassers at the airline’s whim.

More differences between US and European youth soccer

This excellent blog post is on Sacha van der Most van Spijk is on his organization, Home Field Advantage, website.

I think the following from it is a good adder to my post about Sacha’s interview with

I spent many years in my native country of the Netherlands coaching at a community-based club. As I began to find a deeper love with coaching I decided to make a switch and move to the United States in hopes of sharing my love and passion for the game. My first stop began in Northern California where I coached soccer camps with the Ziemer brothers. Later, I moved to Southern California where I took a position as the head coach of a High School soccer program. The following year my progression in the coaching world continued and I began coaching a couple of Club Soccer teams.

Not knowing what to expect, I was very surprised with the way the Club Soccer was structured. Our club played “home” games at a variety of different fields in the area and the league season lasted a mere 3.5 months. Most of the weekend games were being played back-to-back both on Saturday and Sunday. In Europe every youth club has their own home field, league season is spread out in a 9-10 month season, and games are played only once a week.

During State Cup is when I began to question whether my involvement in coaching was actually fun. Early morning games were scheduled at giant soccer complexes about a 2-hour drive North, parking fees were charged to add to an already expensive weekend, games would be scheduled 3 to 4 hours apart, and the boys were required to play 3-4 games in two days!

Some things sound good about the structure of soccer in the Netherlands. Ten month season. One game a week.  A long season to be able to gain the mastery with the burn-out drudgery or multiple game weekends. Games always on the same day (from the podcast). Mostly in the same place.

What’s keeping us from doing that? The fragmentation of the sport between rec, clubs and schools, that’s what.

Missing ingredient in US youth soccer II

There is another thing worth mentioning from the podcast interview with Kephern Fuller that I wrote about in this post.

He said that the youth sports experience is more independent of parents than in the United States. The kids ride their bikes to the club. Their parents don’t come to practice. He said the kids would be mortified if they did. It’d be like a parent coming to watch a child in school.


The answer, my friend, is in the feedback loop

I sometimes forget about my ToE (Theory of Everything): All problems can be traced back to a problem in the feedbacks.

I find this provides a useful lens to look at a lot of problems.

Walter Williams provides a good example in his column this week, Educational Sabotage. It turns out, if you don’t discipline (feedback loop) students for their bad behavior, you get more bad behavior. That shouldn’t be shocking. But, for some, it is. Sadly, the kids who want to get an education suffer the most because of this unwillingness to provide good feedback.

John Stossel provides another good example in his column, Free Market Care. He correctly points out that:

Someone else paying changes our behavior. We don’t shop around. We don’t ask, “Do I really need that test?” “Is there a place where it’s cheaper?”

Cost is a feedback that you and I use to determine if something is ‘worth it’.

When I changed from my previous ‘subscription’ health plan (what most people call insurance) to an HSA+insurance plan, about 10 years ago, I went from paying a flat monthly fee with small co-pays when I visited a doctor to paying for the first few thousand dollars of my medical expenses out of my HSA before the lower monthly fee insurance kicked in.

Shortly after that switch, I took my son to the ER because he wasn’t able to keep anything down. The docs suggested an X-ray to rule out an obstruction.

I asked what the chances were that it was an obstruction (less than 5%) and how much the X-ray would cost ( I was thinking $500, but they said less than $200, depending on insurance).

I decided to get have the X-ray. He was clear. I was pleasantly surprised when the bill was $74. As I was writing the check, I  thought, had this been a year earlier when I was still on the subscription plan where the X-ray would not have cost me anything extra, I would not have asked questions to evaluate whether it was worth it.

The total amount of what I saved each month in my HSA plus the cost of the insurance was the same as the what I used to pay for my subscription plan. In this case, about 75% went to my HSA and 25% went to insurance.

So, in this case, the feedback loop was improved by simply putting a portion of my medical expenses in my control.

A missing ingredient in US youth soccer

Here are two interesting podcasts from John Pranjic at

  1. An interview with a former Dutch soccer player, Sacha, who is currently serving as a scout for the Mexican national team.
  2. An interview with an American coach, Kephern, who is building pathways for American soccer players in Europe, especially the Netherlands (or Holland).

I found the following tidbits interesting.

Growing up soccer in Holland (vs US)

Sacha describes what it’s like growing up as a soccer player in the Netherlands. It’s a stark contrast to the U.S.

It starts with neighborhood pickup games at the park where the older players bring you in to even out sides. That’s common for basketball, football and baseball in the U.S., but not soccer, which is mostly an adult-led activity for youngsters.

Then, you join a local, inexpensive club. He said every neighborhood has a club.

It’s cheap at about $250 per year for a 10-month season compared with $1,000-$3,000 per year for a youth soccer club in the U.S.

There, clubs have a club house, fields and junior and adult teams. Most clubs in the U.S. do not have a clubhouse, fields or adult teams.

At 15, he coached a younger team in the club. Compare this to the U.S., where many are either parent volunteers or former college/semi-pro players trying to make a living.

This inspired him to start a non-profit organization, Home Field Advantage, to teach high school soccer players how to lead and coach a soccer program for elementary students.

The youth teams in their clubs play on Saturdays and the adult teams play on Sundays. The youth players often attend the adult games. They know the adults because they practice near them, are coached by them and see them at social functions. Compare this to the U.S. where kids barely pay attention to soccer outside their team bubble, even within a club.

I assume, that like much of Europe, in Holland athletics and academics isn’t wedded like in the U.S., so the club is the primary source of athletics.

This is the website for his club: Quick. With a little help from Google Translate, I’m able to deduce that they have youth, adult, veteran and masters teams. Sacha said they have 1,500 members.

Differences between European and American youth soccer players

In podcast #2, Pranjic asked Kephern about differences he sees between American and European players.

He said a key difference is in the players knowing where they’re going. American kids don’t seem to have a good sense of this. They are okay to say they’re the best on the team and their team has had some success, but they don’t have a sense beyond that of what good looks like or what kind of player they are working to become.

European kids have a much clearer picture of what they want to become. This shows up in the effort they put in on and off the field and how seriously they take and compete within a drills during training.

Connecting the dots between the two interviews

I think that American and European youth soccer players strive to achieve within their insular bubbles. It’s just that that bubble in Europe, created by the club, includes more exposure to higher levels of play for youth soccer players than in the U.S.

The beginning level senior team in Sacha’s club is like to the high school team in the US, with a key difference. The European youth interact with members of that team often. They watch their games, they may practice on the next pitch and they are coached by them. They know those guys. They are part of the same club.

This gives, as Kephern says, European soccer kids a good idea of where they’re going because they’ve been immersed in it for about decade by the time they are old enough to be considered for the adult team.

A part of the reason there’s such a difference between the U.S. and Europe is that schools have co-opted the sports experience in the U.S. so the soccer system that has emerged in the U.S. is much more fragmented for the youth soccer player than it is in Europe.

In Europe, it’s a short step from pickup soccer to inexpensive clubs where kids can learn and play the sport for decades. While they’re there, they see what “good” looks like from the top adult teams and learn it takes years of practice, patience and play to get there. They may also see a few of their fellow club members make it to the pros.

In the U.S., most kids don’t experience pickup soccer. They start in parks and rec or YMCA program where they learn little more than the difference between a corner kick and goal kick.

If they rise to the top of that bubble (which usually means knowing whether it’s a corner kick or goal kick faster than others on the field), they may join a club that has paid coaches and teams divided by 1-year age groups and skill levels, so games will be competitive to keep kids, and parents, interested.

Sounds good, except, it rarely exposes the kids and parents to what good looks like and what they should want to become. Why try hard to clean up your 1st touch when you and you’re team are competitive?

After a few years in a club, they enter high school and may decide to play there. It’s tough to balance club and high school, so club ranks thin out.

Many adults play soccer in the U.S. at indoor soccer complexes, but these teams are  disconnected from youth soccer. If, in the rare case a club does have a senior team, it’s not common for the youth and senior to practice anywhere near each other.

Club-based vs. School-based sports

Does this theory hold up in other sports? The U.S. dominates in basketball, American football and baseball, which are largely school-based.

Yes. But, these sports were invented in the U.S. and haven’t caught on in countries with the sports club model. It’s easy for the U.S. to dominate with its school-based sports model because its competing against countries that don’t play these sports in a serious way. So, something is better than nothing.

The Dominican baseball academies are similar to sport clubs and they are doing an excellent job of developing talent, being the 2nd largest supplier of MLB players, behind the U.S.

What does this mean?

If the above is true, then anything that helps youth soccer players experience what ‘good’ looks like on a regular basis can help.

Sacha’s Home Field Advantage may be one way. There are lots of others.

Even the MLS is another way. As it gains popularity kids will want to emulate their favorites more, like they do in other sports.