Unsure-ance

According to this article in the New York Times, an insurance company has started offering insurance on the chance that your other insurance policy might fail.

As you may or may not know, the US health system is heavily based on insuring against health problems, as opposed to the comprehensive model chosen by most other Western countries, but a lot of the insurance policies people have are financed as part of their employment deal. This means that if you lose your job or have to change to one that doesn’t cover health insurance, you either lose insurance or have to pay for it yourself. Don’t have one? No treatment. So here is a new policy, designed to insure you from sudden loss of insurance. Two points:

1. I smell a recursion here. There is never enough insurance, so why not get insurance against this insurance too? This strengthens the claim that a pure contractual society is not possible. In the end, there must be some trust in order for society to function

2. How can anyone still claim that this is overall cheaper than having a comprehensive system? Looks to me like the only ones benefitting from this arrangement is the insurance sector.

On an entirely different note, and much closer to my field of research, there is a new report* out on the effects of New Public Management policies in the public sector. In summary, the system works as following: in order to ensure maximum efficiency in all public service, every operation by a public entity must be submitted to cost control and constant revision. This ensures fair competition, accountability and the right allocation of resources.

Unfortunately, there are two large (and other lesser) problems with this model. Firstly, constantly changing suppliers of public services undermines the accumulation of expertise and knowledge in the supply institutions, which is clearly not efficient. Secondly, and more seriously, the accountability measures are themselves expensive. Often, the tiny expense saved by constantly focusing on cost containment is more than offset by the increased expense of constantly checking whether people are doing as they are required. Not to mention the negative effects on morale of institutionalised distrust.

Enough politics. Here is a video on how to build an igloo.

* Full disclosure: The report is released by a political party, SV, where I happen to be a member. Anything in the report must be taken to be coloured by their views. Why link to it? First, one of the authors, Bent Sofus Tranøy is a researcher in welfare state politics in Oslo, and not a member of the party to my knowledge. Second, it does seem to be seriously referenced.

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