1 I feel compelled to put the words “Canadian system” in scare quotes because there is no such system but instead provincial systems operating within a federal framework. See, e.g., Barer, Morris L. et al, “Fee Controls as Cost Control: Tales from the Frozen North,” 66 Milbank Q. 1 (1988).CrossRefGoogle ScholarPubMed

2 For a summary of these proposals, see Blendon, Robert J. et al., “Making the Critical Choices,” 267 JAMA 2509 (1992).Google ScholarPubMed

3 “The Bush-Clinton Health Reform,”N.Y. Times, 10 Oct. 1992, § 1, at 20, col. 1 (lead editorial in nat'l ed.); see also “Hillary Clinton's Potent Brain Trust on Health Reform,”N.Y. Times, 28 Feb. 1993, § 3, at 1, col. 2; “Suddenly, Momentum for Health,”N.Y. Times, 10 Dec. 1992, § A, at 26, col. 1 (lead editorial in nat'l ed.); “Canada's No Medical Market,”N.Y. Times, 26 May 1992, § A, at 16, col. 1 (lead editorial in nat'l ed.); “For Health: Healthy Competition,”N.Y. Times, 26 Jan. 1992, § E, at 18, col. 1; “Tax Credits for Health: Wrong Rx,”N.Y. Times, 16 Dec. 1991, § A, at 18, col. 1 (lead editorial in nat'l ed.).Google Scholar

4 David Mechanic, “The Role of Sociology in Health Affairs,”Health Affairs, Spring 1990, at 85, 90. As explained in its masthead, “Health Affairs is a multidisciplinary journal dedicated to the exploration of major domestic and international health policy and is published quarterly by Project HOPE.” Its articles are free of jargon, not technical, and thus are written for a broad readership in industry, labor, government, and academia.Google Scholar

5 Project HOPE, “Prologue” to Victor R. Fuchs, “National Health Insurance Revisited,”Health Affairs, Winter 1991, at 7.Google Scholar

6 Mechanic, Health Affairs, Spring 1990, at 92–94.Google Scholar

7 Odin W. Anderson, “Letter to the Editor,”Health Affairs, Winter 1991, at 314, 315.Google Scholar

8 Id. at 314–15.Google Scholar

9 See Enthoven, Alain & Kronick, Richard, “A Consumer-Choice Plan for the 1990s: Universal Health Insurance in a System Designed to Promote Quality and Economy” (First of Two Parts), 320 New Eng. J. Med 29 (1989); id., “A Consumer-Choice Plan for the 1990s: Universal Health Insurance in a System Designed to Promote Quality and Economy” (Second of Two Parts), 320 New Eng. J. Med 94 (1989).Google Scholar

10 Enthoven's plan has been shaped in large part by his sense of political feasibility. In his words, enactment of universal health insurance “in any form would be a remarkable achievement. To be politically viable, a proposal for universal health insurance must respect American cultural preferences for pluralism, diversity, local solutions, and individual responsibility. It must consider the preferences of providers and consumers for a variety of systems and styles of care. It must not provoke the strong opposition of large or important groups.”Enthoven, & Kronick, , 320 New Eng. J. Med at 94. In contrast, Pauly's plan has been constructed “without making assumptions about political feasibility” (at 2).CrossRefGoogle Scholar

11 Responsible National Health Insurance is published by the American Enterprise Institute, a Washington policy think tank. The text is not technical in presentation; particularly, it is devoid of the mathematical discourse that is the currency of the realm within the neoclassical community.Google Scholar

12 I also read carefully two other texts: Pauly, Mark V., “Risk Variation and Fallback Insurers in Universal Coverage Insurance Plans,” 29 Inquiry 137 (1992), and id., “The Welfare Economics of Community Rating,” 37 J. Risk & Ins. 407 (1970). Inquiry is published by the Blue Cross and Blue Shield Associations, and it is read widely within the health insurance industry, the health care provider sector, and public policy arenas. Although Pauly's presentation in Inquiry is much more rigorous and developed than that in Responsible National Health Insurance, it is still devoid of mathematics. The Journal of Risk and Insurance is published by the American Risk and Insurance Association for its members, about two-thirds of whom are involved in research relating to principles of risk and insurance and about one-third of whom are practitioners such as lawyers, accountants, and actuaries. Pauly's, presentation in the Journal of Risk and Insurance is also rigorous, and the rigor is enforced by the use of some simple algebra and the presentation of a few integers. The text also assumes basic knowledge of insurance terminology. Nonetheless, the presentation is easily accessible to anyone who has a dusty recollection of an introductory calculus course.Google ScholarPubMed

My selection of texts has of course been shaped by my particular question, for our theoretical interests always drive our selectivity. See Max Weber, “‘Objectivity’ in Social Science and Social Policy,” in Max Weber, The Methodology of the Social Sciences 49, 72, trans. & ed. Edward A. Shils & Henry A. Finch (New York: Free Press, 1949) (“Weber, ‘Objectivity’ in Social Science”).Google Scholar

13 By “historicize,” I mean to situate a discourse within an understanding of our present situation (in contrast to an historical process). Note that I make no reference to the understanding, for I have in mind a battle of language games in which the conflict consists in structuring understandings and thereby shifting the language game. In this combat I too am a spokesperson for one of the protagonists. See generally Michel Foucault, The Archaeology of Knowledge, trans. A. M. Sheridan Smith (New York: Pantheon Books, 1972). These points, stated abstractly here, will become clearer later in the essay.Google Scholar

14 I note that my account should not be read as “deconstructionist,” for I am unconvinced that a text subverts its own subjectivity and authority. To the contrary, we share localized reading and writing practices that make texts intelligible to us and that canonize certain texts as authoritative. See Michel Foucault, “What Is an Author?”in id., Language, Counter-Memory, Practice 113, ed. Donald F. Bouchard (Ithaca, N.Y.: Cornell University Press, 1977). It is in this sense—Foucault's “author-function”—that I read Pauly's work. The discourse of neoclassicism speaks through Pauly's texts.Google Scholar

15 See generally Jean-François Lyotard, The Postmodern Condition: A Report on Knowledge, trans. Geoff Bennington & Brian Massumi (Minneapolis: University of Minnesota Press, 1984).Google Scholar

16 See, e.g., Teubner, Gunther, “How the Law Thinks: Toward a Constructivist Epistemology of Law,” 23 Law & Soc'y Rev. 727 (1989).CrossRefGoogle Scholar

17 I believe that I owe the river metaphor to John Carvalho.Google Scholar

18 In a helpful essay, Craufurd D. Goodwin has distinguished between the tropes used when economists are “gunslingers” and those used when they are “preachers.” See Goodwin, “The Heterogeneity of the Economists' Discourse: Philosopher, Priest, and Hired Gun,” in Arjo Klamer et al, eds., The Consequences of Economic Rhetoric 207 (New York: Cambridge University Press, 1988) (“Goodwin, Consequences of Economic Rhetoric”). When they are hired guns, economists “engag[e] in forensic rhetoric” (Goodwin at 214), to attain a particular client's objective. An example is the expert testimony provided by H. E. Frech III on behalf of the Massachusetts Medical Association in the important antitrust case of Kartell v. Blue Shield of Massachusetts, described in Sylvia A. Law & Barry Ensminger, “Negotiating Physicians' Fees: Individual Patients or Society? (A Case Study in Federalism),” 61 N.Y.U.L Rev. 1, 20–41 (1986). In contrast, as “preachers” economists intervene in the discourse of public policy to persuade lay audiences to follow their policy prescriptions. Responsible National Health Insurance, written for a broad audience, is an example of this discourse. I note that Stigler's term “preaching,” describing any activity by economists outside their development of their formal models, sweeps together too many disparate language games. See George Srigler, “The Economist as Preacher,” in id., The Economist as Preacher and Other Essays 3, 4–5 (Chicago: University of Chicago Press, 1982) (“Stigler, ‘The Economist as Preacher’”). As Goodwin (at 218) put it, “for different audiences, and for different partners in various colloquies, economists use varied rhetorical styles and forms of argument.”.Google Scholar

19 Every country in the Western industrialized world except the United States has enacted some form of national universal health insurance. See, e.g., Brian Abel-Smith, “Who Is the Odd Man Out? The Experience of Western Europe in Containing the Costs of Health Care,” 63 Milbank Q. 1 (1985). In the United States, repeated attempts in the 20th century to enact such a scheme have been rebuffed. See generally Paul Starr, The Social Transformation of American Medicine 235–419 (New York: Basic Books, 1982). We now finally appear to be at the brink.CrossRefGoogle Scholar

20 This paradoxical brew has recently been described as a mixture of a “strong” and a “weak” program in neoclassical health economics, in which strong models of instrumental rationality are bent into an almost unrecognizable form as they bump up against the contingencies of social life. These contingencies subvert successful imposition of the strong form on social life because such attempts require economists to engage in nonrational forms of activity, such as politics. See Malcolm Ashmore, Michael Mulkay, & Trevor Pinch, Health and Efficiency: A Sociology of Health Economics 25–28, 191–95 (Philadelphia: Open University Press, 1989) (“Ashmore et al, Health and Efficiency”).Google Scholar

21 See Albert O. Hirschman, The Passions and the Interests 9–66 (Princeton, N.J.: Princeton University Press, 1977).Google Scholar

22 “There is a familiar scene that has a parent pleading with a child over some matter. Finally, and in some despair, the parent exclaims: ‘Oh be reasonable!’ The child pays some attention to the remark, but replies with a suspicious look.” Shaun Hargreaves Heap, Rationality in Economics 1 (New York: Basil Blackwell, 1989). The concept of reason used here is instrumental or means-end rationality (Zweckrationalität) rather than value-rationality (Wertrationalität). For a discussion of the distinction, see Talcott Parsons, The Structure of Social Action 643–47 (New York: Free Press, 1968) (“Parsons, Structure of Social Action”.Google Scholar

23 See, e.g., Ashmore et al, Health and Efficiency 21–25.Google Scholar

24 As Deborah Stone observes, “[t]hese values are ‘motherhood issues’: everyone is for them when they are stated abstractly.” Deborah A. Stone, Policy Paradox and Political Reason 9 (New York: Harper Collins, 1988) (“Stone, Policy Paradox”).Google Scholar

25 Stone, Policy Paradox 55–56. See generally Norman Fischer, Economy and Self 3–19 (Westport, Conn.: Greenwood Press, 1979).Google Scholar

26 See, e.g., George Stigler, “The Theory of Economic Regulation,” 2 Bell J. Econ. & Mgmt. Sci. 1 (1971). It is very hard to square this view of politics as the venal but rational pursuit of self-interest (see Stigler, “The Economist as Preacher” at 9–10) with language concerning the “imperfections” of government. Indeed, Paul J. Feldstein has attempted at book length to document the interest-seeking rationality embodied in the political economy of health care. See Paul J. Feldstein, The Politics of Health Legislation: An Economic Perspective (Ann Arbor, Mich.: Health Administration Press, 1988); see also Mark V. Pauly, “Positive Political Economy of Medicare, Past and Future,” in Mark V. Pauly & William L. Kissick, eds., Lessons from the First Twenty Years of Medicare 49 (Philadelphia: University of Pennsylvania Press, 1988). The conceptual move, which is the main subject of this essay, is to conceive of rationality as the faculty of an abstract actor who is a composite of our truly rational selves, which we cannot perceive without help due to our irrationalities and shortsightedness. See generally Amartya Sen & Bernard Williams, “Introduction: Utilitarianism and Beyond,”in id, eds., Utilitarianism and Beyond 1 (New York: Cambridge University Press, 1982).Google Scholar

27 See, e.g., Gary S. Becker, The Economic Approach to Human Behavior (Chicago: University of Chicago Press, 1976); see also Jack Hirshleifer, “The Expanding Domain of Economics,” 75 Am Econ. Rev. 53 (1985). For a discussion of the new Methodenstreit created by this “economic imperialism,” see Richard M. Swedberg, “‘The Battle of the Methods’: Toward a Paradigm Shift?” in Amitai Etzioni & Paul R. Lawrence, eds., Socio-economics: Toward a New Synthesis 13 (Armonk, N.Y.: M. E. Sharpe, 1991). The domain of the neoclassical model is limitless because its subject matter concerns the pursuit of objectives by rational means in the face of such obstacles as scarcity and political irrationality: “Since any activity in pursuit of an end potentially possesses a logic that will ensure its effectiveness in face of a series of constraints, the theory of rational behaviour necessarily takes the form, if the content of the activity being analysed remains indeterminate, of a formal theory of all purposive action.” Maurice Godelier, Rationality and Irrationality in Economics 12, trans. Brian Pearce (New York: Monthly Review Press, 1972) (“Godelier, Rationality and Irrationality”).Google Scholar

28 See Immanuel Kant, “An Answer to the Question: What Is Enlightenment?” in id., Perpetual Peace and Other Essays on Politics, History, and Morals 41, trans. Ted Humphrey (Indianapolis: Hackett Publishing, 1983).Google Scholar

29 There are two fundamental problems about which I have written at length else-where and only wish to note here. First, freedom is an ideal, while a national health insurance plan consists of social institutions and practices. Just how one proves that such social institutions and practices embody the ideal of freedom is, to understate the matter, rather unclear. Second, the very concept of freedom requires that normative discourse be used to persuade us about the manner in which we should exercise our freedom. It is therefore incoherent to argue that certain institutional arrangements are necessary; it is simply a category error. See generally Frankford, David M., “Privatizing Health Care: Economic Magic to Cure Legal Medicine,” 66 S. Cal L. Rev. 1 (1992.Google Scholar

30 See, e.g., Stone, Deborah A., “The Rhetoric of Insurance Law: The Debate over AIDS Testing,” 15 Law & Soc. Inquiry 385, 391–403 (1990).CrossRefGoogle Scholar

31 For a powerful development of that claim, see David Mechanic, “The Medical Marketplace and its Delivery Failures,” in Burton A. Weisbrod et al, eds., Public Interest Law: An Economic and Institutional Analysis 350 (Berkeley: University of California Press, 1978).Google Scholar

32 Even though neoclassical economics is the study of rational economic man, it can never be falsified. Whenever an observation violates a prediction of what homo oeconomicus will do in given circumstances, the problem is not in the theory but in the actors or the context. Either the actors just weren't acting rationally, or their preferences changed, or the underlying circumstances changed. See Martin Hollis & Edward J. Nell, Rational Economic Man: A Philosophical Critique of Neo-classical Economics 52–62 (New York: Cambridge University Press, 1975).Google Scholar

Many, including this reviewer, consider the claim concerning markets and freedom to fall within normative discourse. It is thus an error to speak about falsification. Nonetheless, neoclassicism considers itself to be an empirical science, and it is for that reason that I have discussed falsification.Google Scholar

I have been told by a wise colleague that I “confuse nature with normativity,” as in my discussion infra at note 67.1 plead guilty to the charge. Statements in the human sciences regarding “nature” are part of a normative language game. That such statements appear in an ontological form does not render them merely empirical.Google Scholar

33 Ashmore, et al, Health and Efficiency 53, 141–42 (cited in note 20).Google Scholar

34 Freedom is possible only within the realm of constraint. See Immanuel Kant, Groundwork of the Metaphysic of Morals, trans. H. J. Paton (New York: Harper & Row, 1964); Immanuel Kant, “To Perpetual Peace,”in id., Perpetual Peace and Other Essays on Politics, History, and Moral 107, 112 n.*, trans. Ted Humphrey (Indianapolis: Hackett Publishing, 1983); see also Jürgen Habermas, Theory and Practice 76–77, trans. John Viertel (Boston: Beacon Press, 1973).Google Scholar

35 For persons whose income is so low that they incur no federal tax liability, the tax credit would be worthless. Accordingly, these persons would either receive a “refundable credit” through the tax system or, when they could not even afford to pay a premium in advance of the refund, a voucher (at 7, 24).Google Scholar

36 Data from the 1991 Census indicated that approximately 34.7 million individuals—nearly one person out of seven—were without any type of insurance, public or private. More significantly, the figure is closer to one of six when the elderly are excluded, an exclusion appropriate because Medicare universally covers the elderly. Moreover, the problem is rapidly getting worse. Analyses of recent trends most appropriately use data from 1988 to 1991 because those data were generated by consistent survey methods. During those years the number of uninsured increased by 11.9%. Absent governmental intervention, this trend will continue unabated, although the pace may decline if the economy improves. See Katharine R. Levit et al., “Americans' Health Insurance Coverage, 1980–91,”Health Care Fin. Rev., Fall 1992, at 31, 31, 33–34, 48.Google Scholar

Two significant parts of the overall pattern are worth noting. First, the probability of being uninsured is positively correlated with age and lower family income, except that the poorest poor and the poorest young are likely to be covered by Medicaid. Id. at 41–45, 49–50, 52–53. Second, uninsurance is heavily and increasingly dipping into the ranks of the full-time employed. Between 1988 and 1991, the number of uninsured persons in families headed by full-time, full-year workers increased by 18.1%. Id. at 31, 36–37, 52. Worse still, a substantial portion of this increase was due to the continuing shift of our economy from large-firm, manufacture-based employment to smaller-firm, service-sector employment. Id. at 31, 37–41, 54–56. This is a terrible portent of the things to come absent a major overhaul.Google Scholar

37 For a recent review of the literature associating health insurance with access to care and health status, see U.S. Congress, Office of Technology Assessment, Does Health Insurance Make a Difference?—Background Paper, OTA-BP-H-99 (Washington, D.C.: Government Printing Office, 1992).Google Scholar

38 “Responsible National Health Insurance” would eliminate Medicaid (at 25–26), which has in any event insured a smaller proportion of the poor at decreasingly significant amounts as the states have cut back their funding. See, e.g., Morone, James A., “American Political Culture and the Search for Lessons from Abroad,” 15 J. Health Pol. Pol'y & L. 129, 139 (1990). In contrast, the authors of “Responsible National Health Insurance” would not necessarily eliminate Medicare, the financing of which now is and would remain somewhat regressive (at 26). For unarticulated reasons, they consider the decision to fold Medicare into the larger plan to be a “political decision” (id.).Google ScholarPubMed

39 See also Pauly, Mark V., “Taxation, Health Insurance, and Market Failure in the Medical Economy,” 24 J. Econ. Lit. 629, 638 (1986).Google ScholarPubMed

40 See, e.g., Erik Eckholm, “Health Benefits Found to Deter Job Switching,”N.Y. Times, 26 Sept. 1991, § A, at 1, col. 2; Tamar Lewin, “High Medical Costs Affect Broad Areas of Daily Life,”N.Y. Times, 28 April 1991, § A, at 1, col. 1.Google Scholar

41 See, e.g., Light, Donald W., “The Practice and Ethics of Risk-Rated Health Insurance,” 267 JAMA 2503 (1992).CrossRefGoogle ScholarPubMed

42 Jules Coleman has cogently summarized this idea of freedom:.Google Scholar

One set of arguments for the normative use of the Pareto criteria relies on the fact that exchanges in free markets are generally Pareto superior. Individuals transact when it is in their interest to do so; when each views the transaction as liable to make him or her better off. Moreover, the ultimate outcome of Pareto-superior market behavior is Pareto optimality. Individuals will engage in transactions until it is no longer in the interest of at least one of them to do so. At that point negotiations cease because there are no further mutual gains through trades to be had. In the ideal world of noncoercive markets free from transaction costs and third-party effects, in which individuals are both rational and knowledgeable, the exercise of liberty leads to Pareto-optimal states of affairs through a series of Pareto-superior exchanges.Google Scholar

Jules L. Coleman, Markets, Morals and the Law 123 (New York: Cambridge University Press, 1988).Google Scholar

43 The word “efficiency” is sometimes used to mean the production of a given output for the least input, or, in other words, “production efficiency.” Left open, of course, is the key question of who or what specifies the significance of “output” or “input” and, accordingly, the source of the judgment whether an activity is efficient. In contrast, the use of “efficiency” in Responsible National Health Insurance is that a competitive process is by definition efficient. This definition, fundamental to neoclassicism, rests on the Arrow-Debreu equilibrium in which Arrow and Debreu “proved that competitive equilibria for [their] models are Pareto efficient and that Pareto-efficient allocations can be realized by a price system such that the allocation is also a competitive equilibrium.” E. Roy Weintraub, General Equilibrium Analysis: Studies in Appraisal 94 (New York: Cambridge University Press, 1985). Freedom, not a particular outcome or level of cost containment, is at issue.Google Scholar

44 The analogy between our social order and our common experience in the ordinary business of life is positively seducing. Thus Marshall's classic description of the budget constraint remains enjoyable reading:.Google Scholar

And when an experienced housekeeper urges on a young couple the importance of keeping accounts carefully; a chief motive of the advice is that they may avoid spending impulsively a great deal of money on furniture and other things; for, though some quantity of these is really needful, yet when bought lavishly they do not give high (marginal) utilities in proportion to their cost. And when the young pair look over their year's budget at the end of the year, and find perhaps that it is necessary to curtail their expenditure somewhere, they compare (marginal) utilities of different items, weighing the loss of utility that would result from taking away a pound's expenditure here, with that which they would lose by taking it away there: they strive to adjust their parings down so that the aggregate loss of utility may be a minimum, and the aggregate of utility that remains to them may be a maximum.Google Scholar

Alfred Marshall, Principles of Economics 99 (8th ed. Philadelphia: Porcupine Press, 1920) (footnote omitted).Google Scholar

45 “The purely economic man is indeed close to being a social moron.” Amartya K. Sen, “Rational Fools: A Critique of the Behavioural Foundations of Economic Theory,” in Frank Hahn & Martin Hollis, eds., Philosophy and Economic Theory 87, 102 (New York: Oxford University Press, 1979) (“Sen, ‘Rational Fools’”).Google Scholar

46 “Go in health”.Google Scholar

47 “To answer the question of appropriate private and public institutional structures, the most important first issue, I believe, is to clarify what reasonable social objectives are and how voluntary insurance helps to meet them.”Pauly, , 29 Inquiry at 138 (cited in note 12).Google Scholar

48 Imagine the response of the person-on-the-street to the question, Why do you have health insurance or why would you want to have it if you could afford it? The answer might go, What kind of question is that? Of course I want insurance. Compare, e.g., Harold Garfinkel's experiment in which students were sent out to violate the rules of ordinary conversation. Question: “What do you mean you have a flat tire?” Answer: “What do you mean by asking me what I mean by a flat tire? Are you crazy or something?” See generally Harold Garfinkel, Studies in Ethnomethodology (Englewood Cliffs, N.J.: Prentice-Hall, 1967).Google Scholar

49 I am indebted to Deborah Stone for steering me to this point.Google Scholar

50 See Arrow, Kenneth J., “Uncertainty and the Welfare Economics of Medical Care,” 53 Am. Econ. Rev. 942, 959–60 (1963).Google Scholar

51 Pauly, , 29 Inquiry at 137 (cited in note 12) (quoting Arrow, 53 Am. Econ. Rev. at 963–64). Below I discuss how the neoclassical model gets individuals into groups. For now, simply note that it is a problem in the argument.Google Scholar

52 See generally Pauly, , 37 J. Risk & Ins. at 407 (cited in note 12). There are many forms of community rating because there are many alternatives for constructing averages. Here, “any increase in the premium of low-risk individuals from the actuarially fair rate, which is connected with a reduction in the premiums of high-risk individuals is considered to be community rating.”Id. at 409.CrossRefGoogle Scholar

53 See id. at 410–11.Google Scholar

54 See Pauly, , 29 Inquiry at 139.Google Scholar

55 Id, citing Pauly, , 37 J. Risk & Ins.Google Scholar

56 Pauly, , 29 Inquiry at 138. As Deborah Stone pointed out to me, already at this point “risk” has become an individual attribute that can be reified and quantified. This point is more fully explored below.Google Scholar

57 Id.Google Scholar

58 Id. Pauly might suggest that I am taking his claim about coercion too seriously. His point might be that “markets only work well given that the coercive apparatus of the state (or some moral substitute) enforces contracts and protects property rights.” Daniel M. Hausman, The Inexact and Separate Science of Economics 112 (New York: Cambridge University Press, 1992) (“Hausman, The Inexact Science”). So long as the state makes contract work by imposing, for example, reserve requirements and limited-term guaranteed renewability, we can exercise our freedom to choose (at 27, 35–37). See also Pauly, 29 Inquiry at 140–43. However, in such a claim, “contract” and “property” are just as abstract as “insurance,”“efficiency,” and “competition.” Therefore, we have only moved the ball from one abstraction to another, and the argument begs the question, at least for law. The issue for lawyers must always include the question of what the initial property endowment should be, or, in the current context, the question whether individuals should be given an entitlement such that their particular risk category is irrelevant.Google Scholar

59 Pauly, , 29 Inquiry at 139.Google Scholar

60 Pauly, concedes, as he must, that some type of averaging is inevitable given the cost of identifying and segregating risks. As he explains, “if the cost of distinguishing two risks exceeds the net gain to the lower risks from having the distinction made, the distinction will not be made in a competitive marker.”Id. at 141. Accordingly, insurers' ratings are based on the experience of administrably feasible groups of risks, and are known as “experience rating.” The argument against imperfect risk discrimination, therefore, is not posed against the use of any averages but rather against averages not justified by the costs of further refinement. See Pauly, 37 J. Risk & Ins. at 407–11 (cited in note 12).Google Scholar

61 The more technical exposition is as follows:.Google Scholar

If community rating is used, the insured suffers a utility loss as compared to the situation in which the same subsidy is raised through a lump-sum tax. Indeed, this argument is perfectly analogous to the standard economic dictum about the non-optimality of a specific excise tax. Community rating implies that low-risk individuals purchase less than the efficient amount of insurance, in the sense that a movement from community-rating to experience-rating which makes everyone better off involves the purchase of “more” insurance by low-risk individuals.Google Scholar

Pauly, 37 J. Risk & Ins. at 410. Because of the compensation provided through the “lump sum tax,” high-risk individuals will be in the same position in both circumstances, and they will therefore be indifferent between the two. In contrast, low-risk individuals will prefer to substitute payment of the lump-sum tax for the higher community rate, because the use of experience rating will give them a greater boost from the law of large numbers and thereby allow them to transfer “more risk.” Thus, Pauly is able to claim that everyone would prefer experience rating to community rating. If there were, however, one person who preferred community rating to experience rating, Pauly could not draw any welfare conclusions. See, e.g., Amartya K. Sen, Collective Choice and Social Welfare 21–22 (San Francisco: Holden-Day, 1970).CrossRefGoogle Scholar

62 See David Wilsford, Doctors and the State: The Politics of Health Care in France and the United States 56–83 (Durham, N.C.: Duke University Press, 1991).CrossRefGoogle Scholar

63 There are obviously other interpretations of formal social-scientific models. Given the limitations of space, and given that I am only interested in Pauly's use of a general equilibrium model to formulate welfare prescriptions, my discussion here is quite truncated.Google Scholar

64 See Kenneth J. Arrow & F. H. Hahn, General Competitive Analysis vi–viii (San Francisco: Holden-Day, 1971).Google Scholar

65 Sen, “Rational Fools” at 100 (cited in note 45); see Arjo Klamer, Conversations with Economists 245–47 (Totowa, N.J.: Rowman & Allanheld, 1983).Google Scholar

66 This thought experiment is as old as modernity. The mediation between collective rationality and individuals' rational pursuit of self-interest “involves stretching, at a critical point, the conception of rationality beyond its scope in the rest of the theory, to a point where the actors come to realize the situation as a whole instead of pursuing their own ends in terms of their immediate situation.” Talcott Parsons, Structure of Social Action 93 (cited in note 22) (showing how Hobbes equivocated in his concept of reason when he explained why the state exists).Google Scholar

67 Philip Mirowski, “Shall I Compare Thee to a Minkowski-Ricardo-Leontief-Metzler Matrix of the Mosak-Hicks Type? Or, Rhetoric, Mathematics, and the Nature of Neoclassical Economic Theory,” in Goodwin, Consequences of Economic Rhetoric 117, 122 n.3 (cited in note 18) (quoting Frank Hahn's defense of the Arrow-Debreu equilibrium). Neoclassical health economics usually presents itself as a positive science that tells us the “facts” as an “aid to judgment, not a substitute for it.” Alain C. Enthoven, Health Plan: The Only Practical Solution to the Soaring Cost of Medical Care 50 (Reading, Mass.: Addison-Wesley, 1980). To serve as this aid to normative judgment, the social science must be able to mirror an empirical reality. For a sustained argument that equilibrium theory can reflect reality so long as it is appropriately elaborated by models which utilize “realistic” assumptions, and a criticism of Arrow-Debreu's general equilibrium model on the grounds that its assumptions render the model inapplicable to “real economies,” see Hausman, The Inexact Science (cited in note 58). For a somewhat related defense of the use of metaphor to reflect reality as a matter of methodology, see Christina Bicchieri, “Should a Scientist Abstain from Metaphor?” in Goodwin, Consequences of Economic Rhetoric 100. For reasons I can only summarize here, 1 reject these descriptions of what neoclassicists do or should do. First, methodology is itself an abstraction, and it is therefore useful to consider how the neoclassicists have pursued their concept of equilibrium. In this regard, Philip Mirowski has amply demonstrated chat over the course of a century the neoclassicists simply have not pursued the implication of their metaphor to energy physics. See generally Philip Mirowski, More Heat than Light: Economics as Social Physics: Physics as Nature's Economics (New York: Cambridge University Press, 1989). Second, as I have written at length elsewhere, the analogy to physics in neoclassical health economics is at odds with the conception of moral agency which underlies the human sciences. See Frankford, 66 S. Cal. L. Rev. at 1 (cited in note 29). Third, based in large part on the later Wittgenstein, see Ludwig Wittgenstein, Philosophical Investigations§§ 1–71, trans. G. E. M. Anscombe (2d ed. Oxford: Basil Blackwell, 1958), I reject the language-world dichotomy which underlies the claim that heuristics are approximately true and thus sufficiently representative of “the world,” constructed or otherwise. See, e.g. Mary Hesse, Revolutions and Reconstructions in the Philosophy of Science (Bloomington: Indiana University Press, 1980). Realism presupposes that social science proceeds through the construction of theories which successfully explain something; if one instead thinks that social science succeeds when practices “work,” realism (or antirealism) becomes irrelevant. See Joseph Rouse, Knowledge and Power: Toward a Political Philosophy of Science 127–65 (Ithaca, N.Y.: Cornell University Press, 1987). My view is that a human science “works” when we become persuaded by its arguments. Sometimes, as in the present context of the national health insurance debate, the theory works in this sense. Sometimes it does not. I also believe, as this essay makes clear, that there is a normative criterion by which to judge whether such “Success” is good: whether the theory enriches our understanding of our normative possibilities.Google Scholar

68 See generally Ezekiel J. Emanuel, The Ends of Human Life: Medical Ethics in a Liberal Polity 9–154 (Cambridge: Harvard University Press, 1991) (“Emanuel, The Ends of Human Life”). As stated by the authors of Responsible National Health Insurance, “neither economics nor logic can prove that one person's definition of fairness is necessarily superior to another” (at 4).Google Scholar

69 See, e.g., Hausman, The Inexact Science 68–69 (cited in note 58). See generally Jeffrey T. Bergner, The Origin of Freedom in Social Science (Chicago: University of Chicago Press, 1981). For an exchange that indicates, to me at least, why we must maintain a praxis of suspicion directed against palliatives like efficiency, compare Raymond Benton, Jr., “A Hermeneutic Approach to Economics: If Economics Is not Science, and If It Is not Merely Mathematics, Then What Could It Be?”in Warren J. Samuels. ed., Economics as Discourse: An Analysis of the Language of Economics 65 (Boston: Kluwer Academic Publishers, 1990) (“Samuels, Economics as Discourse”), with the comment by C. Edward Arrington later in the same collection.CrossRefGoogle Scholar

70 See Stone, Policy Paradox 13–26 (cited in note 24).Google Scholar

71 See Karl R. Popper, The Logic of Scientific Discovery 34–39 (New York: Free Press, 1968).Google Scholar

72 In Godelier's words, “free competition is an historical stage in the development of capitalism”, a stage that has now passed with the development of monopolies…. Looked at in this perspective, competitive capitalism thus appears as a lost reality to which we ought to return so that everything may go better for us. This past reality thus possesses the quality of a ‘norm,’ and functions as an ‘idea.’Godelier, Maurice, Rationality and Irrationality 53 (cited in note 27.Google Scholar

73 See Weber, “‘Objectivity’ in Social Science” at 89–91 (cited in note 12).Google Scholar

74 See Rothschild, Michael & Stiglitz, Joseph E., “Equilibrium in Competitive Insurance Markets: An Essay on the Economics of Imperfect Information,” 90 Q.J. Econ. 630 (1976). Note the reliance on prisoners' dilemma reasoning. All might agree that some form of community rating would be both instrumentally and normatively desirable, but in the absence of the Leviathan there will be no such practice. For recent examples of the shots fired in the battle to falsify this theory or to restrict its scope, see Marquis, M. Susan, “Adverse Selection with a Multiple Choice among Health Insurance Plans: A Simulation Analysis,” 11 J. Health Econ 129 (1992); Roger Feldman & Bryan Dowd, “Must Adverse Selection Cause Premium Spirals 10 J. Health Econ. 350 (1991).CrossRefGoogle Scholar

75 See, e.g., William A. Glaser. Health Insurance in Practice 40–41 (San Francisco: Jossey-Bass, 1991).Google Scholar

76 My characterization of 1980s as “competitive” rests on the understanding expressed by the procompetitive forces that they have been successful to some extent. They have often written that the traditional health care system of fiducial relationships, resting on professional ethics—to cast the matter in a favorable light—or on professional dominance—to put the matter in a pejorative sense—is now being replaced by a system in which the arm's—length relationships of competitive markets are more prevalent or even predominant. See James F. Blumstein & Frank A. Sloan, “Foreword,” Law & Contemp. Probs., Spring 1988, at 1, 1–2; H. E. Frech III & Paul B. Ginsburg, “Competition among Physicians, Revisited,” 13 J. Health Pol. Pol'y & L. 279 (1988); Clark C. Havighurst, “Applying Antitrust Law to Collaboration in the Production of Information: The Case of Medical Technology Assessment,” Law & Contemp. Probs., Spring 1988, at 341, 347; id., “The Changing Locus of Decision Making in the Health Care Sector,” 11 J. Health Pol., Pol'y & L. 697 (1986); id., “The Contributions of Antitrust Law to a Procompetitive Health Policy,” in Jack A. Meyer, ed., Market Reforms in Health Care 295 (Washington, D.C.: American Enterprise Institute, 1983). As indicated below, when confronted with the continuing rampant cost inflation of the United States compared with the cost control attained by our trading partners (who utilize “monolithic, government-run or government-sponsored-and-controlled systems,” at 6), the procompetitive forces claim that there has not been enough competition.Google Scholar

77 Morone, 15 J. Health Pol, Pol'y & L. at 140 (cited in note 38).Google Scholar

78 For a discussion of social choice under conditions of uncertainty, see Amartya Sen, “Information and Invariance in Normative Choice,” in Walter P. Heller et al, eds., I Social Choice and Public Decision Making 29 (New York: Cambridge University Press, 1986).Google Scholar

79 The inspiration for my tale of rationality is the economic understanding of John Rawls's A Theory of Justice (Cambridge: Harvard University Press, 1981). Reformulated as rational social choice under conditions of uncertainty, Rawls's rational construction of a redistributive social contract is as follows:.Google Scholar

Rawls argues for [the terms of this contract] as being those which would be agreed to by rational individuals in a hypothetical original position, where they have full general knowledge of the world, but do not know which individuals they will be. The idea of this “veil of ignorance” is that principles of justice must be universalizable; they must be such as to command assent by anyone who does not take account of his individual circumstances. If it is assumed that rational individuals under these circumstances have some degree of aversion to uncertainty, then they will find it desirable to enter an insurance agreement, that the more successful will share with the less, though not so much as to make them both worse off.Google Scholar

Kenneth J. Arrow, “Some Ordinalist-Utilitarian Notes on Rawls's Theory of Justice,” in id, Social Choice and Justice 96, 99–100 (Cambridge: Harvard University Press, 1983).Google Scholar

80 Pauly, , 29 Inquiry at 140 (cited in note 12). The object of consumers' trading has been changed. They are not really buying insurance against the risk of becoming ill but are instead buying insurance of insurance. See generally Frankford, 66 S. Cal. L. Rev. at 1 (cited in note 29).Google Scholar

81 Pauly, , 29 Inquiry at 140 (cited in note 12). In fact, Pauly has sometimes expanded the temporal horizons even further by using overlapping-generations models. See id. at 141 n.1; see also Pauly, Mark V., “The Rational Nonpurchase of Long-Term-Care Insurance,” 98 J. Pol. Econ. 153 (1990).Google Scholar

82 Pauly, , 29 Inquiry at 140.Google Scholar

83 Id. at 141. It is not clear what the word “formally” adds.Google Scholar

84 Id. at 142.Google Scholar

85 Id.Google Scholar

86 Light, 267 JAMA at 2503 (cited in note 41); see, e.g., Freudenheim, Milt, “Companies Acting to Trim Benefits Promised Retirees,” N.Y. Times, 24 Dec. 1992, § A, at 1, col. 6; id., “Medical Insurance Is Being Cut Back for Many Retirees,”N.Y. Times, 28 June 1992, § 1, at 1, col. 3; Id., “Employers Winning Right to Cut Back Medical Insurance,”N.Y. Times, 29 March 1992, § A, at 1, col. 6; Gina Kolata, “New Insurance Practice: Dividing Sick from Well,”N.Y. Times, 4 March 1992, § A, at 1, col. 1.Google Scholar

87 Deborah Stone's work shows that individual risk assessment is far more persuasive and destructive of the medical commons than documented in any previous study. See Stone, Deborah A., “The Struggle for the Soul of Health Insurance,” 18 J. Health Pol. Pol'y & L. 287 (1993).CrossRefGoogle ScholarPubMed

88 For example, case law has uniformly held that ERISA permits an employer to alter benefits for the sick or retired so long as the employer has reserved the right to make such changes. See, e.g., Pierce v. Security Trust Life Ins., 979 F.2d 23 (4th Cir. 1992) (requiring contributions by retirees); Senn v. United Dominion Indus., 951 F.2d 806 (7th Cir. 1992) (terminating retirees' benefits); Arnold v. Arrow Transp. Co., 926 F.2d 782 (9th Cir. 1991) (terminating or reducing retirees' benefits); McGann v. H & H Music Co., 946 F.2d 401 (5th Cir. 1991), cert. denied, 113 S. Ct. 482 (1992) (reducing maximum lifetime limitation from $1 million to $5,000 for person diagnosed with AIDS); Alday v. Container Corp., 906 F.2d 660 (11th Cir. 1990), cert denied, III S. Ct. 675 (1991) (increasing retirees' contributions and changing their benefits). Some courts are also holding that ERISA preempts states' efforts to fund uncompensated care through surcharges imposed on self-insured plans. See Travelers Ins. v. Cuomo, 813 F. Supp. 996 (S.D.N.Y. 1993); United Wire, Metal & Machine Health & Welfare Fund v. Morristown Memorial Hosp., 793 F. Supp. 524 (D.N.J. 1992), rev'd 1993 U.S. App. LEXIS 11112 (3d Cir. 1993). For a general discussion of the obstacles imposed by ERISA on states' efforts to shore up the insurance pool, see Employee Benefit Research Institute, Issue Brief, June/July 1992.Google Scholar

89 See, e.g., Evans, Robert G., “Tension, Compression, and Shear: Directions, Stresses, and Outcomes of Health Care Cost Control,” 15 J. Health Pol. Pol'y & L. 101 (1990).CrossRefGoogle ScholarPubMed

90 I will omit specific citations to Glaser's book because description of the types of social security mechanisms used in such societies is his entire topic. For other illustrative discussions of the possibilities, see Robert G. Evans & Greg L. Stoddart, eds., Medicare at Maturity: Achievements, Lessons & Challenges (Calgary, Can.: University of Calgary Press, 1986); Donald W. Light & Alexander Schuller, eds., Political Values and Health Cure: The German Experience (Cambridge: MIT Press) (“Light & Schuller, Political Values and Health Care”) Richard B. Saltman & Casten von Otter, Planned Markers and Public Competition: Strategic Reform in Northem European Health Systems (Philadelphia: Open University Press, 1992) (the United Kingdom, Sweden, and Finland); Deborah A. Stone, The Limits of professional Power: National Health Care in the Federal Republic of Germany (Chicago: University of Chicago Press, 1980) (“Stone, Limits of Professional Power”).Google Scholar

91 Sen, “Rational Fools” at 109 (cited in note 45).Google Scholar

92 I am grateful to Robert Rosen for helping me develop this paragraph.Google Scholar

93 In the United States, the very raison d'9tre of the fragmented private insurance industry is to engage in the spiral of discrimination. Change therefore requires more than regulation; it depends on shock therapy. See generally Stone, 18 J. Health Pol. Pol'y & L.Google Scholar

94 Pauly, , 29 Inquiry at 138–39 (cited in note 12) (my emphasis). Aside from simple ontological statements, there is often the telltale use of the passive voice: “Suppose the population is divided into two groups of individuals identical within each group.” Pauly, 37 J. Risk & Ins. at 408 (cited in note 12) (my emphasis).Google Scholar

95 Imagine a conversation with a person from 1960 who has just come out of a coma. You say, “You had a blood transfusion, and therefore you are at risk for AIDS.” You continue, “We're sorry, but we therefore have to raise your insurance premium.” His response: “What do you mean I am at risk for AIDS, and what's all this have to do with my insurance premium!” To discuss this problem with him, you would have to tell him what you mean by the risk of AIDS and why you think that such a risk is relevant to insurance. He has no unmediated access to his “being” at risk of AIDS and to knowledge that such a risk is somehow relevant to insurance.Google Scholar

96 For my argument here I am heavily indebted to Stone, Deborah A., “At Risk in the Welfare State,” 56 Soc. Research 591 (1989).Google Scholar

97 Let us carry my prior example forward. We can explain to our previously comatose person what “risk of AIDS” is and how that might be related to the insurance premium he will pay. He will understand our explanation only because we share a form of life in which risk is relevant to the insurance premiums we pay. The point may be illustrated by considering the following example from Wittgenstein:.Google Scholar

I am explaining the game of chess to someone; and I begin by pointing to a chessman and saying: “This is the king; it can move like this, …and so on.”—In this case we shall say: the words “This is the king” (or “This is called the ‘king’”) are a definition only if the learner always “knows what a piece in a game is.” That is, if he has already played other games, or has watched other people playing “and understood”—and similar things.Google Scholar

Wittgenstein, Philosophical Investigations§ 31 (cited in note 67).Google Scholar

98 For purposes of this essay, I will presume that groups are the products of social choice. Here I need only follow out the logic of the rational social choice models, for 1 am only interested in their power to persuade.Google Scholar

99 Pauly, , 29 Inquiry at 138–39 (my emphasis).Google Scholar

100 The authors of Responsible National Health Insurance repeatedly indicate that they share with me the ideal of forthright normative debate. Accordingly, they should celebrate the claim that “[h]uman arrangements are in fact a matter of choice and design, and the deepest processes of social choice involve the making and remaking of arrangements (institutions), including language, notwithstanding selective pretensions of determinacy.” Warren J. Samuels, “Introduction,”in Economics as Discourse 1, 12–13 (cited in note 69).Google Scholar

101 Pauly, , 29 Inquiry at 146.Google Scholar

102 “The fate of an epoch which has eaten of the tree of knowledge is that it must know that we cannot learn the meaning of the world from the results of its analysis, be it ever so perfect; it must rather be in a position to create this meaning itself.” Weber, “‘Objectivity’ in Social Science” at 57 (cited in note 12).Google Scholar

103 See Uwe E. Reinhardt, “Breaking American Health Policy Gridlock,”Health Affairs, Summer 1991, at 96.CrossRefGoogle Scholar

104 For some recent data, see George J. Schieber et al, “U.S. Health Expenditure Performance: An International Comparison and Data Update,”Health Care Fin. Rev., Summer 1992, at 1.Google Scholar

105 The book “describes how other countries have taken voluntary and private health insurance—the method longw used in the United States—and transformed it into stable systems of social protection for their entire populations” (at xv). The countries studied are Belgium, France, Germany, the Netherlands, and Switzerland, chosen because they utilize “various mixes of social insurance and private insurance—that is, where subscribers pay premiums or payroll taxes into a fund that pays their health bills—[and] since these arrangements are plausible models for reform in the United States” (id). The book stems from research commissioned in the 1960s and 1970s by federal agencies interested in learning from abroad (at xvi-xvii). This research has resulted in many other publications, including the following: William A. Glaser, Paying the Hospital: The Organization, Dynamics, and Effects of Differing Financial Arrangements (San Francisco: Jossey-Bass, 1987) (“Glaser, Paying the Hospital”); id., Federalism in Canada and West Germany: Lessons for the United States (Washington, D.C.: National Technical Information Service, 1979); id., Health Insurance Bargaining: Foreign Lesson for Americans (New York: Gardner Press, 1978); and id., Paying the Doctor: Systems of Remuneration and Their Effects (Baltimore: Johns Hopkins Press, 1970).Google Scholar

106 At times he literally sneers at them. For example, commenting on the claim-central to the neoclassical model—that at the margin, some rational people will forgo health insurance in the face of a budget constraint, he writes: “Real people in all countries appear extremely ‘risk-averse’ in health. Since most people are fully covered by statutory health insurance, almost everyone else buys the same thing voluntarily. In fact, the rich—who are the lower users—insure themselves even more than the rest of the population by buying supplementary policies for extra benefits” (at 39).Google Scholar

107 Glaser, , Paying the Hospital 388. For my similar ideas concerning Medicare's hospital reimbursement system, see Frankford, David M., “The Complexity of Medicare's Hospital Reimbursement System: Paradoxes of Averaging,” 78 Iowa L. Rev. — (forthcoming 1993). For a more general discussion, see Morone, 15 J. Health Pol., Pol'y & L at 132–35 (cited in note 38).Google Scholar

108 For an interesting account of the manner in which classical political economy became the neoclassicists' economics, see Maurice Dobb, Theories of Value and Distribution Since Adam Smith: Ideology and Economic Theory (New York: Cambridge University Press, 1973).Google Scholar

109 For some relatively early presentations of these problems, see Odin W. Anderson, Health Care: Can There Be Equity? The United States, Sweden, and England (New York: John Wiley & Sons, 1972); Eli Ginzberg, Men, Money, and Medicine (New York: Columbia University Press, 1969). For some more recent accounts, see Henry J. Aaron, Serious and Unstable Condition: Financing America's Health Care (Washington, D.C.: Brookings Institution, 1991); Eli Ginzberg, The Medical Triangle: Physicians, Politicians, and the Public (Cambridge: Harvard University Press, 1990).Google Scholar

110 See generally Granovetter, Mark, “Economic Action and Social Structure: The Problem of Embeddedness,” 91 Am J. Soc. 489 (1985). For a project to avoid the problems of both under- and oversocialized accounts, see Amitai Etzioni, The Moral Dimension: Toward a New Economics (New York: Free Press, 1988).CrossRefGoogle Scholar

111 Emanuel, , The Ends of Human Life 157 (cited in note 68).Google Scholar

112 Hannah Arendt, “Truth and Politics,” in id., Between Past and Future 227, 241 (New York: Penguin Books, 1968).Google Scholar

113 Hannah Arendt, The Human Condition 26 (Chicago: University of Chicago Press, 1958).Google Scholar

114 Kenneth J. Arrow, Social Choice and Individual Values (2d ed. New Haven, Conn.: Yale University Press, 1963).Google Scholar

115 See, e.g., Talcott Parsons, “On Building Social System Theory: A Personal History,” in id, Social Systems and the Evolution of Action Theory 22, 69–74 (New York: Free Press, 1977); Talcott Parsons, “Evaluation and Objectivity in Social Science: An Interpretation of Max Weber's Contributions,”in id., Sociological Theory and Modern Society 79, 91 (New York: Free Press, 1967).Google Scholar

116 For ease of exposition I will use the word “Germany” to refer to Bismarck's and the Kaiser's Germany, the Germany in the interwar period, the Third Reich, and the Federal Republic.Google Scholar

117 As stated by Glaser, “my evidence consists primarily of interviews with administrators and health care researchers in Europe and the United States, supplemented by the administrative and research literature” (at xvi). The interviews were designed to “elicit a systematic description of the respondent's work” (at 524). His description of a “nation's experience” thus stems from the understandings espoused by those actors involved in the nation's statutory health insurance scheme.Google Scholar

118 For a compelling and chilling description of medical institutions in Nazi Germany, see Robert N. Proctor, Racial Hygiene: Medicine Under the Nazis (Cambridge: Harvard University Press, 1988). For a discussion focused particularly on the changes wrought by National Socialism on the sickness funds, see Stephan Leibfried & Florian Tennstedt, “Health-Insurance Policy and Berufsverbote in the Nazi Takeover,” in Light & Schuller, Political Values and Health Care 127, 127–61 (cited in note 90.Google Scholar

119 For an example of this international cross-fertilization, implanting the idea chat risk-based insurance is the universal key to efficiency, compare Pauly, Mark V., “More Market in the West German Health Care System: Comments from a U.S. Perspective,” 144 J. Institutional & Theoretical Econ 407 (1988), with Henke, Klaus-Dirk, “A ‘Concerted’ Approach to Health Care Financing in the Federal Republic of Germany,” 6 Health Pol'y 341 (1986.Google Scholar

120 Wysong, Jere A. & Abel, Thomas, “Universal Health Insurance and High-Risk Groups in West Germany: Implications for US. Health Policy,” 68 Milbank Q. 527, 528 (1990) (citations omitted). For a careful assessment of the validity of such analogies, see Rodwin, Victor G., “American Exceptionalism in the Health Care Sector: The Advances of ‘Backwardness’ in Learning from Abroad,” 44 Medical Care Rev. 119 (1987).CrossRefGoogle Scholar

121 For a similar chronology, but with a quite different emphasis, see Stone, Limits of Professional Power 20–25 (cited in note 90).Google Scholar

122 My term “blue-collar worker” is inexact because the occupations assigned to the occupational funds have changed over time and now include farmers, miners, and sailors. It is the most important classification, however, and for present purposes it suffices.Google Scholar

123 These demographic characteristics and others are reviewed in Wysong, & Abel, , 68 Milbank Q. at 536–41, 547–53.Google Scholar

124 The means of preferred risk selection have to be subtle, because the Ersatzkassen cannot refuse enrollment of bad risks or charge them extra premiums (at 503). In contrast, the private insurers, standing completely outside the statutory system, do engage in such explicit risk discrimination (at 171–72).Google Scholar

125 Wysong, & Abel, , 68 Milbank Q. at 529. The substitute funds enjoy other advantages. Their boards are exclusively governed by their members, while those of the other statutory funds are dominated by employer-employee boards. The Ersatzkassen are federated into seven large associations, while the other funds are still relatively fragmented. Finally, and most importantly, unlike the occupational and community funds, the substitute funds are free to engage in separate negotiations with physician associations in setting the prices for physician services. They have therefore gained the loyalty of physicians and patients by paying higher rates of remuneration to physicians. See id. at 533–35; see also Stone, , Limits of Professional Power 80–82, 88–90 (cited in note 90); Organisation for Economic Co-operation and Development, The Reform of Health Care: A Comparative Analysis of Seven OECD Countries 61 (Paris: OECD, 1992).Google Scholar

126 Wysong, & Abel, , 69 Milbank Q. at 554.Google Scholar

127 See Stone, Limits of Professional Power 92–95.Google Scholar

128 See generally Wysong, & Abel, , 68 Milbank Q. at 527.CrossRefGoogle Scholar

129 As Dr. Glaser indicated to me in a personal communication, the system never approached the current instability of the U.S. insurance system.Google Scholar

130 See also Markus Schneider, “Health Care Cost Containment in the Federal Republic of Germany,”Health Cure Fin. Rev., Spring 1991, at 87, 90–92.Google Scholar

131 A health economist interviewed by Ashmore, Mulkay, and Pinch stated that the goal of the economic models is to “com[e] up with a clean product” in the sense that a solution can be transferred from one context to a completely different one. See Ashmore, et al., Health and Efficiency 46 (cited in note 20).Google Scholar

132 Clifford Geertz, “The Impact of the Concept of Culture on the Concept of Man,” in id., The Interpretation of Cultures 33, 41 (New York: Basic Books, 1973).Google Scholar

133 See Morone, , 15 J. Health Pol. Pol'y & L. at 129 (cited in note 38).CrossRefGoogle Scholar

134 I must say, nonetheless, that there is some needless repetition and that the organization of the book around problem areas and solutions, rather than around nations, sometimes impedes comprehension. The primary impediment, however, is simply the limited capacity of the human mind to absorb the huge amount of information the book conveys.Google Scholar

135 See Glaser, , Paying the Hospital 61 & n.27 (cited in note 105).Google Scholar