I was talking yesterday to Eron Ferreira, a former marathon runner. Eron is Brazilian, grew up poor and could not afford shoes, so he ran barefoot, as many Kenyans do. Later, when he was able to afford shoes he realized that they were soft, mushy and pointless, so he kept running barefoot. But he still had to make a living, and in the 1990s he did that by being a “rabbit“.
Now bear with me: As Eron was telling me about his time as a rabbit, I suddenly understood why Obama’s health care plan, which includes a controversial public-sector insurance option alongside private plans, is correct.
In the context of marathons, Eron explained to me, a rabbit is somebody whom the event organizer pays to run quite fast for the first half of the race. It is understood that the rabbit wears himself out this way, and he can stop running in the second half.
Now, why would the event organizer do such a silly thing–ie, pay somebody … to run fast in a running race? (!)
Apparently, because without such a pace setter, the other runners would hang back tactically and not run fast. It would be boring for the spectators. It would be bad sport. In any other industry, including health care, we would call this a market failure. In theory, it should not happen, but in practice, it does.
1) Success for Eron
In Eron’s case, this once led to his big break in life. One day, during a marathon in France, he was being a rabbit and running quite fast for the first half. He felt great that day, and it occurred to him that he did not technically need to stop, or even to slow down, at all. All the other runners knew he was “just the rabbit”, so they had allowed him to get ahead a bit. Eron looked back, saw that they were far behind him, and just kept going till … he won!
2) Success for health care
And what does this have to do with Obama’s health care proposals? Well, you may have heard that the health care industry and Republicans are preparing to gun down his plan because it will have a new, public insurance option alongside private health insurers. How un-American! How unfair for the private insurers! How socialist!
(For my general thoughts about health care, look here.)
Need I say more? In theory, all the private health insurers should be running fast to win the marathon and make spectators happy. In practice, they are all hanging back tactically. What this sport needs …. is a rabbit!
Hannibal and Me: life lessons from history 
Another analogy to the “rabbit” scenario was the space race, and the creation of that tax-payer funded (and therefore socialist) entity, NASA (Need Another Shuttle, Again) which aided and abetted the invention and development of the computer, satellite communications, and jet engines.
On second thoughts, we might all be better off without them………
Andreas:
I like the analogy- the premise about stimulating success through competition should be correct. But I wonder if we have other examples in history of the government competing with the private sector with such success that their is a true competition driving the service up and the cost down? I truly don’t know. Do you have any in mind?
Do you see the public sector piece for health care being simple, user friendly, and less complicated than crappy private sector insurance? The sad truth is that relying on the insurance industry or the government presents two poor options. Historically unregulated, the insurance industry has never made it simple even for those who can afford it. My deductable for PPO coverage is now $3K / yr. I am largely self insured for my wife and one child still at home. I have the insurance for a catastrophic loss only. But at least I can choose who I go to and that is a huge benefit to me. I don’t want to be forced to go to a Nurse Practitioner for a challenging diagnosis or specialized treatment and I don’t want to wait in line with the Rabbits.
All that said, provocative piece and good food for thought.
SB
Great question! US Post Office?
I must give that more thought, and find more examples (if there are any). Regarding simplicity/complexity, though: I think we are heading straight for hell. In general, I don’t think Obama is a simplifier. As I said in that other post on healthcare, the only two simple systems are a single-payer universal system or a mandatory individual (private-sector) system. What we have is fragmentation, and that leads to the complexity.
Uh yea, talk about an over-over-over-oversimplified perspective on the health care system…
Before you can intelligently talk about how to fix it, you should read rational perspectives on why it’s fucked up. Capitalist hospitals and phama corporations are not “hanging back tactically.” The fact that their values (making profits, lobbying government for more favours and keeping the ones they have) don’t correspond to yours doesn’t mean they are not “performing” in an important sense.
There are many, many reasons why the health care system in the US (and also the ones in the rest of the Western world, to a slightly lesser extent) does not “work” for the population at large. Lack of incentives is not one of them (they have more than enough incentives to fleece you: and so do public institutions, in different ways, which means that switching from one to the other will not necessarily solve anything).