babble home
rabble.ca - news for the rest of us
today's active topics


Post New Topic  Post A Reply
FAQ | Forum Home
  next oldest topic   next newest topic
» babble   » right brain babble   » humanities & science   » If user pay were actually user pay would it be okay?

Email this thread to someone!    
Author Topic: If user pay were actually user pay would it be okay?
NDB
rabble-rouser
Babbler # 1234

posted 15 June 2003 04:20 PM      Profile for NDB     Send New Private Message      Edit/Delete Post  Reply With Quote 
We hear a lot these days about the idea of "user pay" schemes, particularly in reference to social programs like health care or, of concern to me in recent years, post-secondary education. I tend to reject these schemes instinctively and outright because I don't think they're remotely equitable. For me, the problem is that these schemes don't have any reflection of the user's ability to pay, they're actually based on commodity or service pricing. So the rationale goes: if the "sticker price" is the same for everyone, then access to the commodity or service is protected. I think this is an absurd proposition because if something costs $25,000 then obviously the difference in people's income has an impact on their ability to access it.

But, if user pay schemes were actually based on the user's ability to pay, would they be more acceptable? So, for example, someone making minimum wage would pay nothing for any medical service, whereas someone making say $200,000/year would pay a lot for all medical services. The same would be the case for university tuition. It would be a bit more complicated for social programs such EI, CPP, social assistance and others, but the same principle could be applied. It would also protect retired older Canadians since their annual income shrinks dramatically after retirement.

I'm purposely avoiding the technocratic debate about the administration of such a system and the social re-orientation required to make it work. I tend to be a fairly strict universalist about these things, but how would babblers feel about such a system where user pay is actually user pay?


From: Ottawa | Registered: Aug 2001  |  IP: Logged
DrConway
rabble-rouser
Babbler # 490

posted 15 June 2003 05:17 PM      Profile for DrConway     Send New Private Message      Edit/Delete Post  Reply With Quote 
quote:
Originally posted by NDB:
But, if user pay schemes were actually based on the user's ability to pay, would they be more acceptable? So, for example, someone making minimum wage would pay nothing for any medical service, whereas someone making say $200,000/year would pay a lot for all medical services. The same would be the case for university tuition. It would be a bit more complicated for social programs such EI, CPP, social assistance and others, but the same principle could be applied. It would also protect retired older Canadians since their annual income shrinks dramatically after retirement.

A progressive income tax system is the first, and in my opinion, best approximation to this method.

The government collects its money all in one shot and budgets it out over the year. I have a problem with user-pay that has to do more with the increasing tendency to nickel-and-dime people for things that used to be paid for in advance.

What this does is bleeds peoples' wallets more efficiently because the payment might be smaller per occasion, but since it's smaller you might use more of the service - the end result being that you pay more than you would if you'd just paid it all in your taxes.

One example I can think of is parks. If it cost you, say, 50 cents to use a park while it costs the rich guy a thousand bucks, you'd probably use the park so much you end up paying more more than you would have if the user fee was the 8 or 15 bucks it is now.

So yes, in principle, user pay on a progressive basis sounds great, and would be a good idea, but I have problems with it because it buys into a tendency that's been pioneered by corporations which is used to get more of your money.

That is, if you make it seem cheap because the customer is charged per use, rather than in advance, you get more of their money in the end because there's less psychological resistance to paying "one more lousy buck" for something as opposed to being confronted with the $35 in-advance fee.

I don't know if I'm being entirely clear or even if this is a point worth making, so YMMV (Your Mileage May Vary).

[ 15 June 2003: Message edited by: DrConway ]


From: You shall not side with the great against the powerless. | Registered: May 2001  |  IP: Logged
NDB
rabble-rouser
Babbler # 1234

posted 15 June 2003 06:36 PM      Profile for NDB     Send New Private Message      Edit/Delete Post  Reply With Quote 
Doc, I think I understand your point.

I bring this up in reaction to nonsensical (IMHO) idea that user pay should mean one price for all and that everyone can than pay it. Right, like if tuition fees are $5000 for everyone who wants to go to university, then clearly everyone has the same chance to go. Where the kid of a millionaire and the kid of a McDonald's worker each have equal access to $5000. So if you want users to pay then their access to funds seems to me to be incredibly important.

But your point, as I interpret it, are price based methods of allocation inherently flawed to the point of being less efficient, is important. I wonder though, would it produce a more accurate picture of individual choices? Does this matter? So using the parks example, is it better that someone would choose to use a park more often at $0.50 and likely choose not to use something else? Also, does it make a difference who sets the prices?


From: Ottawa | Registered: Aug 2001  |  IP: Logged
DrConway
rabble-rouser
Babbler # 490

posted 15 June 2003 07:00 PM      Profile for DrConway     Send New Private Message      Edit/Delete Post  Reply With Quote 
My basic problem is that it's just going to be another imposition on someone's wallet. People grumble about taxes but they see a connection between what they pay and the myriad of services they get.

If user-pay were to be the predominant method of financing government services, it would likely create a kind of salami effect where you can create a "case" for slicing off government services that might only be used by a minority of people (a classic example of this is children's aid which is specifically aimed at at-risk youth rather than the general population), on the grounds that the user fees don't cover the expense of running the program.

And the question of who sets prices would seem to be answered by leaving it to the government and its magic income-determiner. After all, if "the market" sets the price it would homogenize to a one-size-fits-all solution which is precisely what you want to avoid.

Now, you could answer my point above by saying that the government could increase prices on popular programs in order to pay for the less-well-used ones (such as children's aid), but then you run into the question of how accurately it reflects peoples' choices.

... Which brings up a question.

How does a non-market-determined price reflect peoples' actual choices?


From: You shall not side with the great against the powerless. | Registered: May 2001  |  IP: Logged
bakunin
rabble-rouser
Babbler # 3991

posted 15 June 2003 07:00 PM      Profile for bakunin     Send New Private Message      Edit/Delete Post  Reply With Quote 
NDB, i think what DrC is saying is that that system is just a waste of time and won't end up costing less. taxes just make more sense. They are more efficient and you get better deals "buying in bulk".
From: we may not convince you but we'll convince your children | Registered: Apr 2003  |  IP: Logged
NDB
rabble-rouser
Babbler # 1234

posted 15 June 2003 07:07 PM      Profile for NDB     Send New Private Message      Edit/Delete Post  Reply With Quote 
Yeah fair enough, and I agree mind you, it's just something I've been thinking about as various people try to cram it down my throat. Or other uncomfortable places.
From: Ottawa | Registered: Aug 2001  |  IP: Logged

All times are Pacific Time  

Post New Topic  Post A Reply Close Topic    Move Topic    Delete Topic next oldest topic   next newest topic
Hop To:

Contact Us | rabble.ca | Policy Statement

Copyright 2001-2008 rabble.ca