How Not to Join a Coasian Hell: Brexit

This Pro Publica story about CPAP machines has been doing the rounds because of Eric Umansky’s experience with the one that reported back how much he was sleeping to some…thing…that decided it wasn’t enough, and therefore remotely bricked his sleep aid so he’d…whatever.

But I think trying to force fit this into a mould about surveillance, the Internet of Things, or, God help us, “tech” is missing the point. The problem wasn’t that Umansky’s gadget was connected to the Internet. The problem was that it was connected to the Coasian hell of American healthcare. Viz:

When his doctor prescribed a CPAP, the company that supplied his device, At Home Medical, told him he needed to rent the device for $104 a month for 15 months. The company told him the cost of the CPAP was $2,400.

Levy said he wouldn’t have worried about the cost if his insurance had paid it. But Levy’s plan required him to reach a $5,000 deductible before his insurance plan paid a dime. So Levy looked online and discovered the machine actually cost about $500.

Levy said he called At Home Medical to ask if he could avoid the rental fee and pay $500 up front for the machine, and a company representative said no

Mr Levy eventually sued, and At Home agreed to let him buy the thing for $600. You know you’re in Coasian hell when you go to law in order to just give an intermediary a hundred bucks – twenty per cent! – in clear profit, and you call that a win. Similarly:

But his attorney, Robert Izard, said Cigna contracted with a company called CareCentrix, which coordinates a network of suppliers for the insurer. Neufeld decided to contact his supplier directly to find out what it had been paid for his supplies and compare that to what he was being charged. He discovered that he was paying substantially more than the supplier said the products were worth. For instance, Neufeld owed $25.68 for a disposable filter under his Cigna plan, while the supplier was paid $7.50. He owed $147.78 for a face mask through his Cigna plan while the supplier was paid $95.

That said I do think we could share the blame around here. Sarah Jamie Lewis argues that the problem with federation as a way of organizing information security systems is that it tends to drag everyone down to the level of the worst federal unit. In this case, it definitely did let the medical-insurance complex drag the relationship between Umansky and his doctor down to its own wretched level.

And, he said, putting on his best Anglican version of Rabbi Voice, I thought….that’s like Brexit. There is a very good reason why the EU is paranoically inflexible about its regulatory standards. If you let someone into the federation who doesn’t maintain the standards, they essentially define their behaviour on their worst day as the new standard. This is why all the stuff about mutual recognition never stood a chance. Federation requires enforcement, and that’s exactly what Jean Monnet and Robert Schuman were thinking when they came up with neofunctionalism back in the 1940s.

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