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according to economist, American customer service is getting worse, but that matches my own experience. For example, I recently had trouble with my dental insurance and it was accidentally canceled at the beginning of the year. My wife and I had numerous phone conversations with multiple bureaucracies that handle this policy, and it was like talking to a brick wall.
[If you are interested, my former employer has a company called Voya manage their employee benefits, and they were supposed to instruct CareFirst dental to re-instate my insurance. Voya insisted they sent the information, CareFirst denied getting it. Even a three way phone call failed to resolve the issue.]
When I looked it up online, I found that Voya’s Los Angeles office has terrible record we are not alone. Also, I had the exact same problem last year and had a hard time resolving it.
These are all private companies, but I think the government is to blame for our predicament. To see why, consider the auto repair insurance market. You can also purchase auto repair insurance to cover the cost if you need a transmission overhaul, brake repair, or caliper replacement. However, these insurance policies are usually not very profitable, so I don’t want to buy them. The same applies to home repair policies.
So, what makes dental insurance different? The answer is simple. While these policies are heavily subsidized by the federal government, home and auto repair policies are typically not subsidized. Dental insurance is a highly inefficient system and would have a hard time surviving in a free market. However, if a third party covers his 40% of the costs (through tax deductions), that would induce many companies to offer dental insurance as a “fringe benefit” that is part of the total compensation package. is enough.
In this particular case, if I had known how incompetent the company was, I would have avoided purchasing dental insurance even with the subsidy. However, when making decisions, you can only estimate the quality of the output. With large government subsidies, a product can be very wasteful to society, but still personally beneficial to the purchaser. Even if the company hadn’t screwed up my dental insurance payments, I would still be paying the salaries of the dental insurance company and all the people who work for the company that manages my employer’s benefit plan. be careful. This is an economic waste because these people could be doing something more productive with their time.
Dental insurance is just one of many issues in the dental industry. In a new post, matt iglesias Explain that dentists often prescribe unnecessary treatments. That’s my experience too. I know of many cases where the dentist said extensive treatment was needed, but a second opinion showed that the person’s teeth were in good condition. This is an example of a principal-agent problem. Agents (dentists) have strong financial incentives to overprescribe dental treatments.
Even though dentistry is a private company, I also blame the government for this problem. Iglesias explains the underlying problem:
Because routine dental appointments are conducted by hygienists rather than dentists, some may think that a standard oral health appointment is just a hygienist letting you know if you need more specialized dental care. I don’t know. In reality, however, “scope of practice” rules severely limit the services that hygienists can provide, and hygienists can only perform diagnostic work in Colorado and Oregon.
In a free market, I would avoid the dentist as much as possible and go to a dental hygienist who doesn’t do the actual tooth restoration. I want my “agent” to have no financial interest in over-prescribing dental care. In fact, if you are told that your teeth are in good condition, you will feel happier if you leave your job, so you are more likely to go to a hygienist who will underprescribe dental treatment. Unfortunately, such a streamlined dental industry exists in only two states.
There are many industries that I have little problem with, such as grocery stores, hair salons, dry cleaners, and clothing stores. When I have bad experiences, it’s usually in industries that are heavily distorted by bad regulations and subsidies. These include medical, insurance, travel, pharmacy, housing, and car dealerships. Problems are divided into several categories.
1. Government subsidies, such as dental insurance, that drive customers to inefficient and unsolicited companies.
2. Government regulations that impede efficient ways to provide goods and services, such as direct sales from manufacturers to consumers (such as in the auto industry).
3. Government regulations that significantly increase costs and reduce quality by restricting supply, especially in health care and housing.
4. Government regulations that prevent people from signing contracts promising not to sue over certain issues.
Can’t find an effective painkiller for that toothache? Blame government rules requiring a prescription. Can’t find a Boston apartment to rent to a family with young children? Blame government regulations that prohibit contracts to enforce the right to sue over lead paint. Are you frustrated that U.S. airlines don’t offer the same excellent service you received with Singapore Airlines? Blame government regulations that prohibit foreign airlines from serving the domestic market. Are you frustrated that your children can’t live where you grew up? Because of zoning regulations that limit housing supply.
People who are unaware of the role of government often blame “capitalism” for problems in various sectors of the economy. In some cases, that simple explanation may be correct. But in most cases I’ve seen, the ultimate issue is government subsidies and regulations.
PS. After writing this article, I read: transcript From an interview with Patrick McKenzie by Tyler Cowen. When asked why Western Union’s transfer fees are so high, Mr. McKenzie replied:
Anti-money laundering and customer awareness requirements have huge compliance implications for small value transfers around the world.
Again, if you look closely, it’s mostly due to bad government policies.
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