Cake and Healthcare - When Analogies Attack...

A lot of Americans appear to not quite understand how this whole Universal Healthcare thing might work, and don't understand why (a) they should pay for someone else's healthcare (answer below), or (b) how the system could possibly work and be more efficient than, say, paying some kind of company that tries to make a profit (even 501(c) companies in the US are allowed to make a profit; they're just not allowed to keep it and carry the cash forward to the next year).

Allow me to help.

Let's say you go to a really flashy restaurant. That restaurant feeds you exceptionally well, and you can see hundreds of people coming in and out of the door.

You finish your meal, and you're feeling completely stuffed. The waiter comes by with your bill. You look down at it, and there's a line item for a dime - with just one item listed. "Cake", it says.
You, flustered, wave the waiter back over. "Excuse me, but I didn't order cake, and I don't need cake."

"But it's only a dime, sir," the waiter says. "As you leave the restaurant, if you are still hungry, there is a large cake at the coat check. If you don't believe me, you can come back."
So you get up, and you sign the bill (tipping the waiter less 'cos you don't believe his story), and when you get to the coatcheck they say "So, sir, how was your meal? Can I have your ticket, and may I ask if you're still hungry?"

"Actually, yes, I am hungry," you gruffly state, while handing over the ticket.

The coat-check attendant walks into the other room, and comes back with your coat, and a trolley on which lies an immense 4-storey tier cake, covered in sparklers, with ganache all over it, fresh strawberries and a chocolate fountain bubbling up from the top.

"But... but..." you stammer. "How can you afford to do this?"

It's quite simple: The restaurant feeds all of their customers well ahead of time, making sure that most people never leave hungry, and don't get to the point of needing the cake in the first place.

The dime on every bill adds up for all of the people who come into the restaurant, until eventually, 3000 happy customers have gone by with one 1 of them needing the actual cake itself. And they don't try to make a profit on the cake; they charge a dime, because statistically, that's what the cake costs.

The restaurant is a co-op, which each of the diners buy into. Rather than making a profit for the owner, the membership fee allows the diners to lower their rate. Kind of like CostCo. There's still profits to be made, but it's much cheaper for everyone because the shareholders are taking the profits as direct benefits, not as dividends.

So ultimately, I ask you: Why don't you like cake? Sure, you could go buy that cake yourself for $300... but that's a lot to pay for cake. I'd rather pay 10c every time I went to that restaurant. Sure, occasionally other people might get the benefit of the cake I paid for, but when I want it, it'll be there for me.

(Some people point out that Medicaid/Medicare doesn't work... and that's because Old People and Kids PREFER Cake, which is a concept I'll tackle in my next post).

About the author

Simon Cooke is an occasional video game developer, ex-freelance journalist, screenwriter, film-maker, musician, and software engineer in Seattle, WA.

The views posted on this blog are his and his alone, and have no relation to anything he's working on, his employer, or anything else and are not an official statement of any kind by them (and barely even one by him most of the time).

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Robert Newman wrote on Monday, February 8, 2010:

Si, not sure the the cake analogy works, but as a major advocate of universal health care free at the point of delivery (and one of the first at downing street if its ever seriously challenged) any thing you can do to try to encourage the USA to make their world just a little bit more equal is to be hugely applauded. Rob

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