Tuesday, July 10, 2007

Join the Club

You too can join the Anti-Universal Coverage Club. (I know you probably won't because I don't think many of my readers are actually as free market gaga as I am). Regardless, here are it's basic principles:

  1. Health policy should focus on making health care of ever-increasing quality available to an ever-increasing number of people.

  2. To achieve “universal coverage” would require either having the government provide health insurance to everyone or forcing everyone to buy it. Government provision is undesirable, because government does a poor job of improving quality or efficiency. Forcing people to get insurance would lead to a worse health-care system for everyone, because it would necessitate so much more government intervention.

  3. In a free country, people should have the right to refuse health insurance.

  4. If governments must subsidize those who cannot afford medical care, they should be free to experiment with different types of subsidies (cash, vouchers, insurance, public clinics & hospitals, uncompensated care payments, etc.) and tax exemptions, rather than be forced by a policy of “universal coverage” to subsidize people via “insurance.”

Like I told my new BFF Andrew Tobias, I don't want every trip to the doctor to be like a trip to the DMV--or the emergency room. Though I stick to my economic guns (principle number 2), an interesting and quintessentially libertarian take on this is principle number 3. (Also number 1, here, although many other good points as well). I hadn't quite considered that an actual personal liberty argument can be made. Nonetheless, the sad thing is others won't find it very compelling; I fear that the "Government has a DUTY to take care of me" mindset is alive and growing (damn you, FDR and LBJ, damn you!).

Update: Kip Esquire makes an exceptional point: why do we trust the government to be better at spending on healthcare than say, it is on antiterrorism grants? Excerpted:

So the question becomes: If the federal government can't get spending on domestic security "right" (I refuse to use the fascistic word "homeland" except as part of a proper noun), then why should the healthcare socialists expect the federal government to get spending on health care "right"?

All the same indignation would emerge under socialized medicine: "Why does cancer get more than heart disease?" "Why do New York City's research and teaching hospitals get so little?" "Why does white suburban geriatric nursing get more than black inner-city pediatric nursing?" "Why are 'homosexual diseases' covered at all?" "Why is Viagra covered but not Propecia?" "Why does my neighbor's kid get a motorized wheelchair while my kid gets crutches?" "Why is there a huge hospital at the other end of the Bridge to Nowhere?" And so on.

* * *

Socialized medicine would be a never-ending political haggle based, not on objective metrics, but on the Politics of Pull, balanced out by the Politics of the Warm Fuzzy Feeling, perhaps with some racial, gender and sexual orientation inequities tossed in for flavor.

And the worst part? People would suffer and die from it -- in needless, senseless ways that a terrorist could only dream of.

And Tim, I promise I'll add my own thoughts soon.


Tim in Italy said...

I've started this post about 12 times because there are so many holes in it that I don't know where to begin. Suffice to say that if people can't afford decent health care and if the government refuses to provide same, because they're all getting rich off the insurance lobbies, then people will continue to do what they do now, only in ever growing numbers: they will go to emergency rooms or public hospitals where we will have to pay for their care with our tax dollars. As the numbers increase, the care will deteriorate and so will their health, because things like pre-natal care and preventative medicine will go out the window. It's terrifically inefficient and not particularly cost effective.

Living in Italy and seeing how the system works here, I can't say I'm not impressed, but you're right in saying that the US system is free-market driven. Here there's little choice, but people have decent pensions, medical care is free and taxes are computed and removed automatically, so there's no Tax Day. If you buy a house, the government helps with the down, but you can't sell it for 5 years.

I'm not saying that the system here is better or worse. But that free-market you're so very fond of leaves a lot of people in the dust, because it's more complicated than it looks. And the cost of picking them up and dusting them off has to paid regardless.

Pink Elephant said...

Hi Tim,

I'll be glad to elaborate fully on my universal lhealthcare position in a later post, but for now (due to time pressures and guilt about checking my blog at work) I'll just say this:

I do love the market, and people like to point to healthcare crisis (people being unable to afford insurance and therefore healthcare) as evidence of a market failure. Some valid points on the other side have been made: for instance, Healthcare is different because the consumer doesn't really have the option of walking away, as they do in the market for say bananas. Nonetheless, I am not only skeptical of government run healthcare, I am sure that a government run system will end up with less efficent and desireable outcomes. Michael Morre's single payer plan is lunacy, but even others' more reasonable two tiered system (meaning having both public and private healthcare) will be udnersiirable. With all our problems, the US has shorter wait times than Universal healthcare states for both elective and nonelective surgery--especially among the elderly (I will give a source in my later post). Similarly, the United States has more patient to doctor contact (a result of more doctors and fewer patients--before you think "well we have fewer patients becasue so many people are uninsured" remember that a) the uninsured are likely to go to the emergency room as you point out, and b) when something's free to me, I want more, so Universal Healthcare creates an incentive to see the doctor more often). The United States is more likely not only to develop but to USE new health technology than government systems.

Also, how will a government run system change anything from the emergency room context? Remember that "free to me" increases quantity demanded: we are still going to have strains on healthcare, and someone will still have to ration it.

I'm not saying we are perfect here. The cost of insurance is silly high, but rather than focus making healthcare less efficient, why not do something about the insurance industry?

(Finally rest assured that as a soon-to-be member of the bar, I will not be making the old "it's the lawyers not the insurers that are the problem" argument)

Tim in Italy said...

You're killing me! Go back to work. We'll talk later.

Jason said...

Why I hate this issue... because I can't ever find a suitable answer. No matter where I look... every solution fails to address all of the problems.

I'd favor universal health care in an ideal world... but we don't live in an ideal world. It doesn't take much to know our government would find ways to play politics with people's lives, as they do now. Universal health care would just end up going even more bureaucratic and people would suffer for it. The general level of quality would most likely decrease.

However... what we have now isn't getting it done. Health care is at an impressively high level, but there are too many people who can't get care, who let their kids stay sick and hope it goes away because they can't afford medicine or seeing a doctor. Watching people have to do that isn't fun and isn't conscionable.

So maybe we try beefing up a free health care for those who can't afford it or choose to participate in it. Now these people get health care, but it'll end up being poorer quality than those who can afford to pay for the good care. But then comes the question of how do we pay for it. To offer it to everyone that needs it, where does the money come from? No one wants to pay for it because everyone works hard for their money... and somehow the many people flirting with poverty that work twice as many hours, doing harder work, and making about 1/3 of the amount of money don't earn theirs.

It's discouragingly difficult. For me the answer always lies in oppression. This is where I tend to go Communist. We have a rich elite that believes they have earned their money and wealth and power, but fail to realize they haven't earned it. It's been given to them from where they were born and what color skin they have. They didn't work harder than so many people that have worked just as hard but get paid minimum wage. So instead of sharing what they have, of using their money to take care of those who have worked just as hard, but were never given the opportunities... they hoard it and feel it's their hard-earned money that they shouldn't have to share or give to the lazy poor people that didn't earn it. I mean... when America was founded... the rate of taxes for the wealthy was exorbitant... but it went with the understanding that those with great wealth had great responsibility to take care of those who were not so lucky to be born into wealth.

We've lost that. For a Christian country we're so amusingly both very Christian and very not Christian. We've become individualized Christians. We no longer want to look out for each other, be part of a community. We each think we're responsible for ourselves and entitled to what we need for ourselves. If other people can't take care of themselves... that's their problem, not mine... I've got enough of my own.

And yet Christianity was founded on the principles of caring for each other. All Christ did was go to the poor and sick and outcast and take care of them as best he could. When it comes to health care... as a Christian... this is the most important aspect for me. We do have a duty to take care of each other, to see that each person's needs are met. Having a member of the community suffering, in pain, and sick is bad for the community. To allow it and make no effort to fix it is intolerable. We need a system that aim to take care of everyone, and treat everyone fairly, not one that treats people based on their utility or wealth. Sadly I don't see one of those coming along anytime soon.

andronicus said...

Our system of health care providers is the best in the world but is not efficient. Our system of health care insurers is incredibly inneficient, adding on 20 percent plus just to process claims. Medicare, although it has low reimbursement rates, is pretty damn efficient, costing only about 1 percent to process claims.

Markets only work when there is perfect information and competition. I would say that the huge insurers are an oligarchy and stifle competition. Accordingly, the market for health care insurance does not work.

There is no good answer, only trade offs. Covering everyone will decrease quality. We have to decide as a society what is more important.

matthew said...

Actually, markets work BECAUSE of imperfect information. If we had perfect information readily available to us, then some government planner could simply allocate resources, knowing exactly what to give to whom and at what cost.

Free markets, especially the price mechanism, allow individuals to constantly react to shifts in supply and demand, basing their actions on an ever changing set of conditions exterior to themselves. Knowledge in a society is dispersed and fragmented -- only the person in a specific context knows what they need and how much they are willing to give to satisfy that need. Local knowledge, really, is the only knowledge that matters. And its precisely that type of information that cannot be relayed thoroughly enough or quickly enough to any central planner to allow the government to adequately set prices, distribute resources, etc.

This is one reason why you have long waiting periods with socialized medicine. Planners have to guess where to send resources. Medicine and services are not distributed in regards to demand, but where the government imagines such things will be needed.

Now, this might be a trade-off you want to make. And planners might, over time, get very good at judging where to allocate resources. Obviously, too, I'm simplifying matters. But I simply had to note that imperfect information, following the late, great F.A. Hayek, is the best reason to embrace markets. If we had perfect information markets would be obsolete. This is not an argument against universal health coverage. I'm simply saying this problem -- the problem of knowledge -- needs to be considered when thinking about the matter at hand.

Andronicus said...


A market in the context of imperfect information is, by definition, not a free market. A market can only be free with perfect information.

Pink Elephant said...

Freedom of a market has to do with interference. A market with imperfect information is imperfect (I know that sounds like a tautology, but it isn't, trust me), but can still be free if allowed to function unfettered. Arbitrage, which is possible because of imperfect information, is a perfectly natural activity in markets both free and fettered.

matthew said...

Pink made my point. Most common definitions of "free market" that I'm aware of refers to interference, not information.

DanielNL said...

Matthew, that markets work because of imperfect information is a good one! Sorry, but the argument is twisted. Imperfect information does not mean that the central planner cannot observe it but that the buyers and/or sellers in a market have imperfect information and therefore the otherwise great market mechanism you describe leads to inefficient results.