I read with interest the other day praise by a fellow bookman for libertarian politics. I became a big Ayn Rand fan at the age of 17 and clung to Objectivist certainties until my late 20s, when life experience, broader reading, deeper critical thinking, and subsequent gradual disillusionment intervened. The main charge made in the short piece that got me thinking about this stuff again was the writer’s contention that it is government interference in health care that has sent medical costs soaring. I want to examine that claim.
Certainly a statistical correlation can be found between programs such as Medicare and rising costs since World War II, but other, equally available correlations are left out of such a narrow focus. Three come instantly to my mind.
(1) First there has been the rise of the for-profit hospital. Hospitals used to be owned and run by communities and churches. They were not expected to “make” money but to provide care when needed. These hospitals were not free, but neither were their charges governed by the “free” market. Schools, libraries, hospitals—these were seen as necessary provisions of civilized communities for their members. For-profit hospitals have changed the landscape utterly. Younger people can be forgiven for not remembering a history they did not live through. My generation has no such excuse.
Along with for-profit came (2) more and more health and practice liability insurance "products." Insurance is not in itself a necessarily bad idea. In fact, the pooling of economic risk and sharing of economic benefits are (does this astonish you?) basically a socialist principle. But does anyone not realize that private insurance companies exist to make money? As much money as possible for shareholders and investors. The more you buy—and the less they have to pay out—the more money they make. As for liability insurance for physicians, can a doctor even without malpractice insurance in a for-profit hospital? (Any hospital?) Lawsuits would certainly put profits at risk, and reducing risk to the company is what actuarial calculations are all about.
Also in the postwar period came (3) advances in medical science. These have brought Americans more and more expensive testing and treatment options, and they have also made equipment more expensive to hospitals. Not only are more people kept alive longer (some of them only "alive"), but because more and more new tests and procedures and treatments and equipment all the time come to be regarded as “ordinary care,” the cost of ordinary health insurance continues to go up correspondingly.
Put it all together and look at the expanded picture again. For every case of a Medicare patient costing big bucks, there is a corresponding case of a healthy person with private insurance whose physician has ordered a dozen expensive, often unnecessary tests, "just to be on the safe side”; a man or woman “suffering” from the usual effects of aging and taking prescription medication to hold those “symptoms” at bay; or a comatose patient in a hospital bed being kept “alive” as long as private insurance is footing the bills.
Americans want to live forever, they want to stay young forever, and those who can afford to pay top dollar in their futile search for the Fountain of Youth make it almost impossible for those of us who would be content with basic care to find no-frills providers and institutions. It’s like looking for simple, basic dental care, when the way dentists make money these days is with expensive cosmetic procedures. Who wants to serve the lower end of the market? That won’t pay off medical school debt or help meet malpractice insurance bills!
My point is that private insurance companies, for-profit hospitals, scientific advances, and the race to the top of the medical market all fit perfectly well into the free-market, libertarian model. Why is American medicine so expensive? Blaming government interference is simplistic, narrow thinking. But it’s got “sound bytes” working for it.