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.
4 comments:
International comparisons tell against blaming government interference. The US has the highest proportion of private purchasing of healthcare and the highest healthcare costs in the developed world, and you can just about say the same for the OECD as a whole (Chile slightly outpaces US for proportion of private spending).
This is a reasonable source of information on these claims: http://www.oecd.org/health/healthpoliciesanddata/49105858.pdf
Pages 150 and 157.
Lynette and I were in graduate school together, and she works in bioethics up in Halifax, Nova Scotia. I'm relieved that she, of all persons, did not find my argument wrong-headed. Thanks for reading and commenting, Lynette.
You have brought attention to three different factors that affect the cost of medical care, undoubtedly there are many more. I too fail to see how government involvement increases health care but then we both probably share the belief that all individuals should be afforded at least basic health care as a civil right. There are those who don't. They think that the best way to cut off the rising costs are to keep certain people out. By limiting who gets access to health care the bill the federal government must pay (and therefore the taxpayers who pay keep the government running) goes down. So they are right that governmental subsidization plays a big role in costs and they don't want to be on the hook to pay for the health expenses of others. Which is fine for them because they can afford it. But I certainly don't want to live in a society that thinks its okay to deny other people basic health care not because we can't afford it but because we don't want to foot the bill.
No one would deny that if government is covering basic health care, that expense must be covered by taxes. The question I was addressing here (and I know you realize it, Matthew) is not whether taxpayers or private citizens are paying the bill, but why the bill is so high. As for who gets the bill, private citizens and taxpayers are not mutually exclusive groups. It's a matter, as you point out, of inclusion/exclusion. On a different topic, some people think that internet service or urban garbage collection should be covered by municipal taxes, while other people think it's every household for itself. Either way, people pay. There's no free lunch.
But how expensive is the lunch? If we want champagne and caviar and foie gras on the standard menu, we shouldn't be yelling about the big bill on the basis of who's paying. It's what must be paid for that explains the size of the bill.
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