“… there must be a way …”


A young and thoughtful correspondent posted a question on his Facebook page, and some of his friends had a Tweet-like discussion. As I don’t do Facebook, I’ll respond to his question by e-mail and post that message below. I added remarks about the debate between his friends too. I re-named the friends: Decent and Sensible Canadian, Bleeding Heart, and Movement Conservative. On these conditions, my correspondent agreed that I could post this to you, to my correspondent, his friends, and to our readers.

Here’s the question:

I don’t understand all the complexities in our healthcare system. However, something compels me to think that there MUST be a way to creatively engineer a system that will provide excellent, low-stress, equitably priced, easy-to-access healthcare for all Americans while reducing waste, fraud, abuse, corruption, and unnecessary bureaucracy. I am open to public, private, and hybrid systems. Let the quest for the Holy Grail continue. However, on second thought, I’m probably being a naive moron to think such a thing.

Here’s the friends’ discussion:

Decent and sensible Canadian: I was always happy with the Canadian health-care system.

Bleeding Heart: Works pretty well in most other developed nations…and I’m sure the level of corruption varies but it’s pretty sad that some of the countries we invade have public healthcare and we don’t. Even Cuba has it.

Movement Conservative: Nationalized catastrophic care for high-cost long-term illness. Everything else is cash on the barrel head.
I venture to predict that slowly but surely, the free market half of such a system would be able to take over the public half and even do the catastrophic side better, but just to put anti-capitalists’ minds at ease, we’ll start with the myth that catastrophic care will be “guaranteed” just because government is doing it.

Bleeding Heart Catastrophic care is not health care. It’s sick care. I’ve lived in a country with socialized medicine. Works fine.

Movement Conservative Why not sick care? You don’t expect your car insurance to pay for oil changes.

Movement Conservative Car insurance also works fine.

Bleeding Heart We’re not cars

Movement Conservative Why is it automatically so wrong to be the country that tries to find a market solution?

Bleeding Heart People are not commodities

Movement Conservative Have you ever even considered that insurance in itself is the broken model?
At the end of the day, healthcare is just fixing bodies.

Bleeding Heart Something shouldn’t be run like businesses… in my opinion of course… health, law enforcement, education, government, security

Movement Conservative Are you sure you’d still believe that if a market solution were functional?

Bleeding Heart I agree. Insurance is a broken model. Get rid of it. In England there are no health insurance companies, no billing departments in hospital. It’s part of government… healthcare is a right

Bleeding Heart Yes… cannot trust the market to have the best interest of people in mind when we all know they are profit driven

Bleeding Heart I trust the market for my retirement package and for my commodities because are interests align. Insurance companies make more money if they charge sick people more… that is a problem for the poor and sick

Movement Conservative But if your stance is principled and not utilitarian, how do you justify the notion that you have a right to someone else’s work?

Bleeding Heart Huh? What’s that to do with it?

Bleeding Heart My stance is human

Bleeding Heart I believe in protecting the weak and poor… I believe it’s our duty. What is a country that does not do this..?

Bleeding Heart To cast aside the weak and poor is fascist.

Movement Conservative Except you believe you have a right to the doctor’s work. Docs are human, too. How can you have a right to a service?

Bleeding Heart Not capitalist that was based on Christian belief

Movement Conservative Finding a comprehensive capitalist solution means not casting the poor aside. That’s an unfounded assumption.

Bleeding Heart How does this new law protect the poor and weak

Movement Conservative My proposal had nothing to do with the new law. I was not defending it. It is specifically anti-capitalist.

Bleeding Heart The doctor can be paid by the government just as easily as an insurance company

Bleeding Heart  What is your proposal and how does it protect the poor and weak… and excuse if I disappear for a while I’m going to dinner

Movement Conservative True, but it makes even more sense for the doctor to be paid by the person receiving the service. Government actually has the same problem an insurance company does. Its price point is significantly higher than that of an individual, therefore the market price is skewed as if the person receiving the service has more money than they actually have.
My proposal is to leave routine maintenance to the market but cover everyone for shit like cancer treatment. I’m putting my money where my mouth is because I believe the maintenance/free market section will out perform the crisis care/government section and naturally absorb it. Give everyone the safety net, but see what the market can do with the routine medical expenses. A genuine experiment designed to kill insurance as a model.

Bleeding Heart How about two options? A payroll tax for people who want the single payer program and an opt out for those that want to take their chances on the market approach ?

Movement Conservative That’s just the problem… there is no market approach at all right now. You can’t pretend that’s even an option. That’s why it needs to be cut out as an independent market first.

Bleeding Heart I would rather see the Medicaid system expanded instead to become universal with an opt out tax rebate for those that wish a private plan. Unfortunately I don’t know what will happen to the insurance industry if we did this. They would effectively be g…See More

Movement Conservative Hopefully we can keep operating that way, so long as Washington doesn’t aspire to be Brussels.

Bleeding Heart Don’t see that happening…

To my thoughtful correspondent,

I recognize the sentiment behind your question (and Bleeding Heart’s remarks) as that of a decent, Christian person. Jesus provided what we’d call health care to all who came to him, didn’t ask if they could pay, and didn’t express any thought that they were imposing upon him. He directed his followers in many beautiful passages to care for the sick and infirm, the poor, the foreigner, widows, orphans, and society’s outcasts. Indeed, he sought out such people and modeled for his followers the proper way to relate to them; treat them with compassion and kindness. Christian people have an admirable 2000-year tradition of providing health care to all. They demonstrate their care for the sick, elderly, infirm, and disabled through the many hospitals and clinics operated by churches and with missionary medical care. Once a month in the church where Linnea, my wife, plays organ and piano, they have Christian healing services.

The simple answer to your question is that all advanced nations of the world, except for the United States, provide universal health care for their citizens and residents. These nations have found various solutions, from socialized medicine as in the UK, to single-payer systems as in Canada, and all of them provide health care that is better than the US system and at about half the cost.

Since the United States could easily chose to provide healthcare to everyone by choosing some system like one of the successful ones on exhibit, I conclude that there is some strong reason why we do not do so. I see in the ferocious and insane opposition to Obamacare a positive intent by the Republican party and its voters to harm millions of their fellow citizens. That so many Americans want to harm other Americans is a calamity for America.

Mr. Conservative asks why not provide health care to Americans by way of free markets and capitalism? A good question, and one to which we know the answer. Free markets and capitalism do not provide adequate medical for everyone. The health care that such a system provides is morally unacceptable to most Americans because it provides that care not in accordance with human needs but rations it accordance to wealth and income.

We know how such a free market capitalist system would work because that was the system we had before World War II. We have been gradually fixing failures of that system ever since. Employer-based health insurance became wide-spread during the war as firms competed for scarce war workers. This was useless, however, to retired workers and their families, unless they had worked in unionized major industries. In the 1960s, we created Medicare to help these retired workers and their families. No private insurance firm can provide insurance to the elderly that is affordable to them and turn a profit too. We also created Medicaid to deal with those workers and their families who were priced out of the market, denied health care by the free market.

Mr. Conservative repeats the arguments made by conservatives against these and other innovations that correct for imperfections and failures of markets. Ronald Reagan famously made ads that argued against the Medicare bill (falsely) saying that it was socialized medicine and that it would destroy the American way of life.

Economists favor free markets and capitalism. Many of them, however, make their careers investigating market failures, of which there are many. In economic thought a free market in which supply and demand adjust to clear the market at some price requires that certain assumptions be valid. The text book free market is one in which there are many buyers and many sellers, all fully informed and no one (or a group) of them large enough to dictate the market price. Many economists and conservatives assert that the price at which the market clears maximizes both private and social welfare. The greatest good for the greatest number of people. This is the economic definition of a free market. Some commodity markets tend to approach this. Markets with monopolies do not. A monopolist sets the price to maximize his profits.

One of the several market failures that trouble medical care markets is that in these markets all participants do not know all relevant information. Indeed, they cannot. Ailing people consult physicians specifically because they don’t know the source of their problems and don’t know what to do about them. That is why they consult physicians, who have studied for years, trained for more years, practiced medicine, and continued their study. When a physician recommends a course of treatment or a procedure, the patient is not able to second guess the matter.

Conservatives like to cite Lasik eye surgery as an example of the power of markets to reduce costs. As enterprising ophthalmologists offered these procedures prices fell dramatically. Today such treatments may cost a tenth of what they did a decade ago. Presumably, consumers called around to find the lowest price. But these consumers were not able to evaluate why one doctor charged less than another. How can the consumer evaluate whether the two physicians provide similar quality? How can the consumer find out and evaluate each physician’s complication rate?

Consider the people who use the most medical services, the frail elderly. The market model would require your dear grandmother to call around to investigate prices and quality for her hip replacement surgery as she lies in the emergency room after a fall. No doubt, she queried the 911 operator to be sure that the ambulance service was the best deal; low price, low accident rate, trained emergency personnel, air-conditioned ambulance with a good music system.

As you stand in the supplements aisle at Whole Foods, you likely see a dozen brands of lecithin or B12, with varied prices. You confront an information asymmetry. The manufacturers (one presumes) know what is in their products, but how can you find out? Is this one less expensive because the tablets have not been purified as much as that one? Does this have the amount of vitamin advertised? The manufacturer will increase his profits if he has less of the active ingredient than his competitor or skipped a purification step.

Indeed, the origins of the Food and Drug Administration more than a hundred years ago arose from scandals involving chalk in milk and bread sold in unregulated markets. The famous muckraking novels, such as The Jungle, described the unsanitary conditions in meat packing plants and slaughter houses.

When conservatives refer to free markets, they are not referring to the economists’ free markets. The conservatives have in mind free from government regulation.

Markets cannot approach to the economists’ social-benefit maximizing free markets without governments. Markets will not exist, for example, without government enforcement of the right of free contract. Conservatives call for the end to burdensome and unnecessary regulations to get the government out of free markets. In fact, no one favors burdensome and unnecessary regulations. But it costs manufacturers money to maintain sanitary food processing facilities. From their point of view, using stainless steel equipment and cleaning it regularly using properly trained and supervised employees is a costly burden. Thus, what to them is a burdensome regulation to get rid of is a necessary and sensible requirement from consumers’ points of view.

The answer to Mr. Conservative’s question “Why is it so wrong to be the country that tries to find a market solution?” is that a free market, in the sense of unregulated, is the first solution that we, and everyone else, tried. It failed. In health care, unregulated “free” markets are far from the economists’ free markets.

I was also struck by these two remarks by Mr. Conservative.

But if your stance is principled and not utilitarian, how do you justify the notion that you have a right to someone else’s work?

Except you believe you have a right to the doctor’s work. Docs are human, too. How can you have a right to a service?

I’ve heard this odd argument before, from conservatives and libertarians in another context.

In this case, a physician opens an office and advertises that she will provide medical services in return for payment. Obamacare, and other countries’ systems, insure that every patient can pay. But Mr. (Libertarian) Conservative considers it extraordinary that the paying patient expects the physician to provide the advertised service. According to this line of thought, a paying customer is asserting a right to the doctor’s services. Indeed, a paying customer is asserting a right to milk and yogurt at Whole Foods, asserting a right to an oil change at Jiffy Lube, asserting a right to a Big Mac at MacDonald’s, and a room at Motel 6. For this paying customer to assert this right, is to impose tyranny upon the physician, tyranny for the physician to provide what she advertised she will do.

Indeed, this is the precise argument made by political conservatives against the great civil rights public accommodation laws of the 1960s. The owner of a hotel had a right to chose to whom to rent his rooms, and it would be big government tyranny to require that he treat all paying members of the public alike. Our society has chosen to allow signs such as “No shirts or shoes, no service!” Or “No pets.” But, we no longer allow signs such as “No blacks or Italians.” Nevertheless, some conservatives still consider this as an imposition on the freedom of the business owner. Sen. Rand Paul got in trouble when Rachel Maddow asked him about his views of these public accommodation laws during his campaign for the Senate. Soon the Supreme Court will decide if we will allow bakers to advertise their wares for paying customers, but to put up a sign that says, “No gays.”


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