2009/11/13
Joe Flower (The Health Blog): Free-market competition fails in health care. Whereas suppression of the market is working swimmingly? (I couldn’t make this stuff up.)
Marcia Angell (Huffington Post): “I would rather see us do nothing now. [The House health care reform bill] throws more money into a dysfunctional and unsustainable system, with only a few improvements at the edges, and it augments the central role of the investor-owned insurance industry.”
Kaiser (Health News) on the origin of “Death Panels”: The charge was first made against the Ford Administration.
Jason Shifrin (Healthcare Economist) has a good summary of who wins and who loses in the Pelosi bill.
Marcia Angell seems to have an unnatural aversion to the profit motive in health care. She would rather do nothing (about the 47 million poor souls who lack health coverage) than give another nickel to investor-owned firms.
I used to work for a non-profit health care provider. They were just as concerned about earning a profit as the investor-owned companies. Whether a hospital is for-profit or non-profit has to do with a “tax election” rather than the desire to earn (or not earn) a profit. For-profit firms also pay taxes so they are not guilty of providing fewer societal benefits.
Marcia Angell thinks that socialism works. What more do you need to know about her state of mind?
Let’s deal with Prof. Flower’s arguments:
1. “True medical demand is wildly variable, random, and absolute.” It certainly is: just like death, car crashes, or house fires, but insurance markets have developed to deal with those risks. As for the need being “absolute”, that is not a meaningful adjective. While nobody needs a Jaguar, most people would argue that an adult “needs” a car if he’s going to live a middle-class life. One hundred years ago, only very rich people could afford cars, and it would have been unimaginable to most people that the masses would every acquire them. Thanks to free markets, middle-class American high-school kids now have cars. If the federal government circa 1900 had “guaranteed universal access to transportation”, 90% of the U.S. population today would be limited to public mass transit, with only the very rich being able to afford private automobiles. On the other side of the coin, the “need” for medical care cannot be “absolute” in the sense that if you don’t get it, you die. We are all going to die anyway, and Homo Sapiens existed for 50,000 years without access to medical care as we understand it today. If we are to stare truth in the face, we’ve got to admit that medical care is completely discretionary.
2. “All demand apes this absolute demand.” This is the old trope that individuals are not capable of making informed decisions about the medical care they get, because of the “do this or die” element of it. That may be true for strokes or getting hit by a bus, but it’s certainly not true for most health care: chronic illness, wellness, and prevention, where becoming well informed is necessary to make the right decision. In any case, if the individual is too stupid to make a decision about which medical services to acquire, that leads to a dead end, not the conclusion that the government should take over his access to medical services. Obviously, if the individual cannot chose medical services himself, he cannot choose to elect politicians who will make the right decisions about his access to medical services, nor will he be able to monitor the government’s decisions and hold it accountable. Furthermore, if the government is to take the individual’s sovereignty away because the doctor is so much better informed that the patient, it should do that in every case where the individual relies on expert advice. You should not be allowed to choose your own lawyer, auto mechanic, veterinarian, accountant, etc. Indeed, we live in a world of increasing specialization, where much of our self-directed spending is paid to experts to guide our choices.
3. “The benefit of medical capacity accrues even to those who do not use it.” This is the old “fire department” argument, which I have addressed elsewhere. It is an utterly misleading analogy, confusing public health with private health. Only the most extreme libertarian would argue against a role for government in public health, i.e. reducing the risk of spreading communicable diseases. Until the early 20th century, this was a very big deal. Typhoid, typhus, etc., were the reasons immigrants were quarantined. Today, swine flu is the primary example. So, the public-health department (if it sticks to classically defined public-health issues) is comparable to the fire department. But once your house burns down, despite the efforts of the fire department, you don’t go the the fire department with a claim to indemnify you for the value of your house and possessions. You submit a claim to your private insurer. If the government did insure your private property as well as provide the fire department, it would dictate the type of house you live in and what furniture you can have in it. (Mr. Flowers alludes to mandatory private homeowners’ insurance, but that is not quite accurate. The government does not mandate insurance, the mortgage lender does. That is a free-market transation.)
Flowers statement is a joke. All over the developed world there is no better example of a dysfunctional, system complete with hughe waste, inefficiency and failure to meet human need that nonmarket health care.
I wish there were more people on the left like Marcia. Then we could kill this thing.
You’re right. Flower seems to have no idea what non market health care is, how it works or why it works that way. Obviously, he has never read “Patient Power.”