Available Now! (click cover)

America's Counter-Revolution
The Constitution Revisited

From the back cover:

This book challenges the assumption that the Constitution was a landmark in the struggle for liberty. Instead, Sheldon Richman argues, it was the product of a counter-revolution, a setback for the radicalism represented by America’s break with the British empire. Drawing on careful, credible historical scholarship and contemporary political analysis, Richman suggests that this counter-revolution was the work of conservatives who sought a nation of “power, consequence, and grandeur.” America’s Counter-Revolution makes a persuasive case that the Constitution was a victory not for liberty but for the agendas and interests of a militaristic, aristocratic, privilege-seeking ruling class.

Friday, July 17, 2009

Healthcare Arrogance

The conceit of a handful of congressmen is truly astounding. They actually think they know enough to design a medical marketplace. Do they have any idea what they are up to, any idea of the havoc they will wreak, the hardship they will inflict?

Anyone interested in freedom should read as much as they can about the bills working through the House and Senate. They can be found online, though of course they are not easy to read. The authors don’t want us looking too close. That also means most members of Congress won’t be reading them either. Par for the course.

They call this “representative government”? This is what Joseph Schumpeter had in mind when called political representation a “sham.”

I would advise that no one believe the cost figures the Obama administration and the bills’ sponsors are throwing around. We know the real costs will be far higher. Read the history of Medicare for proof. Today Medicare has an unfunded liability of over $30 trillion.

I would further advise everyone to doubt all the promises about keeping your doctor and medical coverage. The fact is that all medical plans will have to comply with detailed government regulations or they will not qualify for tax exemption. All new policies will have to be bought through government-created “exchanges.” When the government’s own “insurance” plan puts the screws to its rivals and to doctors, they will leave the market and abandon their customers and patients. We’ll be stuck with either the government plan or “private” plans that ape it. Some choice. Some competition. What a cruel hoax on the American people. But they won’t realize it until it’s too late.

No, the alternative is not to do nothing, though that would be far better than what these cretins are about to do. The alternative is to free the market, deregulate top to bottom, and let freedom work for a change.

There is no free market in medical care or insurance. It’s about time we’ve had one.

When will these vain, power-lusting politicians leave us alone?


Mike said...

I admit that I am perplexed as to the right course for providing health care in this country. While my instincts run towards free markets and away from centralized government control, I am nagged by a voice that says that "health care is different."

One of the data points that consistently scare me is the reporting of large numbers of Americans who declare bankruptcy in the face of large medical expenses - even though they had private health insurance. Add to that the "prior existing conditions" trap and insurance that is tied to a job (not a person) and it is hard to argue that this is broken (or worse = a scam) system.

It does seem logical to me that a single payer system makes the best use of the law of large numbers (the healthy subsidize the sick; the wealthy subsidize the poor).

What am I missing here? Is this an example, like the Fire Department, where pooling common resources for the common good make sense?

Sheldon Richman said...

Government increases the price by suppressing supply and inflating demand. Few people shop wisely for services or insurance because of government has made third-party payment dominant. Routine services are paid for by bureaucracies with large overhead.

Pooling risk and resources is fine. It's the basis of insurance. What's not fine is having government do it. Since government exists on forcibly extracted resources--taxation--and cannot go out of business, bureaucrats will not and cannot behave like market actors in a competitive environment. (Why is monopoly universally condemned except when government is the monopolist?) As a result, single-payer would not serve the interests of people in general. Decisions would be made on a political basis, which means on behalf of special interests and constituencies. Lost in a government-run system are entrepreneurship, economic calculation, profit and loss, and the rest of the things that make markets work so well.

If government is paying for medical care, it must control--ration--it, which leads naturally to control of people: The taxpayers should not have to pay for smoking-related illnesses, so let's outlaw smoking. Etc. Etc. Etc.

When the government's medical budget gets out of control, people would be denied service. Why waste money on a hip replacement for an 80-year-old unproductive retiree when "we" could direct those resources to younger people with their productive years ahead of them?

Do you want bureaucrats and politicians making those decisions?

What holds greater potential for authoritarianism than government control of medical care?

What happens when government drives the good doctors out of the industry? Shall we conscript them?

Medical care is not different from other things. It's a constellation of goods and services in a world of scarcity.

Russell Hanneken said...

Mike, you may find these two blog posts of interest:

Elizabeth Warren and the Terrible, Horrible, No Good, Very Bad, Utterly Misleading Bankruptcy Study

Why Warren's New Bankruptcy Study is So Bad

D. Saul Weiner said...

All you need to know about what government intervention does to health care can be found in this masterful documentary:


Mike said...

Sheldon - thanks for the follow up. I am still struggling with how to make the argument that a single payer system would be worse than the existing, fragmented private payer system.

Surely the argument against single payer is not "rationing". There is plenty of evidence that private insurers restrict services and/or payment as a matter of course. In both cases (government or private) reducing the amount of outlay for services becomes an imperative. "Rationing" exists in both options.

While I am troubled by any accretion of power to the federal government, I am also troubled by the fact that 75% of people who are pushed into bankruptcy by medical problems actually had insurance when they got sick or were injured.

It is also a bizarre setup that my health coverage is associated with my job, not my person. I think this is a result of the tax code but still a sub-optimal setup.

It seems that we have morphed our expectations from "insurance" for medical calamities to a "payment" for any and all health services. If this is the true expectation for the majority of the population, is there any other way to provide this than a single payer plan?

I don't want to believe that a government run single payer plan is the answer. Help me understand how the alternative works better.

MarkZ said...

Mike, I don't think Sheldon's supporting the status quo as the alternative. I think his point was that the third-person payment system, which you (rightfully) are criticizing, is a consequence of government intervention.

Personally, I'd add to his brief laundry list of interventions: the drug war, occupational licensure, and the expensive one-size-fits-all schooling industry.

Just to add a personal anecdote, the hospital I currently work at is laying off health care workers by the hundred, all while adding new research space to accommodate those workers. Two different funds, all allocated by the same state congress. It's most likely just a bone they're throwing to the construction companies and their suppliers. It "creates jobs", which we all know is paramount, right?

Mike said...

MarkZ - I am sure that Sheldon would not hold up the status quo as the alternative. What I am asking, albeit in a very inarticulate way, is what is the Free Market alternative which solves the problems of the Status Quo system and avoids the great sucking sound of the Federal System?

It is not enough, I think, to point out that central planning is flawed. We must also answer the question: "How does a Free Market system ensure that everyone can get health care when they need it?"

D. Saul Weiner said...

Mike, watch the video

Mike said...

OK. I watched the video. A cautionary tale indeed. Thanks for the link - I posted it on my blog for others to see as well.