The Health-Care Nirvana Fallacy

Someone explain how coercive centralized bureaucratic control of medical decision-making and the purse can beat the decentralized free market with its undistorted price system. The government has many things besides medical care it wants to spend tax money on, and seemingly free medical care leads to unlimited, unmanageable consumer demand for services. What then? Will the bureaucrats never say NO to many people who need or say they need care? Where will the money come from? Will there not be intolerably long and life-threatening queues for exams, tests, and surgeries? Will doctors work for low reimbursements or be drafted? Aren't resources and labor limited and consumer demand unlimited? Someone square the circle for me.

Many people imagine a perfect medical system in which everyone can have everything he or she wants for the asking and without inconvenience. Nothing can compare to perfection, so case closed. This is the Nirvana Fallacy, judging the possible against the perfectly impossible. The government has steadily made the medical system worse, culminating in the Affordable Care Act (Obamacare) and its distorting mandates, regulations, and subsidies.

In contrast, the competitive, profit-motivated free market would expand the number of practitioners (now limited by government rules) and improve the quality and variety of services. It would create consumer price sensitivity (services would no longer appear to be free) while cutting prices through competition and increased services. As the price of medical care came down, so would the price of medical insurance, which would also be unencumbered by political mandates for coverage whether people want it or not. People would find it worthwhile to reserve insurance for catastrophic events only, covering predictable routine matters through their savings. 

This is as good as it can get in a world of scarce resources and unlimited consumer wants.

Market-Based Medical Care for All

My latest article for the American Institute for Economic Research is "Market-Based Medical Care for All."

One More Flaw in Conservative Health Care Reform

Conservatives oppose federally mandated health insurance benefits (maternity, etc.), but they favor states having the power to mandate such benefits, which they already have. But conservatives (e.g., the Heritage Foundation) say they also favor a nationwide insurance market, that is, competition across state lines, which is not the case today.

The problem is that you cannot have free competition nationwide and state-mandated benefits. Would someone who lives in a state with lots of mandates be free to buy a basic catastrophic policy from a company in a no-mandate state? If not, then there is no nationwide market. If so, then the mandates aren't really mandates.

TGIF: Things to Keep in Mind During the Health Care Debate

As the debate proceeds over what should succeed the Affordable Care Act (Obamacare), here are a few basic ideas to keep in mind.

Read TGIF at The Libertarian Institute.

TGIF (The Goal Is Freedom) appears on Fridays. Sheldon Richman, author of America's Counter-Revolution: The Constitution Revisited, keeps the blog Free Association and is executive editor of The Libertarian Institute. He is also a senior fellow and chair of the trustees of the Center for a Stateless Society and a contributing editor at Antiwar.com. Become a Free Association patron today!

Man's Inhumanity to Man

Customer: Hello, Home Warranty Co.? My A/C system broke down. I'd like coverage for it.
Home Warranty person: Do you have a policy with our company?
Customer: No. That's why I'd like one now.
Home Warranty person: But your A/C is already broken?
Customer: Yes.
Home Warranty person: I'm sorry but we don't cover breakdowns that occur before you buy a policy.
Customer: You don't cover preexisting conditions? How cruel! Does the government know about this?

Question

What's there to say about a person who can't tell the difference between contraception and conscience?

The “Accommodation” that Changes Nothing

Hat tip: Mario Rizzo

Scenario: A woman who works for a Catholic hospital walks into a pharmacy and fills her birth-control prescription. The pharmacy files the claim with her employer’s insurance company. The insurance company pays the pharmacy.

Question: Is this a description of a transaction taking place before or after Obama’s “accommodation” to the Catholic objection to being forced to pay for contraception?

Answer: There’s no way to tell.

Possible objection: But won’t the hospital’s premiums be lower after the accommodation since it won’t be paying for contraception coverage?

Answer: Not if the Department of Health and Human Services is right. HHS says paying for contraception coverage offsets the cost of medical expenses associated with having children. Therefore there is no reason to expect a post-accommodation fall in premiums for Catholic institutions.

Bottom line: If in principle one cannot distinguish a pre-accommodation from a post-accommodation transaction, there is no accommodation at all. The grand compromise is a sham.

Bad Deal

No woman would choose to spend her own money on birth-control "coverage," because the premiums would amount to prepayment for future purchases plus administrative overhead and more -- in other words, a bad deal. However, if you can get someone else to pay, it's another story altogether.

Think Dialectically

The title of the post is the advice my old friend Chris Matthew Sciabarra would surely give about proposals to change or abolish Medicare and Medicaid. It means holding the full context at the front of one's mind. These programs certainly violate the rights of the people forced to finance them and make the recipients dependent on the political class while discouraging independence and mutual-aid solutions. But they are parts of a system that has other, interlocking components. Focusing only on abolishing Medicare and Medicaid commits the serious offense of overlooking all the ways government (at all levels) cartelizes and restricts the provision of medical care and insurance against medical expenses. Licensing is pervasive, and myriad other controls and privileges impede competition, innovation, and entrepreneurship. Libertarians must emphasize this during every discussion of Medicare and Medicaid or they will appear to be advocating that vulnerable people be thrown into the nightmare that the reigning medical and medical-insurance "markets" can be and often are. We must also teach the public about mutual-aid societies and "lodge practice," which enabled poor people to obtain quality medical care during an earlier period in American history. (Also see Roderick Long's article on lodge practice.)

Unfortunately, too many libertarians imply (without quite saying) that these rigged markets are already free and, moreover, that they are the best in the world. I can't imagine a worse position for libertarians to take these days.

If we don't insist on freed medical and insurance markets, we will have no chance to make headway in the public debate. Potential allies who care about the vulnerable will be alienated, and we will be looked on as ... conservatives.

P.S. It should go without saying that this principle applies across the board.

One Last Time: Markets Don't Ration!

The Wall Street Journal takes Donald Berwick, likely the next Medicare chief, to task for saying, “The decision is not whether or not we will ration care—the decision is whether we will ration with our eyes open. And right now, we are doing it blindly.”

Fine. But then the editorial writer adds, “In fact, the real choice with medical care, as with any good or service, is between rationing via politics and bureaucratic lines or via a competitive market and prices.”

Wrong. Markets don’t ration, for the reasons I explain here.

Obama: Enemy of the Working Class

Barack Obama, the current White House occupant, recently reaffirmed his support for employer-based health insurance. In my book that makes him the enemy of all working people. The tethering of employees to their bosses is a rotten leftover from World War II and should have been abolished long ago. Those who believe in freedom and independence must rediscover the mutual-aid movement of the not-too-distant past.

Op-ed: Kill the Insurance Mandate

Everyone who believes he lives in a free country should be asking himself, By what authority do the Congress and the president force me to buy insurance?

My latest FFF op-ed is here.

TGIF: The Power to Tax is the Power

The authority for forcing us to buy health insurance is said to be the Commerce Clause and the taxing power. TGIF looks at these claims.

Read TGIF here.

TGIF

Want to know how the politicians justify forcing us to buy health insurance? I discuss their screwball grounds in this week’s TGIF.

Health Insurance Scam

How can you get insurance for a volitional act? Regardless of one’s position on abortion, there is no denying that it is something a woman chooses. It doesn’t happen without her initiative and consent. My objective here is not moral judgment but precision. For all kinds of reasons a pregnant woman might feel she needs an abortion, but that does not change the fact that it is an action not a happening (as Thomas Szasz would put it).

The rest of TGIF is here.

Insurance Companies Want a Mandate with Teeth

The health-insurance lobbyist complains that under the proposed healthcare overhaul the penalties on individuals who don't buy coverage would be too mild and would encourage people to wait until they are sick before buying a policy -- at which point they couldn't be turned down or charged more than healthy people.

That's right. The industry wants the government to force us to buy its product and to impose harsh penalties on those who refuse. The companies, which oddly are demonized by the "reform" crowd, are happy to accept all kinds of coverage rules in return for captive customers and guaranteed income.

If I may be so presumptuous as to edit Adam Smith:

People of the same trade seldom meet together with government officials, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.

TGIF - ObamaCare: Status Quo on Steroids

Let’s begin by noting that the so-called health-insurance companies deserve little sympathy. As they exist today, they are very much creatures of the State. In fact, there’s a sense in which it can be said that if we didn’t have health-insurance companies, we wouldn’t need them.

Read the rest here.