CHP, #2 of n

Topics: Health
04 Oct 1993

From: ervan

Since Nat has immediately jumped to the big issue, let me start
at the top. What's wrong with medical care in the U.S.: Historically
we have been able to afford all there is. Thus demand is very inelastic.
Modern technology has now made that an impossible situation. We can no
longer afford all of the health care that we might want. People are
trying to deny that fact by getting someone else to pay for it via
the coercive power of government. The game's up. Either health care
becomes elastic via personal choice or via government rationing. Utopia
is not an option. Unfortunately, Clinton is peddling his plan as total
coverage for everyone at no extra cost (except to smokers). That's
a pathetic bald face lie. Impeach President Clinton and her husband
There are really two separate issues that are being deliberately
1) How much do we subsidize the poor?
2) How do we regulate the system?
Far too many people confound these issues. For instance, one of the
most common naive statements about health care is that it is a 'right'
or equivalently that 'it is not fair that so-and-so should not have
procedure X.' This confuses (1) & (2) because providing such care
costs somebody, but that's conveniently overlooked by the assumption
that something in (2) can fix the problem, e.g. 'stop the evil
insurance companies from not covering pre-existing conditions.'
If something in (2) can save money, let's do it regardless of (1).
If (1) is morally the right thing to do, then let's do it regardless
of what might be done with (2).

If the average person making the above fallicious argument
were given the following choice: Would you spend $1M on
A) Saving one of the Philadelphia twins
B) Keeping 10 old people alive another month each
C) Treating cancer for 10 poor people
D) Feeding 500 hungry people for one year
E) Donating it to the LP :-)
F) Giving it back to every taxpayer in the U.S. ?
Which would they choose? It's not obvious (okay, everyone would
pick 'D' except me, but on a more complete list...). Medical
care really does cost money. Simply making someone else pay does
not solve the problem until we squarely answer question (1).

Social Security is similar in that it was sold as a package
to provide retirement security for everyone and assistance for the poor.
It does a miserable job of either and taken separately would be scrapped
for something better (see Friedman's "Free to Choose" in particular).
But somehow strapped together, it has become unassailable. Medical
care is going the same way. It's going to be socialized (apparently)
under the rubric of helping the poor.

Consider food for instance. Food is even more of a necessity
than medical care. Should we therefore have the government control
food prices, setup their own distribution network, control who can
become a farmer, abolish the futures market (like fixing prices
for medical insurance companies), tell farmers what new tractors
they can buy, mandate a standard basket of groceries than everyone
must buy for their own good? No, obviously not. So why do we lose
our collective senses when it comes to medical care and want to do
those things?

Food for the hungry is handled relatively efficiently via food
stamps. Issues (1) & (2) have been cleanly separated. The same can
work for health care. Give the very poor insurance vouchers. Give
the working poor tax breaks. And leave everyone else with their own
freedom to do as they like (oh, perish the thought of such a radical

As for (2) directly, we can see it in action in food production
when the government props up milk prices, pays farmers not to grow,
then pays them to slaughter excess cattle, and has one beauracrat
for every 3 farmers. Is this the way to fix medical care? Do you
want it fixed by the same people who brought you the postal dis-service,
public schools, the war on drugs (even if you like the idea, the
implementation is a disaster), and $500 toilet seats? I don't!

An even more appropriate instance of (2) is the VA. The VA
is widely regarded as a disaster. Does anyone need references? It costs
more per covered person than the best private insurance, it provides
much worse care than 'public' hospitals, and it often forces vets to travel
long distances to get care. For whatever it's worth, my grandfather,
my father, and my cousin have all suffered with the VA. The horror
stories are true. It survives only for peculiar political reasons.

I've tried to stick just to my main theme of the problem
of confounding (1) & (2). I'll return to the specific problems
of regulation in a later post. In so doing, I'm not arguing
about (1), but only (2). Whatever good we can do with (2)
we can redistribute into (1) as outlined above or leave it for
everyone's benefit. But, let's be honest about the amount of (1)
and not confound the two issues.

Now, on to Nat's comments on CHP #1:
> Medical care is not like bicycles or cheeseburgers.

It is now.

> [ if you are sick and must have some treatment ]

Such decisions must obviously be made a-priori. Ex post facto of
acquiring a fatal disease nobody wants to die and (almost) everyone
is willing to steal anything to prevent their own death. We cannot
expend infinite resources. Let individuals choose how to spend
whatever amount we as society choose to budget for kindness.

> [ Most people oppose free-market medicine. ]

Of course, democracy is a failure (this does NOT mean I am advocating
any of the alternatives). Pragmatically it suffers from the population
being composed of fools. Even if that were fixed, it would still
suffer from tyranny of the majority.

> [ Public opinion must be considered ]

Sure. What I would advocate as a politician or what I think we could
get is different than what I think we should do.

> [ There is public consensus for some medical welfare. ]

Vouchers, yes. CHP, no.

> [ either we provide insurance welfare or ER welfare ]

The self insured can pay for ER care and are forced to do so (short
of deliberately bankrupting themselves). There is a class of poor
who do not qualify for Medicare (because they are either men or
they decided to work instead of sit home with a brood of kids) that
are causing trouble for ERs. As I said, I could tolerate giving
them vouchers. Yes, forcing hospitals to cover it creates a sick
tax and discourages people from receiving care they would otherwise
pay for and could use. It's the worst of all options. Actually,
most of the indigent in ERs are there for intrusion wounds received
in the "drug wars". Legalize drugs.

As for the self insured, we will have to be prepared to watch some of
them die due to their own error.