While buying fish at the local fishmonger, another patron lured me into a conversation about the future of health care in America. He saw me using a cane and inquired about it. After I briefly explained my knee injury, he said, shaking his head, “That must have been expensive to take care of. I bet you wish health care were already socialized.” I quickly replied, “Actually, I count myself lucky at least to have experienced the injury before medicine is any more interfered with by government than it currently is.”
Doomed, yes, but at least I'm not alone.
He jerked back and his eyes flared incredulously. “But… why?”
“You really want to know?”
He nodded, “Sure.”
“Well, tell me this. What kind of fish do you usually buy here?”
“Usually, I pick up tilapia, sometimes squid and shrimp.”
“Okay. If you walked into this store and all of the fish in here were available at the same price, which fish would you buy?”
“I like swordfish.”
“Say the swordfish and everything else in here were priced like the tilapia, $5.99 per pound.”
“If the swordfish…” he paused, scanning the store, “and the sea bass were the same price as the tilapia?”
“Exactly.”
“Then, I would get the swordfish and the sea bass.”
“So would I.”
“Oh, and the Alaskan king crab.”
“Right. But the reason that the swordfish and sea bass and the crab from Alaska are available to you at higher prices is because of the higher costs involved in providing them. And if providers of these fish were unable to profit by providing them as a result of an arbitrary rule setting the price too low, then there would quickly be shortages of swordfish and sea bass until they disappeared entirely from store shelves.”
“How do you know that?”
“Well, it’s common sense. For how long would you choose to work at something that cost you more money than it made you?”
“Okay, I see what you mean.”
“Imagine the eventual outcome of scarce services being assigned prices far below the actual costs associated with providing them. For example, if you and everyone else in the neighborhood were informed that you had a “right to affordable fish” and that all of the fish in Astoria would be available for $1 a pound, word would spread and there wouldn’t be a fish in here or any other local store within a day or two. Would those whose livelihoods depend on selling fish continue to resupply our neighborhood, or would they relocate outside of Astoria? If fishmongers were forced by new legislation to provide fish to Astoria at a loss, would those who remained in this business be motivated to incur the costs associated with delivering the most desirable fish? Why would they offer the best for the same price as the least desirable? Undoubtedly, many people in Astoria, even those who were initially excited about an affordable fish program, would not be interested in the quality and types of fish actually available in the neighborhood. They might regret that they didn’t oppose the legislation that ruined the fishmonger business in the neighborhood. They would go elsewhere in New York City to pay for exactly what they want.”
“That’s what so great about New York.”
“But what if the free-fish policy affected all of NYC? All of the United States of America?”
“Maybe they would find a way to make it work.”
“How?”
“You’re asking me? I don’t know. Maybe they would is all I’m saying.”
“This is how socialized medicine obliterates specialized medical care. They attract political will by invoking the public’s right to health care, which of course implies that the government will furnish it for free or at incredibly low prices. Sounds great! However, when all health care services are price controlled by the State (ie, declared virtually ‘free’), the most costly services will soon appear to bureaucrats to be over-utilized; they will limit the availability of costly services until, for all practical purposes, those services are unavailable. Socialized medicine might provide rudimentary health care of mediocre quality to most people who present with relatively straightforward medical issues, but it customarily fails to provide complex and timely care of excellent quality to anyone presenting with relatively unique medical problems. My injury was rare and complex, and anything less than immediate surgery by a stellar surgeon would result in my having a less than ideal recovery. I needed swordfish-care. Tilapia-care wasn’t going to cut it.”
“Okay, first of all, I’m not saying the government should affect choices you make about which doctors you see or the care they provide. You absolutely should see the best doctors and you should benefit from advances in medical technology. You just shouldn’t have to be burdened with the costs of paying for it.”
“You mean, I should have swordfish, but I shouldn’t have to cover the costs associated with providing it to me?”
“Why are you dwelling on specialization? I appreciate that you had a special injury. So of course you would see a special doctor.”
“You’re taking specialization for granted. The only reason I have a shot at recovering most of my knee function and leg strength is that there is a vibrant market in the U.S. for orthopedic specialization, a market which made it possible for my particular surgeon to acquire over the course of decades the extensive experiences and requisite know-how to rebuild my knee joint from shards of bone. But, you see, the kind of expertise I required does not arise inevitably, and neither are the conditions that cultivate it automatic. Excellent specialists cannot be legislated into existence. What gives rise to excellent health care professionals and generates medical breakthroughs is a profit-and-loss-based social order called capitalism.”
“I think capitalism provides the means by which government can offer services that all of us benefit from.”
“And yet, look at all of the advantages in your life produced by capitalism without government involvement. Capitalism is a complex adaptive order that emerges as a result of free, purposeful behavior by people whose interactions are peaceful and mutually beneficial. The reciprocal feedback loops between producers and consumers encourages efficiency and innovation. In health care, capitalism yields an array of competitive options across the entire spectrum of medical needs.”
“Okay, that’s a lot of theory that doesn’t really relate to what we’re talking about. I’m not proposing an end to capitalism—”
“Just socializing the human endeavor most pertinent to our ability to live healthy lives? Look, my surgery was made possible by intellectual capital created by the exceptional dedication of one individual doctor to orthopedic medicine. He developed that capital because it was profitable for him to do so. Like the swordfish producer in our price-fixing situation, this doctor won’t expend resources on an endeavor whose costs exceed its benefits. He never would have developed that capital if health care were already socialized and would have little use for it in such a system. Which is why I answered you the way I did. He used that capital— his understanding, insight, imagination, confidence, and astounding technical precision— to give me back the ability to walk like a normal person. For the opportunity to benefit from his aptitude, one need not be royalty or wealthy or politically connected, but a price must be paid, and I would argue it should be paid by me.”
“If the costs are spread around, then you won’t have to pay as much.”
“That’s what health insurance is for, right? For the eventuality of a catastrophic medical injury. Which should raise the question, why does the government make it so damn hard for individuals to purchase their own health care insurance as individuals?”
“What if somebody needs your type of surgery and doesn’t have health insurance or a job or any money?”
“Then that person must rely upon the charity of others. Or negotiate with a doctor mutually agreeable terms of compensation.”
“Isn’t that cold?”
“Not as cold as giving to those who require the help of others the power to extract that help involuntarily. That’s cold and its chilling effect, over time, is to drive into self-exile those whose services are often most urgently needed. The specialists whose work results in the most dramatic improvements in peoples’ lives disappear from societies in which their expertise makes them vulnerable to being treated like a national resource.”
“Well, I’m fine with capitalism, and I understand that markets work for some things, even most things. But, when it comes to health care, I’m just saying it would be better for you if the government picked up the costs of your surgery the way it picks up the cost of police or firefighters. Some things, like health care, are too important to entrust to the free market. All I’m saying is that the specialist would be paid by the government instead of by you.”
“But it’s not that simple. It’s not merely a matter of the State using taxpayer money to pay health care bills.”
“Why not?”
“Socialized medicine is promoted as “universal health care,” but in fact it is about government control over health care spending, a control exercised according to an inherently politicized agenda. Socialized medicine would have failed me because I represent a clear violation of its resource-allocation priorities. I matter a great deal to myself, so I’ll go to great lengths to ensure I get a positive health care outcome. But, unless I’m well-connected to political elites, I don’t have nearly as much value as an individual in a universal care system. Socialized medicine aims to offer some generic health care for everyone, not highly specialized and costly care to individuals. Government’s resources are limited, its bureaucrats must make cost-conscious compromises so that the greatest number of people receive at least some care. Therefore, by definition, socialized medicine must devalue individuals whose injuries require a maximum of costly health care, people like me.”
“That’s a terrible thing to say. Why would you say that?”
“In a single-payer socialized health care system, which is the kind that President Obama idealizes, all medical care is paid for by a scarce resource, that is, the pile of taxpayer dollars politicians have set aside for this purpose. What that means is that the medical care provided to some people comes necessarily at the expense of limiting or delaying or withholding medical care from other people. Conflict is built into this system.
“Suppose for a moment that the cost of my individual medical care were equal to the sum of the costs of basic annual check-ups for five hundred people. This wouldn’t be too far-fetched. A bureaucrat in charge of determining the best uses of that pile of money would have a hard time authorizing my care. He or she would have to defend such decision to government officials striving always to ensure that as many people as possible benefit from their resources. Would he be likely to succeed if he took up my case? And how often would a person whose job is based on promoting one agenda advocate for individuals like me whose needs contradict that agenda?
“The care of one person versus the care of five hundred people… swordfish for one versus squid for five hundred… there is no individual whose straits are dire enough to overcome the calculated moral imperative of socialism: helping many people a little is always better than helping one person significantly. Consider the twisted incentive built into this system: the less care any one individual gets, the more care can be spread around. ‘Healthcare for all’ sounds inspiring, but collectives don’t require medical care, individuals do. And in a system constantly seeking ways of conserving resources for all, the individual is most vulnerable.
“At the end of the day, socialized or nationalized or government-mandated medicine is about one thing: the State acquiring and preserving the power to decide who receives how much of what and when.”
“You sound like the kind of right-wing nut Jon Stewart parodies.”
“Jon Stewart is far too certain about the benevolence of the State for any trustworthy satirist. His wealth means he’ll be able to opt out of a public option. The vast majority of people won’t be able to avoid the effects of the system President Obama is pushing.
“I’m not making this stuff up. When the government is the sole-provider of health care coverage, increased health care costs can only be paid for by political votes to increase health care spending and eventually… gulp… taxes. But who wants to raise taxes? Nobody. So how are costs contained? By reducing quality and availability of services. Politicians have proved adept at overpromising and underdelivering, and the song remains the same in their medical care machinations. They can never afford the free lunch promises they’ve made. Regarding my injury, I didn’t need the quality or want the effect of a “free lunch,” which you would expect to be unremarkable and worth as much as you paid for it. I hoped for the quality of excellence that a person expects to pay for, I needed something remarkable, indicative of a level of commitment and experience that only arises in free markets.”
“But even in countries with socialized medicine, they perform advanced surgeries.”
“Just like there are some fish left in the melting ice on the second day. Look, politicians customarily ensure that a government-run health care system allows for some set number of surgeries like mine, but given that it must contain its costs in a way that doesn’t affect its overall mission, access to the kind of specialized medical care I needed would have to be arbitrarily limited, which brings us to the logically inevitable and shamefully brutal cost-controlling phenomena of socialized medicine, “rationing” — some bureaucrat calculating that there can only be 8 knee reconstruction surgeries per year — and “the waiting list”— ‘You won’t have to pay more than you’ve already paid in your high taxes to see a doctor for your condition… in a couple of months!.’ These are visible consequences. The invisible cost of socialized medicine is that great doctors and medical researchers leave societies that will not allow them to pursue advanced medical practice.
“Over time, the effect of rationing on specialized medical professionals is easy to predict; specialists become a rare-to-nonexistent breed in societies that embrace socialized medicine, and health care outcomes for cases involving the more challenging and chronic health care issues, like a shattered weight-bearing joint or prostate cancer, become increasingly dismal. This is why elites in countries with socialized medicine come to America to pay for care from the kinds of specialists who are either inadequate or extinct in their countries. What happens to the people who can’t afford that ticket?”
“Actually, it seems to me that caring for many people may be more important than the health care needs of an individual.”
“Easy enough to say that until you’re that individual. You know, if you dwell on this mindset, really adopt, for the briefest of moments, a socialistic perspective, eventually you may come to some dark conclusions. You might think that not only would it be a moral outrage to prioritize my care over that of five hundred other people, but that it would be the ultimate, devilish, savagely individualistic conceit for a person in my situation to believe that my urgent care was worth more than the less urgent but aggregate care of five hundred people. Perhaps, the noble thing would be for me to embrace my fate as a cripple for the good of the hive.
“But, you see, this is how the State getting involved poisons health care issues. Its premises create an inherent conflict between the care different people receive, because we’re all competing for a share of government dollars. Chuck those premises out the window. My health care costs should be borne by me at the expense only of what I would do with my resources otherwise. Even with health insurance, there are out-of-pocket costs, I assure you. I don’t have to spend money on my physical therapy sessions. I could end my gym membership. My recovery would be suboptimal, but I would have more money for other things. But I choose to spend the wealth that I have created on the care that I decide makes sense for me.”
“What about a person with no health insurance and no job?”
“Well, again, that person is going to have to rely on charity.”
“That’s terrible. Our society is wealthy enough to take care of such people.”
“I don’t see any alternative that’s better than private charity. You’re suggesting that there is an alternative that’s somehow more humane, even though it involves authorizing the State to transfer wealth to these people at other people’s involuntary expense. But that creates more problems than it solves. Whose needs entitle them to how much of whose wealth? Who will have the power to enforce such claims and how will that power be limited? And… what the hell are we talking about? If somebody needs help, that’s exactly what charity exists to offer. But putting the government in charge of charity has been such a colossal mistake because it eliminates the quality-enhancing effects of competition. I would rather donate money to a charity with less overhead and a more successful performance history than the State. Wouldn’t you?”
“I think you’re exaggerating. The health care system in this country is broken. Your holding onto a kind of fantasy about the market actually working, which, in light of what’s going on in the world, is anachronistic.”
“Unfortunately, pervasive and costly intervention by the government in the U.S. health care system has produced deleterious effects. For example, it is absurdly difficult for people to purchase their own health care because the market for consumer-based health care is tragically under-developed and has been made outrageously expensive in light of decades-old legislation foisting employer-based health care provision on citizens. For over fifty years, employer-based health care plans have involved the annual evaporation of wealth poured into extensive insurance policies that are usually significantly underutilized, especially by young people. If the U.S. government would abolish laws that make it hard or impossible for private citizens to invest in their own health care savings accounts, then people would be able to leverage their savings accumulated throughout the healthiest years of their lives to offset health care costs that generally increase in later years.”
“Exactly. Health care costs are growing, so isn’t now the time to make sure that everybody has some basic coverage?”
“‘Some basic coverage? ‘Some basic coverage’ is the anthem of socialized medicine. That and nothing else. So how will a health care system run by the State that prioritizes giving everybody “some basic coverage’ ever produce progress in medical science? How would human understanding and expertise ever develop? Are we done, then, with creating medical advances and will now proceed merely to redistribute what we’ve got so far? What about curing cancer and heart disease and dementia? What about slowing aging? What about advances in genetic engineering? There are no incentives for entrepreneurs to discover and learn and mass produce innovations within a socialized medicine paradigm. Socialized medicine halts progress and divides up existing wealth as if progress were an unaffordable luxury.”
“Aren’t greedy companies at the heart of the problem?”
“I can’t imagine how replacing competing firms with one single national bureaucracy would benefit anybody but the people employed by that bureaucracy. No doubt, there are firms that have done unscrupulous things, like lobbying for legislation that gives them artificial advantages over competitors. The prescription drug benefit plan became a fiasco in which large pharmaceutical companies were able to secure monopolistic access to taxpayer funds for the provision of their products at no-bid prices. I am in favor of abolishing all laws and loopholes that enable businesses to use the power of government as leverage to evade the constantly challenging survival requirements of dynamic, competitive markets.
“That said, to the extent it continues to exist, the mere presence of competition in health care in this country encourages hospitals, physicians, researchers, inventors, and all health insurance companies to provide higher quality products and services at lower prices to you and me. The key to reducing health care costs is entrepreneurial discovery, the creative destruction of less effective and less efficient medical options by superior and more cost-effective products and services. To the extent that the medical market has been twisted by government intervention, costs are rocketing out of control. Why, in the face of that, increase the involvement of the State? The vector of true health care reform would roll back the State, not expand and strengthen its controls. Obama’s solutions merely exacerbate the existing snafu.
“Still, though, don’t you wish your health care were free?”
