by Greg Krehbiel on 2 April 2007
Universal health insurance is back on the agenda.
There are some good and some really stupid arguments for universal health insurance. The stupidest is “why shouldn’t everyone in America have the same health coverage the President has?”
By that logic everyone in America should live in a taxpayer-paid mansion, have secret service protection, ride around in a limousine, have a private airplane, etc.
It’s a painfully stupid argument, and falls into the category of “some people don’t understand the most basic idea of a free economy,” i.e., that people with more money get more and better things than everybody else.
In truth I don’t imagine anybody is that stupid. I’ve found that when people sound breath-takingly stupid, there’s usually another explanation.
In this case I suspect that the people who make these arguments know perfectly well that they’re stupid arguments, but they find them to be effective demogoguery, so they use them.
The article above is about how business leaders are getting on the bandwagon of “unversal health care.” I don’t know how true that is, and I’ve never found the New York Times to go to any significant pains to give both sides of an issue, but it does make some sense.
Benefits are an increasingly large part of employee compensation, and companies have been looking for ways to manage that cost. Shirking it off on “the government” — i.e., on all taxpayers — might be a stupid boondoggle in terms of overall cost effectiveness, but it would make this particular issue easier to manage for businesses.
The main stupid thing about universal health coverage is that it doesn’t face up to the simple fact that resources have to be rationed, and that the best way to ration them is by cost. (They will be rationed, either by cost or by long lines or by quality or by something else, but nothing in the universe can change the fact that limited resources must be rationed.)
For example, a lot of people would like to have fresh raspberries on their cereal in the morning, but there’s only so many raspberries in the world, and it costs money to get them from the bush to your bowl. In a free economy, this is handled by the consumer, who chooses to spend the money on raspberries or on something else.
Saying “Every American should have a right to fresh raspberries on his cereal, just like the President and Congress and Donovan” doesn’t change the basic facts about the supply and cost of raspberries. And if we make “fresh raspberries for breakfast” an essential part of being an American, we’ll be diverting our limited resources (time, land, talents, etc.) to this rather than something else.
IOW, everything has a cost. If we do raspberries, we’re not doing something else.
Health care costs money, and in a free society people should choose how they wish to spend their money. Congress can’t change that — it’s simply impossible — and they shouldn’t try, because the attempt will just make a mess.
Having said all that, there is a sense in which we need something like universal health care. When people who can’t afford to go to the doctor or the clinic get sick or hurt, they eventually end up in the emergency room, sometimes worse off then they would have been if they’d gone to the doctor earlier, and the emergency room ends up providing very expensive service. That cost gets passed on to everyone else.
So two things have to be done. We have to decide (1) what level of service everyone should get, and find a cost-effective way to provide that service, and (2) we have to have the stomach to tell people who can’t afford better service that they won’t get it no matter how much they complain and bellyache.
-- 2007-04-02 » Greg Krehbiel