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Thoughts on universal health care

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

Talkback x 7

  1. kdeb kdeb
    2 April 2007 @ 4:06 pm

    “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.”

    No one has yet been able to explain this to the generation which seems logically best able to grasp the idea, and that is the Depression-Era retirees. (I am NOT saying “start with them for cuts” but rather “start with them for understanding.”)
    And yet the simple argument that if you want there to be money for your grandson’s immunizations, you might have to get an MRI at 2 o’clock in the morning because the inconvenience to you means savings to the provider and more money for junior is lost in the universal political stumbling block – Selfishness.

    And it is certainly not just retirees who manage this characteristic, by any means. They just represent a very clear interest group in this area.

  2. Greg Krehbiel Greg Krehbiel
    2 April 2007 @ 4:16 pm

    Somebody allegedly said that democracy will only work until the people realize they can vote themselves largesse at the public trough. I think health care is an example of this.

  3. Brent the Plenapotentate
    3 April 2007 @ 3:19 am

    I think we can get a lot of mileage with two forms of legislation. First, allow insurance companies to deny coverage for pathologies stemming from smoking, non clinical obesity, alcohol or other substance abuse (unless the patient has a history of trying to resolve these). Second, institutionalize success over curriculum. This means reshaping medical licensing to include patient feedback regarding practitioner’s competence – so that a particular MD might get thrown out while elsewhere a particular naturopath is promoted to full licensed status.

  4. John Krehbiel John Krehbiel
    3 April 2007 @ 10:02 am

    But as soon as you give whoever is paying for treatment an out, like not paying for medical costs of obesity, then everyone is suddenly sick becasue they are obese.

    My wife has myasthenia gravis. She went to a neurologist, who seemed more interested in convincing us how great he was than treating her condition. All he could talk about was the fact taht she is heavy. When asked if her weight was contributing to the illness, he admitted that it wasn’t. BTW, he was no lightweight himself.

    There is another solution to resource scarcity: make it less scarce. We have so much corn we literally have to find ways to use the surplus (like wasteful ethanol production, for instance) Why do we have so much corn? Because of government programs to buy votes from farming states.

    Perhaps there’s a way to increase the supply and effectiveness of medical care? Certainly having poor people go to emergency rooms ain’t it.

    Also, poor health costs the healthy too. What if there were half the lost productivity presently caused by illness?

  5. Greg Krehbiel Greg Krehbiel
    3 April 2007 @ 10:10 am

    It would be possible to increase the supply of health care workers — by giving incentives for local clinics, or guaranteed loans to people who study nursing, or something like that, but I dislike such solutions because (like corn subsidies) they seem to invariably create waste.

  6. kdeb kdeb
    3 April 2007 @ 10:36 am

    Well if corn subsidies create surplus corn, then can we use the corn to pay for liability insurance for midwives 🙂

    But seriously, with Doctors unable to be the backup to MidWives’ practises because of liability insurance, maybe the government just ought to provide liability insurance. That would go a long way, I think…

  7. MrMagic
    8 May 2007 @ 11:33 am

    You have a very good point, there are a lot of stupid people out there that say “Why don’t we get it?” It is basically a point where someone is jelous because someone has something more than them, even though that is usually the case with the United States.

    Oh and kdeb… the corn doesn’t work, here in Nebraska, we are the corn lords and you can’t make any money off of something that is already everwhere where i live, so that wouldn’t work in Nebraska D: (Also Cows)