Why just federalize health care? How about the food system too?

Why stop at just health care? The current debate on health care has become so detached from reality that it’s become impossible to have a rational discussion about it. Just visit HuffingtonPost or Daily Kos to get a whiff of the tone. It goes something like this.

“If the current bill isn’t going to cut insurance company executives pay, lower fees for doctors and hospitals and stop insurance companies from gouging consumers, what’s the point?”

“Single payer federalized health care is the only way to stop insurance companies from raping the American people – any bill without it is useless. We need to punish every ‘moderate Democrat’ who doesn’t support it.”

On the right at such places like American Thinker or Atlas Shrugs, comments are more along the lines of:

“85% of people like their health care, there is no crisis that needs to be addressed.”

“This is the part of Obama’s conspiracy to socialize America – it needs to be stopped at all costs.”

And so it goes (to rob a phrase from Kurt Vonnegut, Jr.)

My point? Both sides are dealing in political food-fights rather than serious discussions of the philosophy and policy of our government in this crucial area of our society. For some time I’ve been reluctant to write a piece on health care reform because, as a libertarian, it goes without saying that I’m opposed to the government being involved in health care delivery in any way. Just as importantly, however, I also believe that elections have consequences and Obama ran on a  promise to reform health care with a heavy federal hand, so I’m not freaked out that he and the Democratic congress are pursuing this course. As well, the hypocrisy of the Republicans on this issue is stunning to me. This is clearly a sector of our economy in which cost is spiraling out of control and is a very important need for people that is being met less and less adequately as time goes on. The Republicans had several years to take meaningful action on this front, and other than to create a new entitlement for the elderly for prescription drugs, privatize a bit of Medicare and support for health savings accounts, they did little to alter the fundamental problems of cost and access for most Americans.

As for the Democrats, they may be even more repugnant, given their dishonesty regarding their actual policy goals. It’s clear that the Democrat’s goal is to wrest away what little control of the health care is left in the private sector and give it to the Federal government, yet its initial efforts and rhetoric are intentionally designed provide a pretense that our system will remain private under this system (if you don’t understand this, read the bill). When you strip away their rhetoric, you’re left with a menu of mandates, subsidies and price controls that are a recipe for disaster, and it’s very likely their policies will end up giving us a situation like the U.K. has, where the public health service employs almost as many bureaucrats as caregivers, with rationing and declining quality a given. The Democrat’s tactics are built upon the worst kind of hate-mongering, class warfare and budget gimmickery that only a fool couldn’t see through.

For me, the choice seems to be whether I want to be eaten alive slowly or quickly. Each is its own unique nightmare and I’m at the point where I simply cannot take what either side has to say seriously, based on reason and facts, rather than emotion or hyperbole. So what should we do?

I’d like to start with a couple of observations. First, our health care ‘system’ isn’t much of a system at all – if by use of that word one means that there is some kind of overall design to it. It’s a patchwork of incredibly inefficient systems that together create an expensive, massively inefficient mess. Government already controls sixty one percent of health care spending, regulates insurance companies and providers in thousands of ways, and creates incentives for uneconomic behavior across the entire ‘system’. When observers cite the health care sector as an example of free-market economics gone wrong, they couldn’t be further from the truth! No, it is an example of what can happen when government runs amok.

Second, the American public has been conditioned to believe that they should be able to access as much health care as they want at any cost from the cradle to grave, with no concern for the cost. Whether it’s the employer payment of health insurance and it’s cost being hidden from most plan participants or the fact that any hospital which wants to get paid by Medicare for any procedure (see my post on this mandate) has to offer free lifesaving care to anyone who walks through the door without any assurance of getting paid, the net effect has been to make American’s completely uneconomic when it comes to health care decisions. Because someone else is always paying the bill, we don’t watch fees carefully or think about wasting health care on lost causes (which goes on every day in every hospital in the U.S. – just ask any Cardiac Care Unit nurse). As a result, demand spirals upwards and this demand is met by private sector supply innovation in drugs, therapies, devices and other techniques that serve to increase demand in a symbiotic dance that, if left unchecked, will continue to consume even greater portions of our wealth.

The biggest driver of costs isn’t insurance company profits (well below average for business in general, btw), it’s fees and the growth in utilization. Whether it’s depression or erectile dysfunction, American’s are demanding more and more medical treatment – in fact, lots of folks want insurance to pay for their completely unproven ‘alternative medicine’ now. What about end of life care? How many hundreds of thousands of somebody else’s dollars are you willing to spend on futile care at the end of life? What if it were your money? I would gladly trade a few weeks or even a month or two of hospitalized life to pass along a meaningful inheritance to my daughter versus pissing it away, but when it’s Medicare – well who really cares? These are hard questions but necessary to ask – yet we haven’t discussed any of them and these are the real drivers of cost. I know for sure that I don’t want some Federal government bureaucrat making them for me – and that I don’t want to bankrupt our nation.

So, where do we start? Well, I’d like to see some basic philosophical conversations happen. Let’s start by asking a simple multiple choice question. Which will kill you first? 1. Lack of food? 2. Lack of shelter? 3. Lack of health care? Obviously it’s a rhetorical question, but the obviousness of the answer somehow evades so many Progressives who seem to view health care as something that shouldn’t be sullied by laissez faire market economics. The first thing we have to get through our heads is that there is nothing special about health care: it’s a need that we all have and at times is crucial to our survival but by no means is it the most crucial aspect of our lives or even the most expensive (although it’s getting there). There seems to be an underlying sense that health care is a right and this thinking needs to be explored. The creation of a positive right like this is something we should do with great care. A positive right is one where you are being granted an entitlement by the state, versus having a statutory right to not have a personal, civil or property right infringed on by others. I think that to even consider it a ‘right’ is to get it wrong from the start. It’s axiomatic that the fulfillment of this right will necessitate taking property from someone else to fulfill it in certain cases, so it’s a privilege or an entitlement being granted to you. Of course, this ‘rights’ thinking is based on an entire pedagogy of ‘social justice theory’ and is being applied across society in many ways – witness the EU declaration that seeks to grant high-speed internet access rights to all European citizens (or should we start calling them subjects at this point?). What’s next, mandatory transportation? But I digress… because I can’t freaking believe it!

In my view, positive rights are very dangerous for a society that values personal liberty. That quaint document, the U.S. Constitution, seems to just go on and on about it for some reason, it’s just so pesky.  We should be terribly concerned when we empower government, particularly the Federal government, ensconced in its remote and rarefied salons in Washington DC, to take people’s property as a part of granting rights to us. But sadly, we’re not. This issue isn’t even up for debate, rather the conversation seems to be about how much of our freedom and rights will be impinged, not whether or not our liberty is worth preserving.

Let’s take the basic question I asked above a bit further. Why don’t we have the Federal government take over the production of food, since obviously the lack of food will kill you in short order?  The answer is that there is no real problem for the vast majority of Americans with respect to feeding themselves. The fact is that most American’s can get to a store in thirty minutes or less that contains twenty or more varieties of food for their dogs, no less the virtually unlimited assortment of cheap, fresh and safe foodstuffs that they can readily purchase, twenty four hours a day without much direct help from the Federal government. The very notion of a government takeover of food seems absurd, but you would die without food, right? What do we do when someone needs food but can’t get it? We provide support for those without the means to buy food so they can buy food via public and private welfare programs. We don’t mandate that everyone buy food – or food insurance. The notion that every aspect of food production, distribution and consumption should be mandated, regulated, supervised, subsidized and codified by the Federal government seems ridiculous, but it’s no less ridiculous than the application of the same policy apparatus to health care, and yet, here we are.

The real problem in health care is that we destroyed a functioning market for health care long ago, and both providers and consumers have responded to the uneconomic incentives that are in place. Whether it was the creation of ‘the Blues’ (Blue Cross/Blue Shield) which canonized the provision of health insurance as a non-profit activity, or by creating a health care monopoly called Medicare for seniors – the largest consumers of health care, or by making sure businesses could treat the payment of health insurance for employees as an expense versus compensation, which makes it tax free for the employees, we’ve done our level best to distort the health care sector. It’s economics 101 that when supply and demand are distorted by non-market forces, you will end up with inefficiencies.  Due to our government’s meddling, we have a lot of high prices, over-utlization and shortages, depending on which part of the health care sector you look at, but anyone who has the slightest knowledge of micro/macro-economics could predict the problems we have. As well, anyone in health care will tell you that the system has already gone haywire and is on the verge of collapsing under the heavy hand of our government. I hope that if you’ve actually read this far that you stop and think about this: the problems we have are easily diagnosed by any undergraduate economics student. All the rhetoric about evil capitalists in the insurance industry is just nonsense. If you buy it, you are either a Marxist and don’t limit your hatred of capitalism to just the insurance industry, or you don’t know anything about economics. To blame the ‘market’ for our problems is ridiculous – health care is nowhere near a ‘free market’.

What aggravates me most is that there are very few effective advocates for liberty to be heard. The ground is certainly tilted in the favor of the collectivists, and is unlikely to to be thwarted.  What I can say is that pursuing more of the policies that got us into this mess should give everyone great pause. As Einstein said, “doing the same thing over and over again and expecting different results is the definition of insanity.”

As a libertarian, all I can really do is sit on the sidelines – I have no political representation in government. I’m left waiting for the inevitable collapse of our economic system, hoping that we will be able to rebuild it with an eye towards individual liberty. Sadly, I think that day is coming sooner than most of you realize, but I’m not at all convinced that reason will prevail even then. We need to start thinking instead of yelling – but hey, that’s not nearly as much fun, right?