Markets run health care better than government mandates
This originally appeared at the Foundation for Economic Education on September 20, 2017.
The Western world recently celebrated the 25th anniversary of the collapse of the Soviet Union. The Communist dream turned oppressive totalitarian regime that denied my Jewish parents admission to medical school. Its remnants still plague my Ukrainian relatives to this day. Such a historical reminder comes at a turning point in our own country, with the Republican American Health Care Act (or some future revision of it) on its way to become the new law of the land.
President Obama’s health care legacy, which has taken center-stage among the political debates of the past decade, aimed to enhance efficiency through consolidation into Health Maintenance Organizations and Accountable Care Organizations. This, among other things, led to the creation of monopolistic health networks and the demise of private practices.
In the past few months, we have been inundated with the shortcomings of the Republican proposal, which unsuccessfully attempts to toe the line between maintaining entitlements and subsidies while balancing the budget and deregulating health care. The future of American medicine, for practitioners and patients, hangs in the balance.
Medicine Is an Economic Transaction
As the debate becomes bogged down with logistics and finances, and deception of the American public through fear-mongering and smoke-and-mirror promises runs rampant, both sides of the political aisle have stopped short of questioning the recent distortion of health care’s place in society.
Restoring medicine as an economic transaction rather than a right would allow physicians to better serve the individual and preserve the deep-rooted American freedom that makes our lives worth living in the first place.
Health legislators have historically put emphasis on population health metrics, such as life expectancy and obesity rates, as indicators of the quality of health care in our country. Many were outraged when in 2015, for the first time in decades, US life expectancies dropped.
Although potentially indicative of underlying problems, life expectancy statistics are not the be-all and end-all of a nation’s prosperity. By that logic, one would rather live in totalitarian Cuba (79.2) than the US (78.8). Or in theocratic Iran (75.5) rather than serene Fiji (69.9).
America has long been attractive to those fleeing oppression, like my parents, not for its life expectancy or even comforts, but for its commitment to the preservation of human freedom and economic opportunity. Life without freedom is slavery, but freedom comes without life expectancy guarantees.
Unshackle American Health Care
The core principles of American democracy clash with most the current health policies. In declaring themselves independent of an imposing British empire, our founders cemented the fundamental expectation that democratic government must ensure that its citizens’ rights are not alienated.
They did not, however, guarantee positive rights, which, in other words, mean a “freedom from [sickness, loss, failure],” rather than a “freedom to [live life as one sees fit].”
When applied to health care, this approach dictates that the government’s sole purpose is to protect citizens from “deviation from the norm;” to insure against insults (such as prohibiting a factory from polluting a town’s waterways), rather than to provide interventions.
To believe all people are entitled to artificially maintained physical well-being, the core principle of universal health care, would be to make the physician into a serf, treating patients into a servitude rather than a service, and the government into a despotic Tsar.
The only viable long-term approach to lower costs and improved health quality would be to disincentivize individuals from making poor choices by charging those who do, more for their coverage.
Despite concerns raised by progressive critics, such practices would be no more discriminatory than car insurance policies adding a surcharge for risky driving. Those suffering from genetic conditions or unpreventable cancers would not be punished any more than handicapped drivers are.
Unshackling the market from current regulations (which mandate everything from basic universal coverage to equal premium pricing) would allow insurers to provide plans tailored to individual health care needs and priced according to individual life choices.
Unfortunately, this approach stands at odds with the core tenets of much of the health legislation from both political parties today, which aims to help politicians win votes by distributing the burden of poor health rather than disincentivizing it — by doling out benefits today at our children’s expense tomorrow.
While our legislators attempt to appease political interests and costly patients, free-market advocates stand firm, championing the harsh reality that we need to bring costs down and serve individuals more efficiently.
Free Market Health Care
Government-run health care is inherently a redistribution scheme between those who make good choices and those who do not. But it was never meant to be so.
Health insurance was first adopted by employers to keep their employees healthy and productive, which, in turn, reduced turnover and bred efficiency through the free market. Such private-sector health care, the first of its kind in the world, has produced some of the greatest innovations of the 20th century.
From the anesthesia and antibiotics, which enabled the first surgeries, to the vaccines that let parents sleep at night. From the million dollar heart-stents to the targeted cancer therapies that took lifetimes to develop—our commitment to improving lives (and, of course, the profits that followed) have produced the strongest specialist care in the world.
However, as insurance was expanded to everyone, and as innovations yielded superbly expensive treatments and longer lifespans, consumers were shielded from the costs of their services. Immune to the price, patients kept running up the tab for insurers, including the largest of them all: the federal government. As the debt balloons to over 20 trillion dollars and our government remains gridlocked, placing the future of American health care in jeopardy, we must remember the long-forgotten triumphs of individualism and entrepreneurship that have brought us this far.
Learn from History’s Mistakes
My parents and relatives, all survivors of the failed Soviet Union, can attest to the dangers of placing a “greater public good” above individual freedom.
The USSR believed it could maintain an enormous level of production without any means of rewarding individuals for their contributions, which led to stagnations in all sectors, massive corruption, and a booming black market for those who could afford it. The same fate awaits the American health care system if we do not heed its warnings.
Twenty-five years later, my parents (who were in Moscow at the time) still struggle to comprehend how the mighty Soviet Union could implode literally overnight. If we do not reign in our health care costs and government overreach today, there may not be a health care system left to debate tomorrow.
Over the past decades, the free market has provided consistent and superb specialist care — for the rich or poor— because physicians and hospitals knew their reputations and profits were on the line.
Government-managed medicine, under the guise of helping those most in need, does quite the opposite: it creates a two-tier system, arguably similar to that of Germany today. Physicians, unmotivated to perform their under-compensated public sector obligations, seek to provide superior private care on the side to those who can afford it.
Patients have no option to switch insurance companies or hospitals because such freestanding entities have long been abolished, and with them, any hope of free-market accountability or efficiency. Abandoning the unique principles our revolutionary nation was founded on runs the risk of betraying those very same people—the poor, weak, and sick—we seek to protect.
Adam Barsouki is a medical student at Jefferson Medical College.