There is a capitalist orthodoxy that everything should be left to the market. The market distributes scarce goods and services efficiently to those who value them most, and provides incentives for meeting the every desire of our fellow citizens. (Think of the famous Soviet question, “Who’s in charge of supplying bread to the city of London?” Answer, “Well, no one.”) However, in the U.S.A at the moment, it just isn’t working for health care.
A good part of the problem is that health care isn’t a pure market, and is barely a market at all. Treatment decisions are confusing, time-sensitive, and obscured in a thick haze of technical detail and jargon. Even if all the options and their costs were crystal-clear, how do you put a cost on life and health? How much is a limb worth? Improved vision? The life of a child? The wrenching moral dilemmas required for some of the most expensive treatments would be almost unbearable even in the clearest and most relaxed of times. Is it realistic to believe that “economic man” can make a rational decision in the heat of a confusing emergency when the horrible alternatives are a small chance to save a loved one versus years and years of debt – almost an indentured servitude? The same kind of thinking that goes works for buying apples doesn’t really apply in cases like this.
This, of course, was one of the reasons for insurance. The idea was a private insurance market would cover the most catastrophic cases, and leave the regular market to work the rest of the time. For a multitude of reasons, from basic moral hazard to the complex histories of tax law and organized labor negotiation, these days are long gone. The third party system of employer-provided insurance has so warped the costs and benefits in the industry that it’s now almost entirely one of scale – if you have mounds of capital and large negotiating power, you get a great deal. The small or broke or individual is faced with the prospect of insurance costs far beyond their ability to pay or the risk of being wholly liable for economically crippling sums if there is a catastrophe.
Normally a good libertarian believes in the virtue of doing without. If it’s not worth the market price to you, then don’t buy it. The ability to opt-out is sometimes one of the most valuable freedoms inherited from the enlightenment. This is where not paying for someone else’s religion, propaganda, or favorite sport comes into play: the ability to say “no, thank you” to the majority of your peers. Health care, at least as is stands now, no longer can work this way. In most situations as it stands now, the choices are treatment or no treatment – which isn’t much of a choice.
The question is this: is the pure principle of an uncoerced market in health care worth the perversions that the system makes in countless other activities? As the system stands now, the restrictions on free activity required to stave off irretrievable disaster dictate the constant attachment to large organizations with economies of scale. This erects large capital barriers to both freely buying and selling labor. The inability to move from place to place in the labor market, or to associate and disassociate as the need arises, deposits power in places that cut into individual liberties more than mere taxation. If an average worker needs two weeks, or even two months, wages socked away to stave off the unforeseen, then it’s not an insurmountable obstacle to leaving bad treatment or for a better opportunity. When the sum becomes two
years' wages, then the pressure to be on the payroll of a large concern at all times becomes insurmountable. This is a market that is no longer free.
What are the (macro-level) options? Ideally one would dismantle the employer-provided payment system and restore the pay-as-you-go system in place for most of mankind’s history. If someone figures out how to do that in the real world, let me know. Another oft-cited idea is the vaunted “health savings account.” This has two components a) individual accounts set aside to cover expenses already beyond the reach of most savings as they are now, without any good reasonable explanation of how the prices paid would come down, and b) a government-regulated and controlled account that could be only spent for only one purpose – not exactly free and uncoerced. Another popular suggestion is the “employer mandate.” While exciting in a stick-it-to-the-man kind of way, this only makes both the power of the large concern and the capital barriers to smaller forms of organization even worse than they are now. It’d be the regulatory equivalent of cutting off the nose to spite the face.
Which brings us to the counter-intuitive conclusion: Short of dismantling the entire system and starting over, the most justifiable system is
single-payer universal care. Would there be rationing? Probably. Would it be inefficient? More than likely, but almost anything would be more efficient than the present system or the few band-aid proposals. Would there be involuntary government control? Yes, as there would be with a regulated special account or a government-mandated private system. What it would do is free up the rest of the economy to function as it wants to without the brake of coverage periods and dependant care that there is now. If one could depend on expenses that they could control, at rates they could control, then the fear of starting a business or leaving an exploiter would largely evaporate. No longer could an employer hold someone’s children hostage. The shifts in the balance of power in the labor market could be incredible.
Besides, knowing free enterprise, a better private system would birth itself over the top of the obligatory system and work out for all.
I’m dying to hear what anyone thinks on this one. . . . . .
