The political arguments for totally socializing medicine depend heavily on . . . the failures of the . . . state controlled systems to deliver effective, affordable medical care.—Laws of the Jungle
Everyone agrees that problems exist in America’s current health care system. Both Republicans and Democrats agree on the diagnosis: Medical costs are too high and too few people have health insurance. They agree on the prognosis: The current system is financially unsustainable. Their disagreement concerns the prescription. The Democrats want more government involvement and cuts to Medicare. The Republicans say that we should reform the legal system and then remove barriers to competition among insurance companies.
Many libertarians disagree with the diagnosis. They admit that medical costs are too high but they dispute that more people should have health insurance. The concept of health insurance, like many other political ideas, does not mean what it says. You buy insurance to protect yourself against rare or unforeseen events. For instance, home insurance pays you in the event of a fire and car insurance covers your expenses if you are in an accident. Health insurance is designed to pay for all your medical expenses or some percentage of them. The analogy is that car insurance would pay for oil changes or homeowner’s insurance would reimburse you for lawn mowing expenses.
We are also told that it is wrong to discriminate against people with preexisting medical conditions. In other words, I should be entitled to buy insurance after I come down with a serious medical condition. The analogy is that I should be able to buy car insurance after I caused a major accident. The word discriminate is used in curious manner. If you look at an actuary’s job description, you will see that his first duty is to discriminate. Health insurance is not an accurate name; it is a kind of metaphor and not a very accurate one.
When people talk about health insurance, they really mean a third-party payer system. The government encouraged employers to provide health insurance after World War II by tax policies; it allowed employers to write off the cost of insurance as a business expense without taxing the employees for the benefit. This rather small tax advantage started the third-party payer system rolling. The obvious and notorious fact about third-party paying is that it drives up costs. Those who receive a free benefit want to take advantage of it and so demand increases. Waste, fraud, and abuse are also increased when the actual payer is removed from the transactions. As medical costs increased, the government added the Medicaid and Medicare systems, which added tens of millions of third-party payers and exacerbated the attendant problems. I say that health insurance itself, in its current form, is the problem.
We are now at a point where the mere removal of third-party paying will not be sufficient to lower costs to an affordable level. The Republicans suggest a couple of reforms that would lower costs: tort reform and competition among insurance companies. These two ideas run into the problem of the Constitution. In order to implement either of them, the federal government would have to nullify state laws in regard to tort law and insurance regulation.
In general, the practice of ignoring the federalist structure of our government is not a problem for the liberal jurists, but doing so in furthering Republican ideas would certainly create a whole new generation of “strict constructionists.” In an amusing decision, Judge Sonia Sotomayor found that the states had broad powers in regulating gun possession. In doing so she had to return to a time in the 19th century before the Supreme Court implemented the “Doctrine of Incorporation.” This doctine allowed the Supreme Court to override states rights’ in matters involving the Bill of Rights. Judge Sotomayor probably never decided another case on the basis of the framers’ original intent but she did so when it came to restricting gun rights.
Both parties agree that preventative medicine will save billions of dollars. Both parties are wrong and anyone who has looked into the matter knows it. If you can actually change people’s behavior (which would be a bigger achievement than is imagined), you would increase costs. A person leads an unhealthy life and then dies of cancer, liver disease, heart disease, etc., in his sixties. Take that same person and make him change his lifestyle (good luck). The same person would then die of cancer, liver disease, heart disease, etc., in his eighties, after consuming hundreds of thousands of extra dollars in other health care costs and social security. When this truth was pointed out to an administration spokesperson, she replied that having people live longer could not be seen as a problem. She should probably have checked with the environmentalists on this issue, but she ignored the point: Preventative medicine, if it works, costs more; it does not save money.
The current system, which encourages third-party paying, has another indisputable effect: A great deal of money has been transferred to the medical industry. For instance, high tech equipment has become the norm for diagnosing common ailments. The population now expects medical treatment that was undreamed of only 20 years ago. However, this expenditure brings up a question: Does the money diverted into the medical industry cause people to live longer and healthier lives?
The natural inclination is to answer “yes, of course.” Consider, though, the case of cholesterol-lowering drugs. I hear that some of these drugs have proven their worth in many cases. There were double-blind studies in the past of some cholesterol-lowering drugs in which they lowered cholesterol but did not lower the rate of heart attacks or increase life expectancies. Here’s the most positive statement about the use of statins:
A new study  shows that statins—a kind of cholesterol-lowering drug—can increase life-expectancy by an average of two years. Working at the University of Arkansas for Medical Sciences, researcher Dr. J. L. Mehta concluded that patients over the age of 70 who are at risk would benefit from the drugs.
Note the qualifiers “over the age of 70” and “at risk.” Critics point to side effects of statins and the fact that studies screen a number of natural candidates for the drugs from taking part. Personally, I have no opinion on the question but I do note that the question of life expectancy is not simple.
We are all aware of studies that show how dangerous various practices are to our health. These studies generally are based on correlation rather than cause. If, for instance, I statistically prove that coffee drinkers have more heart disease than non–coffee drinkers, I have not proved that coffee drinking causes heart disease. To do so I must remove all other possible variables, which is impossible. Even if I find people of the same age, socioeconomic status, education, etc., etc., the case may be more complicated. Perhaps tea drinking protects against heart disease. Because coffee drinkers tend not to be tea drinkers, I have thrown most of the tea drinkers into the non–coffee drinking group. In that case, the apparent problem with coffee drinking turns out to be the benefit of tea drinking. Maybe the people with a genetic disposition to heart disease also have a genetic disposition to caffeine consumption. Then coffee drinking is not a cause at all. For all we know, the early stages of heart disease may lead to a thirst for caffeine, in which case, heart disease is the cause and coffee drinking is the effect.
There is one correlation that should never be ignored: The more money you have, the healthier you are. And so I come back to my question. Do people live longer and healthier lives because of the money diverted into the medical industry? When we consider that the U.S. medical industry is 15% to 20% of the entire economy, I think it is fair to ask how much richer people would be if such huge amounts of money were not diverted into medicine. If people were significantly richer, they might actually live longer.
Here are a couple of statistics: The leading cause of death in the 20th century was being killed by your own government either directly or indirectly. The second leading cause of death (far behind number one) in the 20th century was being killed by someone else’s government. I wonder how the FDA would react to those statistics.
I am not usually interested in partisanship or process, but the current fight over health reform is so instructive that I have to mention some details. First we have the incomprehensible question of timing. Again and again the Democrats set deadlines for the passage of their various bills. These deadlines are accompanied by dire rhetoric about how many people will die if the bill is not passed quickly. The incomprehensible part is the fact that no one will receive any benefits from the bill until 2013, which is after the presidential election, even though various taxes begin on passage. It turns out that President Obama promised that he would not tax anyone making less than $250,000. Of course, the president signed the SCHIP bill, which increased taxes, mainly on the poor, two weeks after his inauguration. Fortunately for him, there was a tacit agreement among all media not to mention this tax because it involved tobacco. As far as the haste for passing a bill is involved, the logic is all too clear: The more people understand the provisions of the bill the less popular it has become.
I have argued that the Democratic party is a coaltion of special interests and that the Republican party is a coalition of those opposed to these particular special interests. There is a core of liberals in the Democratic party but the Republicans cannot even claim such a core because the party’s philosophy is merely a collection of groups opposed to modern liberalism. Social conservatives, libertarians, fiscal conservatives and assorted yahoos agree only in their opposition to modern liberalism. If my ideas are correct, it is rather amazing that the president has not seen major splits in his party up until now. Part of his success in keeping the coalitons together can be attributed to rewarding special interests. The stimulus bill and the takeover of the car companies, for instance, involved huge expenditures designed to keep all his constituencies in line.
The problem with health reform is that the money for it has to come from somewhere. The Democrats assert that they can save hundreds of billions of dollars from waste, fraud, and abuse in Medicaid and Medicare. Of course, it is logical to ask why no one has saved these billions yet. Older people are naturally skeptical about these savings so that Governor Palin’s charge of “death panels” has a certain plausibility.
The Democrats also demonize the healthy young, who “think they are invulnerable” and end up in emergency rooms when they become sick. The statistics indicate that the insured and the poor are much more likely to end up taxing the resources of the system in such a way, but the logic is that costs can be lowered if everyone is forced to buy health insurance. The problem here is that making a crime of not buying something is a hideous form of tyranny. From a public relations point of view, though, the president is able to give the appearance of keeping his no-tax promise and the uninsured do not form any sort of special interest. “Do we force yuppies to buy insurance? So what, they can afford it. Do we force the Amish to buy insurance? What did the Amish ever do for us?”
The real solution is glaringly apparent: Tax everyone who registers as a Republican to pay 10% more tax. Problem solved.
As I sit on my couch and watch the spectacle, I become apoplectic. The old gain nothing. The poor who already have Medicaid gain nothing. There is only a small sliver of the population who actually gain from the legislation proposed. The cost, though, is in the hundreds of billions (a hundred billion is $3300 per person) and no one believes it will be limited to that. Why bother? I keep asking. Not even the liberals like the bills that are being proposed. They prefer government health care, and the Democrats take pains to say that everyone can keep his own health insurance. Is the whole thing a power grab? Is the purpose to create a system destined to fail that can then be replaced by government health care? If that is the case, the people grabbing the power will hold the power for a while, the power of failure. In a few years they will no longer hold that power and they will be called incompetent by those who come after them, that is, if they even live long enough. Why? Why push so hard? I keep asking.
My wife has a simple answer, “Spite.” That may be the case. We know that much political activity is motivated by fear and much is motivated by greed. I now believe that I have greatly underestimated how much of modern political thinking is rooted in simple spite. I called this essay “Spite” and I haven’t talked about it much. My problem is that educated people know that much of what I am saying is true. In fact, the strategy of the Democrats has always been to rush the bill through Congress before any details are known, and when the details are brought to light, they imply that any problems will be fixed if we have faith in the government. Those who oppose sweeping reform don’t even argue about the facts; they simply ask, as I do, “Why?” “Why are you even bothering?” The only answer that makes any sense to me is “Spite.”
The administration tells us that all businesses and organizations that have an interest in medical reform are “at the table.” This statement is not true, however, many groups have made deals with the administration. As one wag put it, “If you aren’t at the table, you are on the menu.” The drug companies came to agreements with the administration but the insurance companies did not. Hence, the insurance companies have filled a villain role that drug companies occupied during Clinton’s attempt to reform medicine. The House of Representative has promised to “investigate” management salaries in the health insurance industry. I cannot overemphasize the amount of spite in this debate.
The president, himself, accused doctors of not treating diabetes properly so they could earn more money by amputating feet. Think about that. This vicious lie hardly caused an eyebrow to be raised. Some people are so deep in spite that they lost their sanity and the general population doesn’t seem to notice.
The government controls a huge segment of health care and everyone has his own solution. I ask, “Why not just pay for everyone who has to spend more than, say, 12% of his family income for the year in health care?” But when I think like that, I realize that I have been sucked into the same old game. Ask a person how he would rule the world and he will always come up with an answer.
Here’s the radical libertarian answer: Get government out of health care. Get rid of Medicare and Medicaid, of course. But such a course is not sufficient. You have to start from the beginning: Do not license doctors; remove restrictions from all drugs. If you are horrified by the radical solution and tell me that people will die, then you can make sure they get adequate care with your own money. There is no law against medical charity. Otherwise, just let people decide for themselves what sort of medical professionals they want to consult and what sort of drugs they want to take. Here are my original thoughts from Laws of the Jungle:
“The government wants to fill our need for medical care. We have already been through two stages of state controlled medicine: the licensing of doctors (thereby granting them a state-enforced monopoly) and the Medicaid-Medicare system (a limited form of socialized medicine). The political arguments for totally socializing medicine depend heavily on past failures, that is to say, the failures of the other two state controlled systems to deliver effective, affordable medical care.
“There is an old saying that he who pays the piper calls the tune, and that principle applies to state controlled medicine. If there were medical anarchy, for instance, the health costs of cigarette smoking would be borne by the smoker, his insurer, his doctor, or other parties who entered into voluntary agreements with the smoker. But under the present system, those health costs are often paid by unwilling taxpayers. Shouldn't the taxpayer have control over your smoking?
“Shouldn't the taxpayer have control over your drinking? Your diet? Your exercise? The natural officiousness of mankind is given an economic blank check in socialized medicine. Armed with a few well-chosen studies and some post facto arguments, the determined meddler can justify the law's intrusion into anything you do or fail to do.”