Health Care Fiasco Follow-Up

On a bit of a more personal note, I arrived home today to see a brand new Matrix hatchback parked in my driveway. The car belongs to my roommate's girlfriend, a woman with a young child. The woman is currently on food stamps, and I have previously gotten into arguments with her over the introduction of a universal health care system in the U.S.

In short, her position is "I can't afford health care for my baby. The government should do it for me." This goes along the same reasoning as to why she accepts food stamp assistance from the state.

Yet, there in my driveway is a brand new, $20,000 automobile. She's surely paying hundreds a month for an automobile she does not need, and has the gall to say the government (read: other people) should pay for her food and health care.

This kind of an outrageous use of taxpayer money for personal enrichment is what is so infuriating about the health care debate in the United States. Yes, there are people out there who cannot provide health care insurance for themselves, but its not everybody. Most people that don't have health care insurance don't simply because the cost is very high, and other, immediate wants, control their spending habits. Things, like new cars and high definition televisions, are too hard for many to resist when confronted with the decision between health insurance and needless frills. So many of the uninsured people in the United States have no health care out of voluntary choice: the choice to buy the car outweighing the cost of health care insurance compared to the perceived chance of illness , and in the end, the 2008 Matrix in my driveway proved too enticing for my roommate's girlfriend to resist. Though she could have saved herself $30,000 by purchasing a $1200 used BMW like I did instead of paying the car's ticket price and interest on the car loan for five years, she, like many others, chose not to. She chose dependence upon the government over self-reliance. Why? Because she was allowed to by the slew of welfare-state programs that allow her to abandon responsibility for the care of her child.

Though I have never been on food stamps, Medicaid, or any other governmental welfare-state program, I have known many, many people who have, and these people have all shared a single, common bond - they didn't need the assistance they were receiving. They just wanted it.

Getting $160 worth of food stamps every month, for the people I have known accepting such assistance, has simply meant an additional $160 of monthly expendable income, which in my experience has usually been used to purchase alcohol, marijuana, tobacco, or another needless frill. While there are people who genuinely need welfare, food stamps, and government health care assistance, the vast majority of people in these programs do not, and the end result is American citizens, taxpaying individuals across the country, end up paying for the "needed" services for a group of people that don't "need" the help, in the purest sense of the word.

As someone with a pretty heavily libertarian bend, I foresee an American of the future where the tiny fraction of people who honestly cannot provide for themselves are assisted to the extent of their need through charitable donations. In lieu of enough charity in the United States to provide assistance to these people, which though I doubt would happen I certainly can admit the possibility, then even this libertarian is willing to concede that the state could be allowed to provide for these people. Yet the main gist of this post remains the same - most people receiving state assistance for food, medical care, or housing, don't actually need it. Only by removing the free giveaway of goods, services, and dollars to these people can you ever hope to encourage unwed single mothers like my roommate's girlfriend to buy some goddamn health insurance for her child instead of a shiny new car.

The United States' Health Care Fiasco

The main argument against philosophical world views supporting limited government is that they lack any semblance of compassion for those who cannot provide for themselves in the marketplace. A system of free-market capitalism is viewed by its detractors as a regulatory vacuum in which those without personal means are sheep at the perpetual whim of those with the economic power necessary to exploit the masses. It is this idea that is at the crux of Marxist philosophy, and it is this idea, though usually pursued with the most benevolent of intentions, that inevitably leads to a decrease in the individual standard of living and, more importantly, individual liberty.

Nowhere can this be better illustrated that by examining the health care fiasco that has developed in the United States since the Johnson and Nixon administrations first began to use the federal government to meddle in the nation’s health care institutions. The creation of Medicare, brought into existence under Johnson, and the passage of the Health Maintenance Organization Act, signed into law under Nixon, mark the beginning of this meteoric rise in the price of health care.

Information from the Kaiser Family Foundation shows a direct correlation of an increase in per capita GDP spending on health care in the United States: it rose from $352 per capita in 1970 to $1072 in 1980; $2752 in 1990, and $5711 in 2003 – out-pacing inflation at a tremendous rate and leaving many Americans no longer able to afford even minimal levels of health care. Contrasting this rise in health care spending per capita, Denmark, which led Europe in per-capita spending increases and which had a 1970 per capita spending of $384, in the three decades since had seen its per capita spending increase to only $2743 – less than half the current per capita spending rate of the United States.

And Denmark is not alone. All the world’s other industrialized nations have seen similarly low increases in the rate of per capita health care expenditures when compared to the United States, suggesting that something is inherently wrong at the core of the U.S. health care system and that the answer is not as simple as the “universal v. free market” debate that dominates the political discussion.

That said, there is no denying the correlation between government involvement and the steep rise in the cost of health care. The simple fact remains that health care existed in the United States well before the government got involved, and it does not require nor is it assisted in any way by government regulation with the stated purpose of allowing it to function efficiently. Free of burdensome government regulations, health care in the United States would not only continue to exist, but would improve. Marketplace competition, which is non-existent as Americans are currently forbidden to purchase health insurance outside their given states, would return to the health care sector, leading to increased quality of care and decreased costs.

It is not to say, however, that all types of government involvement in the health care sector have created the catastrophic scenario Americans now face, where 17% of their gross domestic product is spent on health care. Indeed, it is the wrong kind of government involvement, done at the behest and for the benefit of private corporate interests, the pharmaceutical and insurance companies that have pushed their agendas and interests through thirty years of systematic, aggressive lobbing.

It was the HMOs, like Kaiser Permanente, founded by Edward Kaiser and the source of the above-mentioned data that pushed for the passage of the Health Maintenance Organization Act of 1973 which heralded the beginning of the exponential increase in American health care expenditures; it was the insurance companies that pushed for regulation that disallowed the purchase of health insurance over state lines; and it was the pharmaceutical companies that lobbied to ban imports of prescription drugs and loaded Medicare Plan B with what essentially amounted to hundreds of billions of dollars siphoned directly from the hands of the taxpayers to the pockets of shareholders.

It is these corporate fat cats, the people whom the proponents of health care regulation cite as necessitating such regulation, that profit the most from its very enactment. In giving the government the power to regulate health care, it is also given the ability to corrupt such power, and it is this corruption above all else that is responsible for the meteoric rise and ridiculous cost of health care in the United States.

Regulations, with benevolent intent or not, always benefit some individual or group of individuals. With the level of corruption in politics on the national level, where only those represented by lobbyists in D.C. having any actual influence in the political process, it is inevitable that any regulation, no matter how benevolent its intent, will eventually be corrupted into an ill-gotten payday by the clients of the many lobbying firms in Washington. By doing away with these regulations, the ability of the insurance, pharmaceutical, or any other industry to corrupt the power of their government for personal gain at the diffused cost to many is severely retarded.

Yet, for the many problems deregulating the health care sector would solve, it is met by many with critiques, the most common of which states that deregulating health care would cause the profit motivation of the free market to come into conflict with the health concerns of millions of Americans, leading to a situation where health care providers are given a monetary incentive to deny health care claims – a readily observable phenomenon in the U.S. health care system that has undeniably led to countless amounts of unnecessary death and despair.

Examine the source of this problem, however, and a different story is told. While it is true that any for-profit insurance agency or health care provider is going to attempt to maximize its profits, in a free market system (one which should not be confused with the corrupt, over-regulated system currently enjoyed by the American public) the elimination of barriers, such as the ones preventing individuals from purchasing health insurance over state lines or importing prescription drugs from Canada, will create levels of competition and consumer choice that are currently nothing but fond memories of the distant past.

While it is a given that health insurers will perpetually attempt to maximize their profits, as any private for-profit entity in the free market should, in a free-market system where the ability of an individual to choose his or her health care provider from an unlimited number of companies is maintained, competition has returned to the market and the insurance companies engaged in constant attempts at frivolous claim denial will soon find themselves with a significantly smaller market share, or none at all. At the same time, the insurance companies with a word-of-mouth track record of high quality service, low cost, and no frivolous claim denials will soon find themselves in high demand, as individual Americans are now able to choose a health care provider from anywhere in the country, and not simply within the borders of their home state. The bottom line is this: if there is a demand for an insurance provider that treats its clients well, it is a niche in that market that will inevitably be filled.

Another critique of free-market health care is that with the elimination of government health care assistance programs in a nation the size of the United States, there will always be a small number of people simply unable to provide for their own health care needs. Though this percentage of the population is nowhere near the majority of people currently reliant upon the federal government for health care, or who have no health care at all, the answer to the problem of this small is not a massive new federal bureaucracy that robs Americans of health care choice and personal freedom.

The leading reason most uninsured Americans are uninsured is that they simply cannot afford to be. Instead of creating a taxpayer funded system that will stifle our economy and permanently break a malfunctioning but ultimately fixable sector of the American economy, a better alternative is to attempt to create an environment where more people are able to provide health care for themselves, rather than simply creating a new, perpetual bureaucracy that will siphon trillions of dollars from the U.S. economy in the long term in order to create a mediocre, albeit universal, health care system.

The alternative is much more tenable. By deregulating the health care sector, the bought-and-paid-for regulations that Big Insurance and Big Pharmaceutical have used so effectively to line the pockets of their corporate executives and shareholders become a thing of the past, and true competition, which inevitably leads to greater personal choice, higher quality of health care, and lower overall costs, returns to the most wasteful and corrupt sector of the U.S. economy.

If the health care system in the United States were to become deregulated, the vast majority of uninsured Americans would once again be able to provide health care for themselves on an individual basis, instead of being in perpetual reliance upon the federal government for assistance. Furthermore, billions of dollars would be saved annually by eliminating waste from the bloated government bureaucracy currently responsible for pissing away billions of taxpayer dollars every year through Medicare, Medicaid, and the slew of unnecessary regulations in place only for the benefit of the corporate elite. In a deregulated health care system, the federal government could even provide for those unable to provide for themselves, but in the low-cost environment of a deregulated system, it could do so in a much more efficient manner.

The health care system of the United States today is so bloated with unnecessary costs, waste, and corruption that it is likely that even a relatively inefficient, government-sponsored universal health care system could cost significantly less than the current system. Yet, even taking this fact for granted, which it certainly is not, the United States must be wary of the call for universal health care and increased government involvement in the health care sector as a way to solve the woes of the current system. It is one way of doing things, but it is not the best way. By removing the federal government from the system entirely, costs will go down, quality of service will go up, fewer Americans will be unable to insure themselves, and those unable to provide for themselves could receive government-subsidized health care at a fraction of current costs.

The quality of health care in the United States is the envy of the world, and this fact is oft-ignored in the arguments of the proponents of universal health care and increased government involvement in the health care system. The problem with health care in the United States is not that it is bad, just that it is too costly and unavailable to far too many. While the introduction of a universal health care system in the United States would ensure that all Americans would be able to receive health care coverage, it cannot be forgotten that the incredibly high quality of health care in the United States is an economic response to the monetary incentive for offering such high quality service. Remove this monetary incentive through the introduction of universal health care, and health care quality invariably suffers.

The goal of the United States should therefore be two tiered – aiming both to ensure every American has access to health care and to prevent the stifling of innovations in medical technology and practice that have allowed for the development of America’s world-renown high standard of care. While the adoption of universal health care can ensure all Americans have health care, it cannot prevent the decrease in overall quality due to lack of monetary incentive sure to accompany sweeping new regulations, nor can it address the base problem facing the health care system of the United States, the simple fact that the more the government is involved, the more money is lost every year to corruption and waste. Corruption and waste, these two perpetual residents in any governmental system, are the main culprits for the current health care fiasco in the United States. Only by attacking the base cause of these symptoms, government involvement, can progress towards a better health care system truly be made.