Why Free-Market Health Care Doesn’t Work (my dad would disown me if he knew how to use a computer)

Ever since coming home from the mission, I’ve pretty well lost my appetite for arguing, which is why I haven’t done much with this thing lately. But I’ve had about all the stupid I can handle from the health care debate, so here goes.

Why Free-Market Health Care Doesn’t Work

1. Emergency services do not respond normally to the laws of demand that regulate free markets.

When one’s house is burning down, consideration for the price of help is minimal. If a “freelance” fire truck were to drive up and offer to put the fire out, one’s response would be the same whether their asking price was $50 or $5,000: “Fine, whatever, just put the fire out!” In economic terms, we call this a “perfectly inelastic” demand curve–one that is not meaningfully responsive to changes in price. The potential for extortion is obvious, and there’s actually historical precedent for that very situation.

Marcus Licinius Crassus, a Roman politician, operated his own personal fire brigade on free-market principles: when he heard there was a fire in town, he would rush to the scene with a team of slaves, and offer to buy the home at an obscene discount. If the owner refused, the offered price would fall until he was forced to frantically accept, and Crassus would send in his team to put out the fire and salvage what they could.

There’s a similar precedent for contract police forces: the Huns called it “tribute”, and organized criminals call it “protection money”. That’s why we have “socialized” police and fire departments: because we want those industries kept as aloof from the profit motive as possible.

Normal commodities respond favorably to market forces; we get faster computers, more fuel-efficient automobiles, longer-lasting light bulbs, etc. because the consumer has the power to choose between commodities or to go without altogether. It’s this power of choice that drives innovation, lowers costs, increases efficiency–which is almost nonexistent in emergency services.

When I had my appendix out last February, I couldn’t choose a discount hospital, or a luxury hospital, or the one with the most efficient billing and coding system–I just had to drive as fast as possible to the nearest hospital and beg them to anesthetize me. And even if they had told me at the time that it would cost $12,000 (they send you the bill a couple weeks later), my response would have been no different. I needed to not die, at whatever the going rate for not dying happened to be.

2. True Free-market Health Care does not exist–and shouldn’t.

As our system currently operates, free health care is already available to every individual within driving distance of an American hospital, provided that their need is life-threatening and immediate. Emergency rooms don’t ask before they reattach your arm if you are a legal US citizen with valid health insurance–nor should they.

But if you want something close to a functional free-market system, at least one side (supplier or consumer) has to have the power to refuse the transaction. It is illegal in the United States for a hospital to refuse treatment to an ER patient on the basis of their ability to pay; so we don’t have a truly free health care market, and the very idea of such a system ought to be repugnant anyway.

Still, someone has to foot the bill, and you can bet it won’t be the hospitals. To cover the cost of all that free health care (which is huge, given the number of Americans who can’t afford it but still need that bullet out), they inflate prices across the board; but the insurance companies don’t want to eat it either, so they pass it on to you, enlightened consumer, in the form of higher monthly premiums.

In effect, then, American health care is already socialized; but instead of spreading the cost across the 70% of Americans who pay income tax, we spread it across the 60% of Americans who have health insurance–thus, as the Republicans love to say, “punishing the successful and rewarding the unsuccessful”, just the same. The only difference is that–

3. Waiting for the ER Vastly Increases the Cost of Treatment

You could see this all over the place in Memphis: middle-aged, inner-city African Americans suffering from long-term, treatable illnesses for which they couldn’t afford treatment until they could sell it as life-threatening to the ER. Obviously, sometimes these diseases were stupid, and manageable if the person had any sense. Obviously I’d rather not pay to pharmaceutically manage someone’s diabetes, when the patient weighs 450 lbs. and puts away a 2-liter of soda with every meal–but that’s not the choice we’re presented with.

We can either pay for the treatment (and maybe some mandatory education and counseling) in the early stages, when it’s relatively cheap, or we can pay for it when it’s $50,000 to amputate an infected foot. We’re not going to let them die of their stupidity; that’s just not on the table. Our choice is how we will bear the cost of their stupidity.

And that is, of course, an extreme case. Even then, the moral imperative is clear, but there are thousands of other cases in which people get sick through no fault of their own, and we are presented with the same choice. We’re going to have to pay for it either way, but prevention and management is cheaper than emergency care.

Right. Anyway.

What drives me crazy about this whole situation is that the quality of the debate is so unbelievably dim. Republicans have tried to sell it as a Communist conspiracy to overthrow the Constitution, which is about as anachronistic as blaming it on pirates. We won that war 20 years ago, guys… pick a new villain.

Meanwhile the liberals have phrased their entire defense in the lame language of complacent American entitlement… don’t sell me health care reform by telling me what “everybody deserves”. Everybody deserves to have a good family, and nobody should get picked on in school, and nobody’s dog should ever die; but it happens. Life is hard. The state of the economy is enough to keep that important fact fresh in the American consciousness; so you’re never going to sell this thing if you keep talking like a bunch of damn brainless hippies.

Why Free-Market Health Care Doesn’t Work (my dad would disown me if he knew how to use a computer)

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