"When it becomes dominated by a collectivist creed, democracy will inevitably destroy itself." ~ Friedrich August von Hayek
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January 3, 2008
I turned 90 in the year that government finally collapsed, so if anyone had cause for concern about that decapitation of the health care system, I was the one. At this age, one's good health assumes an importance never considered in the carefree days of youth and prime. However, I need not have worried; as always, the market works.
Political management of medical services didn't happen overnight, of course--it grew, over a period of more than a century. First, awareness of a "need" was created in the late 1800s out of a few cases of quackery, then laws were written to prohibit the practice of medicine without obtaining an expensive education and a government-approved license. That very neatly excluded low-price competition and set up the profession for a prosperous century--given that demand (sickness) could be safely relied upon to recur. Then came the licensing of what medications could be prescribed, with the consequent escalation of their cost, so that pharmaceutical makers as well as physicians could make a heap of money at patient expense, provided only that they danced to the government's tune. Then the problem government had created (unaffordable health care) was "solved" by taxing everyone and using the loot to pay the bills. This started in the 1960s and went on increasing through the first quarter of this century until we had a system from which nearly all financial incentive for excellence had been drained and which was in effect one more giant government bureaucracy, hard to distinguish from those in Canada or Europe . Truly, government was great at breaking your legs, then handing you a pair of crutches paid for by someone else. You'd think people would have figured out from those and the old Soviet example that good health is inversely related to government involvement, but most people didn't do that on their own; only as the Academy was used in exponentially increasing numbers did such awareness spread wide.
And so it all fell apart, back in 2027, and we held our breath: would the market keep us healthy?
Of course it did! I reckon it will improve in the future by leaps and bounds, but even now after only three years, the health care industry is in better shape than it's ever been. This relates a few of the details I've seen.
1. Supply increased - the supply of competent professionals, that is. This came about quickly in four main ways:
(a) Medical scientists locked up in fruitless government-funded "research" were suddenly released for productive work. The best known of these was the AIDS swindle; that disease never did exist, yet several billion stolen dollars were being spent chasing a vaccine for it in 2006. That buys a lot of medical researchers--who are all smart, and when they realized what was about to go down, most of them had quit by 2025 or 2026, and now of course none are left; instead, they are all in the market having dusted off their bedside manners, selling their services to people who wish to buy.
(b) A horrendous proportion of every physician's time was wasted conforming to government rules and completing its paperwork, but after E-Day, that waste was eliminated so each could spend much more of his time doing what he had been trained to do. This was estimated to be equivalent to bringing a 25% increase in the number of available physicians and had enormous consequences even worldwide; for whereas in recent decades professionals have been "imported" from India and other lands where their skills were urgently needed but whose pay rates were not competitive, today American doctors can meet the domestic demand and so more foreign-born physicians stay home and treat their neighbors.
(c) Some physicians--hard to tell yet, how many--had left the health care industry and given up, in effect, because of the depressing effect of constant bureaucratic interference. I recall one who tried to keep more of what he earned, in a way of which the old IRS disapproved; that made him a felon, which meant loss of his license. When released, he figured it just wasn't worth the hassle of starting over, and pursued another profession. A perfectly good resource, lost to medicine. However, after E-Day some of those took a fresh look, and re-opened their practices.
(d) Those without a medical degree but with good knowledge of the field--nurses, paramedics--sometimes hung up a shingle on their own account, advertising of course no more expertise than they actually had but aiming to serve the needs of patients with everyday maladies for low fees. This took demand pressure away from those with more advanced skills. Quacks, in the rare case that they show up, are quickly disgraced by the free, Net-based flow of knowledge so all customers know pretty well what quality of counsel they are buying.
2. Demand shrank at first as patients had to pay directly the whole cost of a doctor visit, instead of just a small percentage. Initially there was a lot of interest in insurance policies that would pay those bills, but it deflated fast when members of that industry announced the premiums it would require. Obvious when you think about it (this old 2007 ad shows the AMA apparently could not) but insurance is simply not a good idea for expenses that one is almost certain to incur; it works well only when the event at risk is rare, unexpected, and more or less random. Otherwise, the premium is certain to be greater than the cost of paying directly, for the insurer too expects to eat.
So, sure enough, folk with minor ailments found ways to medicate themselves--and then, as the supply of paramedic services came on line for moderate fees, they found a less expensive way to get adequate advice if and when the abundance of free, interactive diagnostic programs on the Internet didn't suffice.
By now, the true economic demand (the wish, plus the money) has settled down and most people fix a health problem first by checking the Net to match symptoms, then buying any needed medication over the counter. In case of doubt, they spend a bit on advice, choosing the level of skill which seems to match the condition; if they start too "low," the nurse (for example) refers the patient to a (more expensive) specialist because her own reputation in the marketplace would suffer acutely if she offered advice she was unqualified to provide. So having shrunk initially, demand for physician assistance has now risen to over two thirds of where it was before E-Day.
3. Prices tumbled in response to (1) and (2) above, as they must always do in a free market when supply rises and demand falls. It's perfectly normal already to incur an office-visit bill for about one gold gram, or about a third of what it was back in ought-seven; and I'll not be one bit surprised if they fall yet further as the more inventive members of the industry find ways to deliver more for less. Already, one can sometimes see shingles announcing such as "New Patients Wanted - FREE First Visit!" and offers like that have not been dreamed about in living memory.
Another useful service that's emerged is that often, physicians advertise such as "Discount Medications"--meaning that they keep in stock a few dozen pharmaceuticals that they frequently prescribe, and share their profit margins on them with the patient while saving him a separate trip to the pharmacy. Pharmacists don't like that, but hey, the game isn't rigged any more, it's a free market, so they are having to adjust their range of merchandise. (Some of them are selling liquor--a nice touch--and of course, Laudanum has reappeared on their shelves.)
This has meant that per patient, physicians receive less than before. However, because of the much smaller need for paperwork and backside-covering, each has much lower office expenses. So their overall earnings per year are not all that different--and of course, it all stays theirs. None of it is taxed away.
4. Extra Goodies. In the old days I would sometimes ask, when taking my leave of a doctor, prescription in hand, "Now, does this come with a money-back guarantee?" and the negative reply would come with a polite smile. Then the smile became less polite. Then there wasn't even a smile. People working for government, knowing the customer has no alternative supplier, tend to be a humorless lot.
In the discipline of the now-free market, however, it has become urgent to outbid the competitor down the street, and limited warranties have begun to appear, despite the inherent difficulty of predicting how any one human being will react to particular treatment. As experience is gained, I expect this practice to grow, and with it the quality of care in terms of results achieved.
5. Pills Got Cheaper. There is a considerable necessary cost involved in developing new drugs, and that cost has to be recovered from sales. However, in the last half-century of the Age of Government, they were greatly bloated by two major factors: (a) the pre-release testing was required by the FDA to be artificially extensive and expensive and (b) the developer was given only a fixed number of years to sell the product under his monopoly or patent so as to recover them all.
Both of these price boosters have disappeared, and with them retail prices have begun a steep decline. The developer still takes great care before announcing a new product, for he would be liable for any negligence--but he can sell directly to the patient without the cutout, so familiar in advertisements under the ancien regime: "ask your doctor about . . . ." Cheaper, generic lookalikes appear sooner--but the original developer can still promote his version with such as "Buy Merck. Be Sure, Get the Real Thing."
I recall that back in 2007 when Barack Obama was campaigning, one of his most sinister promises was to use the law to stop drug companies "paying manufacturers of generic products not to bring them to market." I've never been clear whether that was actually happening, but he said the law didn't forbid it, so he'd fix it just in case! Like all other pols, he couldn't understand; the free market has taken care of that potential problem very well. First, the price difference between original and copycat isn't all that huge. Second, there are a large number of generic drug makers and it simply isn't possible for Big Pharma to buy them all off. And third, if they ever did, their reputation among customers would sink to that of charlatans like Obama.
Naturally, traditional remedies and pain-killers like vitamins and marijuana are available without price-boosting prohibition or regulations, for those who prefer to keep their bodies as free as possible of powerful new drugs and let the immune system work its wonders. Self-care with such remedies is still about the cheapest kind of medication.
6. Responsibility has been re-introduced. It was really absurd that in the first decade of this century, huge numbers of Americans took so little health responsibility that obesity became commonplace even among children. Now that payment for cures is made directly and the "government will pay" fiction exposed and abolished, there has been a sharp change in the degree to which people care for themselves. Fast-food joints have reacted swiftly to the change in demand, and the commonplace valediction "Take care!" has acquired serious meaning; people do, now, take care of themselves much more.
7. Privacy has been restored. I was horrified, when back in the 1990s I first saw an abomination on paper called the "Patients' Bill of Rights"--it was actually a bill of lost rights, a limit on our privacy laid down by the FedGov. Previously (and of course today) if a doctor handled private information improperly, the patient could complain, claim damages, and ultimately sue. That wicked intrusion gave bureaucrats an almost free hand to peek and poke into everyone's medical secrets. Not any more.
8. Charity helped those who, after E-Day, no longer had Medicare and could not afford even the reduced cost of physicians or low-priced pharmaceuticals. This is only a temporary problem, because all those now earning a living have ample to put by as savings for such eventual costs; but meanwhile it is non-trivial and as always when a real need arises, free Americans have been generous to help with charity. In the last few years, literally hundreds of them have arisen and a small example is a charity I started 30 years ago: the Society to Assist Victims Of Government, SAVOG. At that time it had no funds so was no more than an idea--but more recently I've been able to finance it a bit, and have had the enormous pleasure of helping out. You might like to see its web page as it was back then, very much under construction.
Overall, therefore, I'm pleased to report that the important industry of health care is in very good shape following removal of Big Brother, with all participants--patients, assistants, providers and medication makers--doing from it very well, just as we expect from a free market which by definition (all transactions being voluntary) provides win-win-win solutions. Only the massive overload of bureaucratic parasites has had to find alternative and productive employment, and now that they have done so, I've not yet met any of them who regret the change, uncomfortable as it was for a period.
So the disappearance of government has provided much wider choice, lower costs and higher quality. The result long-term cannot be other than a significantly healthier and longer-lived population. The progress of the human race has resumed.