"Our whole system of banks is a violation of every honest principle of banks. There is no honest bank but a bank of deposit. A bank that issues paper at interest is a pickpocket or a robber. But the delusion will have its course....An aristocracy is growing out of them that will be as fatal as the feudal barons if unchecked in time." ~ John Adams
Free Health Care!
Column by Jim Davies.
Exclusive to STR
That was the promise, made by politicos in the England of my youth; health care, they said, is a right, an entitlement. In Churchill's wartime cabinet, William Beveridge, whom I briefly met 15 years later, had designed a scheme by 1945, and it was rushed through and implemented in 1947. The exodus of British doctors to North America began shortly afterwards. I now much regret not having the libertarian understanding, in 1960, to ask His Lordship where exactly that “entitlement” came from.
That was the “National Health Service” which – coincidentally or not, in this election period – is being praised by the popular BBC drama series on PBS TV, “Call the Midwife.”
The same promise is being made here now by Obamney, after much of it has been slipped in piecemeal anyway during the six decades since; and the elapse of time has not made the claim about rights and entitlements any less false. I don't know whither American doctors will emigrate, once it's all complete. Perhaps bright young biologists simply won't become doctors. One way or another, free health care will become even more expensive.
A member of my family lives in a country where health treatment is free, and he has cancer. Surgery in 2010 succeeded in postponing the inevitable, giving him two or three extra years of life, but this Fall it spread to his brain and is inoperable. His doctors say he will most likely not live to see next Summer.
Currently they are discussing whether or not to treat him with radiation, and here it gets unusually interesting. That may give him some extra living time, but will also reduce the quality of life being lived. So which would you choose: five months of relatively painless life, or (say) eight months of subdued, more painful living?
It's by no means an easy choice. Sitting here now, I think I'd choose the short and sweet option; but if that choice actually faced me for real, would I still feel that way? I can't tell.
In this case, however, the patient doesn't get to choose. His doctors do.
That's because his treatment is free--which doesn't mean the hospital staff work for no salary, out of the goodness of their hearts, it means that their pay doesn't come from the patient directly, as a customer, but from a labyrinthine system of taxation and resource allocation. Laws and regulations are written, about who shall receive what. Acting within those laws, the physicians make the decisions, with little input from the patient.
That's not too illogical, given that treatment is free. One can imagine two patients, with the same symptoms; one is eloquent, the other lacks persuasive skills. If the two could influence the choices, guess which would get the better treatment. No, the decision has to be made coolly, rationally, dispassionately and according to the rules – for the treatment, remember, is free.
The deciders might be a committee of administrators and nurses, as well as physicians, it doesn't matter; that would still be their aim. They would hold the power of life and death in their hands, and would be little influenced by the patient himself. And so it must be, in a system where treatment is free. Anything else would not be fair.
Now let's open this can of worms. The committee has two possible ways of reaching its decision, regarding my relative. One: its members can restrict their discussion to what is best for him, to the limit of their ability to imagine themselves in his situation and in the light of their expert knowledge of what effect each option is likely to have. Always within the governing regulations, of course.
Or, two: they could calculate how much money will flow to their institution (and hence eventually to themselves) in each of the options being considered. For example, more funds will perhaps flow in if a course of radiation is prescribed, than if the patient is just given maintenance care as in a hospice. Since none of them can banish self-interest from their minds, they cannot exclude that consideration from their debate even if it's never spoken out loud.
Since all treatment is free, there will be no problem getting the patient to pay (nor even his private insurer, in an alternative case) so the radiation option in my example would look like a license to print money. Powerfully tempting, even if the patient, were he invited to choose, would prefer the above “short and sweet” option. The regulations allow it, so just sign the treatment order, and funds will flow. Nice work if you can get it.
Which will be the dominant motive in their minds, this month? There's no way to tell. But either way, my relative's final months of life are going to be designed by agents of government. That is always the inevitable consequence, when treatment is free.
Now, the can of worms is still half full. Suppose there were no free treatment. Would not people other than the patient still choose how to dispose of his life? How about greedy, heartless, capitalist insurance companies, supported by a phalanx of contract lawyers, combing the fine print for any syllable that can clip a little off what has to be spent?
Yes, I admit it's so. They are subject to some limits which don't apply to government; for example, if an insurer earns a reputation for pursuing every last penny of profit regardless of human compassion, it will lose new business to competitors and so suffer a profit loss--whereas government, of course, has no competitors. But even if a company agent meets the patient and his doctor to discuss options, ultimately the insurer will carry a great deal of clout, probably more than the patient himself. He pays the piper, so will call the tune.
In the coming free society, insurance will presumably play some part in health care, but it seems to me not to be a very good fit. Insurance is well suited to situations in which there is a small risk of a large loss, where the risk can affect anyone, unpredictably. Originally the industry began to protect shipowners; storms at sea could sink any owner, however well managed was his fleet. It made very good sense for all to pay a premium against the unpredictable, though small, risk of heavy loss.
But health care isn't much like that. It's true that catastrophe can hit anyone in the form of unforeseen illness or accident, but it seems to me that a great deal of ill-health is endemic to individuals; some are more prone to get sick than others. Some have maladies that strike early in life and never go away; today's insurers call those “pre-existing conditions” and try to avoid them. And some just take better care of themselves than others, so the risks to the insurer are not unpredictable or random. He can adjust for that, with higher premiums for smokers for example, but the calculation is rough. This is unlikely to change much, after a free society has begun. Insurance is just not a close fit for health care.
The ideal payment method is self-insurance, meaning that each person pays his own way – perhaps buying true insurance only for unforeseeable disasters--and supported by charities when his means are too slim. Prices are so high today that self-insurance is hardly feasible, but when government has evaporated, that will no longer be the case. Prices will be far lower, and private wealth (there will be no other sort) will be far greater.
The obvious first boost to that wealth will come from the elimination of all taxes, which take nearly half of all we earn. That won't quite double our living standards overnight, because there will be a few items we'll wish to purchase, as in my recent article about a government “menu”--but that immediate near-doubling will be followed by annual growth unimpeded by government regulations, and a 10% rate seems conservative given that even China, in recent years, has grown at 9% a year after just a partial relaxation of business rules. Ten percent growth a year doubles anything in seven years, so well within the first decade of the zero-government society, on average everyone will be about four times better off.
In addition, health care will be a very great deal less expensive. Three reasons:
the extraordinary burden of paperwork, imposed by both government and insurers, will disappear. Physicians will keep only such records as enable them to deliver competitive service to patients. One office assistant will suffice to support several.
enormous “malpractice” settlements will disappear with John Edwards, together with the vast insurance premiums physicians must pay to acquire protection. Mistakes will again be recognized as human frailty, and frequent mistakes will swiftly bring their own cost in terms of loss of market share. Settlements in egregious cases will be made by arbiters able to relate to both parties in the dispute--unlike today's jurors, raised on the premise that money grows on trees and that high earnings exist to be plundered.
most of all, licensure will vanish, so anyone will be free to hang out a shingle and treat what he can, knowing that if he treats badly, his practice will not last. Competition, in other words, will return to the health-care industry after an absence of over a century. No better way of optimizing (reducing) prices has yet been found.
Put these factors together: a drastic reduction in the cost of health care, a huge increase in wealth, a universal acceptance of the principle that each person is responsible for his own expenses whenever feasible, and a substantial rise in the resources available from private charities for when it's not. Add the fact that it worked quite well for the first 49,900 years of modern man's 50-millennia existence, and I suggest that while free health is available only in the fantasy world of statists like Lord Beveridge, when the government era has ended, we shall come as close to it as is possible in the real one.
But first, of course, get yourself a free society.