health care Archives — Page 2 of 15 — Laissez FaireLaissez Faire

On this episode of Eye to Eye, I had the opportunity to interview Sally Pipes, a leading proponent for greater freedom in health care. In discussing health care policy issues in this country, people often make comparisons to the health care systems of other nations—the Canadian system is often brought up. I discussed with Ms. Pipes her firsthand experience of socialized medicine in Canada.

One point she made that I found particularly interesting was her discussion of the factors that lead people to have a skewed view of a health care system. When you have routine medical needs (which is the category most people fall in), a health care system fraught with government intrusion may look as if it is working decently. The shortcomings of such a system often only become apparent when you experience out of the ordinary illnesses that require experimentation, innovation and state-of-the-art care. This is important to keep in mind when you hear Canadians saying, as they often do, that their government-run health care system works great.

Another subject we discussed is the frequently cited fact that Canadians spend a lower percentage of their GDP on health care than Americans (11.4% vs. 17.6%). In my view these kinds of collective statistics are dubious and misleading (given the impact of regulatory controls on costs, and the disparate quality of service from one country to another–to name just two problems).

Some of the other topics Ms. Pipes discusses in the podcast include:

• Why private health care is outlawed in Canada
• The part of the American health care system that most closely resembles Canada’s
• Where doctors and patients are going, to escape government intrusion in their medical decisions
• Why health care in Canada is getting worse

Ms. Pipes is president of the Pacific Research Institute. She writes a column for Forbes.com and is most recently the author of The Pipes Plan: The Top Ten Ways to Dismantle and Replace Obamacare.

We regularly hear that government needs to intervene in the market to ensure that all people have “access” to health care. But what does “access” mean? Is there some epidemic of oversized hockey goalies standing outside hospitals, blocking people from getting into the ER? Have I just missed the news that hospital walkways are booby trapped and that you can only sneak through the door if you have your own invisibility cloak?

On a free market, everyone has the same “access” to a hospital as they have to a movie theater or restaurant: they can walk in and buy what they are willing and able to pay for.

The people lamenting the lack of health care “access” don’t like that. They don’t like the fact that a person has to pay for medical care, and so rather than say, “You are entitled to have other people pay for your health care,” they use misleading language to imply that a person’s having to pay for medical services is equivalent to having someone interfere with his freedom to buy care.

There is no problem of “access” to health care. The problem today is that health care is heavily controlled and regulated: we don’t have the freedom to pursue medical care on a free market. As a result health care is more expensive, more bureaucratic, and less available than it would be if government stopped trying to promote “access.”

In our book Free Market Revolution, Yaron and I spend an entire chapter detailing the way in which Americans do not have a free market in health care.

Americans are understandably worried about the rising cost and deteriorating quality of health care. And they’ve been told that the explanation of this health care crisis is our free market in medicine. As Lyndon B. Johnson’s deputy assistant secretary for health put it in 2004, “Today’s dysfunctional health care system is a palpable example of the lessons that come from our national obsession with markets at all costs.”

But markets don’t lead to mounting bureaucracy and skyrocketing prices—they lead to ever-improving customer satisfaction and steadily declining prices. It’s no accident that we don’t have a computer crisis, or a hair salon crisis, or a veterinary crisis. Nor is it an accident that we did have a housing and financial crisis. Along with housing and finance, medicine is one of the most regulated industries in the United States, and those regulations take center stage in precipitating the health care crisis.

So it was with high hopes that I started reading a recent piece by conservative health care experts Douglas Holtz-Eakin and Avik Roy, “The Future of Free-Market Health Care.” And they started out well enough:

Over nearly a century, progressives have pressed for a national, single-payer healthcare system. When it comes to health reform, what have conservatives stood for?

For far too long, conservatives have failed to coalesce around a long-term vision of what a free-market healthcare system should look like. Republican attention to healthcare, in turn, has only arisen sporadically, in response to Democratic initiatives.

Obamacare is the logical byproduct of this conservative policy neglect.

All of that is true. What is badly needed is a vision of free-market health care—and a powerful intellectual defense of that vision. Sadly, what Holtz-Eakin and Roy offer is nothing of the sort.

After praising George W. Bush’s massive prescription drug entitlement as a “market-oriented” reform, the authors write, “While most Americans view their healthcare system as ‘free-market,’ Switzerland actually has the most market-oriented healthcare system in the West.”

Switzerland? A free market? Really? Listen to their description of the Swiss system:

Swiss government entities spent about 3.5 percent of gross domestic product on healthcare in 2010, compared to 8.5 percent in the United States. That’s a difference of more than $5 trillion over 10 years: real money, especially relative to our $16 trillion debt.

There is no “public option” in Switzerland. Instead, citizens qualify for means-tested, sliding-scale subsidies and choose among a variety of regulated, private-sector insurance products.

Whatever the virtues of the Swiss system, here we have a giant government entitlement program with insurance regulation. Does that sound like a “free market”?

To be fair, the authors do not outright call the Swiss system a “free market.” But they do offer the Swiss system as their model for what “a long-term vision of what a free-market healthcare system should look like.”

Problem is, their vision of a free-market isn’t free. Less controlled? Maybe. But how inspiring is a crusade for “a less controlled healthcare system”?

Interview with Carson here.

George Will has an interesting take on the future of ObamaCare. The basic argument—as Will points out, it actually comes from law professor Thomas A. Lambert—is that the tax used to coerce people into buying health insurance is too small to be an effective incentive, but that a tax large enough to be an effective incentive would not pass constitutional muster:

So, Lambert says, the ACA’s penalties are too low to prod the healthy to purchase insurance, even given ACA’s subsidies for purchasers. The ACA’s authors probably understood this perverse incentive and assumed that once Congress passed the ACA with penalties low enough to be politically palatable, Congress could increase them.

But Roberts’s decision limits Congress’s latitude by holding that the small size of the penalty is part of the reason it is, for constitutional purposes, a tax. It is not a “financial punishment” because it is not so steep that it effectively prohibits the choice of paying it. And, Roberts noted, “by statute, it can never be more.”As Lambert says, the penalty for refusing to purchase insurance counts as a tax only if it remains so small as to be largely ineffective. . . .

Because the penalties are constitutionally limited by the reasoning whereby Roberts declared them taxes, he may have saved the ACA’s constitutionality by sacrificing its feasibility.

Plausible? Wishful thinking? What do the legal experts out there think?