Don Boudreaux, chairman of the economics department at George Mason University and the driver of Cafe Hayek, authored this Christian Science Monitor op-ed that addresses a fundamental problem with reforming the American health care finance system — the expectation of most Americans that health care is a basic human right and entitlement. Boudreaux explains the fallacy of that attitude:
But not everything that is highly desirable is a right. Most rights simply oblige us to respect one another’s freedoms; they do not oblige us to pay for others to exercise these freedoms. Respecting rights such as freedom of speech and of worship does not impose huge demands upon taxpayers.
Healthcare, although highly desirable, differs fundamentally from these rights. Because providing healthcare takes scarce resources, offering it free at the point of delivery would raise its cost and reduce its availability. [. . ]
Medicare, Medicaid, and tax-deductibility of employer-provided health insurance created a system in which patients at the point of delivery now pay only a small fraction of their medical bills out of pocket.
This situation leads to monstrously inefficient consumption of healthcare. Some people consume too much, while many others with more pressing needs do without.
Because the wasteful consumption caused by heavily subsidized access drives up healthcare costs, taxpayers must pay more and more to fund Medicare and Medicaid, while private insurers must continually raise premiums. The sad and perverse result is that increasing numbers of people go without health insurance.
Employer-based health insurance — which proliferated as a means to attract scarce labor during the wage and price controls of World War II — triggered the societal shift in attitude regarding payment of health care costs. Milton Friedman summed up the basic problem during an interview several years ago:
There are four ways in which you can spend money. You can spend your own money on yourself. When you do that, why then you really watch out what you’re doing, and you try to get the most for your money.
Then you can spend your own money on somebody else. For example, I buy a birthday present for someone. Well, then I’m not so careful about the content of the present, but I’m very careful about the cost.
Then, I can spend somebody else’s money on myself. And if I spend somebody else’s money on myself, then I’m sure going to have a good lunch!
Finally, I can spend somebody else’s money on somebody else. And if I spend somebody else’s money on somebody else, I’m not concerned about how much it is, and I’m not concerned about what I get. And that’s government. And that’s close to 40% of our national income.
Thanks for the post tom.
However, this is a old saw. Pointing out health care isn’t a right is a tired statement, and does little to solve the problems.
Transportation, postal delivery, clean streets, clean air, and working in an asbestos free environment aren’t rights either. However, Govt (and science) has determined that these ‘perks’ (LOL) contribute to the public good, and improve productivity.
Is health care considered an entitlement? Doesn’t seem that either me or the patients I see feel they are entitled to healthcare. If we all can get by without paying, great, but no one has come thru the front door demanding free care. So I don’t believe this thinking is of any benefit either.
Telling an unemployed (or fast food worker) 50 year old with diabetes he is not entitled to health care really isn’t going to bring down his blood sugar.
So let’s get on with the solution part of the problem post haste.
Almost every health care professional I know, is of the opinion the entire health care system will explode at some point. Not today, not tomorrow, but at some point in the next couple decades. And almost all now believe that some sort of public health care system can supply the basics (like buses and subways supply a basic transportion system). There is no objection to a free-standing private system remaining for those wo choose that option.
But look at the WHO statistics, and the USA is pretty woeful in delivering health care. Rather than talk about entitlements and rights, lets simply solve the problem.
1. Maldistribution is a problem. It may be that a 15 year old pregnant female in a Houston ghetto doesn’t have the right to free health care; on the other hand it may be VERY WISE, from a public health POV, to supply that girl with health care that may prevent complications of pregnancy, or a bad outcome of pregnancy that means 80 years of problems (life of the child).
2. While people should take reponsibility for there own health, on the other hand business and industry should too. Think about the public health consequences of cigarettes, increasing alochol consumption, toxic chemicals and air, and lard-filled fast food.
3. Poor quality schools (without school nurses), crime and poverty all are horrible from a public health POV.
4. Overwhelming red tape contributes to the dysfunction of the entire system.
While it is agreed that the current bizarre system is inefficient, the distribution of health care problems is likewise. More abuse and neglict in impoverished areas of the city; more crime and assaults; more STDs; more diabetes; more blah blah.
I don’t think making everyone pay for health is the answer (as a matter of fact I pay 1100.00 per month for insurance, and get 800.00 per month in pharmacy bills too; I ask the pharmacy for a small loans app each time).
It seems to me that most people get where they want to go with a combination of public and private transporation. Perhaps use that model.
We need to continue to crusade against those public health menaces like greasy food, poverty, abuse, neglect, poor schools, slums, toxic waste that generate health problems.
And we need to look at the high cost of certain sectors of the health care ‘industry’ that receives inordinate profits (big pharma), and controls inordinate amount of politcal power thru lobbying (bigpharma, we doctors, insurance companies).
🙂