Why Are We Moving Toward Socialized Medicine?
Government intervention in medicine is wrecking American health care. Nearly half of all spending on health care in America is already government spending. Yet President Obama’s “reforms” will only expand that intervention.
Prior to the government’s entrance into medicine, health care was regarded as a product to be traded voluntarily on a free market–no different from food, clothing, or any other important good or service. Medical providers competed to provide the best quality services at the lowest possible prices. Virtually all Americans could afford basic health care, while those few who could not were able to rely on abundant private charity.
Had this freedom been allowed to endure, Americans’ rising productivity would have afforded them better and better health care, just as, today, we buy better and more varied food and clothing than people did a century ago. There would be no crisis of affordability, as there isn’t for food or clothing.
But by the time Medicare and Medicaid were enacted in 1965, this view of health care as an economic product–for which each individual must assume responsibility–had given way to a view of health care as a “right,” an unearned “entitlement,” to be provided at others’ expense.
This entitlement mentality fueled the rise of our current third-party-payer system, a blend of government programs, such as Medicare and Medicaid, together with government-controlled employer-based health insurance (itself spawned by perverse tax incentives during the wage and price controls of World War II).
The resulting system aimed to relieve the individual of the “burden” of paying for his own health care by coercively imposing its costs on his neighbors. Today, for every dollar’s worth of hospital care a patient consumes, that patient pays only about 3 cents out of pocket; the rest is paid by third-party coverage. And for the health care system as a whole, patients pay only about 14 percent.
Shifting the responsibility for health care costs away from the individuals who accrue them led to an explosion in spending. In a system in which someone else is footing the bill, consumers, encouraged to regard health care as a “right,” demand medical services without having to consider their real price. When, through the 1970s and 1980s, this artificially inflated consumer demand sent expenditures soaring out of control, the government cracked down by enacting further coercive measures: price controls on medical services, cuts to medical benefits, and a crushing burden of regulations on every aspect of the health care system.
As each new intervention further distorted the health care market, driving up costs and lowering quality, belligerent voices demanded still further interventions to preserve the “right” to health care: from regulations mandating various forms of insurance coverage to Bush’s massive prescription drug bill.
The solution to this ongoing crisis is to recognize that the very idea of a “right” to health care is a perversion. There can be no such thing as a “right” to products or services created by the effort of others, and this most definitely includes medical products and services. Rights, as the Founders conceived them, are not claims to economic goods, but to freedoms of action.
You are free to see a doctor and pay him for his services–no one may forcibly prevent you from doing so. But you do not have a “right” to force the doctor to treat you without charge or to force others to pay for your treatment. The rights of some cannot require the coercion and sacrifice of others.
Real and lasting solutions to our health care problems require a rejection of the entitlement mentality in favor of a proper conception of rights. This would provide the moral basis for breaking the regulatory chains stifling the medical industry; for lifting the tax and regulatory incentives fueling our dysfunctional, employer-based insurance system; for inaugurating a gradual phase-out of all government health care programs, especially Medicare and Medicaid; and for restoring a true free market in medical care.
Such sweeping reforms would unleash the power of capitalism in the medical industry. They would provide the freedom for entrepreneurs motivated by profit to compete with each other to offer the best quality medical services at the lowest prices, driving innovation and bringing affordable medical care, once again, into the reach of all Americans.
Yaron Brook is the president of the Ayn Rand Center for Individual Rights. The Ayn Rand Center is a division of the Ayn Rand Institute and promotes the philosophy of Ayn Rand, author of “Atlas Shrugged” and “The Fountainhead.”
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Stumble It!
July 29th, 2009 at 10:52 pm
I don’t understand the aversion to a nationalized plan that allows people to not worry “will I loose my house and savings?” if something goes wrong. My mother spent much of the end of her life arguing with insurance people bent upon refusing her medical bills (she had cancer), and I was still getting bills a year after she died. Is this right? I don’t think so.
Another American friend got sick in Italy, had to have emergency surgery for a ruptured appendix and spent a month in intensive care. Even though she’s not Italian the state paid for everything. In the US she would have lost her house.
Last thing: How many of those railing against a national health care plan in the US are willing to renounce medicare and medicade, for themselves or their older relatives?
Kyle
July 30th, 2009 at 7:23 am
Wow! In my opinion this article from the git go was not going to let any thread of reality get in the way of the point it was trying to make. I wonder if ARC is one of those think tanks that decides the point it wants to make then works backwards in writing papers to support its predetermined views of the world.
Right off the bat Mr. Brook says that in the 60s virtually all americans could afford basic health care while those few who could not were able to rely on abundant private charity.
Uhh?
Medicare was enacted because insurance companies were not providing adequate affordable insurance to elderly people and so the elderly were loosing their life savings to medical bills. This makes perfect sense because older people usually require more health care so insurance companies would have to charge them much higher premiums. I doubt that insurance industry shed too many tears over not having to provide coverage to that demographic anymore.
And Mr. Brooks statement: “Those who could not were able to rely on abundant Private Charity”? I would like to see some supporting documentation for that statement, otherwise I would suspect Mr. Brook just made up that little “fact”.
Mr. Brook says that by 1965 health care moved from an economic product that an individual must assume responsibility, to an unearned entitlement. Again Wow! Using that logic shouldn’t public schools fall into the same category? Why should a young child that has yet contributed to society have the “right” to an education?
If you agree with me that a child that has yet to contribute to society has a right to an education, then shouldn’t a person that spent a lifetime contributing to society have the right to health care?
Mr. Brooks says that shifting the responsibility for health care costs away from individuals who accrue them led to an explosion on spending. Isn’t shifting costs that what health insurance is all about!!! I have not been to a doctor in about 10 years. So the ten years of insurance premiums I paid has gone to pay for other peoples treatments, and to of course, the profits of the insurance companies that insured me.
Mr. Brooks says there can be no such thing as a “right” to products or services created by the effort of others. So why should a child have the “right” to an education, as a matter of fact a compulsory education? What about fire fighters, police, the military? Should all these become for profit pay as you go private entities.
Mr. Brooks says you do not have a right to force a doctor to treat you with out charge. Ever walk into a major city’s emergency room especially on a summer weekend? You will most likely find it full of mostly uninsured people who have no way to pay the doctors that are treating them.
My favorite line of all is that “The rights of some cannot require coercion and sacrifice of others”. What the heck about the troops, those drafted and otherwise, that have died in wars to preserve the rights of others!!!!! Mr. Brook is worried about money when many others in this country made the ultimate sacrifice to their countrymen paying it with their lives!
Hopefully we will never live in the world that exists in Mr. Brooks imagination. A world where we happily let our elderly and poor die in destitution, allow our children to grow up to be illiterate adults, and we lock the doors of our emergency rooms to keep out those who can’t pay for the services they need.
All this in attempt to support the withering dogma that what we call “free market capitalism” in this country can solve ALL our problems.