Chicago Boyz

                 
 
 
What Are Chicago Boyz Readers Reading?
 

 
  •   Enter your email to be notified of new posts:
  •   Problem? Question?
  •   Contact Authors:

  • CB Twitter Feed
  • Blog Posts (RSS 2.0)
  • Blog Posts (Atom 0.3)
  • Incoming Links
  • Recent Comments

    • Loading...
  • Authors

  • Notable Discussions

  • Recent Posts

  • Blogroll

  • Categories

  • Archives

  • Having Babies and Having Socialized Health Care

    Posted by James R. Rummel on April 28th, 2005 (All posts by )

    It’s been my experience that most people who favor a form of universal, government controlled health care have extremely unrealistic expectations. They want unlimited resources to be available to everyone, at any time, no matter the cost.

    This subject was recently explored by Susanna at A Cut on the Bias. The subject of her short post was a proposal by the Australian government to limit in vitro fertilization treatments to 3 tries per couple. Any further attempts would have to be funded by the couple themselves.

    That seems perfectly reasonable to me, at least so far as any government controlled health care plan can be said to be reasonable. But Deb over at Accidental Verbosity doesn‘t see it that way.

    Deb details the resource-intensive care that she received during her pregnancy, and she argues that since the care allocated to a healthy fetus shouldn’t be rationed then the procedures to create such a fetus also shouldn’t be rationed.

    Deb makes a good case as long as you accept the base she’s using to build her arguments: that unlimited care is too valuable and politically sensitive to ration. The only problem is that this is a straw man.

    The system cited most often by supporters of socialized medicine is that of Canada. They say that it’s the most caring, the most efficient. That may well be true, but it’s also true that the Canadian system is in trouble, and that it’s only lasted as long as it has by severe rationing. It’s not realistic to assume that, under a universal health care system, everyone who needed it would enjoy the massive amounts of care that Deb did during her last pregnancy. Instead it’s more realistic to expect that she would be denied some forms of pre-natal care that she now has easy access to, even if it results in a stillbirth.

    One form of rationing that was completely unanticipated was that imposed by Canadian physicians themselves, many of whom are cutting back on their hours in response to a lack of financial incentives. It’s gotten so bad that one proposed solution is to import foreign doctors. The simularities to Europe’s solution to an aging work force is astounding.

    The closest thing we’ve had to a Canadian system down here in the US is TennCare, a system to provide government funded health care to eligible consumers. It was a complete disaster, something that compares unfavorably to a natural disaster. (By that I mean that a natural disaster would actually do less damage.) So far as pediatric care is concerned, notice that only 19% of Tennessee’s pediatricians would accept TennCare patients in an effort to protect their income stream. Arguments that doctors would have to accept patients under a blanket government plan ignores the points that I made in the previous paragraph: that there would be less docotrs providing a lower level of care if the finacial incentives were removed.

    Another thing to consider is the incredible sophistication and technical base that supported Deb during her pregnancy. None of that equipment or techniques formed out of thin air. As a commenter points out on this blog post, the Canadian system has practically destroyed the incentives for medical research in that country. The current level of medical technology might be good enough for Deb, but I look forward to more lives being saved and a healthier and longer life span for my children.

     

    14 Responses to “Having Babies and Having Socialized Health Care”

    1. Lex Says:

      James, solid. One thing “…shouldn’t be rationed …” All scarce goods are always and everywhere rationed. They have to be. I think there are four possible ways to do it (1) bidding and buying, (2) queuing, (3) dispensing according to politically determined criteria, which usually ends up being (4) arbitrary dissemination by those in power. If care for infants is “free” then it just means resources which are expended on it will be large and at the expense of other things. This may be a good trade-off, I don’t know, but the problem is that people think they can make the basic reality of scarcity go away by a form of words. Nope scarce goods with competing uses are always limited, and this no more a human construct than gravity is.

    2. Richard Heddleson Says:

      The advantage of rationing via bidding and buying? It provides maximum decentralization of decision making. It is most likely in everyone’s interest for the process to be transparent. It is the only method that stimulates supply of scarce goods by rewarding producers when that is economically possible.

    3. Pogo Says:

      The problem with your arguments is they make too much sense. You are pointing out a law of scarcity and competing interests that is as unalterable as the law of gravity.

      However, 30 years of foucauldian postmodern critique has led to arguments that either ignore such laws or deride them as evil. As a physician interested in economics, I noticed that the paper in JAMA ushering in the latest proposal for a government-run national health care program elicited not a single critique of its basic paradigm, one that had already been proven false.

      That is, despite the fact that the socializm has failed repeatedly throughout the 20th century, not one editor (or reader for that matter) challenged their assumptions. My attempts to rebut this in their journal (and subsequently seven other major journals) were soundly rejected. Pointed criticisms of my papers included the idea that they were “ideologic” (Hayek apparently being an ideology), despite the fact that any plan advocating a social-ist scheme is by nature ideologic as well.

      If I were to post my writings here, your readers would probably laugh at their economic simplicity. But doctors are very often terrible at economics, and the leftist infection afflicting major universities has not escaped academic medicine. Plainly stated, the academic medical establishment does not want to hear objections, because they are, tautologically, right.

      Rejecting any and all such criticism is, in the world of medicine, similar to proposing a new cure-all drug that has no side-effects, but failing to produce any evidence that it worked. Such a paper would never get published. Faux economics is different, because, as I stated, doctors know as much about economics as they do about farming.

      PS: the automated comment screener rejects the correct spelling of “social-ist/ism” due, I suppose, to a string of letters also common to a popular drug for ED.

    4. Jonathan Says:

      I’ve edited the comment blacklist so that it no longer blocks the word “socialism”. Sorry for the inconvenience.

    5. Lex Says:

      But it’s such a filthy, filthy word. Make people spell it s*cialism.

    6. Dave Schuler Says:

      You mis-state the problems with TennCare. TennCare achieved its objectives by re-orienting patients from scarce and expensive emergency rooms to relatively more-available and inexpensive primary care physicians. Unfortunately, this was insufficient to reduce costs sufficiently in the face of health care costs rising dramatically everywhere. If you have evidence of excessive-consumption in TennCare, please present it. Your link only demonstrates that health care is expensive and that physicians are reluctant to take pay-cuts.

      Look, I sincerely wish that neither Medicare nor Medicaid was ever enacted, that all pharmaceuticals were available over-the-counter, and that a market system prevailed in health care. But none of those things are true and health care providers have been subsidized for almost two generations now and have income expectations and financial commitments that would be a lot different if there were a market in place.

      We import doctors from all over the world—particularly Canada (500-1000 docs move from Canada to the U. S. per year) and that raises the cost of health care worldwide.

      If you’ve got a practical, pragmatic, politically possible solution to the real problems with health care, please present them.

    7. Ken Says:

      We’d love to. But all the practical, pragmatic solutions are politically infeasible, and the politically feasible solutions won’t actually improve matters.

    8. Lex Says:

      Ken, that is a counsel of despair. I don’t think it is right. Political feasibility is a matter of building a base, developing policies and presenting them and educating people, which takes time.

      That said, I always stay away from health care issues because the end state looks so simple in theory, but getting there from here looks so daunting that I just focus on other things.

    9. Kevin Fleming Says:

      Re: “If you’ve got a practical, pragmatic, politically possible solution to the real problems with health care, please present them.”

      One thing that is both practical and easy: don’t make things worse by expanding the role of government any further than is currently the case, but rather incrementally shrink its influence over time. Avoid at all costs the nationalization of healthcare.

      Certainly, there are elegant solutions already proposed by numerous authors. My point is, at a minimum we should avoid making things even worse by following other nations down the sinkhole of socialism.

    10. Commander Cornflake Says:

      I think that the national discourse on healthcare ignores a fundamental and uncomfortable truth that Lex alludes to. Namely, that all health care, even the cheapest and simplest forms of health care, are NOT ‘rights.’ Both sides of the political spectrum make noise about the ‘right’ of all americans to recieve good, modern healthcare (more noise on the Left, as this is a fundamentally socialist concept). The unfortunate, and it seems to me fairly obvious, fact, is that health care is a COMMODITY.
      In fact, by supply and demand, health care is one of the most intrinsically valuable commodities that there is- there is no more universal demand than the desire for one’s own life and the lives of those we care for. And the supply of healthcare will always be limited by the fact that medical research and development, equipment costs, and the extraordinarily rigorous training that medical doctors undergo will remain prohibitively expensive.
      Even partly socialized healthcare systems like our curent one are doomed to failure, because it is and will always remain an impossibility to provide ‘something for nothing,’ no matter how much we’d like to pretend otherwise.

    11. -keith in mtn. view Says:

      My experience standing in line for State-Government rationed Milk (overseas, in a semi-socialist region) is that there is graft, corruption, forgery, and tampering that results. Welfare and Food-Stamps are rationed, and still we all hear about the level of fraud endemic in that program? The Washington Post even said, “Welfare fraud is virtually universal.”

    12. Ken Says:

      The biggest problem with our health care system is that it is not, in fact, designed to ensure that people can get care.

      It is designed for the express purpose of preventing people from getting care without approval and close supervision, since letting them hurt themselves is considered worse than letting them suffer without any treatment at all.

      That’s the assumption holding the whole rotten edifice together, and that’s the assumption we’ve got to purge from our culture before our worst problems can possibly be solved. I’m at a loss for how to do that, but that seems to be the thing that must be done.

    13. AMac Says:

      One incremental advance in health care would be to allow the import into the US of cheap, safe pharmaceuticals from Canada. In the last Election Season, one party backed this idea, and the other opposed it for spurious reasons.

      1. Many presecription drugs are, in fact, significantly less expensive in Canada.

      2. Mechanisms for ensuring quality and safety would be neither onerous nor expensive.

      3. Many Canadian wholesalers and retailers would enthusiastically participate in such a scheme, due to large volumes and the prospects for reasonable markups.

      4. At first, some US consumers would see a noticiable dip in the prices paid on many prescriptions.

      …And then…

      5. The major pharma companies will reevaluate their business models. Government-mandated policies have led them to sell drugs at a low cost-plus price in many parts of the world, including Canada. Sunk R&D and marketing costs, profits, and support for future R&D efforts come largely from US sales at what-the-market-will-bear prices. So, with imports-from-Canada as the new paradigm, Big Pharma can (a) ration drug sales to Canada and other markets; (b) “go generic”–e.g. shed research and development; or (c) replace margin-plus pricing to non-US countries with an every-customer-pays strategy.

      6. Price declines in the US would be matched by price increases in the rest of the world, and by declines in investments in new therapies.

      7. A few Americans would ruefully conclude that economic principles apply to prescription drugs, and perhaps to other aspects of the health care system.

      Hmmm. Maybe this isn’t the most brilliant approach, after all.

    14. James R. Rummel Says:

      If you have evidence of excessive-consumption in TennCare, please present it.

      The second link in the TennCare paragraph leads to a blog post at No Illusions. (Look for the words “complete disaster”.) Read the post and follow the links to see that the projected 2008 budget for TennCare would have required 90% of the entire state budget, that families earning a bit more than $56K/year were elegible (or individuals making up to about $37K a year), and that the wasteful spending on questionable treatments and a lousy reimbursement rate to actual health care providers resulted in staggering cost overruns.

      I’m sorry to say this, Dave, but I’m afraid the facts simply can’t be any more clear.

      We import doctors from all over the world—particularly Canada (500-1000 docs move from Canada to the U. S. per year) and that raises the cost of health care worldwide.

      Actually, it only raises Canadian health care costs by making trained doctors a scarce commodity. It lowers American health care costs when a glut of physicians have to adjust their fees in order to stay competitive.

      But you’ve severely misrepresented the situation. The US isn’t actively seeking to recruit Canadian doctors. Instead they’re immigrating all on their own in an effort to finally make some money. (And if you click on the words “lack of financial incentives” you’ll be able to read a newspaper article that explains why.)

      If you’ve got a practical, pragmatic, politically possible solution to the real problems with health care, please present them.

      You’re constructing a straw man. I’m not a Socialist. I don’t demand that everything lead up to Utopia. I’m a pragmatic and realistic man who’s trying to explain the reasons why I think adopting a universal health care system in my country would be a terrible idea.

      The purpose of the post is to prevent disaster by avoiding obvious mistakes, not to solve problems.

      James