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The One Minute Case Against Healthcare Reform

What does the government mean by healthcare reform?

When the Obama administration talks about healthcare reform what they are really talking about is using the coercive power of the government 1) to force healthcare providers to provide services at lower costs 2) to force individuals to choose the least expensive healthcare and 3) to force people who are not receiving those services (aka taxpayers) to pay for them.

Does everyone have a right to healthcare?

Not in the colloquial sense. Everyone does have a right to healthcare, but not in the sense that the administration uses it. The right to healthcare means that man had the right to take the actions necessary (e.g. working) in order to earn money and spend that money as he sees fit – in this case, on his healthcare. It does NOT mean that other people (or the government) must provide him with healthcare.
Thus, we see that the administrations proposed actions will secure the supposed “right” of everyone to have healthcare paid for by other people by undermining the actual, moral, right of individuals to choose, and pay for, their own healthcare goods/services.
“The end does not justify the means. No one’s “rights” can be secured by the violation of the rights of others.”
“The Cashing-In: The Student Rebellion” Capitalism: The Unknown Ideal, 256.

Should the government use force against its own citizens?

No. The purpose of the government is to protect the private property of its citizens against other citizens (the police) and against foreigners (the army). Any further expansion of the governments power beyond this mandate is not only immoral, but unconstitutional. The simple fact that some group of people chosen by the government (in this case, those without healthcare) would benefit from the governments use of force does not create a moral right to use force. This precept is DeToqueville’s “Tyranny of the Majority” in a practical sense, and is exactly what the Founding Fathers intended to protect us against by founding the USA as a republic backed by a bill of rights, instead of as a direct democracy.

Why is the government’s initiation of force immoral, if the goal is to benefit the “public good”?

“Just as no individual has the right to initiate force against anyone, neither does any group of men, in any private or public capacity. It is immoral to initiate force against any individual for any reason. This includes the initiation of force for “the public good.” The “public” is merely a collection of individuals, each possessing the same rights, and each being an end in himself. Any attempt to benefit the “public good” is an immoral attempt to provide a benefit to one group of individuals at the expense of another. In a free society, no individual benefits at the expense of another: men exchange the values they create in voluntary trade to mutual gain. The rule of law in a free society has just one purpose: to protect the rights of the individual.”
The One Minute Case for Capitalism: HeroicLife

Regardless, can the government lower prices of healthcare services?

Prices are determined by the marginal value of a good/service, not a government edict. If the government forces providers to set the price of a good/service below its cost, providers will no longer provide the good/service. If the government forces providers to lower prices, but not to lower them below cost, the government will be redistributing the profits of the HC provider to the HC consumer – thereby starving the R&D engine of modern medicine of its much needed fuel, capital.

Well then, how can the prices of healthcare be lowered?

The price of HC, like any other good/service, can only be lowered through increased productivity and innovation. Productivity in the production of healthcare goods comes directly from the concerted rational effort of those companies who stand to profit from that productivity – big pharma, providers, payers, etc. Stripping away the reward for their productive achievements – profit – severely dampers the incentives for the companies who provide HC goods/services to continue improving productivity and driving innovation. Thus, the only way to properly incentivize lower HC costs is by allowing entrepreneurs and businessmen alike the freedom to fully profit from the risky investments they make in healthcare innovation and productivity improvements.

What will be the direct results of the governments actions?

First, on taxation. The increased taxes proposed to finance healthcare reform, especially those on the rich (who create most of the value in the USA) will serve to disincentivize productivity and innovation.
Second, on providing healthcare. The proximate result of the governments proposal will be rationing, in its purest sense put forward by Ayn Rand in a letter to a friend “[Rationing means] to distribute [goods and services] in a certain particular manner–by the decision of an absolute authority, with the recipients having no choice about what they receive.”
Rationing, it must be made clear, is not the same as the distribution mechanism that occurs in a free market – where the price of a good determines how it is distributed – primarily because in a free market distribution decisions are made by individuals volitional choices, whereas in a rationed market distribution decisions are made by government edict. The government’s actions, in this case, will effectively eliminate some (if not all) of the choices you have in determining the way in which you receive healthcare.

What, then are the real drivers of our health care problems?

Primarily, that no free market currently exists in healthcare. Massive amounts of regulation by the FDA and other government bodies result in dramatic increases in the cost of medicine. Using Big Pharma as an example, the government has two quantifiable impacts. Directly, the cost of developing a drug in compliance with FDA processes costs roughly ~$1 billion per drug, money that would otherwise be used to fund further innovation or be passed on to consumers in the form of lower prices. Indirectly, the extended time it takes for the FDA approval process (roughly 10 years from patent application to market introduction) cuts the effective life of a pharmaceutical patent in half – stripping the PharmaCo of half of its potential profitability. (Barrons, June 2, 2003 Editorial Commentary: Gary Hull: Patent Piracy.)

Further reading

 

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The One Minute Case Against Socialized Healthcare

There is no right to healthcare

The United States was founded with the declaration that all men have the right to “life, liberty, and the pursuit of happiness.” The Founders recognized that all men have a moral right to be free from the coercion of others, as long as they allow others the same freedom. They believed that rights do not impose a positive obligation on others, but only the negative obligation to restrain from the initiation of force.

The claim that there is a “right to healthcare” violates the principle of individual rights because it requires that the liberty of doctors and the property of taxpayers be violated to provide for others.

The myth of “free” healthcare

It is a common belief that when government provides something, it is free or cheap. But politicians cannot create wealth – they can only redistribute it. Money for all government spending comes from business – whether by entrepreneurial investment, the wages of patients, or taxes.

Whether by price controls of outright nationalization, when governments make prices artificially low, demand skyrockets, and shortages result. Politicians respond by passing ever more regulations to control costs. These regulations stifle innovation, drive up costs, and force healthcare providers out of business. The end result is to replace capitalism, the greatest wealth-generating system known to man, with an onerous system of central planning.

Capitalism cannot guarantee that all our medical needs will be provided for – no system can do that. But it does give entrepreneurs the incentive to compete to provide the best possible service they can. Centralized socialized systems have no incentive to improve service or to try bold new techniques. Politicians can force prices to be artificially low, but they cannot lower costs – they can only drive doctors, hospitals, and drug companies out of business.

The victims of “universal” healthcare

The waiting time for treatment in Canada varies from 14 to 30 weeks. Waiting lists for diagnostic procedures range from two to 24 weeks. Some patients die while waiting for treatment. To stop sick people from circumventing the “free” system, the government of British Columbia enacted Bill 82 in 2003, which makes it illegal to pay for private surgery. Patients waiting for critical procedures are now forced to seek procedures in the U.S. and doctors are abandoning Canada in droves. Cleveland, Ohio is now Canada’s hip-replacement center. Ontario is turning nurses into doctors to replace some of the 10,000 doctors who left Canada in the 1990’s. 1 2

What will patients do when it is illegal to seek private medical treatment in the U.S.? Politicians are already working towards that goal. State and federal regulation impose onerous regulations which forbid insurance companies from offering services such as basic coverage for emergencies by requiring coverage of many types of procedures. Medicare forces doctors to follow 130,000 pages of regulations. Critics often attack the “capitalist” nature of American health care system. The reality is that the government now pays for 50% of health care, and closely regulates the rest.

Healthcare is only affordable under capitalism

If a society is not wealthy enough to afford healthcare, health socialism will not make it richer. Cuba, a poster child of socialist healthcare schemes, spends $229 on healthcare per person each year, while the U.S. spends $ 6,096.3 Premium services are available only to paying foreigners, while natives must bribe doctors for timely treatment and bring their own towels, bed sheets, soap, food, and even sutures.4

A government can decide to replace individual choice with state-mandated decisions of what goods and services are more important for the “common good.” But it can only spend on one area at the expense of another. If Cubans are not totally deprived of medical treatment, it can only be at the expense of all other goods. A doctor’s salary in Cuba is 1.5 times the median at $15-20 per month. 5 A telling sign of their deprivation is the Cuban suicide rate, which is the highest in Latin America and among the highest in world. Cubans in Miami on the other hand, kill themselves less often than other Miamians.6 When they risk their lives in leaky boats to escape to the U.S., the right to make their own decisions regarding their health is among the freedoms they hope to gain.

References:

  1. “Free Health Care in Canada” by Walter Williams
  2. “Do We Want Socialized Medicine?” by Walter Williams
  3. Reuters: Health care in Cuba more complicated than on SiCKO
  4. BBC: Keeping Cuba Healthy by John Harris
  5. “An Evaluation of Four Decades of Cuban Healthcare” by Felipe Eduardo Sixto (PDF)
  6. Miami Herald: “Study: Suicide epidemic exists under Castro” by Juan O. Tamayo

Further reading:

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