Sunday, September 29, 2013
It is then to Steyn's credit that he distinguishes politically between Europe and North America when assessing the merits of national health policy. In his latest op-ed Steyn bores into Europeans and "progressive" Americans (progressive in quotes) for rag[ing] at the immorality of the U.S. medical system (no quotes around immorality). Well, not all Europeans would be given to rage, but as a group they would surely deplore the U.S. not recognizing universal access to affordable medical care, if not as a fundamental human right, then simply as a hallmark of a modern Judeo-Christian civilization. Truly, Europeans of no political stripe would feel comfortable with this particular American exceptionalism. To them national health is not a question of political beliefs or social justice but one of cultural hygiene. This is about who we are. We don't look at sickness and decrepitude and see bona fide commercial opportunities.
But speak to a true GOP patriot, or Mark Steyn, about virtues of a profit motive in dispensing health care and you may as well be talking to a Saudi cleric about the conjugal fitness of a nine-year old schoolgirl. There will be something missing in the viewpoint, some essential insight that says, no, this cannot be right today, even if it may have been tolerable before. Why is America opposing universal, simple, national Health Care one-hundred and thirty years after Bismarck ? Glad you asked because it's the wrong question. The question should be, who in America opposes that ? The answer of course is, first it is those who make big money from commercialized medicine as it is today. Who else ? Those who will act as their advocates (for some of that money, of course). Who else ? Those who can be persuaded by the ones who benefit from the status quo and their selfless campaigners, that the prospective users of health care benefit from paying way too much for what is provided to them. That's about it, folks. Everyone else must be, pace Steyn, an un-American alien or a liberal stooge.
And yet the case against the commercial health insurance is fairly simple to understand. It is, frankly speaking, an institutionalized robbery. There can never be fair market value in the provision of health services, because the effects are imponderable. When you insure a house, a vehicle, family jewellery, the object is specific and the covered losses are specific. You don't cover a workshop machinery wholesale against general, non-specific breakdowns. There is no point of doing that since most of the hardware will break down sooner or later and the accumulated premiums need to assure the insurer a return on investment. The insurer would have to plot claims losses over indefinite service life of the machines, and the risk of their breaking down rises exponentially as the workshop ages. This would make the premiums too high in the early years of the coverage to compensate for the latter years. The insurance scheme would not be attractive for the buyer if there were scores of insured parties coming into the picture, subsidizing the older workshops, without guarantee of return if the party goes out of business. It is, as Steyn says of Social Security, a Ponzi scheme. (He of course liberally overlooks the small detail that no Charlie Ponzi is actually stealing from Social Security). As long as you, the insurer, can build up clientele, you are ok. As soon as the workshops start to break down, they no longer present a viable risk. Statistically, they will continue to break down with an ever-increasing frequency. If you don't get enough healthy workshops to pay for the sick ones, you are out of business.
If health insurance is a commercial contract then a gas station holdup is a commercial contract. You empty the cash register; the robber lets you live. Fair exchange, isn't it ? What's a few bucks compared to human life ? Whoa, the market economist will protest: a business transaction assumes a voluntary exchange. How could a holdup be fair business if one side is forced to transact by threats against their life ? Good observation, I say, and one that directly addresses commercial health services. So, what is voluntary about health insurance ? Do you want to pay us, ma'am, or would you prefer to kick the bucket ? It's up to you, hey, no pressure. How about not insuring your kid ? Hey, don't get all worked up about it ! It is clearly a commercial option if your kid has just had a bone-marrow transplant operation. Your premiums are going to go through the roof ! Think it over !
Yes, the element of fraud is built deeply into the medical insurance business. People who need medical insurance the most are by definition the least attractive customers to the providers. Neither side actually wants to transact business over anyone's health. A person with a pre-existing condition knows his buying insurance only hastens his bankruptcy (which of course would make him eligible for Medicaid) and an insurer knows that such a person does not ask him to be a an "insurer" but a benefactor. Both parties will have a built-in interest to defraud the other, by misrepresenting on the one hand, the state of one's health, and on the other, the benefits of the policy.
Steyn becomes laughable when he affects that a National Health Care system is impossible in the USA logistically because it is a country of over three hundred million. Really ?
I am entirely ok with the assessment that Obamacare is a dud that lacks the thing that Obama lacks: strength of conviction. It will be a bureaucratic nightmare, no doubt. It will be a confusing Byzantine labyrinth, full of loopholes. People and companies will be forced into exchanges that are inferior to plans they have today. Steyn has the right gut feeling about this. Where we differ is that I believe that the the hope for a true health care reform in the US was destroyed the moment the president abandoned the public health insurance option. A single-payer system is the way to go, and a robust national health policy probably cannot be effected without it. The government-run insurance, competing with private providers, is a much simpler and much more effective tool, doing what governments around the world have been doing for decades and in a number of areas other than health care. Setting minimum standards, modus operandi, ensuring funding through income tax, or payroll tax provisions. All this of course is doable in a country that figured out how to put people on the moon. One cannot get rid of government bureaucracy but one can right-size it. A government-run national health service in this regard would be much easier to administer (and police) than multi-tiered government subsidies, a myriad of local "marketplaces" and co-ops, state-run programs, Medicaid and Medicare. No, the problem with Obamacare is not that National Health Plans are too complicated for a country like the US as Steyn argues. It is simply that you cannot effect a health reform in the US if you are willing to underwrite a political compromise that surrenders its most effective tools.