||A Shot in the
Arm...or in the Head?
The YFP's Arron Ring and Jonathan Berry debate the viability
of universal health care as compared to a free market system.
by the World Health Organization in 2000, the United States spends more
than any other nation on health care: 14 percent of its GNP. Even so,
it has the highest proportion of uninsured citizens among industrialized
nations and ranks only 37th with respect to the quality of care. Few deny
that the U.S. health care system is in peril, with rising insurance premiums,
decreasing benefits, and compensation dropping to below the cost of care.
Yet many disagree about the role of government in addressing these problems,
and whether universal health care could provide an effective solution.
The need for
universal health care arises from the responsibility of government to
ensure the natural rights of life, liberty, and property for all. Universal
health care provides a necessary framework to secure the right to life.
With this premise in mind, a system of universal health care should entail
more than just treatment for catastrophic injuries or diseases. In addition
to the striking emotional and humanitarian reasons for broader care, the
current system of emergency-room treatment for the uninsured is not costeffective.
On average, ER visits for nonemergencies cost $383 each, while doctors’
office visits only cost about $60, according to Blue Cross/Blue Shield.
Additionally, uninsured patients who can receive only catastrophic health
care coverage place a greater burden on the health care system by entering
care with more advanced stages of illness and often failing to return
for follow-up treatment.
more fundamental questions about the viability of a universal health care
system remain: who is going to pay for it, and how would it work? A single-payer
national health insurance system offers a startlingly feasible mechanism
for universal health care. Two former surgeon generals and over 8,000
doctors endorsed such a proposal in the August 2003 Journal of the American
Medical Association. Why does a single-payer system make economic sense?
In August 2003, the Christian Science Monitor put it best: “Currently,
about 26 cents on every U.S. health care dollar is spent on paperwork
and administration. Replacing private health insurance companies with
a single government insurer like Medicare, which spends about 3 percent
on administration, would save the country $200 billion dollars annually.”
health care provides an economically feasible framework for ensuring the
natural right to life and offers an effective solution to the current
health care crisis.
As the cost of health care skyrockets and
quality plummets, the crisis today stems
from state intervention that distorts
market incentives. A single-payer system
would exacerbate the crisis, not end it.
The fundamental problem with health
care today is that the purchaser and the
user of care tend to be different people.
Employer-provided insurance, Medicare,
and Medicaid all promote this separation.
Production costs fall because consumers
increase consumption when firms lower
prices. Those providers in turn seek out
technological and economic innovations
to save money, allowing them to cut prices
while reaping greater profits. Quality
increases through the same process, as
consumers will demand more of a product
if producers can improve it.
Single-payer proposals pose the same
difficulty as do employer-provided health
insurance, Medicare, and Medicaid. Such
systems sever normal economic
communication. The amount the user
pays for care does not correspond to the
amount he consumes, so he overindulges.
In this system, more health care will be
consumed than in a free market, so total
costs rise. Government must then either
raise taxes or tolerate shortages,
exacerbating the crisis further.
Local knowledge, such as an individual’s
preferences as to price and quality, cannot
be centralized. Every economic transaction
tells firms where to grow, through signals
only the individual producer can
understand. Markets efficiently ration
goods by driving producers to economize
and avoid shortages, while giving voice to
consumer demand for lower prices and
The assertion that “the fundamental
problem with health care today is that
the purchaser and the user of care tend to
be different people” provides one of the
strongest reasons to adopt a system of
universal health care. The cost of providing
health care in modern hospitals with
today’s technology is too high for any but
the wealthy to afford. It is therefore
unreasonable to expect everyone to pay
for their own health care directly.
The real reason for the rising cost of
health care is not that government
intervention has inflated prices. It is that
insured health care users often abuse the
system while uninsured users strain it to
its limits through wasteful emergencyroom
care. Indeed, the problem is one of
incentives: the insured users have no
reason to decline excessive treatment, and
the uninsured have no financial incentive
to seek preventative treatment.
The argument that consumers will
“overindulge” in a single-payer system is
fallacious, akin to the argument that one
would drive endlessly on the highway if
there were no tolls. Just because there are
no barriers to available health care does
not mean there are no limits on its use.
Moreover, the free-market system focuses
on profits, not on care. What incentive does
a so-called free market hospital have to
operate expensive and highly unprofitable
enterprises such as trauma care?
Ultimately, health care must not be seen
as a for-profit business but as a necessary
and humane service to our fellow man.
If “the cost
of providing health care in modern hospitals with today’s technology is
too high for any but the wealthy to afford,” how would splitting the check
among taxpayers make the bill any more affordable? Unless the “wealthy”
make up more of this country than most liberals admit, the money to pay
for today’s care does not exist.
health care costs so much, poorer people could pay for “pre-modern” care
instead. Just a few decades ago, general practitioners used to make house
calls regularly and inexpensively. Personal attention is a lot cheaper
than a laser, yet it can be just as important to a patient’s health. Doctors
make more money, however, in a system that rewards profligacy, where they
can prescribe “excessive treatment” that “insured users have no reason
health insurance means that no one will have a reason to decline anything.
Bureaucrats will decide who gets what treatment, or costs will explode.
Employer-provided health insurance suffers from bureaucracy, too, but
HMOs hardly evolved out of a free market.
planners should regard the recent budgetary collapse of TennCare, the
Left’s health care poster child, as a readily foreseeable consequence
of their utopian schemes. Government intervention rarely solves problems
created by government intervention. This cure is worse than the disease.
Aaron Ring is a freshman in Branford College.
Jonathan Berry is a senior in Ezra Stiles College
and Managing Editor of The Yale Free Press.