Calling It Reform Doesn’t Make It Work

“Government is a health hazard.”

-P.J. O’Rourke, The Liberty Manifesto

    Any attempt to create a national health care system is certain to backfire unless some basic reforms are undertaken first.

    The problem with health care is a problem of supply. There is not enough to meet demand, so the market rations it. Giving more people money for health care will only raise the price to absorb the extra dollars, without increasing the amount supplied by one iota. In fact this is exactly what has happened over the last several decades as health insurance coverage has broadened. (Insurance also creates huge amounts of paperwork which eats up the doctor’s valuable time, without contributing anything at all).

    We have an artificial bottleneck on the health care supply, created at the instigation of the AMA. The educational requirements for physicians (and even nurses) are absurd. In the US, to obtain a prescription for a common antibiotic you need the permission of someone with five to ten years of expensive university education, much of it unrelated to medical practice – the permission to buy a medicine will often cost you many times more than the medicine itself. Yet you can easily look up the side effects and interactions of any medication for yourself, and then you will know more about it than the doctor probably does. The only experts on medications are pharmacists – who aren’t allowed to prescribe.

    If you thought the ten-year training makes our doctors better, think again. A good third of the curriculum has nothing to do with medicine at all, and hardly any of it gets to the business of actually diagnosing illness and knowing the right treatment (and you could look the latter up easily enough for yourself). When a new American physician goes into practice, her useful training is just a couple of years. Can your doctor solve integrals, read French, and debate the merits of Confucianism? Do you care? Well, that’s a good deal of what you’re paying for (see “Education is Class Warfare” for more ranting on this topic). We spend more per capita on health care than any other country, but we have a second-world life expectancy.

    In fact nurses could do the great majority of what doctors do, and increasingly in most states the highest rank of nurses (PA/NP) are doing so – which has led to whining among doctors that the PAs should have seven years of education, which of course would cut down on the competition and preserve the ability of doctors to bleed you dry.

    The claims that high health care prices are caused by liability issues or by the uninsured are lies. Rather, it works the other way around; people sue doctors because they can’t afford the bills, and health care was relatively much cheaper when few people had insurance. It’s the insured people who drive up the cost, because people consume health care more readily when they don’t pay for what they use. Malpractice suits only result in the indigents’ costs being passed on to the insured which they would be anyway. Making health care affordable would eliminate the lawsuits and the need for insurance for ordinary medical expenses, not the other way around.

    Lack of insurance is NOT the problem. Less than a fifth of the population is uninsured. Furthermore, many of these people choose not to carry insurance because they don’t feel that it’s worth the price – they are mainly younger people without health problems, who are indeed cheated by group health plans. If they do have a health problem, the uninsured do not receive full medical care – their only option is to go to the emergency room, which they usually avoid, and even then hospitals will deny them care to the greatest extent possible. Of the care they do receive, a large portion is paid for by themselves or public assistance. Uncompensated care for uninsured individuals contributes only a small fraction of the total demand for health care – less than 5% even at the outrageously inflated prices which the uninsured are billed.

    Giving more people insurance, however it is paid for, can only increase the demand for health care, and it will do nothing to increase the supply. More insurance = just as many people go without care, but the price goes up.

    The market will not help with this problem – rising incomes in the health care industry cannot draw enough people into it. The incomes of doctors have gotten so ridiculously high that further increases actually cause a drop in the supply, as doctors work fewer hours, take more vacations, and retire earlier. (The price supply curve for the time of physicians has a negative slope, for those who know what that means). Can anyone remember when doctors worked all week like normal people and didn’t retire until old age?

    Even if more people want to go into medicine, they can’t. The supply of trained medical personnel is strictly limited by the capacity of the medical schools. The tuition goes up, of course, to meet the rising demand, and graduates have incredible mountains of debt, but their number is not much increased. Even if it was, million-dollar incomes don’t necessarily attract the kind of people into medicine who ought to be there. Who would you want for a doctor, the person who cares at least a little about your health or the one who only wants a new Rolls Royce every year?

    The only way to bring down the cost of health care is to increase the supply. We have to stop squandering our limited education resources on superfluous crap, build more medical schools and hospitals, and train more doctors, nurses, therapists, lab technicians, radiologists, etc. etc. That won’t happen unless it’s done directly and with public funding. Anything else will just result in money being drained into the existing system, which is a proven and effective way of screwing you (literally) to death. If the market were capable of correcting itself or even reaching equilibrium, it would have done so long ago.

    We need to eliminate the absurd barriers to entry into the medical professions. If you’re willing to pay extra for a doctor who can discuss Nietzsche vs. Stirner with you, go look for one. We need shorter, more focused education. We need increased roles for the under-utilized and less over-educated RNs and LPNs, and for pharmacists.

    We need to make medical training accessible to any young person with suitable ability and inclination, not just the wealthy. That means not only building more medical schools, it means 100% public funding for the students. Sounds like it would cost a lot of money? Wouldn’t it be a bargain compared to the blood money we’re putting up now for shitty insurance and three-minute doctor visits?

    We need to eliminate the prescription requirement for anything that’s not genuinely dangerous, including lab procedures. If you want birth control or a blood test or an X-ray, you should be able to get them at the provider’s cost without having to bribe a millionaire doctor as well.

    We need to curb the pharmacy giants. If they can’t make a profit selling medicines at less than 60000% markup, I’m sure the government could manage to produce and distribute patent-expired medicines for a lot less. Newer medicines are usually only a marginal improvement anyway, if at all.

    We need to put a ceiling on what doctors can charge for services, not just to bring the prices down but to make doctors take on a few more patients to pay off their Rolls Royces.

    We need to stop providing insurance for routine health care. Will some people do without? Yes, at least until supply increases. Some people are doing without already. It’s the supply that determines how many people get health care – insurance only determines which people. The federal government can lead the way by changing the insurance it provides – Medicare, Medicaid, employee benefits, etc. – to eliminate coverage for minor medical expenses. To make up for it, they can provide complete coverage for catastrophic medical expenses.

    Arguably, we need a national health care plan that would insure everyone against catastrophic health care costs, so no one would face bankruptcy – or death – simply because they are unable to afford insurance (or are cheated by an insurance company). This would also reduce employment overhead and make it much easier for businesses to hire new employees. For minor problems or elective surgery, no insurance should be provided or allowed – that would discourage people from wasting the doctors’ time with their hangnails, and eliminate the need to fill hospital beds with patients who only need them because they are too heavily insured (hence profitable) not to be admitted. Vaccinations and preventive screenings should be covered only if that is cost effective in reducing major care costs.

    With prices under control and individuals bearing the cost of their own routine doctor visits, everyone should be able to pay for their own catastrophic health insurance without drawing on public funds – but if not, so be it. Maybe public insurance wouldn’t be needed – but given the reputation of insurance companies for cheating people, I think it’s just as well that they be replaced with a public policy that cannot raise your rates or cancel your coverage when you get sick.

    What we do NOT need is increased health care coverage without first addressing the problem of supply. This will accomplish nothing but driving the prices up even faster.

    We also do not need a government-operated health service. Government bureaucrats are certainly not going to do a better job of managing hospitals than is already being done, and instead of rationing health care based on ability to pay it would be distributed by political preference – a nightmare for anyone not living in a major city, given the nature of the administration likely to implement such a plan.

    What we do need, first and foremost, is to abolish the AMA, one of this country’s best funded political lobbies. They are the ones responsible for the health care crisis, and nothing can be done about it as long as they have power. To be on the safe side, we should probably also abolish every Congressvermin that has taken their money. That should eliminate about 535 of the bastards. At the very least we should force them to use any public health care that they foist on the rest of us.

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