American Medical System isn’t Free

Overview
The US healthcare system is an expensive and complex system prone to political and socioeconomic criticism. It is inclusive of a marketplace where medical innovation results in cost increases instead of correcting systemic inefficiencies. In 2011 the Huffington Post reported that healthcare costs would consume a fifth of the US economy by 2020 (Alonso-Zaldivar, 2011). When Congress sent the Affordable Care Act to the White House for signature (Government, 2010) the new law drew the ire of critics claiming the Federal Government, the pharmaceutical lobby and insurance companies maintained an unfair advantage in the marketplace by stemming influence of competition (Alman, 2014; Mark Crumpton, 2013; Sage, 2009). Unlike other areas of commerce and industry the American healthcare system costs more with each increase in technology (Skinner, 2013). Professors and Public Health policy experts Shi and Singh describe the US Healthcare system  as a collection of subsystems characterized by an absence of a central governing agency, unequal access to health care, delivery in an imperfect and multi-player market between financiers, patients and providers,  legal risks that increase costs, awash in new and expensive technology, and a marketplace that focus on quality improvement (Shi & Singh, 2008).

Most modern countries have a strong central government and many first world governments intervene significantly in their economies. Central banks in each of these societies are responsible for the expansion of capital (Goodhart, 1988) and as a result they dominate the influence of business (Sorrentino, 2013). Comparative analysis of healthcare systems across the globe finds state run healthcare with a bias of interventionism in a medical economic model called socialized medicine (Reinhardt, 2009). The challenge with this view is that most systems are looking at through the eyes of collectivist organizations and their governments rather than relationship of the entrepreneur and the consumer. In Japan, where socialized medicine places a huge burden on the government to provide for services and is the norm for an aging population, the finance minister responsible for writing the checks noted that the problems of insufficient resources would be solved if Japan just hurried up and let them die (Tennant, 2013). In places where socialized medicine is touted as a success like Sweden, the citizens of the country are electing private insurance over the state-sponsored product (Tennant, 2014).

The Problem with Other People’s Money
The primary challenge with the US health care system is that the economic value of life saving technology and expertise comes at a person’s most vulnerable moment. In that moment the capital for such an event comes from a third party payer like the government or an insurance firm. Those who purchase insurance or where the government steps in for those who cannot afford to purchase insurance and share the collective cost of healthcare emergencies. When Americans have to decide what kind of system they want, they vote for persons who created this system including those who advocate for others to pay for it by taxing a class of persons and then giving it to those who have not earned it. Americans elected the same Congress who wrote the politically unpopular Affordable Care Act. Whenever a society chooses to use the powers of the state to redistribute wealth through the power of coercion, it inevitably experiences  a flight of capital away from those systems and even development of black markets to correct the deficiencies in the marketplace. This redistribution often becomes a bottomless pit where the need will always exceed the means if the perception is that someone else is paying for it.  While some have argued, this is a Cloward-Piven strategy for social unrest (Corsi, 2014; Hayward, 2014) the Federal government’s unfunded liabilities threaten the national security of the US (Marshall, 2011).

Iconic libertarian writer and free market objectivity Ayn Rand wrote of the challenge of using other people’s money in her work Atlas Shrugged noting:

Do you know how it worked, that plan, and what it did to people? Try pouring water into a tank where there’s a pipe at the bottom draining it out faster than you pour it, and each bucket you bring breaks that pipe an inch wider, and the harder you work the more is demanded of you, and you stand slinging buckets forty hours a week, then forthy-eight, then fifty-six – for your neighbor’s supper – for his wife’s operation – for his child’s measles – for his mother’s wheel chair – for his uncle’s shirt – for his nephew’s schooling – for the baby next door – for the baby to be born – for anyone anywhere around you – it’s theirs to receive, from diapers to dentures – and yours to work, from sunup to sundown, month after month, year after year, with nothing to show for it but your sweat, with nothing in sight for you but their pleasure, for the whole of your life, without rest, without hope, without end … From each according to his ability, to each according to his need (Rand, 1957).

Sometimes the hospital has to incur the expenses due to laws requiring them to render care and this is complicated by more than 12 million undocumented and illegal alien residents accessing the healthcare system (Asbury, 2013). This perspective is further complicated by an aging US population who rather than purchasing their insurance products in conjunction with their employer are retiring and placing more of that responsibility on the Federal Government who has run deficits longer than the boomers have been alive. The same politicians placed into office have failed to set aside these funds like an investment over the years. The insurance lobby realizing this loss lobbied hard for the Affordable Healthcare Act to get young people to buy expensive minimum insurance and defer some of the costs for aging boomers and will use the powers of the state to coerce the young into payment via the IRS to offset these expenses to the society. The complexities of spending other people’s money by insurance companies and the government leave the consumer as a minority voice in a sea of collectivism. There is no such thing as a collectivist voice but the CEO of the insurance company or the lobbyist they spend millions on in Washington that decides how to spend that money becomes the object of other people’s money when it is one, two, three steps removed from the consumer.

Personal Responsibility
When Americans are injured or sick under the current system, a third party such as the government or an insurance company picks up the tab. Furthermore, the resources that are available in the marketplace are correlated to investment. The onslaught of collectivist muscle comes at the consumer from all directions. Healthcare companies and hospitals force consumers into their networks with their providers. Insurance companies do the same and negotiate rates with the hospitals and not the individual consumers. While this purportedly happens on their behalf the Charge-Sheets for hospitals are notorious for overcharging insurance companies because they can (Booth, 2013; Nurses Warn of Ongoing Harm for Patients Needing Care, 2013).

Personal choice is critical to the consumer having control of their healthcare choices and decisions. One way to do this for most Americans is a Personal Medical Savings Account. Medical Savings Accounts allow the invested money to remain with the patient and not the insurance company and also allow the patient to decide where in the healthcare system that money is invested and spent (Ferrara, 2009). These accounts were working well where they were tried with the exception of a small minority of un-insurable cases due to preexisting conditions or inability to acquire insurance due to disability. Presidential Hopeful and Professor Emeritus of Neurosurgery at John Hopkins University Ben Carson exclaimed that a personal solution for these folks would be, “The 5 percent of patients with complex pre-existing or acquired maladies would need to be taken care of through a different system, similar to Medicare and Medicaid but informed by the many mistakes made in those programs from which we can learn. Even this kind of system should have elements of personal responsibility woven into it,” (Carson, 2014).

Fair Market Competition
Problematic is the kind of policy given as politically expedient by the American political class in which compromise or middle of the road policies are promulgated. These policies according to free-market advocate and economist Ludwig Von Mises is a means to a statist and coercive end (Mises, 1954). Any middle of the road solution usually offered by the statists can usually be viewed as a means to an end. In the case of healthcare failures of the market managers to address the business cycle will result in blaming their lack of complete control and thus advocate for redistribution of more dollars and more control. A free market in medical care, would have decreased costs via competition as well as increased access, either privately or through charity, as it had done prior to World War II (Faria, 2011). While not perfect it can take care of people better than the planners by allowing the marketplace to address the needs through entrepreneurial-ship. If more doctors are needed more medical schools can be opened. Even a single sourced medical association limits competition and real elevation of standards where as single point standardization of best practices is a long and delayed process for many life saving practices that sometimes take years to get on insurance registers for payment and thus even decrease medical professionals willingness to learn new techniques from the marketplace when the incentives are not in place to provide them. Competition among medical associations would allow more providers to practice medicine where the AMA over the last 100 years has been responsible for closing medical schools (Kelly, 2011).

Conclusions
While this highlight of some personal and systemic issues is by no means, a comprehensive or exhaustive discussion, it addresses some of the challenges of the current healthcare system by highlighting a few problems and providing a legal framework to function as an alternative to the purported inevitability of the single-payer statist solution. Operating under the principle that markets will always find a way, is the US system goes in this direction with a massive drain on public resources, without reform other markets will emerge– even black ones and consumers will migrate to where their needs are best met.

References
Alman, K. (2014, June 11). How Insurance Companies Have Unfair Advantage. The Lund Report. Portland, OR. Retrieved on May 29, 2015 from https://www.thelundreport.org/content/how-insurance-companies-have-unfair-advantage
Alonso-Zaldivar, R. (2011, July 28). Health Care Costs To Account For One-Fifth Of U.S. Economy By 2020: Report. The Huffington Post. Washington, DC. Retrieved on May 29, 2015 from http://www.huffingtonpost.com/2011/07/28/health-care-costs-economy-us_n_911917.html
Asbury, N. (2013, May 9). The Cost of Permanent Patients. Newsmax. Retrieved on May 29, 2015 from http://www.newsmax.com/Finance/NealAsbury/Immigration-healthcare-illegal-emergency/2013/05/09/id/503579/
Booth, M. (2013, May 13). Facility fees inflate hospital prices for common services. The Denver Post. Denver, CO. Retrieved on May 29, 2015 from http://www.denverpost.com/ci_23236112/facility-fees-inflate-hospital-prices-common-services
Carson, B. (2014, July 9). Better Than Obamacare. National Review Online. New York, New York. Retrieved on May 29, 2015 from http://www.nationalreview.com/article/382261/better-obamacare-ben-carson
Corsi, J. R. (2014, June 11). Congressmen: Obama using “Cloward-Piven maneuver.” World News Daily. New York, New York. Retrieved on May 29, 2015 from http://www.wnd.com/2014/06/congressmen-obama-using-cloward-piven-maneuver/
Crumpton, M. (2013, December 17). Obamacare Gives Big Pharma Unfair Advantage. Los Angeles Times. Washington, DC. Retrieved on May 29, 2015 from http://www.latimes.com/nation/politics/politicsnow/la-obamacare-gives-big-pharma-unfair-advantage-20131217-embeddedvideo.html
Faria, M. A. (2011, September 22). Free Medicine or Socialized Medicine? Hacidena Publishing. Retrieved on May 30, 2015 from http://www.haciendapub.com/randomnotes/free-medicine-or-socialized-medicine
Ferrara, P. (2009, September). Taking Health Savings Into Account. The American Spectator. Retrieved on May 30, 2015 from http://spectator.org/articles/40976/taking-health-savings-account
Goodhart, C. (1988). The Evolution of Central Banks (First). The MIT Press.
Government, U. S. (Ed.). (2010). Patient Protection and Affordable Care Act Public Law 111-148. US Government Printing Office. Retrieved on May 30, 2015  from http://www.gpo.gov/fdsys/pkg/PLAW-111publ148/content-detail.html
Hayward, J. (2014, July 11). Do not doubt the power of the Cloward-Piven strategy. Brietbart News. Retrieved on May 31, 2015 from http://www.breitbart.com/blog/2014/07/11/do-not-doubt-the-power-of-the-cloward-piven-strategy/
Kelly, K. (2011, March 9). The Myth of Free-Market Healthcare: The AMA Monopoly. The Mises Daily. Aubern, Alabama. Retrieved on May 31, 2015 from https://mises.org/library/myth-free-market-healthcare
Marshall, T. C. (2011, September 22). Debt is Biggest Threat to National Security, Chairman Says. DoD News. Washington, DC. Retrieved on May 31, 2015 from http://www.defense.gov/news/newsarticle.aspx?id=65432
Mises, Ludwig Von. (1954). Literature Under Capitalism: The Bigotry of the Literati. In The Anti-Capitalist Mentality (Kindle, p. 33). Auburn, Alabama: Von Mises Institute. Retrieved from on May 31, 2015  http://amzn.com/B004H8G48I
Nurses Warn of Ongoing Harm for Patients Needing Care. (2013). Silver Spring, MD. Retrieved on May 31, 2015 from http://www.nationalnursesunited.org/press/entry/new-data-some-hospitals-set-charges-at-10-times-their-costs/
Rand, A. (1957). Part II- The Sign of the Dollar. In Atlas Shrugged (Kindle, pp. 661–670). New York, New York: Penguin Group. Retrieved on May 31, 2015 from http://amzn.com/B003V8B5XO
Reinhardt, U. E. (2009, May 8). What Is “Socialized Medicine”?: A Taxonomy of Health Care Systems. New York Times Economix Blog. Princeton, NJ. Retrieved on May 31, 2015 from http://economix.blogs.nytimes.com/2009/05/08/what-is-socialized-medicine-a-taxonomy-of-health-care-systems/?_r=0
Sage, B. (2009, April 28). How The Critics Feel About Obama’s Plans to Reform Health Care. About Money. Retrieved from http://personalinsure.about.com/od/health/a/aa042809a.htm
Shi, L., & Singh, D. A. (2008). A Distinctive System of Healthcare Delivery: Summary. In K. Birtcher & T. Chapman (Eds.), Delivering Health Care in America (First, p. 31). Sudbury, MA: Jones and Bartlett Publishers. Retrieved on May 31, 2015 from http://amzn.com/1284074633
Skinner, J. (2013, September 5). The Costly Paradox of Health-Care Technology. MIT Technology Review. Hanover, NH. Retrieved on May 31, 2015 from http://www.technologyreview.com/news/518876/the-costly-paradox-of-health-care-technology/    Sorrentino, N. (2013). Why central banks are inherently crony and undermine the real economy. Against Crony Capitalism. United States of America: Youtube Video. Retrieved on May 31, 2015 from http://www.againstcronycapitalism.org/2013/10/why-central-banks-are-inherently-crony-and-undermine-the-real-economy-video/
Tennant, M. (2013, February 4). “Hurry Up and Die”: The Inescapable Outcome of Socialized Medicine. Retrieved May 30, 2015, from http://fff.org/explore-freedom/article/hurry-up-and-die-the-inescapable-outcome-of-socialized-medicine/
Tennant, M. (2014, January 24). Swedes Choose Private Insurance Over Socialized Medicine. The New American. Appleton, WI. Retrieved on May 31, 2015 from http://www.thenewamerican.com/world-news/europe/item/17472-swedes-choose-private-insurance-over-socialized-medicine

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s