But those physicians have a problem, of a sort that “getting government out of medicine” doesn’t solve.
I’ll describe the problem in a moment; but first, an economic interlude:

When special interests get special grants of power from government, they benefit, of course. But the benefits—what economists call rents—are not static. Over time they tend to dissipate, because the prices of the factors of production required to obtain them are bid up. A new market equilibrium is formed. Some examples:

• The chattel-slave system present during the first century of this country’s existence gave the lie to the noble words of the Declaration of Independence that all men are created equal. I have much sympathy for abolitionist William Lloyd Garrison’s famous epithet that, because it sanctioned slavery, the Constitution was a “covenant with death and an agreement with hell.” But slavery persisted. Economic historians have asked why. Nobel laureate economist Stanley Engerman, in his work Time on the Cross, coauthored with Robert Fogel, investigated the tricky economics of slavery. Do slaves financially benefit the slave owner? One would think they must, and at first that had to be true. But one had to purchase slaves. What is the “market price” of a slave? In theory it would be the same as with any other long-term capital good: the discounted marginal value of the revenue stream the slave could generate over his lifetime of work. People who bought slaves before markets were well established may have benefitted, but over time the economic benefits of slavery were transmitted down the structure of production. So the slave owner ended up paying, on average, the discounted value of what the slave would end up producing. This is not to say that slave-owners therefore had no interest in maintaining the slave system. While not making large profits in holding slaves, they were at risk of incurring large capital losses if slavery ended.
• Few people think today that Social Security is a good deal. Young people doubt it will be around when they retire. Middle-aged people and those recently on Social Security know they could have done better had they been allowed to invest the money themselves in a diversified low-risk portfolio. Granted, those who turned 65 in the early years after FDR began the program benefitted, as they received benefits without incurring costs. But those days are long gone. Now people on Social Security may only break even, and surely in the future they will suffer a financial loss. Nonetheless, current recipients don’t want the system to end, because they’d lose even the little money they’re counting on.
• In New York City and other large metropolitan areas, before you can legally drive a taxi, you have to purchase a medallion (license) from the government. The nominal price of a medallion is not high, but to restrict the supply of cabs the municipality sharply limits the number sold. So (as with ticket scalping) in the resale market the price is much higher than the face value, sometimes several hundred thousand dollars or more. The system benefitted the taxi companies operating at the time licensing was enacted—unsurprisingly, these were the very companies that lobbied for them—because restricting medallions restricted taxi supply and increased the amount the companies could charge their customers. But it didn’t help make a larger profit for the taxi owners who came along later, because the larger fees they were able to earn from a lower supply of cabs were offset by the exorbitant cost of the now-expensive medallions. And yet, although making only market incomes, the current taxi owners have every incentive to maintain the medallion system because eliminating it now would cause them an even greater loss when the market price of medallions fell to zero.

What does any of this have to do with medical care? Medical licenses are like taxi medallions. The AMA assiduously sought the licensing of medical professionals from its very beginning in 1847. At that time, ironically, schooled physicians had little more to offer patients than charlatans did and often caused more harm than good through what was known as “heroic therapy,” treatments like leeching and the use of arsenical purgatives. Finally, about a hundred years ago, medical services were cartelized. After the release of the Flexner Report (1910), the number of medical graduates declined by approximately half over the next decade, a decrease falling disproportionately on minority and female physicians.

How Much Training?

The question is not whether it’s a good thing to have better-trained doctors; the question is whether overtraining is possible, and how to know without market competition whether we’ve reached that point. A recent physician survey asked if doctors thought every M.D. needed all the training he received to be able to provide high-quality care. Many respondents answered no.

Perhaps doctors as good as those currently practicing could be trained in six or seven years—rather than the 12 or more today. Perhaps a combination of less human training but better computer diagnostics would be of value. Perhaps an apprenticeship model would work better than the current didactic educational model. Without a competitive market, there’s no way to tell.

No doubt most physicians are sincere when they say they can’t imagine a system with less training that would protect the patient from charlatans. But it’s also true most citizens under Soviet rule couldn’t imagine how shoes would reach market without central command, and no doubt at least some plantation owners were sincere in their concern that if slavery ended, the slaves would not know what to do or where to go.

Most everyone has met a bad doctor. And yet he, too, spent four years in medical school and passed the boards as presently constituted. If quality were the only consideration, isn’t that evidence that four years plus residency is not enough? Should medical school be eight years long? The point, of course, is that extra training before practice has a cost as well as a benefit.

Just as the economic rent (the excess earnings over the amount necessary to keep the factor of production in its current use) from taxi medallions was dissipated over time as the cost of obtaining the medallions increased, so too the economic rent of a medical license over time does not go to doctors but rather to those who can charge doctors more to meet the license and practice requirements. In the decades after Medicare spending increased the income of physicians, the price of medical school skyrocketed. So while licensed doctors made more money, becoming a doctor with a license cost more money. Doctors all complain about the high cost of malpractice insurance, but few realize that one reason such insurance commands a high price is that doctors can pay it.

Trouble Breaking Even

Current doctors have all paid huge costs to be where they are today. Yet many of them describe trouble breaking even financially, even though the average doctor makes a great income compared to the average American. Like those currently collecting Social Security, they would be hurt by a change in the system that lowered their incomes.

So most doctors do not really want “less government” in health care. They want the type of government control and regulation that restricts supply and limits innovation to that which directly benefits the medical cartel. They don’t want nurses doing things—even simple things—without physician supervision for the same reason dentists don’t want dental hygienists to do even simple basic cleanings without dental supervision. They prefer to view ancillary personnel as subordinates rather than competitors. Like most other licensed professionals, they complain only about the regulations that harm them to the benefit of others, not those that benefit them at the expense of others.

Society was better off ending slavery and would be better off ending the Ponzi scheme of Social Security and the legal cap on taxi medallions. But there are always special interests who will be hurt by socially beneficial reforms. No one likes to see himself as a special interest. But physicians as a group would likely be financially harmed by a true free market in health care, one that ended not only the burdensome regulation doctors all complain about but also the restrictions placed on who is legally allowed to offer services labeled as “health care,” restrictions that redound to physicians’ benefit.

Fortunately for the physicians, almost no one is calling for a free market in health care. Doctors want regulations that free them to practice as they wish, while still having the government assure that everyone can get health insurance and thus pay doctors for practicing as they wish. Patients want as much care as they need and desire, paid for by others. Insurance companies want to maintain their cozy relationships with state regulators, built up over years, and not have to compete nationally, and are therefore opposed to calls to end the prohibition of interstate sales of health insurance. Everyone calls for help from the State, which, as Bastiat pointed out, is the fiction by which everyone tries to live at the expense of everyone else.

The government cannot produce or purchase an infinite amount of health care. Decisions have to be made about what the right to health care includes: Does it include free visits to the doctor anytime you want? MRIs and CTs to check out every pain? Dialysis and kidney transplants for all? Free paid leave for every bout of depression? Experimental therapy? Any and all preventive screening tests? We could spend the entire federal budget on health care and not provide all of that to every American. A right to health care does not guarantee you’ll have all you might want or need.

It’s not only knowing how much to produce, but what types of things to produce. We treat K-12 education as a right and expect the government to provide it. As a result, over the last 40 years the amount of money taken by government at all levels to run K-12 education has almost tripled on an inflation-adjusted per capita basis. But national testing in math, science, and reading skills shows no improvement, according to the National Center for Education Statistics, Digest of Education Statistics 2008.

Clearly, while the government provides something it calls “education,” it is not particularly successful at educating students. Making central decisions on how to educate–such as the “see-say” method versus phonetics or having the same teacher for all classes versus different teachers for every subject–leads to everyone’s suffering if good choices aren’t made. There is a lesson here for the more complicated provision of health care, as we talk about “expert panels” determining “the” way to diagnose and treat various medical ailments.

Just because something is a right doesn’t mean in practice it can’t be restricted. The “right” to K-12 education doesn’t include home tutoring or guarantees of tasty lunch choices in the cafeteria. Even if health care is viewed as a right, it may not include the coverage you hope to have.

Rights Don’t Guarantee Access

The Supreme Court clarified, in the 2008 District of Columbia vs. Heller case, that the right to have a gun to protect your own home is an individual right. The Supreme Court was interpreting the Second Amendment, but the amendment had been operative for over 200 years. A right doesn’t guarantee easy access. Plaintiff Heller had to spend several years and over $1 million to clarify what that right meant. And such clarification is by no means over. While you have a right to own a loaded gun in your own home in a federal enclave like the District of Columbia, the Supreme Court has yet to rule whether that right extends to the states–whether, in the vernacular, it is an incorporated right. Chicago has a total gun ban, and it’s taken two years post-Heller for the Supremes to clarify the Second Amendment’s further extent. DC is still arguing that while people may “keep” guns in their home, post Heller, District residents may still not “bear” them, take them beyond their homes. That requires yet further adjudication. So while Americans have a Second Amendment right, and have had it for over two centuries, it’s not yet clear what is included. And of course in the future, depending on the political makeup of the Court, Heller could always be overturned, as Brown overturned Plessy. Or an amendment could be added to the Constitution to nullify the Second, as the 21st nullified the 18th.

A right to health care faces similar challenges. Getting needed care through the political process takes time. Imagine you have a disease with a cure the government thinks is too experimental, too risky, or not sufficiently cost-effective. You have a right to health care, they say, just not that health care. But you need it, so you do what is typically done to defend your rights in the United States: You lobby the government; you write letters to your congressman; you speak before government committees; you encourage friends and relatives to help; you take time off from your job to do all this. You devote your remaining time on earth to getting the coverage; you raise money for candidates who say they’ll support such coverage. And you’re successful. A decade after your quest began, eight years after you died, the government starts to cover the treatment you needed. You had a right to health care, but wouldn’t it have been easier just to buy it (even if it took some charitable donations to help you)?

The last paragraph is more than hypothetical. In April 2005 England’s National Institute of Clinical Excellence (NICE) issued a press release, “NICE Lifts Restrictions on Access to Bowel Cancer Treatments.” It announced that English and Welsh patients could soon receive the same chemotherapy for advanced colorectal cancer that European and American patients had already been receiving for three years.

The bottom line: Expensive medical therapies are typically available in the United States years before they are available in countries with universal health care. Politicizing health care by making it a “right” simply pushes health care decisions into the political process, routinely leading to delays.

The Right to iPods?

People don’t have a right to iPods. They just have iPods. People who want them buy them. They were once expensive, but have come down dramatically in price in a remarkably short time; now much better units–more memory, more functions, smaller–cost less than half what the original units did. Some claim health care is special, that similar price drops can’t happen there. But when the market is allowed to work–in Lasik eye surgery or cosmetic surgery or when patients with health savings accounts shop around–similar price drops are seen. It’s only when third parties, like the government or large, highly regulated insurance companies, pay for health care that prices go up every year.

Is health care a right? Do we even want it to be a right? People fight about rights. Abortion has been recognized as a right since the 1973 Roe decision, but most Americans want restrictions on that right and many want it taken away. That is a risk of making things rights; rights can be modified, restricted, curtailed, or eliminated, depending on the political climate. Do we want people to be fearful that their right to liver transplants–or hair transplants–might also be someday taken away? Do we really want people feeling they must man picket lines on a regular basis to protect their “right to health care”?

Rights are like money. Both are good to have, but inflating them–believing that every good thing must be a right–makes them less valuable. Is health care a right? I hope not.

“All 58 Democrats and two independents voted to approve the first — and most crucial — of three motions needed to break off action, as the Senate entered a fourth week of debate on the bill. All Republicans voted no.” (Wall Street Journal, Monday)

Now let’s see if the public option gets added in committee.

FEE Timely Classic:
“Why Medicine is Slowly Dying in America” by Michael Hurd

New business … and a new master.

FEE Timely Classic:
“The Awesome Powers of Government” by Murray Weidenbaum

In his April 11 New York Times column, economist Paul Krugman discusses the minor trouble then-presidential candidate Hillary Clinton got into when an anecdote she told about a woman who died because she didn’t have medical coverage was found to be inaccurate. Clinton had used the story in support of her proposal for mandatory medical insurance. Krugman argued that, true or not, the story makes “a valid point about the state of health care in this country.”

On April 14 Krugman conceded that the woman did indeed have insurance, but he maintained that since many people do die from lack of insurance, his earlier column was worthwhile anyway.

I agree that the merits of Krugman’s argument do not stand or fall with the veracity of the anecdote. But while Krugman’s attitude seems to be, “Even if the woman was not uninsured, it’s still true that we need universal care to avoid similar tragedies,” mine would be, “Even if Clinton’s anecdote were accurate, it wouldn’t demonstrate that the only way for society to avoid such tragedies is through coercive national health insurance.”

Part of the problem in discussing this issue is the tendency to conflate several distinct concepts: the ideas that 1) everyone should have access to health care, 2) everyone is entitled to equal levels of health care, and 3) a coercive federal mandate is the only way to accomplish either of those goals. The first is true, but does not imply the second. I doubt that the second is true, but even if it were, it wouldn’t imply the third.

People sometimes mean different things when they speak of access. It would be strikingly immoral for there to be a class of citizens who were forbidden to seek medical attention. Happily, we do not live in such a society. But there are other senses of the word.

Do I have access to a Mercedes? Well, in one sense, yes—if I could afford to buy one, no one would be legally empowered to stop me from doing so.

But I can imagine someone arguing that since, in fact, I cannot afford one, I don’t have “access.” So the argument is not that some people are legally locked out of access to medical care, but that they cannot afford it and in that sense lack access. The very poor are already eligible for government-subsidized medical care, so this argument seems to be directed at uninsured people who make too much money to qualify for Medicaid. But how would mandatory national health insurance fix that problem? Mandating that people buy something won’t suddenly make it affordable.

Why don’t some people have insurance? They may work for employers who do not offer it as a fringe benefit. But they could still enroll in an HMO or in a Blue Cross-type insurance plan. Why don’t they? One possible reason is that they cannot afford the premiums. This means they choose to spend their money in other ways. (Remember, we are not talking about the seriously poor, as they are already covered by government programs.) When I say, “I cannot afford a huge flat-screen TV,” what I mean is that I choose not to afford it; I am saving my money for something else—a new lawnmower, my kids’ college fund, retirement, or what have you. I have assigned a lower priority to a new TV than to several other things.

But wait, comes the rejoinder, flat-screen TVs are a luxury no one needs, but everyone needs health insurance. (Technically, that’s not true, but let’s assume it is.) Then the problem must be that people are arranging their financial priorities erroneously. Mandatory insurance would solve that problem. It would rescue them from their own folly.

This is the core premise of what Krugman calls Progressivism. People do not choose wisely; therefore, for their own good, they must have some choices mandated for them. This premise, of course, is profoundly antithetical to the classical-liberal tradition, in which people’s autonomy and liberty are to be accorded the highest priority unless their actions infringe the equal rights of others. To assume that people cannot be trusted to make wise choices about their welfare is bad enough; it’s worse to add the assumption that a policy wonk is better qualified.

Even if we grant that some people who choose to go uninsured are foolish and ought to be compelled, that wouldn’t address the problem of those who make this choice not out of foolishness, but because they really are so strapped for money that they “cannot afford it” in the ordinary sense of that expression. The mandate then would have the effect of making those people even more impoverished. But at least they wouldn’t die from lack of insurance.

That’s Progressivism? But, a Progressive might reply, isn’t saving lives an important part of the government’s responsibility? Citing the Urban Institute, Krugman says that lack of health insurance kills 27,000 people a year. That’s awful, but the important question is why this happens. More precisely, does government policy make it easier or harder for people to afford medical coverage?

Krugman and Clinton are aware of the affordability problem, but they think the way to address it is through tax-financed subsidies. Here’s a different idea: create market conditions under which lower-income people could receive the coverage and care they currently cannot afford. Contrary to what many think, we have no free market in medical care. Government is pervasive, and that’s the problem. Removing current restrictions would go a long way toward changing this. For example, many routine services could easily be provided by physician’s assistants, nurse-practitioners, or, as they were in the old days, pharmacists.

Imagine if Jiffy Lube had to employ factory-certified master mechanics at $80 an hour to do oil changes. You’d likely get fewer oil changes because they would cost a lot more. But without regular oil changes, your car would be at risk for more serious trouble. When a big problem occurred, people would lament that it could have been prevented with regular maintenance. Some would propose that the government should require people to get regular oil changes even if they can’t afford them. But another approach would be to allow a free market in oil changes, which, as we know, keeps prices low, and enables everyone to get regular care.

Government has many other policies that restrict supply and make medical care artificially expensive. Let’s get rid of them. Why resort to force? Freedom works.

If saving lives is as important a part of the government’s responsibility as Krugman suggests, Progressives would do well to rethink their impulse to regulate behavior. Phrases such as “unregulated markets in health care” evoke the specter of either skyrocketing costs or substandard care. But ironically, that’s the dilemma created by government regulation. Costs for simple preventive care are kept artificially high, so some don’t get it. But unlike the inconvenience of a broken car, this can result in death. Coercion won’t solve the problem.

People often suggest that our health-care system’s problems stem from the fact that we have a free market; hence, their solution is to move to socialized medicine, where everyone has a right to a certain level of health care. The problem with that assessment is that our health-care system is not a free-market system. Over 50 percent of health-care expenditures are made by government at various levels, and there is extensive government regulation and control. Most of the problems of health care can be directly connected to that fact.

But there is a much more important question, not given much discussion, that will be the focus of this article.

Do people possess a right to health care whether they can afford it or not? If you believe the 2008 presidential aspirants, the answer is yes. In a Wisconsin campaign speech Senator Hillary Clinton said, “I believe health care is a right, not a privilege. And I will not rest until every American is covered.” In a campaign speech in Iowa, Senator Barack Obama said, “I believe that every American has the right to affordable health care.” While Senator John McCain has not said health care is a right, he nonetheless proposes greater government involvement. Many Americans share the vision that health care is a right. Let us try to decide what is or is not a right.

Imagine that I meet an attractive young lady and ask her to date me. Suppose she refuses. Have my rights been violated? Or suppose I ask to live in your house, and you say no. Have you violated my rights to decent housing? Finally, suppose I knock on your door and tell you I am hungry and wish to share dinner with you and your family. If you refuse, have you violated my rights? I am sure that most Americans, including Senators Clinton, Obama, and McCain, would agree that I have no constitutional, human, or natural right to date someone, or to live in someone’s house, or dine with him. But why?

Rights and Obligations

True rights, such as those in our Constitution, or those considered to be natural or human rights, exist simultaneously among people. The exercise of a right by one person does not diminish those held by another. It imposes no obligations on another except those of non-interference. I have a right to ask a lady for a date, but I have no right to impose an obligation on her to actually date me. Similarly, I have a right to ask you to permit me to live in your house and dine with your family, but I have no right to impose such an obligation on you. Moreover, since I do not have these rights, I do not have a right to delegate authority to government to impose such obligations on another. In other words, from a moral point of view, one can delegate only those rights that one possesses.

To argue that people have a right that imposes obligations on another is absurd. This can be readily seen if we apply such an idea to my rights to speech or travel. Under that vision, my right to free speech would require government-imposed obligations on others to provide me with an auditorium, television studio, or radio station. My right to travel freely would require government-imposed obligations on others to provide me with airfare and hotel accommodations.

For government to guarantee a “right” to health care, or any other good or service, whether a person can afford it or not, it must diminish someone else’s rights, namely his rights to his earnings. The reason is that government has no resources of its own. Moreover, there is no Santa Claus or Tooth Fairy giving the government those resources. The fact that government has no resources of its own forces one to recognize that for government to give one American citizen a dollar, it must first, through intimidation, threats, and coercion, confiscate that dollar from some other American. In other words, if one person has a right to something he did not earn, it of necessity requires another person not to have a right to something that he did earn.

A better term for these new-fangled rights to health care, decent housing, and food is “wishes.” If we called them wishes, I would be in agreement with Clinton, Obama, McCain, and others. I also wish everyone had adequate health care, decent housing, and nutritious meals. However, if we called them wishes, there would be confusion and cognitive dissonance among people calling for socialized medicine. The average American would cringe at the thought of government punishing one person because he refused to make someone else’s wish come true.

For example, if I simply had a wish for a palatial house and a Rolls Royce in my driveway, and Congress told its agents at the IRS to take other people’s money to make my wish come true, I am sure the average American would be offended. Americans would find it easier to live with their consciences, and find congressional initiation of force against others more palatable, if it were alleged that I have a constitutional “right” to a palatial house and a Rolls Royce. After all the primary job of government is to protect rights.

We can evaluate the morality of rights versus wishes another way. Suppose someone initiated force to prevent another from exercising his speech rights and another stepped in to protect that person’s right to speak. Would the intervener be seen as a hero or villain? Most people would answer hero. Then suppose someone saw a homeless person in need of health care and did privately exactly what government does—initiate force to take someone else’s money to provide that homeless person with medical services. Would that person be seen as a hero or villain? Most people, at least I hope so, would see that person as a villain. That is, taking the rightful property of one person to give to another, to whom it does not belong, is considered theft, and it is theft even if the proceeds are used for selfless purposes. It is theft whether two people or 300 million people agree to taking another’s property.

Finally, charitable efforts to help one’s fellow man in need are noble. Reaching into one’s own pockets to help is praiseworthy and laudable. Reaching into someone else’s pockets to do so is despicable and worthy of condemnation.

A better reason to study economics is to avoid being deceived by politicians; they are the far greater threat to life, liberty, and the pursuit of happiness. When you consider that the typical political campaign is little more than a series of confidence games, understanding basic economics is a matter of survival. Without such an understanding one is an easy mark.

Case in point: How would one see through the flimflam served up as health-care policy without a working knowledge of economic principles? When politicians promise “universal and affordable” medical care and insurance, how else are we to know that those promises can’t be kept? Indeed, attempting to keep them would gravely damage our medical care (even more), our prosperity, our liberty.

What we call medical care/insurance is a bundle of goods and services that have to be produced. They aren’t found superabundant in nature. Production of those things entails real opportunity costs in terms of resources (labor, intellectual capital, machinery, and more, which could be used in alternative ways. The people engaged in this production are (so far) free to do other things if they choose. They can’t be compelled to practice medicine, run hospitals, invent medicines, or offer insurance policies. This sobering thought should be kept in mind when analyzing politicians’ plans for medical “reform.” Any proposal that would drive medical service providers and resources into other lines of work could hardly be said to be in the general interest.

However, one group can be compelled to participate in a government plan: the American people in their dual capacities as taxpayers and consumers of medical services. This is the key to any political “solution.” That’s why Hillary Clinton insists against Barack Obama that any program must be mandatory. Given the premises both candidates share, Clinton has logic on her side. Without compulsion, any government program must fail even on its own terms. You might think that’s a good argument against government programs, but politicians and most other people don’t believe physical force perpetrated by government is objectionable. Go figure.

Candidates who promise universal and affordable medical care don’t really believe they can lower the true costs of the relevant goods and services. Instead, their plans contain methods, overt and covert, to shift some people’s expenses to others. The overall price tag won’t shrink—indeed, it can be expected to grow—but the money price to selected individuals would diminish. (Nonmonetary costs, such as waiting times, would increase.)

The problem for those who promise universal and affordable health care is that medically we are not all created equal. Because of genetics and lifestyle, some people are more likely to get sick than others, and some people are already sick. This upsets the politicians’ plans, and they must do something about it. Clinton declares, “I want to stop the health-insurance companies from discriminating against people because they’re sick.”

One doesn’t know whether to laugh or cry at a statement like that. Is it ignorance, stupidity, or demagoguery? Real insurance lets people hedge against financial ruin by pooling their risk of misfortune with others. For reasons that shouldn’t need explaining, people who present a low risk for whatever is being insured against would reasonably be charged less for coverage than people who present a high risk. For one thing, low-risk customers would be unwilling to pay premiums that overstated their perceived risk. I recall reading that the fire-insurance company founded by Benjamin Franklin set premiums according to how fire-resistant a building was. Was that a reasonable or outrageous thing to do?

The depth of the lack of understanding about insurance is on stark display whenever someone demands that the terms of coverage for a sick person be the same as those for a healthy person. Risk grows out of uncertainty. But if someone is already sick, there is no uncertainty about his need for medical care. “Insurance” in this case would not be real insurance but rather a subsidy provided by others or prepayment for future expenses.

The Real Story

To be actuarially sound, insurance must discriminate on the basis of risk. If the government bars insurers from such price-discrimination, they really wouldn’t be in the insurance business at all. It would be more accurate to call their activity a forced subsidy. We should at least call a thing what it is.

Where would the Clinton principle of nondiscrimination lead if the government seriously enforced it? If an “insurer” is allowed to charge only one price regardless of risk, it would have to set the price high in order to be able to cover the riskiest customers. But that would not honor the politicians’ promise of affordable coverage. Moreover, young, healthy people would opt out, preferring to spend their money otherwise or to save it in order to self-insure. So the government could not let this stand. To “fix” things, it would compel everyone to participate and force the taxpayers to subsidize low-income people.

Even with subsidies the politicians wouldn’t let insurers charge market prices for long because this would anger voters and break the budget. So inevitably, the Clinton principle must lead to price controls.

We know what price ceilings bring: shortages. Why would a company that cannot charge enough to cover its costs and earn a competitive profit continue in business? Thus the principle of nondiscrimination combined with price controls would inevitably dry up the supply of private “insurance.” At that point, the politicians would declare that the “free market” failed and that government must step in to be the sole health insurer. Then government could have full control over who gets what kind of medical attention. It would be in the triage business, a terrifying prospect for sure. It would also dictate prices to doctors, hospitals, and drug companies, speeding up the exodus from that profession and those industries. As supply withered and demand inflated (because of the illusion of low prices), government would impose more and more draconian controls.

There’s a lesson here. When the government seeks to enforce a counterfeit right—such as the “right” to medical care—no expansion of freedom results. Instead, government power expands—to everyone’s detriment.

One way for politicians really to keep their promise of lower medical costs would be to uncover all the ways the government artificially raises costs today. It does this in a variety of ways: restricting supply through licensing and patents, boosting demand by lowering the apparent price of services, promoting third-party payment for even expected routine services, raising drug-research expenses, imposing coverage mandates on insurers, forbidding interstate competition in insurance, and on and on.

But politicians don’t talk about those things. They presumably wouldn’t get credit merely for repealing destructive interventions and letting the competitive free market provide universal affordable medical care—as it has provided so many other things universally and affordably.

This ranking is curious because the actual life expectancy of the average American differs very little from that of the average European. At birth, average life expectancy in the European Union is 78.7. For the average American it is 78. And this doesn’t adjust for factors that can affect the averages which are unrelated to health care, such as lifestyle choices, accident rates, crime rates, and immigration. Health isn’t entirely about longevity but it certainly is a major component. 

What is not mentioned by Moore, or others citing the WHO report, are the measures being used to rate the various countries and who is doing the measuring. There are many ways to nudge ratings in one direction or another that are not directly related to the actual item being measured.

For instance, one might produce a study on transportation. The purpose of transportation is to get people from where they are to where they wish to be. You might rate how quickly people can move, how cheaply they can move relative to their income, how conveniently they can move, and how free they are to move. 

You would think the United States would rate high in such a study. Americans tend to be wealthier than the rest of the world. There is widespread ownership of cars. Gasoline prices are lower than in most other countries. On average, the typical American can travel quicker, cheaper, and more conveniently than people in most parts of the world. But what if this index included other factors as well? For instance, if a major component was the percentage of commuters who use public transportation, that would push the United States far down in the ranking. A larger percentage of the people in other countries have no other option but public transportation. 

In 2000, when the report was issued, WHO was run by Gro Harlem Brundtland, a former prime minister of Norway and a socialist. She doesn’t think the results of a health system alone are important. Rather, she wants to know if the system is “fair.” In introducing the WHO report she wrote that while the goal of a health system “is to improve and protect health,” it also has “other intrinsic goals [that] are concerned with fairness in the way people pay for health care.” She is clear about the ideological factors she thinks are important: “Where health and responsiveness are concerned, achieving a high average level is not good enough: the goals of a health system must also include reducing inequalities, in ways that improve the situation of the worst-off. In this report attainment in relation to these goals provides the basis for measuring the performance of health systems.”

True to her ideological roots, Brundtland prefers socialized medicine over private care. Drawing her first conclusion about what makes a good medical system, she declares: “Ultimate responsibility for the performance of a country’s health system lies with government. The careful and responsible management of the well-being of the population—stewardship—is the very essence of good government. The health of people is always a national priority: government responsibility for it is continuous and permanent.”

One WHO discussion paper states, regarding “fairness” in financing, “we consider only the distribution, not the level, as there is no consensus on what the level of health spending should be.” Equal results, not necessarily good results, are the focus. 

When Moore or others refer to the WHO index as proof that private health care doesn’t work, they aren’t being totally honest because they fail to disclose that the index lowers the scores of systems that don’t satisfy socialist presumptions.

A Second Rigged Study

The New York Times in August editorialized that American health care “lags well behind other advanced nations.” The newspaper relied in part on the WHO rankings as proof. For the rest, it relied on a more recent study by the Commonwealth Fund. But that study, which compared the United States to five other wealthy countries, has weaknesses similar to the WHO study.

The Commonwealth Fund marked down the United States partly because “All other major industrialized nations provide universal health coverage, and most of them have comprehensive benefits packages with no cost-sharing by the patients.” Again the American system loses points because it doesn’t provide socialized medicine. And the Times neglected to note that “no cost-sharing” means the people have paid through taxes whether they receive the care or not. 

Non-Emergency Visits

The United States also was penalized because seeing a physician for non-emergency reasons is harder to do on nights and weekends than in the other five nations. The Fund said “many report having to wait six days or more for an appointment with their own doctors.” 

The survey didn’t look at the treatment of serious conditions. Waiting weeks or months for chemotherapy is not held against a health-care system, but waiting a few days to have a check up is. Waiting time for “elective” surgery is counted (the United States was a close second to Germany), but waiting time for non-elective, serious surgery did not count, though that is precisely where socialist systems do the worst.

This issue is not unknown to the Commonwealth Fund. In 1999 it published The Elderly’s Experiences with Health Care in Five Nations, which found significant delays for “serious surgery.” Only 4 percent of the American seniors reported long waits for serious surgery. The rate was 11 percent in Canada and 13 percent in Britain. For non-serious surgery the differences were more obvious: 7 percent in the United States, 40 percent in Canada, and 51 percent in Britain. 

In the latest survey, the United States came in dead last for health “safety,” but many of the scores were only a few points apart. For instance, 15 percent of American patients said they “believed a medical mistake” had been made in their treatment within the last two years. Notice this is merely patient perception and nothing objective. But the best score was in Britain, where 12 percent said this.

The United States is also marked down because 23 percent of patients report delayed or incorrect results on medical tests they took. That is far worse than the best country, Germany, at 9 percent. But what constitutes a delay? If a result is expected in a week but takes two, that is a delay. But if it is expected in three weeks and arrives then, that isn’t a delay. Thus what constitutes a delay depends on expectations, leading to counter-intuitive results.

The United States also lost credit because fewer Americans report having a regular doctor for five years or more. But Americans are more mobile than many other people. CNN reports that Americans move every five years on average. In comparison, Britain has a moving rate of 10 percent a year, or an average of once a decade. And 60 percent of those move about three miles.

Freer to Change Doctors

Americans are also freer to change doctors if they wish. Britain requires patients to sign up with physicians, and once they do so, they are pretty much stuck unless they want to end up on the waiting list of another physician. Patients often have to wait to get on the books of a physician and only then can they be treated; that is, they wait to get on a wait list. This is true even for heart transplants. The inevitable waiting is a disincentive to change doctors.

Another measure used by the Commonwealth Fund is centralization of medical records. If a country has a system that allows doctors anywhere to tap into the patients’ records, it is rated higher. The United States has no centralized database and so is rated lower. Many Americans may prefer to have their records private and dispersed. When the Clinton plan was proposed in 1993, one of the rallying points that helped defeat it was the centralization of health records.

Out-of-pocket expenses were counted against a system as well. In socialized health care these expenses are zero or very low but are replaced with taxes. Taxes, however, don’t lower a country’s score because the care “is free.”

Countries were also judged on the number of patient complaints. But different cultures have different attitudes toward complaining. Jeremy Laurance wrote in the Belfast Telegraph recently that the National Health Service needs “a healthy dose of American belligerence.”

Finally, the United States is ranked last among the six nations surveyed  in infant mortality. What is not discussed is that nations define infant mortality differently. Any infant, regardless of size or weight or premature status, who shows sign of life is counted as a live birth in the United States. Germany, which ranks number one in the Commonwealth Fund survey, doesn’t count as a live birth any infant with a birth weight under 500 grams (one pound). How valuable is a comparison under those circumstances?

One could easily design a survey that would rank American health care high and other nations low. But this does not mean the American system is what it should be. Its successes and innovation can be attributed to the vestiges of freedom, but government has saddled the system with so much intervention that it is far from market oriented. Instead of worrying about irrelevant international rankings, we should be working toward freeing the medical market.

Today many clamor to place an additional value above life itself. “Without your health, who are you?” is a popular question. “Without your health, you really have nothing,” Internet sites tell us. “Without your health, the rest is pointless. . . . Nothing else matters.” 

Surely something so important as health should be a right, especially in such an affluent nation, shouldn’t it? 

American medicine is often criticized for placing too much emphasis on curing disease and not enough on maintaining health. All we need to do is to prevent people from getting sick, or treat them when they are only slightly ill, to prevent costly hospitalizations later—or so it is claimed. “Health care” supposedly heads off “sickness care,” saving enormous “resources” and making all of society better and happier. Presumably it also increases life expectancy—overall. (There is little evidence for these assertions, and substantial evidence to contradict them, but that’s the subject of another article.) 

Still more important, health is the very “cornerstone of a democratic society,” according to the crusading reformer John Kitzhaber, M.D., the former governor of Oregon who once practiced emergency medicine. In what he dubs the Archimedes Movement, he plans to use health as the lever to move the earth and “reboot democracy.” The overarching (stated) goal is to “maximize the health of the population.” 

What could be wrong with the popular, noble-sounding goals of maximum health or universal health? 

There’s ample evidence that Americans don’t care very much about their health. They grouse about copayments at the doctor’s office or pharmacy and may leave an office in high dudgeon if expected to pay a reasonable bill not “covered” by their insurance. They often refuse to buy medical insurance even if they can afford it. Aside from a subpopulation of health fanatics, many Americans constantly defy the grandmotherly advice that is the proven basis for effective health maintenance. They smoke, drink, take drugs, engage in casual sex, and/or overeat. They do not exercise, eat their vegetables, or conscientiously wash their hands. They may be willing to take lots of pills, but appear to be allergic to anything that interferes with instant gratification or requires self-discipline. 

Fortunately, Americans still have the right to practice good health habits—according to their own views, not necessarily the American Medical Association’s. They also have the right to liberty or to refuse to take care of their health, and many exercise it. Kitzhaber and his fellow reformers plan to do something about that. Being healthy is not just a right but a duty! 

However recalcitrant they may be about unhealthy lifestyles, Americans do care about life when facing a real and present danger of death as opposed to a hypothetical future health problem. At that point they usually want to spare no expense—especially if it is somebody else’s expense. And here’s where human instincts will collide head on with health reformers’ abstractions. People naturally tend to place life above health; after all, without life, health is meaningless. As long as there’s life, there’s hope for improvement. For reformers like Kitzhaber, however, the priority is reversed. Collective health is more important than individual lives. The implications are profound. 

It ought to be obvious that there is an unbridgeable chasm between life and death. Nevertheless, the discontinuity apparently escapes those who set up relative value scales based on “quality-adjusted life-years” (QALYs). The unstated assumption is that at some point on the QALY scale, visible to experts, the value of a life becomes negative—even less than the value of death. While the old-fashioned meaning of “a fate worse than death” has been mostly forgotten, the concept has taken on a whole new and very broad definition. 

How can this be? 

We don’t like to use the term lebensunwertes Leben (life unworthy of life) because of its historical association with the embodiment of evil (National Socialism). Instead, the emphasis is placed on optimizing the use of resources. As the Vision Statement of the Archimedes Movement explains, the goal of maximal population health is to be achieved by “creating a sustainable system which reallocates the public resources spent on health care that ensures universal access to a defined set of effective health services”; that is, “care that is effective in producing health.” Care that simply relieves pain, reduces disability, or postpones death might not qualify (and, unlike “health care,” is certainly not a right, as is operationally demonstrated wherever nationalized medicine has been tried). 

Kitzhaber is the architect of the Oregon Health Plan, which prioritizes services and cuts off public funding for all those that fall below a line set by the legislature. It is probably not coincidental that Oregon is the first state to permit physician-assisted suicide. The health plan was supposed to increase access to “basic health care” without increasing costs. Although by 2003, costs were four times as high as at the plan’s inception, Kitzhaber’s enthusiasm is not dampened: Expenditures are not the only concern. 

Spending can always be ratcheted down once a program is entrenched and accepted. Thus while cost containment is important, it can wait. First there’s the Vision of how reformers can use the perceived health-care crisis to “heal [sic] the divisions within our society”—as it is “the great leveler.” The budget should be used not to “cheat death” but to put bioethics into practice and to “distribute shortfalls equitably.” There will, undoubtedly, be shortfalls. 

Clearly, in Kitzhaber’s view, “health” trumps life. And “health” is not mere physical health but the well-being of society—as manifested by social justice, egalitarian distribution of goods and services, and proper ethics. 

Choice Constrained 

Proponents of “universal health coverage” are generally dedicated to bioethics—which seems largely concerned with choosing death for oneself or others purportedly because an unhealthy life or severe disability is unendurable. But most other choices are to be constrained. 

A “living will is actually a dying will,” explains James Pendleton, M.D., a Pennsylvania psychiatrist and a past president of the Association of American Physicians and Surgeons. The British government holds the view that a living will may not insist that an incapacitated person be kept alive; this view was recently confirmed by the European Court of Appeals. In the United States hospitals are generally not required to continue care that they consider “futile.” Families who disagree with a hospital’s decision may be given ten days to try to find another source of care for a patient. “Futile” care is Newspeak for care that is actually effective at keeping the patient alive, although not at restoring mental capacity or health—otherwise, death of the patient would moot the questions. 

If the taxpayers are involved, then there is a question of whether it is justifiable to seize money from one person to pay for benefits to another, whatever the efficacy of the treatment. But what if private funds are to be used? 

The question of whether a Canadian has the right to use his own money to purchase medical care that is supposed to be covered under the national health plan, but is unavailable, was recently taken to the Canadian Supreme Court by Jacques Chaoulli, M.D. Chaoulli had been forced to abandon his emergency house-call practice because of the mounting government penalties for accepting private payment. The case was brought, at Chaoulli’s personal expense of around $600,000 (and risk of having to pay the government’s legal costs if he lost) on behalf of a patient who had to wait a year for a hip replacement. 

In a decision that some fear could destroy the government’s system, the Court ruled that “access to a waiting list is not access to health care.” The decision was stayed for a year to permit the system to adjust to the threat of competition. While it applies only to Quebec , the effects are expected to reverberate across Canada . 

“How can you imagine that Quebeckers may live,” asks Chaoulli, “and the English Canadian has to die?” 

Would Americans be allowed to buy private care if compulsory public insurance becomes law? Advocates of universal coverage usually don’t address this question. But Kitzhaber says he would permit people to purchase extra medical care, using “discretionary income”—that which is left after taxes. 

Taxes are also a great leveler. For the same miserable public “health insurance” Canadians pay from $305 to $27,000 in taxes each year, depending on income bracket. “The end game is that people with money no longer want to pay the taxes required to provide quality health care to everybody,” states Michael McBane, national coordinator of the Canadian Health Coalition, which opposes privatization. 

Assumed Right 

Americans tend to assume that they have the constitutional right to spend their own money to extend or enhance their own lives. How to get around that obstacle to universal rationing was addressed by the Clinton Task Force on Health Care Reform. The public-private partnership is a promising method, as the Constitution does not apply to private entities. In fact, most Americans have already lost the ability to buy private medical care in this way. 

Medicare patients who are enrolled in Part B may not use their money to buy “covered” services outside the system, unless they see one of the relatively few physicians who have opted out completely, because physicians are forbidden to accept the payment. Shockingly, patients enrolled in managed-care plans have also forfeited their rights, but are generally unaware of it because severe rationing is not yet in effect. 

The key is the “hold harmless” clause that forbids physicians contracted with a managed-care plan to charge subscribers privately or to “balance bill” (charge more than the plan allows, even if the payment is a dollar or less). The only thing subscribers have the right to purchase for themselves from a contracted provider is cosmetic or experimental treatments. The Lobb family discovered this when Sandra Lobb was refused admission to an alcohol-rehabilitation program, although her physician recommended it and her family was willing to pay. By contract the physician was not allowed to circumvent the plan’s utilization-review program. Mrs. Lobb died. 

Insurance companies do not make their subscribers aware of this limitation. Only by remarkable persistence was one small business owner, of Cameron’s Hardware & Supply in Oxford, Pennsylvania , able to get the insurance carrier to admit to the implications of the “hold harmless” clause, which is probably required by state law. 

A Collision of Rights 

Rights are enforceable. The only way to enforce a right to an economic good such as medical treatment is through taxation: in other words, to give some a license to steal resources from productive persons to pay for benefits to others. Because of taxation a person has no right to use his earnings to support his own life until he has first “contributed” to societal health. As demands inevitably mount, rationing becomes increasingly stringent. Only those with sufficient means to pay twice for medical care have a way to escape. If legally prohibited from purchasing extra care in their own country, they may be forced to go abroad, as many affluent Canadians do. 

Despite the professed benevolent intentions of “universal health care” advocates, they are turning a license to steal into a license to kill those who are not sufficiently healthy by depriving them first of medical care and then of the sustenance that all living things require. The term “health care” is well chosen: it cares for health, and discriminates against the sick. 

There are great campaigns underway to coerce people into being fully vaccinated and aggressively monitored and treated for diabetes, mild hypertension, nonoptimal blood lipids, and signs of incipient “mental illness.” At the same time, people are urged to accept nontreatment plus terminal sedation and dehydration for conditions such as stroke or degenerative neurologic diseases. 

There are many stakeholders to be placated in the political process. There are those with crushing liabilities, including governments and business enterprises with underfunded pension plans, as well as family members who don’t want their inheritances to be consumed. There are those with the potential to profit from administering small-claims payments, churning well patients through a clinic while diverting the sick ones, providing blockbuster drugs and vaccines to a large proportion of the population, garnering votes for reelection, or writing the guidelines and protocols for approved treatments. 

Exploiting human fears of sickness and death is a favorite tactic for politicians and rent-seekers. Promising health while being fully aware of the dark side—premature death, the ultimate leveler—is the supreme hypocrisy. 

Persons who want to be in charge of their own life-and-death decisions need to be aware of the price tag on compulsory insurance. Endlessly escalating demands on your money are guaranteed. But worse, you must trade your right to life—and to the liberty and property required to sustain it—for an obligation to measure up to the official standard for health. Or else. Having assumed responsibility for your treatment, the government must assure your worthiness. 

It is worthwhile to remember that the world’s premier health nuts were members of the National Socialist party. And while the talk is about health, that’s merely a lever. The unstated overarching goal is totalitarian control.

It is important to recognize that what we call “health insurance” has little to do with health and nothing to do with insurance. We do not face a “health insurance crisis.” We face the consequences of a set of economic and social problems rooted in a futile effort to make the distribution of health care—unlike the distribution of virtually every other good and service in our society—egalitarian.

The typical contractor of homeowner’s insurance is the homeowner. He buys insurance to protect himself from costly loss caused by events outside his control, such as fire, not to defray the recurring expense of maintaining it. The ideal outcome for both the buyer and the seller of home and automobile insurance is for the policyholder to never make use of his policy.

The typical contractor of health insurance is not the insured person but his employer. Neither party is free to negotiate the terms of the policy. The employee cannot bargain for a lower premium in exchange for a high deductible or for choosing to be not covered for alcoholism or schizophrenia. The employer is not free to decline coverage for state-mandated medical services. In New York State, for example, the Women’s Wellness Act mandates group health-insurance plans to cover contraceptives including abortifacients, and the Infertility Coverage Act mandates that they cover infertility treatments, including selective fetal reduction (abortion of multiple fetuses conceived by artificial means).

The economic survival of an insurance company depends in large part on collecting more in premiums than it pays out in claims. To bring about that outcome the insurer employs certain methods, some complicated, some very simple. Although embarrassingly obvious, some of these simple measures need to be mentioned because they are absent from what we mislabel “health insurance.” For example, a person cannot buy a policy to protect himself from a loss caused by his own actions, such as burning down his own home. But so-called health insurance protects the individual from the medical consequences of his own actions, for example, injuring himself by smashing his car while drunk. Not surprisingly, all the participants in the complex scheme we call “health insurance” are unhappy with the result.

In the case of genuine insurance, there is a direct relationship between the dollar value of the protection purchased and its cost to the insured. The premium for a life-insurance policy with a face value of $100,000 is less than for a policy for a multiple of that amount. In health insurance no such relationship exists between premium paid and compensation received. Moreover, the health-insurance company, acting on its own behalf, can write a contract with a “cap” on claims, that is, for the maximum amount it will pay the insured, regardless of the health-care cost he incurs. The insured person, who typically does not act on his own behalf but is “provided” insurance as an important part of his job benefit, has no reciprocal options.

The sole rational purpose of true insurance is to protect the insured from an unanticipated economic loss so large as to jeopardize his economic well-being. No one sells or buys insurance to cover the cost of maintaining his property. Home insurance does not pay for plumbing repairs; automobile insurance does not pay for replacing worn-out windshield wipers. Yet people demand precisely this kind of reimbursement from so-called health insurance.

“Health Insurance”: The Illusion of Equality

If health insurance is not insurance, what is it? It is a modern version of the illusion that all men are equal—or, when ill, ought to be treated as if they were equal. When religion was the dominant ideology, death was (supposed to be) the great equalizer: once they departed the living, prince and pauper were equal. Today, when medicine is the dominant ideology, health care is (supposed to be) the great equalizer: everyone’s life is “infinitely precious” and hence deserves the same protection from disease. Of course, prince and pauper did not receive the same burial services, and rich and poor do not receive the same medical services. But people prefer the illusion of equality to the recognition of inequality.

Actually, the ruled have always longed for “universal health care,” and the rulers have always supplied them with a policy that the masses accepted as such a service. In the Middle Ages, universal health care was called Catholicism. In the twentieth century, it was called Communism. In the 21st century, it is called Universal Health Insurance. What we choose to call “health insurance” is, in fact, a system of cost-shifting masquerading as a system of insurance. We treat a public, statist political system of health care as if it were a system of private health insurance purchased for the purpose of obtaining private medical care.

Everyone knows but no one admits that health insurance is not really insurance. In fact, Americans now view their health insurance as an open-ended entitlement for reimbursement for virtually any expense that may be categorized as “health care,” such as the cost of birth-control pills or Viagra. The cost of these services is covered on the same basis as the cost of medical catastrophes, such as treatment for the consequences of a brain tumor. Such distorted incentives produce the perverted outcomes with which we are all too familiar.

From a public-health point of view, the state of our health is partly, and often largely, in our own hands and is our own responsibility, even if we have a chronic illness, such as arthritis or diabetes. It is an immoral and impractical endeavor to try to reject that responsibility and place the burden for the consequences on others.