(Fifth in a seven-part series: Medicare for All – Quality and Accessible Care for None)
If the Democrats win the House on Tuesday, the first bill they may pass is “Medicare for All” since it already has over 120 co-sponsors. These now admitted socialists would destroy the world’s greatest health care system due to their arrogance and addiction to political power.
Nearly all previous socialist efforts to destroy the free market have started with the same premise: The current system is so bad, so troubling that government must step in to take remedial action by imposing itself into the marketplace. Phrases like “single-payer,” “universal health care” or the current favorite, “Medicare for All,” are attractive marketing phrases designed to promote expanded government power. In reality, “restricted health care,” “shared shortages,” or “inaccessible care” would be more accurate when describing such concepts.
To socialists, the free market can’t be trusted because it’s just not fair the way it uses merit to produce winners and losers. It’s why government and academia are so closely ideologically aligned. Many have never worked one day of their lives dealing with free market competition. They just know they’re smarter and have better ideas better than those less intelligent simpletons who are out there actually doing the work.
One of the most often heard complaints is: “We spend too much on health care,” (slightly less than 18% of GDP). This is a meaningless statistic. We also spend considerably more per capita on entertainment/leisure, national defense, information and communications technology and others. And though we “spend” or donate to charities about twice as much, as a percentage of GDP (1.44%), than any other nation in the world, not just the industrialized ones, one rarely hears complaints about that.
As the first world nation, we covered the basic necessities of life – food, clothing and shelter – many decades ago. Now in the 21st century, Americans want to live longer, healthier and with greater enjoyment. It’s why we spend more on health care and entertainment than anyone else.
Another complaint heard often is how much we spend on drugs and how expensive they are. This has clearly provided some of the impetuous to Medicare for All. True, American drug makers are profitable but not excessively so compared to many other industries. Total spending on drugs considered as a percentage of total health care spending was 10% before the advent of Medicare in the early 1960s, or virtually identical to what was spent nationally just before the ACA was passed in 2009 (10.1%).
Though drug companies have been justifiably criticized for their aggressive efforts to promote their products, the overall health benefits of new medicines are indisputable. Today’s pharmaceuticals have dramatically extended our lives and improved their quality. Prescription and over-the-counter drugs have also restrained total health care spending. They are now used as substitutes for previously invasive (and expensive) surgeries and have reduced inpatient hospital stays.
George Mason University economist, Walter Williams, reported about a decade ago that Humana Hospitals conducted a study of 1,100 congestive heart failure patients and found that though drug costs were up by 60%, these medications resulted in a 78% reduction in other hospital costs. Overall savings were a stunning $8,000 per patient.
The largest health care costs by far are government regulations. The federal regulatory burden for each hospital requires literally thousands of hours to process annually. A study by the accounting firm, PricewaterhouseCoopers, found that 30 minutes of Medicare paperwork is required by hospital administrators for every four hours a physician treats a Medicare patient. But it’s even worse for emergency room care. There, it’s about one hour of paperwork for every hour of patient care.
The core philosophy of the Medicare for All proponents is that a government bureaucracy is more productive, can function more efficiently and at a lower cost than can any profit-obsessed, private organization. Private is bad, public is good.
These socialism apologists say that although ordinary Americans may initially pay more in taxes, the benefits of eliminating premiums, deductibles and co-pays make government-run health care a bargain that clearly outweighs the cost of those higher taxes. It’s certainly an argument that has resonated with many.
But politicians, bureaucrats and their protected unions can’t lower costs, they can only reduce reimbursements. They can only lower what is paid to doctors, nurses and hospitals. When revenue is reduced in any business, costs (e.g., capacity) must be reduced to a level where the organization can financially survive. For hospitals, by far the largest cost is personnel. Lower levels of staff guarantee fewer available hospital beds in the face of rising demand.
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Thoughts on Socialism
One of the key objectives for most of those on college campuses (both students and professors) and in government is the promotion of “social justice.” From this high-moral-sounding phrase to “socialism” isn’t much of a leap. In their economic ignorance they ask: “How can socialism be bad if social justice is good?”
The godfather of socialism is Karl Marx. His dark view of what he coined “capitalism,” must be placed in context with the times in which he was living. When his magnum opus, The Communist Manifesto, was published in 1848, he was living in an extremely economically-polarized world. Slavery was still strong in America and in Europe the Industrial Revolution was in full swing. Factories there spewed choking black smoke while many workers labored from dawn ’til dusk in horrible working conditions. Marx saw only a distinct oppressor/oppressed society that left the working class (the proletariat) stuck in their plight with no chance of escape or economic advancement.
His dim view of society at the time was shared by Charles Dickens whose most well-known novels, A Christmas Carol (1843) and A Tale of Two Cities (1859) provided the bookends for 1848’s Manifesto. Ebenezer Scrooge continues to this day to be the quintessential characterization of the greedy capitalist.
In general for the socialist, equal outcomes at the finish trump equal opportunities at the starting line. But as socialism has consistently, historically demonstrated, this means robbing a person of God-given rights to achieve — or even to fail. The delusional goal of equality of outcomes really amounts to equality in misery – except for those in power of course.
Though the socialist publicly espouses the virtues of “diversity,” in reality he hates true human diversity and all that comprises it: talent, intelligence, initiative, faith, moral underpinnings, etc. The socialists, led today by Senator Sanders, believe they deserve the power to enact their ideology. They are motivated by an unquenchable thirst for self-aggrandizement that is rationalized as moral nobility.
Socialism is not social justice. And health care is not a right. It’s not free. No one can demand that highly educated individuals (doctors, nurses, technicians, etc.) be required to provide care without compensation. That’s involuntary servitude. Nor is there anything laudable about reaching into the pockets of Peter to pay for Paul who doesn’t pay anything. That’s not a right, it’s state sanctioned theft.
Even before health care, we need food to live. And our food is provided to us in (nearly) an entirely free market system. We have wonderful choices. Don’t want to pay $30 a pound for prime filet mignon at Fresh Market or Whole Foods? Fine, get choice strip steaks for less than half that at Giant or Kroger.
A national, central government running our medical care system would be like a new “Department of Grocery Stores” running our local supermarkets. A number of decades ago, our food markets generally had about 10,000 items for sale on their shelves with limited options for fresh fruits, vegetables, meats or seafood. Today we have specialty supermarkets offering all kinds of ethnic foods along with a tremendous variety of fresh products. Never in history has the world seen anything like our supermarkets. These now routinely have 50,000 to 60,000 different items at a minimum.
In his landmark book, The Road to Serfdom, F.A. Hayek warned about the destruction created by government interference in the free market. He brilliantly predicted that as governments grow in size and strength, they always seek (take) more power under the banner of problem solving. Central planners have numerous other primary objectives before they seek to satisfy the consumers they purportedly serve.
Their decisions and judgments are dictated first by political ramifications, not consumer demand. Not only is there no incentive to seek anything new or life-enhancing, these bureaucrats are mostly subservient to entrenched, politically-powerful cartels that demand the status quo be maintained and new competition restrained. Such interventions always make the market less efficient, less responsive and less innovative and the nation, its economy and its citizens less prosperous over time. Always.
Karl Marx derisively called free enterprise, “capitalism.” The name stuck though it really doesn’t adequately describe voluntary exchange or free enterprise. No one can demand anything in a free market. No seller can demand that someone buy his or her product who may not want it. Nor can anyone demand receipt of a product or service without paying those who produced it.
In our modern day free market economy, the only ones who don’t participate in its opportunities are the ones who’ve convinced themselves that they have no chance; they remain the imagined victims of the straw-man oppressor. That is a state of mind, not a condition of reality. In human history, there has never been a place or time with greater economic opportunity than here in America in 2018.
The extraordinary health care found in the United States and the economic achievements of the West are not based on some hidden formula. The “secret sauce” is there for all to see. It is the reason West Germany’s economy exploded from 1950 to 1983 while East Germany’s was stuck in the Depression era. It’s why South Korea has one of the most vibrant economies in the world but North Korea barely shows any evening lights from satellites in space. It’s why Hong Kong and Taiwan were easily eclipsing the economic gains of China until it was forced to adopt many free-market principles to compete with the West.
The “secret sauce” ingredients? Easy. They’re recognition of God-given human rights, democratic institutions, free-markets, low tax rates, private property protection and rule of law. They allow individuals to work hard to maximize their talents, achieve their dreams and keep the fruits of their labors.
We can’t allow socialist arrogance or delusion to destroy the world’s greatest available health care.
