From David Henderson of Econlog:
Throughout the discussion about the bill, various proponents said that the law would immediately prevent insurance companies from denying coverage to children based on pre-existing conditions. And it does. What, apparently, it doesn't do is require insurance companies to cover children. At least that's what some insurance companies are reputed to be saying. Having heard this, Obama appointee Kathleen Sebelius wrote a threatening letter to the health insurance companies' trade association.
Interestingly, various Democratic Congressmen expressed outrage at the insurance companies for reading the law carefully and trying to figure out what they are and are not required to do. There's no report that the Congressmen are angry at themselves for their carelessness.
This is an isolated issue, so I don't want to make too much of a big deal over it. But I do think this story illustrates a couple of key points about regulation in general.
My thoughts circle around Hayek's Knowledge Gap. Hayek's critique of central planning stated that it was impossible for a small, selected group of "enlightened" individuals to possess the massive amount of knowledge necessary to effectively and efficiently "plan" an industry (obviously a very poor summary on my part).
I think the intuitive points of this theory are very obvious and quite convincing, from a basic common sense perspective. What is even more interesting though, in my view, is that in today's health care system, which is very much a top-down, centralized regime, we have a tug-of-war between knowledge and power. In other words you have a couple hundred of legislators with the most power but least knowledge, followed by legions of bureaucrats with less power but more knowledge, finally ending with health care professionals, mostly private sector, with the least power but the most knowledge. So, in essence, you have this bizarre power/knowledge paradox where those who understand the system best are more or less the slaves of very naive politicians with very bad incentives.
I think what this will do will create a long-term race to bottom for health. At least that's what the systemic incentives in place tell me what will happen. You will have episodes like the one above ("Yes, we have to cover children with pre-existing conditions, but where does it say we have to cover children at all?) or simply a decrease in quality because the best and brightest will not have the power incentive (autonomy) to match the knowledge they possess and the cost it took to attain that knowledge.
Like with all complex pieces of legislation, the unintended consequences, the Unseen as Bastiat said, are very difficult to foresee and account for.
Showing posts with label Health Care. Show all posts
Showing posts with label Health Care. Show all posts
Care vs Insurance
Here's a comment I recently made on the blog Cafe Hayek in response to this question (made by another commenter):
"So what do Americans propose to do for people who have a pre-existing condition and cannot afford health insurance." [sic]
I don't think you're framing the question correctly. It should read, "So what do Americans propose to do for people who have a pre-existing condition and cannot afford the health care services needed to alleviate the problems caused by said pre-existing condition?"
I don't know the answer. But I think it is very important use the correct language. Care, not insurance.
Consumers with pre-existing conditions are probably not priced out of the market because of their own lack of funds, but much more because there is no market to accomodate them. Why? Because there is no risk! Just like you will never find a fire insurance underwriter who will write a burning building, you will never find a health insurance underwriter who will write a person with a pre-existing condition. That's because doing so would defeat the very nature of the product.
Treating people with costly, long-term medical ailments is a serious predicament for our country. Some private/public plan (HSAs + a shorter-term, slimmed down Medicare/Medicaid style contingency option?) is probably the way to go. But insurance companies are the LAST entity that should be looked out for dealing with this issue.
"So what do Americans propose to do for people who have a pre-existing condition and cannot afford health insurance." [sic]
I don't think you're framing the question correctly. It should read, "So what do Americans propose to do for people who have a pre-existing condition and cannot afford the health care services needed to alleviate the problems caused by said pre-existing condition?"
I don't know the answer. But I think it is very important use the correct language. Care, not insurance.
Consumers with pre-existing conditions are probably not priced out of the market because of their own lack of funds, but much more because there is no market to accomodate them. Why? Because there is no risk! Just like you will never find a fire insurance underwriter who will write a burning building, you will never find a health insurance underwriter who will write a person with a pre-existing condition. That's because doing so would defeat the very nature of the product.
Treating people with costly, long-term medical ailments is a serious predicament for our country. Some private/public plan (HSAs + a shorter-term, slimmed down Medicare/Medicaid style contingency option?) is probably the way to go. But insurance companies are the LAST entity that should be looked out for dealing with this issue.
We Need More Competition in Government
Arnold Kling and Scott Sumner both advocate a return to decentralization and federalism-based policies. I particularily like this paragraph from Kling:
I would like to see more experiments and more variety. Instead of having a big national contest over what health care system, why not try single-payer in one part of the country and radical deregulation in another? Switzerland, which is about the size of Maryland, has different health care systems in each of its 20-odd cantons, which are about the size of Maryland counties. Surely it must be possible to try different health care approaches in Texas and Massachusetts.
I do not see what is unreasonable about this. One may say that this would lead to potentially devastating situations in states that took a more decentralized approach, but even if this were true, those peoples could move to a state that offered a more centralized approach if they felt that would benefit them.
Also, Sumner implies that comparing the United States to smaller, far less diverse and complex countries like Denmark and Switzerland is a mistake. I think it is safe to say that it gets exponentially more difficult to centrally plan for a country as it gets larger. Thus, the argument that the US should centrally plan health care because smaller countries do it effectively is a backwards statement. We shouldn't centrally plan precisely because these smaller, less complex nations are competent at it.
UPDATE: Here is Reason's Peter Suderman's take on Kling's post:
I'm obviously wary of socializing medical payment, even at the state or local level. But given the opportunity to see single payer compete against a genuinely deregulated market, I'm pretty sure I'd bite. And I suspect a lot of single payer supporters would too. But that sort of political competition isn't in the cards. Instead we're stuck with a broken, compromised system in which neither side gets what they want: On one hand, the government controls nearly half of all medical spending, but failures get blamed on the free market. On the other hand, those who want to sweep away the current system and socialize medical insurance get stuck with messy legislative compromises larded with handouts for special interests. You could make the Beltway centrist's case that this is a good thing—that political systems shouldn't cater to extremes. But in this instance, we've got a system that's catering to almost no one [emphasis mine -ed.] And in the meantime, we're stifling innovation and experimentation on both ends of the political spectrum.
I would like to see more experiments and more variety. Instead of having a big national contest over what health care system, why not try single-payer in one part of the country and radical deregulation in another? Switzerland, which is about the size of Maryland, has different health care systems in each of its 20-odd cantons, which are about the size of Maryland counties. Surely it must be possible to try different health care approaches in Texas and Massachusetts.
I do not see what is unreasonable about this. One may say that this would lead to potentially devastating situations in states that took a more decentralized approach, but even if this were true, those peoples could move to a state that offered a more centralized approach if they felt that would benefit them.
Also, Sumner implies that comparing the United States to smaller, far less diverse and complex countries like Denmark and Switzerland is a mistake. I think it is safe to say that it gets exponentially more difficult to centrally plan for a country as it gets larger. Thus, the argument that the US should centrally plan health care because smaller countries do it effectively is a backwards statement. We shouldn't centrally plan precisely because these smaller, less complex nations are competent at it.
UPDATE: Here is Reason's Peter Suderman's take on Kling's post:
I'm obviously wary of socializing medical payment, even at the state or local level. But given the opportunity to see single payer compete against a genuinely deregulated market, I'm pretty sure I'd bite. And I suspect a lot of single payer supporters would too. But that sort of political competition isn't in the cards. Instead we're stuck with a broken, compromised system in which neither side gets what they want: On one hand, the government controls nearly half of all medical spending, but failures get blamed on the free market. On the other hand, those who want to sweep away the current system and socialize medical insurance get stuck with messy legislative compromises larded with handouts for special interests. You could make the Beltway centrist's case that this is a good thing—that political systems shouldn't cater to extremes. But in this instance, we've got a system that's catering to almost no one [emphasis mine -ed.] And in the meantime, we're stifling innovation and experimentation on both ends of the political spectrum.
Constitutional or Not?
Steve Chapman writes about whether current health care legislation is constitutional or not. From the article:
“Never in the history of the United States has the federal government ever required someone to engage in an economic activity with a private party,” Georgetown University law professor Randy Barnett has said. If the Supreme Court goes along, he said, “there’s pretty much nothing Congress can’t do.”
George Will offers his thoughts here.
The only argument I've heard so far is the ICC, but I think that is a major stretch.
“Never in the history of the United States has the federal government ever required someone to engage in an economic activity with a private party,” Georgetown University law professor Randy Barnett has said. If the Supreme Court goes along, he said, “there’s pretty much nothing Congress can’t do.”
George Will offers his thoughts here.
The only argument I've heard so far is the ICC, but I think that is a major stretch.
Logic Trumps Politics. As Usual.
Don Boudreaux asks a wonderful question of Nancy Pelosi:
Reacting to Republican Scott Brown’s election to the U.S. Senate seat once held by Massachusetts’s Ted Kennedy, House Speaker Nancy Pelosi said that “Massachusetts has health care… The rest of the country would like to have that too. So we don’t say a state that already has health care should determine whether the rest of the country should” (“Gut-Check for Obama and Dems on Health Care,” Jan. 20).
Questions for Ms. Pelosi. If the citizens of Massachusetts are able, without any further legislation from Congress, to foist on themselves the kind of government-directed health-care that Ms. Pelosi alleges the rest of the country desires, what’s stopping people across America from doing in each of their states what the people of Massachusetts have already done in that state? Why does Congress have to act at all?
Sincerely,
Donald J. Boudreaux
I would love to hear her answer.
Reacting to Republican Scott Brown’s election to the U.S. Senate seat once held by Massachusetts’s Ted Kennedy, House Speaker Nancy Pelosi said that “Massachusetts has health care… The rest of the country would like to have that too. So we don’t say a state that already has health care should determine whether the rest of the country should” (“Gut-Check for Obama and Dems on Health Care,” Jan. 20).
Questions for Ms. Pelosi. If the citizens of Massachusetts are able, without any further legislation from Congress, to foist on themselves the kind of government-directed health-care that Ms. Pelosi alleges the rest of the country desires, what’s stopping people across America from doing in each of their states what the people of Massachusetts have already done in that state? Why does Congress have to act at all?
Sincerely,
Donald J. Boudreaux
I would love to hear her answer.
Sullum on The Right to Health Care
Jacob Sullum offers his thoughts on the supposed right to health care. A snippet:
While liberty rights such as freedom of speech or freedom of contract require others to refrain from acting in certain ways, “welfare rights” such as the purported entitlement to health care (or to food, clothing, or shelter) require others to perform certain actions. They represent a legally enforceable claim on other people’s resources. Taxpayers must cover the cost of subsidies; insurers and medical professionals must provide their services on terms dictated by the government.
A right to health care thus requires the government to infringe on people’s liberty rights by commandeering their talents, labor, and earnings. And since new subsidies will only exacerbate the disconnect between payment and consumption that drives health care inflation, such interference is bound to increase as the government struggles to control ever-escalating spending. Rising costs will also encourage the government to repeatedly redefine the right to health care, deciding exactly which treatments it includes.
I wrote about this topic here.
While liberty rights such as freedom of speech or freedom of contract require others to refrain from acting in certain ways, “welfare rights” such as the purported entitlement to health care (or to food, clothing, or shelter) require others to perform certain actions. They represent a legally enforceable claim on other people’s resources. Taxpayers must cover the cost of subsidies; insurers and medical professionals must provide their services on terms dictated by the government.
A right to health care thus requires the government to infringe on people’s liberty rights by commandeering their talents, labor, and earnings. And since new subsidies will only exacerbate the disconnect between payment and consumption that drives health care inflation, such interference is bound to increase as the government struggles to control ever-escalating spending. Rising costs will also encourage the government to repeatedly redefine the right to health care, deciding exactly which treatments it includes.
I wrote about this topic here.
Wise, Sobering Words
As the new health care legislation passes through Congress, I felt it was appropriate to link to William Graham Sumner's 1916 essay, The Forgotten Man. Here is the concluding paragraph, though I strongly urge all to read it entirely in its unfettered brilliance:
The fallacy of all prohibitory, sumptuary, and moral legislation is the same. A and B determine to be teetotalers, which is often a wise determination, and sometimes a necessary one. If A and B are moved by considerations which seem to them good, that is enough. But A and B put their heads together to get a law passed which shall force C to be a teetotaler for the sake of D, who is in danger of drinking too much. There is no pressure on A and B. They are having their own way, and they like it. There is rarely any pressure on D. He does not like it, and evades it. The pressure all comes on C. The question then arises, Who is C? He is the man who wants alcoholic liquors for any honest purpose whatsoever, who would use his liberty without abusing it, who would occasion no public question, and trouble nobody at all. He is the Forgotten Man again, and as soon as he is drawn from his obscurity we see that he is just what each one of us ought to be.
The fallacy of all prohibitory, sumptuary, and moral legislation is the same. A and B determine to be teetotalers, which is often a wise determination, and sometimes a necessary one. If A and B are moved by considerations which seem to them good, that is enough. But A and B put their heads together to get a law passed which shall force C to be a teetotaler for the sake of D, who is in danger of drinking too much. There is no pressure on A and B. They are having their own way, and they like it. There is rarely any pressure on D. He does not like it, and evades it. The pressure all comes on C. The question then arises, Who is C? He is the man who wants alcoholic liquors for any honest purpose whatsoever, who would use his liberty without abusing it, who would occasion no public question, and trouble nobody at all. He is the Forgotten Man again, and as soon as he is drawn from his obscurity we see that he is just what each one of us ought to be.
An Unfortunate Incident
Emotion is playing too large a role in much of the health care debate. Ezra Klein, a rising liberal intellectual star, resorts to the level of ignorant hysteria when discussing Senator Joseph Lieberman's recent filibuster move. Klein writes:
Lieberman seems primarily motivated by torturing liberals. That is to say, he seems willing to cause the deaths of hundreds of thousands of people in order to settle an old electoral score.
Michael Cannon promptly takes Klein to task for these comments.
We all feel passionate about what we believe in. It's why Rob and I spend a fair amount of our spare time working on this blog. But though essential as the fuel that drives us to make the world a better place, emotion often clouds our better judgement. In this case it resulted in vitriolic, unwarrented slander and an egregious display of confirmation bias.
This debate is an important and necessary one. But there is no need to call those on the other side murderers simply because they disagree.
Lieberman seems primarily motivated by torturing liberals. That is to say, he seems willing to cause the deaths of hundreds of thousands of people in order to settle an old electoral score.
Michael Cannon promptly takes Klein to task for these comments.
We all feel passionate about what we believe in. It's why Rob and I spend a fair amount of our spare time working on this blog. But though essential as the fuel that drives us to make the world a better place, emotion often clouds our better judgement. In this case it resulted in vitriolic, unwarrented slander and an egregious display of confirmation bias.
This debate is an important and necessary one. But there is no need to call those on the other side murderers simply because they disagree.
Utilitarianism and Health Care
Last week Rob asked me this question in response to a post by me questioning the legitimacy of the claim that health care access is a right:
If you could prove that universal education and health care, regardless of being a right or not, created a healthier, better educated society from a utilitarian standpoint, would you still choose not to universalize education and health care in light of your moral position?
This question is more philosophical than economical so I will try and keep my answer in that realm.
Now, what I think Rob is really asking is do the ends justify the means. The means in this case would violate my moral principles, or at least radically diminish them to the point of non-existence, but would also accomplish the ends of attaining the best for the most.
My endorsement for capitalism is two-fold: it is the most efficient and effective economic system we know of and it is, in my opinion, the most moral system we know of. My basis for this assertion is that it, in the long run, capitalism facilitates the maximum amount of freedom for the maximum amount of people and consequently leads to the maximum number of benefits for those said people. Rob's question asks if the economic side of the capitalism argument is false, does the moral side still provide enough value that it should still be advocated?
As one can see (and I'm not writing anything new here), the economic virtues of capitalism directly stem from its moral virtues. By providing individuals with the maximum amount of choice possible, the maximum amount of optimal solutions to whatever problems that face a society have the best chance of being reached. Consequently, we have the largest chance of seeing our lives improve in two ways. Principally, we can follow whatever course of life we deem fit given the choices we are provided with. In a sense, we can say that capitalism is not in and of itself a moral system but an avenue for moral systems to be discovered (invented?), evolve, and compete. And materially, as mentioned before, we can reap the maximum benefits that these choices will inevitably lead to.
Where am I going with this? Maybe it is too much of a stretch, but I think that by eliminating the moral virtues of capitalism in a market as complex and varied as health care, we will by default eliminate the material benefits capitalism provides. Choice is so integral to health care because the market is so varied and complex in all of it demands. Capitalism is thus, by default, the optimal system, both morally and materially, to meet all of these demands.
The inevitable question then is is there a minimum limit of complexity or variation in consumer demand where a centralized approach is more appropriate than the free market model in achieving utilitarian ends? That's a question for another day (and I think the one the Rob is asking and have avoided answering). But I do not think a centralized approach is a plausible model for the our current health care system, and thus cannot answer the original question without basing it on what I think are false premises.
Education strikes me, at least initially, as the better area to look at this question through, I will try and answer that question at some point in the future.
(Note: My knowledge of utilitarianism is very limited, so if I mischaracterized anything about the philosophy forgive me and please correct in the comments section)
If you could prove that universal education and health care, regardless of being a right or not, created a healthier, better educated society from a utilitarian standpoint, would you still choose not to universalize education and health care in light of your moral position?
This question is more philosophical than economical so I will try and keep my answer in that realm.
Now, what I think Rob is really asking is do the ends justify the means. The means in this case would violate my moral principles, or at least radically diminish them to the point of non-existence, but would also accomplish the ends of attaining the best for the most.
My endorsement for capitalism is two-fold: it is the most efficient and effective economic system we know of and it is, in my opinion, the most moral system we know of. My basis for this assertion is that it, in the long run, capitalism facilitates the maximum amount of freedom for the maximum amount of people and consequently leads to the maximum number of benefits for those said people. Rob's question asks if the economic side of the capitalism argument is false, does the moral side still provide enough value that it should still be advocated?
As one can see (and I'm not writing anything new here), the economic virtues of capitalism directly stem from its moral virtues. By providing individuals with the maximum amount of choice possible, the maximum amount of optimal solutions to whatever problems that face a society have the best chance of being reached. Consequently, we have the largest chance of seeing our lives improve in two ways. Principally, we can follow whatever course of life we deem fit given the choices we are provided with. In a sense, we can say that capitalism is not in and of itself a moral system but an avenue for moral systems to be discovered (invented?), evolve, and compete. And materially, as mentioned before, we can reap the maximum benefits that these choices will inevitably lead to.
Where am I going with this? Maybe it is too much of a stretch, but I think that by eliminating the moral virtues of capitalism in a market as complex and varied as health care, we will by default eliminate the material benefits capitalism provides. Choice is so integral to health care because the market is so varied and complex in all of it demands. Capitalism is thus, by default, the optimal system, both morally and materially, to meet all of these demands.
The inevitable question then is is there a minimum limit of complexity or variation in consumer demand where a centralized approach is more appropriate than the free market model in achieving utilitarian ends? That's a question for another day (and I think the one the Rob is asking and have avoided answering). But I do not think a centralized approach is a plausible model for the our current health care system, and thus cannot answer the original question without basing it on what I think are false premises.
Education strikes me, at least initially, as the better area to look at this question through, I will try and answer that question at some point in the future.
(Note: My knowledge of utilitarianism is very limited, so if I mischaracterized anything about the philosophy forgive me and please correct in the comments section)
Your Government at Work
Rob wrote in a recent comment he wishes to learn more about Public Choice Theory. I don't think I'll be able to provide a better example of PCT at work than this:
Via Cafe Hayek, ABCNews reports:
On page 432 of the Reid bill, there is a section increasing federal Medicaid subsidies for “certain states recovering from a major disaster.”
The section spends two pages defining which “states” would qualify, saying, among other things, that it would be states that “during the preceding 7 fiscal years” have been declared a “major disaster area.”
I am told the section applies to exactly one state: Louisiana, the home of moderate Democrat Mary Landrieu, who has been playing hard to get on the health care bill.
In other words, the bill spends two pages describing would could be written with a single word: Louisiana. (This may also help explain why the bill is long.)
Senator Harry Reid, who drafted the bill, cannot pass it without the support of Louisiana’s Mary Landrieu.
How much does it cost? According to the Congressional Budget Office: $100 million.
(Emphasis mine)
In the real world, we would call something like this a bribe. But I guess because Reid is doing it with other people's money, as opposed to his own, it doesn't fit the precise definition of "bribe." Just business as usual in Washington, D.C.
And this racket is what Matt Yglesias thinks will improve health care.
Despicable.
(Kudos to ABCNews for bringing this to light. No doubt there are many other "provisions" like this that need to be identified and brought into public view)
Via Cafe Hayek, ABCNews reports:
On page 432 of the Reid bill, there is a section increasing federal Medicaid subsidies for “certain states recovering from a major disaster.”
The section spends two pages defining which “states” would qualify, saying, among other things, that it would be states that “during the preceding 7 fiscal years” have been declared a “major disaster area.”
I am told the section applies to exactly one state: Louisiana, the home of moderate Democrat Mary Landrieu, who has been playing hard to get on the health care bill.
In other words, the bill spends two pages describing would could be written with a single word: Louisiana. (This may also help explain why the bill is long.)
Senator Harry Reid, who drafted the bill, cannot pass it without the support of Louisiana’s Mary Landrieu.
How much does it cost? According to the Congressional Budget Office: $100 million.
(Emphasis mine)
In the real world, we would call something like this a bribe. But I guess because Reid is doing it with other people's money, as opposed to his own, it doesn't fit the precise definition of "bribe." Just business as usual in Washington, D.C.
And this racket is what Matt Yglesias thinks will improve health care.
Despicable.
(Kudos to ABCNews for bringing this to light. No doubt there are many other "provisions" like this that need to be identified and brought into public view)
Yglesias is the Naive One
Matt Yglesias doesn't agree completely with Dr. Jeffrey Flier's take on the health care bill, which I linked to earlier. Yglesias writes:
Dealing with this will be hard. If the bill Harry Reid unveiled yesterday is signed into law, it will be easier. It will be easier in part because the bill directly tackles the fiscal problem and reduces the deficit. And it will be easier in part because senators and members of congress who are considering additional ideas to improve the situation will have a recent precedent available of legislative success. If the bill is defeated, tackling the problem gets harder. It doesn’t open the door to a broader national conversation in which citizens lose their bias toward the status quo or interest groups lose their desire to fight for the biggest possible slice of pie.
It would be nice if health reform did more to control costs and reform the delivery system than this bill does. But it does something to control costs and it does something to reform the delivery system. And it improves access for millions of people in need. To hold that latter factor hostage to a pie-in-the-sky belief that if the whole thing goes down in flames more radical change will somehow become possible seems to me to exhibit very strange political judgment.
Yglesias calls Flier naive, but I think it is Yglesias who is the naive one. He just assumes that if this bill is passed things will start to get better. But why so much faith in further government intervention, Matt? What evidence do you have that government intervention has done more good than harm since the 1960's? Faith-based conclusions are about as naive as it gets.
Matt also says that it would "exhibit very strange political judgement" if people were to think that the failing of this bill would lead to more radical change. First off, the current bill is not "radical change". This is further socialization of the market. It is not "reform", as every liberal journalist and politician would have you believe.
Radical change would be implementing a more free-market system. I don't think this will happen, at least not for next few years, but stopping this monstrosity would be a start.
Dealing with this will be hard. If the bill Harry Reid unveiled yesterday is signed into law, it will be easier. It will be easier in part because the bill directly tackles the fiscal problem and reduces the deficit. And it will be easier in part because senators and members of congress who are considering additional ideas to improve the situation will have a recent precedent available of legislative success. If the bill is defeated, tackling the problem gets harder. It doesn’t open the door to a broader national conversation in which citizens lose their bias toward the status quo or interest groups lose their desire to fight for the biggest possible slice of pie.
It would be nice if health reform did more to control costs and reform the delivery system than this bill does. But it does something to control costs and it does something to reform the delivery system. And it improves access for millions of people in need. To hold that latter factor hostage to a pie-in-the-sky belief that if the whole thing goes down in flames more radical change will somehow become possible seems to me to exhibit very strange political judgment.
Yglesias calls Flier naive, but I think it is Yglesias who is the naive one. He just assumes that if this bill is passed things will start to get better. But why so much faith in further government intervention, Matt? What evidence do you have that government intervention has done more good than harm since the 1960's? Faith-based conclusions are about as naive as it gets.
Matt also says that it would "exhibit very strange political judgement" if people were to think that the failing of this bill would lead to more radical change. First off, the current bill is not "radical change". This is further socialization of the market. It is not "reform", as every liberal journalist and politician would have you believe.
Radical change would be implementing a more free-market system. I don't think this will happen, at least not for next few years, but stopping this monstrosity would be a start.
Healthcare Legislation = Political Power
Via Greg Mankiw, Dr. Jeffrey S. Flier, Dean of the Harvard Medical School, offers his thoughts on the current healthcare legislation. A snippet:
the majority of our representatives may congratulate themselves on reducing the number of uninsured, while quietly understanding this can only be the first step of a multiyear process to more drastically change the organization and funding of health care in America. I have met many people for whom this strategy is conscious and explicit.
Now why would our benevolent elected leaders do such a thing? Randall Holcombe has the fairly obvious answer:
The only answer I can think of is politics. They said they were going to pass health care reform, they ran on that platform, and now they are determined to do it despite the widespread recognition that if they succeed the outcome will make the nation worse off.
the majority of our representatives may congratulate themselves on reducing the number of uninsured, while quietly understanding this can only be the first step of a multiyear process to more drastically change the organization and funding of health care in America. I have met many people for whom this strategy is conscious and explicit.
Now why would our benevolent elected leaders do such a thing? Randall Holcombe has the fairly obvious answer:
The only answer I can think of is politics. They said they were going to pass health care reform, they ran on that platform, and now they are determined to do it despite the widespread recognition that if they succeed the outcome will make the nation worse off.
Thoughts on Health Care, Part I: A Right to Health Care Access?
Over the next few months I wish to weigh in on the health care debate with a series of short essays. Here is the first:
One of the most relied upon arguments of proponents of socialized medicine is that health care access is an inherent right all human beings possess. I wish to challenge this assertion.
There are numerous practical arguments one can make against this claim. For instance, who will pay for the costs? How will perverse cost incentives be dealt with? How will the distribution of effective services be done efficiently? How will information be shared? The list goes on and on. But I wish to deal with one distinct issue: the fundamental contradictory nature of a so-called "right" to health care access.
Claiming health care is a right is to give credence to the notion of positive rights; rights which are based on action, or require one party to give and another party to receive. Examples are access to health care, as mentioned, or access to public education. Contrast this with negative rights, which are based on inaction, or the freedom "from" something. Popular examples are the rights of freedom of speech and assembly (freedom from coercive measures). Negative rights are a one party system; positive rights are a two-party system. To clarify, take crime as an example. A negative right application of crime in society would be "freedom from crime." If this right were to be violated, society would take ex post measures to compensate the victim for any damages suffered. A positive right application of crime would be the "right" to be served by a public police force, security cameras, etc... to prevent such violations from occuring in the first place.
The key difference between these two types of rights is that positive rights comes at a cost to some party to maintain the right of another party, whereas negative rights do not come at a cost to any second party. I am free to say what I wish, but no one is required to listen. I am free to assemble with others, but I cannot coerce others to assemble with me. On the other hand, if I have a right to health care access, I do not have to endure any cost to attain the benefits of the services of health care. But because health care is a limited resource, to receive it, it must come at some cost to another party. In this simple scenario, that party would be the provider. The cost would be endured in forms of lack of monetary compensation due to time spent, skill applied, effort applied, emotional capacity spent and others.
At its core, a right to health care access is a violation of property rights. The consequence of this would be the extreme perversion of The Law. Frederic Bastiat writes in The Law, "As long as it is admitted that the law may be diverted from its true purpose - that it may violate property instead of protecting it - then everyone will want to participate in making the law, either to protect himself against plunder or use it for plunder." A right to health care access legitimizes the idea that The Law exists not to protect, but to provide. The consequences of such thinking can only lead to totalitarian ends.
As Michael Cannon and Michael Tanner write in Healthy Competition, "Fundamentally, creating a legal "right" to health care is incompatible with the idea of individual rights. People cannot legitimately claim a right to something if that claim infringes on the rights of another." A right to health care is a seductive idea that thrives in the minds of reality-deluded utopian thinkers. All it will provide is a subtle avenue for government to seize individuals' liberties under the guise of paternal altruism.
Do not be fooled.
One of the most relied upon arguments of proponents of socialized medicine is that health care access is an inherent right all human beings possess. I wish to challenge this assertion.
There are numerous practical arguments one can make against this claim. For instance, who will pay for the costs? How will perverse cost incentives be dealt with? How will the distribution of effective services be done efficiently? How will information be shared? The list goes on and on. But I wish to deal with one distinct issue: the fundamental contradictory nature of a so-called "right" to health care access.
Claiming health care is a right is to give credence to the notion of positive rights; rights which are based on action, or require one party to give and another party to receive. Examples are access to health care, as mentioned, or access to public education. Contrast this with negative rights, which are based on inaction, or the freedom "from" something. Popular examples are the rights of freedom of speech and assembly (freedom from coercive measures). Negative rights are a one party system; positive rights are a two-party system. To clarify, take crime as an example. A negative right application of crime in society would be "freedom from crime." If this right were to be violated, society would take ex post measures to compensate the victim for any damages suffered. A positive right application of crime would be the "right" to be served by a public police force, security cameras, etc... to prevent such violations from occuring in the first place.
The key difference between these two types of rights is that positive rights comes at a cost to some party to maintain the right of another party, whereas negative rights do not come at a cost to any second party. I am free to say what I wish, but no one is required to listen. I am free to assemble with others, but I cannot coerce others to assemble with me. On the other hand, if I have a right to health care access, I do not have to endure any cost to attain the benefits of the services of health care. But because health care is a limited resource, to receive it, it must come at some cost to another party. In this simple scenario, that party would be the provider. The cost would be endured in forms of lack of monetary compensation due to time spent, skill applied, effort applied, emotional capacity spent and others.
At its core, a right to health care access is a violation of property rights. The consequence of this would be the extreme perversion of The Law. Frederic Bastiat writes in The Law, "As long as it is admitted that the law may be diverted from its true purpose - that it may violate property instead of protecting it - then everyone will want to participate in making the law, either to protect himself against plunder or use it for plunder." A right to health care access legitimizes the idea that The Law exists not to protect, but to provide. The consequences of such thinking can only lead to totalitarian ends.
As Michael Cannon and Michael Tanner write in Healthy Competition, "Fundamentally, creating a legal "right" to health care is incompatible with the idea of individual rights. People cannot legitimately claim a right to something if that claim infringes on the rights of another." A right to health care is a seductive idea that thrives in the minds of reality-deluded utopian thinkers. All it will provide is a subtle avenue for government to seize individuals' liberties under the guise of paternal altruism.
Do not be fooled.
Healthcare Links
John Stossel on the fallacy of a centrally planned health care system
The New York Times on what the Senate bill may include
Michael Tanner on how the most controversial issues are addresed in the recently passed House bill
Mario Rizzo on how the bill will affect him personally.
Horwitz on ObamaCare
Steve Horwitz on ObamaCare:
I continue to be amazed at my friends on the left who think this bill is some sort of victory for the little guy. This will be a feast of lobbying and rent-seeking as it will be tinkered with for years if it passes. Who wins at that game? Not you and me, but Big Insurance, Big Pharma, and Big Corporations in general, who can absorb the costs and engage in the lobbying. It will kill small businesses and it will impoverish and worsen the medical care of the middle class, as well as the poor.
For all the talk on the left of being opposed to corporate power, they just don't seem to get that expanding the state's role is exactly what gives corporations REAL power through lobbying, rent-seeking and the all the rest.
I'll disagree with Steve on one thing; the left definitely gets it. From the minimum wage to agricultural subsidies to mandated benefits to this garbage, the left's economic philosophy (and recently much of the right's) is combining the redistribution of wealth with corporate back scratching, resulting in a duplicitous system that hides behind a veil of populist rhetoric and propaganda, yet ultimately ends up only benefiting the rich and powerful.
Corporate-statism is the greatest threat to liberty, democracy and capitalism, and this bill is a massive step toward that end.
I continue to be amazed at my friends on the left who think this bill is some sort of victory for the little guy. This will be a feast of lobbying and rent-seeking as it will be tinkered with for years if it passes. Who wins at that game? Not you and me, but Big Insurance, Big Pharma, and Big Corporations in general, who can absorb the costs and engage in the lobbying. It will kill small businesses and it will impoverish and worsen the medical care of the middle class, as well as the poor.
For all the talk on the left of being opposed to corporate power, they just don't seem to get that expanding the state's role is exactly what gives corporations REAL power through lobbying, rent-seeking and the all the rest.
I'll disagree with Steve on one thing; the left definitely gets it. From the minimum wage to agricultural subsidies to mandated benefits to this garbage, the left's economic philosophy (and recently much of the right's) is combining the redistribution of wealth with corporate back scratching, resulting in a duplicitous system that hides behind a veil of populist rhetoric and propaganda, yet ultimately ends up only benefiting the rich and powerful.
Corporate-statism is the greatest threat to liberty, democracy and capitalism, and this bill is a massive step toward that end.
Health Care and Power
The always spot-on David Harsanyi cuts through the BS and reveals Pelosi's health care legislation for what it truly is: an unadultered government power grab.
Public Choice in Action
Via David Henderson over at Econlog, keithhennessey.com points out some precarious and perverse incentives facing DC legislators at the moment. In particular:
The Democratic party is unified in wanting a major legislative accomplishment. I know of no Democrat who is saying he or she wants the bill to fail, even if some of them will vote against it. This sounds trivial but is important. Congressional Democrats appear to believe that enactment of a comprehensive law is critical to their re-election. Most seem to believe that a White House signing ceremony is more important than the contents of the bill that becomes law. This helps the Leaders and the President rally votes and creates legislative bargaining flexibility.
Relying on government benevolence is like leaving the front door of your home unlocked 24/7 because you believe everyone around you is good. It's a wonderful thought, but you are going to get robbed.
The Democratic party is unified in wanting a major legislative accomplishment. I know of no Democrat who is saying he or she wants the bill to fail, even if some of them will vote against it. This sounds trivial but is important. Congressional Democrats appear to believe that enactment of a comprehensive law is critical to their re-election. Most seem to believe that a White House signing ceremony is more important than the contents of the bill that becomes law. This helps the Leaders and the President rally votes and creates legislative bargaining flexibility.
Relying on government benevolence is like leaving the front door of your home unlocked 24/7 because you believe everyone around you is good. It's a wonderful thought, but you are going to get robbed.
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