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May 27, 2005

In Defense of Socialized Medicine

CATO's Tim Lee has been running a very good blog named Binary Bits which seems, in large part, dedicated to correcting Matt, myself, and a few others on our health care posts. Oftentimes, Tim is right and I am wrong. But today he wrote a long post, in response to me, which lets me be right and him wrong (and they say liberals are wishy-washy), so let's get to it.

Tim argues that universal health care, and indeed health care, is nothing more than an effort to redistribute money from the healthy to the sick. And he's right, I guess; that is one way of looking at it. But what society is aiming at isn't a redistribution, but a guarantee: it's promising that if you get extremely, expensively sick, the illness will not bankrupt you and funds will be available to cover your treatment. In this way it doesn't deserve to be grouped in with more commonly discussed forms of redistribution, say from rich to poor or, under Bush, from poor to rich, because it's redistributing to a group we all expect to be part of one day. That's kinda the thing about health insurance, in fact. We all believe that, sooner or later, we'll be the ones on the receiving end of the redistribution, and when that day comes, having paid for others up till now is going to seem like quite a good deal.

That's why, contra-Tim, it does make sense for a middle class person who breaks his arm to have others pay for it. The middle class doesn't constantly break their arms. And indeed, the middle class doesn't always want to spend enormous amounts of money on medical coverage, particularly when the stocks aren't doing well and low consumer spending is cutting back on commissions. So the middle class, like the rest of us, enters into a compact designed to reduce their risk. It's not moral, it's not a deep-seated belief that the sick deserve more money than the well, it's a practical judgment about what will benefit them most.

That goes beyond the middle class as well. Setting a broken bone, buying everyday medicines, and all the rest is very, very, expensive. Not catastrophic expensive, but still quite a drain. My girlfriend's got a genetic disorder that doesn't allow her to produce normal phosphorous. As such, she needs a few medicines to rectify her kidney's oversight and keep all her hair from falling out. They cost money, indeed, quite a bit of it. Without health insurance, she simply wouldn't be able to afford them on a post-college, non-profit salary. Simple as that. Special cases aside, most folks would rather have the security of paying a steady premium that ensures health emergencies don't shock and awe the bank account rather than hope the funds are in good shape when we do, inevitably, need some serious treatment. Security, predictability: these are goods in their own right.

Tim goes on to write that there are bureaucratic issues with having a third-party, be it the government or an insurer, pay for routine services. True enough. But there are also benefits. As countries with single-payer have shown, and as large corporations prove daily, large groups and institutions can bargain far more effectively than individuals. So the French may not like the increased paperwork the government uses, but they're really big fans of the low prices the state negotiates on pharmaceuticals. And we may not like Wal-Mart's practices, but they're really much better at squeezing a discount out of toilet paper producers than is the Qwik Mart on the corner.

Lastly, I don't know where people come up with this stuff:

Single-payer systems are characterized by long waiting lists for common operations, severe shortages of advanced technology, greater difficulty seeing specialists, etc. Ultimately, socialized medicine achieves the cost savings they do largely by letting people die, just as unregulated markets are alleged to do. The only difference is that who dies is decided by the whims of bureaucrats instead of the vagaries of the market.

Sigh. No they're not. They have waiting lists for elective operations, and the lists aren't even that long. Indeed, they're often shorter than in America (where did this idea that America doesn't have wait times come from? It's nuts.). They do not have severe shortages of technology, indeed, the only one with a really low level of new technology use is Britain, and that's because they like to keep costs dirt cheap over there and they pay physicians through capitation.

Further, single-payer systems do not "let people die" any more than we do. That's absurd. What they do less of compared to America is prolonging death. When an illness is terminal, and the end is days away, they are less likely to engage in heroic measures with little hope of survival and no hope of long-term recovery. But in Tim's idealized system of individuals, none but the rich could possibly afford that, so even he agrees it's not a smart move. Further, contra him, that's not where all the cost differences are coming from, not even close.

On the letting folks die note, socialized medicine offers longer life expectancies, less infant mortality and better care than our system. And while those outcomes can't, and shouldn't, be chalked up solely to the health care, it's foolish to deny that health care plays a part. Indeed, there's just about no disagreement over which side achieves better health care outcomes. Outcomes, remember, are not simply who saves more folks from heart disease. Americans do more in the area of cardiac bypass, but then, we need it. We do more in the way of cancer treatment, but see above thing on needing it (indeed, both France and the UK have significantly lower death rates from cancer, heart disease too). Most of this comes because preventive care in other countries, due to the low disincentives for visiting the doctor, is far advanced compared to America. Much more is caught much earlier and lifestyle changes, medications, and small-bore surgeries used to keep folks healthy. And, indeed, life expectancies across the ocean and to the North are much better than they are here.

As for seeing specialists, the French have no gatekeepers, a far higher number of doctors per capita, and no limit on the appointments patients can set. In fact, one of the worst things about the American system are the many disincentives to doctors appointments, leading to an underuse of them and thus a staggering number of preventable or treatable afflictions blowing into catastrophes. Other countries don't have that because their citizenry is able to go to the doctor's office.

None of this, by the way, means there aren't better ways of doing health care than we see in Western Europe and Japan. What we do know, however, is that the American way of doing health care is far, far worse, and we shouldn't be preserving such a broken, busted system because doing so protects some cherished ideological tenets. If you want HSA's, great, let's talk it through. If you want single-payer, as I do, let's have a sit-down. But you don't want what we have and you don't want to tar better systems simply to make ours look better. Because eventually, we're going to have to fix this mess, and when we do, it'd be best not to have any of the options coming pre-demagogued*.

* And yes, I'm looking at you, Gingrich.

May 27, 2005 in Health Care | Permalink

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» Insurance or Redistribution? from The Bit Bucket
Ezra responds to my recent post on national health insurance with a number of insightful observations on the subject. I think he makes a number of mistakes, but rather than fisking him, let me take a step back and see... [Read More]

Tracked on May 27, 2005 1:43:56 PM

» Insurance or Redistribution? from The Bit Bucket
Ezra responds to my recent post on national health insurance with a number of insightful observations on the subject. I think he makes a number of mistakes, but rather than fisking him, let me take a step back and see... [Read More]

Tracked on May 27, 2005 1:47:16 PM

Comments

Healthiness is not some kind of fixed condition, no? That's why it's insurance, not redistribution.

Posted by: praktike | May 27, 2005 12:36:08 PM

Yeah, that's kinda my point above, but stated in a much pithier fashion. In my defense, this post is oncoherent because I wrote it at 8 AM, while studying for a test. WHich I'm about to be late for. Oops.

Posted by: Ezra | May 27, 2005 12:44:31 PM

Framing, Ezra, framing. It's not "socialized medicine". That's their pejorative term. "Single payer insurance" is both more accurate and avoids the negative association with socialism.

Posted by: J Bean | May 27, 2005 1:34:15 PM

Yeah yeah, but it's my blog, read by a few thousand polinerds, and I was making a counterfactual title (after all, who defends "socialized medicine" these days?).

Posted by: Ezra | May 27, 2005 1:41:59 PM

If Tim Lee was my client I would tell him to raise his deductible from $2,250 to $2,600 because then he could deposit more in his tax free HSA. Of course his premium would go down too. I would say, "Nobody pays extra just to limit the size of their tax dodge." $2,250 is the size of the deductible during the first year of MSAs back in 1997. The deductible may rise by the consumer price index (CPI).

My smartest clients call each year and raise the deductible $50 (single coverage) just so they can maximise their HSA deposits.

Tim said, "Cato puts in $1,500 a year into my HSA." By the way he talks it sounds like he is not contributing himself to his maximum of $2,250.

Really smart clients say, "Who would take money out of their HSA, that's growing tax free, even if you could?" I tell them many clients don't. Keep your receipts for anything thats medical, vision and dental and let your HSA grow and then you have the freedom to take your funds when you desire, like next Christmas. You cant do that with an FSA or an HRA.

Posted by: Ron Greiner | May 27, 2005 1:44:14 PM

I guess I'd push for a further step, which is to restructure our "health care" priorities when we undertake economic health care reform. In a sense, to redefine the appropriate bounds of what we consider our health care system.

We should broaden our thinking about what's wrong with health care beyond the economic. The rationale for lumping things like "wellness promotion" into the upcoming reform is that, while economic reform can save a lot of money by limiting inappropriate demands (as discussed here a few days ago) as well as corporate profits (perhaps 30% of our health care costs), preventing disease might be even cheaper than treating it. Of course, if by pushing our society into more healthy behaviors (preventative doctor visits, immunizations, aggressive public health efforts, education regarding diet and exercise) we just shift our costs, that'd still be a good outcome.

Posted by: tinman | May 27, 2005 1:51:20 PM

You should call it socialized medicine and then convince people its a good idea. Its a rare chance to put socialism in a very positive light.

One question, if people in Brittain and France aren't dying from heart disease and cancer, what can kill them?

I like the idea of less infant mortality and less heroic measures to save the very old and very sick. Since so many people seem to be terrified of death though, wouldn't a middle-aged selfish white guy want more heroic measures and be less concerned with infant mortality? Not officially of course, just in reality. It would be nice to br able to sell single payer to middle-aged white guys. They run the world afterall.

Posted by: Neil Paul | May 27, 2005 2:58:08 PM

Over last weekend, my doctor friend and I were talking about end-of-life care, and the ridiculous amounts of money sons and daughters will throw at a hospital to "save the life" of their 80-something parent with preexisting conditions. Infection? Give them those $5,000-a-day antibiotics, STAT!

His thought was that if you could have people look at death differently than they do now (that it can be "cured" somehow), then much of our health-care dollars can be better spent.

Posted by: verplanck colvin | May 27, 2005 3:10:48 PM

Really, what can we expect from CATO-Land? Wasn’t Ayn Rand the ultimate libertarian? But what set her apart? She wasn’t a 20-something jerk. To her dying day, she believed that her icon, the dollar sign, truly represented the difference between the deserving creator capitalists and the stupid parasitical slaves. Of course Tim, the CATO moral imbecile, wonders why Healthy Tim Lee should “support” sick drones.

Full disclosure: I sometimes harbor a vestigial hint of such feelings toward smokers suffering from lung cancer. But then I remember the tortures I suffered while quitting the habit 37 years ago; and the fact that my country encouraged commercials, movies and plays depicting smokers as strong, sexy innovators, unlike those stodgy, timid teetotalers; and that I proudly smoked my Camels in front of my college students, with virile panache; and that at my present age Humphrey Bogart had been dead for twelve years, and Robert Oppenheimer for nine.

Tim Lee should ponder the role that Luck plays in life, and in so doing learn some humility.

Posted by: Dougas Scott | May 27, 2005 9:21:50 PM

health care discussions must include access issues (emergency departments are overcrowded and a primary care source for too many... waiting for illnesses to explode instead of preventing them is costly) and quality (in terms of outcomes research... what's unnecessary surgery? tonsils? c-sections? at what cost is defensive medicine? what's the best asthma care that leads to least missed work days?).

Focusing only on dollars is missing the bigger picture.

Posted by: DemFromCT | May 29, 2005 10:30:28 AM

Ezra - excellent observations, to which I add a fascinating factoid. Throughout the developed world, the medical inflation rate "premium" above the base rate of inflation has averaged out to be 4.2% over the last 20 years. That is, costs are going up at the same rate around the world, but our costs started out higher.

It does not matter if it is single payer (UK), multi-payer (Swiss), independent provider, state-owned provider, black, green, striped or polka-dotted, we're all in the same boat and the tide is rising.

Seems to me that this fact, never mentioned by advocates of any particular system, is kind of important.

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