Thursday, July 23, 2009

Flattery will get you in your buddy's column 

My NARN friend Ed Morrissey writes a column for the American Issues Project today that picks up on my praise of something he wrote earlier this week. The debate over health care is not a debate between rationing and not rationing; it is a debate between rationing by government and rationing by the current system of a little choice for individuals, a medical education system controlled by doctors and government, and third-party payers in insurance companies. Given that's the current system, as Atul Gawande noted last January, you're most likely going to make small changes on that system.

Ed points out two differences between our system and the models of single-payer that proponents use. First, in the systems of Britain and Canada, if one wanted to opt out of the national health system, where would one go? True, you'd have to have a lot of money to do it, but that option is simply not available. Yet the various stories from Canada of people making choices when ill to opt out and use private solutions either in Canada or the USA are something American consumers take for granted. Tell them they won't have that option -- as President Obama got dangerously close to doing last night -- and you will lose a lot of support for changing the system. It's true that when we're not sick we, like most people, don't pay a very high share of our health costs -- as is true everywhere else, Arnold Kling points out. But we seem to have very inelastic demand for treatment when ill. (There must be a dozen good dissertations in health economics in that last paragraph.)

Secondly, Ed worries for the diversity of health care choices under the proposed system:

The rationing decisions come from a voluntary association between the consumer and supplier, not from a coerced �choice� imposed by politicians. If you don�t like the rationing decisions made under single-payer, you will be left with no other options, and the lack of competition will mean that little pressure can be brought to bear to improve those decisions through normal market forces.

In a free market system, even with insurers, the goods or services available to consumers allow for diverse choices and get rationed on the individual's ability to pay. That's true for anything, even the essentials of living � food, drink, clothing, shelter, as a moment's thought will corroborate. Few Americans, at least so far, have argued that any of these basic commodities should be governed by a single-payer entity that assigns those choices by any other means than the fruits of one's labors.

I saw a great headline in our campus newspaper that illustrates one of the problems we have in economics: "Economy leaves many unemployed". To borrow the line from Soylent Green, "the economy is people!!!" It is the actions of millions of individuals who buy and sell, truck, barter and exchange with one another. Or think of the scene from Repo Man
Duke: The lights are growing dim Otto. I know a life of crime has led me to this sorry fate, and yet, I blame society. Society made me what I am.
Otto: That's bullsh*t. You're a white suburban punk just like me.
Duke: Yeah, but it still hurts.
The economy doesn't "leave many unemployed"; at this particular moment workers are not as persuasive in convincing employers that their own situations would be made better if they hired more labor. We get our income by convincing others to give it to us in exchange for something of value. Our ability to convince people depends on choices we make.

That is as true of health care as any other good. We get it by convincing someone else to help us become healthier and to stay healthier. The use of government payments -- "single payer" obfuscates who it is we're enlisting to pay -- brings into that relationship an entity with the legal monopoly on the use of force. I cannot persuade my golf partner the optometrist to give me an eye exam for $20; he's really good at what he does, and the time I spend in the chair could be used on someone else willing to pay $100. But if I tell him "you'll get paid by the government" and the government sets his compensation for an eye exam at $20, he has less freedom to refuse my demand for an eye exam. I might be able to persuade him out of friendship, but why should I bother if I can use government force instead?

When I persuade someone else to exchange with me, we agree on values. When government pays for health care, it imposes its values.

This is why I wanted my question asked of President Obama last night: "Who will provide medical services to the 46 million Americans you say will now receive coverage under your plan that do not now?" Will the government try to persuade them? If so, with money they earn or money they acquired through confiscation (taxes)? Or will the force be more direct? If the government is going to be in the business of promising health care, how will it deliver? It will impose its values on someone; it would be nice of the Democrats to tell us who. Maybe someone will persuade them to tell us, because unlike them, we can't force an answer.

My thanks to Ed for introducing me to the AIP audience; I hope you liked what you read here, and invite you to look around.

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