My friend and I were debating healthcare on Facebook. He recommended I watch this video by Stefan Molyneaux, which I did. My response was too long for Facebook and I don't have a better spot to put it, so I'm posting it here.
- Government is a useful tool against abuses by those in power (including corporations, other parts of the government, and terrorists).
- I absolutely agree with Molyneaux that we need to unbundle healthcare from employment. This is an unfair legacy system that gives employers too much power, employees too little flexibility, and spreads the benfit too thinly.
- I like Molyneaux's "predictability vs cost" quandrant setup. This is a useful tool in evaluating policy options.
- I like hi acknowledgement of the inelasticity of demand of healthcare (everyone wants to live forever!) and his interest in supply-side solutions. Despite this "thesis statement," though, he spends most of the talk on demand-side issues.
- He doesn't state it outright, but throughout his talk, Molyneaux suggests that economic worth is human worth. I find this repulsive and it makes it very hard for me to accept his prescriptions.
- At several points, Molyneaux talks about "choosing to buy health insurance while you're young and healthy." Not everyone has a period in their life when they're young, healthy, and can afford any insurance. That is a luxury of the middle-class (if not the upper-middle class).
Friend: "I don't understand why the liberal mind must defend government at every turn."
Certainly not. Take Jury Nullification. It can be used for what I consider evil: white jurors in Jim Crow refusing to convict lynchers. And it can be used to curb government abuses: jurors in cities in the 80s refusing to convict on minor drug crimes in the drug war. I don't know exactly where I fall, but I know I don't side with the judges who hold in contempt of court those who hand out fliers about nullification.
But one reason I often turn to government as a solution to things is that there aren't many levers that can hold accountable the people who already hold the power. Our free(ish) market means that even the richest don't hold all the power, but they're at a much better negotiating position on nearly every issue, from consumer protection to compensation to environmental protection.
(This is particularly relevant to a minor point Molyneaux makes. He complains that the AMA makes doctors become licensed to practice medicine. The alternative, I suppose, is people doing free market research about which practitioners provide good healthcare value. But most people aren't in a position to do this research. They lack the specialized medical knowledge or the time or money to do the research. Also importantly, this sets up extreme information asymmetry. A random quack can set up shop and pretend to be a great doctor, then change names and towns after his "medicine" fails. Licensing is a form of using government power to hold people accountable because the market is unable to.)
Friend: "The Cato article is a factual history lesson - can't argue with facts."
You can't argue with the facts, but you can argue with the emphasis or omission of facts. But in this case, I think they do a fantastic job of summarizing the history.
Friend: "But 95% it starts with the creator of the rules of the game - the government."
I concede this if you include lobbyists in "the government." It's all one system. It's absolutely politicians and regulators, but also how the policymakers have to campaign and fund-raise. Campaign finance reform is an important aspect of nearly any policy debate.
Molyneaux: "You cannot have a system where everyone gets all the health care they want."
I absolutely agree. Until we have infinite supply, we must ration health care. It drove me nuts when people got up in arms about "rationing health care." All systems ration. We need to choose a way to ration that's fair. In my mind, that means it ignores the circumstances of your birth.
Molyneaux also sets up a "predictability" and "cost" framework that I really like. It's exactly the sort of framework we use in engineering to decide how to allocate our development and process resources.
But he uses that framework to argue against coverage of preexisting conditions. And that is the epitome of unfair by my definition of "ignores the circumstances of your birth." To follow this logic is to put sick babies on crags to feed the crows.
He also sets up a sort of "IRA" vision of health insurance. I think this is a really neat idea. To apply my "fairness" principle to this, the government would contribute to the individual pools for people who can't afford to fund theirs. Their pool would accrue interest in healthy times and become depleted as they needed more healthcare in old age. The rationing means that the most costly individuals who can't afford to fund their own pool would eventually be left without healthcare. This gives us a sort of "policy slider" -- less funding is more free market; more is more universal. But adjusting the slider is just a matter of budget, not rearchitecting the whole industry.
Molyneaux: "You become a medically-bound serf." This is a fantastic phrase for the problem that all three of us agree on. If I had been President in 2008, Rosencare v1 might have just been changing the tax incentives enough to push employers to switch from offering health insurance to paying the cost of the insurance on the same plan. That would free us up to focus on the other incentive problems separately. (This would also require insurers to offer whatever plan they're currently offering at whatever rate they're currently charging on average for the pool; otherwise, it would disproportionately benefit the healthy.)
Given how much he emphasizes the inelasticity of demand and the finite supply at the beginning of the talk, I'm disappointed by Molyneaux how little time he spends on supply-side issues. But I'm glad he raises them and he raises some really good ones. Because of information asymmetries, I do think we need strict licensing and training of medical professionals. But he seemed to, however briefly, suggest an appealing idea: expand the abilities of the people at the lower end of the training scale. For example, allow nurses to prescribe some medicines. I also like his argument that the AMA should not have as much power in deciding these standards since the have an incentive to keep costs high.
On tort reform: I think we can use the "likelihood" framework to cap some lawsuit awards. Rather than global caps (as were favored by the GOP in the late 90s and early 00s), apply caps based on the incidence of disease.
Molyneaux: "The FDA itself is a huge problem and needs to be abolished. There are already laws against harming people with your medicine." There are a few problems with this argument, but they all center around the imbalance of power and costs. The cost to a drug company of killing people is financial. They might lose market share or even be forced into bankrupty. But the limited liability inherent in a corporation means the people who run the company are free to continue their lives. Plus they have billions of dollars with which to fight any legal battle to further ameliorate any pain. Meanwhile, those harmed by their drugs are dead.
Molyneaux repeats over and over the idea that you "buy it while you're healthy, then reap the rewards." He also says, "you can choose not to buy it." But many people are never healthy and many others never have enough money to choose to buy it. He also talks about how insurance and better healthcare technology pay for themselves by making people able to work and contribute economically.
I think the fundamental breakdown is that I and so many millions of like-minded progressives refuse to accept that economic worth is human worth.