Free Drugs
Discussions with my cousin Jason and my sister Alexis prompted me to tackle this one. At first, universal health care sounds great. You get sick, you go to the doctor, no bills to worry about. And why shouldn’t Americans have it? When poeple in Germany and Canada get sick, they can go get help without getting the bill. Politicians paint this sort of picture for unsophisticated American consumption on the compaign trail. Yet, when we take a closer, more thoughtful look at the logical consequences of such a system, one is more likely to eschew that fatherly helping hand that is being offered.
When thinking about our government taking control of 1/7th of our economy we should give some skeptical thought to the consequences. First, lets establish that nothing is really free, and the total cost of healthcare for our nation will not decrease as a consequence of being routed through the federal government. In essence, we are going to give our money to the government, and then, when we need it for healthcare, they are going to give it back to us. (This article raises some interesting points about who decides when we get it back and under what circumstances. ) By virtue of this money being routed through the Federal Government, there is no direct accounting. Healthcare becomes a common good equally available to all. Presumably, some people need a lot and others need none at all. So it works (theoretically) like car insurance where 1000 people pay in and 1 gets in an accident and gets money back. However, the nature of the demand for healthcare is different. You can go your whole life without filing a claim with your auto insurer, yet nearly all of us would need money from the healthcare system, especially near the end of our lives. And we are all driving Rolls Royces, right? There is a lot of range to the types and costs associated with various treatments and I dare say, the government could never say “he/she is totalled.” Do you really want to deal with government beaurocracy when trying to get some promising experimental treatment for your dying mother? This will happen, as it is happening already with the current system.
The principles are well trodden in modern economics. It’s simple supply and demand. The problem is that as price decreases, demand increases. If prices are artificially low, a shortage ensues.
Let’s consider an example. I make and sell candy bars and determine that the market will bare a price of $1 per candy bar. The government steps in and determines that having candy bars is a right and everyone deserves to pay no more than $.25 per candy bar. If people are actually willing to pay $1 per bar then, where one person would buy 1 candy bar, they buy 4. Each person buying 4 means that there are not enough candy bars to go around; a shortage.
This type of shortage will manifest itself in frightening ways when applied to healthcare. Something’s got to give. Either it will take 3 weeks to get an apointment with your physician, or the care you get will be of poorer quality.
Interesting links:
Sowell, Thomas. (2004) Applied Economics: Thinking Beyond Stage One. (pp. 69 - 95) New York: Basic Books. ISBN 0-465-08143-6
The Case For Universal Health Care
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May 9th, 2004 at 9:04 pm
I agree 100%. Health care for all is just another step towards communism. I’m scared to think of what the future could hold if something like this were to go through.