We need to turn away from the myth we have free-market health care
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No Comments [ Add Comment ]By Steve Olsen
Guest commentary
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s I've observed the nearly complete failure of Congress to accomplish anything significant the last few years, I've come to the conclusion that we need a lesson on the concept of ideology versus philosophy. Espousing a political philosophy is good and necessary. When we vote for someone, we need to understand the general guiding philosophy under which they would govern.
Philosophy, by definition, can be considered scientific, and is subject to change as facts and data show the need for such changes to conform to reality. Ideology, on the other hand, is rigid. It is not amenable to change; it is uninterested in facts and data. There is nothing wrong with ideology when applied in the correct circumstances; for example, our religious faith falls into the category of ideology.
It is dangerous, however, to treat political theories as ideology. When people on both sides of the political spectrum treat their own theories as ideology, it results in not only an inability to compromise, but creates an environment where logic, analysis and common sense cease to play a role.
Nowhere is this more apparent than in the debate over health care. The facts are unimpeachable. Americans spend twice as much per capita on health care as other countries, yet tens of millions of Americans do not have health insurance. Eighteen-thousand Americans died in 2006 because they lacked access to health care. The portion of our health care dollar that goes to bureaucracy is twice as high as other industrialized nations. Wellness statistics such as infant mortality lag other countries.
Those who argue free market principles hold the answer need a lesson in how free markets work. Free markets do an excellent job of allocating resources when correctly applied. Markets only work, however, if all the ingredients are in place to create the "invisible hand" that Adam Smith talked about.
The fact is Americans have correctly decided that allocating resources using free market principles doesn't work with certain functions like police and fire protection, and our public schools.
How do we decide whether free markets or the police/fire protection paradigm is better suited for a specific function? It's really quite simple. For free markets to work, society has to be willing to deny access to those who cannot afford it. For example, most everyone would like a BMW, but society only gives them to those who can pay for them. Remove this crucial ingredient, and the free market paradigm collapses.
The fact is that American health care is as "socialist" as any other industrialized nation. About half of the nation's health care is paid for by Medicare, Medicaid, the Veteran's Administration, etc., and most of the rest of us who receive health insurance get it from our employers through what amounts to a de facto payroll tax.
However, through our convoluted attempts to pretend we have free market health care, we have kept the incentives for high profits and waste intact, without the restraints against inefficiency and price gouging that exist in healthy markets. The attempt to maintain the ideologically driven myth that American health care is a free market system is a perfect example of how markets malfunction when misapplied.
Could a pure application of the market fix the health care mess? From an economic standpoint, certainly. Simply eliminate all health care expenditures except those paid for by individuals receiving the service, and deny access to anyone who can't afford it, and the market would quickly bring prices down and squeeze waste out of the system. But we are no more prepared to take this step than to deny access to police protection to those who can't afford it. Nor should we.
Am I arguing that America should adopt Canada's health care system? Of course not. But as the last major nation without universal health care, we should be able to study what everyone else has done, and come up with a uniquely American system that works. However, we must start with the realization that the police/fire protection paradigm is the correct one. Be forewarned, however: Almost half of current dollars spent on health care in this nation go to waste and excessive profits. To keep the health care mess from bankrupting America, we must eliminate that waste.
When we start peeling off those piglets from the teats of the mother sow, there's going to be a lot of squealing. That squealing scuttled health care reform in the '90's. It will happen again if we're not vigilant.
Olsen was the Democratic candidate for Utah's 1st Congressional District in 2006. He lives in Plain City.
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