Health Care

Op-Ed in Crimson

In case I haven’t publicized it enough in every other medium, please note that I had an Op-Ed in the Crimson last week.  The subject was health care.  It is reposted below the fold.

The Divide

There are two underlying visions for health-care reform.

In the first, insurance is a risk-smoothing mechanism. Based on their risk profiles, individuals can enter into a variety of prospective payment contracts to reduce the uncertainty of their future medical expenses—direct or otherwise. Companies selling these contracts will determine the actuarial cost of providing coverage and price premiums, deductibles, and copays accordingly. This is insurance qua insurance.

In the second, insurance is a cooperative endeavor. Citizens pay into a common pool at equal levels—representing their equal responsibility. Health-care expenses are paid out of the pool—representing a right to be secure against unexpected, undeserved, and unaffordable medical expenses. In this vision, insurance is the administrative mechanism of a positive right or entitlement to health care.

A belief that health care is a mere good like any other—to be purchased by willing and able individuals—yields the first vision. The belief that health care is a positive right—that people simply deserve or are entitled to health care regardless of cost, perhaps by virtue of their membership in some community—yields the second.

The first vision ought not be threatening to anyone who maintains a general presumption in favor of individual liberty. Voluntary risk-smoothing is not a dangerous behavior that deserves repression. Only to the extent that it precludes the second vision is it problematic.

Thus, opinions of health-care reform may turn on whether the second vision is accepted. Truly, this vision is such a powerful one that it is shared by many, if not most, of even those conservatives who worry about government funding of abortion, free insurance for illegal aliens, and so-called “death panels.” It promises a less stressful, more secure, and above all more equitable society. So we must consider carefully why this vision might be rejected.

First, it is impossible. No government can truly guarantee security against health risks. If health care is provided by the state, society must decide, for example, the number of resources to be spent on discovering cures for new diseases. There is no necessary limit to this expenditure—ultimately, all lives end in a “health-care failure.” The state must determine a mandatory maximum or minimum level of care. In either case, society tacitly rejects responsibility for alleviating risks above this cap.

Second, it is short-sighted. Because society decides the amount to spend on future developments in medicine, it determines not only the present provision of health care, but also all future provisions. Without a true health care market, society cannot weigh trade-offs between current consumption and future technological progress. Possibly it will set too low a level, capping drug payments and discouraging investment in pharmaceuticals. Just as likely, it will set the level too high, subsidizing university research and granting tax preferences to the medical industry. Everything that is not health care—recreation, education, entrepreneurship, industry—then suffers under the tax burden.

Third, it is incomplete. Or in other words, the first vision is correct. Advocates of the second vision are fond of saying that nothing is more important than health. This is mere assertion—no one has the moral authority to rank one good over all others for all men. In a free market, individuals decide their own ranking of goods—including health—by weighing the perceived benefits against the concomitant costs, measured in forgone goods. Every individual can simultaneously maintain their own ranking of goods both important and trivial: health, religion, family, charity, art, entertainment, style, leisure, etc. A forced redistribution of health-care costs mandates a single set of priorities on all members of society, an imposition no less arbitrary for the original undeserved distribution of health-care risk factors.

Fortunately, the first vision does not in fact preclude the second. No conflict is necessary. Individuals remain free to demonstrate the primary importance they assign to health care by enrolling in whatever sort of mutual insurance communities they are willing and able to pay for. But as Congress moves toward a vast expansion of mandatory health-care regulations, the first vision grows hazy. Clarity of sight may soon be extinguished in the false light of an illusion.

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.