Free Health Care or Health Care Freedom?

I've been wanting to write a follow-up to my first post about health care, and here it is. I believe that we do have a right to "free" health care, but not in the sense of having a right to goods and services that someone else has produced without having to pay for them. What we do have a right to is the freedom to take care of our bodies as we see fit. We have a right to be unmolested in the area of health care as much as we have this right in every other area of life. We also have a right to health care services that cost what they would cost in a voluntary market, free from government intervention. I think that most people vastly underestimate the effect of more than a century of government intervention on the prices in the health care market.

Interventions are rarely initiated by government itself, much less by popular demand, but by business interests seeking government protection from the ruthless demands of the voluntary market. Those most able to pay the admission price to the government's boudoir can buy government guns to protect their interests from the free will of health care customers and providers.

The AMA became a national organization in 1847. Its publicly stated goals were to raise the quality of health care, and protect people from "quacks." And its not-publicly-stated goals included: to protect and increase the income and status of white male doctors within the profession; to restrict the practices of other professionals and other schools of thought in medicine; to control medical schools to restrict the supply of doctors; and to punish price competition among doctors. Of special note was the Flexner Report of 1910, which resulted in legislation further restricting entry into the profession, especially for women, blacks, and Jews. Jews were often able to acquire their education abroad; many medical schools especially for blacks were shut down.

The AMA recently apologized for its racist policies of the past. But at the time, the AMA was just doing its thing as a trade union for white male doctors; it was government enforcement that allowed them to succeed. And the gains of any trade union, monopoly, or cartel always come at the expense of other workers and businesses. The free market is the ever-present enemy of established business. Once you're on top, it's just "good business" to pay the government to protect your position there. You disseminate propaganda to the effect that the upstarts and alternatives are a danger to consumers, and must be regulated out of existence, or kept in a very small pen. Then the government will come to the consumers' "rescue" by limiting their freedom of choice.

For many decades, the AMA and the government have been "protecting" us from black, Jewish, and female doctors; "protecting" us from being served by other professionals such as midwives, osteopaths, homeopaths, pharmacists, and chiropractors; "protecting" us from cooperative medical plans; and so on. In general, for more than a century they've been "protecting" us from less expensive alternatives, and from our own freedom of choice.

It doesn't take too many brain cells to realize that when cheaper alternatives are outlawed, the prices of the restricted supply of the approved good will rise. Thus for a long time, doctors and drugs have become increasingly expensive relative to other goods, over and above the effect of the government's currency inflation, which affects all goods in the market.

With no alternate universe available, it's impossible to say what would have happened over the same period of time in a voluntary market. The government and the medical establishment can claim credit for everything good that has happened in medicine for the last 150 years, and blame all problems on the tattered vestiges of freedom that still remain, and there is no way we can prove them wrong. All we can do is point to economic theories that the average person does not understand.

Mid-20th century, the government interfered in the market with wage and price controls, and employers began offering hospital insurance to employees in lieu of higher wages. Over a decade or two, hospital insurance and then general outpatient health care insurance became the norm. As people got used to third-party payment, they lost touch with the actual price of medical care. And with employers providing insurance, they were shielded from the price of their insurance premiums also. Thus patients were left on the demand side of medical transactions, with very little awareness of the cost of what they were demanding.

This situation was a perfect opportunity for the established medical profession to push their prices up and up, and to sell more and more procedures, office visits, or drugs. When insurance is paying, patients will generally do whatever their doctors suggest, and price is no object. People want to get as much out of their insurance as they can. Thus insurance increases demand and causes prices to skyrocket.

This effect was exacerbated by the policies of Blue Cross/Blue Shield. These major insurers paid "cost-plus," which created an incentive for hospitals and doctors to increase costs, while The Blues generally paid the claims with no questions asked.

The system happily relieved doctors of any concern about their patients' pocketbooks. They could bill insurance companies for much more than they would demand from their patients face tofface. With hospitals, doctors, and drug companies all on the insurance bandwagon, the costs of healthcare rose dramatically; the incomes of doctors, hospitals, and drug companies rose dramatically; and the insurance premiums paid by employers rose dramatically along with them.

When insurance premiums began to rise beyond the means of small businesses and individuals, people began talking about cost control. This took the form of HMOs that attempted to control demand by restricting patients' choices. But the time was also ripe for government to step in and save the day by becoming the insurance company of last resort, first just for the poor and elderly, and later on for everyone.

The government is the ultimate insurance company, because they can extort all the money they want from helpless taxpayers with the help of their gun-toting thugs, and when they don't feel like doing that, they can just create money. Inflationary monetary policy is more palatable to people than gun-toting thugs, because people don't understand that value is being stolen from the money that's still in their hands.

Once the government becomes the insurer of last resort, prices can go through the roof with no visible effect on the average medical consumer. But this game can't go on forever. Eventually the economy begins to show the strain as the demands of 300 million medical consumers are met with more and more expensive products and services. There is really no escape from the laws of economics; rising taxes and rising inflation will eventually wreck the economy.

People become accustomed to the idea that medical care is something you can't possibly pay for without help. What they don't understand is that they are paying for it in many, many indirect ways, but they don't make the connection between economic malaise and the impossibly high cost of the medical care to which everyone has a "right." In fact, we're paying much, much more for it in all these indirect ways than we would if each of us just paid for it directly.

When the economy begins to crumble and crash, politicians must scramble to get the whole mess under control before disaster makes them politically vulnerable. By now, people are thoroughly indoctrinated with the idea that they have a "right" to all the health care they want. And since they've been trained to believe that more government is the answer to every problem, there is nothing for the politicians to do but engineer a government takeover of the entire medical economy.

Now that people are getting desperate about cutting medical costs, it's funny how they're suggesting many of the very things that were outlawed and restricted--by the government, at the AMA's request--so long ago. All through the 20th century, M.D.s were marking out the territory they wanted, and paying people in government to protect the territory of their restricted cartel. They made sure that only M.D.s would be legally allowed to do many procedures and services that could easily have been done by less educated, less expensive professionals. The purpose of the AMA was always to raise the incomes of the doctors that belonged to it. And they succeeded in doing this at the expense of all the people who would have been doctors, all the patients those doctors would have served, all the patients who would have been served by other professionals, as well as those who would have been served by alternative therapies that were suppressed or not allowed to develop.

A friend of mine recently opined that we need a nationalized medical system because (for one thing) nobody can afford the cost of cancer treatment on their own. I did a little research on cancer treatment specifically. The cost of cancer treatment has risen astronomically, mostly due to the almost unbelievable prices of new anti-cancer drugs. It's gotten so bad that people are being bankrupted just by the small slice of the total cost that their insurance companies require them to pay.

Why do these drugs cost so much? I've talked here about the AMA, the insurance effect, and the government, but the Federal Drug Administration is also an important part of the cost picture. The FDA makes it tremendously expensive to get a drug approved, and the patent only lasts for a few years, so the drug companies have to recoup huge expenses and make all the money they want to make on that drug in just a few years' time.

In addition to this reality, they price the drugs high because they can - because insurance companies and/or government will pay for it. And also because the demand for life-saving drugs is pretty inflexible, as evidenced by people going bankrupt to pay for them.

Now imagine that we took insurance and government out of this picture. All that's left is the companies who make the drugs and the patients who need them. Who thinks that the drug companies would price their products so high that nobody could pay for them? Even when people are willing to impoverish themselves and their children to pay for life-saving drugs, there is ultimately a limit to their resources. Another lesson of basic economics is that you can't make money by pricing your product so high that nobody can buy it.

In a voluntary market, medical goods and services would be forced to compete for people's dollars with all the other things that people need and want. People would control their own demand, and spend their own money as judiciously as possible. The medical industry would have to bring its prices within the reach of ordinary people's budgets. And of course, more reasonable forms of insurance, as well as charity, would fill in the gaps between personal budgets and medical costs.

This freedom of choice, this personal autonomy, is what we have a right to. The freedom to take care of our own bodies the way we think best. The freedom to choose our own practitioners, our own medical philosophies, and pay for our own care in a voluntary market.

As yet, I haven't touched on the issue of controlled substances. Throughout most of the 20th century, the government has assumed the power to prohibit or allow citizens to use various chemical substances for medical or recreational purposes. If we grant the government the power to allow or prohibit what drugs and medicines we take, we have surrendered our sovereignty over our own bodies. How anyone can still believe he is free after surrendering control of his own body is beyond me.

If we grant the government the power to control what we're allowed and not allowed to ingest, then this power is up for grabs to the highest bidder. The law enforcement/prison industry wants more drugs in the criminal category, and wants the power to draw the line between recreational and medical uses. Doctors want drugs in the prescription category, so that people have to pay for office visits in order to get drugs. Governments want to declare substances unhealthy so that they can collect "sin taxes" on them.

We have a right to freedom in health care as much as we have a right to freedom in everything else. We have a right to choose our own foods, poisons, and medicines without the interference of busybodies and gun-toting thugs. Our need for health care is being used against us by opportunistic politicians and rapacious business interests. It's being used to impoverish and control us. The problem is not that we can't afford decent health care; it's that we can't afford this lack of freedom.