What do you want for nothing?
January 10, 2008
Recent commenter SteveJ had a blog a few days ago — it seems to be gone now — where he asked ten questions of liberals. One of them was about health care, and the question went something like “when was the last time something you got for free was better quality than something you paid for?” (SteveJ, if you’re still around feel free to correct me if I am wrong.)
Well, any socialized medicine program is not likely to be free, we’re just going to pay for it through taxes rather than directly to a for-profit health insurance company. And if Steve is suggesting the current quality of health care is the best we can expect — since it’s competitive — well, that’s pretty chilling. The metrics seem to bear me out; the US health care system does not fare well in either cost or outcomes when compared to other nations. Here, for example, is a chart on “amenable mortality” from 2002-2003. (”Amenable mortality” means deaths that could have potentially been prevented with the proper health care.)
You’ll notice that France — the country with the socialized medicine program no one ever talks about because it’s so damn good, ranks in at #1. Canada, the horrorshow program everyone here is scared of, comes in sixth. We come in 19 of 19, down four slots from 1997. (Hat tip here to Kevin Drum).
Granted, this is just one measure and one example. But what a measure it is.
But I mustn’t forget to answer SteveJ’s question directly. Now, let me see… “free things” — I’ll take that to include subsidized government services as well, since that’s what the health care plan would be. So, free or subsidized things I’ve had that are better than services I’ve paid for…
- Tap water, for example, occasionally doesn’t taste as good as bottled water but it is for the most part free. And when I am home it is far more convenient. (Sometimes, bottled water is tap water, meaning Coke makes money repackaging government services.)
- The Smithsonian museums are by far better than any museum I’ve ever had to pay to visit.
- The most beautiful road in the country, the Blue Ridge Parkway, is not a toll road. I’ve never had more fun driving than I have had on the Parkway.
- City police have been far more professional and effective than private security guards, at least in my own experience.
- Although certainly not free, the heavily-subsidized mass transportation I used in Washington was much superior to the commercial alternative (buying a car and buying a parking space)
- I blog with Wordpress, which is free. I used to use Movable Type, which I paid for. I tend to think Wordpress is quite a bit better.
- The free material I can get from iTunes as podcasts is far superior to the content I was paying for from Air America.
- The PHP documentation, which is free, is much better than any PHP book I have ever purchased. PHP itself, which is free, is the best programing language I’ve ever used. Ruby is also excellent and free.
And so on.
The government services I listed — running water, transportation, museums, security — all have something in common. They are all massively expensive, they benefit everyone, and for many of them competitive services would not only be extremely inefficient but also reduce the effectiveness. (Imagine different water companies owning their own pipelines and you begin to see the problem.)
As a competitive enterprise, health care suffers by being extremely expensive. It requires a lot of equipment, a lot of personnel overhead, and a lot of paperwork. Our competitive model adds additional levels of paperwork by involving competing insurance companies which also demand an extreme amount of paperwork. These health insurance companies then make massive amounts of money through monthly payments from the insured, and they try to hold onto that money by denying as much care as they possibly can. In other words, they are rewarded for horrible customer service and lose a competitive advantage if they actually serve the needs of their clients.
Medicine — and insurance industries — are also very heavily regulated for damn good reasons. But that means it’s not a free market system. In fact, it’s about as far from a free market system as you can get. No one is going to create a startup health insurance business. The invisible hand of the marketplace is already chained to the invisible wall. So all our “for profit” health care system is really doing is keep more of us sicker than we need to be while it enriches drug and insurance companies.
Of all the ways we could provide health care to people, I tend to think we’ve chosen the most stupid. And the metrics seem to bear that out.
But what about the profit motive? Well, that’s where the other examples come in.
The promise of profit doesn’t guarantee good or quality work, despite what free-market libertarians may think. Once Maslow’s basic needs are taken care of, it’s not as powerful a motivating factor for anyone who’s not an entrepreneur. There are other rewards, too. And that’s why PHP is free (and good), Wordpress is free (and good), and podcasts are free (and good). Profit is in fact frequently a disincentive to good customer service. See also: Comcast, Verizon, Microsoft, Gateway Computers, and the worst offender of all — the Health insurance industry.
“Free” is not the problem. But in health care’s case, specifically, profit is.
Posted in Basics of Liberalism, Politics
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January 10th, 2008 at 12:15 pm
Excellent post!
When my last employer was looking for a new health insurance provider, I learned another reason it’s so expensive: too many hands in the pot. We dealt with an HR rep who dealt with a broker who dealt with a provider. Not only is everyone taking a cut, but accountability is diminished at every turn.
Libraries are another excellent “free” system.
Fire protection too. This is an exaggeration, but did you ever see the part in “Gangs of New York” where the competing for-profit fire companies would start fires, race each other to the house and then wait for payment before attempting to extinguish the fire?
A neighbor and mother of a soon-to-be-kindergartner recently sent out a long email detailing their school search and discovered in the end that, at least in the early years, the free local public charter schools were a better option than the private schools. Pretty good for an urban neighborhood.
A friend of ours who is French and about to move from the US to Germany was telling us how his taxes are going to go up to 40-45%. But his health care is free, he has a free Master’s degree from a Danish school (thereby increasing his earning potential) and if his wife has children, she can stay home from for nearly 2 years with 70% of her salary.
I would argue that many of us pay at least an additional 10-15% of our salary in health care premiums, co-pays and deductibles already. And you have to wonder how a society is affected over the long term when mothers are sent back to work after a couple weeks post-partum and kids are in day care from infancy.
January 10th, 2008 at 8:29 pm
Just a quick comment on a few things. Our healthcare system in the US certainly needs a lot of improvement, no argument there. I’m not sure how much weight I put into amenable mortality though. I’m pretty sure all the of countries listed on that graph have socialized medicine except the US, so every citizen has the right to and access to healthcare. Since the US does not have socialized medicine, it would make perfect sense that we would rank last in this category. Not that that’s good, it just makes sense.
I know there are a lot of things that you’ve experienced that are free are better than what you pay for, but I wouldn’t be so sure healthcare is one of them. Of course, it all depends where you’re getting the free healthcare. I can tell you, the U.K. is not such a place.
I work for a laboratory testing company and have been to our facilities in the UK. I’ve also visited a few of the pubic hospitals that we have contracts with. Believe me, you don’t want to go to them. I thought Igor was going to creep out from around the corner any minute. Patients are literally wheeled outdoors from their rooms to surgery. They were filthy and nasty places to visit.
I spoke to some of our employees over there, and they do NOT opt for the public plans. They pay extra to go the private route.
As Emily posted, I’d be interested to see what readers to pay (percentage-wise) for healthcare. I’m at less than 3% for medical and dental, and that includes coverage for my female domestic partner. I personally think that’s well worth it.
January 10th, 2008 at 8:59 pm
The beauty of a system like the UK’s is we can look at it and say “see, here is what not to do.” You’ll note they rank rather close to us.
As far as percentage of income goes, I work for a very small company and as such we don’t have nearly the bargaining power for health insurance. Our family deductible alone represents 4% of my gross salary.
January 11th, 2008 at 12:00 am
We’re now self-employed and have opted for a high-deductible plan with a health savings account. The premiums are pretty low and it covers our daughter’s well-baby care, but other than that we wanted to mainly have coverage for a crisis.
With my last employer, a small business, family premiums were $500-600 a month, which was probably close to 10% for most people working there. Add to that co-pays and deductibles, and you’re getting close to what the Europeans pay through their taxes. Not to mention if you run out your sick leave and have to take unpaid time for yourself or your kids (let’s not even talk about the putrid amount of paid leave most employers offer in this country). Or things your insurance company won’t even cover.
January 11th, 2008 at 5:49 pm
You are right smart. Don’t ever stop thinking because you make me think too.
January 12th, 2008 at 10:40 am
Thud, those were good examples of free or publicly provided things that seem to work out. I remain convinced, though, that the *tendency* (sans contrary anecdotal evidence) supports the superiority of paid goods and services. Imagine what a government restaurant would be like. Or a government grocery store. Look at how horrible government schools usually are compared to private schools.
You said, “The promise of profit doesn’t guarantee good or quality work, despite what free-market libertarians may think.” Well no kidding it doesn’t. We’re not looking for *guarantees* — they don’t exist and we never claimed they do. We’re looking at the entire body of evidence and asking which generally provides superior quality. Is it government or the free market? The answer is so obvious that I can’t believe we even have to debate it.
I agree that the current state of health care is not nearly what it should be and, admittedly, it does cost far too much. I disagree, though, that this is the consequence of greedy capitalists out to screw everyone for a buck (the endless refrain of the left concerning just about everything). There are other reasons for it, such as the public’s reliance on insurance for routine care. Or today’s litigious tendencies, which forces doctors to buy astronomical premiums and pass on those costs.
By the way, for all your complaints about profits, doctors today don’t make a ton of money like they used to. A lot of people are shunning the profession because, given all the sacrifices and education involved, it’s not all that lucrative. Lawyers seem to do much better, but I don’t hear much outcry from the left about them.
But just because the current system under-performs, does that mean we have to turn it over to government? Aren’t there any other solutions in your heads but statist solutions?
January 12th, 2008 at 6:36 pm
SteveJ, I agree that in general, market-based solutions are superior to government ones. But that doesn’t mean that a government solution to national health care is inappropriate or wouldn’t be better than a market-based solution. Like the other significant government programs I mentioned, a public health care system would benefit greatly from government intervention.
We have plenty of evidence on this, as most if not all other industrialized nations have state run health care of one flavor or another and most, if not all, are superior to what we have now.
There’s so much available data that says state health care *can* work, and so many good examples of what to do and what not to do in terms of national health care is concerned I’m surprised we’re still arguing about this as well.