Health care for the simple minded

Health care would be a perfect example to illustrate the points I made in my previous post. If asked, the majority of Canadians would say that we have an excellent health care system. If you then ask “What makes it excellent?” the answer will not be that clear. If you press, you will eventually learn that what people like is the idea. The communist nature of the idea, specifically, that everybody gets the care according to his needs. The idea that it is “free” and the idea that it is “universal”. They also love the legally enforced egalitarianism of the system which they call the ‘one tier’ health care. None of these claims are actually true, but they sound so very virtuous! That we are taking care of our own, that we are generous and that we treat everybody equally which makes us really, really, reeeeealy good people. That’s it. That is the foundation of the approval of the Canadian health care system: Uninformed and unsubstantiated primitive virtue signaling. Most Canadians do not have a clue how it works, most have no idea how much it costs or how it compares to alternatives. By now most cannot even imagine alternatives. Not for lack of information availability, though. William  D. Gairdner has a long chapter in his book “The trouble with Canada … Still!” analyzing the problems of socialised medicine in Canada. He is providing evidence, dispelling myths, asking sensible questions and offering sensible solutions. The Fraser institute reports on the state of Canadian Healthcare for decades with yearly updates. Prepare for the shock: it keeps getting worse. The Canadian Health care system is NOT HEALTHY and there is no reason to think that it will get better. The evidence is out there. I am not going to quote the data here, I will not try to prove yet again, in a short post that the problem exists. The point I wish to make is that the problems are inevitable consequences of the beloved idea. The point that needs to be made is not simply that our socialised system does not work but that all of its problems were foreseeable and predictable. The point that needs to be made is that the problems of the system are not accidental, but perfectly logical consequences of the communist approach. The point that needs to made is that ill-informed support of a bad system is NOT a moral position. Supporting a communist idea just because it sounds good while disregarding the harm it does is NOT virtuous.

The philosophical problems

Talking about this subject can easily lead to asking the basic questions about the role of government in our lives. When I am asked the rhetorical question “Isn’t one of the basic functions of governments to take care of the health of its citizens? You know, Life, liberty and health care……”, the simple answer is NO, IT IS NOT, but when I try to expose the absurdity of the suggestion by expanding on the idea people think I am joking. There are far more important things in our lives than health care. If we don’t eat, we starve to death. If we do not have clothing and shelter in a Canadian winter, we can quite possibly die. Does that mean that all of those needs in our lives should be managed by government monopolies? How much power should the state have over our lives? Where should the ‘CARE’ of the government start and end? The government already has almost full control over our education, health, retirement and a whole range of personal behaviour choices. Are those services working better than the alternatives?

The political problems

In my case, the question is NOT rhetorical. The communist answer was yes. I grew up in a world where all of these things were the responsibility of the government. It did not work too well. The communists did not understand the problems either. They also wanted to know the reasons for the waiting lines, the shortages, the screw-ups, the lack of innovation and the poor quality of anything that was produced. Looking for scapegoats has always been a standard feature of everyday communist politics. The only thing that was not possible to question was the system itself. Just like it is with the Canadian healthcare system. It is never broken, it only needs some tweaking.

The economic problems

There is NOTHING in this world that a government bureaucracy can run better then a truly free market enterprise. Government run enterprises all suffer from the limitations described in Ludwig von Mises’ “Economic calculation in the socialist commonwealth.” If you take freedom out of exchanges with the tool (money) that makes those exchanges possible, you have no way to measure value, which leads to misallocation of resources. That is why shortages are inevitable in command economies. In ‘socialized’ systems neither cost nor value can be properly determined. Waiting lines in communist countries are not some mysterious habits, but predictable consequences of the breakdown of economic calculation. Just about anybody in the system will tell you that they have no idea how much things cost, they have no way of properly measuring productivity or efficiency and that there are behavioral distortions created by the rationing system that actually cost human lives. (See Gairdner, p303) It is not possible to provide unlimited access to limited resources. Limited resources must be rationed. They can be rationed either by the market (supply and demand reflected in prices) or by politics (All animals are equal, but some animals are more equal than others). Economic value is determined through an interaction of supply and demand, mediated either by an exchange mechanism or political decision making.  ‘Free’ services create excessive demands that will have to be curbed by purely political decisions.  A command economy can never function with an optimal efficiency.

The social problems

I find the very expression ‘socialized medicine’ offensive. There is absolutely NOTHING ‘social’ about government run, state controlled monopolies. Calling it ‘social’ is an attempt to make it more acceptable. The word ‘social’ implies something voluntary. Something that some members of society will voluntarily do for other members of society. Government monopolies don’t do any such thing in general and in this particular case, the Canadian Health care system, it does the opposite. It is a criminal offense to offer medical services outside the control of the government (although this has started to change in some provinces). The state is NOT society. Government monopolies are killing civil society. That is neither good, sensible or moral. This does not mean that society is out of the picture. Society has an amazing power to survive and get back into business. The most important economic assets a citizen of a communist country can have are contacts, and/or a marketable, in-demand product or service. Doctors never had a problem finding fresh meat or people working in slaughterhouses to find a doctor. (Again, see Gairdner about our eight-tier healthcare system, p308) The true victims of such system are always the poor, the least affluent, the protection of whom is the supposed justification for the very existence of the coercive system.

The moral problems

Dinesh D’Souza gives a perfect illustration of one of the many moral problems of government services in this short video. He is making the point that coercion strips any moral content from a transaction. Taking choices and the responsibility for those choices away from people have a corrupting, detrimental effect on the individual. I discussed this point in much more detail in an earlier post, “The harm government services cause.” The essence of the points made is this: giving up the right to control your own fate diminishes you as a human being. Taking responsibility away from people makes them less responsible and less capable. The goal of the state has always been to make its citizens dependent on its power. The appearance of benevolence only makes it more dangerous.

The psychological problems

The psychology of government services is fundamentally different from the psychology of free market exchanges. It is said that “the person who pays the piper calls the tune.” On the free market, that person is the consumer. In the case of government services, it is the government. On the free market, the providers of services have to make YOU happy, in the other system, well, whoever pays them. The difference may be subtle here, but it was very pronounced in communist countries. This does not mean that the people providing the services are bad, but that they also operate under certain pressure. Since the demand on their services is potentially unlimited, they are forced to do rationing themselves. The relationship is very different. You, the patient, represent a liability that should be disposed of as quickly as possible. You have to remember: If you don’t pay for it, you are the product.

The elephants in the room

While we could talk endlessly about the problems of socialised health care, we cannot talk about possible solutions without addressing the problems in the background: labour unions, regulations and intellectual property rights. Labor unions of professionals have fancy names such as associations, federations, guilds and bars. The names should not fool you, federal and provincial medical associations are labour unions just like any other. They are controlling access to the market to limit competition, fixing prices for their members and representing their political interests. These labor unions are also responsible for the regulations that constitute a significant part of the cost. While the benefits of intellectual property rights are arguable and they are argued widely, the fact that they affect the pace of innovation is not.

The simple answer

The answer to the questions “what is wrong with ‘socialised’ medicine?” is simple: Communism. People in the West tend to see communism in black and white but reality is always gray. Communism is not dramatic, it is mostly drab. Cuba has a free healthcare system, only you have to bring you bed-sheet, pillow, toilet paper and preferably your medicine as well because the hospital may not have it. There is nothing sinister about it, it just does not work too well. Is there a way out? Is there a cure? A medicine? Of course, there is: replace the filthy boots of the government interventions with the invisible hand of the free market. How could that be done should be subject of a different post.

The real question

What I tried to show in this post is that the problems that clearly exist are not accidental. There is a logic to them. The proof is clear, the logic is evident. The question therefore is still this, the point of my last post:

What prevents apparently intelligent people from seeing it?

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Just before posting this, I got the following in my daily Economist news feed:

Health ministers from the 35 countries of the OECD start a two-day meeting in Paris, at a conference that will try to frame the future of rich-country health care. The agenda includes making better use of new technologies and harnessing “big data”; the sector is seen as a laggard in these areas. Waste is a huge problem: a recent report found that expenditure on administration is seven times higher per person in some OECD countries than in others, and that one-fifth of spending makes no or minimal contribution to improving health. It also concluded, depressingly, that over 10% of hospital expenditure goes on correcting preventable medical mistakes or infections caught in hospitals. Ministers will discuss this report, and how best to move to a “people-centred approach” in medicine. This curious bureaucratic phrase means putting a higher priority on patients’ needs—as opposed to those of administrators and producer lobbies.

As you can see, the problem is not unique to Canada. Neither is the suggested solution. Communist systems need tweaking everywhere. There is nothing curious about the ‘bureaucratic phrase’ of “people-centred approach”. It is straight out of the communist political dictionary.