Health Care

Economics Economics Questions
1

My school has a newly formed debate club and, as you may have guessed, it is dominated by liberals and has a hardy make-up of Neoconservatives. We are to discuss Health care next meeting and I have already been asked many difficult questions. I am young and fairly new to Austrian economics, and when hammered with many of these questions, I have no valid response except " Let the free market handle it". I was wondering if anyone could please help explain the Austrian view towards free market health care, and I was looking for an answer to some frequently asked questions that I have a hard time answering thoroughly.

Here are some questions I struggle in answering ( if you think of any more, please feel free to address them and give me an Austrian answer. Also, I am writing as a Liberal that may question me, I myself follow Austrian views):

  • Private health care caused the problems we have today, look at our private health care now!

  • How could old people, poor people, or very sick people get coverage when they needed it, when companies would most likely have rates too high for them to pay, based on their bad conditions physically and economically? They could not be able to afford it when they need it and die!

  • Even if one is not denied coverage initially, a person may become very ill and may be old or poor, and the company could drop their coverage all together. How would that be regulated ( I imagine the market would let these unfair companies go out of business, but it would have to happen to some people before it was denied by the market).

-How would people pay for expensive problems that may come up out of nowhere if the government can not help. ( should a tax free Medical Savings Account be established and how would it work).

These are only a few questions, but feel free to go in depth on this issue and offer answers to additional questions I or others may have. Thank you very much for your time and help everyone.

2

Not really a private healthcare system. Really it is a system of price controls on insurance, doctor protectionism, and elimination of any competitor who could do a better job. As such, no wonder people can’t afford it or are dropped by insurance companies.

P.S. I can’t wait to see how socialist healthcare fails in america. I’m gonna enjoy the “prescience” factor. (Of course I’ll probably be dead from all the floridated water by then).

3

This is a baseless assertion that they cannot prove. They can only dogmatically proclaim it as self evident. All that they currently see around when they look out the window is a heavily hampered market.

People will die under any government system as well. The government will not be able to afford all types of healthcare at instant demand. There will be rationing either directly or indirectly and all medical expenditures will be confined to a finite amount of resources. This means that contrary to propaganda, the government cannot guarantee anything. The question remains: what system can best alleviate the problem of scarcity?

Under any government system, the rates will be higher when government controls more and more of the industry due to subsidy and regulations. Demand is increased due to 3rd party paying schemes and prices seize to reflect the action of voluntary exchange. Prices therefore, do not provide meaningful information any longer with respect to how to utilize the limited resources available to best satisfy the consumers.

Basically, what all of this means is that the economic problem of scarcity is not being alleviated with respect to medical care. There is more scarcity, not less. Costs are much greater, not less. There is less health care and not more. How can a system that produces less healthcare better solve the problems they themselves raise?

So will the government! The government is no magician. If it buys 4 MRI machines, then that’s all it has - 4 MRI machines, not 5 and not 6, but 4!. All needs for the MRI will have to do with 4 machines. No government insurance card will give rise to another machine. You will have to wait or basically not wait. The same goes with any treatment that you need.

Those who cannot get properly diagnosed in time and then seek the correct treatment in time will also die! Again, the question remains, who can alleviate this problem more efficiently: A free market or a hampered market? If the market is completly destroyed, there will be no more health care.

It is better to be sick and poor in a capitalistic nation then in a socialist nation. Likewise, it is better to be sick and poor in a capitalistic nation with free market health care then one with socialized medicine! The US currently has no free markets so comparison with Europe is nonsense. Prices will be much lower in a free market. More people will be able to afford more and better healthcare. Charity can serve the very poor much better in a free market then in a hampered system or socialist system where the government crowds out charity, and medical care itself is much scarcer.

If people oppose charity on the grounds that it may not be sufficient, then

  1. We’re back to the myth that government can provide more. They can’t prove it and you know that it’s wrong.

  2. What is sufficient? If the government is in charge, I’m sure the politicians will come up with some arbitrary definition for sufficient. We’re back to #1.

  3. Charity receives whatever people in a free society choose to give. The amount, whatever it will be, is a reflection of the will of the people, or all those who are in a position to give. If the government deems it not enough and decides to provide more by confiscating more wealth from people, then the questions arises: On who’s behalf is the government acting? It can’t be the people since the people have already made their choices in the market.

4

I would use the upfront and pushy approach as the folks evaluating the debate will give the win to those in favor of using other peoples money (Their own) to pay for a giant bureaucracy full or promises, dreams and talk. Start by saying that no matter how you feel about, giving health care away will only force out providers, turn caring medical professionals into government employees, stifle innovation and cost a lot more for a lot less care.

5

Do you know about this:

6

Wow, I have read Mises for a while but just registered, and am very suprised by the willingness of all of you to respond. Thank you all for your help very much, I really appreciate it.

7

This audio may also help: Walter Block talking on socialized medicine It may give you a few pointers on how to make your case. It also talks about how the cartel of doctors contributes to high costs.

8

Ok, now I am going to spend alot of time writing this post to help you out ok? So I implore you to try to use the resources that I give you.

Just taking a bunch of stuff from the fringe elements site. Ryan Faulk is a beast.

Why is Healthcare so expensive?:
http://fringeelements.ning.com/video/medical-services-restricting
http://fringeelements.ning.com/video/medical-services-insurance

The One Way out of medical hell:
http://fringeelements.ning.com/video/the-one-way-out-of-medical-1

“Universal” Healthcare:
http://fringeelements.ning.com/video/universal-healthcare

How Government Solved the Healthcare Problem by Roderick Long:
http://libertariannation.org/a/f12l3.html

The Health Insurance Market is Not Free by Anton Batey:
http://fringeelements.ning.com/video/the-health-insurance-market-is

Conservatives and Obamacare:
http://fee.org/audio/conservatives-and-obamacare/

http://www.youtube.com/watch?v=Ws7hdwQNJOs

http://www.youtube.com/watch?v=Nt0tKl0J-S4&feature=PlayList&p=0629B97DDFA9C7DB&index=55

Now, addressing your problems directly.

Healthcare is also crappy in other nations. Furthermore Healthcare is not private with Medicare, medicate, government controlling insurance, FDA, MDA, ECT. Check the articles, but this is the ultimate strawman.

With costs consistently falling more people would be able to afford healthcare more effectively without the state being involved. Furthermore your concern with these individuals shows a demand that they should be taken care of. You could very easily start up some sort of charity organization in order to fund these people.

  • Eve

Its not a case of letting the firm go out of business, its a case of contract enforcement, pure and bloody simple. Enforce the contract.

Once more, costs would be falling consistently on a free market. People would naturally form mutualist organizations and save in order to prevent such things from happening. Or the hospital could guarantee a degree of coverage should this happen for this would greatly boost the reputation of the hospital.

Really hope this helps.

9

I just spent like half an hour responding to this and I hooked you up with alot of sources. It said “Post awaiting moderation” or somthing. I hope for the love of jesus that, that thing gets posted

10

http://cabalist.wordpress.com/2009/12/22/unhealthy-healthcare/

This might be of some help. I wrote it back in December so it’s not necessarily up-to-date in terms of current health care legislation, but you should be able to get some good information to help with your debate regardless.

11

As filc said in another thread, we all have the common issue of constructing arguments that opponents of the free market can understand. “Just come here and we can bash out an argument together.” [Y]

12

Thank you everyone for all of your help, but someone has given me another question. A friend said that often hospitals are not profitable and need government help. I replied about how private practices today make so much profit, and the better ones would grow, and if they became inprofitable, they would go out of business and sell the hospital or another one would grow. But the kid I was debating with brought up the point about how if a major hospital in an area goes under, and people need medical assistance in that time, who would take care of them. I replied that food is also a necessity, and if a local Publix Super Market goes out of business, people still have food and will not die. Am I correct on the situation? I would just like to know what really would happen, and what would happen if someone who is very poor without insurance gets shot, do we just let him die?

13

You are correct. Just to add about why the hospital goes out of business: About 40 years ago government at all levels got more and more involved in health care in all portions of the business with the approval of the medical industry. Eventually government had its tentacles in basically every aspect of running a hospital. Improvements in medical technology allowed doctors to break off on their own and take the profits that would have gone to the hospital. The hospitals still had a love affair with the government as the government especially local government would help them in their cause against the evil doctors competing with them.

Of course over time the doctors won this battle and really stuck the hospital with a lot of very low profit services. Now the hospitals ended at the mercy of government as they held the only cards left that help the hospital make money: 1. Payments for free care, 2. Territorial monopolies and 3. Non profit status.

Now the citizenry is stuck with hospitals that can not financially exist without government, ie they work for the government, which means worse care and less cost containment. And don’t look now but the Obama is about to worsen this whole mess.

14

Fairly correct. Why not just go somewhere else? Suddenly it becomes more profitable for smaller hospitals and traveling doctors to come to the area, remember that whenever someone supports any type of firm with government funds it is by necessity a net drain on resources.

15

You are on track and despite what the “only government can help” crowd, there is hope. Humans in the absence of force, will work together through mutually beneficial exchange to produce greater and greater products and services. Just as in the supermarket case where one or two supermarkets may go out of business and be switched with one giant supermarket and several convenience stores, so may a hospital be replaced by sending patients to a larger hospital near by and by doctors providing emergency and other medical services with smaller facilities.

Necessity is the mother of invention. Suppliers of healthcare: Doctors, nurses, etc will rush to an area to supply services as there is profit to be made. Without government intervention these people will always find cheaper and better methods to provide care as they will have to compete with others to maintain profits.

16

But if a very large hospital comes about, and provides mostly all of the medical care in an area, the market there is satisfied by this big hospital and many other businesses won’t be found. Then say something happens causing this large hospital to go out of business. The time between that hospital going out of business and new medical care facilities will no be instant, and many may need medical attention in that time. How would that work? *Also, what if someone very poor who does not have insurance is shot, should he be left to die?

17

  1. For the time problem, there would probably be some futures market that already has allocated surplus supplies to future use for patients.

  2. For the “too poor to afford insurance” argument, that person could just be helped by charity, for free, etc. There is nothing about capitalism that goes against free help.

18

What do people who live in very rural areas of America do about this problem already? Oh yes, they find transportation and make their way to a hospital. They don’t just sit around slowly dying because the closest hospital is over 25 miles away or something.

I don’t have insurance if I get shot. This does not preclude me from getting medical treatment. It also does not preclude me from having to pay my medical bills either. If I was extremely poverty-stricken I’m sure I could find charitable help. Otherwise, I would rely on my own wealth and the assistance of my family and friends.

What I am not going to do is ask the government to stick a gun in the collective face of America to raise a buck for me.

19

Yes! Someone on mises.org who knows about the dangers of fluoridated water. I have some great bibliographies if you want to read more into it. Fluoride in water: It is all a “lie” – a way for government monopolies to rid of their toxic by products.

20

I’d suggest that, ahead of the debate, you take some time to research lodge practices and mutual aid societies - i.e. what the market for healthcare looked like when there was a free market. The AMA expelled doctors who ran lodge practices, which provided healthcare at minimal cost. The whole purpose of the formation of the AMA was to increase healthcare costs, and they’ve done it through the help of the regulatory apparatus. Look into regulatory capture as well. If a body is formed to regulate and dole out healthcare, will it be controlled by the average person, or monied interests?

Also, regarding the question about a hospital closing - is a hospital necessarily a good way to provide healthcare? Maybe in a free market there would be different models of distribution. We know that bigness tends to come with government control. Why should all the healthcare resources be in one big building, with immunocompromised people around sick people?

Finally, although it’s hard to bring this up at healthcare debates, the whole damn system is screwed up. The government is churning out false information on nutrition that’s making us unhealthy in the first place. We spend so much time talking about how to pay for CABG and not why heart disease was unknown until 60 years ago - and people then ate a higher fat diet. The people who want to run the thing are the ones lying to us about health, for the purpose of making us dependent. If we’d read Weston Price and eat right, we’d be a lot better off.