One of the most important tenets of public choice economics is the observation that we do not become different people when we leave the private sector and enter the public square. We do not become less selfish, for example, when we leave the supermarket and enter the voting booth. Nor do we become more selfish when we leave the voting booth and return to the supermarket. We are the same people—just as altruistic or just as selfish—in both realms. Nonetheless, some would have us see the marketplace as institutionalized selfishness and political systems as institutionalized altruism. Put differently, they romanticize politics and demonize the marketplace—failing in both cases to see reality as it really is.
This is the underlying reason why so many people in health policy believe that for-profit hospitals or for-profit insurance companies should not exist. In fact, profit is the opportunity cost of capital and that cost has to be borne, even by entities called nonprofits.
Consider Donald Berwick, President Obama’s recess appointee to run Medicare and Medicaid, on his way out of office in the fall of 2011. For starters, he claimed that the Affordable Care Act “is making healthcare a basic human right.” Then he went on to say that because of the new law, “we are a nation headed for justice, for fairness and justice in access to care.”
In fact, there is nothing in the legislation that makes “healthcare a right.” Nor is there anything in the new law that makes the role of government more just or fair. To the contrary, a lot of knowledgeable people (not just conservative critics) predict that access to care is going to be more difficult for our most vulnerable populations. That appears to have been the experience in Massachusetts, which President Obama cites as the model for the new federal reforms. True enough, Massachusetts cut the number of uninsured in that state in half through then-Governor Mitt Romney’s health reform. But while expanding the demand for care, the state did nothing to increase supply. More people than ever are trying to get care, but because there has been no increase in medical services, it is more difficult than ever to actually see a doctor.
Far from being fair, the new federal health law will give some people health insurance subsidies that are as much as $20,000 more than the subsidies available to other people at the same level of income.
Right after the passage of the Affordable Care Act, Obama administration health advisers Robert Kocher, Ezekiel Emanuel, and Nancy-Ann DeParle announced that the new health reform law “guarantees access to healthcare for all Americans.”
In fact, nothing in the act guarantees access to care for any American, let alone all Americans. Far from it. Again, take Massachusetts as the precedent. The waiting time to see a new family practice doctor in Boston is longer than in any other major US city. In a sense, a new patient seeking care in Boston has less access to care than new patients everywhere else.
Reformers in other countries also tend to romanticize their accomplishments. With the enactment of the British National Health Service after World War II, the reformers claimed that they had made healthcare a right. The same claim was made in Canada after that country established its single-payer Medicare scheme. Yet in reality, neither country has made healthcare a right. They didn’t even come close. Neither British nor Canadian citizens have a right to any particular health service. They may get the care they need, or they may not. Sadly, too often they do not.
There is almost a religious quality to the way some people think and talk about healthcare.
Imagine a preacher, a priest, or a rabbi who gets up in front of the congregation and gets a lot of things wrong. Say he misstates facts, distorts reality, or says other things you know are not true. Do you jump up from the pew and yell, “That’s a lie”? Of course not. But if those same misstatements were made by someone during the work week you might well respond with considerable harshness. What’s the difference? I think there are two different thought processes that many people engage in. Let’s call them “Sunday morning” thinking and “Monday morning” thinking. We tolerate things on Sunday that we would never tolerate on Monday. And there is probably nothing wrong with that, unless people get their days mixed up. In my professional career I have been to hundreds of health policy conferences, discussions, get-togethers, and so on, where it seemed as though people were completely failing to connect with each other. At one point it dawned on me that we were having two different conversations. All too often I was engaged in Monday morning thinking, while everyone else was engaged in Sunday morning thinking.
If people don’t come to their convictions by means of reason, then reason isn’t going to convince them to change their minds. This principle applies to healthcare, just as it does to other fields.
For more information, please see my book Priceless: Curing the Healthcare Crisis.
- For an economic explanation of profit, see “Profit (Economic),” Wikipedia.com, June 2011, http://en.wikipedia.org/wiki/Profit_(economics).
- Joe Nocera, “Dr. Berwick’s Pink Slip,” New York Times, December 5, 2011, http://www.nytimes.com/2011/12/06/opinion/nocera-dr-berwicks-pink-slip.html?_r=1.
- Robert Pear, “Health Official Takes Parting Shot at ‘Waste’,” New York Times, December 3, 2011, http://www.nytimes.com/2011/12/04/health/policy/parting-shot-at-waste-by-key-obama-health-official.html.
- Robert Kocher, Ezekiel J. Emanuel, and Nancy-Ann M. DeParle, “The Affordable Care Act and the Future of Clinical Medicine: The Opportunities and Challenges,” Annals of Internal Medicine E-274 published ahead of print (2010). http://www.annals.org/content/early/2010/08/23/0003-4819-153-8-201010190-00274.1.full.
- “2009 Survey of Physician Appointment Wait Times,” Merritt Hawkins & Associates, 2009, http://www.merritthawkins.com/pdf/mha2009waittimesurvey.pdf.