Thursday, May 25, 2017

Single-payer Healthcare: Clueless

The State of California has been taking a look at a state "single-payer" health plan. The idea is that health care ought to be a "right." Only it will cost $400 billion a year, in a state with a general fund budget of $124 billion a year.

Really does anybody have a clue? Let us count the ways.

In the first place, health care is not a thing. It is not something you can just set up as a government program and leave it.

Of course that is true about everything the government does. You can't just pass Social Security and leave it to the bureaucrats forever. Eventually, Social Security runs out of other peoples' money.

But health care is probably a couple orders of magnitude more complicated than raking in and just handing out money. Which the government is farily good at.

Health care is a universe of needs and products, and it is changing every moment. Now, settled science has discovered that in a universe of wants and of products and services competing to supply those wants there is one certain truth. The only way to manage and to adjudicate between the competing needs and products and services is through a price "system." Only it isn't a system. It is an emergent phenomenon, as they say in chaos theory.

But government doesn't do that. It sets up an administrative system, based on the state of play between needs and products and services on Day One. And then it proposes to administer that system for all eternity.

Only eternity ends up in administrative failure in the not-too-distant near future. Because what will health care look like next year? What will it look like ten years from now? Nobody knows. So that is why we need prices and markets to guide the evolutions, the innovations, the changes that will be coming next month, next year, and next decade. There is one thing that government cannot do, and that it manage change.

But what about the poor? Well, people that don't have the ready are people that must line up and wait for the kindly DMV clerk to get to them. That is the inevitable situation of workers and peasants that rely upon a powerful lord to spread his benison to his faithful followers. That is what a "right to health care" means.

But chaps like me don't want that. We want to pay for our own health care and we want to influence the market in health care so that it responds to our needs, on a day-to-day, month-to-month, year-to-year basis. Just like the market in groceries.

The assumption about health care is that it is vital, as important as food and shelter. But this is not quite true. In his Rising Life Expectancy James C. Riley explains that there are about eight factors that have contributed to modern life expectancy of about 75 years at birth, and "bio-medicine" is just one of them. Others are: sanitation, income, aseptic childbirth, education of women, vaccination, etc.

We can see the problem that "single payer" health care will get into. We can see it in education, which has been an elite project for the last 100-200 years. The ruling class has always felt that it knew what sort of education their subjects needed. But they have usually tended to propose the system that they prefer for themselves. So we now have a luxurious system to educate good little girls through college, but a lousy system for educating the middle and the lower income groups. But who cares about them? The real clients of the education system are the teachers and administrators. Who cares about the kids?

Now, if we accept that some sort of subsidy is needed, for education and for health care, why not just give the subsidy directly to the people? Why divert it through the special interests, the hospitals, the doctors, the nurses, the drug companies? Why not just give everyone a subsidy to buy health care as they think fit?

I know the answer to that. Not enough opportunity for graft.

No comments:

Post a Comment