Rad Geek People's Daily

There is no free market for healthcare in the United States.

Every aspect of medicine is tightly controlled by the federal government, and shot through with systematic subsidy and intervention. Federal, state, and local governments restrict who can practice medicine. They restrict where and how medicine can be practiced. They throw people in jail or hit them with massive fines for using the wrong label or practicing alternative forms of medicine or safely performing medical procedures which are considered above their government-licensed station. They tightly regulate which drugs can be produced and where you can get them and whether or not you can import them from somewhere else. They do this partly on the excuse that they know better than you and your doctor do what drugs you should be taking, and partly because they are engaged in a deliberate effort to enforce monopoly pricing for new drugs. The federal government created the circumstances that have forced most American workers either to live with no health insurance at all, or else to depend on their bosses for health insurance; the federal government created and actively subsidized HMOs in order to move more medical care over to a rationing (managed care) model; the federal government provides tax-funded subsidies for healthcare to select patients through Medicare, Medicaid, and S-CHIP; some state governments are now moving to force everyone to participate in a captive market for medical insurance, with more tax-funded subsidies to those who cannot afford it. The health insurance market is in turn heavily regulated by the government and wrapped up as tightly as you can imagine in government-imposed red tape, which systematically constrains choices and suppresses competition. The whole damned thing is run by government bureaucrats, government-insulated corporate bureaucrats, and government-anointed experts.

Yet whenever state Leftists and Progressives call for expanding programs such as S-CHIP, or for thoroughgoing nationalization of healthcare, this is what almost invariably happens: they pick out some horrible thing that has happened, or very nearly happened, to somebody under the present state-corporatist system of healthcare, compare it to what would have happened under a more state-socialist system of healthcare, and then say that this proves that getting healthcare through a state-socialist system is better than getting healthcare on the free market. Since we don’t have a free market in healthcare, and the horrible things that happen, or very nearly happen, in the U.S. medical system aren’t happening in a free market, this is simply a red herring.

Thus, I completely agree with Myca at Alas, A Blog when she says that we need radical healthcare reform and that our current system is abso-fucking lutely sadistic and nonsensical. But I don’t know what any of that has to do with the free market. As I said over there:

Myca: If you oppose universal health care and you do not explain clearly by what mechanism you will give medical care to poor people, you will be banned.

Well, I will give medical care to poor people (other than myself) by continuing to do what I already do. I scrape by on about US $13,000 a year and I give about 1/3 of that to groups that provide direct economic and medical aid to other poor people (Direct Relief, abortion funds, Planned Parenthood, battered women’s shelters, rape crisis counselors, etc.). I’m able to give that much partly because I don’t have any children to care for and partly because I have wealthier family members that I know I could ask for help in an emergency. But even without those advantages, I’d be able to give this kind of money more comfortably if it weren’t for the government’s constant draining of my resources through taxes to pay for red tape, corporate welfare and armed thugs. In any case I do think that I, at least, am doing something more to own my beliefs than just waving my hands around. As for explanation and defense:

Myca: I've heard over and over again that our current system is not a free market, and that's cool, but then it's incumbent on the person claiming that a free market would provide healthcare to those without money to show precisely how that would happen, because I don't see it.

OK, but that’s not what’s been argued so far. What keeps happening is a comparison between something horrible that happens, or almost happened, under the U.S. state-corporatist system, and what would happen under some other state-socialist system of healthcare. But comparing the characteristics of one tightly-controlled government-regimented system of healthcare to those of another tightly-controlled government-regimented system of healthcare illuminates very little about how a free market would work, because neither of the options under comparison has very much to do with free markets. If you want to argue that state-socialism is better than state-corporatism, fine, but you should leave the free market out of it. If you want to argue that a free market in healthcare would still have features that make it worse than state-socialist healthcare, that’s fine too, but it requires some further argument that hasn’t yet been given in any detail.

As for the beginnings of an argument that you give in this comment:

Myca: Roughly, because the free market has no mechanism in place to provide health care to people who are unable to pay for it.

I’m not convinced. Because, well, of course it does. The mechanism is the same mechanism that exists in state-corporatist or state-socialist healthcare systems: people who are unable to pay for healthcare themselves can get it by getting other people to pay for part of it or all of it. The question is what means of getting other people to pay for it are available–and whether these means are voluntary or coercive.

Any State-run system of medical care that you happen to like could, in principle, be provided by voluntary mutual aid on a free market. The State has no special ability to make medical care free, or to summon up money from nowhere to pay for it; for the State to cover the medical costs it has to get money, labor, or supplies from somebody else, and whatever the State takes could be given voluntarily. Suppose that you like the way that money is collected and distributed in the French medical system; then on a free market, nobody is going to stop you from creating a nonprofit French Mutual Society for Medicine that uses the same bureaucratic mechanisms to collect, allocate, and pay out money. The only limitation is that, whatever system you cook up, you cannot force people to pay in, and you can’t force people to use your system for their own healthcare costs.

You might claim that unless everybody is forced to pay in, there wouldn’t be enough money to go around. But consider the billions of dollars that are voluntarily pissed away every two years trying to elect a slightly more progressive gang of weak-kneed establishment politicians, and what might happen if those resources were redirected towards direct action rather than electioneering and lobbying. Let alone the amount of money that might go to healing people rather than killing them if individual people, rather than belligerent governments, had control over the dollars currently seized in taxes.

You might instead claim that even if there is enough money to go around, this kind of model puts poor people at the mercy of donors for their healthcare. But I could just as easily respond that using the State to cover healthcare costs puts poor people’s at the mercy of the political process, which certainly offers no guarantees that the least powerful and least connected people in a society are going to get what they need, or even get decent human respect. In either case, people who aren’t very powerful need to organize and struggle to protect their interests from people who are more powerful than they are. The question, again, is what means of struggle are (1) morally preferable, and (2) strategically effective.

I don’t think it’s crazy to see voluntary, bottom-up mutual aid as both morally and strategically preferable to top-down political regimentation. Voluntary mutual aid may not actually produce a healthcare system that looks much like the nationalized healthcare systems common in western social democracies, but I think that the differences would largely be for the better: less bureaucracy, more alternatives, and more control in the hands of the patients themselves. Unlike the corporatist system in place today, medical costs would be drastically lower, thanks to the removal of the government-created monopolies and cartels that currently control every aspect of the insurance, medical, and pharmaceutical industries. And unlike the corporatist system in place today, medical costs might be covered not only by charities or churches or bosses (gag), but also through grassroots associations such as mutual aid societies and labor unions. (There is some actual history here; lodge practice medical arrangements in the U.S., U.K., and Australia used to provide healthcare to working-class folks at a rate of about one day’s wages for one year of healthcare, before the growing trend was halted and obliterated by the politically-connected medical establishment, with the backing of the State.)

Hope this helps.

I’d also like to add that, in principle, I actually reject the claim that it's incumbent on the person claiming that a free market would provide healthcare to those without money to show precisely how that would happen, because I don't see it. I’ve said something about details here because I know something about the issue that might be illuminating, but generally speaking, part of the point of advocating a free market across the board is that in a free society you do not need to be an expert in everything. No individual person and no committee of people needs to plan out precisely how any social system will work–which is a good thing, because nobody has comprehensive knowledge and organizational skill and entrepreneurial creativity in every field of human endeavor. Advocating free markets for shoes or bread does not make it incumbent on you to spell out all the details of how enough of these will go around to keep people from going around shoeless or from starving in the streets, because that is really a matter that can be left up to the cobbler and the shoe-wearer, or to the baker and the eater–who can be expected to know a lot more than some policy wonk about how to handle their own business and meet their own needs.

Further reading:

• Roderick Long, Formulations (Winter 1993): How Government Solved the Healthcare Crisis
• Sheldon Richman, FFF Commentaries (August 2001): A Stupid Way to Get Health Insurance
• GT 2006-04-13: How physicians learned to stop worrying and love big pharma
• GT 2005-10-20: Patents kill, part II
• GT 2004-04-26: Patents kill
• GT 2007-01-22: Roe v. Wade Day #34
• GT 2006-04-10: Bureaucratic rationality #4: State Ownership of the Means of Reproduction edition
• GT 2006-01-28: Bureaucratic rationality #3: Indecent Exposure edition
• GT 2004-11-22: For your own safety
• GT 2003-12-31: EC OTC in OZ