Wow! This is the best healthcare commentary I’ve read in a long time, excerpted for your convenience (original here):
by Tyler Durden
There are large groups of people in this country who want socialized medicine and they sense that the stars are aligning, and now is their time to succeed. They rarely call it socialized medicine, but instead “single payer health care” or “universal coverage” or something that their public relations people have told them sounds better. Whatever they call it, they believe (or pretend to believe) a lot of wrong-headed things, and they must be stopped. Step one is understanding how and why they are wrong. Step two is kicking their asses back to Cuba where they can get in line with Michael Moore and Al Gore for their free gastric bypasses. . . .
Myth #1 Health Care Costs are Soaring
No, they are not. The amount we spend on health care has indeed risen, in absolute terms, after inflation, and as a percentage of our incomes and GDP. That does not mean costs are soaring.
You cannot judge the �cost� of something by simply what you spend. You must also judge what you get. I’m reasonably certain the cost of 1950’s level health care has dropped in real terms over the last 60 years (and you can probably have a barber from the year 1500 bleed you for almost nothing nowadays). Of course, with 1950’s health care, lots of things will kill you that 2009 health care could prevent. . . .
In the case of health care, the fact that we spend so much more on it now is largely a positive. The negative part is if some, or a lot, of that spending is wasteful. Of course, that is mostly the government’s fault and is not the part on which the socialists want you to focus [emphasis added]. We spend so much more on health care, even relative to other advances, mostly because it is worth so much more to us. Similarly, we spend so much more on computers, compact discs, HDTV, and those wonderful one shot espresso makers that make it like having a barista in your own home.
Myth #2 The Canadian Drug Story
We have a (relatively) free market in the US where drug companies spend a ton to develop new wonder drugs, a non-trivial amount of which is spent to satisfy regulatory requirements. The cost of this development is called a �fixed cost.� Once it’s developed it does not cost that much to make each pill. That’s called a �variable cost.� If people only paid the variable cost (or a bit more) for each pill the whole thing would not work. You see, the company would never get back the massive fixed cost of creating the drug in the first place, and so no company would try to develop one. Thus, companies have to, and do, charge more than the variable cost of making each pill.[2] Some look at this system and say to the drug companies �gee, it doesn’t cost you much to make one more pill, so it’s unfair that you charge much more than your cost.� They are completely wrong and not looking at all the costs. . . .
[Canadians] have socialized medicine and they bargain as the only Canadian buyer for drugs, paying well below normal costs. Drug companies that spent the enormous fixed costs to create new miracles are charging a relatively high cost in the free and still largely competitive world (the US) to recoup their fixed cost and to make a profit. But socialist societies like Canada limit the price they are allowed to charge. The US-based company is then faced with a dilemma. What Canada will pay is not enough to ever have justified creating the miracle pill. But, once created, perhaps Canada is paying more than the variable cost of each pill. Thus, the company can make some money by also selling to Canada at a lower price as it’s still more than it costs them to make that last pill. . . .
I’m a big fan of Canadians in general . . . but when it comes to pharmaceuticals they are lucky parasitic hosers.
Myth #3 Socialized Medicine Works In Some Places
This is a corollary to the �Canada as parasite� parable above. The funny part is socialized medicine has never been truly tested. Those touting socialism’s success have never seen a world without a relatively (for now) free US to make their new drugs, surgical techniques, and other medical advancements for them. When (and I hope this doesn’t happen) the US joins in the insanity of socialized medicine we will see that when you remove the brain from the body, the engine from a car, the candy from the striper, it just does not work. . . .
To put it simply, right now the US’s free system massively intellectually subsidizes the world’s unfree (socialized) ones. That sucks. The only thing that would suck worse is joining them without anyone to subsidize us all.
Myth #4 A Public Option Can Co-Exist with a Private Option
Part of the current junta’s plan is to add a �public option� for health insurance. That is health insurance provided by the government (actually provided by you and your neighbors � this is a good thing to remember whenever you find yourselves thinking anything comes from the government, really, if you take away anything from this essay take away this!). They claim this �public option� can co-exist fairly alongside private health insurance, increasing competition and keeping the private system �honest�, and not deteriorate to a single payer (socialized medicine) system. They are wrong, or very dishonest, as in unguarded moments they admit that the single payer socialized system is what they really want. The New York Times disagrees with me, thinking the two can co-exist. But the New York Times still thinks Stalin was a pretty decent Joe. . . .
The government does not co-exist or compete fairly with private enterprise. It does not play well with others. The regulator cannot be a competitor at the same time. It cannot compete fairly while it owns the armed forces and courts. Finally, it cannot be a fair competitor if when the �public option� screws up (can’t pay its bills), the government implicitly or explicitly guarantees its debts. We have seen what happens in that case and don’t need a re-run.
The first thing the government does is underprice the private system. You can easily be forgiven for thinking this is a good thing. Why not, cheaper is better right? Wrong. They will underprice private enterprise by charging less to the purchaser of health insurance, not by actually creating it cheaper. Who makes up the difference? Well, you and your family do if you pay taxes, or your kids will pay taxes, or their kids will pay taxes. The government can always underprice competition, not through the old fashioned way of doing it better, they never do that, but by robbing Peter to pay for Paul. . . .
Second, the government ultimately always cheats when it’s involved in �honest� competition. Try mailing a first class letter through Fed-Ex [See Post Office sues Cub Scouts to maintain monopoly], or placing an off-track bet with a bookie, or playing a lottery through a private company. Uh, you can’t, so please stop trying. . . . Once the government discovers it cannot win, it changes the rules. You see, the government has the power to legislate, steal, imprison, and kill. Those are advantages most private firms do not have, save Google, and you didn’t hear that from me. . . .
Perhaps the best example of the destructive �public option� is our nation’s schools. Here we clearly have a government provided �public option� competing with (and in fact dominating in size) private schooling. But, is it fair? Does it work well? Not by a long-shot. To send your kids to private school (i.e., a school that competes with the government) you need to first pay your taxes. Absent vouchers or tax credits . . . if you eschew the �public option� you have to pay for education twice. . . .
With a �public option� things inevitably would go the horrific way of our public schools. Instead of existing to please customers (patients and students respectively) the �public option� in schools exists largely to benefit empowered stakeholders of the system (health administrators and unionized school employees respectively), who will shamelessly pretend to give a darn about sick people and children. Watch the analogy play out if we go this route in health care. . . .
Myth #5 We Can Have Health Care Without Rationing
Rationing has to occur. This sounds cold and cruel, but it is reality. . . . [Healthcare is] going to be rationed by some means. The alternatives come down to the marketplace or the government. To choose between those alternatives you judge on morality and efficacy. . . .
There is no system that provides for unlimited wants with limited resources. Our choice is whether it should be rationed by free people making their own economic calculations or by a bureaucracy run by Congressional committee (whose members, like the Russian commissars, will, I guarantee you, still get the best health care the gulag hospitaligo can provide). Free people making their own choices only consume what they value above price, using funds they have earned or been given voluntarily. With socialized medicine health care is rationed by committees of politicians trying to get re-elected and increase their own power, and people consume as much of it as the commissars deem permissible. I do not find these tough alternatives to choose between.
Myth #6 Health Care is A Right
Nope, it’s not. But we are at the nuclear bomb of the discussion. The one guaranteed to get me yelled at or perhaps picketed by a mob waving signs printed up with George Soros’s money. Those advocating socialized medicine love to scream �health care is a right.� They are loud, they are scary, but they are wrong about rights. . . .
Listing rights generally involves enumerating things you may do without interference (the right to free speech) or may not be done to you without your permission (illegal search and seizure, loud boy-band music in public spaces). They are protections, not gifts of material goods. Material goods and services must be taken from others, or provided by their labor, so if you believe you have an absolute right to them, and others don’t choose to provide it to you, you then have a �right� to steal from them. But what about their far more fundamental right not to be robbed?
. . . .
Lots of politicians understand that the simple free system leaves them out in the cold. No power for them. No committees to sit on to decide people’s lives. No lies to tell their constituents how they (the government) brought them the health care they so desperately need. No fat checks from lobbyists as the crony capitalists pay dearly to make the only profits possible under this system, those bestowed by the government. Libertarians are often accused wrongly of loving �big business,� but we don’t, particularly when they predictably turn themselves into crony capitalists who try to succeed by wheedling from the government. On the other hand the socialists love cronies of all sorts, ones who command large enterprises all the better. Socialists are far closer than libertarians to building and countenancing the all-powerful corporate state they claim to fear. Odd I know!
(Read the complete essay at zerohedge.blogspot.com)
