Health Care: Innovation vs. Access
Critics of the government facilitating heath care often worry that taking some or all of the health care field out of the realm of private enterprise will lower the degree of innovation for which the United States system is known. I’m dubious of this claim, given the role of government grants in promoting innovation and the fact that government organizations such as the military get their hands on cutting edge technology, but for the sake of argument, let me presuppose that government run health care does, on average, lead to the outcome of less innovation. Let me also presuppose that government involvement in health care, whether through supplemental programs such as Medicaid or through a socialist system such as single-payer, results in greater access to health care. These two presuppositions arguably set up the heart of the ethical dilemma pertaining to health care reform in the United States: whether or not to sacrifice some quality of care for the sake of universal access.
To answer this core question, we have to ask ourselves which has a greater ethical value: some people having access to a higher level of innovative care or almost all people having access to a lower level of innovative care. I submit the latter, but I grant that the choice is far from obvious. For one thing, technological innovation, while today exclusive to those who can afford it, tends to include more of the population as time goes by. Today’s extraordinary care may be tomorrow’s ordinary care. If the choice were between some innovation and no innovation, I might be ethically paralyzed, but such is not the choice, even presupposing what I have above. Justice names health care something to which we are all entitled and for which we are all responsible; it does not universally demand first rate innovation. If human life is worthy of respect, then it deserves more than the negative right of not being killed; it merits basic nourishment and care. Consequently, I would say that, as a rule, the path to universal access ethically outranks the road to the best possible innovations. What say you?
With government intervention in this service industry market, innovation will decrease and access to demanded services will decrease. I would recommend Hazlitt’s chapter on the price system and how it works. http://mises.org/books/economics_in_one_lesson_hazlitt.pdf
I read the chapter, but I’m not following your application. For starters, what do you mean by “demanded services”? State of the art health care technologies? Basic case? Both?
Let’s consider Medicaid, which enables the poor and relatively poor to have access to care. Medicaid also supplements the coverage of some people with limited insurance. Are you saying that this program, which clearly helps millions of people (disclaimer: my son included; we owe his life to it), works to decreased access to health care? If so, by how much? How many people go without basis health care or who have significantly less access to health care because of Medicaid? What overall measurable consequences does Medicaid have for supply and demand?
“Demanded services” are those that a free person needs. In markets, which health care is located, it is impossible for the government to know how many resources of a given service it needs because the price function cannot clearly be recognized. I am sure millions of people benefit from governmental health but the access has been limited to only those millions, what about all the other millions of people that did not receive access that were in greater need? Perhaps Jim the Ear Ache received service for his infection, but Sue the Suicidal Mental Case could not because resources were alotted elsewhere? So the State would have to figure out who needs what service and without a price function, it not possible. Consider the mandate to provide contraceptives. Forget the morality of the using them for the moment. This one “health care” service is available to half the population under the State. For each of these patients going to receive contraceptives, there is another that is not receiving diabetes care or whatever because these are limited resources. How does the State determine what is more important to a person?
It is easy to see who is helped by any governmental program, but anything that the government does takes away from other free persons which is not considered in the equation. The government cannot create these services out of nothing.
I am sure millions of people benefit from governmental health but the access has been limited to only those millions, what about all the other millions of people that did not receive access that were in greater need?
Who are these millions who did not have access because of Medicaid?
For each of these patients going to receive contraceptives, there is another that is not receiving diabetes care or whatever because these are limited resources.
This seems grossly oversimplified. Yes, health care is a limited resource, but it’s not a fixed one, is it?
“Who are these millions who did not have access because of Medicaid?”
Those making more or having more than the program allows that must pay in but cannot receive the service and so pay the tax and must sacrifice other needed things, those that needed something else that is necessary that Medicaid does not cover.
“This seems grossly oversimplified. Yes, health care is a limited resource, but it’s not a fixed one, is it?”
Not oversimplified, just basic economics. See the Chapter “Public Works Means Taxes” in the link I provided eariler. It is chapter 4.
Those making more or having more than the program allows that must pay in but cannot receive the service and so pay the tax and must sacrifice other needed things, those that needed something else that is necessary that Medicaid does not cover.
So you’re saying there are people who pay into Medicaid, do not directly benefit from it, and because they are paying taxes, are not be able to purchase needed healthcare. Again, who are these people? Who has been unable to pay for a medical service as a result of the percentage of their taxes that go to Medicaid? And if such people exist, does their need match the need of those who receive health care because of Medicaid?
Not oversimplified, just basic economics.
Yeah, admittedly ignorant of economics, but I’m not buying this notion of “basic economics.” Limited doesn’t mean fixed.
Consider the set of new medical treatments that have been developed in the last 20 years. Are any of these new treatments included as part of the health care that justice demands all have access to? If so, then we have a problem. For consider the similar choice we faced 20 years ago about whether to provide more access to then existing treatments at the expense of developing new treatments. If justice demands that we choose access at the expense of innovation then these treatments would not be developed. Which would mean that justice demands that the demands of justice not be met.
It seems to me that there are three options here:
1) you could say that the demands of justice are restricted to the present time, and do not include how our present actions might effect people in the future (note: choosing this option has consequences on issues like global warming that we may not want to accept);
2) you could claim that the current level of medical development just so happens to be the level at which justice has always demanded access, so that until now prioritizing innovation over access made sense, but from here on out access matters more (this is implausible); or
3) that justice demands we prioritize innovation over access to the extent that innovation leads to greater access in the future.
If justice demands that we choose access at the expense of innovation then these treatments would not be developed. Which would mean that justice demands that the demands of justice not be met.
You’d have a point if the choice between access and innovation meant some innovation or none, but I fail to see why this has to be the case. Has it been demonstrated that increasing access 2o years ago would have prevented new medical treatments from being developed during this time?
Are any of these new treatments included as part of the health care that justice demands all have access to?
Depends. The demands of justice do not require us to do what is not in our power. If, say, ten people in an area need immediate organ transplants to live, but there are only five available organs, there’s no injustice in the mere fact that five people will die. There may be an injustice in what determines which people get a transplant. There would almost certainly be an injustice if only three people received the transplant because only three could pay for it.
I guess the main two areas that are cause for concern are (a) pharmaceuticals and (b) medical equipment. I’m not sure how worried I am about (b), though someone in the industry might be able to convince me differently. I have to confess a little bit of ignorance. My wife was talking the other day about how we have ultrasound machines for the purpose of finding blood clots that X-Rays miss. I had no idea we could do that! Saved a boy’s life, though.
I lean towards concern over pharmaceuticals, though. We’ve had significant success there in recent decades keeping AIDS patients alive, with blood pressure, and so on. McArdle has suggested that it could be that we’re running low on low-hanging fruit and that we may not see much in the way of innovation going forward regardless. In which case: hey, screw the drug companies. But I want that anti-fat pill. I want a male oral contraceptive.
I lean towards innovation trumping equality. You have to do new things before it can become cheap enough for everyone. I am disinclined to mess with that pattern of progress. I’m not sure how much tension there actually is, though. In pharmaceuticals, yeah we pay a lot for them, but it is not in itself what is breaking our bank. We could continue to pay generously for them and provide them more freely until they get off-patent.
I lean towards innovation trumping equality. You have to do new things before it can become cheap enough for everyone.
I get this. Innovation can lead to greater access, which is one reason why I wouldn’t want a freeze on innovation. But I am willing to tolerate somewhat less innovation for the sake of greater immediate access.
We had plenty of access to beef- and pig-derived insulin. Wouldn’t the money spent toward recombinant-DNA production have been better spent reducing the cost of beef- and pig-derived insulin?
Interesting. I’ll bet you a nickel that if the rate of new drug development slows down over the next few years – while the ACA just happens to be coming into effect – McCardle will point her finger toward a very different cause for that slowdown in a future post.
If McCardle is right, it really would be a terrible coincidence that a slowdown in innovation came right now; it means that in 5 years or so that this entire debate could be based on a classic causation/correlation error. And served with demagogue sauce, of course.
Anyway, I’d venture to argue that current patent law does at least as much freeze out competition and the innovation that brings with it as it does to mitigate R&D investment risk. The only thing it does reliably and demonstrably is drive up costs for consumers and profits for incumbents.
I’d like to add that this debate about innovation vs access is more directly associated with cost control than access to services. Only in so far as increasing access leads to increased concerns about costs are the two things connected.
And I am pretty sure that means my comment just steered this toward the o-so-familiar policy wonk liberal sphere of argument. Apologies. It’s like the liberal’s version of Tourette’s.
Max, it’s kind of problematic to tag McArdle for dishonesty (which is how I read your comment) precisely when she’s being honest about something which is contrary to her ideological interest.
If she were trying to score political points, she’d be avoiding the subject of whether we’re reaching a natural dead-end entirely. It’s contrary to her ideological interest and to her credit that she is talking about it anyway.
With regard to your second comment, you are correct (I alluded to that in one of my comments around here). It’s only if we ratchet down drug prices that it would have an effect on drug innovation. That, however, is something that advocates of reform point to as something they’d like to do.
“she’s being honest about something which is contrary to her ideological interest”
I don’t see how she is being contrary to her ideological interest here, Will. She was a very reliable conservative voice during the health care debate and she is writing about the slowdown in innovation that is occurring under her preferred healthcare delivery system. The ACA hasn’t been implemented yet so, as I read it, she is trying to explain the lack of progress in new drugs given the status quo system that should prioritize innovation.
The ideologically convenient explanation isn’t “Drugs are getting harder to make,” though (that only makes it harder to say that drug pricing would reduce innovation.” The ideological explanation is “It’s because of the cumbersome FDA and the damn lawyers,” an which she expressly rejects.
Kyle,
In your post you say you will assume for sake of argument that there is a trade off between government imposed access and innovation. To the extent that there is such a trade off, the considerations I noted hold.
On the question of whether there is in fact a trade off, you can compare proportion of medical innovations that have come out of America in recent decades (large) versus the proportion coming from Europe (virtually nonexistent).
I assume a trade-off, but not between some innovation and none.
Regarding your three options, I don’t go with the first two, but your third raises an important complication: today’s innovation may lead to greater access tomorrow. In other words, innovation may be a means to greater access. If this is in fact the case, however, the ethical weight might still fall most heavily on access. The question would then be the best means of achieving greater access, e.g., government imposition versus private enterprise innovation.
Kyle,
Framing the issue as less innovation vs more instead of some vs none doesn’t avoid the dilemma. So long as any innovation is delayed or forgone it will still be the case that access in the future will be less than it would have been otherwise.
There may be ways of increasing access now that don’t reduce innovation and hence reduce access later. In that case the trade off does not hold.
And there may be cases where it is worth it to reduce innovation a little but to expand access a lot now.
But what you can’t say is that as a simple matter of justice we must prefer greater access now to innovation and even greater access later
Framing the issue as less innovation vs more instead of some vs none doesn’t avoid the dilemma. So long as any innovation is delayed or forgone it will still be the case that access in the future will be less than it would have been otherwise.
Let’s assume this is true, that a curbing of innovation now will lower access later. How much it will lower access is ethically relevant here. If the goal is to increase access, both short and long term, it doesn’t make sense to take measures that will result in less access, unless of course access is increased overall by the measures.
If you could freeze Health Care at 1972 levels and hand it out free to all, from Sam Walton to the kid of undocumented immigrants in Los Angeles, from 1972-today… would that be a good thing? On what level would that be a bad thing?
It seems to me that, in 1974, it’d be an excellent thing for everybody in the country.
It’s 2012, though and I look around and say “I am *SOOOOOOOOOOO* glad that we’ve made 40 years’ worth of advancements!”
In 2014, I’m pretty sure that we’ll all be delighted with how much more egalitarian we are now than we were in previous years.
If you could freeze Health Care at 1972 levels and hand it out free to all, from Sam Walton to the kid of undocumented immigrants in Los Angeles, from 1972-today… would that be a good thing? On what level would that be a bad thing?
Good and bad. Innovation improves health care, benefiting and saving people’s lives. We want innovation. My question is not about some innovation versus none, but rather less innovation versus more. If universal coverage puts us back some years, when does the harm caused by this decrease overtake the benefit of universal access? Two years? Five? Twenty?
As an additional bonus, you never know what you don’t have but might have had.
Some weird “vaccine to attack obesity” or “vat grown pancreas” or whatever is only going to be on a dumb show on SyFy. The only things you know about enough to demand them are the things that help Sam Walton but won’t otherwise be available to the poor child in the inner city.
The tradeoff you make is uncertain bets about what might happen in the future (but, seriously, we don’t know) against people, real people, who need help now.
Just like if we were talking about Global Warming.
Depends on who you are and what your problem is, doesn’t it? I mean, my wife had to take a particular medication for an issue because it was the only one she could take while pregnant. This medication did not exist ten years ago. For her, the existence of that medication (which cost substantially) was very important. Is this to be considered less important than someone having access to a predecessor that was contraindicated by pregnancy?
On the one hand, making the predecessor more affordable helps more people. On the other, the drug she took is exactly the kind they would spend less effort getting passed through the FDA (generic alternatives exist, it’s a limited-need product) and, as it stands, will be available as a generic to everyone else eventually.
Anyway, trying to counterbalance what we have available now that not everyone can afford with not having it available but more people being able to afford what came before it does present an interesting dilemma.
Depends on who you are and what your problem is, doesn’t it?
It does, yes, but then no health care policy or system will work the best for everyone.
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Dagnabbit.
I suppose this question brings out my atrophied inner utilitarian. If a greater number of people can be made more well by a relative decrease in the absolute welfare of a few, then I would support greater access for all.
That’s more or less where I am at, but don’t tell anyone that I may have an inner utilitarian.
I know I’m not playing the game, but I’m going to reject the premises.
The underlying assumption here is that a single payer system will strip the profits from health care companies and therefore remove the profit motive and resources for innovation. I do not accept this assumption. We are talking about a single payer system, not socialized medicine (yes, there is a difference). Private insurance companies have an overhead around 30% compared to around 3% for Medicare ( a single payer system). Strip out that 27% cut the middle man is taking, and medical costs go way down while profits stay unchanged. Not to mention the patents we grant for innovations, protecting the profits of companies for a number of years. There is no reason to suggest a single payer system would change the patent system. Would the government impose price controls on services and drugs? Probably. But no more so than private insurance companies already do. There is also economies of scale to consider. Many more people getting a drug at a lower price still yields high profits (because R&D is the main expense in production of drugs). Additionally, what is to prevent the wealthy from buying the higher level of medical care on their own? Higher taxes are going to prevent some people from buying care? Only if those higher taxes are more than they are currently having extracted from their paychecks for insurance, which seems unlikely given the difference in overhead between the private insurance and single payer.
And we can’t ignore the role of government in innovation. Direct government R& D spending amounts to over $80 billion a year. The federal government alone runs over 700 research laboratories and funds 49,000 fellowships and research assistantships in graduate level science and engineering programs. Virtually all of the research done in “basic science” – whose payoffs are often in the future – is sponsored by government. The National Institutes of Health alone spend about $20 billion a year on research, a good portion of which is devoted to developing new drugs. One study found that publicly funded research played a part in the discovery and development of 67% of the 21 most important drugs introduced between 1965 and 1992. Another found that all five of the best-selling products of the drug industry for a recent period – Zantac, Zovirax, Vasotec, Capoten, and Prozac – were initially aided in their development by tax-payer funded government research.
I also wonder sometimes if the profit motive is incentive to develop treatments instead of cures. Why cure someone’s diabetes when you can treat the symptoms and make money off of them for the rest of their lives?
Lastly, do we all benefit from having a healthier populace? Do you benefit from increased “herd immunity?” In other words, do you benefit by paying for other people’s health care because they are no longer carrying germs that might get you or your family sick? Will productivity increase if people are taking fewer sick days? Will we have better student outcomes if fewer kids miss days at school because they are sick less? How does all of this impact the economy as a whole, and does that impact R&D?
And when considering the possibility of an overall boost to the economy, don’t we also have to look at the fact that with a single payer system, employers will not have the burden of providing health insurance for workers?
Just for the record, R&D is not the biggest expense of drug companies: advertising and marketing outstrip it by about three to one.
And loads of their research is federally funded.
Tsk, tsk, Jerome. 😉
@Kyle,
“I would say that, as a rule, the path to universal access ethically outranks the road to the best possible innovations. What say you? ”
Are you sure this is not just an obfuscation, a false dichotomy? If the government thinks it has good reason to fund medical research it should do so. If the government thinks it a good idea to deliver medical care to those in need who may not be able to pay the majority of the cost it should do that too. These two need not be in any way mutually exclusive. Realistically the treasury is finite and the government must make decisions across the entire range of its spending according to its priorities.
Does greater access include access to a tummy tuck or face lift?
If not, why not? I mean, think of the improved quality of life, and perhaps mental health that would come from being prettier.
My point is that one man’s health care is another man’s luxury. At some point, the question of what you have a RIGHT to take from someone in order to give it to someone else ought to give us pause.
A shortcut to finding the greatest utility is to start with a consideration of justice. Kyle, your argument is begging the question of justice. You assume that everyone ought to be given medical care because that is just, and then on the basis of that you say that a plan for universal access is therefore inherently more just. Your assumption leaves out any question of how those resources are created in the first place.
There is a greater moral issue here than health care. It’s called freedom. I am all for persuading people to give health care to others. I am not for persuading people to force other people to give health care to others.
A free system will allow for more innovation (I don’t think there are any serious doubts about that; competition works; and competition works better in a less regulated environment). It will also employ the kind of feedback loop that Jared is alluding to by bringing up the price mechanism. (That is as true of freely given charity as it is of market-purchased health care.) People need to choose whether they want to spend their money on this or that good. The fact that some people choose not to purchase their medication but still go to the movies or drink their frappacinissimo may bother us, but it is after all their call.
All of that said, if you really want to have government provide a social safety net but still have innovation, there is a way to do that. It’s just not popular. The way to do it is to make sure that the safety net is MARKEDLY LOWER than the quality of life that people can typically provide on their own. If the quality of life that one can get by doing nothing is too close to the quality of life that one can get by working — by working on what society values enough to pay well for — then a great many people will do nothing. And then our ability to generate the wealth that makes the system go will dissipate. Welcome to the welfare dependency problem.
Kyle, your argument is begging the question of justice. You assume that everyone ought to be given medical care because that is just, and then on the basis of that you say that a plan for universal access is therefore inherently more just. Your assumption leaves out any question of how those resources are created in the first place.
Not exactly. I say that everyone is entitled to and responsible for care of life, i.e., health care, based on the worth of human life, i.e., human life being worthy of respect. This does not necessarily translate into an assumption that everyone ought to be given medical care. Other factors come into play. As I mentioned in a comment above, if ten people need an organ transplant, but there are only five available organs, there’s no injustice in the inevitability of give people dying for lack of care. The resources needed to make such care available would also be included here. In other words, my argument, such as it is, doesn’t leave out the question, but rather leaves the question open and on the table.
There is a greater moral issue here than health care. It’s called freedom. I am all for persuading people to give health care to others. I am not for persuading people to force other people to give health care to others.
Obviously, I am.
If the quality of life that one can get by doing nothing is too close to the quality of life that one can get by working — by working on what society values enough to pay well for — then a great many people will do nothing.
Oh, please. If someone were entirely dependent on another for all their life needs (food, shelter, health care, clothing, etc.), then I could see this happening, but making health care a given for people, whether they work for it or not, isn’t likely to create unhealthy dependency when most other life needs have to be pursued through hard work. I depend on the police force for my safety, and I don’t have to do anything for that, and yet I’m not inclined to cease working because one or even a few of my needs are met regardless of what I do or do not do.
Does greater access include access to a tummy tuck or face lift?
If not, why not? I mean, think of the improved quality of life, and perhaps mental health that would come from being prettier.
Maybe. Insurance companies have to ask this question now. The framers of any government policy would also have to ask the question.
Oh, please?
Kyle, be consistent. You DO think that government should provide the poor with “all their life needs (food, shelter, health care, clothing, etc.).” And, with the possible exception, these days, of clothing, our government does.
And I am aware of cases (not only cases in theory, cases in the aggregate, but concrete cases of real human beings) who turned down jobs that they were at first excited to be offered because after calculating the loss of their welfare benefits, they found that they would not be as well off financially as on welfare. What they could not calculate and perhaps would not consider is how much better off morally they would have been. As in they would have been happier to be poorer but supporting themselves through their own work, which by another name is service to others.
> And I am aware of cases …who turned down jobs that
> they were at first excited to be offered because after
> calculating the loss of their welfare benefits, they
> found that they would not be as well off financially
> as on welfare.
Two notes:
1. Knowing how much money you can make on welfare, I’m not sure why very many people would be excited to be offered a job at that wage. But I’m over-privileged, so what do I know?
2. Every – and I do mean every – system is going to have edge cases. That’s a trivial given.
If welfare does W good for N people, and X harm for M people, you compare that to not having welfare, which would do Y good for O people and Z harm to P people.
Yes, welfare is going to cause the occasional mis-alignment like you describe. It’s also going to cost the middle and upper classes some tax money that they’d otherwise spend on some things. Those are the harms. The goods are the social safety net.
The absence of welfare would give those middle and upper classes those tax monies (hah! as if the government would ever actually *cut* the total size of government!) and eliminate this edge case you describe. It would also get rid of a large chunk of the social safety net.
Focusing on just one thing is deliberately ignoring the entire picture.
It happens to be true. Unemployed women can get insurance for their children which they will lose if they are employed. True, they themselves suffer, but they will shelter in the windbreak of care for their children.
Kyle, be consistent. You DO think that government should provide the poor with “all their life needs (food, shelter, health care, clothing, etc.).”
Not exactly. I DO think government can and should provide food, clothing, shelter, etc. to those who are temporally or permanently unable to provide for themselves, the degree of help corresponding to the specific needs. Yes, people can develop unhealthy dependency on the social safety net, and that’s a moral, political, and economic problem worth considering, but it’s not an argument against comprehensive or supplemental public funding of some life needs. Some needs we leave primary to the market. Some we entrust primarily to the government. I’ve never heard you complain about your dependency on the military for national security, for example. Others we find assistance coming from both private enterprise and the State. For the reason you mention–happiness–I think it better overall for people to take responsibility for many (though not all) of their needs. Not everyone can do this, though, altogether or all the time. Hence the social safety net.
I’m certainly happy for the existence of Medicaid when my wife was pregnant with our first born. She needed daily shots to maintain the pregnancy, which we were able to afford because Medicaid, in addition to our very limited insurance, covered other major costs for us. Conceivably, my son’s life depended on the government, but I submit that his and our dependency was in no way immoral or unhealthy. Since then, we’ve made the choice to work more (at times five jobs between us) so we needn’t be on welfare. This choice has its risks, though, as neither my wife nor children are insured. We’ve managed some social mobility, but we’ll be in a world of shit if one of them gets seriously ill. Color me selfish, but I’m in favor of health care reform and government involvement in providing for health care needs.
Kyle, I am not convinced that a federal program could provide the basic life needs (food, shelter, etc.) better than a more local approach. There are other universal rights like to work, marry, and mobility but we don’t pay for a person to work unless we consume his production, we are not expected to pay the bill for his marriage, and we are not forced to buy him a car.
Whereas I am glad you and your wife found the urgent care needed in an emergency, I may disagree with the means to that care.
I may be wrong here, but consider your medical bill was so unaffordable because of government programs much like the rise in cost of housing and college. It creates artificial increased demand and the prices reflect that.
Don’t get me wrong, both State and insurance companies are third party and to slam the insurance companies and expect the State would know a better way is hubris. If the private market provides a bad product at a huge cost, the market tends to correct it by offering a better product. That at least allows free persons to decide for themselves.
Stephen’s example of choosing not to work may or may not be outliers. I know people that have done the same as well. But there are also other examples of the same principle in this debate. Within this particular industry, there are many that already choose to live unhealthily. Tax payer health system will burden healthy people to pay for another’s unhealthy lifestyle. While I believe Kyle and his wide to be virtuous people that choose to live as healthy as possible (heck, Kyle rides his bike to work) that is not near the norm. As my wife will attest, hospital wards are filled with obese people that could have controlled their habits through their own effort. In this case, Kyle’s medical needs are the outlier.
Kyle, your argument regarding national defense is a misunderstanding of why we even have a military. It is supposed to protect free people from unlawful harm. It allows free people to choose what they need.
To suggest that welfare dependency consists in “edge cases,” Patrick, is to reveal that you have never seriously looked at the problem. It is a serious problem, and is acknowledged as such even by a great many of the governments who perpetuate it.
I am not suggesting, Kyle, that there should be no social safety net. I am suggesting two things: a) The social safety net must remain at a significantly lower level than the level that ordinary human beings can provide for themselves — otherwise welfare dependency will be rampant (see Hayek). b) Just because the state is not the best way to do something does not mean that thing should not be done at all. And just because the federal government should not do something does not mean that local governments should not.
You might want to study the career of Calvin Coolidge. Most think of him as the great cutter of federal taxes and spending. And he is. But as governor, he expanded government services greatly. And those two things are perfectly consistent.
Harding and, following his death, Coolidge were the only presidents who knew how to snap us out of economic depression. Coolidge pushed Congress to cut the federal budget by a THIRD in a single year, and taxes by even more. Turns out that’s really good for the economy. Also turns out that in the medium run, it greatly increases government revenue, so government actually can help more people.
You clearly no nothing about Justice or Innovation.
Justice cannot include forcing other people to provide you with health care – that is called slavery.
Innovation will be starved because the goal of universal government provided/demanded health care will destroy not only the health care market, but the economy. The result will be rationing and economic stagnation. The USA is the only major country paying for new drugs and new therapies. The countries with socialist health care systems are not innovators. Obamacare will lead to worse health care outcomes for everyone throughout the world.
Yep. It’s exactly like slavery.
Worse. Slavery was only in the South, but the PPACA is everywhere.
Someone’s gonna make a fortune on the newly expanded market for jackboots and thug outfits.
Gentlemen and Ladies, this is my first excursion onto this site and I am not a trained philosopher. My professional training is as a warrior, a historian and a logistician, so any blatant violation of convention is due to ignorance not intent. With that being said, I think the primary problem with this discussion is the framing of the argument. Simply describing the moral tradeoff as between innovation vs. expanded access is too limiting and inaccurate. In the original question you state that, “Justice names health care something to which we are all entitled”, which to put into practice means that in the realm of “Health care” that some individuals are “entitled” to the labor of others, they are entitled to others, intelligence, skills, training, motivation ,and property. This is a clear infringement of individual liberty. I believe that the historical evidence is clear that in “socialistic systems” it is the constraining of individual liberty that is the root cause of the lack of innovation, the destroyer of quality and motivation, and the other associated ills of socialistic systems. . The lack of innovation is merely one symptom of the destruction of individual liberty and is not the only inherent downside of constraining the individual liberty of one group for the benefit of another. Also, the primary purpose of our government, as stated by the founding fathers was the protection of liberty, the negative right protection from the government of not being killed, flows from the protection of liberty….not the other way round. I am not saying that individual liberty is sacrosanct but what I am saying is when discussing this subject we need to correctly identify what our trade offs are and that the infringement of individual liberty sets a much higher ethical bar than the trade off of some undetermined level of unknowable future innovations, not to mention even going down the road of placing into statue the principal that one person’s need “entitles” them to another person’s labor is a very slippery slope on which we must tread lightly. Thoughts?
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I grant that the innovation vs. access framework is not, in actuality, the central conflict, but it’s one of the central debates, and I wished to give it some treatment.
Regarding individual liberty, I wouldn’t use the word “infringement,” necessarily, but you’re correct that any government involvement in health care, because it makes use of force, limits individual liberty. And, yes, that calls for serious ethical consideration.
@Bradley (Buck) Royle
–in the realm of “Health care” that some individuals are “entitled” to the labor of others, they are entitled to others, intelligence, skills, training, motivation ,and property. This is a clear infringement of individual liberty.–
You seem to be under some illusions about the nature of society. One view is that society is an arrangement between its members to co-operate together for the general wellbeing. In doing so it is necessary to surrender some of one’s personal freedom to act. In general, membership of Western society is a very good deal and those with responsibility are continually trying to make it even better at the behest of voters, (we hope). While it’s true that any sharing of resources is indeed an infringement of the liberties of some, the question is rather: Is this loss of personal freedom by some going to lead to a better overall society for everyone?
You obviously had no difficulty with paying for the medical care of your close family members. This too was an infringement of your personal freedom and you would have incurred the disdain and abhorrence of your fellows had you not done so. It’s a pity that your empathy will not stretch as far as your unrelated fellow citizens.
Your branding social medicine as the start of an inevitable slide to a society of “lack of innovation” is not warranted.
You might reflect that your entire life before you became a productive member of society was paid for by others. They didn’t consider the loss of their personal liberty an issue.
That’s all very sweet, Gordon, except for the uncomfortable fact that free markets DO produce more innovation than command markets. Why do you think that might be?
@Stephen
That’s all very sweet, Gordon, except for the uncomfortable fact that free markets DO produce more innovation than command markets. Why do you think that might be?–
The free market responds to demand. But your mistake is believing that because part of demand originates with a government agency that means free market economics cannot operate. It depends on the way it’s done. You will note that American military equipment may be the best in the world and doesn’t lack for innovation, yet it is largely funded by government. It could be argued that much taxpayers money is wasted by inadequate monitoring of military projects but the level of innovation is certainly adequate.
Good point. Markets do not cease to function when their freedom is impinged. They do function within those new limits. However, since perhaps the MAIN function of a market is to measure demand correctly so that producers can be rewarded for producing things that are actually wanted by consumers, having the government create demand by force rather defeats the moral claims of the market.
The gross inefficiency of the military industrial complex is something that can only be mitigated, not ever really eliminated. Why then do we put up with it? Because the job of government, par excellence, is to hold the monopoly on force.
HAS there been innovation in military technology? Quite certainly. That doesn’t mean that we haven’t paid mightily to get it, or that if there could somehow have been a freer market for it, we wouldn’t have gotten it faster.
Applying this logic to health care: I have no doubt that we COULD achieve plenty of additional health care innovation by providing contractors huge sums of tax money to do so. It is just a far less efficient way of paying for that innovation, since companies will work to satisfy bureaucrats, not patients. The free market is far more efficient, and ought to be allowed to work in areas where it is feasible. The military isn’t really one of those areas (even if market forces like competition can be used to mitigate its inherent inefficiency).
What he said!
@Stephen,
I don’t accept that government involvement in a market necessarily means it’s “freedom is impinged”. It depends on the manner of that involvement. I do accept that when people start spending other people’s money in a market that this has some undesirable effects. Nevertheless these effects can be mitigated by regulation. As long as regulation is aimed at getting a market to operate like the theoretical ideal it is not a bad thing.
Why you believe that a government creates demand by force I don’t know. The aim of social medicine is to ensure that everyone has access to the medical care they need irrespective of the ability to pay.
The money for this comes from progressive taxation or some equivalent. You may regard the extraction of this money as “by force” but there is no need for this to be reflected in the health care market.
Gordon,
Government IS force. More precisely, it is supposed to be the monopoly on collective force. Taxation is force. If you don’t believe it, try refusing to pay your taxes.
How does government “create” demand? By paying for things that the market would not freely pay for.
Take the kerfuffle over the contraception benefit that Obama’s HHS has regulated into Obamacare: Oral contraceptives cost $9 per month at Wal-Mart and Target. You can’t tell me that anything like a significant percentage of those who will receive this benefit ACTUALLY cannot afford it. WHY THEN do they not already buy it? Because they CHOOSE to do something else with the $9 per month. Like buy two lattes. But if we make it “free,” lots more folks will use it. Why wouldn’t they?
Anyway, your suggestion that the ill effects of government spending “other people’s money” “in a market” can be “mitigated by regulation” is suspect at best. THE ESSENTIAL BENEFIT of free markets is that price signals accurately reflect what it is that people REALLY want. Government always and everywhere gets that wrong — or at least less right than the price structure would if not interfered with.
Regulation is sometimes necessary to prevent people from externalizing their costs to others. That goes to government’s core responsibility — to prevent plunder. But regulation should NEVER be used to try to determine what it is that consumers really want. It never works. Command economies always fail, whether by outright collapse or by the moral failure of depriving people of their legitimate right to rule themselves.
@Stephen,
I have never denied that government is backed by force. I deny that government action in facilitating access to health care is an interference in the demand side of the market backed by force. Government force is related to raising the money to effect that interference but nobody, least of all government, will force people to use health care they don’t want.
As for the requirement of employers to provide contraception cover. That is backed by force. It is a revenue raising exercise not a direct interference in the market. The question here is should a religious organisation be allowed the privilege of depriving some citizens of what the government has decided should be a guaranteed part of all employed persons remuneration? Certainly this involves a reduction in the freedom of employers but that is the nature of society. It’s a part of general co-operation involving the surrender of some freedoms to bring about an overall more effective society. Whether the trade off is a good one is a different question but time will tell.
As for your last point, I don’t think that the government is deciding what health care people want. People will still choose medical procedures that they and their doctors believe to be a good idea. It’s just that now some people will get those procedures who previously were unable to do so because of cost. Certainly the market will grow but it will still operate as a largely free market.
Some pretty odd definitions there: You say government raises taxes by force but when it juices up demand with tax money that is not a use of force?
And yet the contraception mandate is “a revenue raising exercise” not “not a direct interference in the market”? Are you kidding? Requiring people to provide a product for free is not a direct interference in the market?
And we’re back to your initial claim, “Certainly the market will grow but it will still operate as a largely free market.” That’s just the point. The market will grow FASTER than is warranted by the choices of consumers. What you will SEE is an increase in health care spending, and so in health care and regulatory jobs. What you will NOT SEE, though it will happen, is a congruent decrease in other forms of spending, costing jobs in other industries.
Sounds like market interference to me.
@Stephen,
What the government has done is interfered with the labour market not the health care market. It has raised minimum remuneration to include health care insurance. This will undoubtedly have the effect of tending to reduce overall employment. But that effect may be counterbalanced by the advantages of universal employee health care provision.
As I previously said this will increase health care market size but the market will still function as a free market.
Your view that government revenue raising always leads to fewer jobs is simplistic. If the government is right and social health care is a good investment for society exactly the opposite will result. You only have to look at countries where public education is inadequately funded and see the low level of economic activity to realise that government’s ability to enforce societal co-operation for major projects often leads to a good return.
This apparent anomaly happens despite general government inefficiency. Basically, the whole can be very much greater than the sum of the parts. That’s the reason we are social animals in the first place. It’s good for the survival of our genes. Government’s ability to enforce conformity leads to overall advantage for everyone. Of course I agree conformity can be dangerous. It’s the mavericks who provide society with the flexibility it needs to react to environmental change.
I would say the the government’s health care plans stand or fall on their ability to bring about general greater wellbeing.
You have been quick to identify possible drawbacks but you appear loath to consider the advantages for society.
I suggest that someone has identified Obama’s plan as socialism to you and you have swallowed this whole and regard it as equivalent to the soviet command economy. It’s more reasonable to realise that all governments are involved in effective redistribution of wealth in their major projects and they are all therefore to some extent socialist. The acid test is the efficacy of their plans for society as a whole and in the long run rather than some slavish adherence to particular economic or political principles.
Obamacare isn’t socialism, narrowly defined. It is fascism. Or, if you prefer a less loaded term, corporatism.
Government cannot give anything to anyone without first taking it from someone else. Thus, government creation of jobs always destroys other jobs (usually by preventing them from coming into being). It is true that sometimes the benefits outweigh the damage, but the damage is always there, and it is usually ignored because it is unseen, whereas what is created by the government is seen.
The principal lesson of economics (didn’t someone cite Hazlitt above) is that we ought to pay attention not merely to the seen but also the unseen effects of any given policy. I never suggested we ignore the seen effects, merely that we not make the usual mistake of ignoring the unseen.
You keep saying that increasing the size of a market is not interfering in that market. What you are ignoring is that the very size of a particular market is a function of the choices of individual actors — and so is itself one of the price signals that markets properly convey.
@Stephen,
Sorry I think you’re wrong on all counts.
Democrats have been trying to introduce social health care for decades. The voters must have known what they were likely to get. Obama is responding to his electoral mandate.
All the pros and cons of legislation are only seen in the long run. You may not have ignored some good effects of social medicine but you have jumped to conclusions about its overall, long term efficacy. You’re allowed to do that but you can’t expect others to take you seriously with no evidence and only inappropriate comparisons with failed political systems.
Your definition of “interference” with the market seems to be to enter the market and buy something. Certainly new large purchases will alter the size of the market and the going price, at least temporarily, for its various goods. That’s what markets do. You would be right to complain if the additional demand did not have that result. We can be confident that the market will respond as markets do. In my book that does not constitute interference.
We can be hopeful that the increased market size will eventually lead to additional economies of scale.
@Kyle,
I realise that I have steered this thread away from your original intention of looking at the ethics of universal health care.
In my defence I would say that if universal employee health care produces an overall increase in wellbeing then the ethics take care of themselves. However, I realise for a Catholic, eventual consequences may not be good enough.
Gordon, I don’t think references to failed systems fail to be apt because the systems failed. That’s the point.
By your logic about “interference,” government subsidies of the housing and housing finance industries didn’t have anything to do with the bubble and bust. Oh, I get it: That was all a lack of proper regulation, or something.
And as for the ethics of universal health care, I don’t see how the conversation has ever left that point. Markets work, primarily, because of their moral congruence with human nature. The oft-cited division between ethics and economics is a false dichotomy.
But I enjoyed the conversation. Thanks.