Can We Get Past The Zero Sum Game Thinking On Healthcare?
Today, the Wall Street Journal published an interesting editorial by the Cato Institute’s Arnold Kling. True to form, the essay is truly in the libertarian mode. The editorial, “Mandates for Change,” has one thesis: the Democrats will regulate you to death. Kling’s position is not surprising, given he is with a think tank that subscribes “ to the principles of the American Revolution – individual liberty, limited government, the free market and the rule of law.”
Frankly, some of Kling’s assertions regarding the current healthcare debate appeal to me. He is correct that Massachusetts’ universal healthcare experiment has some flaws. Premiums are very expensive, partly because state residents have little choice in the plan they choose. As a result, some wind up paying for an insurance plan they don’t need in order to subsidize the care of the sickest. This is a bad idea, because while everyone deserves to be covered, not everyone needs the same level of insurance. People need more choice.
However, trotting out the same old story about how regulations will lead disaster is frankly silly. Some of the largest insurance companies in the world are making huge profits administering highly regulated government backed plans. Do they complain about regulations? I’m sure they do, but at the end of the day, they adjust.
In addition, there is good reason for some of those state and federal regulations — they ensure good behavior. It’s when the regulations become unnecessary or are unevenly enforced that they become problematic.
Say what you will about the Massachusetts health reform plan. It’s not perfect, but at least the state did something about the uninsured in the state who were draining resources and seriously distorting the market. My problem with the zero sum game approach is that it is often an excuse for doing nothing or for recommending approaches that do little to address the real problems facing our healthcare system.
It’s time to stop letting ideology get in the way of progress. We have a health system that is too expensive, inefficient and demoralizing. Let’s get out of our own way, work together toward mutually beneficial outcomes and tweak the solutions we jointly develop – no matter our ideological approach.
February 13th, 2008 at 12:27 pm
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February 15th, 2008 at 9:49 pm
And yet, is there not a cost to limiting ourselves to mutually beneficial solutions? But which I mean, win-win solutions that everyone would be happy with?
Perhaps the Bidil medication might have been one, if not quite so costly. But what about another way of getting at the heart failure problem, pharmacist-managed hypertension clinics? Apparently they are cost-efficient and a good use of human resources, and thus good for the community as a whole. But do they pass the win-win test? Maybe not. And that’s a pity.
March 9th, 2008 at 8:50 am
“(…)
Some of the largest insurance companies in the world are making huge profits administering highly regulated government backed plans. Do they complain about regulations? I’m sure they do, but at the end of the day, they adjust.
(…)”
Contrary to the argument, big companies usually hate free market as it means freedom of entry for competitors. They tend to lobby for stricter regulation because they know that they will be able to make money anyway, but smaller firms will not.
As Milton Friedman noted, no established business is a friend of the market. They do not like it, they despise it hence it requires constant struggling against competitors and consumers’ changing taste. It may be (and usually is) cheaper to send your own guys to Washington and pay for proper legislation than to fight for consumers’ money without government protection.