Health care: Nobody has a clue

One reason I could never be an effective politician is that I can’t pretend to have answers I don’t have. And one problem I know I don’t have the answer to is health care. I don’t know what to do about it, and nobody else does, either, at least at the macro level. Everybody who says otherwise is lying.

There are many, many approaches to health care that work in specific circumstances, but nobody has yet developed a set of general principles that can be applied in all situations. Pick any health-care system, and you can find the numbers to show that it’s either the greatest thing ever or a heinous folly. Government-run health care works fine in some countries. In others, it’s a disaster. A free-market system works fine in some places and terribly in others.

I have a theory as to why this is: Health care that’s dramatically effective is a very novel development in human history — about 200 years old, really. It’s one of the finest and most noble fruits to have sprung from the scientific revolution. But for the vast majority of our recorded history, health care was basically the same whether you were rich or poor. The king’s medical staff might charge their client a lot more money, but it was unlikely they were capable of providing care that was appreciably better than what was available to the lowliest peasant.

I think this is important, because it means we really haven’t settled on a generally-accepted model for thinking about how health care should be paid for and provided. A free-market approach was fine when health care was basically a consistent, undifferentiated commodity, like salt. It isn’t clear that such an approach is tenable, though, when spending a lot of money can dramatically affect individual outcomes. Maybe it IS tenable — again, I said I don’t know — but there doesn’t seem to be a widely accepted ethical or moral code one can appeal to for that. All of our codes were developed in an environment where health care outcomes were roughly the same no matter how much money you spent.

People who favor some kind of socialized medicine are merely following the inevitable logic of these ancient moral teachings. But it is one thing to say, for example, that a Christian society has a moral duty to provide bread to the hungry. Bread is bread, after all. One loaf is just as good as another. It’s another thing to say that we have a moral duty to provide extremely costly brain surgery to any person who might require it. Brain surgery isn’t a commodity. It can’t simply be purchased in bulk and then handed out.

This, I think, is the key distinction which eludes proponents of socialized medicine: They are asking for the public provision of a resource which requires enormous specialization, which cannot easily be scaled up. Thus, any attempt at providing these resources at public expense is going to involve painful value judgments. There is not a factory somewhere producing top notch brain surgeons that you can simply assign a higher production quota. Some needy people somewhere will have to go without.

A wealthy society can adequately fill the hungry bellies of all its citizens. But the wealthiest society in the world cannot provide a top-notch brain surgeon to every citizen who needs one.

Under any effective health care system one can imagine, there will need to be some system in place to ration available resources. The free market is, of course, one way to ration resources, and in most spheres of life it is far and away the best method we know of. It is an open question, though, whether it’s the best method for running an advanced health care system. Here’s where the free-market fundamentalists tend to lose perspective: Health care is qualitatively different from other economic goods. This, of course, has been known for decades, and was most famously described by Nobel Prize winning economist Kenneth Arrow in 1963. You can read Arrow’s original paper here if you want a full academic summary of the issue, but let me try to put the problem in more human terms — terms which free-market reductionists tend to skim over.

Let’s go back to the example of brain surgery. Imagine you have a five-year-old child who has a dangerous brain condition, but whose life could potentially be saved by a very expensive medical procedure. Imagine you have no possible way to pay for this surgery, even with insurance. A fellow across town is in a similar situation, but he’s got millions of dollars, and can easily pay for the surgery for his son. A free-market economist would explain to you that the insane price of the necessary surgery is merely a tool to efficiently ration society’s limited resources, and that “the market” has decided the life of the other guy’s son is worth more than your son’s life.

If we were talking about luxury cars, you would have no trouble accepting this logic. Fine, “the market” has decided this other guy “needs” a Ferrari more than you do. Normal people could live with that. It’s a lot harder to follow this logic when the consequences are as stark as life or death. I could shout libertarian slogans at you all day long — “What gives you the right to take my hard-earned money to pay for your son’s health care? Get your hands off my wallet!” — but it wouldn’t make a dent. At some gut level, it still feels wrong that you have to let your son die because you don’t have enough money to pay for the necessary surgery. It’s not that you feel entitled to other people’s money to pay for your expensive health care needs, exactly. You get that we cannot give every person their own brain surgeon, and that difficult decisions must be made. But the “logic” of the market somehow feels particularly wrong and unfair in this situation. There is no easy, universally understood framework for you to find comfort in.

A free-market health care guru would of course point out here that my example is an abstraction, and the situation I’ve just described almost never presents itself this starkly in real life. In the real world, a parent with a child who needs expensive surgery has access to various charitable resources, and doctors will frequently cut their fees or even work pro bono for very needy patients. Even so, the economics of the modern health care marketplace do not naturally line up with people’s moral instincts, or with the moral and ethical codes we have developed over the years to help us navigate these tricky situations.

This is the point at which proponents of socialized medicine jump immediately to the conclusion that some kind of government-run or government-subsidized health care system is the only acceptable solution. But I remain unconvinced. It is far from clear to me that a panel of bureaucrats, even if they all have medical degrees, are demonstrably better than the cold hand of the market at navigating these murky waters. A free-market proponent would point to Hayek’s knowledge problem, but living in Florida, there’s a more fundamental objection (related to the knowledge problem) that arises in my mind.

It can be seen in the myriad shady outfits that have cropped up to cater to Florida’s senior citizen population, who are of course served by Medicare. A problem with allowing humans, rather than impersonal market forces, to make decisions about dividing up resources is that humans are corruptible. In my experience, proponents of any kind of socialist system, including socialized medicine, have a tendency to severely underestimate this problem, and the extent to which it can be easily managed. Again, the fact that the problem can be managed in a highly-ethical, high-trust Scandinavian society is not proof that it can be managed in a society where large numbers of citizens take a more relaxed view of right and wrong.

I keep going back to the fact that really effective health care is a novel historical development. Health care is an impossible problem because we haven’t lived with the problem long enough to develop a broadly shared system of values to deal with it. The only comparable event I can think of in human history is the invention of agriculture, which first introduced the problem of how society should deal with massive disparities in wealth and power. It took centuries of conflict, some of it incredibly bloody, for people to hash out that issue, and it’s only been within my lifetime that we’ve more or less settled on free markets combined with liberal democracy as the best available solution. And even then, there’s a lot of fierce debate around the margins.

And heck: As can be seen from the Bernie Sanders phenomenon, it’s not even a given that this settlement will endure. It’s possible that the superiority of capitalist democracy can only really be absorbed if one has a living counterexample to demonstrate the poverty of the alternatives.

It’s possible, of course, that we will eventually settle on the market as the best solution to the health care dilemma, but it’s equally possible that we might collectively decide that health care, like national defense, is a “special case” that needs to be removed from the vicissitudes of the market and given much more direct public supervision. The problems of a state-centered approach, like the problems of delivering an effective national defense, may just come to be seen as an unavoidable cost of providing a necessary public good.

I’m honest enough to admit that I just don’t know. I suspect it will take many more lifetimes of trial and error before we come up with a widely-shared set of traditions which can guide us to one solution or the other.


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