This Is the Health Care We Want?

Britain’s health care system is often touted as a model for the US to emulate.  Not so fast.  Britain is subject to the same laws of economics as any other nation, and this article is the best explanation of why I have ever read.

Medicine works exactly like any other cooperative endeavor among human beings. People need groceries, so other people become grocers. People need doctors, so other people learn to be doctors. When people are required to pay directly for their groceries, they watch what they buy. Until the grocery business is nationalized, which until this Administration I thought to be an outrageous joke, grocers will respond to the buying habits of their customers.

Nice arrangement, this. One group of people works with another to mutual benefit. I am amazed every time I go to the grocery. Dozens of people buy food, not one expecting that tomorrow there won’t be any. Some buy staples such as bread and milk. Others buy more exotic fare, like shrimp cupcakes.

We know that if the government were to try to “save us money,” we should barricade ourselves in the local Kroger, fending off the interlopers to ensure they didn’t screw things up. Sure, there would be a few people cheering on the government forces. That is, until their granola and organic mushroom supplies were cut in favor of Spam. Then we would find out just how much they were willing to sacrifice for the good of all.

Thankfully, grocery stores are pretty much free to do as they see fit. We budget an amount adequate to feed ourselves because, well, we need to eat. We may gripe over an occasional price spike in some commodity, but by and large, we expect to have to spend a goodly portion of our income on food.

Yet when it comes to medicine, we act as if we are due the efforts of doctors, nurses, technicians, and the thousands of people who support the day-to-day business of health care without personal involvement. We have disconnected ourselves from the transaction by allowing insurers not only to protect us against catastrophic expenses, but to pay for every Band-Aid and blood pressure test. The result? Millions of people who think someone else should be paying for their health care.

When a third party manages anything for us, we lose touch with reality. Health care is more expensive than it used to be for all kinds of reasons. Technology has improved, meaning that our lives can be improved or extended through exotic and highly expensive means. Specialists require more education. Collusion among politicians and insurers distort the market by establishing vast bureaucratic entities that serve mostly to enrich their employees.

It is only the last that constitutes a real problem. If we value the new technology and superbly talented specialists, we need to recognize that they come at a cost. Ironically, when we do so, we also send signals to the providers of these goods that driving costs down is desirable. Witness the precipitous drop in price of laser eye surgery, which is rarely covered by insurance.

Dalrymple is right. Saving money to pay for more of our own health care directly will do more to bring down costs than an army of bureaucrats. If we really wanted to improve health care in this country, we would pressure our representatives in Congress to establish unlimited tax-deductible medical savings accounts. We would allow them not only to be passed down to heirs, but used to pay for the expenses to others whom we wished to help.

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About Terry Noel

I am an Associate Professor of Management and Quantitative Methods at Illinois State University. My specialty is entrepreneurship.
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