Backlogs in socialized healthcare
Political, Trading ·Thursday December 24, 2009 @ 05:39 EST (link)
On the senate passage of this "healthcare" bill so disastrous to liberty, I'm posting a note that I wrote in a discussion on CLAMS on December 2.
Backlogs are frequently mentioned in socialized healthcare countries and perhaps their reason calls for some discussion.
So, why is there a backlog?
Healthcare resources are necessarily finite (there are a finite number of doctors, nurses, beds, scanner hours, lab techs, etc.) in any system, whether socialized or (if such a thing ever existed) a pure capitalist system. When the demand exceeds the supply, there must be rationing: you can't put quarts into pint bottles. The only question is how the rationing is done.
Economics tells us that when demand exceeds supply prices go up, and indeed in a capitalist system the rationing would be done by raising prices until equilibrium is reached. This means that some people that are either not sick or are less sick will consider the cost and not go to the doctor; they may try to take care of the problem themselves (sometimes viable for lesser issues), or go to a lower-cost alternative (perhaps a clinic with less-expert staff but commensurately lower prices). Also, when those prices go up, more people enter the field; prices fall again (except for barriers to entry; see Murray on licensure). Those that just cannot afford treatment will either not get it or perhaps will be able to arrange for charitable funding.
Possible negatives: less affluent people that are seriously ill do not get treated; problems that could be caught early are not (like code bugs, the earlier you catch something in medicine, it seems the cheaper it is to fix). Depending on the generosity of the American people (which has always been reliable in the past), most of those unable to afford treatment may still get treated, with the only people not being treated being those that took risks with or abused their bodies by their own choice (frankly I can't feel too sorry for them).
Positive: assuming you work and have income/savings (or support) you can choose how much you want to spend on your own health, i.e., how much value you place on it. As a younger person or student you may not feel you need/want to pay for as regular check-ups, for example, as an older person. But you do have an economic incentive to get check-ups (anything found early will cost less to fix) and keep yourself in good health (exercise, avoid smoking/drugs, eat well, be careful about physical risks).
In a socialist system, "Now everyone is equal in their chance of dying" (except, of course, Congress and their favored friends). Nobody's paying (everybody's paying; same thing in terms of not being able to use it as a basis for rationing). If you don't pay for something, you don't value it. There is no incentive not to go to the doctor for anything minor, especially if you aren't employed. It's either a first-come first-serve basis, or perhaps by seriousness of the illness, or by who you know (Party member?). There's no economic incentive to get check-ups (or even take good care of yourself), because when you get severely ill it's paid for. This, in turn, uses up more resources than in a system with economic incentives to need and use less healthcare resources and (as an increase in demand) contributes to the backlog. Furthermore, in such a system it is generally not possible for better doctors to charge higher rates (to an extend the same problem exists with private insurance), leading to them either leaving, operating (illegally) outside the system, or not going into the field in the first place, lowering the supply of care further and, again, like any reduction in supply, contributing to the backlog.
(This is not to even consider the moral issue of whether healthcare is a basic right—I and my fellow libertarians/objectivists would say no, since it takes away others' right to their property and places a burden on providers to provide a service. If taxes were no longer taken for it (Medi-*), I, and I suspect most here [CLAMS] would give to a health-related charity that discriminated carefully regarding who they helped, i.e., people in genuine need, not self-inflicted.)
Then you have all the usual problems of government-funded anything: no incentives to reduce overhead costs or be efficient, since more money can always be taken from the taxpayer by force, and very little competition or accountability. Some of those issues are addressed in a book I'm currently reading, Unfair Competition: The Profits of Nonprofits by James T. Bennett and Thomas J. DiLorenzo. For example, one study found that the average cost/day for patients was $47.29 at for-profit hospitals, $43.68 at nonprofits, and $43.60 at government hospitals, but looking at length of stay, the costs were $324.56, $338.71, and $327.87 (with the latter two probably being significantly subsidized).
Did I miss anything significant?
