By Stefan Molyneux, MA
Read the entire book and all of Stefan’s other works here: http://www.freedomainradio.com/FreeBooks.aspx
The provision or subsidization of health care is considered a foundational justification for State power, for a number of seemingly compelling reasons.
First of all, health care expenses can be both unexpected and enormous. Secondly, people undergoing an acute health crisis are scarcely in a position to negotiate, haggle and wait. If you have been hit by a bus, and are bleeding out, you will not barter with whoever arrives to treat your injuries. Thirdly, health care providers are generally considered to be in a difficult position, insofar as they almost never refuse to treat someone who arrives in the emergency room, whether that person can pay or not. Fourthly, people have certain reservations or fears about the trustworthiness of medical advice, and so wish to ensure the quality and consistency of the
instructions they receive. Finally, since doctors, pharmaceutical companies and other healthcare providers currently profit from illness, rather than health, the incentives are considered reversed, in that pharmaceutical companies, for instance, are motivated to deliver medication, rather than discover alternatives to medication or prevent the problem in the first place.
The “solution” to the above problems has almost always been the creation and expansion of State power over the medical field. In all Western democracies except theUnited States, this has resulted
in the socialization of medicine, or the creation of a fundamentally communist monopoly that is funded by the taxes generated through the efficiency and productivity of the free market. Those who are healthy are forced at gunpoint to pay for those who are sick. Furthermore, the State regulates the licensing of health care providers, creating significant legal barriers to entry to doctors, nurses and other practitioners.
The imperative of providing health care – the axiom that it is a “right” – is considered a justification for the violence of the State in a way that trumps just about every other consideration. Even those who would be willing to accept the substitution of private charities for public welfare find themselves hard-pressed to defend the idea that health care should be a for-profit industry, because of the fear that, as the song goes, “the rich stay healthy, the sick stay poor…”
Every empathetic person feels the utmost compassion for an innocent child born with some form of correctable birth defect, to poor parents perhaps, who might require tens of thousands of dollars of expert help to correct the problem. The sheer random misfortune of such a disaster truly stirs us with sympathy, because we all understand that this wounded child could easily have been us, or our own child.
Similarly, those who are born with some genetic or congenital disorder are also “unjustly” inflicted with additional medical costs, through no fault of their own. A child whose teeth just happen to grow crooked requires thousands of dollars more in dental work than a child whose teeth just happen to grow straight.
When a person is struck down by an unexpected, unanticipated or inevitable medical condition – as will happen to all of us, in the case of death itself – it feels excruciating to imagine that they would have to debate costs and benefits. Particularly in the case of parents, having to choose between the best medical care for a sick child, and the medical care that they can afford, seems brutal and inhumane. Michael Moore’s documentary “Sicko,” for instance, opened with the story of a man who, it is claimed, had to choose between replacing one finger or another, but could not afford both.
The vulnerability and fear that accompanies significant medical ailments should, we feel, not also be combined with cold calculations about costs and benefits. Should a man with cancer be forced to choose between chemotherapy and eating? Surely a just and compassionate society should do everything within its power to avoid inflicting such stark and ghastly choices upon its citizens.
Furthermore, since medical advice can be truly a matter of life or death, a compassionate society should take every conceivable step to ensure that medical practitioners go through a rigorous process of training and evaluation. Again, the vulnerability and fear involved in medical decisions should never be exacerbated by fears that the self-interest of the medical practitioner is not directly aligned with the self-interest of the patient.
ANARCHISM AND MEDICAL CARE
There is no question that human beings are not possessed by innate sainthood. Doctors can be abrupt, greedy, false and treacherous. Patients, as well, can be difficult, obstructive, non-compliant, litigious and hypochondriacal. They can fake injuries in order to gain unjust benefits, and can also become addicted to certain medications such as painkillers, and become dangerously manipulative.
Anarchism recognizes the empirical reality of human corruption in a way that statism simply does not. Anarchists recognize that power corrupts, while statists forever believe that power is the cure for corruption. Anarchists understand that the only valid and proven way to oppose human corruption is through voluntarism and competition – statists believe that the only way to oppose human corruption is to create a monopoly of violent power.
Fundamentally, anarchists believe that virtue results from a marketplace of voluntary interactions – statists believe that virtue is a dictatorial compulsion, created and maintained at the point of a gun.
Ideally, no matter what your political convictions, we can all recognize that medical care should be:
1. Focused on prevention, rather than cure;
2. As cheap as possible;
3. As competent as possible;
4. As accessible as possible;
5. Aligned with the interests of the patient.
A basic law of economics is that whatever you subsidize, increases; and whatever you tax, decreases.
Statist health care “systems” follow the basic model that the doctor does not get paid when you are healthy, but only gets paid when you are sick.
In other words, the doctor has no direct economic incentive to prevent illness, but every incentive to treat it.
In statist health care systems, the doctor is paid per patient visit, not for a successful cure. Thus doctors do not make their money from curing patients, but rather from seeing patients – thus they have every economic incentive to keep consultations as short as possible, and to outsource any complicated “cures.”
Furthermore, in socialized medical systems in particular, it is actually illegal to collect and publish information about the quality and success rates of doctors. If I find out that I have prostate cancer, I cannot possibly find out which doctor has the greatest or best success rate in curing it. (More importantly, if I have a family history of prostate cancer, I cannot find out which doctor has been most successful in preventing it from occurring.)
When you sit back and really think about it, this is staggering – absolutely staggering!
It is illegal to sell a food item without publishing the nutritional information. It is illegal to run a public company without publishing your financial information. It is illegal to sell a car without publishing its fuel efficiency. Hell, it is illegal to sell an item of clothing without publishing where it was made.
Every stupid and irrelevant piece of information is required by law – but the success rates of doctors are not only not required, but you will actually go to jail for collecting and publishing this information!
Why is that?
This information is violently banned in most countries for two simple reasons – firstly, in any socialized system, this information would cause a stampede of sick people towards the most effective doctors. Since access to a doctor cannot be determined by price, the waiting times for good doctors would increase exponentially, while the incomes of bad doctors would decrease. Voters would go largely insane if they could not get access to the most competent doctors, and would demand immediate changes in the system. Unfortunately, the only way to limit general access to specific doctors in a socialist medical system is to allow those doctors to raise their prices – thus eliminating the communist aspect of the system.
The second reason that this information is unavailable in most medical systems is that it is already available to particular individuals, who specifically do not want it to be shared among the general population.
“TWO-TIERED” HEALTH CARE
Whenever the “specter” of privatized medical care is raised, every pundit on the planet starts wailing about the evils of a “two-tiered” medical system. Basically, this is the fear that if elements of privatization are introduced to a public health care system, all the good doctors will flee to the private sector, leaving a dilapidated public area.
The fascinating aspect of this scare story is that these same pundits genuinely do not seem to imagine that a “tiered” medical system does not already exist within a socialized environment.
There are in fact four tiers in a socialized medical system; the first is inhabited by rich and prominent people, such as politicians, media personalities, pundits and so on – who do not wait in line to get MRIs or consultations with the top specialists in the field. These people inhabit a sort of “Potemkin village” of “show medicine,” and are never allowed to fall through the cracks, for fear that they may write about or describe the true realities of the system. Those in the know will direct these people to the most competent medical specialists, and ensure that they are ushered into private consultations without the indignity of having sit in a waiting room. These patients then inevitably move to the front of the line for treatment, and remain immensely satisfied with the public health care system, because they do not actually have to deal with it, but rather remain quite happy to have everyone else pay for their elite private medical care.
The second tier is composed of those who are inside – or at least near – the medical profession itself. A gentleman I know who is a psychologist received the bad news that his father had colon cancer. Because he was relatively close to the medical profession, he could call on friends and immediately find out who was the best specialist in town for this disease. Then, he introduced himself to this doctor, saying that he was a friend of so-and-so, and thus inevitably vaulted to the front of the line – and this special treatment followed his father all the way through his diagnosis and chemotherapy. He always got the best doctors, and he rarely had to wait. This is not because doctors are evil, or innately corrupt, or anything like that, but rather because it is very uncomfortable to refuse a favor to a friend – and it is in fact easier to gather and keep friends when you can do favors for them, because then they will inevitably do favors for you as well.
The third tier is composed of rich people without political or medical contacts who can fly overseas for medical treatment, to theUSor other more market-driven health care environments.
The fourth tier is composed of those who are not prominent, or do not wield power, are not rich, and who also do not have contacts within or near the medical profession. These hapless souls shuffle through the public health care maze, consistently displaced by those with more power, unable to gain even a scrap of information about the quality of the care that they are receiving, waiting with numb hope for the system to grace them with an appointment, with x-rays, with treatment, with advice – lost, helpless, dependent, frightened, ignorant – with no more actual “rights” than a forgotten cow lodged in a stall awaiting antibiotics.
Since a doctor is paid to see as many of these people as possible, he will impatiently rush them through his office, spending a documented average of about eighteen seconds listening to their symptoms – and by far his most common treatment option will be to write a prescription, or refer the patient to a specialist.
There are three main reasons that he writes a prescription; the first is that it gets the patient out of his office as quickly as possible, as well as transferring the bulk of any potential liability to the pharmaceutical company. The second reason, which is directly related to first, is that
pharmaceutical companies shower him with gifts and trips and seminars in order to promote their medications. The third reason is that a patient can be seen very rapidly if he or she is only coming in to get a refill of the prescription – “Are you still experiencing the same symptoms? Very well, here you go!” – thus ensuring continued high-volume billing.
Of course, referring a patient to a specialist is also a very rapid way of getting him out of your office, thus maintaining your billing rate.
THE ANARCHIST “SOLUTION”?
Imagine if I suggested the following as the solution to the problem of how to deliver healthcare in a stateless society:
The way that I see it working is this: one DRO should amass enough weaponry to violently drive all other medical DROs out of business. This DRO should then take about twenty percent of people’s income – and kidnap or shoot them if they do not give up their money – and then provide health care as it sees fit. This same DRO should also have complete control over how many doctors there are, and how a doctor should be trained, and how a doctor should be paid. Again, if anyone attempts to become a doctor without following the detailed and lengthy rules of this DRO, they can be kidnapped and/or shot. This DRO should pay doctors per patient visit, to ensure that doctors would see as many patients as possible in any given day – and it should make sure that doctors are neither paid for successful treatments, nor penalized for any unsuccessful treatments. Doctors should not make any money whatsoever by preventing illness, but rather should get paid for treating as many illnesses as possible, as quickly as possible.
Furthermore, this DRO monopoly should be able to shoot or kidnap anyone who dares to collect and publicize any information about the success rates of its doctors.
In order to ensure that citizen feedback is available to this DRO, every couple of years, citizens should be able to appoint a representative of their choice to the Board of Directors. Whoever they choose should be paid by the existing doctors that the DRO controls, or by the pharmaceutical companies…
We could continue with this example, but I think that you can see the ridiculousness of this “solution.” If I put this forward as my answer, I would receive an unbelievable tsunami of incredulous and contemptuous e-mails, wondering just what particular drugs I had been on when I described this as the best possible solution to the problem of providing health care.
Inevitably – and again, ludicrously – these same people will also deluge me with incredulous and contemptuous e-mails when I suggest privatizing the provision of health care.
HOW IT DOESN’T WORK: AN ANALOGY
In socialized medicine – as in any socialized or communistic system – the consumers are not the customers. I talked about this in terms of academia in my previous book, “Everyday Anarchy,” but this reality has far more dire consequences in the realm of health care.
If automobile manufacturers were paid to produce automobiles by politicians, rather than by consumers, it is easy to imagine what the results would be. Since consumer input would be almost nonexistent, the preferences and needs of the consumer would have almost no effect on what was produced.
If this statist monopoly also supported and protected a monopolistic public sector union, can we imagine what the efficiency and productivity of these workers would be?
What if these manufacturers were paid by the number of cars that were delivered, not the quality of each car? Can we imagine what would happen to the wheels when we attempted to drive the cars
off the lot?
What if these car manufacturers were also heavily subsidized by the oil and gasoline industries – and those subsidies were directly proportional to the inefficient fuel consumption of their cars? Can we imagine that they would build energy-efficient cars, or would they want to increase their income by building inefficient cars?
Does anyone ever suggest that we should nationalize car production? Yet it is impossible to have a health care system without cars – or at least ambulances – since there is no easy way to deliver doctors, medicines or patients without cars.
(We could easily make the same arguments about the software and computer industry, with even more deleterious results!)
It is hard to imagine why we would create such a horrendous system for health care, while rejecting it as ridiculous and inefficient in terms of car production.
Surely our health is far more important than our cars.
Any time a coercive agency intervenes on behalf of the consumer, that coercive agency then immediately and permanently becomes the consumer, and the needs and desires of the actual consumer are almost entirely eliminated from the equation.
HOW IT WILL WORK
Ever since Blaise Pascal discovered the laws of probability, a singular human institution has arisen to help people deal with unpredictable risk – insurance.
Insurance is simply a way of playing the law of averages in order to create predictability. If one out of a hundred people is going to be randomly hit with a ten thousand dollar bill, it makes sense for everyone to have the option of paying a fixed amount of money in order to be insured against such a bill.
(Please note that in this section, I am talking about the free market insurance companies of the future, not the mercantilist semi-statist monsters of the present.)
The wonderful thing about insurance is that the interests of consumers are almost exactly aligned with the interests of providers, since both are directly motivated by the desire to decrease risk.
If I take out insurance against the dangers of smoking, the insurance company only has to pay out if I get sick from smoking – thus the insurance company will inevitably reduce my rates if I quit. In the same way, if I have taken out insurance against the danger and expense of diabetes, my insurance company will charge me less if I lose weight.
(To be slightly more precise, the insurance company does not exactly want me to quit smoking, but rather wants to make money out of insuring me. An insurance company can as easily make money insuring smokers as it can non-smokers – however, insurance companies know that customers are more likely to stay if their rates can be reduced, which means creating incentives to quit smoking.)
Every sane individual prefers to prevent an illness rather than cure it – and this is exactly the same motivation that drives insurance companies as well, since they make the most profit from healthy people, rather than sick people.
Thus, in a free society, insurance companies provide two essential services – one that you have to pay for, and one that you get for free.
The service that you get for free is an objective and detailed risk analysis of various lifestyle options. If you want to know how dangerous hang gliding is, all you have to do is apply for insurance, tell them that you are a hang glider, and see what happens to your rates. You do not have to sign up in order to gain detailed information about the risks your habits and hobbies incur – all you have to do is apply. Insurance companies are invaluable sources of information about relative risk, since their entire livelihood is based upon a rational and sustainable evaluation of risk.
The service that you have to pay for is the alleviation of risk by spreading it around.
(This is an enormous topic, but I would briefly like to mention that any discussion of free-market health-care provision – and insurance companies in particular – will doubtless draw comparisons to the existing system within theUnited States. This “system” has very little to do with the free market, in that more than fifty cents of every health care dollar is spent by the government, which violently protects a monopolistic doctor’s union called the American Medical Association, and also hyper-regulates the medical field with literally hundreds of thousands of laws, rules, directives and requirements. The incentive of private profit, combined with the corrupt largesse of a public purse,
is technically called “fascism,” rather than freedom.)
In terms of health care, then, we can be sure that your insurance company wants to keep you as healthy as possible. The farmer who sells cows is interested in their long-term health, in a way that the butcher who disassembles them is not.
Due to this motivation, private insurance companies will be reasonably proactive in attempting to prevent health problems from developing, rather than merely curing them after they have occurred.
They will be sure to pay doctors first for prevention, and then for successful cures, rather than for merely cycling as many patients through their offices as humanly possible.
In any situation where lifestyle choices can ameliorate health problems, those will be chosen in preference to endless medication. It does not cost the insurance company any money if you go for a walk or do some sit-ups; it does if you have to be on insulin for the rest of your life.
Conversely, medication is in general cheaper than surgery, all other things being equal, and so effective medications will be researched, developed and prescribed more often than invasive and dangerous surgery.
Spending money on a pricey doctor is probably about the most cost-effective investment you will ever make. The most effective doctors are those who cure the most efficiently – and for sure, most customers of health care insurance would also purchase life insurance from the same company, so that any disastrously failed “cures” would cost the company an enormous amount of money.
In this way, returning a customer to health not only guarantees future health care payments, but it also postpones the payment of death benefits. In this way, the self-interest of the insurance company is directly aligned with the self-interest of the customer, who doubtless does not prefer to be either sick, or dead. If the doctor is also paid to prevent, cure and keep alive, then all three parties have the same goal, which is the polar opposite of any statist system.
Thus whenever anyone starts evaluating which health care insurance company to go with, each company would be tripping over themselves to provide independently verified statistics about the
long-term health of their customers – the number of ailments prevented, identified and cured; the average life expectancy, successful pregnancies and births and so on. These companies would be selling health to you, rather than inflicting repetitive treatments on you, which is the case with socialized medicine.
The proactive and dedicated partnership between insurance company and customer – designed to serve the self-interest of each – would create a very positive and prevention-based healthcare approach. In the same way that companies that sell dental insurance require you to go for bi-annual checkups, proactive insurance companies would require regular health checkups. (I have experienced this directly in my career. Most investors require senior managers to be insured against illness, to protect their investment – in order to qualify for this, I had to go through a full checkup by a private agency, which reviewed my blood work, my history, and ran a wide battery of tests.)
In this way, the self-interest of the doctor – who normally gets paid for treatment, not cure – and that of the patient, who prefers prevention rather than treatment – can be productively aligned.
HEALTH CARE AND THE POOR
It is not a subject that many people are particularly comfortable with, but charity can be a very complex and dangerous thing.
We certainly want to help the unfortunate, but we do not wish to enable and subsidize bad decisions – this is only part of the complexity involved in helping others – which a statist society cannot distinguish or deal with at all.
If society gave everything that a poor person could possibly require in order to live comfortably, that would scarcely reduce the numbers of poor people, but would rather increase them considerably. On the other hand, the children of poor people are scarcely responsible for any bad decisions their parents may have made – however, if charities give a lot of money to poor people with children, more poor people will tend to have more children, which will only increase poverty.
This balancing act is one of the enormous and complex challenges of true charity – and yet another reason why a violent monopoly will never end up helping the poor in any substantive or permanent manner.
When it comes to health care, there is no doubt whatsoever that the majority of people care about the provision of health care for those who cannot afford it. At a hospital I visited recently, I saw a placard on the wall thanking the five thousand volunteers who helped run the place.
Doctors as a whole will always treat someone who comes with an immediate injury, whether they can pay or not. If we assume that medical treatments for the genuinely deserving and needy poor would consume about ten percent of general health care spending, then we can be completely certain that this amount of money would be donated by concerned individuals, either in time or money. We can be certain of this because we know of a large number of religious organizations that require ten percent of people’s total income – twenty percent in fact, since this is pretax income – and people are quite happy to pay that.
Thus the medical needs of the poor would be entirely taken care of in a free society through charity and pro bono work. Charities would also compete to provide the most effective care for the poor, in order to gain the most donations. I would certainly prefer to give my money to an organization that was best able to create and provide sustainable health practices and medical treatments for the poor.
In this way, not only would the self-interest of doctors, insurance companies and customers be aligned – but also the self-interest of donators, charities and the poor they serve.
In a stateless society, the poor will be genuinely served by a far better system, composed of those whose self-interest is directly aligned with the health of the poor.
As has been shown over and over again, throughout history and across the world, benevolent self-interest, enhanced by free association and voluntary competition, is the only way to create sustainable compassion within society.
I am aware that I have not answered all possible objections to the question of how health care is provided in a free society. I am also aware that the possibility always exists that people can “fall through the cracks,” or that charities could conceivably make mistakes, and either fund the wrong people, or fail to fund the right people.
Once more, this possibility of corruption and/or error is often considered to be an airtight argument against anarchy, when in fact it is an airtight argument for anarchy, and against statism.
Competition and voluntarism are the only known methodologies for repairing and opposing the inevitable errors and corruptions that constantly creep into human relations. The fact that human beings can make mistakes – and are always susceptible to corruption – is exactly why they should never be given a monopoly power of violence over others.
When an entrepreneur – whether charitable or for-profit – makes a mistake by failing to provide value – others will immediately rush in to provide the missing benefit. It is this constant process of challenge and competition that allows the best solutions to be consistently discovered and reinvented in an ever-changing world.
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