- Market discipline would produce a better healthcare system.
The editors of the Wall Street Journal complain about the evils of “government healthcare”:
President Obama addressed the Veterans Affairs scandal on Wednesday, saying he’s waiting for an Inspector General “audit” of what went wrong. And the press corps is debating whether VA Secretary Eric Shinseki should be fired. These are sideshows. The real story of the VA scandal is the failure of what liberals have long hailed as the model of government health care.
Don’t take our word for it. As recently as November 2011, Paul Krugman praised the VA as a triumph of “socialized medicine,” as he put it: “What’s behind this success? Crucially, the V.H.A. is an integrated system, which provides health care as well as paying for it. So it’s free from the perverse incentives created when doctors and hospitals profit from expensive tests and procedures, whether or not those procedures actually make medical sense.”
Ah, yes, the VA lacks the evil profit motive. What the egalitarians ignore, however, is that a government system contains its own “perverse incentives,” such as rationing that leads to treatment delays and preventable deaths, which the bureaucracy then tries to cover up. This isn’t an accident or one-time error. It is inherent in a system that allocates resources by political force rather than individual consumer choices. The VA is ObamaCare’s ultimate destination.
I think they’re missing some basic things. We haven’t had anything approximating free market healthcare in the United States for about a century, there are basically no prospects for ever having such a system again, no one would like going back to such a system, and the promise of a free market healthcare system is that it would optimize welfare in the economic sense of producing the greatest quantity of healthcare at the lowest prices for those willing to pay. It does not promise that ordinary people won’t drop dead in the streets of preventable causes, that the diseases of the poor won’t spread to the rich, or that a world with free market healthcare would be one that any of us would want to live in. All of those things require some level of “government healthcare” so we’re stuck with it.
The challenge that we face is how to be prudent stewards in the face of scarcity and human nature. Minimizing the role of government or maximizing it are trivial in difficulty by comparison. They’re the easy, simple-minded, and completely unsatisfactory solutions. Prudence is always the scarcest commodity.