Monday, April 7, 2008
Comment on Healthcare
Silverlight responded to my post on Healthcare. I returned to her blog site and noticed her own post on Healthcare, but with more personal experiences. So I commented their with respect to her post and her comment on my post. Check it out and let me know where you stand onHealthcare
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3 comments:
Thank you for commenting back Nathan, I enjoy a good discussion. But before I reply let me just point out that I am a gentleman lol.
I agree with you that concern for the American public should always be the government’s top priority. I too am a moral person just like you and I feel that it is wrong for any person to suffer, to be turned away from seeing a doctor, or to be denied medicine because of price. However, where I disagree with you is in method. Economically, universal health coverage is a terrible idea. Let me start with your assumption that the government can determine the price of medication. If the government succeeded in placing price controls on medicine the American public would suffer in the long term. By inhibiting pharmaceutical companies’ potential profit margins you inhibit the incentive to invest, develop, and bring new drugs on to the market. You see profits are essential in a business where research and development are key. Profit is the instrument that attracts companies to create new things and when they do the quality of life the American public enjoys increases and they are better served. Profits also alert other companies that there is high demand for a particular drug and encourages them to develop a competing product with better quality and lower price. This is the fundamental core of the free market system. Another point I don’t share Nathan is I do not believe that the government will be capable of doing a better job allocating money to the best doctors who perform better. The current system does it better. Better doctors can charge a higher price and patients who are willing to pay can see the doctor. By making the cost of all doctors the same to each American it makes only logical sense that they all choose the best doctor since they don’t internalize the differences in cost. As a result the Government takes the burden of these increased visits to more expensive doctors and resources become misallocated. You see Nathan, socialism is a type of market organization where the government owns all the goods and services that an economy produces and redistributes these resources through policy. But what right does the government have on the product or service that I produce through my own blood, sweat, and tears? I produced it right, so therefore I should own and enjoy at least in the majority of the money that my hard work produced. Universal Healthcare is essentially the government saying that every American has a right to this produced service. That is un-American.
If you want to see a track record for government programs just take a look at social security. Ideally it had seemed like a good idea, but economically it was unsound. Universal healthcare is doomed to the same fate.
I am starting to look forward to these comments of yours Nathan.
You asserted somewhere in the beginning of your comment that the government cares about making profits as well. That’s not true. The purpose of the National Healthcare proposal is to keep prices at cost which makes it impossible for the Government to make any profits. But even with the objective of keeping costs down you have diluted one powerful market force –Demand. By transferring the incentive to keep costs down from the consumer to the government you’ve placed a buffer of bureaucracy in between.
Secondly you said that profit inhibits the quality of items versus cost and then pointed out that some pharmaceutical companies have put out drugs on the market that have been harmful to the buyers as a result of lack of study on the drug. That is the FDA’s fault. Federal regulation is designed to protect consumers from pre-mature drugs. Eliminating profits so drug companies don’t release pre-mature drugs out onto the market is not the solution, better regulation is (I stress better regulation and not more regulation).
Thirdly in your comment you make it sound as if all the doctors in America are like some sort of cartel. If a doctor increases the quantityof patients he sees and reduces the quality of care he gives them a patient is not bound to that doctor they are free to change doctors. And doctors are paid by performance, not by performance on individual operations but by his performance and the recognition of his practice. Better doctors charge a higher price because they are better at what they do; they are not limited to a certain price per a patient that you suggest me to believe because doctors compete against each other in the market place.
Fourthly, you say “from a moral standpoint, profit should not be an issue when finding ways to better people’s health”. If profit was not the issue for companies finding ways for better health than what will? Do you expect in the real world or even in a world with Universal Healthcare that a company like Pfizer is going to spend 100 million dollars, time, resource, and energy developing a drug and charging just cost for the sake of humanity and the misfortunate? No, that will never happen. And if the Government ever stepped in and said we have the right to the drug that you are developing and you must sell it to us at cost what do you think will happen? Companies will go out of business, innovation will die. No one will want to be making drugs in an industry that just breaks-even, especially in an industry where you never get it right the first time, where costs are so high because medicine is such a difficult science. It remains that profit is the only system that keeps bringing out drugs into the market.
Finally to my last point-Education. Before the 1950’s K-12 education was in hands of parents, local, and state government. Primarily because the United States Constitution did not and still does not give the Federal Government the authority to involve itself in education, it is unconstitutional (just like Healthcare and the Iraq War). However, in the 1950’s congress passed a resolution creating the Department of Education. If you look at the quality of education in public schools over the past 60 years since the Department of Education’s inception, the quality has deteriorated on average every single year while the size of the department has doubled in the past 10 years! Clearly more government does not necessarily lead to better results. In fact former President Ronald Regan ran on the platform to eliminate the Department of Education and return control back to the states, local authority, and parents. In his State of the Union Address in 1982 he had this to say “The budget plan I submit to you on Feb. 8 will realize major savings by dismantling the Department of Education” (Cato Institute).
The point I am trying to stress Nathan is free markets and small governments are an important thing. Overbearing Federal Government has not been the solution to problems in the past and Universal Healthcare is not the solution to problems with health care today.
1. Elimination Lost: What happened to abolishing the Department of Education?. Cato Institute (2004-02-11). Retrieved on 2008-04-11.
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