Government institutions not role model for health care

One of the arguments used to promote more government involvement in the provision of health care is this: government already provides so many services, and government provides these so well, that we ought to turn over medicine to it too.

The New York Times’ Nicholas D. Kristof made such an argument in a recent column, citing, specifically, “fire protection, police work, education, postal service, libraries, health care” as examples of where “governments fill needs better than free markets.”

This might possibly make sense if the premise of the argument — that government does all this stuff well — wasn’t false. Kristof himself has written several columns in the past year that are critical of public (government) education in America.

Something that almost everyone assumes that only government can provide — libraries — illustrates how we end up with sub-standard institutions and service. My post Consider the alternative to a public library in Wichita provides additional detail.

For deconstruction of the myth that there are things — like police protection and the streets and highways — that government provides best, or government can be the only provider of, see For A New Liberty: The Libertarian Manifesto by economist Murray N. Rothbard. In his introduction to this work, Lew Rockwell wrote: “Murray Rothbard was the creator of modern libertarianism, a political-ideological system that proposes a once-and-for-all escape from the trappings of left and right and their central plans for how state power should be used. Libertarianism is the radical alternative that says state power is unworkable and immoral.” For streets and highways, see the introduction to Walter Block’s new book A Future of Private Roads and Highways.

Yet, many people love these public institutions because they’re free, or at least they seem to be. It doesn’t cost anything to call the police or to check out a book from the library, and enrolling a child in a public school costs only a modest fee.

But these institutions not free. They cost a great deal. But they seem to be free, and that’s a dangerous illusion.

Already much of the trouble attributed to our health care system stems from its appearance of being free of cost, or at least having very low cost compared to its actual cost. This is the case for Medicare and Medicaid recipients, and for most people who have employer-provided health insurance.

When more people begin considering health care to be free, that will truly be a dangerous time. Our government-run schools, post office, and libraries are not institutions that provide good role models.

4 Comments

  • Somebody explain this circle logic to me. Everybody says there is up to 30% fraud and waste in the medicare program, and this is where we will get the money to pay for health care reform. If the Government can do a better cheaper job at health care how come its one example (medicare) has 30% fraud and waste.
    2. Pres. Obama said last night in his address he wants to set up an exchange like Federal employees have to take advantage of group size. Good enough on the surface. He also said that same plan has a 3% administrative cost. Also very good on the surface. What he failed to say was that that 3% was in addition to to the normal profits and administrative costs that the same 5 big insurers (Blue Cross, Aetna, etc. etc.)
    make to provide the plans for the federal employees.
    My barber is retired from the V.A. he has the federal employees health program. Guess who his provider is same as you and I Blue Cross. Uncle Sam pays $670 per month and him and his wife pay $340. CNN reported the average cost of health insurance in the US is $4600 per year and the man and his wife pay $4080 for just 1/3 of their plan. Yea this is going to save us all a bundle.

  • The example of the V.A. man is complete nonsense.
    In countries that have UNIVERSAL public insurance the costs are a lot lower. Only in the US did you come up with a stupid plan that insures mainly sick people (medicare and medicaid), and this disproportional rate of sick people in the public sector of health insurance is pushing the costs up (if you don’t understand why, simply ask an insurance company executive if he’d like the majority of his clients to be either old or disable, and get him a clean shirt after he spills his drink). This ridiculous situation, in which the government is insuring mostly sick people, is the reason why USA spends 16% of its GDP on healthcare, where as countries with universal public insurance spend around 8% – HALF! The lack of a public option means there is no real competition for the healthcare industry CARTEL (no, sorry, there isn’t a free market on healthcare in the US, there really isn’t). As a result, the average costs of healthcare per individual in the US is at least 1.5 higher than the costs for an individual in countries that have a normal healthcare system (universal, single payer, etc. etc.). If you want a clearer example about the cost of healthcare in the US compared to countries with universal public healthcare, I can provide you with an example from my own country, Israel. The average income in Israel is around 8500NIS per month. For someone making this much, the mandatory part of the public insurance is a little less than 310NIS. There is also and optional part, which costs 40NIS, and most people opt for is as well. That’s 350. Say you wish to add a nursing insurance – it would cost you 50NIS, bringing us to 400NIS. A dental insurance would cost you about 40NIS (most people do without it, but what the heck). 440NIS. How about a private insurance, too? It’ll cover you for medical procedures abroad, and pay up to 100,000NIS for loss of income while you were hospitalised – add 120NIS and you’re at 560NIS. That’s about 6.5% of the average income in Israel, and most Israelis never opt for all of that stuff. The Average income in the US, if I’m not mistaken, is about 3000$ per month. The average health insurance is 383 per month. That’s more than 12% of the average income. Almost double. The Israeli public insurance follows you from the minute you become an adult civilian (either at age 18 or when your military service is done) to the time you die (at the average age of 79 years. One of the highest life spans in the world). You can move, switch jobs, LOSE your job, get sick, get sicker. You may have pre-existing conditions or a family history – and that would have zero affect on your coverage. The American private insurance – well, don’t tell them grandma had acne, that’s all. And hope you’ll never get too sick, or unemployed. Israelis pay less, and get peace of mind. Americans pay more than double – and live in fear for the rest of their lives.

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