In 1994, George Reisman wrote a pamphlet explaining the problems with America’s health care system. He criticized the Clinton plan for reform, and offered an alternative based on freedom and markets rather than government interventionism. It is a brilliant work, and still relevant today: “I wrote this essay to help defeat the Clinton plan for socialized medicine. In all essentials it’s as valid today as it was then. It’s a demonstration that government intervention inspired by the philosophy of collectivism is the cause of America’s medical crisis and that a free market in medical care is the solution for the crisis. I urge everyone who wants to help defeat the essentially similar Obama scheme to read it.”
You can read the pamphlet by clicking on The real right to medical care versus socialized medicine. It’s lengthy, at about 22,000 words. It takes a while to read. Part of what accounts for its length is Reisman’s explanation of every point he makes, which is very helpful.
Reisman calls for more than simply defeating the Clinton plan, as we who oppose the Obama plan should be doing too. He calls for reform — radical reform — of America’s health care, and presents a plan.
By way of introduction, Reisman writes
… while the philosophy of Marx and Engels is dying, the philosophy of Locke and Jefferson, and Adam Smith, that is, the philosophy of individual freedom and capitalism underlying the American Revolution — the philosophy which, ironically enough, was the original meaning of the word liberalism — has been reborn. It has been reborn first and foremost at the hands of Ayn Rand in political philosophy and of Ludwig von Mises in economic theory, both of whom have enormously strengthened it. This philosophy of individual freedom, of the inviolability of individual rights, of the benevolent functioning of an economic system based on private ownership of the means of production and the profit motive — of capitalism — calls for a radically new political agenda. It calls for a political agenda that progressively rolls back the interference of the state and progressively enlarges the freedom of the individual. This is now what political philosophy and economic theory at their highest levels of development recognize to be the essential means of solving social and economic problems. Movement in this direction — in the direction of individual freedom from government interference — is henceforth to be regarded as the standard of what is to be considered progress in the realm of political action.
It is on the basis of this newly resurgent, radically different political philosophy and economic theory — this philosophy and theory of individual rights and capitalism — that I explain the causes of the present crisis in medical care, criticize the Clinton plan, and present the appropriate solution and how to achieve it.
The fundamental problem is this: “… the perverted notion of the need-based right to medical care — that is, an alleged right to medical care that entails a claim on other people’s wealth or labor, which must be met with or without their consent — is what underlies both the collectivization of medical costs and the concomitant loss of the individual’s personal financial responsibility. In this way, it is a perverted notion of the right to medical care that is fundamentally responsible for the rising cost of medical care.”
Reisman goes on to explain, in detail, how the present system of purchasing health care leads to a variety of problems, such as “the potential for a limitless rise in the price of medical services” and “irrational medical malpractice awards and the practice of defensive medicine.” Most people seem to agree that these problems are present. He also explains how the present system is “perverting technological progress into a source of higher costs rather than lower costs,” how it is responsible for high drug prices, and how hospitals waste money buying costly equipment that is not needed.
He also explains “bureaucratic interference with medicine and the rise in administrative costs,” characteristics of private health insurance companies that those who support government takeover rail against.
Reisman then criticizes the details of the Clinton plan. These apply equally to the Obama plan.
Then, Reisman proposes his solution. It’s not more government, which is what Obama offers. It’s less government and restoration of individual rights:
The actual solution to the problem of runaway medical costs lies in the precise opposite of the direction chosen by the Clinton plan. It is not the final destruction of the individual’s rational right to medical care, which is what the Clinton plan would achieve, but the restoration and full implementation of that right — that is, the removal of all government interference that stands between buyers and sellers of medical care or in any way causes medical care to be more expensive than it otherwise would be.
The best way to accomplish reform, Reisman writes, is: “The simplest, most obvious method of achieving a free market in medical care would be at one stroke to abolish all government intervention that violates a free market in medical care.”
Recognizing that this is not likely to happen, Reisman proposes some steps to take.
The first is a change in the tax laws that would have the effect of “[having] employees realize that they were responsible for the cost of their own medical care, even if the employer continued to pay insurance premiums on their behalf. This is because the individual employee would know that he could have his share of the money his employer paid on his behalf, in his own pocket if he wished.” In other words, dissolve many peoples’ notion that their health care is free (or very low cost) just because they get it as part of their job.
Next, end the idea that Medicare is a free resource: “… unless they can demonstrate a lack of means, individuals covered by Medicare be required to pay a substantial deductible before their coverage under the program begins and then to make a continuing copayment of a significant percentage of all costs beyond some maximum limit. ”
To increase the supply of health care, “it is certainly reasonable to ask that medical licensing laws be liberalized — nothing so extreme, mind you, as their outright abolition, but merely their significant liberalization.”
To control hospital costs, a radical reduction in the regulation hospitals face is required.