Tuesday, August 25, 2015

[x] socialized medicine

A staple of the political discourse in Canada is the constant affirmation of both the quality of our health care system and the importance of preserving it's single payer nature.  The allegedly pro free market conservatives have nearly doubled spending on health care, education and social services in just under a decade and federal health care spending in particular has increased a a rate of 6% per year. Patrick Brown, leader of the Conservative Party of Ontario, has attacked Liberal health care "cuts" and representatives from both the Liberal and New Democratic Parties federally and provincially bray constantly about the necessity of spending more money on health care. Among Canadian politicians there is a virtual unanimity of opinion in favour of socialized medicine. The public is equally enamoured with free health care and expresses their support overwhelming in opinion polls on the subject.

How does the system work?  Individuals who need medical attention go to a doctors office or hospital and the government is billed for the cost of these visits in accordance with an annual price structure determined by the Ministry of Health.  Some physicians are salaried employees of hospitals.

Private health insurance is illegal in Alberta, B.C., Manitoba, Ontario and PEI but was recently legalized in Quebec through a recent court decision. Price controls in Manitoba, Nova Scotia and Ontario are in place forbidding private sector physicians from charging more than the OHIP (Ontario Health Insurance Plan) price schedule. Since health insurance is a vital to handling the expense of catastrophic care and a freely fluctuating price system is critical for the health of any market these regulations have served to cripple any affordable private alternative to the public system, which was kind of the point.

Economically the Canadian public system is one of 'market socialism'. The theory of market socialism developed as a response to Mises' problem of economic calculation which argues that rational allocation of scarce resources in capital goods industries is impossible without a price structure derived from legitimate market activities. Why socialists want to play market when you could just have a market is still something of a mystery.

The libertarian alternative would be simply to have a market in health care, likely taking the form of direct payment for routine visits and insurance for catastrophic care. Eliminating compulsory licensure and legalizing health insurance would also be important. The advantage to an actual health care market would be an end to health care rationing and the long waiting lists which plague our system and a substantial reduction in bureaucracy. Competition between firms would help keep prices under control and reduce waste while freely floating prices would help direct scarce resources towards their most efficacious ends. Insurance can also help individuals identify risk, as lifestyle choices such as smoking or obesity lead to higher premiums, and provide a financial incentive to make healthier decisions. End users being charged for doctors visits would also help eliminate patients making a frivolous use of a doctors time and the elimination of compulsory licensure would make it much easier for foreign trained doctors or other non certified individuals (such as a nurse who has been practicing for 20 years) to provide medical care.

Advocates of the current single payer system argue that a market in health care will make things more expensive because of the dread profit motive, that everyone deserves access to care or that everyone deserves equal access to care, that private insurance companies have higher overheads than government insurance and that some people won't be able to afford health insurance.  But the argument against the profit motive is not unique to the health care industry and taken to it's logical conclusion it advocates for complete communism, which historically has not worked out that well, and it's difficult to imagine the private sector ever having as much waste and bureaucracy as a government program.  As for those who cannot afford to pay a doctor or purchase health insurance, presumably they will still be treated at hospitals in the event of an emergency and charitable free clinics can be established for more routine care.

Eliminating the state monopoly on health insurance and developing a free market in medical care is absolutely critical to the well being of our nation.

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