The contrast between what is possible in modern medicine and what is affordable grows sharper by the year, and has uselessly stressed the question of health care into a problem of redistributive equity. Whether by the cruelty of fact in a market economy or the cruelty of fiat in a socialist system, medical care will be rationed one way or another. The poor and the aged already have socialized medicine. Changing the method of payment for the rest of the population will have little substantive effect other than to introduce economies of scale offset by bureaucratic gigantisms. The best response to the crisis lies in reducing costs.
The most obvious means of lowering the prices of medical “goods”—doctors, hospitals, auxiliary personnel, machines, drugs, etc.—is to increase their supply. Some hold that in medicine this fundamental law of economics is inoperative, or that, mysteriously, supply simply cannot be increased. They are wrong.
In comparison with the United States, Japan and the major countries of Western Europe other than Britain have on average 150% more physicians and 200% more hospital beds per capita. Care and outcomes in these physician-hospitalization-intense environments are roughly similar to our own. In fact, the average life expectancy of 12 such representative countries is 80.2 years as opposed to America’s 78.5. And yet we spend 16% of GDP on health, 63% more than their 9.4%.
Britain and Canada, like us apparently following an Anglo-Saxon model, have similar physician and hospital-bed ratios, and yet spend far less, 10% of GDP, than we do. Canada’s cost efficiencies and somewhat greater life expectancy are due to the absence of a Lumpenproletariat and to the suppression of individual choice: i.e., sorry, Grandma’s got to die now. When it comes to such decisions we must be absolutely sure that in the reform of our own systems bureaucracy is excluded.
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Independent of the austerity of decree in socialized medicine and the austerity of unaffordability in our half-socialized system is a model of cost efficiency based on the richer presence of things that are correlated with healing and yet have foolishly been made scarce. In the period 1970-1990, the granting of American medical degrees increased by 81%. In 1990-2004, as the population grew by 18%, the granting of medical degrees declined by 5%. Though looting physicians from third-world countries that desperately need them has slightly increased the ratio of physicians per capita, it is still much lower than in most advanced countries.
To increase the supply of medical “goods,”—for example, doubling in ten years the number of medical graduates and hospital beds—the government, which spends almost $1 trillion annually on the socialized portion of the American health care system and is projected to spend more than twice that by 2016, can reschedule a portion of its payments so as over time to double the enrollments of medical and nursing schools, educate medical professionals without debt, build and expand hospitals and research institutions, and increase expenditures on public health and prevention (which, especially for chronically unhealthy segments of the population, are more valuable and cost-effective than just picking up the pieces).
The resources for this can be drawn from spending in areas that do not pertain to matters of life or death; from targeted tax increases in times of economic expansion (so you won’t have to lie on a gurney in the hall as you expire from cirrhosis, you might have to pay more for your gin); from the issuance of federal and state health bonds; and by wringing out criminal and institutionalized fraud, lunatic inefficiencies, and excessive bureaucratization. My mother’s flimsy, hospital-style bed, which she used at home before she died, and which could not have cost more than $300 to manufacture, was for years billed to Medicare at $2,160 per annum. With appropriate resolution, this kind of shameful gouging, which leads to medical and hospitalization charges that make you think you’re on LSD, can easily be crushed. No senator would be as popular as the one who threw the lobbyists from the temple and focused the ire of his investigative committee upon the ten thousand varieties of this continuing outrage.
Further to promote the abundance that can drive down costs (or at least keep them stable as care intensifies), favored tax treatment can lure private capital into the health sector on a massive scale and channel it to remedy deficiencies: for example, by yoking tax abatements to high-quality hospitals in under-served areas or for under-served populations or illnesses. This, and increasing the tax advantage of directing philanthropy to medical institutions and facilities, are the best and least compulsory means of moving the necessary proportion of our unprecedented national wealth away from non-essentials to the preservation and protection of lives and health.
A society without the strength or sense to elevate matters of mortality and human suffering above those of material wealth or whim will suffer until its conflicting desires are forcibly reconciled by suffering it can no longer bear. The American health care system long ago jumped the rails, and arguing one theoretical preference or another is useless while what has evolved continues without restraint to grow as a hybrid.
Though they have great potential for improving health care, the steps outlined above would commit us neither to experimenting with the inadequacies of socialized medicine nor to holding fast to the failures of what we now have. Quite apart from its recent unprecedented interventions and expenditures, the government has for a long time wielded a massive and blunt instrument supporting an unsatisfactory state of affairs. Rather than inducing collapse or further atrophy by simply withdrawing or advancing its involvement, it could with its customary weight alone transform the health care system according to rational principles. As for political impediments and the power of special interests, with the proper posing of the question to the public, these could be blown away like the most fragile leaf in the most violent wind.
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For Correspondence on this Parthian Shot, click here.