Some impromptu thoughts on healthcare and the United States

I started writing this entry because of a post I read about Canadian health care....

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Let's strip away all the political rhetoric and look at the facts. For goods and services whose demand can be affected by external factors such as cost (i.e. elastic demand), markets are the best way to allocate resources. Health care (a product with inelastic demands) does not behave this way, as no one bleeding to death will ask how much does it cost for a doctor to fix me? For goods and services like health care, other, more efficient methods have to be devised to best allocate resources.

Let's take away from our argument the idea of charity hospitals and doctors practicing without regard to money. The number of these people and organizations is shrinking, as states have allowed medical organizations to be profit making organizations. This has led to markets being used to allocate resources where markets are not the best way to allocate resources.

In a society that values human life more than ours, people's lives are maintained without regard to market forces. The individual receiving health care is not part of the market. So, how is care allocated? In the US, we used to have organizations called HMO's. But even they were affected by markets, and limited care when care was needed.

Many developed nations, such as Canada provide health care services with a fixed amount of money allocated for care in each province's budget. People get to see their doctors by appointment (usually more often than in America). Care provided has been vetted against "best practices" and drugs/procedures which provide the most bang per buck are usually chosen to reduce costs. In areas where there might be inflexible demands, such as needing heart transplants, they prioritize recipients of care to those who would get the greatest statistical benefit from that care. This means that a 40 y/o man might be selected for a transplant over a 90 y/o man. This takes market forces out of the decision, and allows care to be provided without regard to a person's wealth or lack of it.

America has distorted the use of markets so much, that many of us fear what might happen if we move some goods and services out of market place allocation of these goods and services. The experiences we've seen in foreign lands shows us that costs can be reduced by taking things out of markets. In fact, we're now seeing medical "tourism" where many Americans are flying to Europe and Asia for non-emergency procedures. There are many procedures that cost half as much when done in Europe than when done in the States. In Asia, the costs are even lower. And, quality is similar (or better) than what one finds in the States.

The drawback - no one likes being a gate keeper. No one likes having gate keepers. And non-market systems require gate keepers. Who wants to hear that a $500,000 procedure won't be performed that could add another year to your 90 year old grandma's life, because society has chosen to fund a rural clinic that provides 10,000 people with essential health care?

Being a decent human being means making choices. Canada and most of the developed world have made good choices. America  doesn't yet make that many good ones....