Bottom Blog

Monday, I wrote: If we can, we should. And if you agree, then I’m sure you also agree that if we can’t, we shouldn’t.

If you don’t accept that simple logic, then you are not
being objective.

I have as many friends who call themselves Democrats as
Republicans, and lately, the conversation has increasingly turned to the
concept of Medicare for All. While I’m sure it’s pure coincidence and has
nothing to do with the work of Broken Healthcare, I often get asked my opinion
of Medicare for All. Unfortunately, I have proven woefully inept at getting
people to understand why I believe Medicare for All would not only be a
disaster but would be the death knell for American healthcare.

A couple of months ago I started trying a different tack. I
had observed that my friends who are supporters of Medicare for All favor it
for moral reasons, and on that subject, we are mostly in agreement that
something must be done to fix our broken healthcare system. But moral justification
tends to lead to emotional, not objective, economic reasoning, thus making it a
hard debate to win.

Essentially, what I’ve said to people is, “Why don’t we step
out of the world of healthcare for a moment—it’s too emotional. Instead, let’s examine
how things might work through an analog, say the food industry.”

For me, there are many similarities between food and
healthcare. Clearly food (along with water) is a basic necessity of life. And I
think most of us believe that everyone has (or at least should have) the right
to not starve to death in the United States of America, where food is abundant
and cheap. We ache for children who are going hungry, feeding millions of them
through our schools. We help the poor with food stamps (now SNAP) and we
subsidize farmers. So, what would happen if we adopted a Food for All program that ran like today’s Medicare?

A Cars for All
program might be similarly appealing. What would the auto industry look like if
government established what features a car needed, what price would be paid,
and how repairs and maintenance would be paid?

How about a Housing
for All
program? We all care about ending homelessness. So why not let the
government decide what housing everyone needs? It would certainly be a lot more

You see, it’s the “All” in Medicare for All that is the
problem. I am in favor of subsidizing healthcare for those who need it, but when
we start to make the assumption that the government should provide a minimum
level of something for everyone, we distort the market in ways we can barely
imagine. Right now, government-sponsored healthcare is only half the market and
it’s destroyed the entire market for all of us, creating price distortions and
stifling competition. Medicare and Medicaid, the lowest prices in the market,
don’t result from competition, they result from price setting by bureaucrats
which makes people believe they are truly the lowest prices possible. Only
competition can find the lowest prices. This misperception has also created the
concept of cost-shifting to the private sector.

Taken in sum, it’s a dysfunctional economic system that all
started with government interventions.

Medicare created hospital Charge Masters and mandated that
everyone be “charged” the same price (before discounts). In other words, the
government created hospitals’ greatest Weapon
of Mass Corruption
. In 1973, the Federal Government allowed the nation’s
non-profit health insurers to become for-profit businesses while leaving intact
certain exemptions from anti-trust regulation that was only intended for
non-profits. Decades later, we have an incredibly corrupt health insurance
industry that is already starting to do the same to Medicare through Medicare
Advantage plans.

Government created the fee-for-service model and allows
obscene abuse of patent law that enables pharmaceutical companies to keep
generic options off the market. The Federal Government also wrote into law that
it may not negotiate drug prices, which keeps costs artificially high.

Government also created the Medical Loss Ratio (MLR) via the
Affordable Care Act (ACA), eliminating the incentive for insurance companies to
drive prices down, instead creating a perverse incentive to allow prices to

For the private sector, government has created High
Deductible Health Plans, Health Savings Accounts, and Health Reimbursement Accounts,
none of which have brought down the cost of healthcare by driving greater
consumerism; and there was never any evidence to suggest they would in the
first place. These were merely political ideas. Every government-lead effort to
engineer a better healthcare system has failed, leaving us with what we have
now. So now, for some reason, we believe we can achieve better results by
further broadening government’s domain?

The only tried and true system, the one that we have 250
years’ of experience with—one that has given us the cheapest energy in the
world, the cheapest and most abundant supply of food in the world, broad home
ownership, a car in every driveway , and so much more—is the one system we
haven’t tried.

The Free Market is
capable of giving us the best healthcare system in the world. The confusion is
that because our healthcare system is so economically dysfunctional, many
believe it is capitalism run amok, when in fact the problem with our healthcare
system is just the opposite—it’s capitalism denied.

This is the debate that must take place before we go any
further down the path of Medicare for All. The question is whether we have truly
tried free market principles in healthcare yet, and if we haven’t, is it smart
to move to a more engineered system, whatever form Medicare for All might take,
without first trying the one system that we know works in every other market?

And finally, please just come back to the original question:
“If you believe we can engineer a Medicare for All system, then why wouldn’t we
also apply the same principles to food, automobiles, and housing?” If you
cannot, or will not, answer that question, then ask yourself “why not?”

So, this is the bottom line for me—it’s not about morality,
because on the grounds of morality, I think If we can, we should.
Unfortunately, we can’t, so we shouldn’t. And there’s still another way that
we haven’t tried.


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