But health care is expensive! – Socialization (Part 2)

If you support a universal health care system, can you think of a reason why it would be different from other government run programs? The Post Office takes no responsibility for its mistakes. Why would health care be any different?

Imagine that your spouse got sick and had to go to the hospital. You went to visit after work, and your spouse said the nurse never brought by any medication, and as a result is feeling much sicker. You go out to the nurses station and say, ”My spouse didn’t get any medicine today.” Under our current system the nurse would apologize profusely and quickly get the medication. She may offer to give you a discount on your bill. You could choose to never use that hospital again. You could choose to sue the hospital for negligence. You could choose to be understanding and forgive the nurse for making a mistake.

Or, we can have the same situation under a universal system. You complain to the nurse, and the nurse rolls her eyes and tells you she has a lot of patients, sometimes she misses one or two. You say you want the medicine now, and she says she’s really busy, she’ll get it when she has the time. You would like to go to a different hospital, but this is the hospital district you live in, so you don’t have a choice. You would like to sue for negligence, but no one has much success when trying to sue the government. Do you think this is an unreasonable situation? Why? These are exactly the differences between the post office and UPS, exactly the differences between public schools and private schools. Why would health care be any different?

But it’s expensive!

Despite the fact that the government doesn’t run anything efficiently, many people still come back to the fact that health care is expensive. Some people can’t afford health care, even those who can often spend more than they would like. Liberals believe that health care should be affordable for everyone, and that under the current system it is simply out of reach for some people.

This makes me think of a woman I met who moved to Utah from Sweden. She met her husband there, but he was American so they moved here and got married. Many liberals laud the Health Care systems in Europe, and many Europeans seem quite happy with the system as well. While talking to my friend she told me she was from Sweden. She must have heard some disdain when I responded, asking her if it was a socialist government. She said, “Oh, yes, it’s wonderful, I think it’s a great system.” I just nodded. I think Socialism sounds bad in theory, but if she was happy with it I wasn’t going to argue. We went on, talking about college and our plans for the future. I said my husband had graduated with a Bachelors degree, and we were currently working and saving money for law school. Perplexed, she asked how we were doing that. I didn’t understand what she meant, and she said, ”How are you saving any money? Don’t you have to pay off your student loans?” No, we didn’t have any loans. We both paid for college as we went. But, to her it was inconceivable that anyone would be able to afford college. Maybe, in Sweden, no one can, but luckily they have the government to help them out. A little later on in the conversation I asked her if she liked Ikea. She told me she loved it, and then started gushing about how cheap everything is. So… she loves her Socialist government. However, she obviously has some misconceptions about America. Maybe she wouldn’t be so thrilled about her government if she knew that people here can afford to go to college without government help. Maybe they even have to take out loans, but if they don’t have the kinds of taxes Swedes get, then they aren’t too hard to pay back. Also, things are cheaper in America! Gas is at least $6 a gallon all over Europe. We get to keep more of our paycheck, and things are cheaper. That’s nice on multiple levels. Maybe people in Europe love their socialist governments because they grew up their whole lives thinking that they couldn’t afford health care or an education without their government to take care of them. I’m sure some of them are also just happy to not have to work hard for everything they have. That is wonderful for them. But I would rather have my free market system, resulting in lower prices and higher quality care.

Have you ever wondered why health care is so expensive? My conclusion is government intervention. Did you know that Medical schools have to be approved by the government? A group of highly skilled, altruistic doctors and professors can not simply open a new medical school and charge less than all the current medical schools. They have to get approval from our government. One of the most basic principles in economics has to do with supply and demand; the more there is of something, the less it costs. The less there is of something, the more it costs. If the government is controlling the creation of new medical schools, that creates an artificial shortage, resulting in higher costs. Everyone knows that medical school is expensive. I majored in Biochemistry; about half my friends went on to Medical School (the other half went on to get a Masters or PhD in a Chemistry related field). The ones who went to Medical School spent thousands of dollars just on applications and interviews. A couple of them didn’t get in immediately, and had to reapply before they were accepted anywhere. Once they were in medical school they paid tens of thousands of dollars for their education. My friends who went on to graduate school did not spend thousands of dollars applying; once they were accepted they received stipends that paid their way through school. Part of the reason is that there are many more graduate schools than there are Medical Schools. There are also many more people who want to be Doctors than there are people who want to do Chemistry research for the rest of their lives. In a purely free market society that would result in more Medical schools. However, government intervention has resulted in less medical schools. This, in turn, makes going to medical school much more expensive. Which results in doctor visits being more expensive, so they can pay off their school loans.

It also results in less doctors. According to the World Health Organization, there are about 245 Physicians for ever 100,000 people in America. If there were more doctors, they would be competing for your business by lowering prices. Doctors don’t compete by lowering prices, because you don’t know how much you’re spending. I went to a dentist once to get my teeth fixed; after getting several fillings the woman in the billing department asked me what I wanted to pay for a down payment. When I asked what the total was, she said she hadn’t calculated it yet! The reason she didn’t know was because at that point (in college) I was on Medicaid, and the government had a bureaucratic nightmare of a system for calculating the price of service.  Can you imagine that happening in ANY other industry? Can you imagine taking your car in for repairs without getting a quote, then when they’re finished they ask for a down payment on the work without knowing how much it would cost you? Can you imagine grocery shopping without any prices, then having the cashier calculate the total using a complicated billing system that takes into account how much of each item you bought, and the combination of products? That doesn’t happen in a free market society, because industries have to compete for your business by lowering prices. Why don’t free market society rules apply to health care? Because of government intervention.

I know that health care is expensive. I also know that one cause of health care being so expensive is Government intervention. Medical schools have to be approved by the government, causing an artificial shortage and therefore higher prices. It is also the law that hospitals have to treat patients, regardless of their ability to pay. My mom was a nurse in an Ambulatory Infusion department in a hospital. She gave treatments to outpatients, treatments like dialysis and chemotherapy. There was a woman who comes in twice a week for chemo treatments. Each treatment costs $5000 for the drugs, equipment and their time. She doesn’t pay a cent; she has been coming twice a week for about two years, and the hospital legally has to treat her. After two years that is over $1,000,000. This is one patient, in one small hospital in Indiana. Who is paying for it? All the other patients. The hospitals have to raise their prices on other treatments in order to cover the cost of patients who can’t pay. It’s just like walking into a Wa-Mart and shoplifting; the costs go up for everyone else. Only here the government says they are allowed to go in and shoplift, and no one can do anything about it.  The government also likes to raise taxes on Pharmaceutical companies, which drives up the costs of treatments. They also support tort lawsuits and civil suits, which means everyone in the medical profession needs to purchase millions of dollars of insurance; increasing the price of their overhead increases their prices.

So now (thanks to the government) Health Care is very expensive. I know it’s expensive. I also know that being a doctor is expensive. I majored in Biochemistry and minored in Physics. Every single person I graduated with went on to Medical school or Grad school. I know that medical research is expensive.  Do you think new drugs just appear out of thin air?  The expenses of medical research could be an entire chapter on its own.  I know that Medical school is expensive (supply and demand). I know that it takes a long time and a lot of work.

So, now the government wants to save us from the problems they helped perpetuate by making Health Care a government gift. They made prices go up by getting involved before, but somehow think they can make things better by completely taking over? What do you think will happen to prices if the government instituted a universal health care program?

Let’s look at a simple example using another industry; dry cleaning. You have found a nice, little dry cleaning shop that cleans your suits for $20. You shopped around a bit before choosing; you found some that were more expensive, you found one that was only $15, but they didn’t do a very good job. You like having a clean suit; you feel more relaxed at work knowing that your suits are clean, so you work harder and are more productive. You look nice, which reflects well on the customers, and increases business.

The government sees the benefits of everyone having access to a clean suit, and they decide to subsidize it. They allot $35 for every claim a dry cleaner submits, because some dry cleaners cost more. Do you think that your dry cleaner will continue to charge $20? Any dry cleaner that isn’t already charging $35 will immediately raise their prices. The government doesn’t have any idea what quality of suit cleaning you are receiving. They might open a new department, the Department Assuring Clean Suits. The department costs money to run, plus they need to hire a few hundred employees, all of whom are receiving a government paycheck. To make things easier for them to track they regulate which dry cleaners can provide service to the area you live in. If you want a free cleaning your only choice is the previously $15, low quality dry cleaner. You can choose to go to the one you used to like, but you would have to pay $35.

The DACS hears that your dry cleaner is providing low quality service. They may not care, like the DMV and USPS. But they might, so they come in and try to fix the problem. The dry cleaner is a family business that has been providing cheap dry cleaning to the city for fifty years. Unfortunately, they can’t afford to implement all the new DACS regulations, so they lose government approval. They try to stay open, but no one comes to them because the dry cleaner is charging $15, and everyone can get their suits cleaned for free. The dry cleaner quickly goes out of business, and all the employees lose their jobs.

Because the government is paying the dry cleaners they can control what equipment is used (and maybe make the industry standard a machine produced by a company that financially backed one of the Senators when he was running for office), the hiring standards, the products that are used, the prices, etc.  They require newly hired employees to have specific training, which is only provided at certain facilities approved by the government.  These regulations are made by government employees who don’t have any personal experience running a dry cleaner.  The businesses that can’t afford the standards close. The businesses that stay open are much busier. Not only are there less dry cleaners available, there is also more unexpected business. Some people used to clean their suits at home, now they use a dry cleaner. Other people didn’t care about having a clean suit, but now that it is free they might as well use it. Some people used to get a suit cleaned every two months; now they get one cleaned once a month. Some people are taking their suits in for little specks; they wouldn’t have worried about them in the past, but they might as well take care of them now that it’s free. You used to wait three days for your clean suit; now the wait is at least two weeks. The employees used to treat you well, because you were a valued customer that chose to spend your money at their company. Now they don’t care, because it’s not your money they are receiving. They used to be careful while cleaning your suit, but now there is no incentive to provide a quality cleaning. The competition has gone out of business; their company falls within the government standards so they aren’t worried about being shut down.

Let’s look at what you have gained: you get a free suit cleaning whenever you want.

Let’s look at what you have lost: it takes much longer for you to receive your service. You used to be treated well, but now the employees don’t care. Your suits used to come back cleaner.

Well, at least you are getting a free suit cleaning. Right? You used to pay $20. Now your taxes pay $35 for every suit that is cleaned. Several times as many suits are being cleaned. Government budget projectors looked at the number of suits that were being cleaned and underestimated the increase; they underestimated all the people who previously didn’t use the service and they underestimated the people who would begin using it more. Your taxes are also paying for an entire new department, DACS, with hundreds of employees, as well as all the typical business expenses. There are thousands of former dry cleaners who are collecting unemployment as they look for new jobs. Every cent the government spends comes from the taxpayers.

Is it worth it?

I can imagine some people are appalled that I would use such a heartless, simplistic comparison. How dare I compare life and death treatment to dry cleaning? I do recognize that there is a difference, but I think that people get caught up in the thought that health care deals with people’s bodies, and potentially their lives, making all other considerations irrelevant. I think the solution lies is less government intervention. As soon as the government gets involved prices skyrocket, while quality decreases. This is true of every single industry the government is involved in. Public schools cost, on average, three times per student than private schools. Private schools provide a better quality of education. USPS is heavily government subsidized, your tax dollars pay to keep it in business, yet it provides horrendous service compared to FedEx or UPS. The government decided to provide retirement for everyone, since some people weren’t willing to save for themselves, and now Social Security is completely bankrupt, even though we’ll be paying into it our entire lives.

When the government started instituting regulations on airlines, prices jumped. There are now taxes on every ticket purchased to cover government security costs. How’s the quality these days? The last time I flew I had two children under two with me. My husband can no longer escort me to the gate; I asked for special permission, because I was literally unable to carry both children, a car seat and a diaper bag, and I was told he could not pass security with me. I asked for an escort or a cart, and was told that they couldn’t provide me with an escort and that carts were not allowed past security. It’s nice to know that I’m paying extra for the extra security, which is doing literally nothing to make me any safer and is making every trip through security an extraordinarily miserable experience. Is there anyone out there who loves the new security measures? You enjoy taking off your shoes in an airport, you enjoy not being allowed to take your favorite drink past security, you enjoy having to pull out your laptop and open it, and you enjoy having your travel nail-clippers thrown away because you forgot they were on your keychain? As someone who has studied Biochemistry, I can personally assure you that none of these ’security measures’ are keeping you any safer from bombs. They may keep you from being jabbed by a nail clipper and maybe some really, really dumb terrorists. No liquids allowed past security? Just get the explosive in a powder form; that is how most of them come anyway. I worked in a Chemistry stockroom, I know about explosives in solid forms, which wouldn’t be thrown away with your perfume because they aren’t a liquid. I also wouldn’t be dumb enough to handle them in the same clothes I wore to the airport, rendering those huge, expensive machines that blow on you and then test the particles in the air for nitrates completely useless. But I digress.

My point is, government intervention makes things worse. I don’t understand why anyone would want lower quality health care which will ultimately cost more. You may not write the check, but you are paying for it. Please remember (and this is important throughout my entire blog); every cent the government spends comes from taxpayers. Every time I say ”tax dollars” replace it with ”my money” in your mind. Every time I say ”government funded” replace it with, ”funded with money I worked for”. But this isn’t just about money. It is mostly about the quality of the care. Right now people get the health care they can afford. If they are fabulously wealthy, they pay for the best doctor in New York. If they are poor, they go to clinics and emergency rooms. Most people have decent health care, they can afford to go to dentists, get check-ups and receive the care they need. The U.S. Census Bureau reports that, ”In 2007, some 45.7 million Americans 15.3 percent of the population were uninsured.” So, 15.3%. How many of those are by choice? I’m serious; many people see statistics like that and assume that every single one of those people are uninsured because they literally have no insurance available to them. That’s not true. Some people choose not to have health insurance. Some people just don’t think it’s worth it. Some people are religiously opposed to receiving health care. Some people can afford it, they just forget to sign up or are too lazy to do the paperwork. Some people could afford it, but they don’t want to make the necessary sacrifices. Some people literally can not afford health insurance, but if they go to a hospital they will receive treatment.