Milton Friedman’s Healthcare

In last week’s post, I discussed why healthcare should not be left to the free market. Since then I’ve done some more reading and have come across some pretty interesting stuff by Nobel Laureate Milton Friedman. Milton Friedman doesn’t like third-party payer systems, and he really doesn’t like government-sponsored healthcare. He believes the government has no role in regulating, purchasing, or administering healthcare services. If we had it his way, he would even do away with medical licensure. Fine. But what about people who cannot afford healthcare? He thinks that poverty-struck people should be given a negative income tax to the point that they are capable of subsisting at a socially-acceptable level. From there, people can then choose how to spend their money, whether it be on healthcare, mortgage payments, or highly marketed-high-fructose corn syrup products. While giving impoverished people extra money to survive is fine enough an idea, I must question how much people at the subsistence level would really demand health insurance when faced with many other options to spend their minimal income.

The problem with Friedman’s argument is people without health insurance likely will pose a higher cost to society through more extensive utilization of emergency care services instead of primary care physicians. By getting people invested in their own health and taking advantage of preventive measures, our healthcare costs will likely fall.

Healthcare doesn’t lend itself to the Free Market

Healthcare in the United States is big business, and that’s a big problem. We spend around 16% of our GDP on healthcare, nearly double that of other industrialized nations. Additionally our system does not provide coverage for all Americans, and our life expectancy falls below other developed nations as well. For the amount of money we’re spending on healthcare, we aren’t getting a very good bang for our buck. So what’s our remedy? A healthy dose of preventive care.

As Americans, we tend to believe the free market will solve our problems better than the government can. And with some pretty inefficient government programs in our past, I agree sometimes. The problem however is that our current system is failing to deliver what it should, so we need to figure out a solution. There’s a fundamental divide between people who believe healthcare is a birthright and those who believe healthcare is just like any other good or service and should be priced/sold accordingly. To the latter, I applaud your libertarian ideals, but I also chuckle. Although Americans largely fund their healthcare directly, through insurance, or through the government, some people cannot afford coverage. And while these people do not get flu shots or go in for annual checkups, they can get very sick and receive hospital treatment that they cannot afford and won’t pay back. So while some people currently believe our healthcare system promotes capitalist ideals, everyone already has access to healthcare (however clumsy the arrangement).

A chief issue with our current healthcare arrangement is that many medical issues-and the resulting expenses-are considered tomorrow’s problems, not today’s. While this saves money in the moment, no strategy can prove more costly in the long run. A simple yearly checkup might supplant the need for hospitalization later. So instead of providing hospitals as an unaffordable last-resort, we need a system that allows all people to receive non-emergency treatment. Through providing non-emergency treatment for all Americans, more illnesses will be treated earlier and at a lower cost to society.

Although I doubt the American healthcare system is likely to drastically change in the near future, we need to attempt to provide more low cost medical services to more people, regardless of the distribution method. This is one way in which we can save money (down the road) and provide more efficient medical care to all Americans.

Get the Middlemen Out! Why we need to eliminate 3rd party payer systems in education

The Blaine Truth argued a few weeks ago about the usefulness of college considering the soaring costs of education. While this is an important question to answer, after reading that I started to think more about the root of the problem: why are education costs soaring? They have far outpaced inflation in the past many years, and the reason for this is the current funding system that relies upon a third-party payer system. In the current model, students who cannot afford college tuition receive funding from a variety of sources until their ‘demonstrated need’ has been met. Most typically, the educational institution and the federal government supply the necessary scholarships to enable students to attend college.

Daily Nonstop Service JFK-Mars on Virgin Galactic

I came across this article about new rocket technology that could help get humans to Mars faster. In the article it mentions that the future of space exploration might rest in the hands of the private-sector, making me think about the role of privatization in American government. Heralded by the Right as an effective means to combat the inefficiencies of bureaucracy, privatization makes the Left scream in the opposite direction for fear of uncertainty and risk associated with market-based activities. Despite this fundamental divide, Obama has seemingly crossed party lines to promote the prospects of privatization, a concept that sometimes just makes sense.  In space, Obama feels that NASA is better suited to serve as a contract-awarding agency instead of an in-house R&D entity.  Not that this is anything revolutionary- it’s largely the Defense Department model of utilizing military contractors to develop new technologies (let’s discuss that program’s efficacy later). However, Obama has also utilized the private sector in his far-reaching healthcare law, affectionately dubbed Obamacare. True, the law expands the number of those eligible for Medicaid and Medicare, but for the rest of the US population, the system relies on health insurance companies to provide coverage to individuals. Instead of developing a new administration to provide coverage and treatment for all, the law uses existing structures to expand coverage to most. Now I’m not urging you to write your congressman to demand a European model of state healthcare administration, but instead point out that the private sector, when carefully watched, can work.