Thursday, April 05, 2007

State-based universal healthcare.

Over here, we have Mike (of Rational Reasons fame) trying to argue against state-based universal healthcare. It doesn't work; and here's why.

The first error comes in a contrast between the American and Canadian systems. He's right that these don't exhaust the options. He's wrong in saying the following:

The Canadian system, on the other hand, resorts to rationing in order to ensure universality. The system is more efficient, to be sure, and the rationing is done via time rather than choice (that is, we wait for longer times for procedures and tests, rather than making the choice between a hip replacement and a broken leg operation, although that does happen) but the system is still expensive and unresponsive to health care consumer’s needs. Both systems have conspired to take away free choice from consumers of health care and driven up costs of these services, so that only the wealthy can get decent care, in either system.

There's at least two major errors in here. First is the slide from "needs" to "choice" from the end of the second-last sentence to the beginning of the last. It's a slide Mike needs to make, else he has nothing to browbeat the state-based system with: the state-based system is responsive (or as responsive as any system can reasonably be, which amounts to the same thing) to healthcare needs. To claim that it isn't would require finding a non-insignificant set of cases where healthcare needs were not met. However, what is usually presented in response to that kind of challenge is a set of cases where healthcare wants or preferences are not met. Hence, the introduction of the word "choice". Choices are, indeed, blocked; but so what? Liberty is not license (as Locke taught us), and it's rather bizarre to blame what is, at heart, a rationing system for blocking certain individual choices from being realized.

The second error is the claim that only the wealthy get decent care. There's really no evidence given to support the claim; we're just supposed to take it for granted that being rich is required in order to get "decent" care. Note that word: "decent". It's not to get great care, or fantastic care, but "decent" care. "Decent" generally refers to some basic threshold that needs to be cleared; so, the implication of the sentence is that not being wealthy implies getting less care than is required by some minimum threshold of adequacy. But when did this happen in Canada? When did those who are not wealthy fail to get care that falls above a minimum threshold of adequacy? It's not absurd; but it doesn't seem empirically well-grounded, either.

Here's a great series of howlers:
The biggest problem in our health care system today is a shortage of doctors. This is one of the biggest reasons for our long waiting lists and the kind of rationing we see. Combine this shortage with the fact that a doctor is needed for nearly every medical decision, no matter how minor, and we see via simple supply and demand why many health care costs are so high. This is not an accident of organization, though, but a well designed strategy. Medical organizations - essentially the doctor’s union - have colluded with the state to ensure that the supply of doctors has been kept artificially low. They ensure that provincial governments keep enrollment in medical schools are low, that foreign-trained doctors find it difficult or impossible to become licensed and that doctors, as opposed to nurses, nurse-practitioners or pharmacists, must be the ones to make even obvious medical decisions. This not only reduces the supply of doctors, but all but eliminates any competition for and among them. Right now in Ontario, you cannot shop around for a doctor as you are lucky to even have one - any one - in the first place. As a result, doctors are able to negotiate high fees from the government, often making twice as much as their European counterparts. And the a person has no choice but to go to a doctor - and only a doctor - for their health care needs. A monopoly control of supply, with all the common high prices, low quality and inefficiencies that accompany all monopolies.

Where to begin? He's right that a doctor shouldn't be needed to make absolutely every medical decision. You don't need a full-fledged lawyer to make any legal decision, only the big ones. Similarly, a further professionalization, in the form of greater division of labour, of the medical profession would be a good thing. However, the lurid conspiracy referred to is simple nonsense. Medical organizations have a vested interest in keeping the number of practicing physicians high, not low, and the reason is simple economics. The more physicians there are, the more the physicians' organizations (and there are several, not one monolith; but that is the least of the errors contained in this argument) get in membership fees.

Moving on, I'm quite perplexed as to the second conspiracy Mike sees, namely between doctor's organizations and provincial governments and medical schools in keeping enrollments "low". I'm not sure what counts as a low enrollment; I'm also not sure as to what Mike's solution would be to provide the requisite instructors, facilities, and residency spaces for training more physicians, not to mention the economic drain that would result from taking more able-bodied young people out of the workforce for the extended period of time required to adequately train a physician.

The difficulties of foreign-trained physicians are well-documented, and The College of Physicians and Surgeons of Ontario (CPSO) is moving to try to accommodate them. This is a general problem of foreign training not always being fairly recognized, though, and is not simply limited to the practice of medicine. I would suggest that it is even less plausible that teachers' organizations are conspiring against foreign-trained colleagues than that physicians' organizations are conspiring in a similar fashion. The increased mobility of professionals which has arisen over the past few decades is something that all governments are going to have to come to terms with across the board. To blame a state-based universal healthcare system for it is bizarre.

Mike suggests that nurses, nurse-practitioners, and pharmacists should be making some medical decisions. The former and latter would need some retraining in order to make that work, but it's not, in principle, impossible, and it would take some pressure off the supply of doctors. It's hard to see why there's no way for a state-based system to introduce incentives in order to encourage this. Indeed, it seems to me that a state-based system could implement such a change with greater rapidity and efficacy than a market-based one, given that the government could deliberately direct the implementation of the policy, instead of relying on blind market forces.

He also claims that "doctor-shopping" is impossible. It is in certain areas, but not in all. What's not clear to me is why that's a bad thing. He doesn't explain; instead, just assumes that this is a problem.

Finally, he claims that physicians negotiate high fees. This is beyond absurd. Physicians are underpaid, generally speaking, in Canada. The evidence for this is obvious: compare Canadian and American fees. The comparison he draws to Europe is almost useless, given that many areas of Europe have lower costs of living than in Canada. This is the strength of a comparison between Canada and the US. Of course, the reason Mike doesn't draw that comparison is it shoots his argument to hell. American physicians have comparable cost of living to Canadian physicians, but make much more money, on average. (If anyone has stats to support or undermine this, I would be interested; I've been told it's the case, but can't actually find data to back it up.)

Now it gets really bad:
Without the state, the consumer would have the choice in the market. Doctor’s would no longer be the bottle neck in the system. You could choose to go to a GP or a nurse practitioner.Indeed, you could choose a witch doctor, herbalist or a homeopath if you want. If you have a recurring ailment or condition, you would merely go to the pharmacist and request the medication. You could request your own tests and diagnostics. You would be able to mitigate your risks by being informed and having health competition for these services. And the competition, combined with a lowered barrier to entry, would drive the costs of these services down. Anyone properly trained (in you opinion, not a medical association, though association membership would likely be a deciding factor) could enter the market and compete on quality and price.

What Mike is advocating here is healthcare anarchy, writ large: no authority, no control, no assurances, caveat emptor. If consumers and producers were as well-informed and honest as rarefied economic theory requires them to be, then this might work; however, when dealing with actual people in actual circumstances, this is a recipe for disaster. GPs and NPs are not equivalent to each other, despite both receiving adequate training; and they are certainly not equivalent to witch doctors, herbalists, and homeopaths. Without state-based guidance as to the relative worth of various practitioners, we'd be left with a medical analogue to the height problem in politics. (That is, people tend to vote for the taller candidate, all things being equal.) The idea that there would ever be a fair competition on quality and price in this sort of market-based system is a laughable fantasy at best. I wonder how, exactly, Mike thinks the average person with a stomachache is going to have the time and resources necessary to adequately research the options in his system.

The prevailing notion underneath all this is probably the idea that there's something wrong with interfering in individual healthcare choice. But nothing could be further from the truth. If we were all fairytale libertarian atoms, floating in a social sea and interacting as we willed, then healthcare choice might be sacrosanct; however, we are heavily interconnected with each other basically from birth, and these connections run deeper as we grow older. Given this, interference in healthcare choice is justified on entirely libertarian grounds: if I do not prevent you (and you and you...) from going to the witch doctor instead of a GP, then the GP goes out of business and I am forced to go to the witch doctor, too; moreover, that you're all undergoing "treatment" which will cure nothing implies a whole host of consequences for me.

Perhaps the idea is that GPs, et al., will always win out in a fair market-based competition? I don't have the kind of faith necessary to believe that consumers are sufficiently rational in their market choices to accept that claim. It seems to me that the cheapest and flashiest options are the ones that will win; and the ones that are actually good will, in the long run, lose out. This is where professional associations come in, and legally-mandated monopolies, and the whole apparatus of the state-based healthcare system.

Mike's speculations on insurance alternatives fall to similar objections. It's largely the kind of libertarian myth-making that has fallen out of favour in serious political philosophy in the past twenty years or so. (Jan Narveson notwithstanding.) There is no consideration of the possibility of collusion or cabals; no consideration of the motivations which actually drive consumer choice; and pie-in-the-sky dreams of perfectly rational consumers.

And that's why you should be a statist. It's the only way to make any sense.


Closet Liberal said...

Just randomly clicked your blog from Progressive Blogger list, and WOW! You nailed it. I had a big problem with Mike's blathering on this issue (I generally like his reasoning, but he lost me on this one) but couldn't come up with a suitable reply.

Well earned applause from this corner I say.

ADHR said...

I've been meaning to post this for a while. Glad you got something out of it!

Anonymous said...

Doctor shopping, as he called it, is impossible because GP doctors make you sign a form nowadays saying you will not do it. (Ostensibly the form enrolls you in a "doctor group" which is advertised as a good thing, which it may partly be. But it also disallows switching doctors)

ADHR said...

Technically, that doesn't make it impossible; it just makes it impermissible. I'd imagine that the form works for some people, for some time, but not for everyone and not for all the time. After all, what's the enforcement mechanism? It's probably just kicking you out of the doctor group; if you're sufficiently dissatisfied with the level of care to go outside the group anyway, then this is hardly a punishment.