Another healthcare post, partially inspired by the last comment over
here. I'll start by introducing the principles I consider important in distribution of healthcare resources, then discuss how they might be realized in policy.
The essential healthcare problem is a matter of fairly deciding who loses. Healthcare resources (including not only money and physicians, but support from allied professions, physical resources (e.g., ORs, organs), and so on) are scarce -- sufficiently scarce that there isn't enough to go around. So, when deciding between various methods of distributing resources we have to view the decision as a matter of deciding who will not be treated, rather than who will; as who will continue to live in pain, rather than who won't; as who will die, rather than who will live.
Immediately, then, this rules out full-competition, private healthcare as exists (largely) in the United States. It is grossly unfair to decide that certain people will fail to be treated, will live in pain and will die because they lack the ability to purchase the services they need. The only argument to the contrary that is worth taking seriously is the libertarian argument. The libertarian position holds that resources can be disposed of as one wishes as long as the acquisition was just; so, if one has justly acquired the resources used to purchase healthcare resources, then the acquisition of the healthcare resources is also just.
A just acquisition, for most libertarians, is an acquisition via (at possibly some distance) resources that one received directly for one's labour. So, the chain would be: labour, receive pay, use pay to acquire goods ... use goods or pay to acquire medical resources. But, the problems with the libertarian argument are legion. In this context, the most important is the labour-pay connection. Sellers of labour are very often on unequal footing with purchasers: the latter have tremendous power and leisure in their negotiations, while the former simply do not. Sooner or later, the seller of labour will have to accept what he is offered or die; the purchaser has no such limitation, insofar as he has already purchased much of others' labour and is capable of sustaining himself on the resources he currently controls. (The latter is a not-unreasonable assumption in the contemporary labour market.) At this point, a libertarian might reply that no interference in negative liberty is ever justified, except to correct a prior violation. That this is false follows from enriching the concept of liberty in a way most libertarians refuse: with
positive liberty, the expansion of one's powers and abilities, and thus of one's liberty in ways of living. The contrast is not sharp, admittedly, but it amounts to something like this: a proponent of negative liberty considers a person free if he is not in chains, while the proponent of positive liberty considers a person free if he can achieve his goals.
Seen from this perspective, the injustice of the libertarian position is clear. Sellers of labour are not free, on their construal, because their achievement of their goals is blocked by the actions of another; sellers of labour are not in chains, but their options are curtailed by the demands of a fully free market. So, the libertarian argument cannot justify a free-market free-for-all when it comes to healthcare resources, because the libertarian argument cannot justify the system of labour and pay that operates underneath the healthcare market.
If not ability to pay, though, then what should be the principles by which we decide how to allocate healthcare resources? At a minimum, I would suggest, we should look to both consequentialist and deontological considerations: that is, we should look to the
outcome of a given use of resources, and we should look to the
need for a given use of resources. The former matters because of concerns regarding waste; when resources are as scarce as they in the healthcare sector, we should be careful to use them as effectively as possible. The latter matters because of concerns regarding respect and dignity of persons; even though resources are scarce, that does not justify cavalierly or callously dismissing particular patients from consideration simply because their outcomes are less optimal than those of others. So, whatever system we adopt to allocate healthcare resources, it must somehow weigh outcome and need.
This may not seem to rule out ability to pay completely, though. One could suggest that ability to pay serve as a tie-breaker: when confronted with two patients who are equal in terms of outcome and need, ability to pay could serve as a morally-neutral way to resolve the tie between them. Of course, this just assumes that ability to pay is morally neutral; as argued above, though, given the problems with the current system of labour and pay, it is extremely doubtful that this is the case.
Moving down from the level of principle to the level of policy, there are two distinct questions. The first is how we distribute the pay for healthcare resources to those who provide the resources. After all, even given the labour market is unjust, as defended above, it doesn't follow that the healthcare-related labour market should also be unjust -- the opposite, in fact. The second is how to decide who gets to access these healthcare resources.
With regard to the first, the options seem to be either free labour market or regulated. Clearly, a free labour market would just institute the problems with a free labour market demonstrated above: sellers of labour are under constant threat of violation of their positive liberty. So, what form should the regulation take? Free distribution of relevant information (e.g., complications records of physicians), of course; one of the causes of the above liberty problem is the labour-sellers lack of information regarding the purchaser. Minimum wages and other floors to the pay for providers of healthcare services also seems reasonable. The argument against price-fixing is that it leads either to surpluses (in the case of a price floor) or shortages (in the case of a price ceiling); however, there is already a shortage of trained healthcare service providers, thus a price floor, which would create a surplus, is actually a
good thing. (FWIW, I have no ideas on how to solve the organ shortages, short of
Max Headroom style murder-for-parts.) Whether or not there should be
ceilings -- with the possibility that this sustains or worsens the current shortage -- relates to the second question, however: that is, how to decide who gets access to healthcare resources.
The pay for healthcare provision is, at least in part, borne by the consumers of healthcare resources. It follows from this that the prices for healthcare resources could serve as an access barrier; given the above claim that it is unfair to decide who loses healthcare resources on the basis of ability to pay (because ability to pay is determined by an unjust system), it would be unfair for prices to serve as a barrier to access. However, both the systems I will consider could adjust for pricing problems without putting a price ceiling in place.
Once the free-for-all of free-market healthcare is off the table, the remaining two options are public insurance and public health savings accounts (HSAs). Under a public insurance scheme, the public purse pays whatever the cost of the healthcare resources is. Under a public HSA scheme, the public purse contributes to a savings account, which is then drawn from in order to pay for healthcare resources. I envision the latter as a system whereby some fixed amount of money is reserved for every citizen under the government's jurisdiction, drawn from general tax revenues. This would prevent the wealthy from using their wealth to bulk up vast HSAs and consume far more than their share of healthcare resources, given that the middle-class and poor will run out their HSAs before the wealthy do. The amount should probably be determined based on the average cost of healthcare resources the average consumer needs (not uses, otherwise there's an incentive to overuse).
The former has good reasons to put a price ceiling in place: since healthcare consumers never have any real idea how much their use of the healthcare system costs, and since healthcare service providers won't be losing customers due to their prices, a price ceiling is the only way to prevent the system from being drained dry. The latter, however, has no good reason to do so: since consumers would control their own HSAs, they could shop around to the healthcare providers that they consider to offer reasonable prices for the service in question. One could also, if one chose, use non-HSA money to cover the difference between what the HSA money will cover and what one wants to purchase; since the HSA amount is determined by average cost of average need, this does not necessarily deprive anyone of healthcare resources without justification. The possibility of physicians rushing into elite practices and avoiding the middle-class and poor is a real one, I admit, but I suspect that tax disincentives could be used to steer physicians toward providing healthcare resources to the masses. (Something like: if you only performed six surgeries last year, but each cost $1 million, your tax rate increases by 50%. If you're already in a tax bracket of, say, 30%, that would increase the rate to 45%, which would constitute a big kick in the pocketbook.) Given that there is a price floor in place, the other concern -- that back-alley, disreputable physicians would undercut competitors' prices and offer incredibly bad service to the vulnerable -- is eliminated: if a consumer must pay the same amount to the back-alley doctor as a doctor providing better service, then why not go to the one with better service? (The incentive on the physician to provide better service would have to come from the profession; but that's an issue for another day.)Finally, HSAs have the advantage of encouraging rationing of routine medical procedures, as once the account is empty, it will remain empty until topped up again -- which, if the money comes from income taxes, will only happen once a year.
Overall, public HSAs seem to do a good job of balancing outcome and need, as long as the profession is doing its job, and the tax system works to push healthcare providers to work for other than the good of the rich. Where HSAs clearly fail, though, is in catastrophic cases and in expensive, routine procedures. The amount saved in an HSA may not be equal to the costs of a significant healthcare problem, and it seems unjust to punish those who are greatly in need. Similarly, it seems unjust to punish those who need expensive, but routine, procedures by forcing them to pay for the care out of pocket. The latter is fairly easy to solve: on a case-by-case basis, a given person could petition to have their HSA amount increased; if the problem is across a particular group (for example,
women), then the distinction could be built into the HSA system from the beginning. The former is also fairly easy to solve: catastrophic cases are where an insurance scheme really shines, after all. So, the public insurance scheme would still exist, but as a back-up system to, on a case-by-case basis, fund necessary treatment that exceeded the amount contained in the HSA.
I think that covers most of the basic principled and policy ground. Any thoughts, omissions or critical remarks are welcome.