Socialized Healthcare: When Money Trumps Life

G. Stolyarov II
Issue CXXXVI - December 29, 2007
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Originally published on GrasstopsUSA.com.

Proponents of socialized healthcare like to characterize the private provision of healthcare as callous and uncaring – prioritizing the patients’ money over their lives and permitting those without money to suffer and die. 

           This is blatantly untrue, of course, but the argument against socialized healthcare goes much farther than this. Indeed, socialized healthcare is guilty of the very fault that private healthcare is alleged to have. Under government healthcare, government providers indeed prioritize their own cost savings above the lives and well-being of their patients.

            In a truly private healthcare system with no government interference, anybody who needs healthcare can in fact receive it. Those who are unable to pay can rely on the services of the numerous private charities and charitable doctors operating on the market. In small towns and country regions, many private doctors are able to serve the poorest patients by engaging in voluntary price discrimination whereby they charge richer patients high prices while poorer ones pay only nominal fees. Such price discrimination is necessary for small-town and country doctors to stay in business and serve all patients in need – but government antitrust laws have frequently cracked down on this benign practice. The free market has numerous creative solutions to ensure that for all those who demand a particular good or service there will be a sufficient supply of that good or service.

            But with a sole government provider of healthcare, the incentives of both the patients and the providers change. The patients – having paid their taxes – are seemingly entitled by law to unlimited healthcare services, and they consider themselves so entitled. While in a private system, patients themselves have incentives to cut costs by only pursuing necessary medical services, patients in a socialized system have the incentive of trying to get as much healthcare as they can for the fixed amount that they already paid in taxes. With everybody demanding the maximum healthcare they can get, government supply will naturally be insufficient to meet the demand. Thus, what began as a system based on the premise that everyone has a “right” to healthcare becomes in fact a system of rationed care, where the government decides who will get treated and who will not. Hence the huge waiting lists of months and even years that characterize the socialized healthcare systems of Great Britain and Canada, among others.

            Under a socialized system, a patient with a life-threatening cancer will be placed on a waiting list – possibly many years long – for even an elementary diagnosis, because the government has prioritized its money over his life. This prioritization is not due to the malice of government officials; rather, it is an economic necessity given the incentives created by socialized medicine. After all, there are plenty of other people with life-threatening illnesses, who may already have waited for years to get treatment, and the government only has so much money it can spend. As the government is a monopoly provider of healthcare, patients have no other recourse but to keep waiting – even if they could afford to pay the full cost of private treatment. Many Canadian patients currently use the still partially private American health care system as a safety valve in such instances. But if the United States government foolishly nationalizes healthcare, this safety valve will be gone, and both countries’ healthcare systems will lapse into a state of dire crisis.  

            Contrast this dismal state of affairs to what would happen in a fully private system. A patient with cancer can immediately get diagnosis and treatment from one of a vast multitude of for-profit healthcare providers if he can afford to pay. Indeed, services will tend to spring up specifically to accommodate the demand of patients like him. If he cannot afford to pay, he can still benefit from the generosity of many private charities and price-discriminating doctors. Furthermore, in a private system, the rate of medical progress is tremendously high, leading to increasingly effective treatments and cures for life-threatening diseases . In a socialized system, there is no incentive for individuals to innovate; indeed, highly bureaucratized government healthcare greatly discourages innovation, seeing it as initially costly and wasteful and failing to recognize its long-term benefits. After all, new drugs and treatment methods have a high initial likelihood of failure – and an already strained socialized healthcare system will be highly resistant to bearing those costs. But in a free market, private individuals can choose to personally bear the risk of their innovations failing; they will only choose to do this, however, if they are assured that they can profit if their innovations succeed.

            In a private healthcare system, at least some of the decentralized market actors will find a way to save individuals’ lives at costs that those individuals can afford. With government healthcare, however, an inevitable tradeoff between money and lives exists. Only where genuine consumer choice is possible can such a tradeoff be eliminated.

G. Stolyarov II is a science fiction novelist, independent philosophical essayist, poet, amateur mathematician, composer, contributor to Enter Stage Right, Le Quebecois Libre,  Rebirth of Reason, and the Ludwig von Mises Institute, Senior Writer for The Liberal Institute, weekly columnist for GrasstopsUSA.com, and Editor-in-Chief of The Rational Argumentator, a magazine championing the principles of reason, rights, and progress. Mr. Stolyarov also publishes his articles on Helium.com and Associated Content to assist the spread of rational ideas. His newest science fiction novel is Eden against the Colossus. His latest non-fiction treatise is A Rational Cosmology. His most recent play is Implied Consent. Mr. Stolyarov can be contacted at gennadystolyarovii@yahoo.com.

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Learn about Mr. Stolyarov's novel, Eden against the Colossus, here.

Read Mr. Stolyarov's new comprehensive treatise, A Rational Cosmology, explicating such terms as the universe, matter, space, time, sound, light, life, consciousness, and volition, here.

Read Mr. Stolyarov's new four-act play, Implied Consent, a futuristic intellectual drama on the sanctity of human life, here.