You wouldn’t take an over-the-counter medication without considering its side effects. We should be at least as cautious when considering further government intrusion into health care. We need only look at countries with government health care to see its side effects in full force. President Obama and other supporters of government health care aren’t villains who want to kill Grandma. They have good intentions, but so does the girl who sees a bug crawling on her sleeping mother’s face and runs to get the frying pan.
“Lowering the cost of health care” is politician-speak for shifting some or all of the price away from the actual consumer to someone else, either the consumer’s employer or government (taxpayers).
The primary side effect of shielding the consumer from the actual price of his purchase is inflated demand. We’re all inclined to use more of a good or service when someone else foots part or all of the bill. I have worn eyeglasses since age seven. I know laser surgery is available, but the price persuades me eyeglasses aren’t so bad. However, if congress passes legislation forcing my neighbor to pay half of the bill, I just may reevaluate my optical options. When government artificially lowers the consumer’s share of the price, the woman who might have bought a bottle of acetaminophen for her headache now makes a doctor visit. The overweight man who might have bought a treadmill at the market price now seeks gastric bypass surgery at taxpayers’ expense.
In countries with government health care, the main side-effect of inflated demand is a longer average waiting time. In 2001, 38 percent of British patients and 27 percent of Canadian patients waited over four months for elective surgeries including cataract removals and hip replacements. Only 5 percent of American patients had to wait so long. Swedish clinics have appointed guards to keep order while frustrated patients wait hours to speak to a doctor. The guards’ duties also include keeping customers out of clinics when waiting rooms are full.
When more patients compete for the same amount of time, even patients with serious ailments have to make do with shorter doctor visits and shorter hospital stays. This is a noted problem in Canada and Japan. In the old Soviet Union, the average doctor visit consisted of two and a half minutes of doctor-patient interaction and five minutes of the doctor filling out bureaucratic paperwork
A third effect of inflated demand is lower quality of service. Private business owners try to provide clean environments and friendly service because they fear losing customers. When inflated demand creates a surplus of customers, this incentive disappears. If a customer gets offended and walks out, others are waiting right behind him. To see this process in action, just look at government housing projects. After 60 years of government health care, British hospitals have acquired a reputation for having dirty rooms and overworked nurses.
Economist Milton Friedman explained why government programs are inefficient. He described four categories of spending:
Category 1 is you spending money on yourself. You have incentives to consider cost and quality.
Category 2 is you spending your money on someone else. When you buy your mother-in-law a gift, you have the same incentive to consider cost, but less incentive to consider quality.
Category 3 is you spending someone else’s money on yourself. You’ll want the best money can buy, regardless of cost. This is the consumer’s position in government health care.
Category 4 is you spending someone else’s money on still another stranger. When you rob Peter to pay Paul, you have no incentives to consider cost or quality. This is the bureaucrat’s position in government health care.
Efficient health care would look less like categories 3 and 4 and more like category 1. Allowing consumers to purchase out-of-state insurance would force insurance companies to compete with one another. If government stopped requiring employers to provide health care, some employers would continue to offer it, and others wouldn’t. Those who didn’t would have to offer higher wages to compete for workers, who could use the higher wages to purchase insurance privately. An efficient system is one in which the buyer and the user are the same person.
Next time you go grocery shopping, try this experiment. You and some friends stand in a circle, and each of you pass your credit card to the person at your left. Now everyone can shop at someone else’s expense. If that sounds like a good idea to you, Obamacare may be just your cup of Kool-Aid.
Tommy Richardson grew up in rural Texas, graduated from Tarleton State University and lives in Erath County. His column appears monthly.