Tuesday, August 4, 2009

Socialized Healthcare

This post is in regard to Socialized Healthcare vs. The Laws of Economics by Thomas DiLorenzo

At the outset, let me be clear, it is not that I think that government run healthcare is free or that it’s a panacea for the healthcare problem; it’s rather that I believe private healthcare insurance has done a poor job in providing coverage – even denying coverage in some instances – that is affordable. I believe increased choice and competition can bring down the cost of healthcare; is that not in part, in principle, the ideology of free market? I do not believe that capitalist, free marketers, and private healthcare insurers, if left to their druthers will provide coverage that is accessible, affordable, and portable for everyone; if it is not lucratively viable for them they simply will not provide it.

No one can say they have looked at a plan for healthcare reform since there is no plan in place.

The plan when in place and ready for legislative action, as I understand it, is for reform. The plan is not for revamping the whole system. It is not a plan for an exclusive government takeover of the healthcare system. The plan’s main objective is to stem the rising cost of healthcare in America. Second, to the main objective, is to make healthcare, if not to provide universal coverage, at least more accessible for more Americans. Universally covering Americans and providing Americans with other healthcare options, such as a public option, will reduce cost.

For those who stick to the mantra that President Obama is a Marxist, since these healthcare plan proposals are socialistic, I must point out that what we have now is American style socialism. We now have a mix of private insurance options, and government run Medicare and Medicaid, along with the intrusion of government regulation and government support to insurance companies who participate in Medicare Advantage.


As Tip O’Neil, the late former Speaker of the House of Representatives, once said, all politics is local.

The bottom line for me, regardless of what the proponents of capitalism, free market, private healthcare insurance, or the Thomas DiLorenzo’s and Milton Friedman’s of the world might say, existentially, or empirically if you wish, it does not measure up. It’s what I observe in my own life and community that primarily shapes my view on subjects such as the economy and healthcare. As Tip said, It’s all local.

For me at least, and I know of many others who believe that American Capitalism and American free market enterprise have not Saved America. Our system of Keynesian economics has failed us. Please note, I said American … not authentic capitalism or authentic free markets of which Keynesianism is not, i.e. free 100% of the time from government interference of any kind. Even that is speculation because we have no real world evidence that that kind of capitalism or free market would really work or be an improvement.

Many expound the Austrian School of economics as superior, but no one really works toward the implementation of its laissez faire tenets. Americans seem to expect change all in one stroke of the brush, instead of incremental change, a little at a time, over a long period of time. It has been all talk, so far.

Incremental steps toward a laissez faire system of economics with its praxeological concepts of how economic systems work would be one of the first steps to the abolition of money and the incremental changes that are needed to move forward to a resource-based economy. In the end, the abolition of money is the answer to 99.9 % of our problems. I believe long term that should be the goal of society.

Those free market folks, capitalist, and our government told us how important it was to invest. They told Americans that the interest on invested dollars would compound in value and grow exponentially over time. Of course, in an environment of probity and high ethical standards, everything being on the up-and-up, no interference, I suppose that may be true. As it turned out, many of us who had investments in our 401K’s may have been better off putting our money into a savings bank. Saving money the old fashion way. And, for many they say, thank god for Social Security; incidentally a government administered program.

The local view is that the government and Wall Street, capitalist and the free marketers, have screwed us, and they have. That being said, it would be seemingly incongruous with that view for us to put healthcare into their hands now. But what choices do we really have. It seems to me it is important to stay with this mix of private and public healthcare, and tweak it to make it work better for consumers. One way is to increase the competition with an insertion of a public healthcare plan, which is smack-dab within the principles of free market concepts.


Many of our politicians -- except for a few like Obama and some others -- oligarchics, and Wall Street types, like most Americans have never had to face the real world life of providing for a family in an environment where the resources to do that are scarce. And, even those who at one time might have had the life of a proletariat, it was brief.

The economic mess as well as the healthcare problem is partly the result of the failure of government to understand and react to the problems of the average Joe and Jane while embracing those who are wealthy, failures of American Capitalism, and American free market, as well as the American consumer of healthcare.


I pay $12,000 a year to get supposedly the best healthcare in the world. I have read and heard reports where some pay more for healthcare insurance than they do for home mortgage. Now, that certainly isn’t affordable for a great many Americans. Loss of a job and consequently your health insurance puts families in dire circumstance, for only until you apply, and eligibility is acknowledged, can you receive government mandated Cobra. However, for many Americans this is unattainable because they simply cannot afford its cost.

Some will say, what’s your complaint -- that’s cheap money for the best healthcare in the world. To those who say that, I would say, everything is relative to ones own situation. Where is the empirical and scientific data to support that contention? Value in the market place is determined by what someone is willing to pay for a product or service, but for the most part those products and services are for wants, desires, or needs; the same measurement cannot be made for necessities. (cosmetic surgery is certainly not as necessary as heart surgery) Whatever the cost of necessity in order to continue to live needs to be paid. When a decision must be made as to whether you have a roof over your head, food on the table, or the medical care for yourself or a sick child, what would be your decision?


Healthcare is provided promptly if you have the money or a Cadillac of a health insurance plan to pay for it. But, for most, it’s not that easy, and one must wait for their care unless you utilize the services of a hospital emergency room. In Massachusetts the wait for care in the ER could be all day and all night. This situation is not because of our state mandated healthcare insurance law, as far back as I can remember, it has always been that way. Not like Canada, which in this Wikipedia article said, Studies by the Commonwealth Fund found that 57% of Canadians reported waiting 4 weeks [Americans can wait as long or longer] or more to see a specialist; 24% of Canadians waited 4 hours or more in the emergency room. [as said previously, an American emergency room wait for care can be, and often is, all day and night].

Anyone who goes to another country for his or her healthcare, whether it is Canada to America, or between any other two countries, pays those healthcare cost as well as the associated cost out-of-pocket. You must be financially secure in order to acquire top of the line care in America, or if you wish to go somewhere else for care on demand and that is less expensive.


Mr. DiLorenzo’s statistical analysis may or may not be accurate, but, on its surface, to me it does not bear out empirically nor is it in agreement, overall, with the following data.

Source: Wikipedia

Therefore, no matter what is said, whether it is by a libertarian ideologue, politician, economist, or other professional who oppose healthcare public plans, their conclusions are different from the facts. The truth is a set of corroborating facts that may be a priori or based on some kind of scientific analysis that can be tested by observation or scientifically (independently verified) to reach the same conclusions. The corroborating facts are that there are too many things that are factual to make what they, the opponents, are telling us as the truth. Obama said on Wednesday’s press conference, we spend much more on health care than any other nation, but aren't any healthier for it. He must be reading the same data as me.


If the private sector can do a better job, why are they in the private sector so concerned about a law [they claim] that would eventually drive the private health insurance industry out of existence [because of competition]? Mr. DiLorenzo’s argument is bogus when he says that it would be difficult to compete with a rival who has all of his capital and operating costs paid out of tax dollars. Private insurance’s operating cost, capital, profit, and all other cost are paid to those companies with premiums paid by the consumer. A public plan is not free, as Mr. DiLorenzo explained. However, in a public healthcare plan, a tax and a premium on top of the tax pays for operating cost, capital for reinvestment back into the system, and all other costs is fundamentally no different from private healthcare insurance.

The article states, The Obama administration's claim that a government takeover of healthcare will somehow magically reduce costs is not to be taken seriously. Government never, ever, reduces the cost of doing anything. Well now, has the private insurance sector reduced the cost of anything except to take measures to decrease their cost, at times denying coverage, to increase profits? Have the shenanigans of capitalist and free marketers decreased the cost of any good and service for Americans? Nevertheless, there is no plan by President Obama that I know of to take over healthcare.

The article says … since healthcare is free [the implication being that Americans are of the mind set that it is free]. Socialized healthcare is not really free, of course; the true cost is merely hidden, since it is paid for by taxes. Americans understand that socialized healthcare, i.e. a public plan, is not free. The cost is not hidden if one wants to make the effort to lookup the data.

I have not found the word rationing as used by Mr. DiLorenzo in any public government document concerning a public healthcare option. Moreover, if one does not think that private healthcare insurance is in de facto rationed has their head in the sand.


Statistics and analysis are fine and do have there place, but they somehow must be congruent, not only scientifically, but also with what is happening existentially, locally in the communities, on the ground, as they say; i.e what is happening to real people in a real way.

Bill Maher Explains the Healthcare Crisis, March 6, 2009