Why Are We Moving Toward Socialized
By Yaron Brook
Government intervention in medicine is wrecking American health care. Nearly
half of all spending on health care in America is already government spending.
Yet President Obama’s “reforms” will only expand that intervention.
Prior to the government’s entrance into medicine, health care was regarded as
a product to be traded voluntarily on a free market–no different from food,
clothing, or any other important good or service. Medical providers competed to
provide the best quality services at the lowest possible prices. Virtually all
Americans could afford basic health care, while those few who could not were
able to rely on abundant private charity.
Had this freedom been allowed to endure, Americans’ rising productivity would
have afforded them better and better health care, just as, today, we buy better
and more varied food and clothing than people did a century ago. There would be
no crisis of affordability, as there isn’t for food or clothing.
But by the time Medicare and Medicaid were enacted in 1965, this view of
health care as an economic product–for which each individual must assume
responsibility–had given way to a view of health care as a “right,” an unearned
“entitlement,” to be provided at others’ expense.
This entitlement mentality fueled the rise of our current third-party-payer
system, a blend of government programs, such as Medicare and Medicaid, together
with government-controlled employer-based health insurance (itself spawned by
perverse tax incentives during the wage and price controls of World War II).
The resulting system aimed to relieve the individual of the “burden” of
paying for his own health care by coercively imposing its costs on his
neighbors. Today, for every dollar’s worth of hospital care a patient consumes,
that patient pays only about 3 cents out of pocket; the rest is paid by
third-party coverage. And for the health care system as a whole, patients pay
only about 14 percent.
Shifting the responsibility for health care costs away from the individuals
who accrue them led to an explosion in spending. In a system in which someone
else is footing the bill, consumers, encouraged to regard health care as a
“right,” demand medical services without having to consider their real price.
When, through the 1970s and 1980s, this artificially inflated consumer demand
sent expenditures soaring out of control, the government cracked down by
enacting further coercive measures: price controls on medical services, cuts to
medical benefits, and a crushing burden of regulations on every aspect of the
health care system.
As each new intervention further distorted the health care market, driving up
costs and lowering quality, belligerent voices demanded still further
interventions to preserve the “right” to health care: from regulations mandating
various forms of insurance coverage to Bush’s massive prescription drug
The solution to this ongoing crisis is to recognize that the very idea of a
“right” to health care is a perversion. There can be no such thing as a “right”
to products or services created by the effort of others, and this most
definitely includes medical products and services. Rights, as the Founders
conceived them, are not claims to economic goods, but to freedoms of action.
You are free to see a doctor and pay him for his services–no one may
forcibly prevent you from doing so. But you do not have a “right” to force the
doctor to treat you without charge or to force others to pay for your treatment.
The rights of some cannot require the coercion and sacrifice of others.
Real and lasting solutions to our health care problems require a rejection of
the entitlement mentality in favor of a proper conception of rights. This would
provide the moral basis for breaking the regulatory chains stifling the medical
industry; for lifting the tax and regulatory incentives fueling our
dysfunctional, employer-based insurance system; for inaugurating a gradual
phase-out of all government health care programs, especially Medicare and
Medicaid; and for restoring a true free market in medical care.
Such sweeping reforms would unleash the power of capitalism in the medical
industry. They would provide the freedom for entrepreneurs motivated by profit
to compete with each other to offer the best quality medical services at the
lowest prices, driving innovation and bringing affordable medical care, once
again, into the reach of all Americans.
Yaron Brook is the president of the Ayn Rand Center for Individual
Rights. The Ayn Rand Center is a division of the Ayn Rand Institute and promotes
the philosophy of Ayn Rand, author of “Atlas Shrugged” and “The