8.03.2009

20 More Words Against Socialized Medicine

Paul Hsieh quotes Amy Ridenour's nicely compact argument against "universal" health care, saying, "The point bears repeating: Coverage does not equal care."

Ridenour's formulation, which I would call "pretty good," follows:
To meet budget targets, governments reduce payments to providers and to buy equipment. This reduces the supply of people willing to provide health care services (doctors, nurses, medical staff and support) and the supply of equipment (hospital beds, diagnostic tools, etc.). Shortages develop, and those who are sick or injured, suffer.

They find themselves with health care coverage, but without health care.
The great thing about this is how short it is, and that, as far as it goes, it accurately represents one side of the economic question of government controls. For me, however, I'd like to see it expanded to briefly touch on the other side of this type of government intervention.

Ridenour correctly stresses how restrictions imposed by budget cutting in a government-controlled market will disincentivize producers (from docs to devices to drugs) from entering the non-market. This is one part of the way central planners cause shortages. But equally important is how artificially low prices--the price control scheme of "free" "universal" coverage--dramatically increase demand. Both of these market distortions contribute in a predictably destructive feedback loop to cause severe shortages. 1

My expansion of Ridenour's argument, in only 82 words, is:
To meet budget targets, governments reduce payments to providers and to buy equipment. This reduces the supply of people willing to provide health care services (doctors, nurses, medical staff and support) and the supply of equipment (hospital beds, diagnostic tools, etc.). Meanwhile, the idea of "free" care leads to artificially high demand as people flock to the now understaffed, underequipped clinics. Shortages develop, and those who are sick or injured, suffer.

They find themselves with health care coverage, but without health care.
Government promises don't equal bread on your table or clothes on your back. Government health coverage doesn't equal health care. In fact, government's destruction of the free market in health care will inexorably lead to less care for everyone.


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1. See "The Flawed Economics of Socialized Medicine" for a detailed look at this phenomenon.

2 comments:

Wayne said...

Excellent.
Maybe you could add a note since it's from the government it's a monopoly by force you're stuck with.
Something like:
To meet budget targets, government cut payments to providers and to buy equipment. This reduces supply of health care providers (doctors, nurses, medical staff and support) and equipment (hospital beds, diagnostic tools, etc.). At the same time, "free" care artificially ramps up demand and thongs line up at now understaffed, underequipped clinics. Those who are really sick or injured, suffer. They have health coverage, but not health care. It’s like the old joke. The wait for a bed in the maternity ward improved. It’s down to 10 months. Since this is single payer, one provider, you’re stuck with by force of monopoly. There is no competition.

Wayne said...

I corrected some typos.

To meet budget targets, government cuts payments for health care providers and equipment. This reduces supply of medical staff and equipment. At the same time, "free" care artificially ramps up demand and throngs line up at now understaffed, underequipped clinics. Those who are really sick or injured, wait in line and suffer. They have health coverage, but not health care. “You’re covered for cancer. Here’s a pain pill.” Since a single party controls all, you’re stuck by force of monopoly. It’s like the old joke. “The government reports the wait for a bed in the maternity ward improved. It’s down to 10 months.”