Go to links

Thursday, July 16, 2009

Bernie Sanders and government-funded healthcare vs. the unhampered market

Bernie cites Medicare as shining example of government-funded healthcare, but Medicare suffers from a fiscal gap that Richard Fischer of the Dallas Fed estimates to be $86 trillion. Does Bernie have a plan for closing this gap?

This is not an argument for the healthcare status quo. I believe we can do better than our current "system", but I also wonder, can't we do better than how government-funded healthcare actually works in practice (in Canada, the UK, etc.)?

Our current "system" is a healthcare market that has been highly distorted and hampered by government intervention. The question is, are the problems in our current "system" due to the market elements or are they due to the government interventions? Bernie and other champions of government-funded healthcare never really address this question. They have jumped to the conclusion (or simply assumed the conclusion) that the problems in our current "system" are due to the market elements.

I invite you to read "I Tip My Hat to the New Revolution" by Gene Callahan. It is a little bit dated now (e.g., it was written before the Medicare drug benefit was enacted into law), but it gives a clear exposition of how government intervention in the market leads to undesirable, unintended consequences ("side effects"), which lead government to introduce further interventions, which lead to further undesirable, unintended consequences, ad infinitum. Several cycles of this process have given us our present healthcare "system", with all of its problems--i.e., the undesirable, unintended consequences that are the result of government intervention in the healthcare market.

This is one of the reasons I have been putting the word "system" in quotation marks. What we have is not really a healthcare system, it is, rather, a highly distorted and hampered healthcare market in which many of the problems arise from the fact that much of the money changing hands in the "system" is coming from third parties. Changing the identity of the third parties from insurance companies to governments doesn't solve the problems that are the result of third-party payments.

There is an alternative to both the current "system" and government-funded healthcare. This alternative involves the undoing of all of government's interventions in healthcare until we return to an undistorted, unhampered healthcare market. Neither Bernie nor any of the other advocates for government-funded healthcare compare government-funded healthcare with the unhampered market. Instead, they continue to tear apart the straw man of our present "system", a system that almost no one advocates.


Post a Comment

Links to this post:

Create a Link

<< Home