So with the extra free time of the corona virus, I’ve been doing some thonking and I think I’ve come up with a 100% right wing argument for nationalized healthcare.
For clarity, when I say nationalized healthcare, I mean the government owning hospitals, employing virtually all doctors/nurses, etc. Not Medicare-for-all which is essentially just nationalized health insurance.
Also this is basically a first draft, since I don’t get paid or graded on this, so lol grammar.
Inability of the Market to Economize Healthcare
The foundation of my theory is that healthcare doesn’t function like a typical market in almost anyway. For the most part demand for health care is nearly 100% determined by physical conditions, no healthy person is going to be motivated to get a knee surgery or purchase insulin if they don’t suffer the medical conditions that could be remedied by them. Unlike other markets, even for essential items like food, demand fluctuates on factors such as consumers desire for surplus or higher quality/exotic foods. Additionally for basic food items such grains, fruits, vegetables, and common meats; suppliers are essentially in-capable of differentiating their products from competitors, since the product is mostly determined by nature. So the only way they can compete is on price, which leads to the lowest prices possible for basic food, while the market also allows for the allocation of surplus and higher quality food products that a centrally planned economy/market would have almost no hope of allocating efficiently.
Where the healthcare market fails, is that there’s no surplus demand for healthcare and differentiation is minimal like basic food. This may seem like the market would be able optimize on price, as in basic food; however because of the minimum standard of healthcare set by societal demand and the resulting government regulations of things like education of workers, building codes, cost of sophisticated equipment that’s not present in industries like food. There’s a very high price floor set for healthcare providers making price competition insignificant to the consumer.
Insurance Corporations: Privatized Socialism and Bureaucracy
For brevity, I’m just going to use the existence and function of insurance companies to demonstrate that price competition in healthcare still cannot deliver affordable services since insurance is still necessary for consumers to get healthcare. Furthermore I’ll argue that insurance companies are incapable of providing any benefits to consumers over a government bureaucracy.
One of the common talking points among mainstream conservatives is that insurance companies are good for consumers, because they compete and have motivation to lower healthcare costs to increase their profits and prevent doctors from performing unnecessary procedures for profit.
My line of thinking on insurance companies being no better than a government bureau is as follows. Firstly, competition among insurance companies isn’t the same competitive force that economizes most markets. Insurance is an order removed from the actual products and services of value. When consumers make a choice as to which insurance provider to go with, the only information they have is premium pricing and healthcare genres the company claims to cover (and they leave plenty of loop holes in the fine print to give them weasel room to deny services to satisfy their profit motive). Where this fails to create an efficient market is that the choice of service provider and services rendered is taken away from the actual consumer and decided by the insurance company who is not the actual consumer of healthcare, and thus a true free market is never established since ultimately a corporate bureaucrat is determining the allocation of resources rather than the decisions of consumers and suppliers. Furthermore this system obfuscates important information such as healthcare providers the consumer can go to, which exact conditions and treatments will be covered, which diminishes the consumer’s ability to make good decisions about which insurer to use.
The alternative with a nationalized health care system, is that all healthcare providers would be available for consumers to chose from, avoiding all the confusion over insurance networks and coverage. Meanwhile, the nationalized system’s fiscal motivations can be no worse than that of private insurance. The government still has a type of profit motive, as they’ll want to stay as close to budget as possible without raising additional taxes, thus driving lower costs. However the government suffers much less of a penalty for going over budget than a private firm and doesn’t have the incentive to run a large surplus like private insurers have an incentive to run a large profit to encourage investment and higher stock prices.
An additional benefit of government over private insurance, is the government’s ability to levy taxes. Using smokers as an example, private insurance must increase their revenues from all of their customers to cover the additional future costs of the smokers. Whereas almost all governments have excise taxes on products like alcohol and tobacco which could be directly used to subsides healthcare costs, while with private insurance, smokers and drinkers still pay the tax, but insurance companies still must charge for smokers and drinkers extra healthcare cost because they’re not the ones collecting the alcohol and tobacco taxes.
Since this is already quite long, I’ll just quickly sum up a few other points.
The way healthcare providers would be paid, would be hourly, and the goal of their supervisors would be to schedule most people to work 40 hours a week. This way if a facility is routinely working employees 40+ hours a week to meet demand, more workers can be allocated to work there from areas were employees don’t meet 40 hours a week to satisfy demand. (for some specialists like brain surgeons or whatever, it may be necessary to target a lower weekly target and have a higher hourly wage.)
Also a type of “Pay what you use” system could be implemented to reduce the tax burden. In conjunction with a medicaid type program so that this system wouldn’t be regressive. So for low to medium costs treatments, patients would pay in full or partially for the service depending on the overall cost and their income. Additionally since the government only needs to settle it’s debts and not turn a profit, it could give out zero interest payment plans for those who are able to pay to minimize upfront costs without burdening them with interest bearing debt. Example, a surgery may cost $10,000 and a patient who isn’t eligible at all for the medicaid program could be liable for $2,000 of it, but could pay it off interest free over the course of a year or two.
As for research and innovation, this could be handled similarly to the military. Were the government would contract or fund institutions to improve or create new treatments and drugs. Healthcare would have further advantages in this regard since it’d be more likely for nations to work together and fund these projects, since unlike military projects, there isn’t a need for secrecy around medical practices and drugs that were developed for a non-profit healthcare system.