Message from another thread:
lewrockwell.com
"...Now, it is sometimes said that medical care is too important to be left to the market, and that it is immoral to profit from the
illnesses of others. I say medical care is too important to be left to the failed central plans of the political class. And as for profiting
from providing medical care, we can never be reminded enough that in a free society, a profit is a signal that valuable services are
being rendered to people on a voluntary basis. Profits are merely a by-product of a system of private property and freedom of
exchange, two conditions which are the foundation of an innovative and responsive medical sector. ..."
"...Before coming to power, Hitler's party, for example, made statements condemning socialized medicine and compulsory social
insurance as a conspiracy to soften German manhood. But once in power, they saw the advantages of the very programs they
condemned. As Melchoir Palyi argued, Hitler saw that the system was actually a great means of political demagoguery, a bastion of
bureaucratic power, an instrument of regimentation, and a reservoir from which to draw jobs for political favorites. By 1939, Hitler
had extended the system of compulsory insurance to small business and tightened the system in Austria. One of his last acts in 1945
was to include workers from irregular types of employment in the system, socializing medical care even in his last days. ..."
"...All Western systems have been based on a deeply flawed notion of insurance. After Hillary's outrageous medical plan came out in
1993, I appeared on panels at National Review and the Claremont Institute on the subject, and explained what insurance is and what
it is not. Hillary's plan was not insurance. It was regimentation through welfare. Other panelists were aghast that I was criticizing not
just Hillary's plan but the very principle of government insurance, dating back to Bismarck. So that we are not confused, let me
explain.
The world is full of risks, among which are those that are inherent in the nature of things, and those which can be increased or
decreased according to human will. The risks against which you can insure yourself are those over which you can have no control.
You can't stop a hurricane from destroying your house. The chances of this happening are random. Hence you can be protected
against losses through insurance with reasonable rates, set according to the risk factor. If you take actions that bring about the
destruction of yourself and try to collect, however, you are committing insurance fraud. That is because outcomes that can be directly
controlled are not random and thus are not insurable.
The risk of getting sick combines random and nonrandom variables. Catastrophic illnesses can be randomly distributed and thus
insured against. But routine maintenance follows many predictable lines that must be reflected in premiums. The most cost effective
way to pay for medical care is the same way car maintenance is paid for: a fee for service. In a free market, this would be the
dominant way medical care is funded. Prices would be aboveboard and competitive, and there would be a range of quality available
for everyone. There would be no moral hazard. This was largely the system before the Blues, of course.
What is called health insurance in the US consists of two types: one provided by employers in which the insurer is not permitted to
discriminate too severely in light of individual risks. The other is not insurance at all but a straight-out welfare payment mandated by
the state: this is Medicare, Medicaid, and the huge range of programs delivering aid to individuals. None has much to do with a
free-market provision of medical services.
As a result, the consumer has fewer rights than ever. Physicians are caught up in an awful web of regulations and mandates.
Business is saddled with huge burdens that have nothing to do with satisfying consumer demands. And innovation is limited by an
array of penalties, subsidies, and regulations. The failures of the present system create constant pressure for ever more legislation
that further socializes the system, which produces more failure and so on and so on...."
"...Government intervention in the US medical market began in the late 19th century, first in form of government regulations on
medical schools. No one dreamed where this would eventually lead. Moreover, no one would have thought to call such interventions a
species of socialism. Socialism, it was believed, was Plato. It was Marx. It was not the American Medical Association. The AMA is
about insuring quality, not equalizing wealth or expropriating the expropriators.
In fact, the empowerment of this physician cartel was the original sin of American medicine. Through its ability to limit supply and
outlaw competition, organized medicine has punished its customers, although the word is never used so as to disguise what is, after
all, an economic relationship.
Competition among providers leads to rational pricing and maximum consumer choice. But this is exactly what the AMA has always
sought to prevent. The AMA, organized in New York City in 1848, advanced two seemingly innocent propositions in its early days:
that all doctors should have a "suitable education" and that a "uniform elevated standard of requirements for the degree of MD
should be adopted by all medical schools in the US." These were part of the AMA's real program, which was openly discussed at its
conventions and in the medical journals: to secure a government-enforced medical monopoly and high incomes for mainstream
doctors.
Membership in the new organization was open only to "regular" physicians, whose therapies were based on the "best system of
physiology and pathology, as taught in the best schools in Europe and America." Emphatically not included among the "best" were
the homeopaths. How the "regulars" came to crush the homeopaths and other competitors, and penalize patients in the process, is a
story of deception and manipulation, of industry self-interest and state power. The organization knew it needed more than persuasion
to secure a monopoly, so it also called for a national bureau of medicine to oversee state licensing and other regulations.
In those limited-government days, however, the idea went nowhere. But in the statist Progressive Era after the turn of the century,
anticompetitive measures became respectable, and the AMA renewed its drive for a cartel, spurred on by the popularity of
self-medication and the increasing number of medical schools and doctors. Then the AMA's secretary N.P. Colwell helped plan (and
some say write) the famous 1910 report by Abraham Flexner. Flexner, the owner of a bankrupt prep school, had the good fortune to
have a brother, Simon, who was director of the Rockefeller Institute for Medical Research.
At his brother's suggestion, Abraham Flexner was hired by the Rockefeller-allied Carnegie Foundation so that the report would not
be seen as a Rockefeller initiative. AMA-dominated state medical boards ruled that in order to practice medicine, a doctor had to
graduate from an approved school. Post-Flexner, a school could not be approved if it taught alternative therapies, didn't restrict the
number of students, or made profits based on student fees.
The Flexner Report was more than an attack on free competition funded by special interests. It was also a fraud. For example,
Flexner claimed to have thoroughly investigated 69 schools in 90 days, and he sent prepublication copies of his report to the favored
schools for their revisions. So we can see that using lies to advance political goals long predated the Gore campaign.
With its monopoly, the AMA sought to fix prices. Early on, the AMA had come to the conclusion that it was "unethical" for the
consumer to have any say over what he paid. Common prices were transmuted into professional "fees," and the AMA sought to
make them uniform across the profession. Lowering fees and advertising them were the worst violations of medical ethics and were
made illegal. When fees were raised across the board, as they frequently could be with decreased competition, it was done in
secret.
Then there was the problem of pharmacists selling drugs without a doctor's prescription. This was denounced as "therapeutic
nihilism" and the American Pharmaceutical Association, controlled by the AMA, tried to stamp out this low-cost, in-demand practice.
In nearly every state, the AMA secured laws that made it illegal for patients to seek treatment from a pharmacist. But still common
were pharmacists who refilled prescriptions at customer request. The AMA lobbied to make this illegal, too, but most state
legislatures wouldn't go along with this because of constituent pressure. The AMA got its way through the federal government, of
course.
By the end of the Progressive Era, the AMA had triumphed over all of its competitors. Through the use of government power, it had
come to control education, licensure, treatment, and price. Later it outcompeted fraternal medical insurance with the state-privileged
and subsidized Blue Cross and Blue Shield. The AMA-dominated Blues, in addition to other benefits, gave us the egalitarian notion
of "community rating," under which everyone pays the same price no matter what his condition.
The rest of the story wrote itself. A cartelized profession is one that is easier to control and nationalize. Thus the New Deal brought us
massive national subsidies. The Great Society brought us the disastrous welfare systems of Medicare and Medicaid. There were
also the HMO subsidies from the Nixon administration's monstrous Health Care Financing Administration. The employer-mandates
that make life so difficult for small business and led to the creation of more HMOs resulted from the lobbying of large corporations
wanting to impose higher costs on their competitors, and labor unions attempting to cartelize the labor force and keep out low-price
labor services.
And today, both major parties say all this apparatus is wonderful and should be protected and expanded until the end of time. It is
true that there are some wonderful efforts afoot to resist further socialization of medical care. But there are no active political
movements alive that are making any progress toward a fully free market in medicine, toward a full de-Nazification, a complete
de-Sovietization, and a total de-AMAization. ..." |
