It Is Healthcare, Stupid
Echoing James Carville’s now famous reminder to the Clinton campaign in 1992 that it is “the economy, stupid,” presidential candidates would be well advised that in 2020, it is healthcare, stupid. But not for the reasons you might think.
Democratic presidential candidates are lining up in support of universal healthcare, differing only over the means of getting there. Most of them have succumbed to the temptation to justify their position based on the simple assertion that healthcare is a “right.” It is not. One cannot have a “right” that requires a service from another. True rights are reserved for those freedoms that exist in nature and that should not be infringed upon by government, such as the right to life, to liberty, to assemble, to freedom of speech, etc. In relying on this fallacious assertion, we believe that candidates are leaving out the most powerful argument for universal healthcare, and that is this: If left unreformed, the rising cost of healthcare as currently provided by the free market is no longer sustainable, even for the wealthy.
It is well documented that in the US we spend 80% more on healthcare but only cover part of the population. Because we only cover part, we have on average inferior outcomes compared to countries like Germany, France, and Japan. Other countries reduce the overall cost of healthcare by eliminating for-profit insurance administration and controlling drug and provider costs (see Healthcare Research). If we don’t join them, several things will happen.
A substantial part of the population will continue to go uninsured, resulting in avoidable human suffering, personal bankruptcies, and excessive costs borne by hospital emergency rooms as they treat the uninsured resulting in uncollectible accounts.
Medicare and Medicaid will continue to grow as a percentage of the federal budget (see Fiscal Policy Research), leading to continual and unsustainable budget deficits.
As Medicare and Medicaid spending increases, other necessary investments in infrastructure, climate change, and education will be unaffordable.
Because of the growing cost of providing healthcare to their employees, US companies will become less and less competitive compared to their competitors in countries with universal healthcare.
Absence of affordable healthcare is also embedded in the cycle of poverty. The growing divide between the rich and the poor in America cannot be addressed without addressing healthcare. Free-market insurance premiums are unaffordable to low-income Americans. As a result, preventive care is not available, and avoidable illnesses and their costly consequences will continue. Healthcare-related absences from work and school continue the cycle. Last year’s 700,000 personal bankruptcies due to unpayable healthcare bills will grow.
The unavoidable truth is that by adopting a US version of the best practices of other countries, we can lower our healthcare costs and with the savings provide healthcare universally. Average outcomes will improve to global levels, our federal budget will come under control, and general economic productivity will rise.
Alas, there is no free lunch and there will be losers. Drug companies will remain profitable and innovative as they spread their costs to consumers everywhere rather than continue to ask the US consumer to subsidize the world. For-profit insurance companies, however, will lose. They simply cannot be afforded. And, most painfully perhaps, healthcare providers in the US will cease to be the wealthiest amongst us as their compensation declines to the world average. While this adjustment will hurt, it is immaterial in comparison to the unnecessary human suffering and economic hardship that are inevitable if we do nothing.