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Friday, August 14, 2009  

A Legitimate Argument

Amidst all the paranoia and stupidity out there, it's worth considering those arguments against comprehensive health care reform that really do have some merit. Megan McArdle makes one, and in so doing does a helpful job of clarifying what libertarianism means in her case.

I'll be the first to admit that I don't get libertarianism. Like communism, if it were such a self-evidently awesome way of organizing economic life, it would have (cough) triumphed over its competitors, you know, somewhere on the globe, which it hasn't. There is no libertarian paradise anywhere in the world, unless you count Somalia, and there most likely never will be one. Even as a magnetic pole within the parameters of a mixed economy, it is severely limited. It assumes humans are economically rational, which they aren't. It assumes markets are efficient, which they aren't. It assumes that human beings have no essential or experiential unity with each other, which as a Christian I find intolerable. It just plain makes no sense to me.

Having said that, deeply flawed views of the world can certainly get hold of important truths (I'm looking at you, Marxism). And the proposition that people won't innovate without a strong profit motive is just such an insight. So Megan poses an important question to would-be health reformers, whether of an NHS, single-payer, or Bismarckian frame of mind:

If my objection is just "practical", he says, then why don't I include the good that could be done by a national health care program if it worked? Well, I have. I've acknowledged that at least some people would have to be better off under such a system (and others worse off, and I can't begin to calculate which group is larger) But as I said at the beginning, geometric progressions are a bitch. If the innovation spurred by the private sector could save 1% of the people who currently die each year, the number of people we'd be killing along with the private sector would necessarily be hugely larger than the number of people we'd save by implementing such insurance, since the most grotesquely exaggerated estimates released by interest groups pin the latter figure at around 0.8% of deaths in America (a much smaller number than the number who are estimated to be killed by access to the system--nosocomial infections and treatment side effects). That's even before you consider the people in other countries who would be saved by these advances. When I talk about the utilitarian calculus of weighing the good of current uninsured against the good to people who are currently, and in the future, untreatable without further innovation.

This is a real concern. I don't think it pertains very much to our present debate, in which PhRMA has sided with the reformers, at least nominally. In other words, Megan and all the libertarians out there shouldn't worry--our system will still bankrupt plenty of people, cost way more than any other country, and leave plenty of folks uninsured. Got that?

But for those of us hoping that elements of the present proposals will be able to expand, over time, as to cover more people in a guaranteed system with its attendant and necessary cost controls, this is a question we need to grapple with at some point. I think Megan and the libertarians overstate the case somewhat. There will always be an incentive to innovate when it comes to life-extending treatments. It's the most elementary human drive after food and sex, and there's simply no way to stop it. She makes another significant mistake in even speaking of "saving" and "killing" people, as if we don't all die at some point even with the aid of hypothetical future therapies. And lastly, it's not as though the vast gap between what we spend and what the UK spends is mostly or even largely accounted for by differences in research and development budgets. We're heaving a huge amount of inputs into a very inefficient system and all, on McArdle's account, because a tiny few of those inputs get turned into promising new treatments. This is not a sound way to think about the issue.

But the fact remains: innovation is driven by profit. And squeezing some profits out of the system will be necessary if, as we must, we want to lower costs and cover everyone. We do need to balance the potential for radically life-extending treatments in the future with the urgency of present needs. I'm inclined pretty heavily towards the latter. It offends me much more that children around the world die today from easily treated diarrhea than that it might take us years or decades longer to find a better treatment for arthritis. I'll take a heavy dose of equality before I start worrying that the best off among us aren't getting awesome new treatments that will eventually trickle down to us (and I feel the same way about economic growth). All the same, I'd like to see new cancer treatments (much of the research for this already being funded publicly, of course) and so on. And the pharm companies spend tons of money on advertising and tons of money on developing marketable new drugs that add little or nothing to human well-being (three erection pills?). But damnit, we can't yet do without them. So what do we do?

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posted by Benjamin Dueholm | 10:16 PM
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