Healthcare Pessimism

The discourse surrounding healthcare investment in the United State is often toxic and riddled with misinformation. Attempting to dispel misleading statistics or to answer bad-faith arguments means poring over pages of libertarian drivel telling Americans to “buck up” and “pull themselves up by their bootstraps.” Principled libertarians, those who genuinely believe their politics will bring about the rising tide that lifts all boats, have my respect. At the same time, I have no respect for the segment of conservatives who write with an obvious and repugnant disdain for the American poor. Megan McArdle is one such conservative. 

McArdle’s August 2016 piece in The Oregonian, “Healthcare will always be a business, not a right,” shows some of the ways in which the American obsession with profit-oriented economics has a pernicious effect on the ways in which some of the most valuable resources in our society are distributed. This excerpt from McArdle’s column makes this troubling reality more clear: 

“[Reciprocal altruism] is a system of mutual obligation: I do a favor for you now, and you do a favor for me at some unspecified point in the future. Reciprocal altruism is not explicit, and it is not limited in the same way that market exchange is. 

[Robert] Hanson is suggesting that we have a strong intuitive preference for altruistic health care — for an enormous, practically unlimited amount of altruistic health care — because healthcare is a way to demonstrate loyalty and caring to people you love.

The issue, in other words, is not necessarily profit — health insurers are not particularly profitable as industries go, and hospitals and other care organizations are often nonprofit. The issue is making decisions based on money.

Unfortunately, this leaves us with something of a problem. Reciprocal altruism is fine if all you need is for Mom to sit with you and brew you some herbal tea. But in a modern society, you need to procure health care from strangers — which is to say, through the transactional system of market exchange. Nationalizing the health care system does not fix this fundamental disconnect between our evolved instincts and the inevitable necessities of a modern economy.

A true national health care system, along the lines of Britain or Canada, would have advantages and disadvantages over what we have now. But one advantage that it doesn’t offer is to free us from the need to think about our health care in the cold logic of dollars and cents, rather than warm and fuzzy altruistic ideals. Health care cannot be a right, full stop; it has to stop before we run out of wallet. Which means that no matter how much it horrifies, we have to stop hoping for a system that will make those hard decisions and unhappy trade-offs go away.”

It is impossible to come away from reading this article without a great sense of pessimism about the healthcare industry — McArdle’s intended takeaway is that we’re better off dealing with a horrific system and its injustices than hoping for any change at all. Yet however disheartening this claim seems to be, making a strong case against pessimism requires strategy and sound argumentation. 

McArdle’s claim rests on the fact that using money to pay for healthcare creates an inevitable obstacle to the distribution of health services. To an extent, McArdle is correct — any economic system that provides healthcare requires money to be spent to obtain services. Spending money is inevitable. 

But where progressive and conservative views really differ is on the question of what the requirements should be to obtain healthcare — not whether or not someone is going to pay for medical services. In a nationalized healthcare system, the limitations one has on obtaining care are based on the severity of the health issue and availability of treatment — otherwise known as triage. Citizens pay taxes to the government in advance of their treatment to ensure that a funding base is available for a potential treatment in the future. Sure, the government must make monetary decisions (as McArdle acknowledges), but its distribution of available services is based on necessity, not profit. McArdle even unintentionally agrees with this framework, claiming that the British National Health Service (NHS) planned to provide less of the expensive cancer treatment drug Herceptin for monetary reasons, but public outrage forced the government to back off the decisions. What McArdle conveniently forgets is that the NHS rebounded from its “loss,” striking a leveraged collective bargaining agreement to reduce the drug’s price that only a nationalized healthcare system could enforce. 

On the other hand, in a free-market healthcare system, the only restriction on someone’s ability to obtain care is the amount of money available to them. In this case, money is the issue — for providers, every healthcare decision is based on the profitability of its provision. If humans truly had evolved to entertain a system of reciprocal altruism (I have my reservations with evolutionary economics), then forcing healthcare into a transactional market economy seems only to exacerbate the issues that come with paying for healthcare services with money. McArdle seems to unintentionally identify capitalism as the problem with healthcare — not the NHS. 

Furthermore, the instinct of reciprocal altruism seems to identify that a system based on conditional reciprocity would be better suited to tackle the issues with healthcare than one based on profit. Hanson’s paper identifies that reciprocal altruism evolved from a bartering and favor-based system, where an individual works on behalf of others to receive work done on their behalf. It is surprising to say the least, that McArdle is unable to see how a nationalized healthcare system is analogous to reciprocal altruism. In a nationalized healthcare system, taxpayers collectively work on behalf of each other (paying taxes) to receive work done on their behalf. Moreover, a nationalized healthcare system is not for profit, so it incurs a more equitable exchange of services between taxpayers and healthcare recipients — similar to how it’s only fair to expect a gift if you’ve given a gift before. A profit-based system is more analogous to extorting your friends and family to receive the most expensive gift while minimizing the cost of the gift you will give in return. I would hope McArdle does not treat interpersonal relationships like economic transactions, though my expectations are low. 

In claiming that adding money into the altruism equation taints the system and causes it to fall apart, McArdle once again shows her profound misunderstanding of nationalized healthcare. Polls show that most British taxpayers see the NHS not as a cash transfer from one individual to another, but as a system of comprehensive reciprocal care. And the rate at which British taxpayers are willing to support a tax hike for a better NHS shows that they don’t see healthcare as a product to be purchased on the market, but as a burden shared by wider society. 

At the end of the day, we should strive to make the healthcare economy work for its citizens, not the other way around. The economy is not something that people must simply accept, but rather something that people create as a result of their actions. And if Hanson’s models of social behaviour are correct, we should aim to design our economy such that it best suits the human propensity towards reciprocal altruism, rather than forcing ourselves into a system of market exchange. Market exchange is not an immutable fact of life — and we need to keep fighting in order to change it.

Categories: Culture

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