One of the frequent arguments you hear in favor of single-payer or other forms of socialized health care systems is: “every other industrialized country has a nationalized system,” or “country X spends less on health care (as a % of GDP) and yet has better outcomes (using some cherry-picked statistic, usually infant mortality).” They’ll even cite the same, subjective WHO study over and over again, calling the US only the 37th-best health care system- as if an international organization would ever give Americans credit where credit is due.
Any substantive argument that you present to these individuals will be instinctively discounted. If you point out that world leaders and regular Canadian citizens come to the US for treatment, they’ll say that’s okay as long as the poorest of poor in those nations can receive treatment. If you explain that these systems produce long waiting lists for non-urgent care, they’ll reply that as long as such care is ultimately rendered, it doesn’t matter how long someone has to wait. And forget about pointing out that their holy-grail of assumptions, a human right to health care, is in fact quite wrong. That will only lead them to label you as uncaring and soulless.
Progressives don’t view health care as a good/service to be traded, just as any other commodity in a free economy. To them, health care must act as a safety net; who cares if you have to wait six months for a checkup, if you can get that triple bypass when you need that bypass? As long as such people have a functional single-payer system (let alone a dozen) to point at, they can claim that it works. Thus, it becomes a necessary for the United States to undertake a sytematic campaign to destroy socialized medicine abroad, with techniques that will simultaneously improve our own care. We must expose them for what they are- rickety forms of collectivism that free-ride on American innovations.
In order to understand how these systems achieve their supposed efficiency gains, you have to understand the concept of a monopsony. The basic macroeconomic definition of monopsony is a sole purchaser of a good or service, facing multiple providers. Thus, the buyer has extraordinary market power, and can demand unreasonable price concessions. This goes a long way in explaining how the VA and Medicare within the United States receive the lowest prices for pharmaceuticals, and how European nations, especially those with single-payer insurance schemes, can achieve significant cost savings. These cost savings come not from efficiency gains, as would occur in a free economy, but from the blunt negotiating power of a monopsony. According to the study European Pharmaceutical Price Regulation, Firm Profitability, and R&D Spending by the National Bureau of Economic Research, 57% of European pharmaceutical profits were made in the US, while only 24% of American pharmaceutical profits were generated in Europe. The reasoning behind this is simple- the pharmaceutical company, regardless of where it is located, makes its profits in the US, and then sells the drugs for cheap elsewhere. As long as no one rocks the boat, this arrangement works out just fine for them.
This is why I propose the United States legalize drug re-importation. First of all, this is a pure application of the principle of free trade, that goods should be able to freely cross borders. The eventuality of such a policy would be to put a downward pressure on the price of American pharmaceuticals, as a supply of identical, cheap drugs come from abroad. Second, this will endanger the European market, as shortages develop from these drugs fleeing to where they are valued at their market price, absent of price controls. Unfortunately, not all free-market institutions support this philosophy. The first argument presented is that the safety of foreign drugs cannot be verified. I reject this line of thinking a priori. Consumers would never willingly consume pharmaceuticals that would harm them, and new institutions would develop to examine the inflow of drugs. Perhaps, after they grow adjusted to this new policy, pharmaceutical companies themselves will establish their own importation programs. The second supposed downside of re-importation is the eventual assault on intellectual property, as foreign countries begin to manufacture their own generic versions of American pharmaceuticals in response to their shortages. To that, I say good riddance! It’s about time an assault on the intellectual monopoly regime begins.
The second step the United States should take is to rob these nations of their health care professionals. The folly of Europe, Canada, Japan, Australia, and every other nation that formulated a collectivist health care system is to designate health care as a right; once you have done this, someone (the government) must provide that service. This turns the providers, the doctors and nurses, into slaves of the consumers. To some extent, we have done this in the United States, mandating that no emergency room may turn away a patient, regardless of ability to pay, a regulation that I disagree with. Is it any wonder that doctors in Germany, Canada, Australia, Switzerland, Sweden, France and the United Kingdom are all payed much less than American doctors? The solution- let’s import doctors and nurses on a mass scale! I propose that the United States set up a special class of visa called, say, H1-MD. We’ll allow all doctors and nurses and their families from the above nations move to the US and begin practice here. As their ranks shrink, the strain on remaining providers will grow, and the already-considerable waiting lists for care will push even further. This already occurs, in a somewhat limited capacity. For example, my mother is a foreign medical graduate. Within a few months of graduation, she had one foot in the plane door. Such mass migration, just as with foreign patients coming to the United States for treatment, reveals hidden preferences and robs people of their naivete about the quality of respective health care systems. But as long as the US puts up artificial roadblocks to coming here, we will fail to extend these advantages. Living in the United States, the land of opportunity, is the envy of the world; we should use this occasion to drain the world of its talent in medicine, engineering, and all other advanced crafts.
Several socialized medical systems are already teetering on the edge of bankruptcy, particularly Britain’s NHS. America must add as great a burden to their systems as possible, through the application of free market principles: free trade and free migration. Hopefully, this will precipitate their collapse and show, in full view of the world, yet another failure of socialism (although, if the collapse of the Soviet Union didn’t didn’t change their minds, I doubt even this will); ending forever the push for single-payer variants in the United States. These nations have been free-riding on us for long enough; now it’s our turn.
Update 3/7/2010: The UK Guardian notes that many pharmacies in Britain are selling their drugs in continental Europe, leading to shortages in pharmaceuticals for British patients. However, the article fails to examine the issue using economic thinking, never mentioning NHS price controls as the source of the problem. Instead, the exporters are demonized as engaging in an illicit trade or pharmaceutical companies are blamed for not bringing enough drugs into the UK.
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