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Medical Consumer or Ward of the State?

Sheldon Richman

How did it become normal, or for that matter even acceptable, to refer to medical patients as “consumers”? The relationship between patient and doctor used to be considered something special, almost sacred. Now politicians and supposed reformers talk about the act of receiving care as if it were no different from a commercial transaction, like buying a car — and their only complaint is that it isn’t commercial enough.

What has gone wrong with us?

Paul Krugman asked that question recently in the New York Times. We could hit back with a quick, “What’s wrong with referring to medical patients as “consumers”? But let’s take another route. Leave aside the problems with the “special, sacred” relationship Krugman romanticizes. (In earlier times everyone pretended that doctors were uninterested in money.) Let’s concede there is something unattractive about thinking of patients as consumers.

As Krugman writes, “Medical care, after all, is an area in which crucial decisions — life and death decisions — must be made. Yet making such decisions intelligently requires a vast amount of specialized knowledge. Furthermore, those decisions often must be made under conditions in which the patient is incapacitated, under severe stress, or needs action immediately, with no time for discussion, let alone comparison shopping.”

What’s the Alternative?

All true, but not necessarily decisive in answering Krugman’s question – because if we reject the patient-as-consumer model we must then ask: What’s the realistic alternative? An economist should know that this is always the magic question.

I believe the answer is this: if the patient is not a consumer he or she will be a ward of the State or a government-empowered insurance company.

So if the choice is between consumer and ward of the State, consumer doesn’t look so bad after all.

To see what ward status means, ponder Krugman’s thoughts on the Independent Payment Advisory Board, Obamacare’s Medicare cost-cutting apparatus:

About that advisory board: We have to do something about health care costs, which means that we have to find a way to start saying no. In particular, given continuing medical innovation, we can’t maintain a system in which Medicare essentially pays for anything a doctor recommends. And that’s especially true when that blank-check approach is combined with a system that gives doctors and hospitals — who aren’t saints — a strong financial incentive to engage in excessive care.

…The board, composed of health-care experts, would be given a target rate of growth in Medicare spending. To keep spending at or below this target, the board would submit “fast-track” recommendations for cost control that would go into effect automatically unless overruled by Congress. [Emphasis added.]

Before you start yelling about “rationing” and “death panels,” bear in mind that we’re not talking about limits on what health care you’re allowed to buy with your own (or your insurance company’s) money. We’re talking only about what will be paid for with taxpayers’ money. And the last time I looked at it, the Declaration of Independence didn’t declare that we had the right to life, liberty, and the all-expenses-paid pursuit of happiness. [Emphasis in original.]

And the point is that choices must be made; one way or another, government spending on health care must be limited. [Emphasis added.]

Much of what Krugman says here is correct. Resources are limited. Choices must be made. No matter how medical care is paid for, spending will be limited — regardless of what demagogues imply. But under Krugman’s patient-not-as-consumer model (which is largely in effect today), government experts make all the important decisions. Bureaucrats will have a global budget for medical spending, and it will be their job to stick to that budget. Advocates of this scheme insist the quality of medical care will not be cut along with costs. They assure us they will prohibit only “unnecessary” and “wasteful” procedures. But how objective are those categories? And why should we trust unaccountable bureaucrats and “experts” to make the right decisions, as though there were one-size-fits-all answers in medicine? This is a pretense of knowledge.

The upshot is that anyone who has his or her medical bills paid by the taxpayers will ultimately be at the government’s mercy. If you’re not a consumer you’re a ward of the State.

Competitive Environment

But won’t private medical coverage do something similar? An insurer is not going to make a limitless commitment to pay for anything and everything a patient wants. The difference is that if medical coverage is offered in a freed market — no privileges, no licenses, no protectionism – the environment is competitive. When government is in charge competition disappears or is vastly constrained to the point of where it hardly matters. In a competitive environment entrepreneurs seek to discover what services best satisfy their customers’ requirements. Note well: This environment includes nonprofit solutions, such as mutual-aid societies, which through “lodge practice” managed to provide decent medical coverage to people of modest means in earlier times.

Competition is a discovery process (Hayek). Government is the habitat of expert-bureaucrats who pretend they know it all already.

Note that Krugman cautions, “[B]ear in mind that we’re not talking about limits on what health care you’re allowed to buy with your own (or your insurance company’s) money. We’re talking only about what will be paid for with taxpayers’ money.” This is disingenuous. After being taxed all their lives, how many elderly people are in a position to forgo Medicare in favor of private insurance? They will be wards of the State, at the mercy of the faceless, unaccountable Independent Payment Advisory Board.

Government creates dependence, then exploits that dependence to justify its power over people.

How interesting to see Krugman pointing out that “the last time I looked at it, the Declaration of Independence didn’t declare that we had the right to life, liberty, and the all-expenses-paid pursuit of happiness.”

Actually, Mr. Nobel Laureate, we don’t have a right to any-expense-paid pursuit of happiness. Once you start down that road, ward status awaits you.

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