The Problem with Government Healthcare

The WSJ gave Betsy McCaughey half of their opinion page on Thursday to expose the views of Ezekiel Emanuel (“Obama’s Health Rationer-in-Chief“).  The disapproving essay concludes with a question, “Is this what Americans want?” and seems to presume that Emanual’s principles for allocating scarce medical resources are so horrifying that simply describing them is sufficient to reject them.

However this did not reduce my enthusiasm for Emanuel’s philosophy.  McCaughey’s citations show Emanual raising essential issues, making excellent ethical arguments, and providing solutions that make perfect sense for government spending on individual welfare.

The problem with this debate is that it is about two separate but sometimes correlated questions:

  1. How much healthcare should government provide?
  2. Should government healthcare usurp private markets for the same goods and services?

What is both reasonable and necessary for government healthcare would be unethical for free market medical services: Namely, a system for rationing finite resources that considers cost and benefits in a social, not individual, context.  Government can’t pretend that it has unlimited resources.  And in this debate I have not yet heard an explicit argument in favor of the default method for allocating scarce resources: queues.

Government needs some socialist basis for (A) taking money from some people (via taxes) and (B) giving it to others (via medical services).  Of course a major part of the debate pertains to (A), i.e., the degree and manner in which government is justified in coercing some people to contribute towards the health of others.  But given some level of government-sponsored healthcare Emanual offers an ethical framework — indeed, the only coherent one I have encountered — for part (B): disbursement of finite resources

The second question raised above is more difficult, but insofar as a rationing system is employed to problem 1A it need not interfere with private markets.  I.e., Govenrment should not encumber private commerce in medical goods and services even if it does itself engage in socialized medicine.

To Balance Out Casual Fridays

Why stop at Casual Fridays? I propose the following:

Formal Mondays: Appropriate attire is limited to tuxedos or morning suits for men, and ballgowns or wedding dresses for women.

Tactical Tuesdays: Fatigues, battle dress uniforms, or other paramilitary attire. Open-carry of weapons and tactical accessories is also encouraged.

Onesie Wednesdays: Coveralls, jump suits, or siren suits.

Athletic Thursdays: Dress for your favorite athletic pursuit. Wear a gi, bike shorts, racing suits, or any uniform appropriate for a particular sport (e.g., fencing, dressage). Where headgear is part of the sport you must bring it, but you need not wear it in the office.

Geothermal Energy

While researching the best way to take advantage of the 2009-2010 tax credit for household energy upgrades I looked at geothermal heating/cooling systems.  Currently the most energy-efficient residential climate control system is a heat pump, which is essentially two-way air conditioner: It doesn’t expend energy to generate heat, but rather to extract latent heat from air in one location and to pump it to another.  During the summer it pumps from inside a house to the outside, like a conventional air conditioner, and during the winter it pumps heat from outside air back indoors.  The problem with an outdoor heat pump is that it’s always working against the weather: During hot weather it’s trying to move heat from a hot location (inside) to an even hotter location (outside).  During cold winters it’s even harder to extract heat from freezing outside air to raise indoor temperatures to a comfortable level.  Geothermal heat pumps solve this problem by exploiting the fact that subterranean temperatures are a nearly constant 50 degrees year-round.  By putting the heat exchanger underground the heat pump runs much more efficiently because it doesn’t have to fight the weather.

Geothermal heat pumps are very nifty and efficient, but even with the government’s 30% tax credit they are still not economical for conventionally-sized residences.  Drilling underground heat exchange loops will typically exceed $10,000, and the efficiency gains don’t justify that expense given current energy prices.

But geothermal heat sinks aren’t the only advancing technology.  A study by the U.S. Geological Survey suggests that geothermal power generation may be able to satisfy a large portion of our energy demand.  Existing geothermal power plants depend on unique geological formations where high temperatures can be found in permeable rock within 2 miles of the earth’s surface.  Such sites are limited and only rarely economical to exploit.  Newer approaches, dubbed “Enhanced Geothermal Systems” (EGS), would tap up to 4 miles below the surface and take advantage of the higher temperatures and pressures to drive power plants with greater capacity and service life.  EGS appear to be practical over much wider geographic areas.  The USGS report, the first comprehensive geothermal resource assessment in thirty years, suggests that EGS could add on the order of half a terawatt of generating capacity to the domestic power grid.  (Current U.S. generating capacity is roughly one terawatt.)

Healthcare: Government is the Problem, Not Cost

Craig Karpel makes an excellent point in his essay today, “We Don’t Spend Enough on Health Care.”  He cites studies suggesting that it would not be unreasonable for the American healthcare industry to grow from 17% of GDP today to more than 30% of GDP in a few decades.

Why not?  Industrialization has steadily decreased the resources Americans must devote to satisfying the basic human needs of food, clothing, and shelter.  With increasing resources to spend on non-necessities it should not surprise us to find individuals more disposed to indulge in advanced medicine.  Entertainment and luxury goods have a limited power to increase quality of life, especially once health and vitality begin to decline.  Until we have achieved perfect immortality health technology is the ultimate luxury good.

Yet government and the liberal establishment are evangelizing an odd perspective on the healthcare industry.  Obama’s attempts to increase the federal government’s role as a purchaser and provider of healthcare are premised on the argument that, “The cost of health care has weighed down our economy.”

The President’s complaint seems to be about the efficiency of healthcare — i.e., the amount of dollars it takes to purchase a given level of service.  It is true that any market inefficiency “weighs down our economy,” insofar as we enjoy greater production at a lower costs when markets run more efficiently.  We could say the same about any sector of economic activity — “The cost of transportation has weighed down our economy.  If only we could move people and goods more efficiently our economy would certainly grow!”

In this case, the President is actually saying, “We’re spending 17% of GDP on healthcare, and that’s too much because I happen to know we could get the exact same goods and services for just 15% of GDP!”  Of course, anyone who still believes that a government can acquire or provide goods and services more efficiently than for-profit enterprises in a free market hasn’t been paying attention for the last century.  Indeed, insofar as there are obvious inefficiencies in the healthcare industry government interference is invariably the dominant cause.

A slightly different formulation of the President’s complaint might be, “We’re spending 17% of GDP on healthcare, and that’s too much because we need to increase spending on [insert the cause du jour — the war, or the space program, or entitlements to special interests….]”  In which case this is just an opportunistic appeal for increasing government control of the economy.

In the first case the President is almost certainly correct — America’s healthcare spending is less efficient than it could be — but for the exact opposite reason he would stipulate:  The federal government’s staggering regulation and spending in healthcare impairs the efficient operation of that industry.

In the second case, we should celebrate a society that can afford to devote such unprecedented resources to any sort of discretionary spending.  We might debate priorities: Perhaps there is some level or character of individual healthcare spending we should find as tasteless as megayachts.  But so long as we are a free republic that is a debate that should be conducted outside of the halls of a coercive government.

American Politics Confronts the Ugly Reality of Fascism

If the government is going to provide medical services with finite resources then it is going to have to make difficult choices: It can’t take a spare-no-expense approach to treating every single person.

I addressed the question of how to rationally distribute life-saving resources three years ago.  Any coherent allocation of these resources will be fascist, which makes government healthcare even more politically unpalatable in a culturally libertarian country like the United States.

Amusingly, the Obama administration is under attack because its healthcare policy advisor, Ezekial Emanuel, earlier this year published “Principles for Allocation of Scarce Medical Interventions” reminiscent of mine.  It may not help that he gave his proposal the vaguely orwellian name, “The Complete Lives System.”