One of the things I was known for during my statist days was as an ardent defender of Canada’s Universal Health Care system. As a social democrat, I took great pride in pointing to our system as one of the things that made us ‘Canadian’. I defended it on many occasions against the forces of “privatization”.
But I have come to realize that it is possible to have universal, affordable health care without the state.
What Universal Health Care without the State is Not
Before I discuss what Health Care without the state is, I need to stipulate what it is not.
It is not the US health care model. Indeed, that very model is ridiculed quite handily in “What Hunger Insurance Could Teach us about Health Insurance” from 1993.
It is not simply privatization of the health care system as we currently have it in Canada. That would simply give corporations that benefit from state cartelization the opportunity to buy “public” property at fire sale prices while giving them oligopoly control over health care market. That is certainly not universal, nor free.
It is not a false dichotomy of choice between an American system and a Canadian system. Both of these state sponsored and supported are deeply flawed in different ways. The American system sacrifices universality for expedience while being incredibly inefficient, expensive and often resulting in what is currently called “market failure” – high costs for services that are not needed while services that are needed are unfulfilled. The Canadian system, on the other hand, resorts to rationing in order to ensure universality. The system is more efficient, to be sure, and the rationing is done via time rather than choice (that is, we wait for longer times for procedures and tests, rather than making the choice between a hip replacement and a broken leg operation, although that does happen) but the system is still expensive and unresponsive to health care consumer’s needs. Both systems have conspired to take away free choice from consumers of health care and driven up costs of these services, so that only the wealthy can get decent care, in either system.
Lastly, it is not ‘survival of the richest’ health care, where only the wealthy can afford care and the poor continue to suffer.
What Universal Health Care without the State Is
It is exactly as it says, health care without the state. Health care services offered on a free market, insured in a variety of ways, also offered in a free market, with the choice and power to make health care decisions resting with the health care consumer. This may sound Utopian, but when compared to the problems our current system and their causes, the elegant simplicity becomes clear.
The biggest problem in our health care system today is a shortage of doctors. This is one of the biggest reasons for our long waiting lists and the kind of rationing we see. Combine this shortage with the fact that a doctor is needed for nearly every medical decision, no matter how minor, and we see via simple supply and demand why many health care costs are so high. This is not an accident of organization, though, but a well designed strategy. Medical organizations – essentially the doctor’s union – have colluded with the state to ensure that the supply of doctors has been kept artificially low. They ensure that provincial governments keep enrollment in medical schools are low, that foreign-trained doctors find it difficult or impossible to become licensed and that doctors, as opposed to nurses, nurse-practitioners or pharmacists, must be the ones to make even obvious medical decisions. This not only reduces the supply of doctors, but all but eliminates any competition for and among them. Right now in Ontario, you cannot shop around for a doctor as you are lucky to even have one – any one – in the first place. As a result, doctors are able to negotiate high fees from the government, often making twice as much as their European counterparts. And the a person has no choice but to go to a doctor – and only a doctor – for their health care needs. A monopoly control of supply, with all the common high prices, low quality and inefficiencies that accompany all monopolies.
Without the state, the consumer would have the choice in the market. Doctor’s would no longer be the bottle neck in the system. You could choose to go to a GP or a nurse practitioner.Indeed, you could choose a witch doctor, herbalist or a homeopath if you want. If you have a recurring ailment or condition, you would merely go to the pharmacist and request the medication. You could request your own tests and diagnostics. You would be able to mitigate your risks by being informed and having health competition for these services. And the competition, combined with a lowered barrier to entry, would drive the costs of these services down. Anyone properly trained (in you opinion, not a medical association, though association membership would likely be a deciding factor) could enter the market and compete on quality and price.
Of course, the costs of many procedures, diagnostics and tests would still be out of reach of all but the richest, so there would need to be insurance. One of the other problems encountered today is with insurance companies. Because of the twin demons of “moral hazard” and “adverse selection”, especially in the US, private insurance often drives prices up, and results in those that need service being denied while others are able to get unneeded services covered. These are driven by state-implemented tax breaks and regulatory requirements as well as the profit motive of insurance companies within the system. Insurance companies exists to make money by gambling on risk. They help individuals reduce their personal risk by spreading that risk among a large group. They make money by taking individual people’s premiums, pooling them and investing these funds. The less money paid out in settlements, the more money insurance companies make. Indeed, the purpose of an insurance company is to not pay out. Now combining this clear risk-adverse profit motive with regulations requiring insurance coverage for everything, including doctor’s visits, and allowing tax deductions for businesses spending on health insurance is a virtual recipe for market distortion and inefficiency. And too look at the US, that is what they have.
Stateless health insurance would be quite different. Firstly, it need not be typical ‘insurance’ at all. Current single-payer insurance like Canada’s are more efficient than the US insurance system because they are able to spread risk without also having profit-motive driven need to drop people to avoid adverse selection. This can be emulated in the free market by consumer’s cooperatives or not-for-profit insurance, similar to he way credit unions operate in the banking sector – they would exist to provide medical services and insurance to their members. These cooperatives could offer not just insurance, but the actual service of the doctor, diagnostic technical or other health care provider. The health professionals may themselves form cooperatives or partnerships that may work with or compete with consumer coops. There would also be for-profit insurance companies competing against these agencies on price, quality of care and facilities. Again, the greater competition and elimination of barriers to entry will drive prices down for these services.
Consumers could choose to only insure for catastrophic health emergencies, like cancer and heart attack and pay for every day expenses out of pocket. They could choose to enter a consumer coop to share all expenses or sign up for a local one-stop-health shop or medical practitioner coop that offers it all as part of the monthly subscription fee. Or they could purchase it as they do now from an insurance company.
The medical practitioners, coops, clinics, hospitals and diagnostic facilities could choose accept whatever payment was appropriate. Some may accept cash, trade, barter or credit or any combination thereof. Some may do weekly volunteer work at a clinic for the poor in exchange for other kinds of labour. Some may be supported by churches, unions, coop associations (like the current Mondragon in Spain) or any other voluntary, member supported mutual aid society. In this, the poor and dispossessed will still be able to access health care, likely easier and faster than they can today.
In the end health care without the state would offer greater consumer choice and greater practitioner latitude in service and payment all at lower cost, because of greater supply and competition in the all areas. With lower costs, and higher income (because of no taxes) an more options, health care can be universal, efficient and affordable.