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Cost-cutting at patients' expense: The inherent deprivation of statist health care

By Edmund Daleford
web posted September 23, 2002

A September 20, 2002, Associated Press report revealed to me a constantly exacerbated frustration felt by Portuguese drug companies, the government's regulation on whom is a step beyond that of the United States in the direction of "universal" taxpayer-funded health care. It is a brief post, but it has nevertheless sparked a realization at which I could only speculate earlier.

"Drug companies in Portugal, angered by a new law which encourages doctors to prescribe generic medicines instead of more expensive branded drugs, say they intend to call in a debt of about 525 million euros (US$511 million) run up by the government. The national pharmaceutical industry association Apifarma said its members plan to demand immediate payment of the debt accumulated by public hospitals up to the end of last year, a newspaper report said Wednesday. Apifarma threatened to cut the supply of nonessential medicines to hospitals if the payment is not made, daily Publico said. The health ministry has said it plans to pay the debt by Oct. 12. The ministry says it needs to save money to keep the debt-ridden national health service in operation. Generic medicines will bring savings of about 60 million euros (US$58 million) a year, it says."

Apifarma and fellow companies possess good reason to present such grievances. A national health care service, one which proposes to employ "need" as the standard for receiving treatment instead of the patients' willingness and ability to pay cannot be recompensed for the amount it spends on "curing" the homeless, the retarded, and the otherwise incapacitated. The latter are, simply put, lacking in resources to reward the doctors who had prolonged their lives and health. Thus, the diligent medical professionals are unable to receive their promised salaries, not because of slacking off on the job (which would have been the case in a laissez-faire capitalist society), but because they work well, but have no choice of whom to work for.

Naturally in such a system, the doctors, the pharmaceutical companies, the researchers, the deliverers are all forced into literal slavery, working for nothing to sustain a bum due to an arbitrary classification of the latter as "needy". The government's debt to them accumulates with every coming pay day, upon which some of the brightest men in the country of Portugal, having had to undergo years if not decades of training for an intricate job, go home hungry, for they have nothing to obtain from an intoxicated ruffian or a thug on rehabilitation. It is about time they complained and refused to grant their oppressors the sanction of the victim by continuing to grant "free" health care.

Of course, as the all-mighty state in Portugal seeks to retain its stranglehold on the medical market, it seeks to coax the producers into continuing to surrender their services. It has chosen to alleviate debt not by liberalizing the markets and granting doctors and pharmaceuticals the choice of customers, but by... diminishing the quality of products provided! In a free market, both brand names and generic items are available, and it is the patient's decision whether he wishes to expend a greater sum for a more credible and perhaps more efficient drug or stock up on his finances while considering a generic medicine worth trying on a minor ailment. The doctor, as he seeks payment from the patient in return from providing the best advice and widest choice range available (so as to satisfy the consumer and perhaps cause the latter to employ him in regard to future medical issues). But in Portugal, even the affluent upper-middle classes, with more than enough money to purchase quality brand name drugs, would be forced to prescribe to more uncertain and perhaps less effective treatments. In the slave mentality of altruism, which is precisely the calculus embraced by the Portuguese government, perpetuation is achieved only through sacrifice on behalf of the servant (of his time and effort) and on behalf of the recipient (of the quality of services he receives).

Moreover, in a laissez-faire capitalist system, there would have existed no need for socialized health care aimed at a needy, penniless underclass. Government minimum wage regulations had for over seventy years in the United States and a century in Europe barred young beginners from employment due to insufficiency of skills. This phenomenon, dubbed institutional unemployment by Ludwig von Mises, took its toll on every subsequent generation as well as firmly rooted the children of the original unemployed in a culture of indolence (that of the ghettoes, now spreading like a plague to the middle classes and polluting them with a similar mindset) and created the need for an ever-amounting number of social services-welfare for those unable to work, social security for those unable to fund their retirement, Medicare or outright nationalization of health care for those who have been coerced out of the opportunity to pay their doctors.

The obvious solution for the Portuguese government and for that of the United States (as the hypocritical nationalization advocate, Otto von Bismarck, once said; "Only a fool learns from his own mistakes.") is to dissociate themselves from medicine! Along with that, they should abolish wage regulations, terminate redistribution campaigns, and scram out of economics altogether. The poor and unemployed will be able to find work and pay doctors for their health care needs. The doctors will be able to expand their operations and refine their techniques due to a massive inpouring of customers and much longed-for money. Products of every degree of cost and efficiency will be available to anyone capable of paying for them, and doctors will no longer be forbidden to advise their patients what is best for their health. Pharmaceutical researchers will be thrilled to earn their wages on time and realize that the amount thereof depends on the quality of their explorations and resulting medicines.

Apifarma and its fellow companies should not satisfy themselves with a mere repayment of debts, government appeasement for their virtual slavery. They should, like Dr. Hendricks in Atlas Shrugged, withdraw all their services from a corrupt government behemoth until the absolute and irreversible liberalization of Portuguese markets.

Edmund Daleford is a freelance writer and Vice Editor-in-Chief of The Rational Argumentator, an online publication championing the Western principles of reason, rights, and progress, to be found at http://www.geocities.com/rationalargumentator/index.html. He is also a member of the Objective Medicine Group, a philosophical forum devoted to defending the endeavors of diligent doctors against state controls and oppression, whose site can be accessed at http://www.objectivemedicine.org. Mr. Daleford can be contacted at rationalargumentator@yahoo.com.

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