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On healthcare and the proper role of government therein

By Jonah Chan
web posted September 26, 2022

Every doctor in the country must be licensed by the state government. Every drug available for purchase requires an FDA certification. Every time my grandparents visit the doctor or order medical equipment, they rely on government programs such as Medicare and Medi-Cal. The amount to which the government should be involved in healthcare, if at all, is a hotly debated topic these days. British economist and Princeton professor Agnus Deaton expresses his opinion on this issue in his book Deaths of Despair: A Tale of Two Americas. He writes, “A single-payer healthcare system – that covers everyone from birth and enforces price controls – would remove a [spreading] cancer on American wealth and health [. . .]” In my opinion, however, a single-payer, government-operated healthcare system would be harmful to our country because it would restrict the free market from functioning as it normally would, and it would drive up consumer prices.

First of all, price controls are detrimental to society. It prevents the market from naturally shifting to equilibrium when supply and demand change. For example, if the supply of a good or service decreases, perhaps medication in this case, prices would most likely increase, because there would be the same amount of demand for the medication, but there would be less medication available. When prices rise, people might decide that they do not need that much of the product after all, or that they could make do with an alternative. However, if the government did not allow prices to increase, people would continue trying to buy the same amount of medication, potentially leading to shortages and backorders. Nobody would be better off in this situation – consumers would lack their medication, and producers might not be able to make enough money to continue producing at the same quality. The government might have good intentions to keep companies from charging us high prices, but, in reality, price controls simply obstruct the natural operation of the free market and harm us as consumers.

Also, a single-payer healthcare system would suppress our freedom to choose and drive prices up. In a nation founded on the principles of freedom and individualism, we should have the power to make choices about our own health. Furthermore, even if we were allowed to choose between medical providers within a single-payer system, there would be far fewer options. It would be much harder for companies to enter the government-controlled market because of the strict rules and cumbersome registration processes involving mountains upon mountains of paperwork, not to mention all the associated fees and expenses. To compensate for their outlays, those entities would charge more, ultimately resulting in higher taxes on the average American. Finally, a third party spending your money for you would never allocate it as carefully or frugally as yourself, and the government has never been known for its thriftiness. Thus, the larger the role the government plays in the healthcare system, the higher our related expenses will become.

However, some may argue that the government should have more say in the healthcare sector. They believe that this would allow lower income and other disadvantaged groups to receive the necessary care they would not otherwise be able to pay for. At first glance, this may seem like a compelling reason. However, this would simply add to the already growing list of incentives for people who really belong in the workforce to remain unemployed and depend on the government for their everyday needs. If the government will provide so much for them, why would they want to try to gain wealth and thus lose all their benefits? Furthermore, our own country’s economy would be harmed. The less labor that is employed, the less efficiently we will be producing and the further from our production possibilities curve we will be operating at. Last but not least, it is we taxpayers who ultimately must foot the bill.

Recently, my grandmother received a new $2,735 CPAP system provided through Medicare and Medi-Cal, which she would not have been able to purchase on her own. Yet, we essentially already paid for the CPAP system through our federal and state taxes. Proponents of the single-payer system also argue that administrative costs could be lowered in a centralized environment. This reason, too, is invalid. Extrapolating from the extremely wasteful track record of the government, administrative costs would likely rise instead of going down. For example, the Social Security Administration, by its own estimation, wastes roughly $3 billion taxpayer dollars annually in improper payments alone, without factoring in the cost of the labor it then hires to track down those payments. Thus, neither the claim that it would provide care for a larger number of needy people nor the projection that it would reduce expenditures is valid.

In conclusion, additional government control over the healthcare system would only add to the existing adverse effects on our country. Besides artificially restricting the market from responding to changes in supply and demand, it would also cost us more as consumers. The better option is to allow the healthcare market to be as free from federal and local regulations as possible. This would promote healthy competition leading to innovation, lower prices, and a higher quality of care overall.

This is Jonah Chan’s first contribution to Enter Stage Right. (c) Jonah Chan

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