Healthcare: Right or luxury?

Posted on March 23, 2012 at 11:18 am,

This is the latest in our series of posts critiquing Wayne Grudem’s book Politics According to the Bible. Today we’re looking at his arguments about the healthcare system. Although the section on this issue is relatively short, it is probably the part of the economics chapter that I have the greatest issues with (and if you’ve been following this series, you’ll know that’s saying something).

Healthcare Systems for Dummies

Before starting on Grudem’s comments, it will be helpful to outline the three different types of healthcare systems that exist in rich-world countries.

The first is the state-run healthcare system. The UK’s NHS has been the prime example of this since it was founded (although the recently passed NHS bill looks set to change that). In this system, the government owns the hospitals and directly funds GPs (that’s “family Doctors” in American) out of taxpayers money. Private healthcare is still available for those that want it, but healthcare is provided completely free at the point of use (the NHS has two exceptions – there is a standard charge for prescriptions and a standard charge for dental treatment – neither of which apply for children or those claiming certain benefits, and both of which are quite modest). In 2011, a study found that the NHS was the second most efficient health service.

The second is the state-run health insurance system. This is the standard in mainland Europe. The state funds healthcare treatment, but does not directly run hospitals. These schemes are usually a lot more expensive than the NHS, but often produce better overall healthcare results. In such systems, patients often have to pay upfront for treatment – and some of this money may not be refunded by the system.

The third is the US system. In the US, the federal government funds health insurance for the poorest, the elderly, and veterans. It may also fund part of the health insurance plan for its employees. Everything else is left to private health insurance. Health insurance used to be largely funded by employers, but this kind of benefit is often not available. There is a long history of Americans being denied health insurance due to pre-existing medical conditions. The US system is the most expensive in the world, and the nation does very poorly compared to other rich nations in the vast majority of healthcare statistics. It also causes some unique problems – such as medical bills being the main cause of bankruptcy, and people being stuck in certain jobs (or forced not to work) because it’s the only way they can afford the healthcare they need.

Grudem’s take on healthcare

My main problem with Grudem’s take on the issue is not that he tries to portray the US system as superior to the alternatives, nor that he lets his economy ideology decide his stance on the issue. It’s that his case is based on what, frankly, is a pack of lies.* Here’s a list of them (in the order they occur):

  1. Barack Obama’s healthcare plan was based on the idea that the federal government should control all medical care in the US. The actual reforms they passed simply regulated existing healthcare schemes. Whilst many Democrats would like a government-run health insurance scheme that would provide universal healthcare, that option wasn’t even on the table when the bill was being made.
  2. Free market competition reduces the price of healthcare. Which might be plausible if the two most cost-efficient healthcare systems weren’t Ireland and the UK – two nations in which the government directly runs most of the hospitals – and the least cost-efficient wasn’t the US – which has the most free-market system in any rich-world country.
  3. State control of healthcare leads to rationing, because the government can’t an infinite supply of healthcare. Except, of course, that the government doesn’t need to provide an infinite supply of healthcare. It simply needs to provide enough so that all genuine medical needs can be met within a reasonable timeframe. And services like the NHS usually manage that. If there is rationing in such systems, it is done purely on the basis of clinical need. In the US system, by contrast, healthcare is rationed on the basis of ability to pay.
  4. The quality of healthcare available in the US in 2009 was the best available in the entire world. Which is a claim unsupported by evidence. Given that the World Health Organization ranked them the 37th nation in the world (between Costa Rica and Slovenia) in their 2000 report, that would be a remarkable turnaround. It may be true that some of the hospitals are the best at particular procedures. But if people who need healthcare can’t get access to them, that surely indicates an inferior healthcare system. Grudem’s concern with this point seems to be the idea that letting more people access healthcare would be a bad thing, because the quality of care might not be as good as a result.
  5. Grudem claims that reforming the law around medical malpractice would save $5.4 billion out of the $35 billion that the US spends on healthcare each year. A quick google reveals that US healthcare costs are much higher than that (figures seem to be in the range of $2.6 trillion), and that instead of contributing around 15% of the US medical bill – as Grudem’s figures state – they only contribute around 2.4%. This proposal (the centrepiece of his party’s healthcare proposals) would only have a marginal effect on the cost of US healthcare.
  6. He claims that by making it impossible for US states to prevent their citizens from buying healthcare from another state, costs would decrease. Whilst this may does have a ring of truth, such a measure would mean that health insurance companies relocate to whichever state has the most lax regulation (as has happened in other similar industries in the past). This would inevitably mean that the quality of available health insurance diminishes, and may well mean that people end up having to pay for more of their healthcare out of their own pocket.

Where Grudem is on sound factual ground is that allowing states to charge higher premiums for high-risk customers (such as those with pre-existing conditions) drives up the price of health insurance for the average consumer. However, he fails to note that these are the people most in need of healthcare. If they are priced out of the market for healthcare, then either you have to let them die (the complete opposite of what Grudem established when covering the topic of Euthanasia) or somebody has to provide healthcare for them.

It’s pretty universally accepted that charities can’t meet all the demand (if they could, which means the only option is for the state to pick it up (which is, essentially, Grudem’s stated solution). To put it another way, Grudem’s proposed healthcare system is one where the government provides healthcare for the most expensive patients, whilst private health insurance/healthcare companies pocket the profits from providing health insurance/care for the least expensive patients. And he proposes this in the same chapter as he advocates a low tax/low spending model of government. A more coherent approach to the subject might come up with the idea of cutting costs for the taxpayer by also providing health insurance to the low-cost patients. But Grudem appears to have ruled out this option due to a combination of free-market ideology with his belief that state-run healthcare takes away our freedom.

Right or luxury?

Finally, I admit that neither I nor Grudem actually addressed the question in the title of this post. In rich world countries other than the US, access to healthcare is generally regarded as a right. In any healthcare system that provides universal coverage, it’s pretty much inevitable that this will become the majority view. In a system like the US where universal healthcare coverage will require a major change in the attitude of politicians, it remains a de-facto luxury. Whilst many on the left of American politics do view access to healthcare as a right we should all enjoy, that idea is adopted by very few of the people who could actually make it happen.

Whilst universal access to healthcare isn’t taught in the Bible, most readers of this blog live in societies where it is relatively easy to design a system that will make it happen (most, and probably all, of you live in rich-world countries). Given the Biblical command to love our neighbour as ourselves, it seems to me that the Christian approach to this issue should be to advocate some kind of universal healthcare system. Leaving this task solely to businesses and charities has been proven not to work, so the real question is what model of government involvement is the most effective.

* Whilst I say that these arguments are, essentially, a pack of lies, I don’t think that Grudem is out to deceive anybody. He’s simply believed things that are widely parroted within the political party he supports.

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