Jewish World Review May 7, 2003 / 5 Iyar 5763

Thomas Sowell

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Consumer Reports

"Universal health care": Part II | Whenever I hear about how many Americans do not have health insurance, my usual response is to wish that I were one of them.

That does not mean that I want to continue paying taxes and insurance premiums without getting the benefits. It means that I would rather pay doctors and pharmacies directly, without sending the money through bureaucratic channels in the government and the insurance companies, with all the restrictions and red tape that bureaucrats produce.

Neither bureaucracies nor red tape is free. So we are talking about my having to pay more money for things I don't want, rather than paying just for what I do want, namely medical care and prescription medicine.

What about catastrophic illnesses that can be as devastating to your life's savings as it is to your health? That is one of the legitimate uses of insurance, to guard against the unforeseeable. We have automobile insurance for the same reason -- but our automobile insurance does not cover gasoline or oil changes.

"Universal health care" means insuring against the trivial and the catastrophic alike. Most of us have no problem with buying insurance to cover catastrophes. But it is a waste to have us drawn into a bureaucratic maze, in order to cover routine things like annual checkups or occasional antibiotics.

Like so many welfare state programs, government health insurance is based ultimately on an implicit assumption of getting something for nothing. I must confess to a certain grudging admiration for the fellow who said, "The government has its own money." At least he made explicit what is only implicit in others.

If the government indeed has its own money, and is gracious enough to spend some of it on me, what is there for me to do but express my thanks and get on the gravy train? On the other hand, if the government has only the money that it takes from the rest of us, how are we better off to have to pay not only for what we want but also for all the hoops we have to jump through to get it?

Just as there is no free lunch, there are no free hoops.

Some believe -- contrary to all evidence -- that the government can provide things cheaper, that it can "bring down the cost of health care," for example.

Virtually everything that the government does costs more than when the same thing is done in private industry -- whether it is building housing, running prisons, collecting garbage, or innumerable other things. Why in the world would we imagine that health care would be the exception?

When people talk about the government's bringing down costs, what they really mean is that the government can impose price controls. But bringing down costs is wholly different from not allowing those costs to be paid in full.

Price controls have a history that goes back for centuries in countries around the world. Their consequences have long been known by economists, though not by enough voters to prevent politicians from bamboozling them.

Keeping prices lower than they would be under supply and demand produces shortages, quality deterioration, and black markets -- whether the price that is being controlled is that of food, housing, medical care or innumerable other things. (Anyone who is interested in how this happens under rent control can read pages 22 to 32 of my book "Basic Economics"). [Click on link to order. Sales help fund JWR.]

The only difference with medical care is that the consequences are more disastrous. Shortages mean more time sitting in waiting rooms and less time in doctors' offices. It means more time on waiting lists before there is someone available to perform surgery.

Under the British government's health service, for example, more than 10,000 people waited more than 15 months for surgery. These included a woman whose cancer surgery was postponed so many times that it finally had to be cancelled because the cancer had become inoperable. Meanwhile surgery was performed to provide breast implants for a 12-year-old girl. Third-party payment reduces the need to set priorities.

Similar horror stories can be found under government health care systems in countries around the world. But such facts will never come out, so long as the public and the media continue to accept pretty words and unsubstantiated assumptions.

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JWR contributor Thomas Sowell, a fellow at the Hoover Institution, is author of several books, including his latest, "Controversial Essays." (Sales help fund JWR.)


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