The Customer is Always Right - Except where Healthcare is Concerned

The Invisible Hand, Adam Smith called it. A free market, one truly free, presupposes no judgment upon the collective actions of the participants, since that market will necessarily discipline those who overstep their moral boundaries. Smith understood that the Market is actually an expression of Natural Law, and as such comes from God, and is not merely a construct of Man. The construct of Man is the regulated, guided, command market. Socialism is the final expression of an artificial economic construct.

A truly conservative approach to economics does not wield judgment on the participants. Liberals do that. Judgment is rather reserved for those who warp the economy with unnatural interference; government bureaucrats, judges, international agencies, money manipulators like the Federal Reserve. We judge Congress. We judge the President. We judge the IMF. But traditionally we shy away from judging either consumers or providers in our economy (except where those same participants use these corrupt institutions to unfair advantage.) It is axiomatic that the customer is always right for a reason - he is the engine of the whole economic system and ultimately his choices are what drive all economic activity

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Sadly, when it comes to health care, many good conservatives have fallen into the trap of blaming the customer for the problems that are evident in the industry.  Here  is an example of a very sharp conservative falling into this particular trap. Derrick Wilburn, writing  at American Thinker, argues that the problem with our healthcare system is a function of an over demanding consumer class. Wilburn states:

"Want to know the real problem with healthcare "insurance" in this nation? It’s not federal overbearance; not liberty-robbing purchase mandates; not unscrupulous doctors nor pill-pushing pharmaceutical companies. The fact is the real issue is your, mine and everybody's attitude towards health insurance. Or, put more accurately, our misconception of what healthcare insurance is truly supposed to be. The issue is one of mental conditioning. You and I have been conditioned to believe that healthcare insurance is something that it is not. Or at least that it was not intended to nor should it be. We have become conditioned to not be self-reliant but rather to depend upon the system to "take care of us."

While I would agree to a degree, I think this idea is overblown and the author fails to make the case. For instance:

"You smack your car into another and the repair bill comes in at $3,300. You file an insurance claim. You have a policy for the express reason of accidental, catastrophic loss. No one buys an auto insurance policy and then expects the insurance company to cover windshield wiper changes, tire rotation, air and oil filters. You pay for those things out of your own pocket. You are self-reliant for the more trivial, mundane expenses; are insured for the larger, non-routine unexpected ones. Healthcare insurance, however, is the opposite. As is the case in so many other areas of our society, we’ve been conditioned to an entitlement mentality toward healthcare insurance; to believe that we are entitled to something at little or no cost to ourselves. Insurance should be a safety net. Something that’s there in the event the worst should happen; i.e. to cover catastrophic event(s). But instead of being the safety net it was intended to and should be, it has now become a sidewalk. When the mechanic tells you it’s time for brakes and we may as well service your tranny while it's in, what's the first question you ask? When you go to the doctor and she says she'd like to send you to the lab or a clinic to draw some blood and have you pee in a cup so they can run a battery of tests you don't ask the doctor, "How much is that going to cost?" Why don't you ask? Because you don't care. Someone else is paying for it. You're just going to show up at the clinic, present an insurance card at the counter, pay your $20 co-pay and the balance -- how every many hundreds or thousands of dollars that is -- you don't have to worry about. Someone else is paying that."

Here he is demonstrably wrong. Go into any Walgreens and see the aisles upon aisles of over-the-counter healthcare products, the equivalent of an Autozone for your health. What are these other than the medical equivalent of wiper blades and tires? Americans self medicate on a regular basis; doctors and hospitals are for things that one cannot do for oneself or for medications restricted BY LAW. I cannot obtain insulin, for instance, without seeing a doctor no matter how cost conscious I am. As to thinking we are entitled to something at little or no cost, think again. I pay a huge amount for my healthcare coverage. Not just what I pay but what my employer pays (which I then do not receive.) This is not a matter of expecting something for nothing but of expecting my money to be well spent. Under Wilburn’s line of reasoning you would pay your mechanic every month just in case you needed auto repairs but then not have anything done. Nobody is going to do that. This is not the fault of the consumer. It should be pointed out, too, that people try to throw all manner of extras in when they DO make claims to their auto insurance. A friend who is an auto appraiser complains to me fairly regularly about people trying to toss in things that were obviously not caused by their accidents. Health care is no different. As for people not asking the cost of body maintenance, he misses the point; people do not generally expect to keep their cars for 90 years, but they have to keep their bodies. Neglect of car maintenance at worst leads to replacement of some part, but it means death or terrible health if you neglect your body maintenance. And again, the basic maintenance is frequently done at home. If your transmission is grinding you will take the car in, and at worst buy a new one - something that cannot be done with your body. The author continues:

"Right now the healthcare services consumer in American pays only about twelve cents per dollar spent on healthcare services. The other eighty-eight cents is paid by someone else. We see it as being paid ‘by insurance’ but of course the insurance company isn't just coughing that money up, they're paying for it via premiums charged our friends, family and neighbors – "someone else.”'

But that 12 cents on the dollar is probably much closer to what the cost of treatment would be anyway, as the hospitals and everyone else in the business jack up prices to cover the uninsured and the rest of the mandates government imposes, as well as malpractice insurance. The consumer is actually paying the cost of his own care to a large degree. Any time an uninsured person receives treatment his final bill is usually around what the insured person ends up paying out of pocket. And that extra cost is not paid by someone else; you have been paying into the system all along. . It is not free - a fundamental assumption the author is making here. As a society we have to learn to say no, to tell those who choose not to insure themselves that they will not be treated - as we USED to do. Now the government requires hospitals to treat anyone, and the result is jammed ER's full of freeloaders. We have to start telling them tough luck. Nobody thinks it unfair that they have to pay for food, or for clothes, or for electricity. Why is health care different? (Here’s an idea; let’s have hospitals run by charitable organizations for the poor! Oh wait…) The current system is monumentally idiotic, and it is a result of terrible government intervention over decades, as well as restraint of free trade by professional organizations and licensing bodies. For example, a friend of mine has been an RN for decades, and was recently required to go back to school because his undergraduate degree was not in nursing, although he received his RN and has been practicing for literally decades. This is done to enrich the schools and to empower professional organizations, which can keep some people out. But this drives up costs and offers no discernible benefit to anyone. How long was chiropractic care not covered? To drive down costs we need to increase supply and shrink demand. Alternatives to the licensed medical profession should have been encouraged but it was not because it stepped on the professional licensing toes. The numbers of doctors and other care providers was purposely restricted to keep prices high. Malpractice too leads to unnecessary testing which drives up cost. I was in the hospital for eye surgery and the doctor on staff ordered up heart tests for me - although I had just had a battery of them a few months prior. He wasn't going to risk accepting someone else's word about my condition for fear I would sue. And of course insurance is very heavily regulated and there is no portability or across state line competition. These are all examples of a command system, one that thwarts Adam Smith's invisible hand. These things all add together to drive up costs, and insurance companies were never really upset with rising medical prices because it forced everyone to buy their products. Doctors and other medical people weren’t crying in their mocha latte's either. Supply-side economics has always argued that economic problems are caused by imbalance at the supply end of the pipeline. Keynesians blame the consumer (too much consuming’ goin’ on! As  Democrat Ernest “Fritz” Hollings once said. ) If we buy into the argument that health care consumption is what is driving prices then we accept the Keynesian belief system. We buy into the tired liberal notion of limits to growth, of “sustainability”, of an economics that believes in scarcity, rationing, in “fairness” as defined by how thinly one can cut the economic pie.  In no other industry do we blame the customers for rising prices, yet it has become fashionable to do so with medicine. Nobody said the housing bubble was the fault of homebuyers. We diagnosed the problem based on what was driving the home buying - government programs, regulations, and lending policy. Yes, there were plenty of people purchasing homes who had no business doing so, but we rightly blamed policy by Fannie and Freddie, not the purchaser, who was simply doing what customers do. We do not blame drivers for high gasoline prices. We do not blame hipsters for high coffee prices (although it's tempting). The market is what it is and the fault is not in ourselves but in our stars, those luminaries in Washington and the other seats of power who interfere where they should not. Blame is the province of Liberals, who stand in self-righteous moral judgment over everything. Conservatives generally believe in taking reality as it is and working with that. And we believe in Natural Law. The Market has problems because of some imbalance, likely caused by government. It is not the fault of the consumer who is simply seeking to meet his own needs. As conservatives we should not make the mistake of falling into the judgmental trap. And it is bad politics as well; how are we going to sell this to the voters? We should leave righteous indignation to the Liberals.