“What would you do? Just let people die?”

Megan McArdle

“Well then, what would you do? Just let people die?”  Those words were thrown at me the first time I debated a national healthcare program for America, way back in the 1990s. Through all the years since then, I have been hearing some version of them at regular intervals.

During the debate over the Patient Protection and Affordable Care Act (ACA), that question was the ultimate resort of anyone arguing in favor of the law: whatever its problems, it was better than letting tens of thousands of Americans die each year.

There are a couple of shaky assumptions underlying the question. The first is that health insurance does a great deal to increase health and reduce mortality. This seems obvious enough, but it’s surprisingly hard to tease out of the data.

For example, the creation of Medicare, which vastly expanded utilization of health care, seems to have produced no measurable impact on mortality among the elderly in its first 10 years of existence. There is ample evidence that health insurance protects people from financial risk — which isn’t surprising, because that’s what insurance is for. The evidence that it protects people from premature death is less compelling.

Of course, the financial risk is a real problem — a health-related financial disaster can be devastating for families that go through it. But even if we also assume that there are real, and large, health benefits from providing insurance to people, that still wouldn’t mean that the ACA was better than nothing. This is the fallacious syllogism that led America into the Iraq War:

1. Something must be done.

2. This is something.

3. Therefore, this must be done.

And thus we got a bloated, complicated law that still isn’t quite working as planned. Fewer people are insured than projected, the insurance is less generous than be expected, the exchanges are in financial trouble, the federal back end to pay insurers still hasn’t been built.

Worst of all, we’ve locked in most of the features that people hated about the old system: the lack of transparency, the endless battles with insurers over what is covered and what isn’t, the feeling that you are captive to behemoth government and corporate bureaucracies that are more interested in the numbers on their spreadsheets than in what you want out of your health care.

I do think that something should have been done. But not this something. What we should have done is created a system that focused on protecting people from the risk we know they face — catastrophic medical bills — and that sought to preserve the best of the American system rather than the worst — that is, to preserve our endless talent for innovation through markets rather than our decidedly lesser talent for creating and managing massive regulatory bureaucracies.

Government as the Insurer of Last Resort

How could a government program have freed up markets to innovate? Simple: by getting the government to do something it already does decently well, which is to function as the insurer of last resort. Deposit insurance, pioneered by the United States, has basically halted bank runs. Pension benefit guarantees have made sure seniors don’t end up in penury. (The Pension Benefit Guaranty Corporation could be better financed, but that doesn’t mean the idea itself is bad.) FEMA essentially functions as an insurer of last resort for people struck by natural disasters.

These programs introduce a certain amount of moral hazard, as people take more risks and underinsure themselves in the expectation that the government will pick up the tab. But when you look at the devastation these programs have mitigated, it is hard to call them anything but an overwhelming success.

How would a similar program work for health care? The government would pick up 100 percent of the tab for health care over a certain percentage of adjusted gross income — the number would have to be negotiated through the political process, but I have suggested between 15 and 20 percent.

There could be special treatment for people living at or near the poverty line, and for people who have medical bills that exceed the set percentage of their income for five years in a row, so that the poor and people with chronic illness are not disadvantaged by the system.

In exchange, we would get rid of the tax deduction for employer-sponsored health insurance, and all the other government health insurance programs, with the exception of the military’s system, which for obvious reasons does need to be run by the government.

People would be free to insure the gap if they wanted, and such insurance would be relatively cheap, because the insurers would see their losses strictly limited. Or people could choose to save money in a tax-deductible health savings account to cover the eventual likelihood of a serious medical problem.

Advantages of the Insurer-of-Last-Resort Alternative

Of course, anyone proposing an alternative to the ACA, or to the previous status quo, has to be able to say why the alternative is better. In this case, there are three answers to that challenge. First of all, it is dead simple, and the simpler a government program is, the better it works. The ideal government program can be explained to a third grader on a postcard, and this one comes close.

The second reason this is better is that it protects people from actual catastrophic costs better than the existing system, while also being more progressive. Warren Buffett will get nothing out of the system; someone with very little income will have all medical bills paid. No one will have to worry about being slapped with an unpayable bill if, say, an anesthesiologist turns out to be out of network.

But the third and most important reason this alternative is better is that it introduces a key element that has gone missing from health care since third-party payers started to take responsibility for the bills: transparent prices, and consumers who make decisions based on them.

Milton Friedman famously divided spending into four categories, which P. J. O’Rourke summarized thus:

1. You spend your money on yourself. You’re motivated to get the thing you want most at the best price. This is the way middle-aged men haggle with Porsche dealers.

2. You spend your money on other people. You still want a bargain, but you’re less interested in pleasing the recipient of your largesse. This is why children get underwear at Christmas.

3. You spend other people’s money on yourself. You get what you want but price no longer matters. The second wives who ride around with the middle-aged men in the Porsches do this kind of spending at Neiman Marcus.

4. You spend other people’s money on other people. And in this case, who gives a [damn]?

The first category is what produces market efficiency. Unfortunately, almost no one in the system does that. Instead, we have insurers spending their money on someone else, consumers spending someone else’s money on themselves, and the government spending other people’s money on someone else. No one gets what he or she wants, vast oceans of times are wasted fighting over what to buy, and it all costs too much.

Of course, some things are too expensive to get price discipline from this system: organ transplants, very early preemies, many forms of cancer. But there’s little price discipline in those areas now, so we wouldn’t be any worse off. Meanwhile, lots of areas, from hospital beds to the details of knee surgery, would for the first time in decades be subject to the decisions of consumers who care both about getting what they need and about how much they’re spending.

Conclusion

I spent years uninsured in my twenties, and remarkably, I got the best health care of my life, because doctors stopped performing tests and procedures “just in case” and thought hard about what was necessary. I was obviously taking an enormous financial risk, and the government can usefully mitigate that. But I was also an empowered consumer rather than a number in our vast healthcare bureaucracy. A better future for American health care would be one where more people are uninsured and fewer of them are at risk.

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SCOTUS: Some Rights Are More Equal Than Others

What happens when the rule of men supplants Rule of Law? In the case of Whole Woman’s Health vs. Cole, you end up with a Court decision that strikes a severe blow to those who seek to protect the lives of the unborn. The most significant abortion decision in a quarter century is also yet another reminder of the Court’s importance this November.

Yesterday, the Supreme Court ruled 5-3 to strike down a Texas law in its entirety over two particular requirements. First, abortionists had to have admitting privileges to a local hospital. Second, clinics had to meet surgical standards. Both provisions in Texas law were enacted to protect mothers and the lives of unborn children.

Justice Alito noted, “The law was one of many enacted by states in the wake of the Kermit Gosnell scandal, in which a physician who ran an abortion clinic in Philadelphia was convicted for the first degree murder of three infants who were born alive and for the manslaughter of a patient.”

And National Review adds, “Whole Women’s Health, which operates facilities in four Texas cities, was disciplined repeatedly by the state for offenses ranging from failing to have licensed nursing staff at the facility (2007) to illegally dumping medical waste (2011) to using rusty equipment (2014). In 2013, it was cited on 13 different safety-code violations.”

In addition to ensuring that qualified doctors were the only doctors allowed to perform abortion procedures, the Texas abortion law would also have reduced the number of clinics from 42 to 10. The state government had essentially decided that the other 32 locations were unsuitable for medical procedures. Again, Texas was trying to protect mothers and unborn children.

But SCOTUS decided that the restrictions in Texas posed an “undue burden” on a woman’s supposed constitutional right to have unrestricted access an abortion. Aren’t abortion supporters supposed to be worried about “safe” abortions?

Justices Anthony Kennedy, Sonia Sotomayor, Elena Kagan, Ruth Bader Ginsberg and Stephen Breyer delivered the majority opinion, while Samuel Alito, John Roberts and Clarence Thomas dissented. Even a living Antonin Scalia wouldn’t have saved this one.

“We conclude that neither of these provisions offers medical benefits sufficient to justify the burdens upon access that each imposes,” argued Breyer’s majority opinion. “Each places a substantial obstacle in the path of women seeking an abortion, each constitutes an undue burden on abortion access, and each violates the Federal Constitution.”

Following the decision, Obama crowed, “I am pleased to see the Supreme Court protect women’s rights and health today. These restrictions harm women’s health and place an unconstitutional obstacle in the path of a woman’s reproductive freedom.”

And of course Hillary Clinton chimed in, “This fight isn’t over: The next president has to protect women’s health. Women won’t be ‘punished’ for exercising their basic rights.”

Did you catch all of this nonsense? The Texas law violates the Federal Constitution it imposed an unconstitutional obstacle and women’s basic rights won’t be punished.

Exactly which Constitution are these people reading? To be abundantly clear, there is absolutely nothing in the Constitution that secures or provides a woman’s ability to take the life of her unborn child. Period.

Writing in a blistering dissent, Justice Thomas maintained that the majority’s decision “ignores compelling evidence that Texas' law imposes no unconstitutional burden.” Thomas also objected that the decision “perpetuates the Court’s habit of applying different rules to different constitutional rights — especially the putative right to abortion.”

He went further, writing, “The Court has simultaneously transformed judicially created rights like the right to abortion into preferred constitutional rights, while disfavoring many of the rights actually enumerated in the Constitution. But our Constitution renounces the notion that some constitutional rights are more equal than others. A plaintiff either possesses the constitutional right he is asserting, or not — and if not, the judiciary has no business creating ad hoc exceptions so that others can assert rights that seem especially important to vindicate. A law either infringes a constitutional right, or not; there is no room for the judiciary to invent tolerable degrees of encroachment.”

There is a constitutional right to keep and bear arms, and rights to free speech, due process and private property, among others. Statists go out of their way to impose restrictions and regulations on those rights. But in this case, the black-robed despots declared that Texas cannot impose regulations or restrictions on a right that previous justices created out of thin air.

The majority opinion also addressed the argument that new regulations from Texas would prevent misconduct. Breyer wrote, “[T]here is no reason to believe that an extra layer of regulation would have affected that behavior. Determined wrongdoers, already ignoring existing statutes and safety measures, are unlikely to be convinced to adopt safe practices by a new overlay of regulations.”

If that is the case for abortion, then why doesn’t the Court consistently apply the same reasoning to restrictions on the right to own firearms, or due process, or religion?

Sadly, the Supreme Court’s decision is a severe blow for Texas and those across America who fight for life. And the decision will most likely open up new cases against other states that have passed similar measures. Conservatives in Texas lost this battle, but the war is far from being over. The next battle is the presidential election, which will decide who nominates the next justice(s). Don’t underestimate the importance of the future composition of the courts.

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For more blog postings from me, see  TONGUE-TIED, EDUCATION WATCH INTERNATIONAL, GREENIE WATCH,  POLITICAL CORRECTNESS WATCH, AUSTRALIAN POLITICS, and Paralipomena (Occasionally updated),  a Coral reef compendium and an IQ compendium. (Both updated as news items come in).  GUN WATCH is now mainly put together by Dean Weingarten. I also put up occasional updates on my Personal blog and each day I gather together my most substantial current writings on A WESTERN HEART.

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