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Health Care: The Road to Rationing

Health Care: The Road to Rationing

7 Min.
August 10, 2009

A half-century ago, when the American medical care system was largely free and voluntary, and people regularly called it “the world’s finest medical care,” the advocates of the welfare state were able to converge on a strategy.

They told people that they had a “right to health care.” Every argument and

proposal for “national health insurance” (then called “socialized medicine” by its opponents, who had seen the complete takeover of medical care in Britain) included, as a basic premise, the merely asserted “right to health care.” The moral premise was nailed into place, the only issue was implementation.

The “right to health care” sounded vaguely benevolent and caring. How can one ignore a sick neighbor? Of course, sick neighbors were not ignored. Doctors and hospitals routinely provided care, free of charge, to the indigent: not the most expensive care, but basic, sound treatment.

In fact, however, the “right to health care” was revolutionary, in the precise sense of that word. It turned the concept of rights in the Declaration of Independence on its head. The rights to “life, liberty, and the pursuit of happiness [or property, in another formulation] were rights to freedom of action—to live as one chooses, act as one chooses, and keep the results of one’s work. The “right to health care” had nothing to do with liberty or freedom of action. It implied that anyone and everyone was morally entitled to the services of doctors and nurses, the care provided by hospitals, the drugs developed and sold by drug companies, the services of a nursing home—all without concern for whose work made these possible, at what cost. The “right to health care” made irrelevant who would provide the services, who would pay.

How can one ignore a sick neighbor?

A “right” is not a right if ensured at the discretion of the provider, it cannot be the result of voluntary action. That would be a privilege. A right is a guarantee; in American parlance, rights are absolute and inalienable. Someone has to be forced to deliver and pay for services to which there is a right; choice must be eliminated.

The philosophical hijacking of the concept of a “right” paid off in the political realm. In 1965, during the first administration of Lyndon B. Johnson, a protégé of FDR who sought to extend the New Deal with the Great Society, Congress passed and the President approved both Medicare and Medicaid, guaranteeing free medical and hospital care to all Americans over 65 years of age, whatever their income or wealth, and to Americans defined as below the “poverty level.”

[ Video below: CBS News shares historic recordings of L.B.J. discussing his efforts to pass Medicare and voicing concerns that support would dwindle if people knew the projected costs of the program. "He kept trying to lowball the estimates."]

To get this legislation enacted past the opposition of the then-powerful organizations of physicians, such as the American Medical Association, Medicare simply offered to reimburse doctors and hospitals for the care they provided to elderly individuals: send the bill and the government would pay it. For a few years, this provided a windfall for doctors and hospitals, who had been giving a great deal of charity care to elderly and indigent persons who could not pay.

The “right to health care” turned the concept of rights in the Declaration of Independence on its head.

With all medical and hospital care now free to anyone over 65, or below the “poverty level,” the cost of medical and hospital care to government rocketed past all estimates of the cost of Medicare. Initial cost estimates were exceeded by 100 percent, 200 percent, 1,000 percent, and today are projected, by sober actuaries, to portend the bankruptcy of America as the population over 65 keeps increasing. Yet, those over 65 now fiercely defend their "right" to free care, and, recently, in their name, organizations such as AARP demanded and received the addition of prescription drugs--said to be the single most expensive bill ever enacted in this country. At the same time, the demand unleashed on the medical and hospital care systems by Medicare and Medicaid helped to drive up the cost of medical and hospital care for everyone at a rate faster than almost any other category of good or service.

From the start, government tried to control the costs of medical and hospital care by rationing that care. One of the earliest attempts was the system of Professional Standards Review Organizations (PSRO), through which government-created panels of doctors decided what medical and hospital care was and was not medically justified. Then came the craze for government-created or government-favored health maintenance organizations (HMO). Many, many rationing schemes followed.

From the start, government tried to control the costs of medical and hospital care by rationing that care.

Such rationing was part of the iron logic of the “right to health care.” If there is a “right to health care,” then government must be its upholder—as it upholds traditional natural rights to life, liberty, and property. Therefore, government must pay for the care. But a valuable good that is offered for free is demanded in unlimited quantities. Why should you do without any type of care—treatment, prevention, enhancement—if it is free? Given what the government is now paying for Medicare, and projections of population growth of those 65 and over, the government’s financial obligation in future years exceeds any possible source of funds. Government must decide who gets what care, when, and how much.

The stumbling block to government attempts at rationing care has been the continued existence of private insurance companies. Individuals know perfectly well, from their conversations with friends and relatives about that favorite topic, health and medical care, what is available. If certain services are provided by private health insurers, the government cannot get away with denying them, or rationing them (limiting them), for the large and politically powerful group of elderly persons on Medicare.

The stumbling block to government attempts at rationing care has been the continued existence of private insurance companies.

The only answer, politically, is to put all medical and hospital care under one payer—government. That is the thrust of the Obama administration’s new bill to move toward the complete government takeover of health care. Of course, private insurers are not outlawed in the bill; instead, the government would become a major health insurer in competition with private companies. But with government providing insurance subsidized by taxes, borrowing, and the unlimited capacity to print money, who would win in this competition? Soon, there would be only one payer.

Republicans and some Democrats are now fighting this aspect of the bill, proposing, instead, some kind of nonprofit organization that would provide health care insurance to those unable to obtain it elsewhere.

But the underlying direction is clear, as it has been clear from the day that the advocates of the welfare state introduced the concept of a “right to health care.” If everyone has a “right to health care” that only can mean a right to the state-of-the-art health care available at any given time. Because no government can afford to pay for everyone to receive the truly best medical and hospital care available, health care must be standardized, defined by government, and doled out in equal measure to all. This is the exact meaning of the proposal to tax companies that provide “Cadillac” health insurance to pay for the services that the bill would provide to those who cannot afford health insurance.

In effect, the “right to health care” will be achieved by rationing available care among all comers—those who can pay and those who can’t—so that all are equal. Of course, the equality will be achieved by averaging down—farther and farther down, as time passes. But in this way, the concept of a “right to health care” can be realized by the logic that everyone is getting the same care--at whatever level a debt-loaded, tax-gobbling, technically bankrupt government can afford. But first, the availability of private care must be ended.

The “right to health care” means everyone is getting the same care--at whatever level a debt-loaded, tax-gobbling, technically bankrupt government can afford.

Less than 50 years after the battle cry “the right to health care” was introduced by the welfare statists, their bogus claim to the moral high ground has virtually overcome all principled opposition to socialized medicine. Only the details are now under discussion in Congress. With the passage of the Obama bill, serious rationing will begin, with the lines waiting for hospital and medical care, with the trips out the country (but to where?) to obtain desperately needed care, that have become every day life in Britain, Canada, Sweden, and other havens of socialized medicine. There already are many systems, waiting in the wings, for determining what are the statistically highest-payoff diagnostic and treatment procedures--what will yield the average best results for the average patient. A high-priority consideration will be the average number of years of life a procedure will buy, which will make expensive treatments for older patients a bad bargain and a target for severe rationing.

Behold the long-term power of morality, the appeal to moral principle, in determining the course of a country’s freedom or destruction of freedom. The only principled opposition to the “right to health care” in the 1960’s came from Objectivists. The single best article refuting such a right appeared in the prestigious New England Journal of Medicine. The author [Robert Sade*] was a physician who was an admirer of Ayn Rand.

Without the irresistible long-term power of a rational moral code, the government takeover of medical and hospital care—complete, bureaucratic, and as innovative and compassionate as government bureaucracy—cannot be resisted. Today, the only arsenal with the firepower to prevail in the moral war for genuine rights and freedom is the philosophy of Objectivism.

*Robert Sade also published a piece in the Journal of Medicine and Philosophy, 33: 461-497, 2008, on " Foundational Ethics of the Health Care System: The Moral and Practical Superiority of Free Market Reforms ."

Walter Donway  previously served as editor (until 2002) of Cerebrum: The Dana Forum on Brain Science for the Dana Foundation, where he was director of the Dana Press. He has published dozens of articles on the economics of health care regulation in Private Practice, Medical World News, and Human Events. He has been a trustee of the Atlas Society since its inception.

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Walter Donway
About the author:
Walter Donway

"Walter's latest book is How Philosophers Change Civilizations: The Age of Enlightenment."