As a paramedic, I see the failure of health care in the United States on a daily basis. I see people continually fighting a system designed more to deny them care, and extract their money, than a system designed to treat their injuries and illnesses. I see people afraid to go to the hospital because they know they have no way to pay the thousands, or tens or hundreds of thousands, of dollars it will cost. I see people struggling with their illnesses because they cannot afford the drugs they need to function. I see the elderly spending their time sitting aimlessly in “assisted living” facilities that are more like warehouses than homes. People who are not living, but who are merely waiting to die (while their wallets are systematically drained). Health care in America is not working. It is not working because it is designed not to work.
Why? Because is has been misnamed and its energies misdirected for the profits of the few and at the vast expense of the many. America does not have a health care system, it has a money transfer system.
How has this happened? Intentionally and with malice aforethought. The system has not been designed to deliver health care. It has been designed to deliver profits, no matter how many people suffer and die in the process.
Why has this happened? Because of a slavish obsession with and worship of “the marketplace.” The mistaken and/or self-serving belief that every thing, every human action and interaction, can be, and should be, understood in terms only of a marketplace.
Health care is not a marketplace. Logically, morally, and ethically it cannot be.
The flawed premise of American Health Care
Health care in the United States has traditionally been viewed through the lens of capitalism and “free market” forces. The presumed goal of all actors (people who take action, not people who perform for a living) within the health care marketplace, from minimally-trained home health aides to world-class doctors at the most prestigious hospitals, is to generate maximum profit. The outcome of this profit-generating process, according to this theoretical model, will be the best allocation of health care resources and optimum public health outcomes: More healthy people.
The failure of this approach is in the fact that the provision of health care does not take place in anything like a marketplace in any meaningful sense. This paper will show how the principles of the marketplace do not and cannot logically apply to the provision of health care.
Let’s begin with a few simple definitions.
What is a marketplace?
To begin to deconstruct the myth, we must first describe a marketplace. In The Wealth of Nations, Adam Smith posits a dynamic force which governs the marketplace: An “Invisible Hand” which describes a set of unintended benefits which accrue to individuals within a marketplace acting solely out of self interest. As Smith describes it, “By directing that industry [an individual’s work] in such a manner as its produce may be of the greatest value, he intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention.”
The butcher, the baker and the brewer (as Smith describes his three generalized economic actors in his theoretical 18th century marketplace) acting out of self interest alone, produce goods and offer them for sale in the marketplace. Their participation in the marketplace ensures that the brewer has bread, the butcher has ale and the baker has meat. All their lives are bettered because the “invisible hand” guides their self-interested actions to accrue benefits for all. Says Smith, “It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own self-interest. We address ourselves, not to their humanity but to their self-love, and never talk to them of our own necessities but of their advantages.”
Beyond self-interest, the marketplace is driven by Want. This is the idea that, if an individual wants something, he or she must be willing to work for it. If the desired thing is of greater market value, he or she must be willing to work harder or more efficiently for it. Without want, a marketplace cannot exist. A marketplace that sells only those things people do not want, or a marketplace whose customers want nothing, is not a marketplace. This is key to the health care marketplace model’s flaws.
Supply and demand
Supply and demand are the key forces in determining the market price of goods and services within the marketplace. The principle is simple enough to understand: The demand for any good is dynamic. For example, in the summer there is little demand for heavy coats while, in the winter, everyone wants one. When there is a poor harvest of oranges, the price of orange juice rises because the existing supply cannot meet the existing demand. Sellers know they can ask more for their goods and reasonably expect to get the higher asking price: e.g. If ten people want a glass of orange juice and there are only five glasses, some people will be willing to pay more for a glass, increasing the dynamic market price. On the other hand, some people may be willing to have a glass of water, or some other beverage, thus preventing a non-market circumstance of scarcity or monopoly to exist.
Monopolies and scarcity
When there is too little of a good to go around, or when a commodity is controlled by single entity or cartel which can manipulate supply to artificially drive up prices, market forces can no longer function as intended. The marketplace model falls apart and market rules can no longer apply; the invisible hand becomes as intangible as it is invisible. Markets are not immortal, inevitable or sacred. They are subject to abuse, manipulation and criminal activity.
A marketplace can not function within monopoly control because those holding the monopoly have no incentive to serve the needs of their customers either by lowering prices or making a better product, two of the primary ways that competitors gain advantage in a functioning marketplace. No economist would, therefore, ever suggest that monopolistic circumstance constitutes a marketplace. Antitrust laws exist to regulate companies and prevent the formation of monopolies for this very reason.
In instances of scarcity, famine or other disaster, society rightfully rejects the actions of “profiteers,” individuals who would use dire circumstances to inflate prices and make large profits off the suffering of others. Society recognizes, through its laws and morals, that times of hardship are not marketplaces and other rules must apply.
Buying a pig in a poke
The admonition against buying a pig in a poke (a “poke” is bag) is based on the understanding that, until the bag is opened, you cannot actually know what you have bought: Is it even a pig? In marketplace terms, one cannot assess the value of a given good or service without knowing its nature, without knowing what you are buying. The principle of informed consumerism is another key factor in determining the existence of a real marketplace.
Without verifiable knowledge of the nature of what one is buying, one cannot make informed choices as a consumer. This is why we have consumer protection laws that prevent marketers from offering fake or fraudulent goods. A seller cannot lie about the nature of their product, its contents, hazards, or its effects and side effects. Nor may they offer you one thing, take your money, and provide another.
Consumers cannot determine the value of something they cannot understand. I may offer to sell you a widget that is purported to turn lead into gold, but unless you know how the widget is supposed to work, you cannot make a rational decision about whether it will work, what it is worth to you, or if it is worth anything at all. Some may be willing to gamble on the hope of easy riches (and thus the preponderance of get-rich-quick schemes and hucksters marketing “I can make you a millionaire” plans), but rational consumers will want to know a great deal more about the widget before they spend their hard-earned money on it. A seller who cannot provide substantiation of their beneficial claims is rightfully, and often legally, regarded with suspicion.
Choosing not to buy
Even knowing what you are buying, even when wanting to have the item offered, in order for a true marketplace to exist, the option must be available to choose not to buy. I may want a plasma television, may even be able to afford it, but choose not to buy it for reasons of my own, or no reason at all. This is a point with the utmost importance in the marketplace model.
If I can be compelled to purchase something -- when the seller can, metaphorically or not, hold a gun to my head -- such a transaction can no longer be ethically or logically seen as taking place within a marketplace model. Even if the compulsion is not initiated or controlled by the seller -- he sells, for example, antidotes to poison -- but arises from secondary circumstances -- I have swallowed poison -- the threat of death or physical harm removes the transaction from the realm of the marketplace into the realm of extortion. This is why medical care must, by law, be provided in emergency situations. A doctor or EMS worker may not, ethically or legally, turn away a patient in distress.
Not everything is a marketplace
However one describes the basic workings of any marketplace, the core methodology is two-fold: (1) producers create goods which are offered to the public for sale, and (2) the public, wanting those goods, chooses to buy them or not.
When either of these foundational principles are lost or do not apply, we can no longer be said to have a marketplace and the rules of the marketplace do not and cannot apply. Insisting that only a “market” can describe everything on earth is childish and, frankly, delusional.
Many circumstances exist in which no “market” can or should be applied, or even ethically or morally imagined. What profit does a person make from their children? From their religion? From their love for their friends and family?
Any person who tried to sell their children for profit would be justifiably condemned (and arrested). Can you imagine the reaction if a person started to brag that they made a fortune off their kids’ forced labor in the coal mines last year? And that they’re thinking of having a few more children to expand their cash flow?
In matters of religion, society justifiably condemns preachers who exploit religion for their own profit and power (not that this stops the religious hucksters). Even on a personal level, would you change your religion in exchange for money? How much would you ask to become an atheist (really, truly an atheist, not just take the cash and sneak around on Sundays praying on the sly)? If you are a Christian, what would you charge to genuinely become a Muslim or a Jew (is such a conversion even possible?) And how could you prove you had returned actual value-- actual religious conversion -- for the money?
What would you think of a person who clearly and regularly exploited his friends for personal profit? Would you be friends with such a person? Could such a person even have real, actual friends?
Not every human situation or interaction is, can, or should be described in marketplace terms. By trying to shoe-horn the ideology of a “market” into circumstances in which the functional realities of a market do not and cannot not apply, one is not only engaging in sophistry, one risks causing genuine harm and hardship to society. And to themselves.
Disaster capitalism
When a disaster strikes: famine, invasion, pandemic, flood or other natural disaster, people instinctively understand that, “You’re on your own!” is not a moral or ethical option. People justly condemn profiteers and hoarders and do-nothing government. People look to each other and to their government (which ought to be just another name for “each other”) for solutions that save the lives and property of as many people as possible.
As our society looks at the possibility of novel pandemics, ongoing climatological disruption, and the dangers of terrorism causing wide-spread disruption, responsible, rational people eschew the idea that government should sit back and do nothing.
Ethical individuals would never suggest that hospitals and doctors should increase the price of treating disaster victims because, since demand is rising, enormous profit can be had by raising prices in the face of increasing demand. If a doctor stood in front of the emergency room and asked for bids for services, treating only those who could pay up right now and only the highest bidders, he would likely be lynched. People instinctively know that such behavior is reprehensible. Such “market” prescriptions are justly condemned as being cruel, immoral and unjust.
Why the marketplace model does not work in health care
Given these basic descriptions of the marketplace and its rational, moral and ethical functions and constraints, it is now possible to examine the reasons why the marketplace model does not and cannot apply in designing a fair, moral and ethical program for the provision of health care.
Nobody wants cancer
It is inconceivable that anyone would choose to suffer from a horrible disease. No one has ever said, “Wow! I got a bigger bonus than I thought I was going to this year, now I can finally afford that heart attack I’ve always wanted!” Disease is not, by any stretch of the imagination, a “want.”
Rather, disease or injury is thrust upon us unexpectedly, without our desire or consent. This inevitably renders the common mechanics of the marketplace inoperative. If one has a heart attack, one can hardly ask the ambulance crew to shop around for the best doctor at the lowest price. Even when one has more leisure to treat a disease -- various forms of cancer or other debilitating illness which do not kill immediately, for example -- one is often in the position of simply not knowing what the best course of action is and must rely of the advice of physicians.
The option not to buy medical care often is effectively non existent: buy or die. What’s more, at least in emergency situations, society actively prevents you, with all the legal power at its disposal, from choosing to forego life-saving care if your injury or disease is immediately life threatening, or threatening to others, such as with a communicable disease. In such cases you may be compelled to accept care -- even to purchase care -- even when you may have specifically requested or demanded not to be cared for (yes, things like “Do Not Resuscitate” orders exist, but most people presenting to an EMS worker or ER doctor do not have such orders and, therefore, the presumption of consent to medical treatment exists if the patient is in extremis. As a paramedic, I can hardly be expected to wait for you to wake up and tell me whether you want me to defibrillate you. If you’re in cardiac arrest, you’re gonna get shocked).
What’s more, an emergency results in a patient’s presumed “right” to care, under which a patient may demand services or goods which the physician seller cannot, legally or ethically, refuse to provide. You cannot be turned away from an emergency room or by a paramedic on scene. It is justifiably against the law: You must, by force of law and morality, be treated.
Again, both of these instances result in a circumstance in which market forces, and therefore market rules, can not and do not apply. Logically, if you cannot refuse to buy and I cannot refuse to sell, no functional marketplace exists.
Caveat Emptor
“Let the buyer beware,” is a classic Latin admonition against trusting the seller of any good or service. It is always wise to examine the thing you are buying, and inform yourself of the quality thereof, before you hand over your money. Unfortunately, this is seldom a viable option when buying health care. Absent an extensive (and expensive) medical education coupled with (at least) several years of practical experience, a layman cannot possibly know whether to trust a physician or a recommended course of treatment (no matter how many hours you spend poking around on WebMD).
The special status of doctors and other health care providers arises from the ancient admonition that doctors will provide care based upon their patient’s need alone. Such an obligation to provide care is a core value of medical ethics. As noted in the original Hippocratic oath (ca. 4th century BCE):
“I will prescribe regimens for the good of my patients according to my ability and my judgment and never do harm to anyone.”
Other similar oaths, such as the Declaration of Geneva and Nightingale Pledge, taken by nurses, say pretty much the same thing. All presume that the doctor’s or health care provider’s first duty is to the patient, not their own pocketbook. Note that medical ethicists do not suggest that doctors are obliged to provide care at no cost, only that they are obliged to provide care. It is the presumption that such an obligation exists, that the care provided will be ethical and professional, and that the physician will, according to the well-known admonition, “First, do no harm,” that places doctors in a special class of trusted sellers.
We must trust the doctor to act in OUR best interests before his own. If a doctor abuses the trust placed in him and prescribes fraudulent or unnecessary treatments, tests, and/or medications, or intentionally provides inadequate and/or improper care -- or no care at all when he is obliged to do so -- he is legally and ethically subject to sanction, loss of license, and even prosecution and imprisonment. How can it be otherwise? We place in him our trust when we are at our most vulnerable: Sick, injured, even dying. The violation of that trust is a despicable act and is justifiably condemned at all levels. To violate that trust for personal or corporate profit is no less despicable than to violate it for spite, bigotry or any other reason.
In no other marketplace are we expected to simply rely on trusting the seller to do the right thing. Medicine asks us to place doctors and other health care providers in a special, trusted class of sellers, yet often demands their “business model” be treated in purely market terms, much the same way as selling a can of peas. This is ridiculous on its face.
Extortion is not health care
Any ER doctor or paramedic could make a fortune by simply waiting until a patient presents with a possible heart attack or life-threatening injury, and then offer to intervene only in exchange for the patient’s life savings: Just sign here or die. Under such duress -- the fear of immanent death -- who could say no? Society and law condemns such crass profiteering, and justifiably so. Any medical provider who tried to engage in such immoral and illegal acts would lose their license to practice and, possibly -- almost certainly, face prosecution and jail time. If not a lynching.
And yet such behavior is common in actual, real marketplaces. Sellers wait until demand is high, then charge what they can get. Buy low and sell high. The art market is a case in point. People who own valuable works of art exploit and manipulate the marketplace to get the highest possible return on their investments. And this is perfectly reasonable. Why? Because no one is going to die if the painting does not get sold or if someone “over” pays. The art world is a marketplace. Health care is not.
At this point, it should be obvious that I am not arguing against the morality of marketplaces in general. I am not a communist or a socialist. And I am not making the standard anti-capitalist, anti-market argument. I do not argue against marketplace models, I am simply pointing out that they do not and cannot logically, morally or ethically apply to the provision of health care.
Patients are not “consumers”
It has become fashionable to describe patients as “consumers of health care” who will be more “careful” of how their “health care dollars” are spent if they are more active in the purchasing process; that is, if they have higher “insurance” premiums, higher deductables, and less comprehensive insurance, forcing them to pay out of pocket for more (or all) of their health care. This is a cruel sophistry. As has been already noted, most patients are incapable of determining whether the treatments they are being offered are valid or helpful. They must trust the doctor to do what is right, not what is personally profitable.
Consumer choice is a staple of any marketplace. When you want to buy most products, a car for example, you have a range of options to fit most incomes and life styles. But not everyone can afford what they might want. You may want a BMW, or a Maserati, but be forced to settle for a Honda. Or a bicycle. This common principle of marketplace consumer choice does not exist in health care. There are some who might liken the provision of health care to the provision of food: people get sick, people get hungry. No on wants to be hungry. But, just as with cars, there are many foods available and one need not go hungry unless one is in dire straits. And in such cases, the denial of food to the starving poor is every bit as unethical and immoral as the denial of medical care.
In health care, the variety of available services, such as exist in food stuffs and material goods like cars, means almost nothing. If you need a coronary bypass, you cannot rationally tell the doctor you’d rather have an appendectomy because it’s cheaper. If you need cancer treatment, you cannot accept -- and a doctor cannot ethically offer -- a cheaper, ineffective treatment. He cannot simply tell you to, “Take two aspirin and call me in the morning" to treat your pancreatic cancer. There is no such thing as consumer choice in health care. When you need a given treatment, you do not have many alternatives.
You must buy or die.
While you may be able to find a cheaper surgeon to perform a given procedure, there are not so many doctors around, nor hospitals with open operating rooms, that you can truly “shop around” and dicker over price. Besides, Doctor A is simply likely to say that he is better than Doctor B and therefore deserves more. Who are you to argue? Again, you are not a doctor and really have no basis for counter argument.
And, finally, if your condition is immediately life-threatening, you may not have the option of shopping around at all; you may need surgery, or other treatment, RIGHT NOW.
Again, the common mechanism of “consumer choice” within a marketplace simply does not and cannot apply to the provision of health care.
There is no “marketplace” in health care
Want, effective application of supply and demand, the basic understanding of what and why we are buying, and the option not to buy, do not exist in the provision of health care. While we may want to be cured, we do not want the disease to begin with. While doctors may diagnose us and inform us of their findings to the best of their ability, we cannot know without an extensive medical education and experience that their prescriptions are the right ones. We must trust them and have good reasons to trust them. Doctors must act in our best interests, not the interests of hospital shareholders and not the interests of their wallets. When demand for medical care rises, we cannot (and oddly enough make no attempt to) simply manufacture more doctors, nurses and EMS personnel to increase supply to meet the demand. Yet the law requires that all those needing or demanding care receive it, and doctors cannot, willy-nilly, raise their prices to take advantage of scare supply. The option to buy or die is not a viable market choice. Consumer choice is a fairy tale used (or, rather, abused) to justify the cynical exploitation of sickness, injury and misery for profit.
None of the precepts of an active, rational, functioning “free market” apply to health care. When the principles of one circumstance do not describe the reality of another circumstance, one cannot logically describe the latter as an instance of the former. I can call my dog an automobile, but I cannot rationally expect to drive him to work. Calling the provision of health care a “marketplace” does not make it so. No matter how much you cross your fingers, click your heels together and wish, wish, wish it were so. By any definition of a marketplace, a health care marketplace does not and cannot logically, morally or ethically exist. And it does not. It’s long past time to abandon this foolish, flawed and dangerous idea.