While it broke the then political noise level some weeks back, discussion on welfare state never took off in a satisfying manner. PAS was the one that rolled the ball but apart from rhetoric and how Islam advocates a welfare state, actual details have been sparse and it is unclear how much thought has gone into the proposal. That notwithstanding, an idea of a welfare state almost always involves an establishment of a universal health care program to at least provide subsidized health care to all citizens. While the goal of universal health care is noble, it is not necessarily the perfect or even a desirable policy, with all things being constant.
Again, the goal of the policy is admirable. It is really hurtful to witness sick individuals unable to gain access to drugs or health facilities because he cannot afford it. Kantian categorical imperative may work to force us to provide the needy individuals with help. Universal health care policy provides us with just the tool we need to answer our conscience and absolve our guilt by doing supposedly the greatest good for the greatest number of people. Categorical imperative or not, validly utilitarian or not, it is wise for us to take a step back and consider a weakness of universal health care program — by implication, welfare state as well — before we jump off the ledge into a possibly 10 feet deep dry pool.
Universal health care does little to encourage healthy behavior. The rationale behind this relates to one essential lesson in economics: people respond to incentive, perverse or otherwise. Smoking is a clear example of this.
There is a number of health risks associated with excessive smoking of tobacco. With a universal healthcare system in place, smokers do not have to overly worry about treatment cost. This takes away the disincentive to smoke. Indeed, smokers do suffer when their health is adversely affected but they do not terribly suffer due to availability of modern and effective subsidized or even free treatments. Pain is a strong incentive to stop smoking and universal health care takes away that incentive.
In many cases, it may already be too late for those that have finally paid the price. The younger generations on the other hand have the opportunity to learn from others’ past mistakes. The availability of a free health care system however fails to emphasize the adverse effects of smoking and so, offers limited lessons to learn from. When the young observe that their elders do not suffer too much from smoking, they recalibrate the weight between gratification from smoking against its associated future increased health risks. These rational individuals do so because the welfare state policy encourages them to favor enjoyment derived from smoking and discount the associated health risks.
Such system is often funded by public resources. Riddles of high maintenance cost await a system that happily provides free treatments but falls terribly short in preventive measures.
In purchasing typical health insurance, one of few questions that affect premium calculation revolves around tobacco: do you smoke? If the answer is yes, the premium would go many notches up to match uncertainty — or really, increased certainty — linked with smoking. In a system which the risk cannot be compensated, it will struggle to keep up with demand in the long run and somebody will have to pay for it. When the giant collapses, I pray that I will not be there.
A compulsory health insurance scheme may partially solve that problem but that involves coercion. As a libertarian, I do not favor it. Besides, not everybody requires the kind of insurance offered by that scheme.
Admittedly, scenarios involving tobacco smokers in a universal healthcare system is somewhat specialized. There are individuals that suffer diseases right from birth and their behavior may not be adversely affected by a universal health care. Yet, there are other cases that run parallel with smoking such as over-consumption of sugar or cholesterol and crucially, those cases illustrate how skewed cost and benefit created by a universal health care system adversely affect judgment and only to eventually undermine the system itself.
Lesson?
A universal healthcare system, much like other welfare state policies, does not target the root cause of the problem. In hope to achieve immediate good rather hastily, it distorts incentives and causes greater problem in the future. Is that the kind of system worth investing in?
5 replies on “[1550] Of a weakness of universal healthcare program”
I can understand Hafiz Noor Shams’ argument. In fact he uses the argument based on the American (US) context.
I do understand how the market is supposed to work to ration goods and services (static) and how it would promote production and development of the goods and services (dynamic).
But should we think “health market” operates in the same manner as the market for housing let say….?
Or to make matters more extreme does buying health products and services the same as buying a sports shoe?
Or let say….Does buying health products and services the same as buying a car?
Unlike sports shoes and houses and cars, the consumer don’t have have the power to choose the goods and services they want.
When you are really sick – do you have the choice to choose which medical provider to go to? If you have debilitating disease, do you have the knowledge to choose the doctors which provides the best yet affordable consultation. Do you have the knowledge of which drugs and medications to buy?
Conceptually there are many elements of ‘public good’ in health services – and the market fails when it comes to public/ welfare goods.
And the result – perhaps we should look at the health-crisis facing America today!
Dear moo_t,
Again, tobacco smoking is just an example. I’ve mentioned other similar scenario involving overconsumption of sugar and cholesterol that enable the same consequences to unravel. Banning usually does not work. Would one ban consumption of sugar in hope to build an healthier society?
I find that is unacceptable.
And what do you mean by those subscribed to private medical insurance are covered? Public insurance does exactly the same thing. In fact, all kinds of insurance suffer it. Discussion of insurances and free healthcare however are two different issues.
On bias toward profit and inadequate investment, that is easily compensated through competition. Those that fail to modernize will lose their customers. In a universal healthcare system, there is really no competition and service level will drop.
Talking about “medical benefit migration”, I believe that is a non-starter argument. Else, why people are migrating to the US when their home country offer universal healthcare? Are the people migrating permanently to say China or Saudi Arabia because of universal healthcare system there?
If there is any “medical benefit migration” at all, in absence of evidence, it is probably low and probably overpowered by other factors like better opportunities, liberty and security. And insurance offered by company is different from a subsidized healthcare system. It is offered by the company as and you don’t pay for it. That is unlike a public healthcare system where you have to pay for it through taxation or involved some form of coercion. There are two different issues in two different structures and scenarios that should not be confused.
Hmmm, I think all end up to philosophy.
In fact, the ciggies issue is just a point of hypocrisy. In fact, banning the cigarettes will solve the problem. Alas, the government wants the tobacco tax, and the tobacco planter also need the industry. See the problem of hypocrisy.
To the contrast, the privatize medical insurance has more flaw than advantages. The tendencies towards PROFIT. And it doesn’t promote healthier life either, since people who are “covered”, will assume everything is cover. Worst, when hospital start maximize profit, capital investment on general health care will degrade. Since someone must acquire the expensive equipment somehow, so which parties will acquired the equipment except the public funding hospital?
Bare in mind the so called utilitarian method has ignore the dependencies nature. Take economy for example,it is nice to have super profitable conglomerate than many small SME. But we learn that it is not the case. Both are complimentary.
And indiscriminate universal health system are mean to compensate in the similar matters. “Medication benefit migration” is not uncommon, EVEN in USA. It is rather hilarious the state and company with better medicare benefit are able to attract more professional. Many professional start realize that better pay might failed to compensate the medication cost!
You are missing the point. The issue here is skewed cost and benefit. The point is that people may have little disregard for their health if treatment is available cheaply or freely.
Other issues that run parallel with smoking is consumption of sugar, salt and bad cholesterol. Smoking is just an example.
And no. Government is not necessarily against liberalism. Government is against anarchism and not all strains of liberalism, classical that is, or even libertarianism are fully against the concept of government. The minarchists for one support the existence of a government/state, albeit a small one.
And no, formation of government/state is not necessarily for welfare. In fact, rather, in classical liberal or libertarian tradition, it is to enforce individual rights and be the neutral arbiter of rights conflict and has nothing to do with welfare. The government/state is the enforcer of a social contract based on individual liberty. It has nothing to do with welfare, unless, if you understand the concept of government from leftward perspective. But obviously, there are other views of government, as I have stated above.
And taxation? That is coercion. Besides, some people don’t really care for their health. Why should we tell them what to consume and what not? Would like a tax on sugar, salt, etc for health purpose too? I don’t and will oppose.
In fact, taxation on cigarette is so it, it encourages other activities like smuggling or even consumption of fake cigarette, which is more dangerous.
In conclusion, the problem with universal health is that it encourages the bad side even more, with all things being constant.
IMHO, smoking is a bad excuses not to implement the universal health care.
Like utilities, a government denies the universal rights for utilities using excuses of “not cost effective”. After all, government itself are AGAINST the real spirit of liberalism. So when a body is in place to take care the general welfare, then it must mean it. Otherwise, there is no reason for government to exist.
In addition, the issue of smokers can be easily counter. Isn’t the heavy tax levy on the cigarettes already did its part? Don’t forget, the government also tax the tobacco company. Do you think the taxation are not “heavy” enough to compensate the medicare?