Socialism and Medicine

Both free enterprise and socialism have their shortcomings, but a joining of the two is a marriage made in hell. This is what we have in the US today. The offspring of this union is an abomination. Many other examples may be shown, but the medical care industry is a good case in point where the joining of socialism and free enterprise has created an impending disaster.

It started as a typical socialist question, "How would you like to be old, destitute and in need of medical care?" (The bait is cast.)

Then you must answer, "I wouldn't like that a bit." (You take the hook, bait, sinker and line.)

"Then why don't we do something about all these suffering and dying old people? You do want to help them don't you?" the socialist pounces, "All we need to do is have the government pay for their medical care."

In the first place: To suffer and die is part and parcel of growing old. No amount of money or care will change that. All it can possibly do is prolong that part of life that is not much fun. From a species welfare standpoint, would not the money be better spent somewhere else?

Secondly: From birth, people know they will be old someday. They know full well that they should be arranging for their own care, and that they should take good care of their health.

Thirdly: Are there cultural and economic side effects that should be taken into consideration? As you will see, the effects are severe and many.

And fourth: Is socialization the most efficient way of doing it? The answer is, of course not. Even if paid to design a more inept system to do anything, no one could possibly design one.

A victim has been created though, one that must be serviced. If anyone should question the side effects, he would immediately be branded as mean-spirited, vicious, cruel, a hater of old people, one who is insensitive to someone else's pain, etc. Besides, the government will pay for it and everyone knows that they have a lot of money. The interesting part about the socialist/liberal way of thinking, is that there is no lack of victims for whom huge programs must be begun. In fact the best way to take the spotlight off the last fiasco is to be always generating a new one to shift the public's attention. Everyone alive has a problem. In some way everyone is a victim of some sort of hardship and unfairness. Fighting to survive has been man's lot since the beginning.

In the free enterprise economic system, man struggles to produce. If a new product is born, it can create a new market. It has been estimated that each dollar spent on a product will generate about nine dollars in the GNP. It pays for salaries and goods that in turn generates other sales and labor. These dollars create wealth that in turn brings a higher living standard for everyone who produces. In socialism, man struggles to allocate resources fairly. Each dollar spent in socialized programs subtracts from the GNP. Its spiral is cut short by the costs of administration, and often helps keeping someone from producing. These dollars are not the result of creating wealth but of slicing it from somewhere else.

Having said all these true things, the fact remains: Old people at the point of greatest medical need are also at the lowest earning point of their lives. The public has an obligation to alleviate that suffering. Still, to lavish unbridled care on all, whether needy or not, is a stupid decision. What should be done may be described in two sentences: Those that are needy should receive help. The help given must be needed. This service may be public supported but should be administered locally so that both requirements may be more easily verified.

So Medicare was born. In its original form it was a government socialization of the medical needs of the elderly, paid for by the government (don't give me this stuff that they pay part of it out of their social security, both social security and Medicare are paid by the government and come from taxes). And no hardship qualification is required. And the establishment of need for the service is not required. And no limit is placed on cost.

Medicine had been free enterprise until that point. Even medical insurance (a voluntary form of medical socialization) was scarce and expensive. The relationship between the doctor and the patient was both personal and economic. Since the patient was spending his own money, he was frugal. Since the doctor received his income directly from the patient, he was personable in his service and caring in his approach. He was also careful not to overcharge.

The big mistake made was that economic and cultural changes that would result from Medicare were not considered.

A culture is a set of behaviors. All human behaviors are the result of instincts modified by intellect. Changing one element of a culture affects all others. In a sense, any change to a culture creates an entirely new one. A list of interactive elements within a culture would be quite long (the result is called a simulation). One has never been made (it would now be possible, however, with modern computer equipment). When a change is proposed, especially one so large as the move toward the socialization of medicine, at least gross analyses of the interactive effects should have been made.

A free enterprise system is based on supply and demand. A balance is reached between the sector of our society that creates goods and services, and the consumer of those goods and services. The mind-set of the consumer is that he will buy only if the quality/price ratio is high. The mind-set of the producer is that of discovering the proper quality/price ratio so that he may sell his product. This system has feedback that drives the quality/price ratio to its optimum point.

In a socialist system, the consumer is allowed those products and services decreed by the proper decision body. The cost of producing the goods and services is not relevant (one of the reasons they all go broke). The individual has nothing to say (except by vote, if then) about the quality or amount of the goods and services he receives. The producer of the goods and services is not paid by the consumer, so he has no incentive to produce a quality product. Since there is no feedback on his cost, the cost inevitably drifts out of control. The result is a system that produces poor quality, poor service, and at a high cost.

If a socialist system is placed over a sizable portion of a free-market economy, the result is economic and cultural chaos.

Another Big Mistake: It is assumed that the amount now being spent may be used as a basis for determining the project cost. In fact, there are so many other factors adding to the cost that the original cost is probably incidental.

Suddenly, medical service becomes almost free for the elderly. The government provides the money. Private enterprise provides the product. Old people have many aches and pains. They are also lonely and feel discarded by life. A trip to the doctor becomes a new part, a new interest, of life. Conversations with friends begin with a recitation on the number of medicines taken and the amount of surgery during the past year. The amount of medical service demanded jumps by a huge factor.

People, who would otherwise pay their own way, join the gravy train. Without a requirement of being economically needy, anyone who qualifies for free medical care is silly to pass up the opportunity not only to get free medical care but to get many services he would not require if he had to pay for it out of his own pocket. Even more strain is placed on the medical service and the taxpayer's pocketbook.

The local con man sees a lucrative opportunity. Anytime the government is paying the bill, fraud enters the picture. It has been estimated that between 7% and 10% of the bill for Medicare is payment for fraud.

Doctors need a little extra to pay for that new Mercedes. The government refuses to look at this problem. The AMA is a powerful political force. Reporting obvious doctor fraud to the government is a waste of time. Doctors charge for services not rendered. They cooperate by calling each other in on cases where they are not needed. Often they do not even show. They own laboratories where they send work that may not even be required. They own hospitals where a $10.00 aspirin or Band-Aid is common. There are obvious conflicts of interest, to which the government is blind. Doctors under free enterprise made house calls, and were noted for their bedside manner. When the government started paying Medicare, all doctors suddenly had no need for such stuff. Since the desired price schedule for all medical services is invariably (anyone getting money from the government becomes insatiable) half of that allowed, the problem is solved by spending half as much time with a patient, and stacking patients in the waiting room for hours to ensure a steady flow through his production line. This sharp dealing, reminiscent of lawyers or used car salesmen, adds enormously to the cost.

Added together, all of these factors cause an enormous upsurge in annual cost of care. From a national average of a few hundred dollars per year per senior citizen, it has become several thousand per year. In a free enterprise system, this is seen as a huge jump in demand. Prices rise accordingly, adding even further to the cost. Drugs are suddenly in demand. In a supply and demand society this means surging costs.

The most expensive way to do anything is to hand it to a bureaucracy. Their cost is added. Bureaucrats are experts at economic razzle-dazzle. Since it is not their money, their accounting system is bizarre, to put it kindly. As a result, no one knows what the real costs of the Medicare bureaucracy are. Estimates from an added 25% to 35% of total cost have been made by experts in the field. But, there are also hidden governmental costs. For example: Medicare requires considerable congressional and executive branch maintenance effort. The limousines and chauffeurs servicing these people when working on Medicare alone cost a nice piece of change, let alone the costs for these people, their staffs, and all of the little perks picked up along the way. In addition, one should allocate a percentage of the costs of IRS for collecting the taxes, the justice department for bringing Medicare offenders (what few they bother with) to justice, etc.

So far, this discussion has been on factors that directly relate to Medicare costs. These direct costs include the doctors, staff, hospitals, drugs, fraud and waste.

A huge bureaucratic force is required to administer Medicare. Since bureaucrats have no accountability, their work is complex, slovenly and slow. In addition, their pay is high, their perks are expensive, their retirement is lavish, they enjoy every conceivable holiday, they have two hour three martini lunches, 30 days sick leave and 30 days vacation off each year, plus any other time they can wrangle. They also tend to come to work late and leave early, Their main job is to create work, so they can justify their own existence. They do this by generating paper work and otherwise harassing the working people. They not only add their own cost to the Medicare, but their interference creates costs in the medical industry. All of this adds to the overall cost. On top of that, though, their jobs are a significant part of the labor costs in the overall GNP, which raises the labor rate for the entire nation. Industry must compete with their pay, perks and generally easy life style. The taxpayer then picks up the tab on this hidden tax every time he buys anything.

There are also insidious hidden costs. For example: Outside purchase versus in-house production is always a big part of the planning in the manufacturing industry. As long as the make-or-buy decision is in an open market, it is quite valid to use market competition to hold overall manufacturing costs down. The automotive and aircraft manufacturing companies will often buy half or more of their total manufacturing costs. When the government is footing the tab, however, this outside purchase of goods and services is more often taken for convenience rather than price control, and the resulting costs are much higher. Customary three-bid-quotations are dispensed with. The supplier is able to gouge due to lack of competition. The government picks up the tab. The taxpayer pays through the nose. Look at the hospital of today. There are hundreds, if not thousands, of service groups sharing in the pie.

So the taxpayer pays for the medical care, the overhead government costs, the increased labor costs across the nation, the fraud and insipid price gouging, and the increased cost for his own medical care, since it is now in competition with the government project. Since medical costs have now increased beyond his means to save for a medical emergency, he must now pay an additional fee for medical insurance to protect himself and his family. That raises his medical costs at least another 25%.

Suddenly medicine became big business. Wall Street got into the picture. The cold war government/big business alliances moved across the street and set up new shops in the health care field. HMOs became predominant health care providers. Huge alliances were made.

Meanwhile the patient is getting a lot of money spent on him, but he is now no more than raw material in a new factory. They process him through, and collect big bucks.

Then we added Medicaid.

And now we are talking about universal health coverage.

Before Medicare, we had many old folks who had health care problems. After Medicare, everybody has a health care problem.

A large part of the medical industry is now run by bureaucrats. All bureaucracies have two characteristics: 1. Cost of service will climb, 2. Quality of service will fall. When faced with a shortfall, schools always threaten to let teachers go, police departments threaten to let police officers go, etc. Both of those institutions have been around awhile. Their bureaucracies are well established. Most schools could not cut 10% off their budgets without letting all of the teachers go. The expense of attending a college or university is spiraling, yet rare is the class taught by a professor. That same thing is happening in the medical industry. The result of the socialization of a large part of national health care has produced a new wealthy class. However, patients are seeing less and less of the doctor and more of the head nurse or practitioner. As with other bureaucratized functions, cost will continue to spiral while service will continue to decline.

Saving enough during one's life work to hedge against old age medical problems was difficult before Medicare. Instead of Medicare we should have attacked that as the main problem and then stood willing to fill in if needed. Because of Medicare, saving enough is now impossible. Instead of helping a victim, we have created many, while losing entirely the notion that saving is a virtue.

Free enterprise is a self-healing process. The marketplace provides the correction. Socialism has no correction process. It starts well, but it is all down hill from there.

The drive toward socalized medicine, of which medicare and medicaid are the first two steps, appears to be more of a political process than a humanitarian one. The spectre of old people without adequate medical care is the facade, hiding a spear thrust into a capable society, rendering it helpless in the face of inevitable economic failure. We had the foremost medical system on the face of the earth, far superior to those in socialist countries. We now have a ravenous, insatiable monster devouring our resources, while degenerating our ethics and virtues. What better way to drive a nation to its knees, making it more vulnerable for a socialist coup?

Now add social security, welfare, and a socialized education system teaching only socialism, and the future looks grim.

All socialist projects are money transfers from one group to another. Social security transfers money from the young to the government and the old, as does medicare. Welfare and medicaid transfers money from the healthy and energetic to the inept, sick, lazy and again the government. With every program the government gets fatter and gains more perks.