A European’s Letter to America on Healthcare

Over the next week, I’ll be very closely reading Watching America.com, the site that translates foreign news about the USA, to see how the world will react to Congress’s historic vote on healthcare.

The general failure of the American healthcare system, in terms of both failure to deliver quality healthcare to all of society and, despite this, the huge amount of money spent, has boggled the minds of citizens of other developed nations for years.

Most of the rest of the world will probably see today’s vote as a move of America toward common sense. And well it may be, but sometimes “common sense” is more common than it is sense.

As someone born in the U.K., a country with a “single-payer” healthcare system that is founded on the principle, “Healthcare should be free at the point of delivery”, I would rather be sick in the U.K. than in the USA. That’s because I don’t have health insurance – and that’s because the cost of catastrophic health insurance – the only type I would consider, since I don’t wish to insure what I can underwrite myself – would be so high for me here that I (uneasily) prefer to take the gamble of not having it. The gamble is more of a calculated risk as I am very good with diet and exercise. Of course, I can imagine being in a car accident, but for now at least, I cannot imagine getting that sick.

The fact that I would much rather be sick in England than the USA today would make a hypocrite of me if I were to say that the American healthcare system of yesterday was better than England’s socialized system.

I’d rather be sick in England than in the USA because here, without insurance, I would have to pay for my healthcare just as I pay for my food, and I resent the fact that in the States, I would have to pay massively more for treatment than the provision of that treatment really costs. I would be paying inflated prices because of the complete lack of market forces in health care delivery in the U.S.: the overwhelming cause of the outrageous costs of medical care – which explains the fact that the USA spends more than twice what is spent by most other developed nations – is that the person who consumes the care has no incentive to shop for value for money, because the employer buys the insurance with money that the consumer never sees, and the insurance companies pays for the care with money that the consumer never sees. This decoupling between the consumer of a product and the entity that pays for that product eliminates price competition. It is unique to the healthcare industry and the massive difference between health care costs and prices directly reflects it. Deliverers of health services hike prices as they know insurers will pay (and also indirectly pick up the tab for those uninsured who never pay). Insurers price their premiums accordingly to cover these inflated prices, and we have a vicious cycle. Meanwhile, as prices fail to reflect costs, those who do not have an employer to cover their insurance premiums are faced with having to buy from this artificially inflated insurance market if they are to have any healthcare at all…

And so 62% of bankruptcies in the United States are “medical bankruptcies” – a term that doesn’t exist anywhere else in the civilized world. Out of nothing more than sheer humanity, that is a damned shame; that it should be so in the “richest” nation in the world is a damned damned shame. On that point the Democrats are correct, and of course the U.S. has to do something about this. But since the first-order cause is obvious, the first thing that should be done to solve the healthcare crisis in this country is to eliminate its cause – and let the free market operate. It is the U.S. government that is historically responsible for this situation that rewards the provision of healthcare insurance by employers to their employees. The entity that caused the problem today moved to solve it. Progress? Perhaps; but they used the same tools in both cases.

To be clear, since I am a “victim” of the current system (mess), as I am not an employee, I stand to gain from the law passed tonight.

And yet, as an immigrant and lover of this great nation, I feel sad today.

I immigrated to America is because it is America. Or rather, because it is America. And the USA had today (and has had for decades) a choice about how to solve this problem. It chose a very un-American solution, and a sub-optimal one.

Food, for example, is as essential as health care and no one would countenance socializing its delivery on principle. It is the free market in groceries, which includes farmers, refrigerators, distributors, retailers and many other moving parts, that has made food affordable for all Americans: most of the poorest Americans, including those on foodstamps, are not poor by global standards or even by standards of other first world countries. The free market works when it is allowed to optimize the efficiency of allocation of resources to deliver a product. If the product does not do what it says on the tin, the provider goes out of business and someone who can deliver a better product or at the very least the same product more competitively will rightfully gain from meeting the needs of the consumer. This force alone has been and continues to be responsible for lifting more people from poverty than any other. Markets for every product and service that are not government-related benefit from these simple dynamics – which would include healthcare if only the government would get out of the way and undo the massive historic distortions they allowed to stand for years in the health system of this country, indirectly killing thousands.

Today’s passing of healthcare will improve things for people like me, and certainly in the short run, but it is a massive lost opportunity for America in the long run.

The new healthcare bill will not damage people directly and immediately. It probably won’t bring down the standard of healthcare in the U.S., and on average, compared with last week at least, it may well indeed make it more “affordable” – but only because it is taking arguably the most distorted market in the USA and distorting it according to a more coherent – one might even say, higher – vision.

Superficially, then, the Democrats are likely to be right: the American people will actually like it when they get it. And therein lies the problem: that is exactly what has happened in every nation that has introduced it. You’ll have to look hard to find a nation that would give up its socialized healthcare. (That is why this decision can never be undone.)

The problem with socialized healthcare is not with what the healthcare system does at the point of delivery – since if you spend enough money on a thing, you can probably make it work o.k. It is what it does to the bigger picture. That big picture is Big Government and in the long run, that is what takes down the nation. And on that, the Republicans are right.

Look at Europe. Twenty-seven former democracies, most of them “social democratic”, have become so numb, so used to giving away their liberties and giving up their responsibilities that on 1 Dec 2009, by the enactment of the Lisbon Treaty, their political classes gave away their sovereignty to a supra-government called the European Union, a fundamentally undemocratic body that now makes most of the laws for the constituent former-nations. When government becomes the solution to everything, eventually people believe that more government means more problems get solved.

Lest this sounds unbelievable – because surely you’d have heard of all the riots as the British, the French, the Germans etc. marched in the streets at the elimination of their historic and proud countries – consider that you didn’t hear about it because people didn’t even march. They accepted. And lest that sounds unbelievable, consider the British grocer who went to jail because he sold his produce in pounds and ounces, because those are the measurements that his customers understood. It is not an urban myth. A man went to jail under European law, that seeks to homogenize its 27 provinces under, among other things, the metric system. He went to jail in a country formerly known as England.

Can the USA expand its government this much into the lives of its people and not end up where the Europeans have? Perhaps. But only if it takes the greatest of care. Today’s decision is an identity-changing one for the land of the free. I’m telling you now, because you may not see it until it’s too late, as it is in the country of my birth.

The National Health Service of the U.K. consumes more than twice the country’s defense budget. That won’t become the case in the U.S. because it cannot, but it gives some sense of how today’s vote will change the U.S. in the long-run. If, in a generous reading, today’s vote is really the “last great unfinished business” of America, as the late Ted Kennedy wrote, then the USA will do well to take him at his word, and agree that the last great work of government has finally been done – and now get on with the greater work of putting the government back in the chains of the Constitution – chains from which it broke free long ago, and today left far behind.