What Kind of Good is Health Care?
Until we as a society come to some consensus on what category of good health care falls under, we probably won’t settle on a permanent system for paying for it. The question we have to answer is whether we should treat health care as a private good, a public good, or something of both. Our contemporary debate over health care costs rests on this question.
At present, we envision health care mostly as a private good, though we have mechanisms in place to decrease the number of people excluded from access to the good because of their inability to pay for insurance coverage or the health care services themselves. The Affordance Care Act was designed to further decrease the number of people without access.
The call for universal healthcare, especially for a single-payer system that covers the costs for everyone, is a call to treat health care more as a public good—as a good that is non-rival and non-excludable. Of course, even in such a system, health care services would retain properties of a private good: an individual provider has only so much time in the day and can see only so many patients. The ethical core of universal healthcare, however, is the principle that we as a society have the obligation to make health care universally available and to take efficient measures to ensure that no one is excluded from receiving health care services.
To speak perhaps simplistically, it is an economic mistake to consider heath care simply as a public good, but a moral error to treat it simply as a private good. While justice demands that we approach health care as a public good and strive to make it universal, economics insists that we remember that it retains some properties of a private good, even in the most just of all systems.
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If the argument is that healthcare should be considered a public good, on the ground that justice or charity demands that no one who needs it should be denied: Then why not also make food, clothing and shelter public goods?
Food, clothing and shelter (FCS) are even more basic necessities than healthcare, since strictly speaking you only *need* healthcare when you’re sick or injured, but you need FCS on a daily basis.
Why not have everyone pay into a federal plan (the Affordable FCS Act) which ensures that everyone is fed, clothed and sheltered, and compel everyone to register with this plan and have all FCS obtained through the plan?
To reiterate: I consider healthcare a good with both public good and private good characteristics. Short answer to your question:
1. We’re doing a better (though by no stretch of the imagination perfect) job at providing for food, clothing, and shelter needs than we are people’s healthcare needs.
2. There’s a big difference between the associated costs. It costs a lot less to provide an individual with food, clothing, and even shelter than, say, cancer treatments.
Kyle,
As you correctly note, in economics a public good is something that is nonrival (i.e. it doesn’t cost more to provide it to an additional person) and nonexcludable (i.e. if you provide it at all you have to provide it to everyone).
Clearly health care is not a public good in that sense. It is possible to provide health care to some people in a society but not others (as the current system proves), and providing it to each additional person increases the overall cost (as the current system proves).
I’m not sure what you mean when you say that “justice demands that we approach health care as a public good.” If health care is a rival and excludable good, what sense does it make to say that justice requires us to approach it as something it is not? Denying reality, in addition to being very costly, is presumably not a demand of justice.
In the sense that, morally, it should be (in a sense), even if economically, it isn’t. That’s why I say “approach” rather than “treat as” or “treat as if it were.” I’m fishing for a new term here, one that may already exist. Thoughts?
What does it mean to say that morally a good should be nonrival and nonexcludable? I don’t get it.
I mean that there are some goods that while economically private, ought morally to be available to all without rivalry (to the extent possible) and exclusion. Perhaps common goods would be a better term.
Kyle,
Look, suppose someone were to say “I admit that people get sick due to disease. That shouldn’t happen. Therefore, I believe that morally we should approach health care as if people didn’t get sick.”
Hopefully we can agree that this would not be a good response to the problem of health care. That people get sick is a fact. It cannot be condemned out of existence, and acting as if it were not a fact is not going to be doing anyone any favors.
Similarly, health care is a rival good. This is a fact. Saying that it shouldn’t be rival won’t make it non-rival (not even a little bit). Acting as if it were nonrival won’t make it nonrival, and will in fact have horrible consequences.
What I’m after is a system in which we can simultaneously meet the needs of all those who require health care. That’s the sense in which I want healthcare to be a non-rival good, though, as you are probably getting irritating at pointing out to me, strictly speaking, health care as provided by individuals, is a rival good.
Kyle,
A good’s bring nonrival is neither necessary nor sufficient for its being adequately provided to all members of society.
Why not just say that health care is not a public good, but that this doesn’t mean the government shouldn’t have a role in ensuring all citizens receive adequate health care?
I really do see your point. But please let me play devil’s advocate.
So then, you’re saying things should be public goods when “we” are otherwise not doing a good job of providing them for all persons, and when they’re expensive for individuals. To me this sounds like an ad hoc basis for defining something as a “public good”.
Military forces and police and a criminal justice system, to me sound like natural public goods, because revelation itself tells us that governments are given authority by God to do those things. I don’t see revelation naming governments as bearing responsibility for providing for the needs of individual citizens. Rather, scripture over and over admonishes individuals to act justly and provide for other individuals who are in need.
Further, I submit that we have a chicken-and-egg scenario here. The reason cancer treatment is so expensive is *because* of government funding of healthcare. It’s government funding that enabled such expensive treatments to be invented and provided to large numbers of people in the first place.
So there is a cycle: Government funding encourages the development of expensive treatments; then government funding is demanded as a right because it’s the only way to pay for expensive treatments. But what if government had never gotten involved in healthcare? Then these treatments would never have become so widespread, and people would not be using them as justification for demanding government funding of healthcare.
The question, when approached as a matter of principle (and not on an ad hoc basis), is not, are treatments so expensive that they can’t be afforded other than through government funding, and therefore gov’t needs to fund them; but rather, should government ever have gotten involved in healthcare treatments in the first place.
Back before government got involved in funding healthcare, expensive treatments were less common and there was therefore less demand for them. Was there then, at that point in time, a moral need for government to get involved so that more expensive treatments might be developed and made widely available?
In other words, if it’s the expense that causes healthcare to fit the criteria for a public good, then during the time before it became as expensive as it is now, did it then fit the criteria for a public good? Or was it more in the category of FCS?
I thought JP2 got rid of the devil’s advocate. ;-)
Assuming the means used to further the development of medicine and healthcare technology are not immoral or grossly imprudent, the social obligation, in my view, is to do what we can to improve the care of health, both for individuals and systematically. My position is that health care is something approaching a public good, and while not a public good in a pure economic sense, but a good that is due to everyone and to which we as a public have an obligation to resp0nd. I classify food, shelter, etc. the same way, only they don’t pose the same financial difficulties. As I said to Blackadder, I’m on the lookout for a term other than public or private to classify these goods.
Agellius,
If nothing else, I appreciate your observation that we now have life saving medical treatments thanks to government action. Yes, without government, health care could well be as cheap as the price of leeches!
Kurt:
Yes, but that’s kind of my point. When people had to pay their own way — or rely on charity hospitals when they could not — prices were controlled by how much people could pay. Since costs were limited in that way, the availability of treatments was also limited.
Now, availability of treatments is much less limited — but so are costs. Because the government — and not only the government but also insurance companies — have such deep pockets, the limits to what they can afford to pay are sky-high. This is the reason for the more widespread availability of expensive treatments, but also the reason for the endless rises in insurance premiums and MediCare costs.
Customers demand expensive treatments be available, so the companies oblige by providing them. They don’t care because all they have to do is raise premiums to cover the costs. The government also doesn’t care, because all it has to do is raise taxes (or deficits) to cover the costs.
Meanwhile, the people care because their premiums and taxes (or deficits) are going through the roof. But instead of blaming themselves for demanding the most expensive treatments be available to them, they instead complain that other people ought to cover the costs: Namely the government, and mainly by taxing the rich.
Yes, expensive treatments are wonderful (sometimes at least), but unaffordable premiums and unsustainable government deficits are not. It sounds harsh to say that we need to cut down on available treatments in order to save money. After all how can you put a price on health? But reality dictates that there has to be a limit somewhere.
IMHO, even “government healthcare” (realize that may not be a perfectly accurate term, but let’s just use it on the assumption that everyone knows what I mean) will not solve this problem. If it works as its proponents believe, the larger pool of people paying into the system may bring prices down for a while once it gets into full swing. But eventually the economics that have been at work for the past half-century will catch up to it: People will keep insisting on having the most expensive treatments available to them, and costs will have to rise in order to pay for them, no matter how many payers there are. So basically we will just be postponing the inevitable: we will get lower premiums for a while, but eventually they will rise back up to current levels, and beyond.
We have two choices: Limit available care in order to keep care affordable; or else have unlimited care and go bankrupt. The beauty of having people pay their own way, was that costs were controlled by the market. It was not anyone’s job to say “We can no longer provide CT scans at the drop of a hat because they’re too expensive.” Instead that decision was made by the “invisible hand” and no individual person was to blame for it.
As it is now, someone needs to say that, but no one is willing to take the blame. So costs go up and up with no end in sight, and we try to cook up schemes to somehow pay them. But there has to be a limit somewhere.
“I thought JP2 got rid of the devil’s advocate. ;-)”
That’s pretty funny for a philosopher. ;)
I think of health care in terms of limited right and commodity. There is a basic level of health care to which all are entitled (i.e. routine health care, basic medications, immunizations etc.) Then there is a level others may choose to pursue (cardiac bypass, transplants, higher level medications etc.) How to supply those do not necessarily require public provision but may allow it. Don’t know how this relates to your public/private good divide.