Do we have a right to health care or a free college education?

The following quote has often been attributed to Benjamin Franklin. I am not sure who said it, but it certainly fits with the aim of the founders relative to our rights:

“The U.S. Constitution does not guarantee happiness, only the pursuit of it. You have to catch up with it yourself." --

Lately this word has been thrown around quite a lot. Politicians under pressure to shout about a right to a “free college education” or a right to healthcare. What do we mean by the word “rights?” Who has them? Who is obligated to see that the right is fulfilled and not infringed upon? Many of us first heard the word “right” as it was used in the Declaration of Independence; we have the right to life, liberty, and the pursuit of happiness.  Let us consider this word “right” as we use it in four ways:

Claim right:  A claim right is a right which entails responsibilities, duties, or obligations on other parties regarding the right-holder. If I hold the “mineral rights” to my property, then I must be paid by someone who expects to extract these minerals.

A liberty right or privilege, in contrast, is simply a freedom or permission for the right-holder to do something, such as freedom of speech, press or assembly. There are no obligations on other parties to do or not do anything. I can show up at “Speaker’s Corner” in London and talk about anything from the demise of the earth according to the Mayan Calendar to monetary policy in the US.

Natural rights: Natural rights are rights not contingent upon the laws, customs, or beliefs of any particular culture or government, and therefore universal and inalienable; are rights which are "natural" in the sense of "not artificial, not man-made.”[i] They're sometimes called moral rights or inalienable rights.  John Locke (1632–1704) proposed that there are three natural rights[ii]:

• Life: everyone is entitled to live once they are created.
• Liberty: everyone is entitled to do anything they want to so long as it does not conflict with the first right.
• Estate: everyone is entitled to own all they create or gain through gift or trade so long as it does not conflict with the first two rights.

Legal rights, in contrast, are based on a society's customs, laws, statutes or actions by legislatures. Legal rights are sometimes referred to as civil rights; the right to vote, serve on juries, etc.

Many people in politics and government routinely refer to healthcare as a right. If healthcare is a right, who is obligated to give you healthcare? How did you earn this right? What are you giving in return? In 2009, John D. Lewis, PhD, at Duke University wrote:[iii]

“…the very idea that health care -- or any good provided by others -- is a 'right' is a contradiction. The rights enshrined in the Declaration of Independence were to life, liberty, and the pursuit of happiness. Each of these is a right to act, not a right to things...”

Professor Lewis elaborates further:

“These two concepts of rights -- rights as the right to liberty, versus rights as the rights to things -- cannot coexist in the same respect at the same time...To reform our health care industry we should challenge the premises that invited government intervention in the first place. The moral premise is that medical care is a right. It is not. There was no 'right' to such care before doctors, hospitals, and pharmaceutical companies produced it. There is no 'right' to anything that others must produce, because no one may claim a 'right' to force others to provide it. Health care is a service, and we all depend upon thinking professionals for it. To place doctors under hamstringing bureaucratic control is to invite poor results."

While the political rhetoric sounds good when the politician declares that we have a “right to health care” or a “right to a free college education,” we should be on guard. Who is obligated to pay for this positive right in our society, a society based on the protection of liberty for the individual?

Government cannot give you anything unless they take it away from you or someone else first. Shouting for free stuff is treading on the liberty of your fellow citizens.

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[i] Natural Rights: http://en.wikipedia.org/wiki/Natural_and_legal_rights

[ii] John Locke on natural rights: http://en.wikipedia.org/wiki/Natural_and_legal_rights

[iii] Aug. 12, 2009 Huffington Post article "Health Care, Why Call It a 'Right'?" by John David Lewis

Mystery of Language in Health Care: Prices or Costs?

       Health Care in the United States has a language that is very different from the rest of us. David Goldhill has referred to this as “island speak” in his wonderful book, Catastrophic Care.  Goldhill discusses the use of the word “cost” in place of the word “price” and maintains this choice of language is purposeful: “The distinction isn’t just a linguistic one— with “cost” serving as a polite synonym for “price.” Calling costs “prices” would recognize that they are in fact the industry’s active and calculated responses to incentives created by us.

        So what? Goldhill observes in the same year that gas prices went up 1200 dollars for the average American household, we had a national outcry for action to find out what was wrong. Congress had hearings with the major oil companies summoned before House Committees. Our government wanted answers! However, health care costs increased $1110.00 for the average American household in the same year and there was not a peep of protest; it all seems so inevitable; these “costs.” Prices on the other hand have an evil hand at work. More recently, when oil prices plummeted and gas prices followed, there were no calls to find out what evil was at work behind this scheme. Apparently, the market is only a problem when prices are going up.

 

       The use and misuse of the word costs provides good cover. Many providers and others have no idea of what their costs are in the US health care system. Historically, since the US government took over 40% of the health care system in 1965, this has not been necessary. The large hospital systems have learned to overcharge on their “charge masters,” then the patient surrogates, insurance companies and CMS, tell the providers what they will pay; typically this is a third of the bill being charged. Instead of a market using price to regulate what is produced in terms of health services, we have centralized planners establishing prices. Recently, CMS decided not to reimburse for “readmissions.” A good decision. Now the unintended consequences: the providers, being more of them and certainly more creative than the planners at CMS, have now framed a “readmission” to be an “observation” so they can get paid. CMS is now trying to figure out what to reimburse for an “observation.”

 

       This charade reminds me of the observation from Dr. Thomas Sowell in his book Basic Economics on the role of central planners in the former Soviet Union tasked with setting prices:

 

        “The significance of free market prices in the allocation of resources can be seen more clearly by looking at situations where prices are not allowed to perform this function. During the era of the government-directed economy of the Soviet Union, for example, prices were not set by supply and demand but by central planners who sent resources to their various uses by direct commands, supplemented by prices that the planners raised or lowered as they saw fit. Two Soviet economists, Nikolai Shmelev and Vladimir Popov, described a situation in which their government raised the price it would pay for moleskins, leading hunters to get and sell more of them:

 

       State purchases increased, and now all the distribution centers are filled with these pelts. Industry is unable to use them all, and they often rot in warehouses before they can be processed. The Ministry of Light Industry has already requested Goskomtsen twice to lower purchasing prices, but the “question has not been decided” yet. And this is not surprising. Its members are too busy to decide. They have no time: besides setting prices on these pelts, they have to keep track of another 24 million prices.

 

       However overwhelming it might be for a government agency to try to keep track of 24 million prices, a country with more than a hundred million people can far more easily keep track of those prices individually, because no given individual or enterprise has to keep track of more than the relatively few prices that are relevant to their own decision-making. The over-all coordination of these innumerable isolated decisions takes place through the effect of supply and demand on prices and the effect of prices on the behavior of consumers and producers. Money talks— and people listen. Their reactions are usually faster than central planners could get their reports together.”

 

       A simple solution is to post prices for all providers. Why is this never on the agenda? Singapore spends about 4% of their GDP on health care and is one of the wealthiest countries per capita on the planet. The following link will take you to a price table that is impossible to find in the United States: http://polyclinic.singhealth.com.sg/Pages/FeesAndCharges.aspx

 

       This is just the top level of prices for one provider. The Ministry of Health provides transparency on pricing for all providers and typical operations. Patients are free to choose where they spend their health care dollars. Singapore’s 4% compares to our 16%-18%. Countries in Europe spend on average about 8-9%. Singapore’s market approach, putting the patient in charge, outperforms the socialist countries and certainly our crony capitalist approach in the US.

 

        Just post the prices…please! Put the patients in charge of choosing their health care services.

 

References:

Goldhill, David (2013-01-08). Catastrophic Care: How American Health Care Killed My Father--and How We Can Fix It (pp. 22-23). Knopf Doubleday Publishing Group. Kindle Edition.

Sowell, Thomas (2010-12-28). Basic Economics: A Common Sense Guide to the Economy, 4th Edition (pp. 17-18). Basic Books. Kindle Edition.