Seth Payne

The next question for us to consider is whether the current condition of health care policy within the United States is theoretically just based on the Rawlsian conception of justice. We must examine issues of equality of opportunity and also examine how social inequalities impact the whole of society.

            While nearly 50% of all health care expenditure in the United States originates with the federal government, the delivery of services is largely private and thus costs and prices are very much a function of market dynamics.[1] The bulk of health care policy in the United States deals with the regulation of private health care delivery. By contrast, “public health, which has few dollars to fund its advocacy, tends to be neglected.”[2] Indeed, “over the decades since the passage of Medicare and Medicaid, the nation has witnessed the slow shrinking of the reach, scope, and funding of public health.” According to Weissert and Weissert:

            The nation continues to face a plethora of health policy problems, some new (the obesity epidemic) and some very old (medical errors and patients’ safety). A persistent one, getting worse for many rather than better, is access to care. Indeed, in recent decades this lack of access has gotten worse at faster rates as more and more employers reduce the scope of their health care coverage or give it up altogether, leaving much of the workforce uninsured. Most Americans enjoy health care that at times, for some conditions, is the best (and most expensive) on the planet, but 45 million or more of us go without health insurance, and nearly as many more have inadequate or intermittent coverage, thanks to our nation’s incomplete, uncoordinated and very expensive health policy approaches. Even more Americans go without any or adequate coverage of their prescription drugs, although beginning in 2006, elderly people – especially ppor elderly people – have some level of coverage under the Medicare Prescription Drug, Improvement and Modernization Act of 2003 (or, in brief, the Medicare Modernization Act, MMA). Mental health coverage, dental coverage, and long-term care are particularly lacking, even for middle-class Americans. Those who have access to insurance are not always able to get appropriate care within a reasonable time or within a convenient geographic area. Rural and inner-city areas suffer shortages of facilities and specialty medicine.[3]

            In a society and economy with the aggregate resources of the United States, it is inconceivable that any U.S. citizens should go without access to basic levels of health care. As Weissert and Weissert point out, it is not those in poverty who are deprived of basic health care needs but rather, those in the middle-class who are self-employed or work for firms which cannot provide basic health coverage due to high costs. For purposes of this discussion, I will focus on issues of access to basic coverage, rather than the more abstract discussion of health resource distribution which will be discussed in detail below. In regard to basic health care needs does equality of opportunity exist? No. Thus, at first glance it appears that the current state of basic health coverage in the U.S. in theoretically unjust.

            This inequality of opportunity does not derive from any particular or explicit policy but rather from a delivery system which misplaces economic costs and responsibilities. The problem is not necessarily with private delivery based on the market forces of supply and demand. Rather, the problem may be due to failures within the market itself. Consumers, who are insured either through employers or through government-funded programs, are shielded from the true costs of health care and are therefore likely to over-consume health care services and be less concerned with taking actions in their private lives to lessen the likelihood of requiring medical attention.[4] This overconsumption drives up prices due to a finite supply of medical and health care resources. For example, a consumer who visits his/her local doctor is likely to pay a co-payment of $10-$20 for a standard visit regardless of what services are rendered. The actual costs of the office visit may be $100, which is billed to Medicare, Medicaid, or the private insurer, but remain unknown to the consumer. Thus, the consumer receives $100 of services for only $10-$20 and is therefore likely to visit the doctor more often than if he/she were to pay the full $100 cost each time. In this scenario, doctors also have an incentive to overcharge for their services since the consumer is unaware of the real costs. This of course, leads both government and private insurers to strictly regulate what amount they will pay for various services. This problem of moral hazard is one among many reasons why costs are soaring in the United States and many citizens do not have access to basic health care. In this sense, we in the United States champion the market efficiencies of private delivery yet we do not allow the market to function based on the basic laws of supply and demand.

            The current health insurance system is akin to auto insurance which covers basic maintenance such as oil changes and tire rotations. Auto insurers and consumers recognize that their insurance policies are designed to protect against catastrophic loss and not routine maintenance. Were auto insurance companies to cover such routine maintenance, their policy premiums would quickly become unaffordable and unavailable to all but the very wealthy. Auto insurers recognize that insurance is intended to protect against catastrophic loss and have structured their policy products in such a way as to eliminate the problem of moral hazard.

            Some efforts are being made to eliminate or at least lessen the impact of the moral hazard problem in health insurance. Health savings accounts are now being offered by some insurers and offer tremendous tax benefits and also act as a type of retirement savings account. One drawback to making health care choices a function of economics is some may avoid seeking care which they need or may delay receiving early diagnosis of severe health problems. There are no simple answers but it does seem that there are more effective and affordable ways to deliver basic health care to every American.

            Some argue that the answer is to be found in a universal public health care system. For the past 50+ years Americans have resisted such a system, likely due to a societal ethos which prizes private enterprise and is suspicious of government power and intervention although there is a clear split in ideological approaches to providing care:

                        Liberals and conservatives often part company over means testing as a way of limiting public subsidies and the scope of the public role. The two major political parties subscribe to different philosophies of how best to improve the lot of the poor. Conservative fear creating dependency among those given free care, and they worry that further taxing the well-off will stifle investment and that the inevitable standards that accompany subsidies will discourage innovation. They prefer to restrict free care to the poorest of the poor and count on a growing and innovative economy to provide more income for everyone and more efficient production that a highly regulated economy can offer.[5]

            I am skeptical of publicly delivered health care. While I recognize that it would solve the problem of providing basic care to all citizens, I am wary of other consequences a public delivery system would introduce. We live in a world of scarcity and limited resources. If a public delivery system were adopted, inevitably government bureaucrats would be forced to make priority assessments regarding resource allocation which introduce a whole new set of difficult moral problems: Who should receive a new kidney? Is this person too old to be given an artificial heart? I am not suggesting that the free market is a solution to these difficult questions. However, in the free market individuals are an essential part of the moral dynamic and are not simply on the receiving end of moral choices made within the government vacuum.

            I also have concerns about the infringement on personal freedoms that socialized medicine may introduce. For example, homosexual men are (statistically) much more likely to contract HIV than others within society. If the government is providing health care benefits, will it demand that gay men cease sexual activity or risk the loss of care? Will certain religious groups with health codes (Jews and Mormons for example) be given preferential treatment? Will African-Americans be discriminated against because they are statistically much more likely to experience a serious stroke? In general, I find the position of Milton Friedman the most compelling: free markets and capitalism tend to lead to increased personal freedom and liberty. Again, the free market does not solve these difficult questions, but it does require that the individuals involved be directly involved in the resource allocation dynamic and not simply be appendages to it.

            We must now consider the issue of the inequity of resource distribution in the U.S. health care system. Does the current inequality create an aggregate benefit for society as a whole? How do the least advantaged fare? In the current U.S. health care system the wealthy have access not only to basic care, but also advanced and cutting-edge techniques which are extremely expensive and not widely available. Market forces limit the availability of these treatments to only those who have the ability to pay. Does this inequity have a benefit for all within society and is it therefore just? Yes. One advantage of our market driven system is that corporations, surgeons, and other health care professionals have an incredible economic incentive to develop new and more effective treatment. This is especially true in the pharmaceutical industry.

            If we adopt a long-term outlook we can see that these market forces produce a significant benefit to all members of society. In essence, the wealthy fund investment and innovation through their payment of premium prices until such a point as manufacturers and providers are able to lower their costs and provide services at much lower prices.[6] We must remember that (at least in an efficient market environment) providers and manufacturers have an incredible incentive to lower their costs and thus, their price. For corporations, profits are maximized when marginal revenue is equal to marginal costs. Therefore, it is in the best interest of providers to lower costs and prices in order to make their products and services available to the broadest possible set of consumers. In other words, in the long-term, new and more efficient treatments become available to most, if not all consumers of health care services and products.

            Market dynamics, however, do not resolve all issues of inequity. For example, consider diseases which are have an extremely low occurrence rate and thus represent a very small market as opposed to say, diabetes of cancer. In such cases, firms have little economic incentive to develop treatments for extremely uncommon diseases and therefore, even when treatments are developed, prices remain incredibly high due to the inherent limited demand. In scenarios such as this, just policy should create the incentives necessary for firms to develop treatments for these diseases and provide them at affordable prices.

            In an ideal world we would not be concerned with issues of resource distribution but as it is, we must adopt a system which creates an aggregate benefit for all within society through the distribution of those resources which are available. I believe that in general, the free market system currently in place for high cost health care serves this purpose and that inequity in treatments is both just and fair.

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