A Short History of Health Care: Let Doctors Be Doctors

I just ran across this on another website.  It’s a column I wrote for Indiana Policy Review a couple of years ago that seems more appropriate than ever now.

A Short History of Health Care: Let Doctors Be Doctors
By Andrew Horning

Healthcare is an odd business in that it has always been both expensive and unpleasant. Until the 1920s, the average doctor couldn’t even help with the average ailment. While medicine then included a range of arts like phrenology, acupuncture, homeopathy and allopathy it really was a coin-toss whether you’d be saved or killed by a doctor’s work.

Then the 20’s brought insulin, sulfa, other “miracle” drugs and sterile fields that meant, for the first time, that healthcare actually worked more often than not. From there, doctors, scientists and medical engineers really took off; rapid advancements increased life expectancies and decreased suffering. And because of increasing effectiveness and supply, healthcare was even becoming cheaper in real cost-benefit terms.

However, politicians had nothing at all to do with this, and that was apparently a problem. Teddy Roosevelt proposed a German-style, cradle-to-grave “socialized” healthcare system, but it was assailed as “the Prussian Menace” in those anti-German years before WWI, and Teddy’s scheme died. Even so, politicians wanting to seem compassionate started promoting socialized healthcare. The July 1919 issue of the Insurance Monitor made this prescient assertion: “The opportunities for fraud upset all statistical calculations. . . . Health and sickness are vague terms open to endless construction. Death is clearly defined, but to say what shall constitute such loss of health as will justify insurance compensation is no easy task.”

No matter. Between The Revenue Act of 1939’s health-related tax breaks, and 1943, when the War Labor Board excluded employer-paid health insurance from its wage freeze, American politicians charged into health care on their favorite horse, income tax.

In a nutshell, here’s what happened: Tax breaks for employer-paid health insurance meant that health insurance became a part of employment, and insurance became an integral part of healthcare. This inserted middlemen, which of course made everything more expensive. But who cared? The tax-subsidized, payroll-deducted cost was invisible enough that Americans started using insurance to pay for routine visits, dental checkups, eyeglasses and even plastic surgery. Group insurance offered large corporations better plans than small companies could muster, giving large corporations even greater advantages in hiring and competition than corporate laws already gave them. This also meant that the poor, or worse, the self employed, were even further distanced from the rich and incorporated in a very serious way. Obviously this created problems, but politicians never admit error, do they?

Four days before Tax Day, 1953, President Dwight Eisenhower established the U.S. Department of Health, Education and Welfare, giving government even more direct control over some of humanity’s most precious commodities. More political money and power meant more reasons for businesses to make campaign contributions and lobby. Of course, politicians at every level of government have used healthcare policy to reward their friends and punish their enemies. That’s their stock in trade.

Now tax money and policy is sifted and sorted through political appointees, immortal bureaucracies and defense-contract-style arrangements to feed a dwindling number of profit-starved insurance companies who then deny your claim. Doctors hire legions of workers to manage the regulatory, litigative, and insurance paperwork hassles; or leave private practice to become an employee within a clerically staffed healthcare corporation. So healthcare is still both expensive and unpleasant. But now it’s only because politicians, not doctors, are practicing medicine. Our healthcare injustices and vital statistics have decayed into an embarrassment at just the time when technology should make healthcare cheap, effective and available to all.

It is hard to imagine what politicians could have done to make our healthcare situation any worse. Yet, according to a July 2006 Harris Poll, Americans rate the issue of healthcare well-behind Iraq, the economy, immigration and even gas prices. Even more strangely, most people now think we must, to some degree and by some unspecified method, “socialize” healthcare just as Europe, Canada and other nations are now scrambling back toward free market reforms. What are we thinking?

Let politicians have their way with Iraq, the Colts and toll roads. Let them run lotteries and practice voodoo. But please, let doctors do healthcare at last; they’ve earned the right.

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15 CommentsLeave a comment

  1. So you go to a doc, get ‘take 2 pills forever’, because we don’t want to run all those tests to find out whats wrong and whether it has a cure. Then you get the bill for the tests you did have and the insurance didn’t cover much. And then you feel sicker than before you went in and get a headache trying to read the paperwork that you thought said you could afford to go to the doctor.
    Bah humbug. Politicians should try dealing with their medical issues on the average persons budget.

  2. For the past thirty years I have been a healthcare provider in research, clinical and industry roles. My work has taken me to Canada, South America and Europe, and through both human and veterinary medicine realms. I know what healthcare should cost, and how freely available it should be.
    Look at coffee, computers, fashions or any other business where politicians leave things pretty much alone, and you’ll see what I mean.
    Heck, go check the prices for equivalent drugs and services at your veterinarian’s office. Even though vets suffer some burdens of the human medicine market, vets can do things much cheaper, and in greater abundance…even with to-your-farm service!

    Oh, and I have also suffered extensive, multi-decade and exhausting immersion politics.

    I have studied healthcare, I have studied politics, and I have a recommendation based upon my hard-won knowledge: Get politicians and their lobbyists completely out of healthcare.

    Failing that, work out a hush-hush deal with a good local veterinarian. You’ll live longer, keep more of your own money, and your vet will enjoy talking with his patient for a change.

  3. Sometimes the tax revenue is a very scary thing for us. Because we have to get out some extra cash. However, the tax is very important to support the development of a country. Thank you for telling this good info.

  4. Have doctors earned the right to a legally enforced cartel? What isn’t socialist about medical licensing?

    As MIlton Friedman put it in this video…

  5. That’s right, Nicholas. The allopaths and osteopaths unionized against all alternatives, and that was not only unfair, it was medically shortsighted as well.

  6. So, from the outset American medicine is already socialized. Every aspect of American medicine is now either regulated by government, an agency of government, or paid for by government. The stage has been set since the introduction of physician licensing and the prescription drug laws for the full and inevitable socialization of healthcare in America, as Dr. Friedman avers. Full socialization would be worse and should be opposed, we should have no illusion that the present system is not awful, as would be the case with any system where the consumer is not sovereign. Resist as we might full socialization, it will eventually come since few Americans oppose government-controlled care on principle. The conservatives oppose Democratic proposals, but generally have no harsh words for Romney, whose Massachussets plan is comparably intrusive and coercive.

    It does little good for libertarians to oppose the last steps toward socialized healthcare without forthrightly opposing the first steps. Rare indeed are those, like Thomas Szasz and Milton Friedman, who protest medical licensure and prescription drug laws.

  7. The notion that we should “let doctors be doctors” ignores the fact that in practice and in profit physicians benefit from their state-provided monopoly over the practice of medicine. This situation is no more beneficial to consumers than the one envisioned by proponents of healthcare reform (e.g., more socialism). Right now medical errors are a leading cause of death, and physicians engage in anti-consumer practices consistent with a cartel, such as inflating prices, not complying with proper hygiene practices, not writing prescriptions clearly, etc. Doctors being doctors under a cartel regime is harmful to the health and finances of consumers.

    Dentistry has been spared much attention in the healthcare debates, but due to the cartelized nature of dentistry the status of consumers is just as dire. While the country’s population has increased substantially in the past 30 years, the number of dentists has not increased. Hence dentists have higher average incomes than physicians and many consumers cannot afford dental care. This amounts to “letting dentists be dentists” in the phraseology of Mr. Horning.

  8. I agree with all that, and I’ve written about that as well (even in a letter in USA Today about eight years ago).
    But this isn’t our biggest issue now. It’s a red-herring, in fact.
    You know that, right?
    I hope I’m totally wrong about what’s coming early next year…

  9. On the contrary. Not only is it not a “red herring” to discuss the present distortions in the healthcare free market, it is absolutely essential. The lack of attention to existing state-imposed distortions, has allowed the incrementalism which has led us to the precipice of near-total government takeover of the system.

    Many libertarians have the unfortunate habit of arguing against the nouveau bad thing while ignoring the factors which led to it. They fight skirmishes but not the war. Your brief history serves as a tacit defense of the licensed physician monopolists who, above all others, have profited, in money and status, from the existing statist system, and stand to continue profiting no matter how the system is configured after reform.

    Even an ostensibly free market physician organization, The Association of American Physicians and Surgeons, offers to collaborate with the DEA and other law enforcement agencies by reporting patients who are “drug abusers,” so that the doctors who prescribe the drugs will not be arrested for doing so. Physicians tethered to the state by licensing become agents of the state. This impacts healthcare in every way, including cost and service, not to mention liberty.

    A short history of healthcare that doesn’t talk about licensing and drug laws, is like a history of radio and TV that ignores the FCC. Incrementalist argumentation, merely fighting the latest state encroachment, is not sufficient. Just as it is necessary to oppose gun laws by noting that there is a fundamental right to bear arms, and just as it is necessary to oppose censorship laws by noting that free speech and press rights are fundamental, it is essential to argue that we have a fundamental right to medical care unmolested by government.

    Libertarians need to argue, without reservation of defensiveness, that there should be separation of medicine and state, as there is of church and state. Arguing that cartelized physicians should be free to continue as they now practice ignores how the state presently controls their practice, and how this adversely impacts consumers. Doctors already anteriorly serve the interests of the their master, the state, before they serve those of consumers.

  10. Well, like I’d said, I hope I’m wrong about what’s coming next. Because if I’m right, you’ll agree that the healthcare debate was, indeed, a tiny, tiny problem.
    Remember, healthcare is my business. It’s been my day job for thirty years. I do not lightly dismiss the current debate as a small potato.
    But I’m predicting that global domination, slavery, genocide and war are on the way – right here in our own homes. And I’m not speaking figuratively or with exaggeration. I’m talkin’ our ancient Bad Habit.
    I’d gladly accept soviet-style healthcare problems if one could swap one problem for another.

  11. If things will be as harsh as you predict, then it is imperative to argue for first principles in addition to focusing on the present skirmishes. Incrementalism is not a defense against slavery, genocide, war, and global domination, and is almost always affords only temporary respite. If the state continues to control healthcare, it will eventually become fully socialized, as Dr. Friedman asserted. Today’s victories will be Pyrrhic. Free market healthcare should be advocated and defended with the same degree of absolutism as free speech as free religious choice.

    I hardly think I lightly dismiss the current debate by arguing that it is important to address the original and most fundamental problems caused by statist interference with healthcare. You may work in healthcare, but the primary stake most of us have is as consumers, and it is primarily for consumers that the free market must be allowed to work. Working in healthcare provides no better perspective on free market principles than does being a consumer.

  12. Nicolas, I must not understand what you’re arguing here.
    Are you arguing that as you’re hauled off as an enemy of the state that your core problem is health freedom?
    Why do you think I’m an incrementalist?
    As somebody who’s arguing for secession and a new constitution/new nation based on suspicion of politics and maximum individual liberty, I have to wonder what in the world you think is NOT incrementalism?
    Isn’t there some point at which we could drop the Randian Objectivist-versus-George Mason libertarian bickering and agree upon a course of action?
    What, in short, do you suggest we do today…right now?
    If we have only so much time left to use cell phones and email, what is your plan?

  13. I think I’ve stated my view clearly. The case against ANY state involvement in healthcare should be central to the argument for a free market. First principles should be central to any argument for liberty. Milton Friedman’s speech is an example of the statement of principle which is not incrementalist.

    Your views seem to have taken on such an apocalyptic cast that reason and practicality are jettisoned. Even in much worse places than the U.S. — say Cuba and Kenya — there are principled libertarians who agitate for liberty.

    If, as you believe, the world is on the verge of savage breakdown, what is the point in creating an annotated constitution or working against healthcare reform? Or doing anything? I think things are rough, but freedom will be be regained by articulating and battling on behalf of libertarian principles, not by wailing that the sky is falling.

    It is important to fight near-term battles in defense of liberty, but the arguments employed must always be wedded to the articulation of core libertarian principles. Incrementalism is the waging of those battles piecemeal and without enunciating core principles. It is, for instance, opposing healthcare reform by tacitly defending (or ignoring) the present physician monopoly.

    The advance of liberty has come via hard-fought efforts and well-articulated arguments. The same methods need to be employed today.

    Why not write an entry describing your opinion of medical licensure, and we can see where you stand on the core principle of healthcare liberty? Do you oppose physician licensing? Do you oppose the prescription drug laws? If you do, then how do those things harm consumers?

  14. Nicolas, I already said that I have written about licensure and my opposition to licensing by politicians. No, I guess haven’t done that on this blog site, but I have even spoken on the subject in public (There used to be a YouTube video of at least one such talk).
    I’m opposed to corporations for the same reason. Politics shouldn’t twist the free market this way. So I think we’re in agreement on this. But I still have no idea what you think we could agree upon in action. I have no idea what you want to do.
    I don’t fool myself about my constitution proposal, but I see it as a very, very basic first step in preparing a path past a very bad collapse. While the pattern we’re reproducing has a 100% bad history, there’s also a history of a remnant jumping clear of the train wreck. So if it’s possible, why not prepare for the possibility that we can pull success out of failure?
    I don’t at all understand your leap to fatalism, nor do I understand why you think that Cuba and Kenya represent anything like humanity’s worst scenarios.
    I wish I had time to explore this more, because you seem like an intelligent, energetic fellow that I’d like to get on my side.
    But I just don’t see healthcare as the battlefield. On the contrary, I see this as a smoke screen/red herring/false flag/etc. It is the red flag that matadors use to bait their victim and conceal the sword.
    Our sovereignty is gone. Our money is about to be gone (think Mugabe/Zimbabwe), and the silk glove is about to come off the iron fist that’s been growing for the past hundred years.
    I’d happily buy healthcare from my veterinarian if healthcare were all we had to worry about.
    But we’ve apparently come to think that the USA and today’s world are immune to the obviously inevitable forces of destruction we carry in our DNA.
    I am afraid that we’re about to learn the truth…again.
    I’ve been right about our direction for the past fifteen years…I hope I’m wrong now.

  15. Hmm. I wonder if my cats’ veterinarian will do a splenectomy for me.


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