The Insatiable Need

Much of the recent debate on health care reform revolved around the cost of the American system of health care and how much of our GDP said system consumes. One of the selling points for the proposed plans was "controlling costs." While I am sure that many inefficiencies exist in the American health care system as currently implemented (particularly in the litigation portion), in the long run, reduction of these inefficiencies is unlikely to lead to any less money actually spent on health care. Instead, it will just improve the quality of care for the price that we pay.

In a free-market system, products and services evolve to serve wants and needs. Some people, like farmers, target needs -- they know that though the need is limited and can be satisfied, people will always get hungry. In this case, demand, while finite, is assured. Other providers focus on wants, and many great entrepreneurs have discovered that the well of wants is far deeper than the well of needs, with one exception. These providers find our desires and produce things to fill them. In this market, products and services will emerge with features we desire balanced against the price we are willing to pay to fill that want.

Health care is unique in that it is an insatiable need of humans. Our most basic instinct is that of survival, and all of us are benefited to that end by health care. The paradox occurs because we all must in fact die at some point. At that point, the health care that would have saved us is either unobtainable for cost reasons or not yet invented. And so our most basic need is unmet at some point in our lives, and though we want to continue to live, we die. While this is not news to anyone, the human desire to live a longer, healthier life is the market-driver in a free health care system.

The market becomes, then, one of an insatiable need: the need to continue living that can never be met. Certainly it can for a while, but the end is never averted. Considering the progress of medicine, imagine a test, performable early in life, that could accurately predict if, when, and where cancer would form in the human body. That knowledge might be worth ten, twenty, thirty years of life, but what's it worth in dollars and cents to the average person? Imagine, then, the life-threatening disease. How much is the treatment worth to the afflicted? 

It becomes easy to see that under such a free system, where people are free to decide what care they receive, costs will continue to increase to support more complex tests, procedures, and medicines, which in the end will likely extend life and improve both health and quality of living. But those costs will continue to increase until as a whole, consumers concede that additional quality of care -- i.e., length of life -- is no longer worth the cost. In this way, free-market medicine will always have or evolve to have both superior quality and nearly unbearable price wherever it exists.

This situation of prices ballooning to just shy of the truly unbearable is certainly not desirable, but unfortunately, only one alternative exists to this mode of thinking. Since the crisis of cost is driven by individual decisions to purchase and stop purchasing care, the only way to keep costs down is to allow a third party, someone willing to spend less, control over when to purchase and stop purchasing health care for the masses.

All further debate on the topic is essentially trying to paint the argument in different colors. Nothing changes those underlying truths. Cutting profits to drug companies equates to fewer new medicines developed. Fixing prices to doctors equates to longer lines and less individual attention. Government option insurance equates to government rules on covered and non-covered treatment. Which side does that radical, new, expensive treatment fall on? I'm sure it depends on its cost-benefit analysis, which the bureaucrats will get around to publishing to the appropriate board sometime, someday. The fact that it may be someone's best chance of survival is not a "need" of the state -- perhaps a vague want, if the affected person votes and/or pays taxes.

In the months to come, I am sure that the debate will pick back up, and the discussion of cost is likely to come out again. Once again, I am certain that the system in place has a number of inefficiencies, and vast improvements could likely be made which would reduce the overall costs of the existing treatments. I personally would like to see some reform which allows more cost visibility to the consumer so that when my doctor recommends a test, I'm not surprised to see a bill for $500 for what I thought was routine and simple. It might prime the question, "How bad do I need this?"

Many other areas in our system could be reformed without making government a de facto rationer of care. And if something inspired manages to make its way from the legislature into law, then we might see a reduction in cost for a while until that desire, that need, to live catches back up with us. In the end, though, it becomes a very personal question, and at some point, it will no longer be hypothetical -- it will be ourselves and those we love. The choice again is before us. You can make the call on how much care and for how long, or you can let a statistician with a mandate to save money make the call for you.

Michael Charles Keehn blogs at libertasperadamas.blogspot.com.
Much of the recent debate on health care reform revolved around the cost of the American system of health care and how much of our GDP said system consumes. One of the selling points for the proposed plans was "controlling costs." While I am sure that many inefficiencies exist in the American health care system as currently implemented (particularly in the litigation portion), in the long run, reduction of these inefficiencies is unlikely to lead to any less money actually spent on health care. Instead, it will just improve the quality of care for the price that we pay.

In a free-market system, products and services evolve to serve wants and needs. Some people, like farmers, target needs -- they know that though the need is limited and can be satisfied, people will always get hungry. In this case, demand, while finite, is assured. Other providers focus on wants, and many great entrepreneurs have discovered that the well of wants is far deeper than the well of needs, with one exception. These providers find our desires and produce things to fill them. In this market, products and services will emerge with features we desire balanced against the price we are willing to pay to fill that want.

Health care is unique in that it is an insatiable need of humans. Our most basic instinct is that of survival, and all of us are benefited to that end by health care. The paradox occurs because we all must in fact die at some point. At that point, the health care that would have saved us is either unobtainable for cost reasons or not yet invented. And so our most basic need is unmet at some point in our lives, and though we want to continue to live, we die. While this is not news to anyone, the human desire to live a longer, healthier life is the market-driver in a free health care system.

The market becomes, then, one of an insatiable need: the need to continue living that can never be met. Certainly it can for a while, but the end is never averted. Considering the progress of medicine, imagine a test, performable early in life, that could accurately predict if, when, and where cancer would form in the human body. That knowledge might be worth ten, twenty, thirty years of life, but what's it worth in dollars and cents to the average person? Imagine, then, the life-threatening disease. How much is the treatment worth to the afflicted? 

It becomes easy to see that under such a free system, where people are free to decide what care they receive, costs will continue to increase to support more complex tests, procedures, and medicines, which in the end will likely extend life and improve both health and quality of living. But those costs will continue to increase until as a whole, consumers concede that additional quality of care -- i.e., length of life -- is no longer worth the cost. In this way, free-market medicine will always have or evolve to have both superior quality and nearly unbearable price wherever it exists.

This situation of prices ballooning to just shy of the truly unbearable is certainly not desirable, but unfortunately, only one alternative exists to this mode of thinking. Since the crisis of cost is driven by individual decisions to purchase and stop purchasing care, the only way to keep costs down is to allow a third party, someone willing to spend less, control over when to purchase and stop purchasing health care for the masses.

All further debate on the topic is essentially trying to paint the argument in different colors. Nothing changes those underlying truths. Cutting profits to drug companies equates to fewer new medicines developed. Fixing prices to doctors equates to longer lines and less individual attention. Government option insurance equates to government rules on covered and non-covered treatment. Which side does that radical, new, expensive treatment fall on? I'm sure it depends on its cost-benefit analysis, which the bureaucrats will get around to publishing to the appropriate board sometime, someday. The fact that it may be someone's best chance of survival is not a "need" of the state -- perhaps a vague want, if the affected person votes and/or pays taxes.

In the months to come, I am sure that the debate will pick back up, and the discussion of cost is likely to come out again. Once again, I am certain that the system in place has a number of inefficiencies, and vast improvements could likely be made which would reduce the overall costs of the existing treatments. I personally would like to see some reform which allows more cost visibility to the consumer so that when my doctor recommends a test, I'm not surprised to see a bill for $500 for what I thought was routine and simple. It might prime the question, "How bad do I need this?"

Many other areas in our system could be reformed without making government a de facto rationer of care. And if something inspired manages to make its way from the legislature into law, then we might see a reduction in cost for a while until that desire, that need, to live catches back up with us. In the end, though, it becomes a very personal question, and at some point, it will no longer be hypothetical -- it will be ourselves and those we love. The choice again is before us. You can make the call on how much care and for how long, or you can let a statistician with a mandate to save money make the call for you.

Michael Charles Keehn blogs at libertasperadamas.blogspot.com.