National Health Service

The government is again talking about fixing our health system. I am glad. I hope they really fix it this time. In the meantime, I thought I would share my thoughts on the subject.

I am a capitalist. I believe in the free market, and using market incentives to optimize social systems. But with healthcare, I don’t believe that this works. People do not shop around for price when they are sick. When in the hospital, you take the pill they hand you; you don’t ask how much it costs. Even when people do shop around, they almost always look for the best doctor, not the best cost. So providers have the incentive to be the best, regardless of the cost.

Right now the only companies really making a lot of money at healthcare are the drug companies. They are making some pretty extraordinary drugs, and while the patents hold out, they make good money at it. But there is no incentive to cure disease, only treat it. What are the big new drugs? Drugs for Aids, mental health, allergies, and ED are the big drugs. They all treat disease. The best thing a drug company can do to maximize its profits is to develop a pill that will treat a common disease with one pill a day for life. If you cure your customer, they don’t need you any more.

So what is the solution? Public health care, socialized medicine, call it what you like. Everybody needs healthcare. Not just those who work. Not just those who work for large generous companies. People often need healthcare more when they are not working than when they are.

Are there downsides? You bet! Public healthcare is just like any other public service run by the government. There are politics and inefficiency and bureaucracy. Think IRS, DMV, or the department of public works. But the school system, the military, and first responders (fire, police, etc.) are public too. Still, in spite of likely lines, and long waits, and mixed quality, I believe it is far better to provide adequate medical care to everyone than good care to just a few. And I believe government doctors are better deciders of who should get care than insurance companies, lawyers, and luck.

Executive Pay

There is the issue of executive pay. And then there is the issue of companies taking government money, and then giving employees, executives, and shareholders excessive compensation. I have no problem with successful, thriving companies paying executives as much as they want. I have no problem with companies paying employees salary, bonuses, and other compensation. But if a company is taking charity from Uncle Sam, if they are only in business because of a government bailout, they have given up the right to manage their company.

We have bailed out companies because in the best judgement of our leaders, they are vital to the nation and the nation’s economy. And if not for the government, the company would close. O. K. fine. We need the company. So we bail it out. But it is a slap in the face to the taxpayer when that company then pays its employees, shareholders, and executives large bonuses, dividends, salaries, or other compensation.

The focus of the outrage has been on the executives. Good, but it is not enough. This new paymaster, or whatever his title is, should not be looking at the compensation of the top executives. He should look at the expenses of the entire company. He should look at cutting any unnecessary spending. And there should be no incentive to go get a big government bailout. On the contrary, there should be a penalty.