Laboratories of Failure

In an apparent effort to outdo himself in the competition for Dumbest Column About Healthcare Ever Written, John Stossel has cranked out another doozy.

Stossel uses Wisconsin's ambitious attempt to provide insurance for all of its citizens as a springboard for making some of the most wildly incoherent arguments I've ever seen from the anti-universal care crowd. He suggests that Wisconsin's inevitable failure will prove to the country what a bad idea universal healthcare systems are:

That's why America needs "Healthy Wisconsin." The fall of the Soviet Union deprived us of the biggest example of how socialism works. We need laboratories of failure to demonstrate what socialism is like. All we have now is Cuba, Venezuela, North Korea, the U.S. Post Office, and state motor-vehicle departments.

It's not enough. Wisconsin can show the other 49 states what "universal" coverage is like.

Ha ha ha. Of course, Stossel leaves out a few other "laboratories," like, for instance, every industrialized country on the planet, all of which have functioning universal health care systems that produce better medical outcomes at considerably lower cost than our own (often half as much). Why should all eyes be on Wisconsin or North Korea instead of, say, France or Germany?
This is a consistent theme among opponents of universal care. They act like universal care is some crazy utopian fantasy like communism that has no realistic prospect of working and has failed miserably whenever tried. They never acknowledge the fact we are the outliers, that every other first world country has long since moved to a system of universal care and that there are now a multitude of different, fully-functioning systems out there for us to choose from. In other words, we're well past the experimental stage. It's like mocking someone's idea for a "flying machine" in, say, 1954 ("when that contraption crashes it will prove to the world that man was never meant to fly!").

The weakness of Stossel's argument is only underscored by the few specific criticisms he provides. After noting that the Wisconsim plan relies on corporate taxes, he predicts: "[B]usinesses that can't pass the taxes on to someone else will close or move out of state." He also approvingly quotes the Wall Street Journal's contention that "Cheesehead nation could expect to attract health-care free-riders while losing productive workers who leave for less-taxing climes."

Even if these predictions are borne out, they are at most arguments against trying to achieve universal care on a state-by-state, piecemeal basis. Under a national system, these incentives would disappear (which again illustrates why it's better to look at the experiences of other countries, not individual states for guidance). But as a purely factual matter, some of these premises seem doubtful. For starters, I highly doubt they'll be mass migrations to or from Wisconsin. The Wisconsin plan doesn't affect existing insurance. It requires businesses to either provide insurance to employees (which most do anyway) or pay a tax which would be used to provide affordable care to everyone else (premiums would be on a sliding scale based on income and coverage would be mandatory). That's not even close to socialism. Why would people leave the state to avoid such a system? And it's tough to "free-ride" when coverage isn't free.

Stossel at least acknowledges that people hate our current system and that the government already pays almost half of all costs, but then he takes a predictable detour into knee-jerk libertarian land:

I'm struck by how many hate the current semi-free-market system America has now. I say "semi" because it's not a free market when about half the health-care bill is funded by government. But it's still better than socialism. It allows for innovation like the creation of better drugs, pain-relieving joint replacements, artificial hearts, LASIK eye surgery, and who-knows-what-else that may reduce pain and extend my life.

Socialism will kill that, but people seem to like socialism, at least when it's sold as free stuff from politicians.

This is such simple-minded claptrap. Do people like Stossel really believe that the only reason there is any innovation in the medical world is because our system relies (partially) on private health insurance? Guess what, John, not only is ours not the only system that includes a private insurance component, but the purely government-funded systems purchase the very same drugs and medical technology. If you invent a new drug or a new joint replacement, you're going to make just as much money selling it in Europe as you will selling it here. The market for health care products is global and growing rapidly. Regardless of what sort of health care system we adopt, there will still be more than enough financial incentive to invent new things. This would be the case even if the United States were to drop off the face of the planet tomorrow. To suggest otherwise is to ignore the power of the market, not to embrace it.

It's probably also worth pointing out that a significant percentage of medical innovation is the result of government-funded research grants and that patent laws play a far more significant role in encouraging or discouraging innovation than the structure of the world's health care systems.

Also, John, the overwhelming majority of joint replacements in this country are paid for by Medicare (i.e. through Socialism!) and LASIK eye surgery is almost always considered an elective procedure and therefore paid for out-of-pocket (and would continue to be under any system). So these are really bad examples to be trotting out as proof that universal healthcare will stifle innovation.

But without poorly chosen examples and the omission of key facts, it just wouldn't be a John Stossel column, would it?