I'm old enough to remember when The Economist was a source of good economic sense on most issues of public policy. By that I really mean only that they generally recognized that resources were not infinite, that choices needed to be made, and that all human problems could not be immediately solved by just spending enough money from the infinite piles of government loot. But over the last decade or so they have gradually lost track of these principles.
The levels to which they have sunk are well-illustrated by the lead article in the current (April 28 - May 4) issue, headline "Universal healthcare, worldwide, is within reach." You read that right. This is not an argument, à la Bernie Sanders, that wealthy countries like the United States now have sufficient wealth that they should use some (much) of it to provide universal health care to their citizens. Rather, this argument is that universal "basic" health care should be adopted everywhere:
[T]here is a principled, liberal case for universal health care. Good health is something everyone can reasonably be assumed to want in order to realise their full individual potential. Universal care is a way of providing it that is pro-growth. The costs of inaccessible, expensive and abject treatment are enormous. The sick struggle to get an education or to be productive at work. Land cannot be developed if it is full of disease-carrying parasites. According to several studies, confidence about health makes people more likely to set up their own businesses.
Got that? Obviously, universal "basic" health care is necessary for people "to realise their full individual potential." How could anyone be against that?
Might we perhaps address questions of costs and tradeoffs? Not in this Economist piece -- they don't do that any more. Here in New York we spend about $10,000 per year for "health care" for each and every beneficiary of Medicaid. According to these charts from the World Bank, CIA and IMF, that $10,000 per year is approximately the same as the average total per capita GDP of the world! You would think that a source as sophisticated as The Economist would address this issue directly; but they don't. Instead, they think they have the simple answer that will keep runaway costs from over time sinking this ship (and the world economy). The answer is: we're not talking about wasteful over-the-top health care with all the crazy bells and whistles; we're just talking about "basic" (or maybe it's "rudimentary") health care!
At least half the world is without access to what the World Health Organisation deems essential, including antenatal care, insecticide-treated bednets, screening for cervical cancer and vaccinations against diphtheria, tetanus and whooping cough. Safe, basic surgery is out of reach for 5bn people. . . . Universal basic health care is also affordable. A country need not wait to be rich before it can have comprehensive, if rudimentary, treatment. . . . The evidence for the feasibility of universal health care goes beyond theories jotted on the back of prescription pads. It is supported by several pioneering examples. Chile and Costa Rica spend about an eighth of what America does per person on health and have similar life expectancies. Thailand spends $220 per person a year on health, and yet has outcomes nearly as good as in the OECD. . . .
But what about the problem that, in any socialist model of service delivery, productivity soon starts to decline and costs to escalate inexorably? What starts out seeming affordable soon enters a death spiral eating away at the productive part of the economy. Once the government is paying for "health care," everybody has a powerful incentive to maneuver expenses into the health care category so that somebody else will pay for them. Experience teaches that governments have little ability to push back. Shouldn't this issue be addressed at least a little?
To get an idea how it is that Thailand can, at least at the moment, provide "basic" health care to its people at $220 per hear per head, while New York spends about $10,000 per year per Medicaid beneficiary, you might consider the article from the New York Times edition on Monday headlined "Injecting Drugs Can Ruin a Heart. How Many Second Chances Should a User Get?" We are taken to Tennessee, where a young woman was recently saved from a heart infection -- endocarditis -- by means of expensive surgery. The infection was brought about by her abuse of injected methamphetamines. Now the young woman has a newborn baby and has returned to the hospital. In the article, it turns out that this particular young woman has not resumed abuse of drugs, and her infection has not returned, at least for now. But there are many others who do return to the drugs, and some who need additional operations whether or not they have returned to the drugs. The cost of the treatments and operations?
Treatment for endocarditis usually involves up to six weeks of intravenous antibiotics, often in the hospital because doctors are wary of sending addicted patients home with IV lines for fear they would use them to inject illicit drugs. Many, like Ms. Whitefield, also need intricate surgery to repair or replace damaged heart valves. The cost can easily top $150,000, Dr. Pollard said.
So, Economist, is this kind of thing included in your vision of "basic" or "rudimentary" health care, or no? You can see how, if it is included, the idea of health care for $220 per capita annually is a pipe dream. And if it is not included, then someone has to tell the young drug-abusing woman with the newborn baby that our "universal" health care does not cover you and we are going to leave you to die. And of course, this one particular type of operation is just one thing out of hundreds that may or may not be included in someone's idea of "basic" health care. How about the latest chemotherapies for some types of cancer (can be $100,000 and up per course of treatment)? How about long-term nursing home care? How about life-long care for juvenile diabetes (hundreds of thousands of dollars per affected individual)? How about in vitro fertility treatments for couple who can't have a baby otherwise? The potential list is endless.
Once a government gets into this game, it has no way of avoiding decisions on every heart-rending case that presents itself. And don't forget, the bureaucrats have a powerful incentive to say yes in as many cases as possible. That's how they grow their staffs and budgets.
Ultimately the real trade-off comes in having unsustainably high taxes that degrade the potential of a poor country to grow out of its poverty. No doubt, these are difficult trade-offs to make. But there is no avoiding making them. Pretending that "universal basic" health care can be had for a pittance and no real trade-off needs to be made is just burying your head in the sand.