We're going to go from the free market pencil to health care, which is not quite the free market.
How's everybody's temperature, by the way? Comfortable? Good? All right.
I'm sure we can either make you hot or cold by the end of the day.
Anyway, we hear this all the time. Health care is a basic human right, right?
We've heard this all year long, and during this debate on Capitol Hill, in fact, Mark mentioned Mr. Obama, the President, and he stated firmly and without hesitation that healthcare is a basic human right.
and he has plenty of support for this position, like another community organizer, Donna Smith, she's an organizer for the California Nurses Association and she wrote that granting that right is not something to be calculated differently in swing congressional districts, off-year strategy, second term presidential term planning, it is your duty to me, to my fellow citizens and to you,
Every other developed nation in the world sees health care as one of the obligations of government.
But can health care really be a basic human right?
Well, we need to talk about rights, and there are two types of rights.
First, there are positive rights, and positive rights are really just desires
So the corresponding obligation therefore violates other people's negative rights to liberty by the taking of their property and their income without their consent.
So an expansive combination of rights is inconsistent with a more fundamental right to be free.
Liberty, of course, means that people rule themselves.
And voluntary arrangements are the means to resolving conflicts that we have.
But when government assigns positive rights to others, it means that someone else rules over those choices and resources,
taken from those forced to pay.
However, since no one has the right to rob others, if government is to remain within the narrow range consistent with equal rights,
no one can delegate that power to the government.
So we can't say that America is the land of the free and the home of the brave
if some of us are forced to pay for other people's health care or housing or anything else.
So, while Nurse Donna is claiming that healthcare is a basic human right, someone else is going to have to pay, and they're going to have to have their rights violated to pay Nurse Donna, or Dr. Donna, of the world to provide that right.
So, this right to healthcare is simply not a legitimate right.
The legitimate rights are negative rights, and in this case people have a right not to be aggressed against, have their property stolen either by individuals or by the government.
We have a right to take care of ourselves and to protect ourselves.
So we have a right to go seek the health care that we need, but we don't have the right to receive from others health care.
Now, I'm not all that old, as much as some of you may think I am, but I remember when doctors actually made house calls.
And there's a few in the audience probably remember that. I mean, now you can't get a doctor to make a house call.
It makes sense now, if you get sick, that you should have someone in your household load you up in the car
and take you a waiting room to hang around with some other sick people and wait and see the doctor and of course probably get sicker in the process and that's the way the process works but I remember a day when back in Abilene, Kansas where I grew up that my doctor, Dr. Rohrbaugh, Rocky Rohrbaugh, would charge three to four dollars for a house call.
Now, $3 or $4 then is not what $3 or $4 is today, but it's, say, $30 or $40. Not a bad deal.
And what I remember most about doctors back then is the doctor's office, how small they were.
You'd go in, you'd wait in a waiting room, and then you'd have a little receptionist,
and then you'd have examination rooms. Made perfect sense, right?
Right? But now, what do doctors' offices have? They have big rooms with lots of files and people on computers.
And what are those people doing? They're trying to get paid. They're trying to get the doctor paid.
Because for most people, they pay for their health care, not with their own dollars, but with insurance.
Insurance. They make a small little payment, a little co-pay, and then the rest of the payment for the medical procedure is done through those people working in that file room, and it's the same way with medication. Insurance pays for a certain amount, and you might make a co-pay, but for medicine
So that's the way it is with most people. If you don't have insurance, many people go to the emergency room. If they get sick, they go to the emergency room and the taxpayers pick up the tab.
So the price mechanism that Mark was talking about earlier doesn't work in health care. The reason it doesn't work is that you as the consumer who's buying the health care, you don't pay for it. You don't negotiate.
The only place you see the price mechanism work in healthcare is elective surgeries, cosmetic procedures, and then supply and demand move pricing in those areas.
But for run-of-the-mill healthcare, you don't drive by a hospital and they have a big sign.
You never see a big sign on the side of the building. Appendectomy is 1995 this month.
I mean, it just doesn't, it just never happens, right?
Pharmacies, now they may discount their milk, they may discount their household goods,
but you never see in a pharmacy penicillin half off, right? It never happens.
So, we as consumers shop for the best price and the best service for everything except healthcare.
And why don't we shop for the best price?
Well, if someone else is picking up the bill, first of all, are you going to be inclined to use more or less of that good?
Well, you're going to be inclined to use more of that good, especially if time doesn't have much value to you.
Now, most of us don't go to the doctor when we don't need to because we don't want to sit around and wait.
which not only do you get to wait for the doctor, but then he gives you a little piece of paper and you have to go to another building, you have to get back in your car and drive to your pharmacy and then you get to wait again for your medicine.
Now, you know, people are describing this as the free market, but of course it's not.
It needs fixed, but it doesn't need fixed with more government.
So you might say, well, your examples aren't terribly relevant.
I mean, medical care isn't like other goods.
I mean, medical care is an emergency, right?
If you're sick, you need to get well right away.
Well, not every medical procedure is an emergency, number one, and number two, I think there's other emergencies out there, like eating and drinking, housing, shelter, these are all emergencies, and here in, you know, about, you know, a few minutes, you're going to have those hunger pangs for that Chick-fil-A box lunch, and you're going to say, boy, that's an emergency, I need that,
And if we want food, we have all kinds of choices, right?
We can go to the grocery store and buy food and cook it ourselves.
We can go to restaurants.
We can get food any way we want it.
Same way with housing.
You can get housing any way you want it.
Where do you want to live?
How much do you want to pay?
So on and so forth.
So price, quality, convenience drive those decisions.
Now imagine if we got food and housing the way we get health care.
I mean, there's no way that you can call health care the way we've been getting it the free market.
So how did this all happen?
Well, first, the medical profession was monopolized by the AMA, the American Medical Association, in the early 1900s.
What the AMA did was restrict the number of medical schools and who could go to medical school and how many doctors were produced.
So that's the first thing that happened, and then ten years later, around 1910, there was a national conference calling for universal health and social insurance.
So this started a long time ago in America, but the big change happened during World War II.
What happened in World War II is there's a number of, obviously, soldiers drafted to fight in Europe and the Pacific.
This took a number of people out of the workforce, defense contractors.
Maybe you've seen the posters of Rosie the Riveter, you know, making planes.
so a lot of people working for defense contractors so employers there was a shortage of labor and they had to attract people to work for them wages were exploding and what the government do well they they placed a ceiling on wages they had wage controls so employers couldn't pay more than a certain amount so if they couldn't pay over a certain amount what did they do well they offered other perks
The other perk was insurance, and that's why most people, to this day, get their insurance from their employer.
This is really no different than banks. When banks used to be restricted by the amount of interest that they paid to attract deposits,
they used to give away toasters and other sorts of small appliances.
So as the market tried to deal with government price restrictions or wage restrictions, it unleashed this genie out of the bottle that's been with us ever since.
And it's really become the custom that if you get a job anywhere, insurance is a benefit that goes with it.
was with it. And so the seeds of our health care system were sown a long time ago, back
during World War II. And after World War II, President Harry Truman, in a speech in November
19, 1945, he'd only been president seven months, he said, the health of American children,
like their education should be recognized as a definite public responsibility.
The right to adequate medical care and the opportunity to achieve and enjoy good health
was part of Truman's economic Bill of Rights.
He said the right to adequate protection from economic fears such as sickness had to be
addressed by the government.
So he was essentially proposing a national healthcare insurance fund that would be created
and run by the federal government.
And even the AMA at the time, the American Medical Association, called the bill socialized
medicine and said that those in the Truman White House were followers of the Moscow line,
party line.
So despite having lots of support from big labor unions and others, Truman was forced
to abandon this attempt to have the government take over health care.
But like most bad ideas hatched in Washington, part of Truman's proposal lived on and it
resurfaced 20 years later.
1965, Lyndon Johnson signed Medicare into law. Medicare provides health care to those over 65.
And when Johnson signed the bill into law, he actually selected the Harry S. Truman Library,
Independence, Missouri, and he reminded onlookers that Medicare, quote,
all started really with the man from independence."
So in other words, it's taken a long time, about a hundred years, to get to where we
are, to this latest iteration of patching together health care in America.
And even under Obamacare, what we have is really not total socialization, but just this
Trying to patch up this failed system that we have that is not anything like the free
market and the price system that Mark described earlier.
The fact is, 29% of all Americans depend on the federal government for their health care.
29%.
And for those over 65, the percentage is 75%.
So most people over 65 get their health care provided for by Uncle Sam, and this was brought
out recently in these town hall meetings when you had a gentleman who was shouting at his
congressman from South Carolina and he said, keep your government hands off my Medicare.
And the guy just couldn't be convinced that Medicare already is a government program.
So our healthcare is this mixture of private enterprise and regulatory apparatus, subsidies,
licenses, controls, patents, monopolies, outright welfare, consumption controls.
I mean it's a system that needs to be fixed, but certainly, but not by government.
We need more freedom injected into this, we need to have the government peeled away, but that's not what's going on.
So really we've had experiments in socialized medicine around the world for many, many years.
In fact, Mises pointed out in 1922 that whether it's healthcare or any sort of business, without property and market prices, economic rationality disappears.
Result is unworkable, it's chaotic, and it's impoverishing.
So medical socialism is particularly devastating because of the effects, the capacity for us to stay healthy and alive.
It robs us of the rights to exchange and choose. In fact, Mises wrote about state-run medical systems, and there were a few even at the time, and there still are to this day.
The Army has its own medical system, and prisons have their own medical system, and these are not centers of health, but of disease and disaster.
So, if we go back to the beginning of my talk, you remember one of our real rights is the right to seek and obtain medical care through voluntary exchange.
And this increased socialization will actually destroy that right.
Now, I wanted to talk a little bit about insurance, because insurance gets bound up in this discussion.
discussion, and much of the debate's been about the portability of insurance policies,
and insurance companies not allowing pre-existing conditions, right?
Hear this all the time, people get excluded, they can't buy insurance because they have
some sort of health problem that keeps them from getting insured.
And this is unfair and something needs to be done about it is the case that's always made.
Well, imagine if you will that we're not talking about health insurance but we're talking about
casualty insurance, fire insurance.
And let's just say you're selling casualty insurance, okay, and you're on the phone one
day and you get a call from a guy and the guy says, listen, I need to buy insurance
on my house, fire insurance on my house, and you go, great, that's great, that's what we're
Tell me a little bit about your property. Where's it at? What's it worth? Is there a lien on the property? Usual things.
And then you say, you know, he gives you that information very rapidly. He's in a hurry.
You say, we'll insure the house and the policy as soon as you should make arrangements for payment, and we can go, you know, we can do an inspection of the house.
and that'll be maybe later today and the person says no no I'd really need the coverage right now
right now I got to have it right now and you said well why are you in a loan closing is the lender
requiring that you have proof as insurance right away he says no my house is on fire I need to
insure it for the full value well that's really what we're talking about with it pre-existing
and Conditions is that what people are demanding is that the people with burning houses be
lumped in the same risk pool as people with houses that aren't on fire.
Not only aren't they on fire, they're supposed to be in the same risk pool as houses that
might be located next to the fire station.
So that's the fallacy of including those with pre-existing conditions into this risk pool.
You know, that's maybe, it's not insurance to do that, they call it insurance, but it's
really just a redistribution of assets by government force when you require that the
and the burning houses be thrown in the same risk pool.
So, when you look at it in those terms, it becomes quite clear,
but evidently those in Washington haven't quite thought about it that way.
And if you turn things around a little bit,
I think a lot of you probably drive in the audience here today, so you have car insurance.
In fact, the premiums for your car insurance is probably pretty high, right?
Insurance companies have determined that you're a riskier pool than normal.
Younger drivers tend to be less experienced behind the wheel and possibly more aggressive, shall we say.
So they tend to charge more for that insurance, right?
but they lower the premiums if you're a good student and other things like that and that's what insurers do.
They assess risk and there's a pool they throw you into and they don't know who is going to have accidents
but they know a certain group of people are going to have an accident and they've determined over time that younger drivers have this accident.
But imagine if car insurance was like health insurance, the health insurance we have.
It'd cover you not only in the case of an accident, it would cover oil changes, tires, you name it.
What would happen? Would you use your car more or less?
Well, you'd use it more, because your insurance is going to cover everything.
It'd cover for wear and tear. You'd be less careful when you drive.
And so there would be ramifications if car insurance wasn't like the health insurance that we have today.
So there are real ways to solve the health care problem.
And Hans Hoppe has outlined four simple steps to solve the problem.
And the first thing he would do is eliminate all licensing requirements for medical schools.
Hospitals, pharmacies, medical doctors and health care personnel.
And he makes the case that the supply would immediately increase, prices would fall, and there would be a greater variety of health care services.
And there's been a lot of discussion during this health care debate on Capitol Hill that Obamacare will actually bring down costs, right? We've heard that.
The Office of Budget Crunching, or whatever they call it, has said that there'll be no effect on the deficit.
Well, that's crazy, of course. If you insure more people, if you require people to have insurance, the demand for health care will go up.
They've not addressed the supply of health care.
And thus, the cost of healthcare is going to continue to increase under the latest proposal.
But if we went the Hoppe route, we would have a decrease in costs by eliminating these licensing requirements.
And you'd have all kinds of people get into the healthcare business.
Of course, some people would, they freak out about that notion.
Well, gee, oh my gosh, my doctor wouldn't be certified by the law.
I mean, we'd all be at risk.
Well, I think the first thing you do when you select a doctor is not,
you don't call the government and say, gee, give me a list of all the doctors who are board certified.
What you do is ask people at work.
I know that's the first thing I did when I came to Auburn 18 months ago.
I asked the people here at the Institute.
I Got Sick, who's your doctor? Do you like your guy? Do you like your guy? So on and so forth.
And that's how the market would work. Unfortunately, when you have the government certifying doctors,
or for that matter, if you have the SEC saying that guys like Bernie Madoff are okay, then people think they're okay.
They don't do their own due diligence. They don't ask people whether either doctors or financial advisors are good.
They just take it for granted because the government says it's okay.
So that's the first thing we would do. We'd eliminate all the licensing requirements.
We would also eliminate all government restrictions on the production of sale pharmaceutical products and medical services.
Because it takes not years, it takes decades to get new drugs approved.
And if that apparatus was thrown, done away with, costs and prices would fall tremendously.
You see this debate all the time.
Various states would like to have it approved that people could import drugs through the
internet from Canada.
And you see it time and time again.
They talk about doing it.
The drugs are cheaper, but they say, no, wait a minute, that's a health risk.
You know, if you're trying to get your drugs from Canada, there's a health risk.
We don't know what's going on up there, north of the border, so we just can't allow that.
And you see this all the time.
Need to eliminate all those government restrictions.
Need to deregulate the health insurance industry.
would be his next solution.
We talked about insurance a little bit
and how absurd it is that insurers in the healthcare arena
have to insure people who are high risk
at the same rate as people who are low risk.
And Hoppe makes the case that he gets thrown
in the same pool as, say, professional football players who arguably have the greater propensity
to get injured than, say, economics professors.
So, of course, in the case of Hoppe, I'm not sure that's the case.
But anyway, obviously there's two different risk pools, but insurers are not allowed to
to price people who are less risky differently than those who present a greater risk.
Also, he would, and finally, he would eliminate all subsidies to the sick and unhealthy.
When you subsidize anything, you get more of it.
Subsidize the ill and disease, you promote carelessness, indigest, dependency, and that's what we have.
We have, with Medicare and Medicaid, we have created this sort of dependency.
So there are ways to fix America's health care problem.
It is not with more government.
We do have a right to seek and choose and pay for the best health care our money can
buy.
But what we're getting slowly but surely is what the government decides is the health
and Health Care. It believes we should have, and I believe that is the worst possible health care that we can have. Thank you.