Medicare For All? At What Cost To Us and The Rest Of The World?

AUTHOR’S NOTE: Many positive things about Big Pharma and no negative things about government mal-regulation of Big Pharma (of which there is much of both) are discussed. Nothing in this post should be viewed as an endorsement of or excuse for the many negative aspects and consequences of Big Pharma or the federal government. Those are both big and important topics and many improvements could be made for both. Those matters, however, are not relevant to the points made in this post.

Similarly, this post focuses on many of America’s positive deeds that benefit all of mankind. Of course, over its history and recently, America has committed many detrimental deeds and will commit more. Those deeds, however, are likewise not relevant to the point being made.

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The Immorality of Medicare For Less Than All” explained how policies that are motivated primarily by empathy often create more miseries than they relieve and that supporting policies that create more net misery is immoral—regardless of how much misery would be relieved. Condemning people who oppose a net negative empathy-motivated policy is a sign of ignorance or evil motives rather than a sign of superior empathy. Consequently, to support policies without a good understanding of the policy’s negative consequences is irresponsible and immoral.

Why Not Provide Medicare To Everyone In The World?” gave an example of a net negative policy—despite all of its extremely positive benefits to some. It explained how Medicare for Everyone in the world (“MFE”) could not possibly work and would cause everyone in the world, including Americans in every income bracket, to consume less healthcare than the poor in America do today. That case was made by focusing only on the stark and devastating math concerning MFE. As such, it only scratched the surface of the negative consequences of MFE.

The math of Medicare for Americans (“MFA”) is significant, but a case based solely on the math is less compelling than is the math-only case against MFE. One must do more than scratch the surface to sort out why supporting MFA is also immoral.

Nevertheless, noting the math of MFA give context and continuity to the discussion. About 330 million people live in America today.[i] America’s annual GDP[ii] is about $21.5 trillion.[iii] That means that Americans are producing about $65,000 per person/yr. ($180 /person/day) of goods and services. As is the case with world consumption discussed in a prior post, Americans cannot sustain consumption in excess of their production. America’s production is about six times more than the world’s average of $11,225/person/yr.[iv] Compare that to Europe’s 750 million[v] people producing $18.8 trillion[vi] ($25,000/person) and one might think that everything would be fine with the U.S. having less GDP/person.

THE ELEPHANT IN THE ROOM

As conceded in earlier posts, universal healthcare bestows great benefits on some people. For example, poor people receiving otherwise unavailable healthcare is large and an almost unalloyed benefit. While opponents to universal healthcare attack universal systems elsewhere as being inferior to the American healthcare systems (many of which attacks are quite persuasive), universal healthcare systems in other countries generally do deliver most of the benefits conceded above, people are not rebelling against their systems, and—so far—have been sustainable.[vii] (This post will overlook the fact that, by their constant need to tinker with their systems, those countries reveal that even people in those countries do not believe all is well with their healthcare systems.)

In light of the above, one might be tempted to conclude that those other countries’ experiences prove that America can afford to adopt a universal healthcare program and the benefits would be great. The elephant in the room (the thing about which nary a word is spoken) is that American plays a different role from all other countries in many important respects, including healthcare. In short, if America were to adopt a universal healthcare system, healthcare would not only be worse in America, healthcare everywhere would suffer and universal healthcare would become impractical essentially everywhere.

Let’s sort out why that is true.

THE INDISPENSABLE NATION-AMERICA’S ROLE IN THE WORLD TODAY

  • Funding of World Initiatives. Making the world a better place is expensive. Many international organizations have been formed to achieve global goals. For example, in 2000, the U.N. established the Millennial Development Goals to improve standards of living of the poorest people on earth by 2015. The most urgent of those goals were achieved well before the deadline. “As a founding member of the United Nations and the host for its headquarters, the United States has been a chief guide and major funder of the organization for more than seventy years…The United States remains the largest donor to the United Nations, contributing more than $10 billion in 2017, roughly one-fifth of the body’s collective budget.” ”Similarly, America’s 4.3% of world population funds over 12% of the operations of the World Bank, “that helps the world’s poorest countries.” The U.S. is a disproportionate supplier of direct foreign aid and is often the only country to play a dominant role in assisting other countries when natural disasters strike. Individual Americans contribute heavily and disproportionately to other global initiatives [viii] (because in America more than any other large country, it is possible to become rich enough to afford to make significant contributions to the world by inventing, developing, manufacturing, marketing, and delivering goods and services that other people value more than the money it takes to buy them).
  • Defense. The countries that have universal healthcare systems that Americans are urged to emulate are mostly NATO members. America’s population is only 35%[ix] of NATO’s, but its defense spending is 63% [x] of NATO’s total. When other wars come, as they inevitably will, the U.S. will likely pay a disproportionate share of the war’s costs (in both blood and treasure) as it has ever since most of her allies have become more collectivist, thereby leaving them with insufficient ability to afford to do their fair share.
  • America Keeps Sea Lanes Open. International trade has been crucial in enabling wealthy countries to thrive and impoverished countries to rise out of abject poverty. As discussed in “Exploitation—Part IV (c), Exploiting Exploitation−The Path To Prosperity,” what impoverished countries need most is a functional political/economic system. Such systems, however, are less likely to succeed without an ability to create wealth by trading what they produce with willing cash buyers outside their borders.[xi] The more markets they can reach, the greater and faster their rise out of poverty. The more pirates or blockades keep products from reaching markets, the less and slower they can take advantage of free trade.[xii] America has been the overwhelming leader[xiii] in enabling billions of people to rise from poverty by keeping trade routes open.
  • The World’s Customer. As mentioned above, to create wealth of their own, people in other lands need customers. In 2017, America imported $2.4 trillion of goods and services from abroad, which amount is about 1/3 of the top 20 importers total and twice the next two largest importers, China and Germany, respectively?[xiv] (2019 U.S. imports are projected to have grown to $2.9 trillion, while predictions for China show a slowing of imports.) Without American purchasers, wealth creation and standards of living of everyone in the world would be much lower.
  • Research and Development. With less than 4.3% of the world’s population, the approximate $510 Billion[xv] spent annually on R&D by Americans is 25% of all investments in R&D in the world, which is exceeded only by China at 27%, which is likely falling due to China’s financial woes.

Since this post is about healthcare, it is worth noting that “In 2004, U.S. medical R&D spending represented 57 percent of the global total. By 2014, the U.S. share had fallen to 44 percent with Asia [despite it having only 4.3% of the world’s population]… Once the undisputed center of global innovation in medicine, the U.S. is steadily losing ground to Asia and Europe [but is still the leader].”[xvi] Confirmation of the greatness of America’s contributions advancements in medical science is that the first many pages of a Google search yield no relevant data. Using Bing, I found a website that presented statistics concerning the quantity of “cited” American medical research on a “per person” basis.[xvii] Presented in that fashion, America’s efforts appear flaccid. For example, “Citable documents per million population” for Switzerland were over 70,000 compared to America’s 31,000. Doing the math, however, reveals that Americans produced 10 million cited medical papers while Switzerland produced 0.6 million. With less than half the population of Europe, America produced only slightly fewer “citable” medical science documents as Europe did, i.e., America’s citable medical science per person is twice that of Europe’s.

 

  • Drug Prices. Everyone who debates the merits/demerits of universal healthcare knows that Americans pay more for prescription drugs than other people. The difference is massive, e.g., three times what the Brits pay and 16 times the Brazilians.[xviii] Few, however, appear to know neither why that is true or what to make of that fact. Let’s sort out why drug prices are so high in America and its effects everyone in the world and their progeny.

Why not have the federal government negotiate with Big Pharma?

Hopefully, the answer is evident by now, but let’s leave no doubt about it. “One perennial proposal to reduce health care costs has been to have the federal government negotiate drug prices with pharmaceutical manufacturers.”[xix] This quote is from a persuasive article that argues that such negotiations would likely cause drug prices to fall, and “Artificially depressing prices is a sure way to depress future research and the stream of new treatments. Depressing future research would, of course, would enable drug prices in America to be lower but at the cost of human lives and suffering that could have been avoided. Because America is less collectivist than other wealthy nations, Americans are the only people left in the world wealthy enough to fund (via high prices) fulsome medical R&D, certification, and administrative costs for drug improvements. (BTW: I’ve seen no research or articles that give America credit for funding R&D and regulatory certification conducted by foreign companies that cash in on the inflated drug prices paid overwhelmingly by Americans.)

The international cost of Medicare for All in America.

The stark reality is that either America, the wealthiest and most prosperous nation on earth, funds robust medical R&D and drug certifications, and the overhead associated therewith, or R&D funding will be anemic. Slashing the prices drug companies can receive for drugs would not only slow to a crawl the pace of medical improvements, it would (1) put many highly trained and skilled researchers and other Big Pharma employees (of which there are currently about one million) on the streets looking for jobs—which will drive down salaries, and bump lower-skilled workers out of jobs, (2) slash Big Pharma’s market value, thereby hurting people’s investments and destroying wealth that could have been used for investment in all industries—which slows job growth, (3) cause people buy less of everything due to lower pay—which produces job losses, (4) increase the need for unemployment compensation and welfare payments, (5) reduce the amount of taxes paid, and on and on—with each problem making the other problems worse. The ripple effects through the economies around the world would be huge. The cost of lost opportunities to cure medical conditions is inestimable.

Significant shocks to America’s economy (which MFA would necessarily inflict) would reduce America’s ability to do all the positive things it does for the world. With the destabilization of the Western World and its allies that MFA would inflict, the relative strength of its enemies will increase.

The above discussion of the compounding problems that MFA would unleash at home and abroad are only snippets of the disaster that would unfold, but hopefully, the above is sufficient to make the case. MFA in America is a really bad idea.

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AUTHOR’S NOTES:

Fairness. That America carries so much of the world’s burdens on her shoulders is patently unfair. However, complaints by U.S. politicians about other countries’ freeloading will do virtually nothing to enable those countries to reduce their wealth redistribution sufficiently to become wealthy enough to carry a fair share of the burden. Similarly, it isn’t fair that inventors earn nothing on their failed attempts to invent and, usually, only a small single-digit percentage of the value of successful inventions. Neither is it fair that honest people/companies that produce things of great benefit to consumers are penalized with high tax rates, while those who produce little or nothing are rewarded with the fruits of the labor of others. That, however, is how the world works and will likely change for the better very little absent considerable changes to the cultures. However, the fact that “the system” is unfair is not a reason to make the world a worse place for ourselves and our progeny.

The Big Pharma/Government Axis can and should be reformed. And we should get on with reforming it. On the other hand, because taking the profit out of Big Pharma would make matters worse, the key will be reducing Big Pharma’s costs, e.g., reductions in regulatory compliance costs and the “lobbying” cost of obtaining reasonable regulations.


[i]

World Population 2019

[ii] “[GDP] represents the total dollar value of all goods and services produced over a specific time period, often referred to as the size of the economy.

[iii] See, “FRED Gross Domestic Product.“ An interesting fact: With 4.3% of the globe’s people, America produces  25% of Global GDP. See “Global GDP (gross domestic product) at current prices from 2014 to 2024 (in billion U.S. dollars).”

[iv] See “Why Not Provide Medicare To Everyone In The World?

[v] See “World Population Review.”

[vi] See “European Union GDP.

[vii] See “Is Canada’s healthcare system as bad as Donald Trump says?

[viii] See “Should the Federal Government Negotiate Drug Prices?

[ix] See “NATO Countries | North Atlantic Treaty Organization Members 2019.”

[x] See “List of countries by military expenditures.”

[xi] See “Exploitation—Part IV (a), Exploiting Exploitation−The Cause.” ,” especially “Two Cheers for Sweatshops.

[xii] See “Trump’s Tariffs—A Sad Realization.”

[xiii] See “Securing the World’s Commercial Sea Lanes” and “At the most basic level, the mission of our Navy is to defend our homeland while keeping global sea lanes open and free. In fact, the latter actually helps us do the former, since so much of our nation’s prosperity and security comes for the free flow of maritime commerce.”

[xiv] See ““Leading import countries worldwide in 2017.

[xv] See “List of countries by research and development spending

[xvi] See “U.S. Slipping as Global Leader in Medical Research.”

[xvii] See “What countries have lead the world in medical research and innovation during the time period between 1995 and 2014?” (This is a bit dated, but is likely because Big Tech’s algorithms do not want this data to be found.)”

[xviii] See “From Scientific American, “How the U.S. Pays 3 Times More for Drugs,” “Researchers from Britain’s University of Liverpool also found U.S. prices were consistently higher than in other European markets. Elsewhere, U.S. prices were six times higher than in Brazil and 16 times higher than the average in the lowest-price country, which was usually India.”

[xix] See “Should the Federal Government Negotiate Drug Prices?.”

Why Not Provide Medicare To Everyone In The World?

The Selfish Leftist Heart” pointed out that Medicare for All (“MFA”) is a misleading moniker for proposals that provide health insurance coverage for only a select, relatively wealthy group of people who happen to live in America. “The Immorality of Medicare For Less Than All” explained how (1) MFA supporters give themselves too much credit for being empathetic when they sanguinely and uncritically condone proposals that deny billions of poorer people their “human right”[i] to healthcare, and (2) if the first point was brought to their attention, many of them would switch their demands to “Medicare For Everyone in the World” (“MFE”). The post ended with this: “However, neither MFA for Americans only nor everyone in the world is a moral proposition” and a promise to explain why that is true in this post. This post will sort out what is immoral about MFE.

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Author’s Note: An essential premise for the following argument that support for MFA is immoral is the following:

No matter how positive the benefits of a policy are (e.g., every poor person in the world getting all the healthcare they need would be immensely positive), the policy is, nevertheless, bad if its negative consequences are greater than its positive consequences. Supporting proposals that do more harm than good is immoral.

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Why not MFE? In a word, math.

About 7.75 billion humans are alive today.[ii] The sum of the annual GDP[iii] of every country totals about $87 trillion.[iv] That means that humans are producing goods and services of a mere $11,225 per person per year ($30/day). Over the long haul, humans cannot consume more goods and services than they produce. So, the average consumption per person per year cannot sustainably exceed $11,225. If some people consume more than that amount, there will be less than that amount available to be consumed by others. Just under one billion people live on less than $2/day (which is about one billion fewer than were living at that level in 1990).[v]

The average per-person consumption (which includes the consumption of healthcare) of Americans in the bottom 10% is over $15,000 per year.[vi] So, if world GDP were redistributed so that consumption by all the people of the world were equalized, the amount of consumption of “poor” Americans would fall about 25% from what they currently consume, i.e., MFE would mean more healthcare coverage for billions of desperately poor people, but vastly less healthcare for all Americans, including the about 11 million “poor” Americans to which MFA would provide healthcare coverage. Because food and shelter are higher human priorities than healthcare, the resources people would have to consume healthcare would be what is left over after sufficient resources are used to obtain food and shelter. Consequently, what would be available American poor people for healthcare would fall by more than 25%.

However, having healthcare coverage does not mean that healthcare, much less high-quality/timely healthcare, can be obtained. The infrastructure to deliver timely healthcare to most poor people in the world does not exist even if there were sufficient medical professionals to provide healthcare to everyone. Significant doctor shortages exist across the even wealthy parts of the world.[vii] Those shortages exist with billions of people having little to no access to healthcare. Nationalized healthcare systems typically impose long wait-times, do not provide the latest drugs if pharmaceutical companies refuse to slash their prices to near the cost of production (which drug companies will not always do), and decide not to provide healthcare when a bureaucrat determines that the cost/benefits analysis is not in the patient’s (or bureaucrat’s) favor. Passing a law to provide something does not magically cause the thing to materialize.

On the contrary, demanding the production of more of something (e.g., healthcare) typically causes the price of the thing demanded to rise. This is because the currently available volume of things is that which is economically feasible to deliver at the existing market price. In order to fund the motivation and means to produce more of the thing, the cost of the thing must rise.[viii]/sup> Demanding more healthcare be provided means either that the cost of healthcare will rise or the production system will become uneconomic/dysfunctional. For example, if providers are ordered to produce healthcare at a below-market price the number of people willing to stay in the healthcare business and the number of people deciding to enter the healthcare business will fall.

A man-made law cannot change the natural laws of economics any more than a law banning hurricanes would change the incidence of hurricanes. (Unsurprisingly, laws that ignore the natural laws of economics usually create more damage than hurricanes, albeit of a different sort.)[ix]

Given these realities, providing the level of healthcare that is available to America’s poor to all the poor of the world would require more money than the world can produce.

No moral person who is aware of reality could support the MFE. The same is true of MFA. Let’s sort that out in the next post.


[i] Healthcare is not something to which people have a human right. More on that in a future post.

[ii]World Population 2019

[iii] “[GDP] represents the total dollar value of all goods and services produced over a specific time period, often referred to as the size of the economy.

[iv] See, “Global GDP (gross domestic product) at current prices from 2014 to 2024 (in billion U.S. dollars).”

[v] See “Poverty.”

[vi] See “Finance and Economics Discussion Series Divisions of Research & Statistics and Monetary Affairs Federal Reserve Board, Washington, D.C.,”pg. 39.

[vii] See “Europe faces a shortage of doctors,”U.S. faces 90,000 doctor shortage by 2025, medical school association warns,” “Poor salaries and overwork led to shortage of doctors in China,” “Dubious cure for doctor shortage. ‘The number of doctors per 1,000 people [in Japan] is 2.2 — about two-thirds of the average level in industrialized economies.,” “India suffering critical shortage of doctors…”

[viii] See “Wealth” and “Income Inequality Is More Than It’s Cracked Up To Be.”

[ix] The discussion in this paragraph highlights a major confusion that confounds the public debate about “the cost of healthcare.” Providers of healthcare incur costs to research, invent, develop, produce, and deliver healthcare and consumers of healthcare incur costs to purchase healthcare. These two kinds of “healthcare costs” have few things in common and, in many respects conflict with each other, yet when people argue for or against MFA, they mindlessly draw no distinctions between the two. This adds major irrationality and confusion to those debates. The topic is well worth sorting out in a future post.

The Immorality of Medicare For Less Than All

The Selfish Leftist Heart” pointed out that, despite presumed morality of their proposals and their apparent sincerity, viable American politicians never actually propose what they say they are proposing, “Medicare for All” (“MFA”). Instead, they propose MFA only for people who reside in America, all of whom are wealthy compared to the billions of vastly poorer people around the world (but, of course, those people cannot improve politicians’ election prospects).

With some exceptions,[i] few, if any non-politician Americans clamor for MFA in order to gain personal benefits (though many personally do benefit from supporting MFA,[ii] while others support MFA from immoral, fallacious or misguided reasons[iii]). On the contrary, many, probably a majority of those people believe they will have to pay some part of the cost of MFA. They are happy to sacrifice for the goal they presume to be laudable. Their motivation is typically a belief that they are supporting a good cause, i.e., MFA is the moral thing to do. (Although a review of a couple of pages of search results produced no article in which the author(s) actually attempted a moral argument that supports the morality of their stance. Rather, the authors merely asserted MFA’s morality and proceeded on the strength of their unsubstantiated premise[iv]—in so doing they also revealed that they do not understand what “moral” means.[v]) Nevertheless, in order to sort out an important issue about MFA, let’s assume that someone has made a case that MFA for Americans is the moral thing to do. What about the billions of poorer people left out in the cold?

It is commonplace for MFA supporters to condemn those who do not support MFA as having insufficient (if not no) empathy. If, however, empathy is the reason to support MFA for those who cannot afford healthcare, how can those condemners justify limiting their empathy to the lucky few who happen to reside within America’s borders, i.e., people who already have much more access to healthcare (e.g., ambulance services, world-class hospitals and doctors and many charitable organizations) than the bottom few of billions in the world? If funding MFA by fleecing millionaire and billionaire is a morally acceptable way to achieve the glorious goal of MFA, how can good people morally deny the “human right” to healthcare to the more desperate billions of poorer people in the world? Are the MFA proponents vastly less empathetic than they believe themselves to be? Are they tribalistic, America First people? Are they just pretending to be empathetic? Do they have no heart? Whatever the reason, if asked about their heartlessness toward poorer people, supporters of MFA for Americans only would have some explaining to do.

On the other hand, I’ve never seen MFA champions asked/challenged about this conundrum, and I suspect that the vast majority of them have never considered how constricted and discriminatory their empathy must be to support those proposals. (Full consideration of a topic is typically not a strong suit of champions.) Confronting this issue would surely create cognitive dissonance. How might they deal with the dissonance?

My guess is that most of them would respond by attacking the questioner, but some would grapple with the issue and ultimately relieve their cognitive dissidence (from realizing that they have been supporting a racially discriminatory and insufficiently empathetic proposal) and restore their empathetic self-image by switching their demand to “Medicare For Everyone in the World.”  After all, it was not long ago that no American politician would dare insist that America’s MFA cover U.S. inhabitants who did not follow U.S. immigration law to get here. Recently, when enough leftists realized that excluding “illegal aliens” from MFA caused cognitive dissidence, leftists began insisting that “undocumented immigrants” be covered, and Democrat politicians jumped to the front of that parade.[vi] If leftists believe, as many do, that healthcare is a human right and MFA is the moral thing to do, is there a reason to believe that they would not assuage their cognitive dissidence and restore their empathetic pose by demanding MFA for everyone in the world? I think not.

However, neither MFA for Americans only nor everyone in the world is a moral proposition. Let’s sort out why that is true in the next post.


[i] The 30.4 million (11.3%) U.S. inhabitants who do not currently have healthcare coverage expect to directly and immediately benefit. See “Health Insurance Coverage: Early Release of Estimates From the National Health Interview Survey, 2018.” [The 11.3 % figure adjusts the 13.3% figure presented in this report (which was the percentage of uninsured Americans younger than 65) to take into account the 15% of Americans who are covered by Medicare.]

[ii] Many, perhaps most, people who support MFA gain from combinations of the following:

  1. The dopamine rush from believing their support is doing something moral/noble,
  2. Reducing the risk that they will be vilified, shunned, derided, ridiculed, or fired from their job by the mob that favors MFA,

[iii] Some of the supports of MFA believe they will gain from some or all of the following reasons:

  1. They believe their desire for revenge against you name it, (e.g., drug or insurance companies, political opponents, the millionaires and billionaires who they believe will pay for it, all of the above) will be satisfied,
  2. A belief in the promises of politicians that MFA will lower their own cost of health insurance, and
  3. A reduction in their risk of destitution and lack of healthcare if they lose their job or otherwise run out of money.

[iv] See  “Ady Barkan makes a moral case for single payer at first-ever Medicare for All hearing” and “Bernie Sanders: Why We Need Medicare for All.”

[v]     Consider the following claim in WE CAN AFFORD TO HAVE HEALTH CARE FOR ALL IN THE U.S:  “The core argument in favor of universal health care is the moral one, especially for people of faith. 26-year-old Alec Smith of Minnesota died in 2017 because he could not afford insulin. That is immoral.” In light of Webster’s definition of “moral:”

1      a: of or relating to principles of right and wrong in behavior : ETHICAL

//moral judgments

b: expressing or teaching a conception of right behavior

//moral poem

c: conforming to a standard of right behavior

//took a moral position on the issue though it cost him the nomination

d: sanctioned by or operative on one’s conscience or ethical judgment

//a moral obligation

e: capable of right and wrong action

// moral agent

As you can see, “moral” has to do with a person’s behavior. The moral “argument” made about Alec Smith in the above quote was “That is immoral.” Who in the story about Alec Smith did the immoral act, and what wrongdoing was committed by that person? The correct answers are no one in the Alec story engaged in immoral conduct. If the cat, who has no capacity to be moral or immoral, or misfortune caused the woeful outcome, the outcome cannot be is immoral—outcomes are not acts.

[vi] See “Where Democrats Stand.”