Socialist or Corporatist Medicine?

The Democratic Party agenda tends to be a mixture of socialism and corporatism, whereas Republicans probably emphasize corporatism and socialism. Obama’s health care plan has always been a hybrid, as most interventionist polices are in a mixed economy. Perhaps in the longterm he wants to move toward as fully socialist a system as possible, but it is hard to know. We do know that the president would rather push something significant through than nothing. We also know that he has to play a game where corporate interests who want a captive market through mandated health care are happy, but so too are the progressive true believers in social democracy on the far left. Will he be able to do it?

It appears as though Obama may be backing off the “public option“—a socialist health “insurance” scheme to “compete” with private enterprise—as the central element of the proposal. Although some progressives and Democrats claim they would not support a program without a “public option,” Obama may be able to win them over with health-care co-ops, which would operate as non-profits with subsidies and support from the state.

Despite the Democrats’ insistence that all opposition to the plan is coming from big industry (unless it’s rooted in “racism”), Big Health is actually largely behind Obama’s general move toward more intervention. The drug companies are taking out many millions of dollars in advertising in support of Obamacare. The connection between big business and more regulation and government involvement should be no surprise. When Bush expanded Medicare, the drug companies of course cheered. (While some of his partisans denied that this was a bothersome element in the prescription drug program.)

When the dust settles, I expect if a bill passes, it will involve massive intervention on behalf of the state with just enough to satisfy the biggest players in industry as well as enough bureaucratic expansion to please the left. What will be sold as a “compromise” will actually be, in some respects (though perhaps not all respects), the worst of all worlds: A further solidification of fascism in the health care sector. This means that any further disasters, reduced quality, shortages or climbing health care costs will continue to be blamed on the market and there will be another round of calls for more socialization a few years down the line.

If we want true health care reform—and many opponents of the plan are doing a disservice by defending our very flawed system as “the best health care plan in the world” or a paragon of capitalism—we must see dramatic moves toward the free market. This would mean, among other things, eliminating the licensing of health care professionals, deregulating the insurance industry, undoing the unholy link between insurance and employment created by the tax code (while perhaps allowing pure tax credits for any health care expenditures—I see tax credits as a tricky issue), abolishing or greatly scaling back the Food and Drug Administration, which drives up prescription costs and has killed hundreds of thousands of Americans, rethinking the patent system for health care services and, ultimately, scrapping Medicare. On the last one, I’d favor immediate abolition as a matter of principle, but here’s a gradualist reform I could live with: Get rid of the illusion of government-backed old-age medical insurance of any kind. It’s a pay-as-you-go program, so it should be treated as one. The Medicare tax should be eliminated (not replaced by government savings accounts) and recipients of Medicare should be, in the transition, paid for out of the general fund. This would at least be honest accounting. Medicare is a welfare redistribution plan, not an insurance plan of any sort, and it must be treated as one. No one paying into the system would be under the illusion that the government will care for them years down the road. To lessen the burden and shrink the government’s involvement, perhaps those receiving Medicare would be free to opt out of it in return for a huge reduction in their federal taxes.

Any legitimate reform will discernably take away the government’s power over something significant and will scale back its size and involvement. That is the only antedote to our health care troubles, and the only true alternative to more socialism and fascism in American medicine.

Anthony Gregory is a former Research Fellow at the Independent Institute and author of the Independent books American Surveillance and The Power of Habeas Corpus in America.
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