Tom Pittman's WebLog

(or something like that)

2005 August 30 -- TANSTAAFL*

I had some surgery done last week. It cost me several thousand dollars. One family member urged me to delay it until I became eligible for Medicare, another suggested I should have travelled to a country she recently visited, where the same procedure costs only $100. I suspect that price applies only to local citizens, not "rich Americans."

In some other country the labor costs might be somewhat less than in the USA, but the equipment costs are higher, so the real cost there is not significantly cheaper than here. I paid perhaps 30% less at an out-of-state (non-profit) university hospital than it would have cost me at a for-profit facility here in town. Apart from profit (in my case, not) paid to the investors, it cost the university about as much to perform the surgery as I paid out of pocket. I got what I paid for.

Everybody wants "free" health care. It ain't gonna happen. Somebody must pay the doctors for their high-priced education and even more to the lawyers who drive the cost of malpractice insurance through the sky. Somebody must pay manufacturers to make sophisticated medical equipment, and pharmaceuticals to research and test effective drugs. The contractors who built the hospitals didn't work for free, and the bright lights in the operating room use up the same expensive electric energy that I pay to light my home office. Who's going to pay for it?

There are only two possible answers to that question. Either the person receiving health care services pays for it (directly or indirectly), or else it's coming out of somebody else's pocket. If that somebody else is an altruistic Christian (there aren't many of those around; Mother Theresa died a while back), they might give voluntarily. Otherwise it is taken from them by force (also known as "theft" or "taxes"). However, there are more people wanting "free" health care than there are people willing to pay for it out of their own pockets. So in reality, you pay for your own medical care.

Many Americans have employer-paid health insurance. They also have employer-paid paychecks, meaning that the health insurance costs are nothing more than a bookkeeping fiction. It's all part of the cost of labor the employer pays for your services. If they didn't pay the insurance company, they would have more money on the table for salary. My niece voted against a unionization bid in her workplace because she happened to think the health benefits were better than the salary the union was willing to trade it off for. To the employer and the union alike, it's all fungible dollars. Bigger numbers on the paychecks look better -- unless you happen to need a lot of medical attention. Then what happens is that the other employees are paying your medical costs. In any case, a large part of the insurance premiums pay insurance company salaries and fancy buildings and TV ads. That money does not pay for health care at all.

In countries with government-paid health care, the tax system is the real payer. And because "there are two ways to do a job, the right way and the government way," they must collect far more taxes than the hospital ever sees in payment, even more than insurance companies waste. MediCare is like that. I suspect they collect $3 in taxes for every $1 that actually goes to pay doctors and hospitals. Remember the $300 toilet seats? Government is like that. MediCare is (or soon will be) bankrupt. So they will raise taxes. Again, it's all fungible dollars, paid by you.

Since I have been paying taxes into the MediCare system all these years, I deserve to take some out, right? If I follow that logic to its conclusion, then because I have been paying taxes to support the military, I have also earned the right to make war on the USA. Wrong. Furthermore, once you put your hand into the government cookie jar, you become a slave to the politicians. I rightly call "hypocrites" those people who protest nuclear power plants and hydroelectric dams while munching on veggies kept fresh in electric refrigerators, or wearing clothes sewn on electric sewing machines, or shouting obscenities into electric bullhorns. I earn the right to complain about taxes only by refusing to accept any government benefits paid from those taxes.

The bottom line in my case is not so bad. In the 25 years I have been without health insurance, I would have spent a total of maybe $50,000 in premiums, perhaps as much as double that. After paying for the surgery, I still have enough left over to buy a fancy new car. I think that's a better deal than buying a fancy new car for the insurance company executive. Somebody else bought his car, not I. Also, my experience is that I get better quality health care when I'm the one making the decisions about which procedures get paid for and which do not, instead of some remote government or insurance company bureaucrat.

There remains one nagging question -- about health care in general, not mine -- whether it is morally right to burden the whole pool of employees and/or taxpayers (as the case may be) for the irresponsible unhealthy habits ("lifestyle") of a few people. By not pooling my medical costs with them, I end up paying far less than the average American citizen for health care, despite an occasional blip like last week. But obese people (who get diabetes and all kinds of heart problems), smokers (who get respiratory and heart problems), sun-worshippers (skin cancers), and male homosexuals (AIDS and a whole bunch of STDs) tend to use up far more than their fair share of health care resources. Why should responsible people be forced to pay for their irresponsibility?

* TANSTAAFL = There Ain't No Such Thing As A Free Lunch, coined by Robert Heinlein in "The Moon is a Harsh Mistress".