Megan McArdle has a problem.
Drug companies are raising prices dramatically; drug costs now account for "17% of overall personal health care services" and people are starting to talk about using government power to bring them down to an appropriate level. Once again, Nancy Drew is on the case!
However, it's never been very clear why McArdle has such a personal interest in preserving the extravagant success of drug companies. It's very clear that she's willing to lie and deceive to support them but the why is much less clear.
Of all things, why medical care? She has a knee-jerk reaction to Obamacare, Medicare, Medicaid, and Great Britain's NHS. She has said that she'd rather pay for a doctor out of pocket than have the government involved in health care and destroy drug innovation. McArdle risked her precious career to lie for them.
Although McArdle's only concern is the cultivation and happiness of Megan McArdle, and her tendency towards greed was reinforced and deepened by disappointed monetary expectations, one can only guess.
Say, I just had a stray thought. I wonder how much money McArdle has in drug company stocks?
Back to her post:
“The health of Americans should not be a profit center. Health care is a right. Full stop.”
That comes from the Twitter feed of personal finance writer Helaine Olen. But it could have issued straight from the heart of any progressive in the land.Remember the episode of Star Trek called, "Mirror, Mirror," with the Good Enterprise crew and the bearded Evil alternate universe crew? Olen is the Good Enterprise mirror image of McArdle.
Subjecting health care to the sordid whims of the marketplace strikes many people as simply immoral.Yes, raising the price of EpiPens from $57 to $600 might appear to be immoral, but McArdle wants to assure you otherwise. The parents of kids who will die from anaphylactic shock but can't afford the cost of the pen will no doubt be infinitely relieved by her reassurance.
Nor is this feeling confined to the left. Conservatives may be less enthusiastic about socialized medicine, but talk to one about the health care system, and there’s a good chance you’ll get a rant about greedy insurers nickel-and-diming hardworking consumers when they’re sick. Almost everyone feels that there is something fundamentally wrong about making money off of someone else’s illness.McArdle doesn't. I could go on and on but that says it all. She thinks it's just fine if drug companies gouge sick children.
Why do we feel this way? No, don’t sputter and tell me that it’s obvious, that people need health care. People need a lot of things. You’ll die without food long before you’ll die without health care, and yet few people say we need to “take the profit motive out of farming”. (There are some, to be sure, but this was never a widespread sentiment even when food was a lot scarcer and more expensive). Why is health care special?If you get hit by a truck, you'll die in minutes without health care. McArdle thinks you should be spending those minutes googling hospitals to see which one has the lowest prices for brain surgery and putting metal pins in your legs. She thinks it's okay to charge whatever the market can (or cannot) bear for drugs, no matter how high.
There is a profit motive in farming, but if you raise prices until people can't afford to feed their children, you will set off riots and revolutions. If you raise drug prices until people have to give up food to buy another EpiPen because Junior lost it on the playground, you will set off a disturbance in the force as well.
But nothing is more disturbing to McArdle than the government threatening to lower drug company profits so Americans can afford medicine for their children. McArdle goes on to discuss Robin Hanson's ideas on altruistic versus market exchange.
Hanson is suggesting that we have a strong intuitive preference for altruistic health care -- for an enormous, practically unlimited amount of altruistic health care -- because health care is a way to demonstrate loyalty and caring to people you love. But the thing about reciprocal altruism is that it's not supposed to be an explicit quid pro quo. That may explain why we like insurance that covers as much as possible and dislike any suggestion that the people who provide our health care are calculating what it will cost them to provide it. Bringing money into an altruistic exchange taints it (as you’ll quickly find if you try offering your spouse cash to get romantic when they say they’re not in the mood).
The issue, in other words, is not necessarily profit -- health insurers are not particularly profitable as industries go, and hospitals and other care organizations are often nonprofit. The issue is making decisions based on money.McArdle must have been elated at the justification for eliminating the discussion of profit from health insurance calculations. She also thought it was a great idea to eliminate the idea of money from aiding the poor, since they only care about reciprocal altruism as well. Why give money to the poor when they'll just share it with other, poorer people?
Unfortunately, this leaves us with something of a problem. Reciprocal altruism is fine if all you need is for Mom to sit with you and brew you some herbal tea. But in a modern society, you need to procure health care from strangers -- which is to say, through the transactional system of market exchange. Nationalizing the health care system does not fix this fundamental disconnect between our evolved instincts and the inevitable necessities of a modern economy.
National health care systems, in other words, must make exactly the same sort of decisions that private insurers and individuals do: what is worth paying for and how much to pay.Yes, once you glibly eliminate the profit motive, all decisions are the same!
A few years ago, around the time that Obamacare passed, I was invited on a British radio show to represent the anti-national-healthcare point of view. Needless to say, I knew going in that I was in hostile territory; this is, after all, a nation that featured its National Health Service in a dance number at the opening of the London Olympics. Brits tend to have a very strong attachment to the NHS, and very strong objections to anyone who speaks ill of it in any way.McArdle's objections to the NHS, Obamacare, single payer, etc., are all based on her greed. She ran through a laundry list of reasons when Obamacare was being formed, but all her rationalizations sift down to one simple reason: she doesn't want anyone to take money from the rich. From a 2009 McArdle post:
John Holbo challenged me in a former post to say what I would think about the various proposals, or a putative single payer system, if it worked just the way progressives think it will. I thought I had, but I'll do it again. The answer is that I would be against it because I don't believe in taking money from the rich to subsidize the middle class--I don't think that people whose basic needs are taken care of have any distributional claim on people with more money, even though it is perfectly fair to ask the wealthy to pay more for goods that are broadly publicly enjoyed.That was perfectly clear. McArdle is rich. She doesn't want you to take any of her money. She says doesn't like her government and employer-subsidized health insurance but that means nothing because she takes it anyway. It's easy to say that nobody should give you any help when they are already helping you. McArdle could refuse to accept the subsidy. Only she can control this outrage, but it's the strangest thing: she does nothing about taking away her own subsidy while writing 100 articles saying that everyone else's insurance subsidy should be taken away.
In view of this, I took the coward’s way out; rather than making a full throated defense of the marvels of free-market health care, I stuck to describing differences between the two systems, rather than advocating for one kind or another. I can’t now find the clip, so you’ll have to take my word for it that my tone was “blandly inarguable” rather than “stacking the deck in favor of my argument”.I can't find her clip either, unfortunately. I suspect it was very enjoyable. Watching McArdle explain to the British that they have NHS because they just happen to like national health care would have been amusing.
McArdle goes on to describe how she schooled the other debater in his own system, and informs us that that we must let people die when drug prices are raised too high for wealthy countries to afford.
A true national health care system, along the lines of Britain or Canada, would have advantages and disadvantages over what we have now. But one advantage that it doesn’t offer is to free us from the need to think about our health care in the cold logic of dollars and cents, rather than warm and fuzzy altruistic ideals. Health care cannot be a right, full stop; it has to stop before we run out of wallet. Which means that no matter how much it horrifies, we have to stop hoping for a system that will make those hard decisions and unhappy trade-offs go away.The alternative, of course, is for the government to control drug prices, like other countries. But McArdle already decided that taking money from the rich and giving it to anyone else is wrong, so I guess we'll just have to watch our children die instead.