The Economic Case for Universal Health Care

So with health care being top of mind for a lot of people right now, I’ve been giving the system some thought as well.  In the states, generally speaking, conservatives think healthcare should be left to the private sector and that people should should be able to source their own coverage.  Liberals, generally speaking, think health care is a basic right and the government should assist in making sure everyone is covered.

The frustrating thing about politics for me is that these aren’t conversations about the most efficient way forward, these debates simply an arena where governing parties fight for power and control.  I say this with confidence because if you think about it carefully, both sides are right but they can’t see it.  Rather than working together and coming up with a solution that accommodates the priorities of both sides, those involved seem more interested in obstructing their opposition.

Healthcare should be privatized because privatization isn’t an evil word.  In fact, all it really means is opening that business opportunity up to the public.  As it turns out, the general population is filled with awesome ideas and great entrepreneurs who can bring them to market.  Add in some competition with one another and we’ll find some pretty fantastic ways to deliver healthcare to those who need it.

People should be able to source their own coverage.  Why?  For the same reason we should be able to choose our own internet provider, streaming subscription, or gym membership.  Where we choose to spend money reflects our preferences and our preferences let our providers know where they should be competing hardest.

All that said, health care should absolutely be a basic human right and the government should absolutely have a hand in providing health care to those without the means to provide it to themselves.  I’ll even explain why with basic economic theory.

So I have this theory that right and wrong are human constructs which are actually based in efficiency (I’ll explore that more in another post once I’ve refined the theory a bit more). Effectively, the most efficient manner of accomplishing long-term progress is perceived to be both the most moral and ethical way forward. This is because for it to be the most efficient path forward, it must take all variables into consideration and deliver us to our end goal with the least amount of effort and time.

The next concept that needs to be touched on is comparative advantage. It’s a basic economic theory which essentially says that we’re all built a little differently, and that if we’re able to figure out what we do really well, we should do the hell out of it. Everyone produces what they’re absolutely best at, and trade helps goods and services end up where they should.

Most republicans and economists recognize comparative advantage to be fundamental to the free market – and for good reason. But for people to reach the peak of their comparative advantage, they require favourable circumstances. People on welfare, working minimum wage jobs, etc. are unlikely to be producing at their highest levels (AKA maximum utility) and without more favourable circumstances, never will. I get the classic conservative approach of taking it upon yourself to create your own favourable circumstances – I often tell people to be the change that they seek, but it’s not always in the cards.  For you hold’em players out there, let’s use a poker analogy. Would you rather have pocket aces and hit nothing on the board or a 7/2 off-suit and hit nothing on the board? Most people will choose the aces, but statistically, both are losing hands. I think the best thing the government can do for itself and for its people is help the person holding aces to a hand where they flop the other two aces and the 7/2 to a flop with the other three 7s.

If we can do that, the entire country transforms and becomes an unparalleled powerhouse of production, delivering levels of value that we didn’t even realize were possible. Cost of universal health care in that scenario? Negligible.

I know, I know, what does comparative advantage and maximum utility have to do with healthcare? Stephen Hawking. He’s said on multiple occasions that he would likely be dead without access to the NHS, Britain’s public healthcare system. If that’s true, what if he had been born in the US? He’s one of my favourite examples of someone who was dealt a 7/2 offset, but because he existed in a system which wanted to give him every opportunity to reach his maximum utility, he was given the chance to make his contribution.

Would you agree that the value Hawking has provided to the world has exceeded the health care services he has provided? Perhaps my biggest point here is that everyone *should have* the opportunity to make their greatest contribution to society. Some of us are able to earn it, but as circumstance would have it, for those like Hawking it must be given.  Healthcare included.

Author: Author

In an age of promotion before substance, let's try substance before promotion. I'm hoping anonymity will help keep a focus on the ideas but I do understand wanting to connect to the person behind them. Let's split the difference with some fun facts: I have a professional crush on Harvey Specter, Bruce Wayne is my favourite superhero, and I share a personality type with the likes of Warren Buffet, Steve Jobs, and Lex Luthor.

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