For a fiscal conservative, the market sets the price and any government interference is going to disrupt the market and lead to inefficient outcomes. As such, it may seem strange as to why a fiscal conservative would argue for having a government run, single payer, healthcare system. I’m going to disregard my own biases, pre-existing political beliefs, and moral obligations for the time being in order to make a convincing argument as to why this would be the case.
Putting aside the whole “markets-will-fix-it” notion for a second, there is one big argument for why we can not and should not have a single payer healthcare system that is constantly brought up by fiscal conservatives.
Earlier this year, I was watching a debate which concerned free college education and free healthcare; of course, as I think both of the people in the segment realized, there is no such thing as free anything. Having realized this, the conservative Fox News reporter repeatedly interrupted the liberal college girl by asking, “who’s going to pay?” Well, that’s the million-dollar question, isn’t it? Who is going to pay? Her response was shaky at best, claiming that the top one percent were going to pay for it through an increase in taxes — yes, we’ve all heard the argument before.
Currently, more than half of the total expenditures towards healthcare in the U.S. are private expenditures; surely enough, if the U.S. is to move into a single-payer system, we would have to raise taxes enormously, right? Well, not necessarily. Nearly every single government in the world, regardless of whether or not they have universal healthcare, spend less than the U.S. on per capita healthcare in terms of public expenditures — the only two exceptions being Norway and Switzerland, countries which have a higher GDP per capita (PPP) than the U.S. Yes, that’s right, the U.S. government pays more in per-capita healthcare than Sweden, Germany, and Denmark — countries notorious for their social policy infrastructure.
Contrary to fundamental economic models seen in the Classical School of Economics, healthcare is a market in which competition does not necessarily drive down prices to an efficient and equitable price level; since it’s very hard to put a price on life, the price tag on a drug or medical equipment is determined by whatever the provider can get away with without getting bad PR — think EpiPen. While there is no such thing as a product or service that has perfectly inelastic demand, medicine is most likely the closest thing we'll ever get to having a product with perfectly inelastic demand. It’s simple, if a drug costs $5 dollar but saves your life, you’ll buy it; however, you would also buy the drug if it cost $500, as your life is worth more than $500.
With a centralized negotiation system, the one which stems from a single-payer system, the government would be able to negotiate prices by going out to all providers of a specific good to offer contracts to the providers who could sell the cheapest good, while still making sure the good is safe — driving the price down. Even though marginal profits may be narrow for the producer, the sheer number of products sold will mean enormous profits for whoever manages to secure the contract — making the contract very attractive and highly sought after.
Even with centralized negotiation, it is highly unlikely that the U.S. could ever get their per capita healthcare spending comparable to that of Sweden or Denmark without major healthcare reform; Nonetheless, it would, with absolute certainty, drive the price of healthcare down.
The U.S. would be able to allocate their resources much more efficiently. Public spending would be redirected to other markets and would increase investments in sectors which could potentially boost the overall U.S. economy — increasing effective tax dollars raised and lessening the need for private expenditures in the healthcare market.
Private healthcare costs are a tremendous economic burden; every year, 643,000 people go bankrupt due to medical bills. Not only is this an economic burden for the individuals — the current, half & half, healthcare system is a ball and chain attached to the ankle of the nation’s economic growth.
In order to receive coverage, a lot of talented individuals are forced to work for large corporations. Of course, it could be argued that having this system will incentivize individuals to enter the workforce sooner, rather than later; however, it drastically inhibits innovation and entrepreneurship as individuals put themselves at incredible risk if they cannot secure health coverage. It systematically hurts small businesses, reduces the likelihood for someone to start their own business, and makes it difficult for nonconventional workers, such as content creators, to make a sustained living.
It’s time we address the elephant in the room, however (and that’s not just a republican pun). Will universal healthcare not reduce the quality of care and increase wait times? Both yes and no.
As a consequence of having universal healthcare, it could potentially reduce poor quality care due to unnecessary treatments and redundant controls to cover physicians from malpractice lawsuits. Furthermore, the privatized healthcare system has a perverse incentivization system inherent to it, much like the private prisons. It is not in the best interest to patch up the patient in few sessions; rather the contrary, the healthcare sector now stand to gain from having more people require medical assistance.
With the current call for healthcare reform, a call which is getting stronger by the day, we cannot afford to pull in the opposite directions. Privatization has been the bedrock for growth in a magnitude of sectors and it has been proven throughout history — however, healthcare is not one of those sectors. This is not about entitlements, nor is it about rights, it’s about a healthcare system which makes economic sense in the twenty-first century.