Health Insurance is Not a "Right"

The Ayn Rand Institute released this 1993 speech by its founder on the Clinton Health Plan -- originally delivered at a Town Hall meeting in Costa Mesa, California -- because the same essential issues underlie today's debate over universal health coverage. While current proposals, such as Governor Arnold Schwarzenegger's, differ in their details from the Clinton plan, they share with Clinton's proposal a fundamental moral premise: the notion of a right to health insurance. -- The Editors.

Most people who oppose socialized medicine do so on the grounds that it is moral and well-intentioned, but impractical; i.e., it is a noble idea--which just somehow does not work. I do not agree that socialized medicine is moral and well-intentioned, but impractical. Of course, it is impractical--it does not work--but I hold that it is impractical because it is immoral. This is not a case of noble in theory but a failure in practice; it is a case of vicious in theory and therefore a disaster in practice. So I'm going to leave it to other speakers to concentrate on the practical flaws in the Clinton health plan. I want to focus on the moral issue at stake. So long as people believe that socialized medicine is a noble plan, there is no way to fight it. You cannot stop a noble plan--not if it really is noble. The only way you can defeat it is to unmask it--to show that it is the very opposite of noble. Then at least you have a fighting chance.

What is morality in this context? The American concept of it is officially stated in the Declaration of Independence. It upholds man's unalienable, individual rights. The term "rights," note, is a moral (not just a political) term; it tells us that a certain course of behavior is right, sanctioned, proper, a prerogative to be respected by others, not interfered with--and that anyone who violates a man's rights is: wrong, morally wrong, unsanctioned, evil.

Now our only rights, the American viewpoint continues, are the rights to life, liberty, property, and the pursuit of happiness. That's all. According to the Founding Fathers, we are not born with a right to a trip to Disneyland, or a meal at Mcdonald's, or a kidney dialysis (nor with the 18th-century equivalent of these things). We have certain specific rights--and only these.

Why only these? Observe that all legitimate rights have one thing in common: they are rights to action, not to rewards from other people. The American rights impose no obligations on other people, merely the negative obligation to leave you alone. The system guarantees you the chance to work for what you want--not to be given it without effort by somebody else.

The right to life, e.g., does not mean that your neighbors have to feed and clothe you; it means you have the right to earn your food and clothes yourself, if necessary by a hard struggle, and that no one can forcibly stop your struggle for these things or steal them from you if and when you have achieved them. In other words: you have the right to act, and to keep the results of your actions, the products you make, to keep them or to trade them with others, if you wish. But you have no right to the actions or products of others, except on terms to which they voluntarily agree.

To take one more example: the right to the pursuit of happiness is precisely that: the right to the pursuit--to a certain type of action on your part and its result--not to any guarantee that other people will make you happy or even try to do so. Otherwise, there would be no liberty in the country: if your mere desire for something, anything, imposes a duty on other people to satisfy you, then they have no choice in their lives, no say in what they do, they have no liberty, they cannot pursue their happiness. Your "right" to happiness at their expense means that they become rightless serfs, i.e., your slaves. Your right to anything at others' expense means that they become rightless.

That is why the U.S. system defines rights as it does, strictly as the rights to action. This was the approach that made the U.S. the first truly free country in all world history--and, soon afterwards, as a result, the greatest country in history, the richest and the most powerful. It became the most powerful because its view of rights made it the most moral. It was the country of individualism and personal independence.

Today, however, we are seeing the rise of principled immorality in this country. We are seeing a total abandonment by the intellectuals and the politicians of the moral principles on which the U.S. was founded. We are seeing the complete destruction of the concept of rights. The original American idea has been virtually wiped out, ignored as if it had never existed. The rule now is for politicians to ignore and violate men's actual rights, while arguing about a whole list of rights never dreamed of in this country's founding documents--rights which require no earning, no effort, no action at all on the part of the recipient.

You are entitled to something, the politicians say, simply because it exists and you want or need it--period. You are entitled to be given it by the government. Where does the government get it from? What does the government have to do to private citizens--to their individual rights--to their real rights--in order to carry out the promise of showering free services on the people?

The answers are obvious. The newfangled rights wipe out real rights--and turn the people who actually create the goods and services involved into servants of the state. The Russians tried this exact system for many decades. Unfortunately, we have not learned from their experience. Yet the meaning of socialism (this is the right name for Clinton's medical plan) is clearly evident in any field at all--you don't need to think of health care as a special case; it is just as apparent if the government were to proclaim a universal right to food, or to a vacation, or to a haircut. I mean: a right in the new sense: not that you are free to earn these things by your own effort and trade, but that you have a moral claim to be given these things free of charge, with no action on your part, simply as handouts from a benevolent government.

How would these alleged new rights be fulfilled? Take the simplest case: you are born with a moral right to hair care, let us say, provided by a loving government free of charge to all who want or need it. What would happen under such a moral theory?

Haircuts are free, like the air we breathe, so some people show up every day for an expensive new styling, the government pays out more and more, barbers revel in their huge new incomes, and the profession starts to grow ravenously, bald men start to come in droves for free hair implantations, a school of fancy, specialized eyebrow pluckers develops--it's all free, the government pays. The dishonest barbers are having a field day, of course--but so are the honest ones; they are working and spending like mad, trying to give every customer his heart's desire, which is a millionaire's worth of special hair care and services--the government starts to scream, the budget is out of control. Suddenly directives erupt: we must limit the number of barbers, we must limit the time spent on haircuts, we must limit the permissible type of hair styles; bureaucrats begin to split hairs about how many hairs a barber should be allowed to split. A new computerized office of records filled with inspectors and red tape shoots up; some barbers, it seems, are still getting too rich, they must be getting more than their fair share of the national hair, so barbers have to start applying for Certificates of Need in order to buy razors, while peer review boards are established to assess every stylist's work, both the dishonest and the overly honest alike, to make sure that no one is too bad or too good or too busy or too unbusy. Etc. In the end, there are lines of wretched customers waiting for their chance to be routinely scalped by bored, hog-tied haircutters some of whom remember dreamily the old days when somehow everything was so much better.

Do you think the situation would be improved by having hair-care cooperatives organized by the government?--having them engage in managed competition, managed by the government, in order to buy haircut insurance from companies controlled by the government?

If this is what would happen under government-managed hair care, what else can possibly happen--it is already starting to happen--under the idea of health care as a right? Health care in the modern world is a complex, scientific, technological service. How can anybody be born with a right to such a thing?

Under the American system you have a right to health care if you can pay for it, i.e., if you can earn it by your own action and effort. But nobody has the right to the services of any professional individual or group simply because he wants them and desperately needs them. The very fact that he needs these services so desperately is the proof that he had better respect the freedom, the integrity, and the rights of the people who provide them.

You have a right to work, not to rob others of the fruits of their work, not to turn others into sacrificial, rightless animals laboring to fulfill your needs.

Some of you may ask here: But can people afford health care on their own? Even leaving aside the present government-inflated medical prices, the answer is: Certainly people can afford it. Where do you think the money is coming from right now to pay for it all--where does the government get its fabled unlimited money? Government is not a productive organization; it has no source of wealth other than confiscation of the citizens' wealth, through taxation, deficit financing or the like.

But, you may say, isn't it the "rich" who are really paying the costs of medical care now--the rich, not the broad bulk of the people? As has been proved time and again, there are not enough rich anywhere to make a dent in the government's costs; it is the vast middle class in the U.S. that is the only source of the kind of money that national programs like government health care require. A simple example of this is the fact that the Clinton Administration's new program rests squarely on the backs not of Big Business, but of small businessmen who are struggling in today's economy merely to stay alive and in existence. Under any socialized program, it is the "little people" who do most of the paying for it--under the senseless pretext that "the people" can't afford such and such, so the government must take over. If the people of a country truly couldn't afford a certain service--as e.g. in Somalia--neither, for that very reason, could any government in that country afford it, either.

Some people can't afford medical care in the U.S. But they are necessarily a small minority in a free or even semi-free country. If they were the majority, the country would be an utter bankrupt and could not even think of a national medical program. As to this small minority, in a free country they have to rely solely on private, voluntary charity. Yes, charity, the kindness of the doctors or of the better off--charity, not right, i.e. not their right to the lives or work of others. And such charity, I may say, was always forthcoming in the past in America. The advocates of Medicaid and Medicare under LBJ did not claim that the poor or old in the '60's got bad care; they claimed that it was an affront for anyone to have to depend on charity.

But the fact is: You don't abolish charity by calling it something else. If a person is getting health care for nothing, simply because he is breathing, he is still getting charity, whether or not President Clinton calls it a "right." To call it a Right when the recipient did not earn it is merely to compound the evil. It is charity still--though now extorted by criminal tactics of force, while hiding under a dishonest name.

As with any good or service that is provided by some specific group of men, if you try to make its possession by all a right, you thereby enslave the providers of the service, wreck the service, and end up depriving the very consumers you are supposed to be helping. To call "medical care" a right will merely enslave the doctors and thus destroy the quality of medical care in this country, as socialized medicine has done around the world, wherever it has been tried, including Canada (I was born in Canada and I know a bit about that system first hand).

I would like to clarify the point about socialized medicine enslaving the doctors. Let me quote here from an article I wrote a few years ago: "Medicine: The Death of a Profession." [The Voice of Reason: Essays in Objectivist Thought, NAL Books, c 1988 by the Estate of Ayn Rand and Leonard Peikoff.]

"In medicine, above all, the mind must be left free. Medical treatment involves countless variables and options that must be taken into account, weighed, and summed up by the doctor's mind and subconscious. Your life depends on the private, inner essence of the doctor's function: it depends on the input that enters his brain, and on the processing such input receives from him. What is being thrust now into the equation? It is not only objective medical facts any longer. Today, in one form or another, the following also has to enter that brain: 'The DRG administrator [in effect, the hospital or HMO man trying to control costs] will raise hell if I operate, but the malpractice attorney will have a field day if I don't--and my rival down the street, who heads the local PRO [Peer Review Organization], favors a CAT scan in these cases, I can't afford to antagonize him, but the CON boys disagree and they won't authorize a CAT scanner for our hospital--and besides the FDA prohibits the drug I should be prescribing, even though it is widely used in Europe, and the IRS might not allow the patient a tax deduction for it, anyhow, and I can't get a specialist's advice because the latest Medicare rules prohibit a consultation with this diagnosis, and maybe I shouldn't even take this patient, he's so sick--after all, some doctors are manipulating their slate of patients, they accept only the healthiest ones, so their average costs are coming in lower than mine, and it looks bad for my staff privileges.' Would you like your case to be treated this way--by a doctor who takes into account your objective medical needs and the contradictory, unintelligible demands of some ninety different state and Federal government agencies? If you were a doctor could you comply with all of it? Could you plan or work around or deal with the unknowable? But how could you not? Those agencies are real and they are rapidly gaining total power over you and your mind and your patients. In this kind of nightmare world, if and when it takes hold fully, thought is helpless; no one can decide by rational means what to do. A doctor either obeys the loudest authority--or he tries to sneak by unnoticed, bootlegging some good health care occasionally or, as so many are doing now, he simply gives up and quits the field."

The Clinton plan will finish off quality medicine in this country--because it will finish off the medical profession. It will deliver doctors bound hands and feet to the mercies of the bureaucracy.

The only hope--for the doctors, for their patients, for all of us--is for the doctors to assert a moral principle. I mean: to assert their own personal individual rights--their real rights in this issue--their right to their lives, their liberty, their property, their pursuit of happiness. The Declaration of Independence applies to the medical profession too. We must reject the idea that doctors are slaves destined to serve others at the behest of the state.

I'd like to conclude with a sentence from Ayn Rand. Doctors, she wrote, are not servants of their patients. They are "traders, like everyone else in a free society, and they should bear that title proudly, considering the crucial importance of the services they offer."

The battle against the Clinton plan, in my opinion, depends on the doctors speaking out against the plan--but not only on practical grounds--rather, first of all, on moral grounds. The doctors must defend themselves and their own interests as a matter of solemn justice, upholding a moral principle, the first moral principle: self- preservation. If they can do it, all of us will still have a chance. I hope it is not already too late. Thank you.

Health Care, the Ultimate in Government Control

by Mark Vande Pol

In a free society, health care choices are necessarily individual, but given the uneven chance that an individual will incur catastrophic healthcare expenses, individuals must pool resources to fund health coverage, usually by means of insurance.

When healthcare was funded by a single family, funds were necessarily limited. A family would not starve its children to treat the sick or aged. The amount of effort to save a single life that could be spent has changed for two reasons:

1. Technology has vastly increased the amount that could be spent on any one case.

2. Pooling healthcare resources has vastly increased the money available to be spent on any one case.

In effect, the family paying for the service is the entire insurance pool. That pool, or its agent, the insurer, then has a say in what they will fund, just as the family once did. So now, instead of a family refusing to starve, we have an insurer refusing to go broke. It's a tradeoff. We have more funds available for any one individual, but less control over how they are spent. As long as technology is increasing the upper bounds of what might be spent, we, as a pool, face hard choices about what we can afford. When a moral imperative to make an infinite commitment to save any one life meets a technical ability to bankrupt the pool, somebody MUST lose in the pursuit of saving that one life.

As the pool enlarges to a global perspective, the moral problem takes on a new dimension, and "the least of mine," takes on a whole new meaning. The money being spent on Terri Shiavo could feed, clothe, medicate, and educate ten thousand children who will otherwise die.

We have to find ways to make hard moral choices in order to contain costs. It's inescapable.

Seventy percent of your medical dollar (or nearly eight percent of the national economy)is spent upon people who die within six months. Meanwhile, pregnant mothers still don't get decent prenatal care that would prevent life-long medical expenses and aliens enter the country carrying hepatitis, parasites, and antibiotic-resistant strains of infectious diseases that go untreated. Hospitals are on the verge of bankruptcy caring for the indigent. Private insurance rates bear much of that cost as a hidden tax in hospital charges.

Distorted treatment priorities are only part of the picture. The system provides few financial incentives to promote health. Proper diet, regular exercise, and annual check-ups do not reduce the price of coverage. Similarly, there are few penalties for high-risk behavior.

The system is insane. Government is the problem and socializing medicine will make it worse.

In a free market, there are usually two underlying factors determining the scope of coverage:

1. How the costs were incurred: whether the medical problem was no fault of the insured person's own choices or whether it was the result of an irresponsible and avoidable choice.

2. The cost-effectiveness and extent of the adjustment: whether it's risky or experimental or if less expensive substitutes exist.

The cost of coverage is determined by the scope of covered risks, the probability of a claim, and the average expense of the treatment. The price of coverage is offset by investment returns on the cash in the coverage pool.

For example, insurers may charge more to cover high-risk activities such as smoking or skydiving. A policy may also limit the extent of elective procedures such as certain forms of cosmetic surgery. Unfortunately, pricing many other distinguishing risks is not allowed because the State enlarges the pool paying into the system to the point of the absurd. It closely regulates the terms of the contracts based upon the political power of the groups at risk: those seeking to get others to subsidize the cost of their choices.

It doesn't matter if the risk is riding a motorcycle without a helmet, not taking prescribed medication, or bare-backing in a bath-house, high-risk individual choices cost the insurance pool that pays for the treatment and poses additional risks to the public at large. A State-financed or regulated system, heavily influenced by political interests, is unlikely to assess those risks objectively.

Once those risks are assumed, there is the additional unnecessary legal overhead associated with malpractice settlements. Since humans will probably never know everything about their bodies, there always will be uncertainty and risk associated with the delivery of medical products and services. The assumption that anything less than a perfect cure constitutes medical malpractice is one expensive fantasy. At some point, the choice exercised by those who make healthcare choices must bring its own responsibilities.

The insurer may have reason to lose that lawsuit. First, the settlement is often less than the cost of a court battle. That means that more such cases will be brought because a new precedent, whether due to the cause of the loss, the size of the settlement, or the type of restorative measures demanded, means that all such cases must be covered the same way by all insurers. They must then raise rates and the total industry cash flow then increases. Insurers make money on that cash flow, as well as on investments in companies that treat covered losses. If that sounds like a conflict of interest, it can be.

Free Health Care

Healthcare services don't come free; somebody has to pay for them. While central planning in healthcare works no better than it did in the Soviet Union, the United States, torn between socialized medicine and corporate welfare, has some of the finest care available, but by far the most expensive. While the US bears much of the research and product development costs for the rest of the world, in no way can it be considered a cost-effective system by world standards. There is a lot that can be done to improve its efficiency without resorting to the mediocre treatment characteristic of socialized medicine.

When the level of free service is equivalent to what can be purchased by private parties, there is then no reason to invest in private care. Socialized medicine makes all healthcare policy decisions political thus masking the cost of individual decisions by placing the burden for their consequences upon everybody. That's why AIDS research is starving the search to cure cancer even though the latter clearly costs society far more, which destroys the wealth that funds AIDS research. Government intervention into free-market risk management distorts the cost assessments that help industry identify costly health risks to invest in eliminating them. Treating medical problems is a human need capable of virtually infinite costs, simply because life is fatal. As medical technologies proliferate no insurance pool will be able to afford all the treatments its users could desire.

The best way to reduce the cost of treatment is to prevent the need, a focus upon which our physician-dominated system is lacking. These activities include personal habits that preclude problems (exercise, diet, posture, marriage, oral hygiene), mitigating measures designed to keep a problem from getting worse (special diets, spinal correction, dental care), and diagnostic tools to detect potential problems.

Many nutritional supplements don’t get onto the market as substitutes for prescription drugs because food is not patentable. Decades later, expensive drugs are qualified by the FDA that have side effects the natural products don't have! The fix starts with private property rights. Many of these nutrients are only in unique local habitats. In that respect, the combination of resources and processes that support production of a particular nutrient should be patentable just like a mining claim. It certainly provides reason to understand and care for that habitat instead of ruthlessly exploiting it. You saw it here first.

It is within the preventative realm that the market has operated with relative freedom, but it has suffered from the distortions of treatment costs downstream. New preventative technology usually lacks physician or insurer acceptance, has high initial costs, or suffers from the perverse result of providing insurers reason to cancel coverage as is the case with diagnostic equipment. This is because minimizing total cost to the patient does not drive the profit motives to coverage providers, indeed, quite the opposite.

Only patients can have their own best interests at heart. That's why individual payment systems are the least expensive in delivered cost across total populations as long as each patient understands and is motivated to adopt the least cost option.

Unfortunately, the patient has no idea what a competitive price for most medical services might be, in part because of the distortions due to the buying power of large pools. HMOs, MediCare, and hospital bills (padded to cover the cost of services to the indigent) have absolutely destroyed the patient's ability to weigh competing prices of medical services. Have you ever looked at an Explanation of Benefits form? Did the prices bear any resemblance to reality? Have you ever asked your physician what he or she might take for the service in cash? If so, were you surprised at the difference? So how can anyone objectively judge what is in their own best interest?

You now know why the system is insane.

The Deep End of the Pool

Treatment of the medically indigent is totally dependent upon the insurance pool of last resort: the taxpayer. Although minimal free healthcare services cost taxpayers, confining infectious diseases and preventing lifelong problems in children saves taxpayers money in the long run. There is an obvious peril, however, in making free health care services available to anyone.

Controlling healthcare costs thus faces an inherent conflict, regardless of whether healthcare services are private or socialized: A high price at the initial point-of-service inhibits people from seeking help early, when most medical problems are less expensive to confine or treat. Conversely, pricing medical care free of charge would make containing costs impossible. The key to resolving that paradox is in managing the triage function in a manner that serves more purposes than the system does now.

Triage is the process of evaluating patients and determining what kind of diagnostic work or treatment they need. It is done by firemen or EMTs in an emergency. It should be performed a qualified technician or nurse before any person makes it into an emergency room. Any person who doesn't qualify for emergency treatment could then be directed to an urgent care facility or asked to make an appointment.

Triage should be free. The provider must have no relationship to any downstream medical provider. They would provide pricing information on the various alternatives in the process, whether a visit with a doctor, chiropractor, nutritionist, or purchasing lab tests. Triage would thus be little different than walking into a store and deciding what to buy, if anything.

The one problem with putting triage in front of a physician visit is that when most people get sick they want to see a doctor right away. The way to meet that demand is by automating the triage function. Many people have the education to make confined medical choices. An insurer could provide qualified subscribers access to online diagnostic information that would help them research their medical problem, select the appropriate specialist, make an appointment, or communicate about problem to a triage specialist. The software might also test the users' comprehension by which to qualify for the option to make more decisions for themselves. They could schedule diagnostic tests so that a physician could make a decision without a visit. Putting test and treatment protocols online thus would improve both patient education and physician accountability.

Such testing also assesses the effectiveness of the educational tools by which to market better services, reason to research, develop, and improve the quality of online education tools. If copyright for such information bundling and testing were confined for, let's say, five to seven years, the provider has reason to invest in improving proprietary tools, while the benefits are not retained from the public at large for an unreasonable period.

Increasing use of nurse practitioners to screen incoming patients would save both time and money as well as handle the indigent patient fairly. Here we come to the manner in which the scope of patient care for the indigent must be confined to a rational minimum. We have a right to be free, but we don't have a right to free care. The only way to manage the cost of medical treatment for the indigent is to define what kind of services they may have very carefully. It is a political decision.

Where the healthcare industry is truly responsible to the public is in informing our representatives of the relative cost of various healthcare options by which they can then define the scope of coverage in budgetary legislation. Providers should effectively give us a budget for what they can accomplish for a given amount of money, what would be effectively indigent healthcare for bid.

Most healthcare purchases today are not made by the user, but by an interest without accountability for acting as the user's agent: their employer. To combine the benefits of pooling with visible pricing means more than making the purchase price of healthcare options visible, it is to return to the user control of the buying decision. We need to expand the concept of the Medical Savings Account to include pretax purchase of healthcare on the part of the employee and end employer purchase of healthcare.

One way to resolve that customer alienation from reality, and provide private providers a way to contain costs, would be to market coverage from a menu of narrowly defined policies. Consumers would combine these policies into a package to suit their individual preferences. By defining coverage pools according to the choices people make, those behaviors that unnecessarily cost the total system would be borne by those who choose to incur those costs.

For example, people who don't want extreme measures taken to save their lives or don't need coverage to treat STDs, obesity, infertility treatments, or caring for children, wouldn't have to pay for them. Those who don’t want elective cosmetic surgery wouldn't buy that policy. If getting regular exercise assured a lower cost of coverage it would motivate the sedentary to start working to qualify for that pool. Forcing people to confront the cost of their choices is an important way to prevent expensive problems. That process reduces the total cost of the entire system.

Pricing each distinct need focuses research dollars to fix the problems that have the most potential, whether glamorous university-research or a simple educational tool. It may be true that America's research is carrying much of the rest of the world stuck with socialized medical care, but it is product development that pays for it. No political system is as efficient at optimizing competing demands on capital as is the marketplace.

There will still need to be restrictions on customized customer pools for the sale of health insurance to preclude exclusion of people who had no choice in their ailments, such as those who suffer congenital diseases. That such groups exist does not discount the value of pricing services by behavior because it motivates healthy decisions that decrease burden on the total wealth that ultimately must bear at least some of the burden for those who can't possibly do so.

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