David R. Henderson  

Krugman, Tennessee Fires, and Health Care

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After I posted Tuesday about the Tennessee fire, I saw that Paul Krugman had posted about it also. About the Tennessee fire department that refused to put out a fire for someone who had refused to pay $75 a year for the service, he wrote:

This is essentially the same as denying someone essential medical care because he doesn't have insurance. So the question is, do you want to live in the kind of society in which this happens?

Clearly, he doesn't want to live in such a society. But his analogy with medical care got me thinking. In New York a police officer blocked a mother from taking her daughter, Briana Ojeda, to the hospital. According to Will Grigg, the cop, Alfonso Mendez, even after telling the mother that he didn't do CPR, proceeded to write a ticket because the mother had driven the wrong way on a one-way street. The daughter thus lost precious time and, although she reached the hospital, died shortly after that.

So which do you think is worse: not providing health care to someone who doesn't pay or forcibly preventing someone from getting health care who is willing to pay? I think the second is worse. Interestingly, though, Paul Krugman didn't bother to write about Briana's case. Now, maybe that's just because we have to pick our topics and he didn't have time. But in Canada every day, the government forcibly prevents people from buying health care. When my father needed surgery for his leg, for example, he was not allowed to go to a doctor or hospital and pay for it. For the vast majority of medical services in Canada, people are not allowed to pay. That's what single payer means: the government pays and individuals are not allowed to. Not surprisingly, that's why Canadians line up for health care. I've never seen Paul Krugman criticize this aspect of Canada's health care system. In fact, to the extent he has addressed Canada's system, he has praised it. So given his criticism of the Tennessee fire case and his analogy to health care, I take it that in Krugman's mind, forcibly preventing someone from buying health care, the essence of Canada's system, is not as bad as refusing to provide health care to those who don't pay for it.

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COMMENTS (14 to date)
RPLong writes:

Few Americans really understand that about the Canadian system. It hasn't really occurred to most Americans that just because someone says, "Okay, yes, I promise you have health care," doesn't mean you actually RECEIVE the health care as promised.

This can take the form of waiting lists, drug rationing, service rationing, medical device quotas (X number of CT machines per Y population), or - and this is the really nasty one - doctor referrals.

If you have to get several doctor referrals in order to see the specific doctor who can help you, you have to take several days off work. The poor fair NO BETTER in this system, because they cannot financially afford to take time off work for their "free" health care appointments.

J Oxman writes:

You are quite right about the Canadian system. I don't live there anymore (many reasons) but it was and still is quite common to purchase medical services in the U.S. out of one's own pocket. Life-threatening surgeries were dealt with quickly, but quality-of-life-threatening issues were always allowed to languish. Now, at least two provinces (Alberta and Quebec) allow the citizens to carry private health insurance and private clinics exist that can provide the full suite of services. So, it is a two-tier system, despite "health care coverage for everyone!"

A big negative consequence is the loss of doctors. Canada typically imports doctors from abroad (South Africa was always a favorite source) because Canadian-trained doctors used to come to the U.S. I think that tide will turn though.

RPLong - good post. Rationing exists at all levels of the medical system in Canada.

geckonomist writes:

Mr. Henderson, how do you call it when a private insurance does not deny life saving health care but denies payment for it?

So what is worse: being health insured in the USA but dying because you're not rich enough, or getting treatment in Canada like everybody else.

floccina writes:

I notice that people pushing for more Gov. involvement seldom acknowledge that people without health insurance can pay for care after the fact.

It is not clear that it is better for most people to prepay for health care through insurance. After you have received treatment you have negotiating power, the providers would probably give you terms. If the care did not work you could refuse to pay and if the care killed you you surely would not pay nor should anyone pay. Perhaps if it could be policed an indemnity insurance system would work best. The insurer would pay the insured and insured would pay the provider. Providers would surely be reluctant to do surgery on the old but maybe that should be reluctant surgery can easily kill old people. Providers might appeal more for charity from the people they helped and others and might get much more than they get now. Providers would probably do less and could negotiate for prepayment in non emergency cases.

Who knows how it would work out, but my point is that it is not a sure thing that prepaying through insurance (say $400/month) is better than post paying (say $400/month).

I think that average lifetime health care spending in the USA is about $400K, most Americans could amortize that.

res08hao writes:

[Comment removed for ongoing crude language. --Econlib Ed.]

Tracy W writes:

The comparison puzzles me. Without immediate healthcare in the situations described, someone could die. In the case of the fire, they just lost their house. How's that essentially the same?

David R. Henderson writes:

@Tracy W,
I'm not sure why you're asking that. I didn't say it was the same. I said it was worse.

John David Galt writes:

Whether the government takes over the field of health care (or for that matter fire protection) or not, the amount of care available will always be finite because it costs money. The difference is that in the case of health, some people are much more costly to save than others.

Thus while it's sad when someone dies because he's not rich enough to afford the care he needs, that situation is impossible for any system always to prevent. The "forcibly preventing someone from getting health care even if s/he is willing to pay for it" situation, though, can be prevented perfectly well just by getting government out of the way. So it is inexcusable for THAT to happen. Ever.

Hume writes:

I'm not well versed in the moral duty to rescue literature, so my following points may be besides the point (its interesting to me that no one has really analyzed ths situation within the context of the moral duty to rescue debate).

What are the moral obligations of this individual? I think there is a strong argument that such individual comes with "dirty hands" and his claim of right is empty. He admits that it was his intention to free ride, and we are all aware of the role of the evil free rider in e.g., Rawls' theory in justifying the use of coercive force even against those that do not intend to free ride.

The man's claim for assistance directly undermines the project of the potential rescuer. So its a moral double-whammy: (1) he is morally blameworthy for intentionally attempting to free-ride, and (2) he is morally blameworthy for indirectly attempting to undermine a legitimate project of the potential rescuer. I'm sure there is literature on this and there may be easy counter-arguments. But I think the moral blameworthiness of the rescuee is relevant in considering whether the rescuer has a moral duty to rescue, especially when the morally blameworthy acts are directly against the rescuer.

So Krugman is guilty of false analogy.

Kurbla writes:

You have one emergency service car, and two man need it in the same time; boy whose life is in danger due to traffic accident, and old millionaire who has moderate constipation, but he is willing to pay $100 more than boy can. What do you think? Who should be served?

David R. Henderson writes:

If I were the ambulance owner, I would serve the boy. How about you?

Kurbla writes:

I should do the same.

Vangel writes:

I am sorry David but I believe that you missed Krugman's big error. He tried to blame the free market while the fire department was run by the county. I do not believe that a privately run fire department would allow their people to stand around and watch a fire burn when they could have made the owner pay full costs plus a premium for doing the job. As usual, Krugman gets it wrong.

David R. Henderson writes:

No I didn't. Read my October 5 post that I linked to above.

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