Arnold Kling  

Jonathan Rauch is Uncharitable

Education and Option Value: A ... Would Conscription Reduce Supp...

He writes,

According to conservatives, the government should not make people buy insurance; it certainly should not provide coverage for them. That would seem to eliminate the two main ways to deal with free riders. One obvious possibility remains. If you can't pay for medical treatment, you can't expect to receive it. Period.

Rauch implies that libertarians face a dilemma. Either coerce hospitals to provide care to the indigent (as we do now) or coerce individuals to buy insurance.

There is a third alternative: charity. Take it as given that we feel revulsion at the prospect that someone in urgent need of medical care will go untreated. We can deal with that revulsion by a coercive system of tax collection. But we could also deal with that revulsion by contributing to charity that is dedicated to providing urgent care to the indigent. Rauch seems to have forgotten about the charity option.

All options, coercive and charitable, have the disadvantage that patients can "free ride" by not obtaining health insurance. They can count on the kindness of strangers to pay for their urgent health care needs.

The disadvantage of the charity option is that it creates an additional group of free riders. These free riders are people who want to see the indigent cared for but do not want to contribute to the charity that will make it happen.

Even granted this disadvantage, I think that the advantages of the charity option make it worth considering. One advantage is that a charity might do a better job of deciding on a fair level of cost-sharing for patients. For example, the charity might, if it deems it appropriate, pay only 20 percent of the cost of care, leaving the rest to the individual. Thus, a charity might reduce the free riding undertaken by patients.

However, the biggest advantage of the charity option is that it fits with Civil Societarianism. We need to remember that there are solutions to problems that do not require the exercise of coercive power.

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COMMENTS (20 to date)
Matt H writes:

I don't that approach will lead to a stable equilibrium. In the past, we had charity but letting the poor go without care wasn't such a bad thing. Care could do little in most cases, and often wasn't priced out of the range of the poor. Today, emergency care works, and they charge you more for it if you are uninsured.

If we try this and on day 1 I go to the hospital and there is not charity, then what I die. How long will this last? What about if we never raise enough to solve the problem or help most people. Is it ok to let a kid die from an infection because he was born to poor parents. I just think people won't go for it, and if they did a year later they would change it back, how many bad stories do we need to hear. The best you can hope for is to require some ultra minimal catastrophic insurance via mandate. The grown-up republicans once understood this.

chipotle writes:

Standard liberal objection: People won't give enough charity to cover those who are indigent and/or have extremely expensive-to-treat illnesses.

Some illnesses can cost $100s of K per year to treat. If charity can't meet those needs, should those people just die? (I suspect Bryan Caplan, the non-bleeding heart lbtrn, would quickly say "yes.")

Remember that a lot of charitable donation is about giving to institutions so they can raise your social status by putting your name on the side of a big building.

How confident are you that charity will cover the need?

collin writes:

For somebody who does not trust charities, then why bring up the claim that charities could work? You have argued that charties customers are not the users but the givers. Therefore most charties, especially national ones, are not very functional or effective to the need. At times, it seems like libertarians only use charity arguments because they do not want to appear complete non-caring people.

Thucydides writes:

If we don't want to see the improvident go untreated, and don't want to rely on charity, then the alternative is some sort of coerced coverage.

Doing this as a matter of taxes and entitlements is fraught with problems and obviously isn't working.

The best solution might be something akin to the social security reforms undertaken in Chile and elsewhere; mandatory private savings from payroll to purchase insurance, with government backup where those savings proved insufficient.

Old Man writes:

Some of us are old enough to remember that before our Medicare masters made it illegal, it was not uncommon to find hospitals that never billed a patient.

Randy writes:

Re; "The disadvantage of the charity option is that it creates an additional group of free riders. These free riders are people who want to see the indigent cared for but do not want to contribute to the charity that will make it happen."

The fact that I would like to see the indigent cared for but do not wish to contribute does not make me a free rider. It simply means that I have other priorities. There are, after all, a great many things I would like to have but do not choose to pay for.

MingoV writes:

Routine medical care does not require insurance or taxpayer-provided care. People who need care but don't have insurance or sufficient funds have multiple options: borrow money or go to a clinician who offers an extended payment plan, go to a clinician who discounts fees based on ability to pay, convince a charity to pay for all or part of the care, or use a free clinic (funded by charitable donations).

Emergent care of those without insurance or sufficient funds could be handled as above but at hospitals or urgent care centers instead of medical offices or clinics.

Providing nonurgent hospital care for those without insurance or sufficient funds is a difficult problem. A nonlibertarian approach is to require everyone to have catastrophic health care insurance (in a manner similar to the requirement that all drivers have auto insurance). Those who cannot afford such insurance could have premiums partly or completely paid by charities. A libertarian approach is to have charities pay for hospitalization of the poor. Non-poor persons who did not purchase health insurance would have to borrow money, ask relatives and friends to help pay, choose a less expensive care option, or go without hospitalization. That may seem cruel, but there's little sense in rewarding persons who are able to buy health insurance but don't.

mark writes:

There is a fourth option which is for govt to run a health service that all people can access.

Rauch seems to think that having people pay for something they want to acquire is an ideological or normative choice. Unfortunately, it is just economics and arithmetic. Somehow, somewhere, someone has to pay for a service. It is just a question of who and how, not whether.

mark writes:

I am reading the opinions in NFIB v Sebelius and I have to tie to this post a quote from Ginsburg's dissent: "Although an individual might buy a car or a crown of broccoli one day, there is no certainty she will ever do so. And, if she eventually wants a car or has a craving for broccoli, she will be obliged to pay at the counter before receiving the vehicle or nourishment. She will get no free ride at the expense of another consumer forced to pay an inflated price." italics mine

Becky Hargrove writes:

As an unemployed person who does not want to be a burden on the system, I only want to ask doctors and healthcare workers to find ways to deal with this that allow the poor to heal themselves, and please discourage the public from getting too worked up about this whole thing. I still live in the South and it would not do my health good to hear more anger and division at what has come to pass.

Doug writes:

Liberals hate non-government charity. They often feel that those charities that aren't tied to government or explicit liberal causes are nothing more than patriarchal fronts to destroy the culture of the poor.

Nothing riles a liberal up more than suggesting that Victorian work houses were actually far more effective at helping poor people than the modern day welfare state. They prefer government enforced irresponsible largesse that doesn't try to amend the behavior of the recipients. This is because 1) it creates cushy life-long jobs for government bureaucrats, 2) even though the money is still coming from the rich in the form of taxes it removes the prestige the rich gain from charitable donations and 3) it creates an urban poor underclass voting block that's hard-core left.

Witness the left's unrestrained ire for the one major remaining class of charitable institutions that actually help people but demand responsibility and behavior change from the poor. There's nothing a hard left liberal hates more than community churches.

Joe Cushing writes:

"We need to remember that there are solutions to problems that do not require the exercise of coercive power"

Just as importantly, we need people to realize that nearly every action of government is an act of coercive power. The only exceptions are when they charge a fee for a service....that's not to be confused with a fee for permission.

Justin R. writes:

There are multiple approaches the government could take to reduce health care cost, reduce red tape, and not add a cent to the national debt:

1. Remove the restriction that prevents insurance companies from competing across states.

2. Remove the AMA's monopoly over the number of medical schools, new entrant slots, and who may become a doctor. Or at a minimum do the first two and allow anyone who can pass the boards to enter the medical profession.

3. Somewhat a subset of #2, allow nurse practitioners to have their own medical practices. Do I really need to see a doctor for an ear infection?

The result would be a reduction in health care costs by inducing more competition and increasing the supply of medical practitioners. More people would be able to afford health care and it would make it cheaper for charities to provide care for those who can't afford it. And it wouldn't increase government spending (the Congressional Budget Office estimates that Obamacare will cost taxpayers $1 trillion over the next 10 years.)

Justin R. writes:

I forgot to add: Reduce the time/cost of getting FDA approval for new drugs.

lukas writes:

Re-read Rauch. He hasn't forgotten about the charity option, because even with charity, "if you can't pay for medical treatment, you can't expect to receive it. Period." You may receive it, but you cannot have a firm expectation that you will.

I do not think this is necessarily a bad thing, but it seems that it isn't good enough for Rauch.

Dan writes:

I think under the current protectionist policies of government to the benefit of the, the malpractice industry, the health ins industry, AND the health provider industry...Rauch is correct. Unless those policies are eliminated and a far freer health care market is established, the charity option will always fail (unless strongly and permanently bolstered with tax dollars i.e. FQHC's).


James writes:

Chipotle writes, "Standard liberal objection: People won't give enough charity to cover those who are indigent and/or have extremely expensive-to-treat illnesses."

If people are willing to provide enough money to cover the cost of health care for the poor, then charity would be adequate. In this case a government program to provide care to the poor would be unnecessary.

If people are not willing to provide enough money to cover the cost of health care for the poor, then they would not knowingly agree to provide that much money via a government program. In a democratic society, such a program could only become law through deception.

Lord writes:

Isn't your next argument the really charitable thing is to let them die? Some were certainly applauding Ron Paul in the debates.

Charity is a public good. People who do not donate benefit. This does not imply that government assumption of responsibility for the provision of charity enhances welfare. Corporate oversight is a public good. Shareholders who do not audit financial statements and monitor operations benefit from the work of those who do. The State is a corporation. Inattentive voters benefit from the effort of voters, bloggers, and scholars who monitor government performance. State assumption of responsibility for the provision of public goods (such as charity) transforms the free rider problem at the root of public goods analysis but does not eliminate it.
GSA, anyone?

Floccina writes:

There is another option, that is to collect from the person who received there latter.

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