Showing posts with label market-based health care. Show all posts
Showing posts with label market-based health care. Show all posts

Friday, September 17, 2021

Freedom Amendments

More than two centuries ago, the United States Constitution was framed with the goal of limiting federal authority by enumerating its powers. Yet over time, this system has failed to restrain the steady and expansive growth of government. As Lysander Spooner once wrote, “But whether the Constitution really be one thing, or another, this much is certain—that it has either authorized such a government as we have had, or has been powerless to prevent it. In either case it is unfit to exist.”

The Freedom Amendments respond directly to this constitutional crisis—not by treating the symptoms of overreach, but by addressing the structural defects that made such overreach possible. While Mark Levin’s Liberty Amendments offered thoughtful proposals for reform, many of his suggestions do not go far enough, and some may even entrench the very powers they aim to curtail. The Freedom Amendments offer a deeper and more durable correction.

One major reform is the replacement of the presidential system with a parliamentary model. Over time, the presidency has accumulated vast authority, evolving into what Arthur Schlesinger, Jr. famously called “The Imperial Presidency.” Professor Thomas E. Cronin has described this as a system of largely unchecked executive power, exercised under vague constitutional grants and often shielded from meaningful oversight. A parliamentary model restores balance by making the executive directly accountable to the legislature, curbing the illusion of a popular mandate that has emboldened the modern presidency far beyond its intended scope.

These amendments also depoliticize the judiciary by severing its appointment process from direct electoral politics. Returning to the original design of the Senate—chosen by state legislatures—helps reestablish state sovereignty while reducing the partisan nature of federal judicial appointments. Likewise, placing judicial nomination powers with a ceremonial head of state, removed from day-to-day politics, helps to insulate the judiciary from ideological warfare.

Congressional overreach has become normalized, often justified by strained interpretations of the commerce and general welfare clauses. The Freedom Amendments impose clear limits by expressly tying federal spending and lawmaking to enumerated powers only. They eliminate the federal government’s authority to levy income taxes, restrict borrowing powers, and prohibit Congress from funding or administering state-level programs that are beyond its constitutional reach.

The war powers of the federal government are also reformed. A supermajority is required for any declaration of war, which must expire after one year unless renewed. Congress is prohibited from authorizing military force through any mechanism other than a formal declaration of war, thus ending decades of undeclared, open-ended military interventions.

To ensure fidelity to these reforms, a Constitutional Council is established to review legislation for compliance before it reaches the President. Additionally, two-thirds of state legislatures may nullify acts of Congress within a limited window, reviving the role of states as checks on federal power.

Finally, the Freedom Amendments require that future constitutional interpretation adhere to the principle that government exists solely to protect preexisting rights—not to create new ones or impose obligations upon others. This interpretive standard is essential to preserving liberty for future generations.

These amendments do not seek to perfect government—they aim to restrain it. Their purpose is to restore a federal balance of power, revive the role of the states, rein in executive authority, and make liberty once again the central feature of the American constitutional order.


Freedom Amendments

I.          No bill shall become a law which embraces more than one subject, that subject to be expressed in the title.

 

II.         The Congress shall have power to lay and collect taxes, duties, imposts, and excises for the purpose of paying debts, supporting the operation of the government, and providing for the common defense of the United States. No such tax or duty shall be enacted unless approved by two-thirds of each House of Congress, including any bill that increases revenue. Congressional spending shall be limited to carrying into execution powers expressly enumerated in this Constitution. No duty or tax on imports from foreign nations may be imposed to promote or favor any industry. All such taxes and duties shall be uniform throughout the United States.

 

III.       The Congress shall have power to borrow money on the credit of the United States provided two-thirds of each House of Congress approves.

 

IV.       Congress shall have no authority to regulate, restrict, or prescribe the terms of any voluntary economic transaction, contractual agreement, or productive economic activity among persons, nor to impair the obligation of contracts, nor to compel any person to participate in any economic or commercial arrangement as a condition of engaging in economic or commercial activity.

 Congress shall have no authority to prohibit or restrict the freedom of production, voluntary exchange, or the voluntary transfer of goods, services, labor, or property.

 Congress shall have authority to prohibit any State from imposing taxes, duties, fees, or regulations that discriminate on their face, or that are enacted or administered for a protectionist purpose, against goods, services, or persons because they originate in, reside in, or are destined for another State. Congress shall have no authority to regulate commerce among the several States beyond what is strictly necessary to enforce this prohibition.

 No power enumerated elsewhere in this Constitution shall be construed to authorize the regulation of voluntary economic transactions, contractual agreements, or productive economic activity in a manner this Amendment forbids; provided that this Amendment shall not be construed to limit the power of Congress to establish uniform laws on the subject of bankruptcies, or to secure for limited times to authors and inventors the exclusive right to their writings and discoveries.

 Congress shall have no authority to create, operate, subsidize, or hold any ownership interest in any business, professional, commercial, financial, or industrial enterprise, except where such activity is expressly authorized by an enumerated power in this Constitution and is indispensable to executing that power.

 

V.        The Congress shall have power to declare war, provided two-thirds of each House of Congress approves, and every declaration of war shall expire one year thereafter unless two-thirds of each House of Congress shall authorize an additional year, each year thereafter. Congress shall have no power to authorize any use of military force by any bill, order, resolution or vote other than a declaration of war, unless actually invaded, or in such imminent danger as will not admit of delay. 

 

VI.       The Head of State

A.    The President of the United States shall be the head of state of the United States. He shall hold his office during one term of eight years. 

B.    The President shall be elected, as follows:

1.     The Legislature of each state shall appoint a number of electors, equal to the whole number of Senators and Representatives to which the state may be entitled in the Congress: but no Senator or Representative, or person holding an office of trust or profit under the United States, shall be appointed an elector.

2.     The electors shall meet in their respective states and vote by ballot for President; they shall name in their ballots the person voted for as President and they shall make distinct lists of all persons voted for as President, and of the number of votes for each, which lists they shall sign and certify, and transmit sealed to the seat of the government of the United States, directed to the President of the Senate. The President of the Senate shall, in the presence of the Senate and House of Representatives, open all the certificates and the votes shall then be counted. The person having the greatest number of votes for President, shall be the President, if such number be a majority of the whole number of electors appointed; and if no person have such majority, then from the persons having the highest numbers not exceeding three on the list of those voted for as President, the electors shall choose immediately, by ballot, the President; and if no person shall then have such majority, the electors shall proceed forthwith to a further ballot between the two persons having the highest numbers on the preceding ballot, and a majority of the whole number of electors appointed shall be necessary to a choice.

3.     The Congress may determine the time of choosing the electors, and the day on which they shall give their votes; which day shall be the same throughout the United States.

4.     No person except a natural born citizen shall be eligible to the office of President; neither shall any person be eligible to that office who shall not have attained to the age of thirty-five years, and been fourteen years a resident within the United States.

5.     The President shall not be a member of Congress or of the legislature of any state nor shall the President hold any other office of profit or trust of the United States or any of the several states for a period of five years before his election. 

C.    The President shall, at stated times, receive for his services, a compensation, which shall neither be increased nor diminished during the period for which he shall have been elected, and he shall not receive within that period any other emolument from the United States, or any of them.

D.    Before he enter on the execution of his office, he shall take the following oath or affirmation:  "I do solemnly swear (or affirm) that I will faithfully execute the office of President of the United States, and will to the best of my ability, preserve, protect and defend the Constitution of the United States."

E.     Duties of the President of the United States

1.     The President shall appoint and commission as Head of Government the person who, by vote of the House of Representatives, has obtained the confidence of a majority of its members.

2.     The President shall appoint and commission the principal officers of the executive departments upon the proposal of the Head of Government and after such officers have obtained the confidence of a majority of the House of Representatives, with the exception of the Prosecutor General. Principal officers of the executive departments may be chosen from among the Members of the House of Representatives. Such officers shall serve at the pleasure of the Head of Government. The withdrawal of confidence from the Head of Government shall operate as withdrawal of confidence from the Government collectively.

3.     The President shall have power to grant reprieves, commutations, exonerations and pardons for offenses against the United States, except in cases of impeachment.

4.     The President shall nominate, and by and with the advice and consent of the Senate, shall appoint judges of the Supreme and inferior Courts and councilors of the Constitutional Council.

5.     The President shall, on the recommendation of the Head of Government, appoint ambassadors who shall serve as representative of the United States. Ambassadors may be removed from office by the Head of Government.

6.     The President shall bear the title of commander in chief of the defense forces of the United States, and of the organized militia of the several States when called into the actual service of the United States. The command of the defense forces shall be exercised by the Head of Government.

7.     The President shall dissolve the House of Representatives and call a general election if the House has failed to elect a Head of Government within forty-five days from the occurrence of a vacancy in the office of Head of Government.

8.     The President shall receive ambassadors and other public ministers and heads of state.

9.     The President shall commission all the officers of the United States.

10.  The President shall recognize individuals or groups for extraordinary achievement and acts of bravery and heroism.

F.     The President and all civil officers of the United States shall be removed from office on impeachment for, and conviction of, treason, bribery, other felonies and misdemeanors.

G.    Whenever the President transmits to the Head of Government his written declaration that he is temporarily unable to discharge the powers and duties of his office, and until he transmits to the Head of Government a written declaration to the contrary, such powers and duties shall be discharged by the President of the Senate as Acting President.

H.    In case of the removal of the President from office, or of death, resignation, or permanent inability to discharge the powers and duties of the office, the same shall devolve on the President of the Senate, who shall serve as Acting President until a new President is chosen.

The several state legislatures shall, within twenty days of such permanent vacancy, appoint electors in the manner they deem appropriate for choosing a President. These electors shall meet within ten days thereafter to vote for a new President, whose election shall be finalized by Congress in accordance with established procedures.
During the interim period, the Acting President may perform ceremonial duties, receive ambassadors, recognize extraordinary achievements, commission officers, and execute administrative and ministerial tasks necessary for continuity. The Acting President shall not exercise powers involving judicial nominations, pardons, ambassadorial appointments, or military command beyond ceremonial or administrative acts, unless expressly authorized by Congress or the Head of Government.
The new President shall serve a full eight-year term, beginning upon taking office. No person shall serve as President for more than eight years in total, whether consecutive or non-consecutive.

 

VII.      The President of the Senate shall be chosen by the executive authority of each state, each casting one vote, no later than noon on the third day of January in the year in which a new class of Senators is chosen, and following the general election of Representatives. Voting shall be by ballot, and shall continue without adjournment until one person has received a majority of all votes cast. The candidate must be eligible to serve as President of the United States and shall not hold any other office under the United States or any of the several States. Ballots shall be transmitted to the Senate and counted in the presence of a judge of the Supreme Court or another federal court as prescribed by law. The President of the Senate shall serve for a term of three years and may be re-elected. Removal from office before the expiration of the term shall require a two-thirds vote of the executive authorities of the several states.

 

VIII.     The Head of Government

A.    The person elected by the House of Representatives to command its confidence and commissioned by the President to execute the laws of the United States shall be the Head of Government. No individual shall hold the office of two executive departments simultaneously nor shall the Head of Government hold any other appointed office. 

B.    Duties of the Head of Government

1.     The Head of Government shall take care that the laws be faithfully executed.

2.     The Head of Government shall give to the Congress information of the state of the federation, and recommend to their consideration such measures as he shall judge necessary and expedient.

3.     The Head of Government shall confer with the Head of State at regular intervals on matters concerning the governance and affairs of the federation.

4.     The Head of Government shall have power to negotiate treaties, which shall enter into force only upon the concurrence of a majority of the House of Representatives and two-thirds of the Senate.

5.     The Head of Government shall appoint all other officers of the United States, whose appointments are not herein otherwise provided for, and which shall be established by law: but the Congress may by law vest the appointment of such inferior officers, as they think proper, in the Head of State alone, in the courts of law, or in the heads of departments.

6.     The Head of Government may require the opinion, in writing, of the principal officer in each of the executive departments, upon any subject relating to the duties of their respective offices.

C.    The Head of Government shall hold office only so long as they command the confidence of a majority of the House of Representatives. The House may withdraw such confidence only by simultaneously electing a successor by a majority of its members. The person so elected shall be commissioned by the President of the United States and shall thereupon assume the office of Head of Government.

D.    Upon the resignation, removal, death, or incapacity of the Head of Government, the powers and duties of the office shall be exercised by such principal officer of the executive departments as Congress may designate by law, or, in the absence of such designation, by the senior principal officer as determined by length of continuous service in that principal office, until a successor has been commissioned.

During any period in which the office of Head of Government is vacant, the person exercising the powers of that office and the principal officers of the executive departments lawfully in office shall continue in a caretaker capacity until a successor has been commissioned.

A government in caretaker capacity shall exercise only those powers necessary for the ordinary administration of government business and the continuity of essential public services. It shall not undertake major policy decisions, make permanent appointments, enter major contracts or other commitments, or take any other action of a permanent or irreversible character that would bind or materially constrain a successor government, except as strictly and demonstrably necessary to address urgent and unforeseen emergencies threatening public safety, national security, or the basic functioning of government. A caretaker government may make temporary acting appointments strictly necessary to maintain the continuity of essential government functions, provided that any such appointment shall expire upon the commissioning of a successor Head of Government. 

 

IX.       Any Act of Congress shall take effect upon its promulgation as provided by this Constitution. Within twelve months of such promulgation, the legislatures of two-thirds of the several States may declare, by resolution adopted independently by each state legislature and transmitted to the Constitutional Council, that the Act exceeds the powers delegated to the United States by this Constitution. Upon ministerial certification by the Chief Councilor of the Constitutional Council that resolutions of two-thirds of the several States have been duly received within the prescribed period, the Act shall be of no force or effect throughout the United States.

 

X.        The sixteenth article of amendment to the Constitution of the United States is hereby repealed. The Congress shall have no power to lay and collect taxes on incomes, from whatever source derived.

 

XI.       The Senate of the United States shall be composed of three Senators from each state, chosen by the legislature thereof, for terms of nine years, with a power reserved to a two-thirds majority of each legislature to recall its Senators, or any of them.

Except in trials of impeachment, each state shall cast one vote in the Senate, to be determined by the majority of its Senators. In the event the Senators fail to agree, the vote of that state shall not be counted. In trials of impeachment, each Senator shall have one vote.

Immediately after they shall be assembled in consequence of the first election, they shall be divided equally into three classes, each class composed of one member of each state delegation so that one third may be chosen every third year; and if vacancies happen by resignation or otherwise, during the recess of the legislature of any state, the executive thereof may make temporary appointments until the next meeting of the legislature, which shall then fill such vacancies.

 

XII.      The House of Representatives shall be composed of members chosen every third year by the people of the several states, and the electors in each state shall have the qualifications requisite for electors of the most numerous branch of the state legislature.

Each state shall have at least three Representatives; and until such enumeration shall be made, shall be apportioned in accordance with the most recent census. No state shall create a legislative district with fewer than three Representatives. Representatives shall be chosen in accordance with the principle of proportional representation. 

When vacancies occur in the representation from any state, they shall be filled in the manner prescribed by the legislature of that state, provided that such manner shall preserve, as nearly as practicable, the proportional results of the most recent election in that district. Such individual shall serve for the remainder of the term.

Notwithstanding any other provision of this Constitution, a Member of the House of Representatives may be appointed as a principal officer of the Government who serves at the confidence of the House of Representatives and may retain his or her seat during continuance in such office.

 

XIII.     The Constitutional Council shall consist of no more than nine councilors, who shall hold office during good behavior and receive compensation at stated intervals, which shall not be diminished during their continuance in office. The Councilors shall designate one of their own number who shall preside as Chief Councilor. The decisions, opinions, or objections of the Constitutional Council on bills presented to the Constitutional Council by Congress shall not be considered binding precedent nor possess the force of law, and shall be advisory only, serving solely to identify whether a proposed measure conforms to this Constitution. Such determinations shall not limit the authority of the several states to nullify any law, nor restrict the Supreme Court or inferior courts in their judicial review.

 

Every bill, order or resolution, declarations of war notwithstanding, which shall have passed the House of Representatives and the Senate shall be presented to the Constitutional Council of the United States. The Constitutional Council shall only determine if the bill is in full compliance with all the articles of this Constitution and any amendments thereto. If it approves, the Constitutional Council shall transmit the bill to the President but if not, the Constitutional Council shall return it, with its objections to that House in which it shall have originated, who shall enter the objections at large on their journal, and proceed to reconsider it. No bill shall be presented to the President of the United States without the approval of the Constitutional Council of the United States.

Every bill approved by the Constitutional Council shall be countersigned by the Head of Government and certified and promulgated by the President of the United States. Such bill shall take effect in accordance with its terms.

Every order, resolution, or vote to which the concurrence of the Senate and House of Representatives may be necessary (except on a question of adjournment) shall be subject to the same procedure.

 

XIV.    The Judiciary and Prosecutor General

A.    The judicial power of the United States shall be vested in one Supreme Court consisting of nine judges and in such inferior courts as the Congress may from time to time ordain and establish. The judges, both of the Supreme Court and the inferior courts, shall hold their offices during good behavior and shall, at stated times, receive for their services a compensation, which shall not be diminished during their continuance in office.

B.    The judges of the Supreme Court shall nominate, and by and with the advice and consent of the Senate, shall appoint the Prosecutor General of the United States. The Prosecutor General shall hold office for a term of ten years and shall not be eligible for reappointment.

The Prosecutor General shall nominate, and by and with the advice and consent of the Senate, shall appoint Attorneys for the United States for any district for which a judge having criminal jurisdiction shall have been provided by law. The Attorneys for the United States shall hold office for a term of eight years and shall be eligible for reappointment to one additional term.

The Prosecutor General and all appointed Attorneys for the United States shall be removed from office only upon impeachment for, and conviction of, treason, bribery, or other felonies and misdemeanors.

C.    The Prosecutor General shall exercise prosecutorial authority independently and shall not be subject to the direction or supervision of the President, the Head of Government, Congress, or any officer or agent of any of them, in the exercise of prosecutorial discretion. The Prosecutor General shall determine whether criminal or civil proceedings shall be commenced, maintained, settled, or dismissed on behalf of the United States and shall direct the conduct of all prosecutions brought in the name of the United States.

 

D.    Nothing in this Article shall be construed to limit the authority of Congress to enact laws, appropriate funds, conduct oversight, confirm appointments, or exercise the power of impeachment, provided that neither House of Congress nor any committee, member, officer, or agent thereof may direct the exercise of prosecutorial discretion in any particular matter.

 

E.     The Attorneys for the United States and all subordinate prosecutorial officers shall exercise prosecutorial authority under the direction of the Prosecutor General alone. The Prosecutor General shall establish uniform policies governing the exercise of prosecutorial discretion. Congress shall provide by law for such offices, personnel, appropriations, and procedures as are necessary to assist the Prosecutor General and the Attorneys for the United States in carrying out the duties of their offices.

 

F.     Investigative agencies and law enforcement bodies of the United States shall remain within the executive branch and under the authority and direction of the Head of Government. Such agencies shall comply with all lawful requests of the Prosecutor General reasonably necessary for the investigation and prosecution of offenses against the laws of the United States. No executive officer shall prohibit, obstruct, or materially interfere with such lawful requests, nor refuse compliance on the basis of direction from the President, the Head of Government, or any other executive authority.

 

G.    The Prosecutor General may petition any court of competent jurisdiction for appropriate relief to secure compliance with this Article. Nothing in this Article shall be construed to authorize the Prosecutor General to direct the administration, organization, personnel, appropriations, or general operations of any investigative agency or law enforcement body, except as may be necessary to enforce lawful judicial orders issued pursuant to this Article. 

 

XV.     The Congress shall not appropriate funds to any state, nor enter into agreements with any state to perform or administer policy, programs or services except where such funding or cooperation is both necessary and proper for carrying into execution enumerated powers vested by this Constitution in the government of the United States, and all such appropriations shall be subject to the revision and control of the Congress.

Friday, January 10, 2020

US Healthcare Overview


Single payer advocates typically use two primary arguments to support a single payer system:
1) The US system is more expensive per patient than single payer systems, and
2) Health outcomes are better for those in single payer systems
It is necessary to understand these issues before coming to the conclusion a single payer system will correct these problems.

In truth, health outcomes in the United States are far better than those of single payer nations. Further, the cost of care in the United States is the result of government interventions for over a century. The difference is the single payer systems have the means to control expenses through the rationing of care.

Every government-run healthcare system around the world rations care to control costs. In Great Britain, the National Institute on Clinical Effectiveness makes such decisions, including a controversial determination that certain cancer drugs are “too expensive.” The government effectively puts a price tag on each citizen’s life—some $44,305 per year, to be exact. That’s just a baseline, of course, and, as the British Institute’s chairman, Michael Rawlins, points out, the agency has at times approved treatments costing as much as $70,887 per year of extended life. But these are approved only if it can be shown they extend life by at least three months and are used for illnesses that affect fewer than 7,000 new patients per year.

This is the reality of socialized medicine. But the mercantile system in the US is little better as noted in this quote describing the problems with the US system:

Both the current public and private insurance systems main techniques for holding down costs are practicing third party rationing by limiting the services covered, price controls by constraining payments to providers, and shifting costs to patients. But given the system's fragmentation and perverse incentives, much cost-effective care is squeezed out, resources are increasingly allocated to costly, inefficient and opaque administrative and regulatory procedures and central organizational overgrowth with un-necessary and in-efficient micro-management of physicians rather than medical need. The system wastes money on unnecessary premium care workups for all patients, and inappropriate use of expensive technology. Other inefficiencies include information failures, inefficient moral hazard issues, adverse selection, distorted incentives, inflated hospital and pharmaceutical pricing and cost shifting. Many attainable efficiencies are not achieved. We also use medicines and technologies that cost a lot for little or no marginal health benefit. Administrative expenses are high, and enormous sums are squandered in efforts to game the system. Given the mercantile emphasis on production and the ignored consumer it is no wonder that between one fifth and one third of medical outlays do nothing to improve health.[i]

So, what then is the answer to this? More government, the same government which created the US system we have now? "What? The US did not create our healthcare system", you are probably saying. Indeed it did and is described in this article.  But managed care and our current single payer government systems, Medicare and Medicaid, are not fixing what is broken.  Cookbook medicine does not contain costs. All current cost containment strategies are failing.
For a more detailed explanation of how government created the system we have, it started about 100 years ago with medical licensing laws which created a crony relationship between the American Medical Association (AMA) and government which removed competition from within the medical community. Dr. Michel Accad, M.D. describes this in detail in his healthcare blog, alertandoriented.com.  In it, he describes the transition of healthcare following the Flexner Report in 1910. He goes into detail concerning the results of the report:

The main effect of the report was to change public and political opinion about medical education and to influence the implementation of strict licensing laws.  The change in sentiment was facilitated by the political and financial influence of organizations such as the Carnegie Corporation and the Rockefeller Foundation.

In the wake of the report, and under the lobbying efforts of the AMA, states rapidly established medical acts to regulate the issuance of medical licenses.  Henceforth, licenses would only be given to graduates of schools that met criteria set forth by the Flexner report.  Those medical schools would have to be accredited by the Liaison Committee on Medical Education, a joint venture of the AMA and its close ally, the American Association of Medical Colleges.
From an economic standpoint, what happened next was a period of severe medical price inflation which occurred quickly and dramatically.  The situation was so serious that in 1925, a national Committee on the Costs of Medical Care (CCMC) was organized to address the question.

The CCMC was also funded by the Carnegie Corporation and by a number of other private foundations, such as the Rockefeller Foundation.  The committee received material assistance from the AMA, the American Hospital Association, and other leading professional organizations, as well as from many government agencies, including the National Bureau of Economic Research.  Numerous reports were issued over the next few years, and those were compiled in 1932 into a large volume entitled The Costs of Medical Care.

The CCMC confirmed that the costs of medical care had risen dramatically in the prior years.  The committee also found that health care disparities had increased, with access to medical care in rural and poor areas being particularly problematic.[ii]

Coinciding with the Flexner Reforms was the active effort by the government to terminate the relationship people had with mutual assistance organizations.  Mutual assistance organizations used to be a source for primary care for working poor across the country.  Lodge practice was the means by which doctors provided primary care to members of these organizations.  Removing primary care as a benefit to lodge membership, by making lodge practice illegal, forced people to pay for care out of pocket.

"Lodge practice" refers to an arrangement, reminiscent of today's HMOs, whereby a particular society or lodge would contract with a doctor to provide medical care to its members. The doctor received a regular salary on a retainer basis, rather than charging per item; members would pay a yearly fee and then call on the doctor's services as needed. If medical services were found unsatisfactory, the doctor would be penalized, and the contract might not be renewed.

Most remarkable was the low cost at which these medical services were provided. At the turn of the century, the average cost of "lodge practice" to an individual member was between one and two dollars a year. A day's wage would pay for a year's worth of medical care. By contrast, the average cost of medical service on the regular market was between one and two dollars per visit. Yet licensed physicians, particularly those who did not come from "big name" medical schools, competed vigorously for lodge contracts, perhaps because of the security they offered; and this competition continued to keep costs low.

The response of the medical establishment, both in America and in Britain, was one of outrage; the institution of lodge practice was denounced in harsh language and apocalyptic tones. Such low fees, many doctors charged, were bankrupting the medical profession. Moreover, many saw it as a blow to the dignity of the profession that trained physicians should be eagerly bidding for the chance to serve as the hirelings of lower-class tradesmen. It was particularly detestable that such uneducated and socially inferior people should be permitted to set fees for the physicians' services, or to sit in judgment on professionals to determine whether their services had been satisfactory. The government, they demanded, must do something.

And so it did. In Britain, the state put an end to the "evil" of lodge practice by bringing health care under political control. Physicians' fees would now be determined by panels of trained professionals (i.e., the physicians themselves) rather than by ignorant patients. State-financed medical care edged out lodge practice; those who were being forced to pay taxes for "free" health care whether they wanted it or not had little incentive to pay extra for health care through the fraternal societies, rather than using the government care they had already paid for.
In America, it took longer for the nation's health care system to be socialized, so the medical establishment had to achieve its ends more indirectly; but the essential result was the same. Medical societies like the AMA imposed sanctions on doctors who dared to sign lodge practice contracts. This might have been less effective if such medical societies had not had access to government power; but in fact, thanks to governmental grants of privilege, they controlled the medical licensure procedure, thus ensuring that those in their disfavor would be denied the right to practice medicine.
Such licensure laws also offered the medical establishment a less overt way of combating lodge practice. It was during this period that the AMA made the requirements for medical licensure far more strict than they had previously been. Their reason, they claimed, was to raise the quality of medical care. But the result was that the number of physicians fell, competition dwindled, and medical fees rose; the vast pool of physicians bidding for lodge practice contracts had been abolished. As with any market good, artificial restrictions on supply created higher prices — a particular hardship for the working-class members of fraternal societies.[iii]

Then, along comes WWII and government policies which connected health insurance with one's employer and began the 3rd party payer system we have made into law with ACA.

It started with wartime wage freezes. Employers desperate to entice employees used health insurance benefits as an enticement since wages were frozen by law.[iv] After the war, the tax code was altered to give tax benefits to employers for providing health insurance.[v]  So, what happens over time is that individual ownership of health insurance policies ownership slows or stops while simultaneously premiums and costs begin to go up. Why? Because now insurance pays for everything and the user does not even pay for the insurance. Prices are the means of communicating value, but with healthcare, prices are irrelevant as a result of the 3rd party payer system. This video briefly describes the problem.

Because insurance companies are — partly — obligated to pay for any expenses of their customers, and the inability of customers to establish what the real prices of their services provided are — something readily available in a real free market — prices are able to rise far beyond what would be the case in a free market with functioning price signals. Because governments, through taxation, pay for the largest part of these health insurance schemes, we as consumers are not aware of the total costs of these medical services. This lack of awareness in turn contributes to the possibilities of rising prices for medical services.[vi]

But then, what happens when one needs to change jobs for better money or whatever...fine, if you are healthy but not if you are sick. Voila, the pre-existing condition problem. Again, the result of employer provided insurance which had been incentivized by government wage and tax policy. So, what happens when one retires from all but a handful of the largest employers which have healthcare plans for retirees? Since the insurance was employer provided and not individually owned, no more insurance at retirement. Add to this the expense at that point of trying to obtain insurance, which at 65 is not cheap, and you have the need for Medicare. Again, a problem caused by government.

So along comes the HMO law the brainchild of Ted Kennedy[vii]. "Combined with Medicare, the HMO Act eventually eliminated the market for affordable individual health insurance".[viii]  Within 20 years of that law, the system is hopelessly damaged and the 3rd party payer system is the rule. Do not also forget the prices of policies are forced up by numerous mandates by both the states and federal government.[ix] Pricing for medical services is almost universally based on Medicare pricing[x] and policy pricing is regulated by the states[xi]. Thus, bureaucrats have decided what the value of a medical service will be, not the market and there is no pricing mechanism to transmit information.

ACA made the 3rd party payer system, which was already failing, into law by mandating employers offer those benefits. In other words, ACA doubled down on failure.  ACA creates an illusion of having elements of the free market in the form of the exchanges and when the system begins to fail, as it is now, the blame can be laid on the failure of markets so as to usher in a single payer system.

One of the big justifications used by many advocating a single payer system is that in single payer countries, the health of the people is better. Health outcomes in those countries are in fact not better than those in the United States.

For example, life expectancies are affected by exogenous factors such as violent crime, poverty, obesity, tobacco and drug use, and other issues unrelated to health care. As the Organization for Economic Co-operation and Development explains, “It is difficult to estimate the relative contribution of the numerous nonmedical and medical factors that might affect variations in life expectancy across countries and over time.”[xii]

Similarly, infant mortality, a common measure in cross-country comparisons, is highly problematic. In the United States, very low birth-weight infants have a much greater chance of being brought to term with the latest medical technologies. Some of those low birth-weight babies die soon after birth, which boosts our infant mortality rate, but in many other Western countries, those high-risk, low birth-weight infants are not included when infant mortality is calculated.[xiii]

When you compare the outcomes for specific diseases, the United States clearly outperforms the rest of the world. Whether the disease is cancer, pneumonia, heart disease, or AIDS, the chances of a patient surviving are far higher in the United States than in other countries. For example, according to a study published in the British medical journal The Lancet, the United States is at the top of the charts when it comes to surviving cancer. Among men, roughly 62.9 percent of those diagnosed with cancer survive for at least five years.[xiv] The news is even better for women: the five year-survival rate is 66.3 percent, or two thirds. The countries with the next best results are Iceland for men (61.8 percent) and Sweden for women (60.3 percent). Most countries with national health care fare far worse.[xv]

Moreover, the United States drives much of the innovation and research on health care worldwide. Eighteen of the last 25 winners of the Nobel Prize in Medicine are either U.S. citizens or individuals working here.[xvi] U.S. companies have developed half of all new major medicines introduced worldwide over the past 20 years.[xvii] In fact, Americans played a key role in 80 percent of the most important medical advances of the past 30 years.[xviii] Advanced medical technology is far more available in the United States than in nearly any other country.

By the same token, not only do thousands of foreign-born doctors come to the United States to practice medicine, but foreign pharmaceutical companies fleeing taxes, regulation, and price controls are increasingly relocating to the United States.[xix] In many ways, the rest of the world piggybacks on the U.S. system.

Health and medicine present unique challenges but non-coercive measures are best able to address these challenges. A comprehensive functional market-based system is far better positioned to match resources without price controls or rationing care. A market-based system suffers far less of the feast-or-famine misallocation of resources driven by our current mercantile system. It also saves huge sums that our current system wastes on administration, physician micro-management, billing, excessive executive compensation, and risk selection signing up only the healthy and wealthy leaving the sick and poor to be paid at the maximum rate by the American taxpayer.



[i] Lanzalotti, M.D., J. (2011). Jeffersonian Health Policy Foundation -Single Payer vs. Market System. [online] Jhpf.org. Available at: http://www.jhpf.org/research/healthcare/singlepayer.asp [Accessed 10 Jan. 2020].
[ii] Accad, M.D., M. (2015). An economic history of the American health care system-Part 1 | Alert & Oriented. [online] Alert & Oriented. Available at: http://alertandoriented.com/an-economic-history-of-the-american-health-care-system-part-1/ [Accessed 10 Jan. 2020].
[iii] Long, R. (1993). How Government Solved the Health Care Crisis. [online] Freenation.org. Available at: http://www.freenation.org/a/f12l3.html [Accessed 10 Jan. 2020].
[iv] Institute of Medicine (US) Committee on Employment-Based Health Benefits; Field MJ, Shapiro HT, editors. Employment and Health Benefits: A Connection at Risk. Washington (DC): National Academies Press (US); 1993. 2, Origins and Evolution of Employment-Based Health Benefits. Available from: https://www.ncbi.nlm.nih.gov/books/NBK235989/
[v] Ibid
[vi] Cornax, W. (2014). How Third-Party Payers Drive Up Medical Costs | Willem G. Cornax. [online] Mises Institute. Available at: https://mises.org/library/how-third-party-payers-drive-medical-costs [Accessed 11 Jan. 2020].
[vii] En.wikipedia.org. (2019). Health Maintenance Organization Act of 1973. [online] Available at: https://en.wikipedia.org/wiki/Health_Maintenance_Organization_Act_of_1973 [Accessed 11 Jan. 2020].
[viii] Holleran, S. (1999). The History of HMOs - Capitalism Magazine. [online] Capitalism Magazine. Available at: http://capitalismmagazine.com/1999/11/the-history-of-hmos/ [Accessed 11 Jan. 2020].
[ix] New, Michael J, Ph.D (2005). The Effect of State Regulations on Health Insurance Premiums: A Preliminary Analysis, Center for Data Analysis, CDA05-07, October 27, 2005
[x] Roger Feldman, Bryan Dowd, and Robert Coulam. “Medicare’s Role in Determining Prices throughout the Health Care System.” Mercatus Working Paper, Mercatus Center at George Mason University, Arlington, VA, October 2015.
[xi] New, Michael J, Ph.D (2005). The Effect of State Regulations on Health Insurance Premiums: A Preliminary Analysis, Center for Data Analysis, CDA05-07, October 27, 2005
[xii] OECD, “Health at a Glance: OECD Indicators, 2005” (Paris: OECD Publishing, 2005), p.11
[xiii] World Health Statistics Quarterly 36 (1983), cited in Nicholas Eberstadt, The Tyranny of Numbers: Measurements and Misrule (Washington: AEI Press, 1995), p. 50.
[xiv] Arduino Verdecchia et al., “Recent Cancer Survival in Europe: A 2000–02 Period Analysis of EUROCARE-4 Data,” The Lancet Oncology 8, no. 9 (2007): 784–96, http://www.thelancet.com /journals/lanonc/article/PIIS1470204507702462/abstract
[xv] Nicole Martin, “UK Cancer Survival Rate Lowest in Europe,” Daily Telegraph, August 24, 2007.
[xvi] “Nobel Prize in Physiology or Medicine Winners 2007–1901,” The Nobel Prize Internet Archive, http://almaz.com /nobel/medicine/medicine.html.
[xvii] “Pharmaceutical Research and Manufacturing of America,“ R&D Spending by U.S. Biopharmaceutical Companies Reaches a Record $55.2 Billion in 2006,” February 12, 2007.
[xviii] Economic Report of the President (Washington: Government Printing Office, 2004), p. 192.
[xix] “The Novartis Warning,” Wall Street Journal, May 8, 2002