Can America afford conservative privatization in "voucher socialism" form?

This article by Michael Lind in Salon argues that we can’t. In a nutshell, his argument is this:

  1. Nowadays, American conservatives (other than the really radical hard-RWs and Libertarians) mostly are arguing, not for total privatization of public services and programs and utilities, but for their provision through “voucher socialism” – i.e., government would continue to pay for such services with tax dollars, but would not provide the goods or services or run the utilities directly, but, rather, would issue vouchers (like food stamps) to people who need them, and let them use those vouchers to buy the goods and services from private enterprise. This, conservatives argue, would be more economically efficient, because, instead of a government monopoly that allows cost-inefficiencies to flourish, there would be price-competition between the private-sector providers.

  2. That reasoning is wrong. A voucher system works perfectly well in some sectors (e.g., food stamps). But many of the services in question are natural oligopolies or monopolies. (E.g., if you need a hospital, you are necessarily limited in choice to the limited number of hospitals near you.) Providing them through vouchers would enable rent-seeking behavior among the private-sector providers and drive the prices up.

Makes a lot of sense to me. Anyone see any flaws in this?

I’ve never seen any evidence that a free market health care system will function more cheaply than one with heavy state involvement. The VA system in the US has undergone drastic improvements lately and it wasn’t due to deregulation. Other OECD nations don’t provide high quality health care for far less money due to a free market system. The agenda of these people is and always has been to promote their ideology and mold the world to their ideology, not offer pragmatic solutions to serious problems. It is no different than some deeply religious people I know who think converting people to their religion is a solution for problem A-Z. Problems are viewed as opportunities to push the dogma and mold the world to fit the ideology, not as serious issues that need to be solved pragmatically. If the ‘solutions’ to a problem make the underlying problem worse, so be it, just so long as the solution is more ideologically pure than the previous system. Sadly I don’t see it changing.

If people have pragmatic evidence that these ideas work that is fine. Places like Taiwan use market incentives to drive down cost and drive up quality (doctors are forced to compete with each other to attract patients, and to provide care for the rates they are being offered). The UK reimburses in part based on how healthy patients are, not on how many services are offered. But those are still incentives that are controlled by the state.

Well, BrainGlutton, the real question is, What Would Jesus Do? And I don’t think Jesus would want us to tell a doctor who’s gone to medical school and racked up a million dollars of debt that he has to take orders from some relatively uneducated Washington bureaucrat. You have ask yourself, when you look at Washington, D.C., is this like the fig tree that Jesus smote with blight because it wouldn’t bear fruit for the Son of God out of season? Well, you’ll have to decide that for yourself.

What I know is that Jesus said, “To he who has much even more shall be given, and from who has little even that shall be taken away and given to he who has much.” That sounds like capitalism to me, and I think maybe it’s modern capitalist Protestants who really follow Jesus, not all these well-meaning charities and the like.

So would Jesus really want us to fund the medical care of pagans and sinners at all? Shouldn’t that be up to God’s people to decide? I think it’s up to us to determine how much charity should even be granted to heathens and unbelievers, and how much preaching we should make them sit through to get it. Don’t be afraid of that which destroys their bodies, but of that which destroys their souls.

Seriously, though, Jesus kind of sucks.

The health care market does not have transparent pricing. Rates for substantially the same procedure can vary widely. When consumers have price information they change behaviour, even if it is the insurance company picking up the tab.

Consultancy companies such as this one are even being paid by insurers because providing customers with pricing information works to save the insurer money.

A voucher system will not work well in a market without transparent pricing. While people don’t exactly have time to price shop in a true emergency they could for more routine procedures. For that colonoscopy are you going to go to the hospital for $4500 or the specialty GI clinic for $2100?

Make a health care provider publish rates and other relevant data (complication rates, for example) and let the consumer choose.

Yeah, making hospitals compete on price sounds good, at least in a hypothetical society without massive wealth & income disparity. Though it would be utterly impractical to expect competition for emergency care or new treatments with few trained specialists–or in rural areas with only one hospital.

But I wonder if transparent pricing wouldn’t occur hand-in-hand with a push toward standardized pricing as opposed to progressive pricing. This would either price a lot of people out of the health care market altogether (yeah, we already are, what else is new) or create a drive to make health care cheap in general for the poor’s sake, as we do already with food.

I’m inclined to think that any fee-for-service health care system, even one with standardized pricing, just adds unnecessary complexity to the process of delivering care. (And yes, I include in that vouchers, single-payer, any fee-for-service system.) If we treated hospitals like roads, where we see how much they’re being used and then simply devoted resources according to that use, that would in theory be more efficient, wouldn’t it?
(Oh, yeah, sorry for my previous post. I’m not sure why I dropped that particular snark right then. General irritation at the Religious Right/econoconservative nexus, obviously, but bit of a threadshit, or threadfart or something.)*

That assumes rational and prudent use of the health care system. Unfortunately a small proportion of the population use the health care system in an abusive manner. Just ask paramedics about their frequent flyers , many of whom are not insured.

If we simply adjust resources to meet demand then demand expands to meet supply. What we need are some innovative approaches to better involve patients in their own care.

A bit?


I read it and I was thinking, “WTF?” But then I thought, “A-ha. Well done.”

But I have been thinking about this idea of why conservatives seem to be suggesting vouchers for stuff like education and health care. It just doesn’t make much sense to me: those who seem to be most in favor of vouchers for various purposes also seem to be the most opposed to government intrusion into markets, such as, for example, Paul Ryan. These voucher ideas very much seem to me to be cut out of the same cloth as the individual mandate: a novel “conservative” idea that, if it came to fruition, would be pilloried as “voucher socialism” as the OP put it.

The cynic in me says that part of the fascination with such programs is that it is easier to propose budget cuts to a voucher program than it is a government service. Think about it: if someone proposes a reduction in school funding, that necessarily means teachers are going to be laid off and schools may close, and most people hate that. But if a voucher program takes a modest cut – like that $5,000 annual education voucher becomes $4,900, or simply is not adjusted for inflation – then the impact of the cuts is not immediately known. It just means parents have to come up with a little more money to send their kid to private school, and we can all tighten our belts instead of relying on government assistance for something as important as a good education, riiiiiiight?

I try not to ascribe ulterior motives to people’s political views, but in this case, I just can’t help but think that the voucher systems that have been proposed is a rather obvious attempt to cut domestic spending without regard for how it may impact people dependent on those services.

It’s more of a non sequitur than a threadshit (which means saying the topic is beneath you). It doesn’t make any sense. You would not pass that religious Turing test Bricker talked about. There’s nothing remotely in the Bible about Jesus disliking state health care, and Jesus absolutely did not restrict charity to Christians, nor give us any choice in the matter.

Doctors and hospitals do compete on price, though, don’t they? Why else does my insurer provide more favorable coverage when I use an in-network provider?

Yep, they must compete on price - look at the meagre salaries, Board-level remunerations and healthcare industry profits. Nothing there to suggest a free market failure at all.

You’ve never seen a link to independent data showing USA healthcare at around 16-17% of GDP and heading towards 20%, with the European average at around 10%?

Takes some doing.

I would guess Jesus would say something along the lines of, “That’s your cross, physician, and you’ll bear it and like it.” Just as St. Paul enjoined slaves to meekly obey their masters (and masters to treat their slaves kindly), since slavery is but a fleeting thing of this world, and there is neither bond nor free but ye are all one in Christ – spiritually, not socially – and all the saved will be equal in Heaven anyway.

So, you’re suggesting a British-style system where all physicians are in effect salaried state employees like police officers, rather than a Canadian-style system where the state merely supplants the private health-insurers and regulates the fees and costs?

Voucher socialism is a contradiction in terms. Socialism means that the state controls the means of production. Vouchers mean that the state provides citizens some money for a specific purpose. They are totally different and Lind just uses that to be perjorative and to mock people for their antipathy towards socialism.
If all conservatives wanted was cheaper healthcare, he would be right. Just nationalize healthcare and announce the government was cutting it 50% and le voila healthcare is 50% cheaper. But conservatives do not just want cheaper healthcare they want quality healthcare too. In order to get both you need innovation. In areas of healthcare where consumers shop with their own money you get innovation. In optometry you get LASIC and other eye surgerys where prices have fallen drastically over the last 10 years while quality keeps getting better. Cosmetic dentistry has brought us a seemingly never ending variety of ways to keep our teeth whiter, and the prices keep falling.
His arguments about how healthcare is different are "The same is true in the case of healthcare. Apart from minor, non-life-threatening services like dentistry and optometry, there can never be a competitive market in healthcare — there aren’t enough hospitals nearby, consumers can’t judge the quality of the care they are receiving, and deregulation could be catastrophic. " Most places do have more than one hospital nearby and in the few places that do not then the threat of competition would be enough to keep prices at market rates. Consumers can definetly judge the quality of care they receive. There is plenty of information available about how good different doctors are and if more patients were choosing hospitals and doctors there would be a market for even more information.
Deregulation could be catastrophic, but it also could be great. He does not even bother to argue this one.
None of his critiques are unique to healthcare. There are lots of small towns who can’t support more than one or two grocery stores. When you go to the car mechanic you have no way of knowing how good the service you are getting is. Deregulating trucking and airplane travel could have been a catastrophe, but they weren’t.
Competition is what creates innovation. Wanting to gain market share or being afraid of losing market share is why companies innovate. We have much more people on Earth than 100 years ago and fewer natural resources. Yet we are much richer than we were then because of innovation made people produce more with less. If we want lower prices and better quality innovation is our only hope.
The government’s incentives for innovation are much worse. If they do not innovate they may get voted out of office but they may not. What if a government does a great job on healthcare but the economy tanks. They will get voted out anyway, or if they do a poor job but win a war. They will get reelected anyway.
Government is very risk averse. every government worker knows the easiest way to get fired is to show up in the newspapers. Thus it is better to be cautious and ineffectual rather than risk embarassing your boss with a high profile failure. This creates a culture that is opposed to innovation.

Wesley was saying he’s never seen a link showing the opposite of that.

I’m sorry!

Fwiw, I think in this kind of debate the UK case is usually touted because it’s diametrically the furthest from the US model - more chance people will throw up their hands in horror.

I also think the reality is no country would devise a healthcare system now like the system in the UK - even the UK, though they may or would in the social and political climate immediately post-war. Remember, the electorate threw out Churchill in a landslide to the get welfare reform. In 1946.

On that basis, it’s a red herring in pretty well all healthcare debates.

Fwiw, the reason the UK hasn’t shifted more to the European norm is partly emotional and partly rational. As someone once said, the NHS is the closest the UK has to a state religion - it’s a visceral bond that, obviously, begins at birth. Rationally, it’s also a matter of not trusting politicians.

The two greatest things about the NHS are (a) it’s beautiful and bonkers at the same time, and (b) it demonstrates that once you give something to the people they ain’t giving it back.

It also costs about 10% of GDP. It’s a pretty decent deal.

I don’t think there’s anything bonkers about the NHS. Like any big bureaucracy, it has its problems, but it’s not immune from change. Look at the doctor choice initiative - a market-inspired reform in an entirely socialized system.

I guess it’s perspective; when you speak to as many economic migrants as I do (from East Europe and Africa, mainly) when they first arrive they’re both amazed and shocked in equal proportion by the idea of it.

I also think it’s slightly bonkers from the pov of 21st century capitalism, but it was created in a different time by a very different people.

You sometimes wonder how it survived this long, a bit like Lemme or Ozzy Osbourne.