Dueling Economists: Paul Krugman v. Milton Friedman on Health Care
By Barbara Lock, MDJuly 21, 2009
Nobel Prize Winning Economists Paul Krugman and Milton Friedman share their views on health care reform. Friedman, a conservative economist who built an international reputation as a free-market advocate at the University of Chicago, died in 2006. He spoke at the Mayo Clinic in 1978 about what he saw as government's role in the medical field: to enforce laws against fraud and deception and to help people in dire distress. He rightly noted that health care costs in 1978 for the average family were lower than the cost of having a car, and far less than the cost of housing. Why should the government, paid for by taxpayers, pick up the cost of cancer, heart disease and chronic bronchitis treatment for people who freely chose to spend money on smoking? Why should we pay for the cost of trauma care for victims of motor vehicle collisions who freely chose to spend money on alcohol and fast cars? While there are many health conditions that are unpredictable and unavoidable, there are many others brought on by the poor choices of patients. Friedman fully supports the freedom of people to make poor choices, but doesn't think that the government ought to step in and pay for those choices.
Friedman's basic premise, that allocating resources towards or away from the care of one's health is a choice that every individual must be free to make, is very appealing and correct on many levels. But listen carefully: he says "People ought to be free to hurt themselves as well as help themselves as long as they do it at their own expense." And here is where the holes in the argument appear: the social and financial cost of the poor health of others is already born by all Americans.
You know that chronic alcoholic that chooses to drink at his own expense? He goes to the Emergency Department about twenty times a month, sometimes twice in the same day. Usually he comes by ambulance, sometimes he is brought in by police, costing taxpayers each time. A nurse and doctor sees him, he gets IV fluid, a stretcher with sheets. Sometimes his blood is drawn to check an alcohol level. Sometimes he gets a CT scan because he's hit his head. Sometimes he gets medications. About once a month he is admitted to the hospital for trauma, pancreatitis, or alcohol withdrawal. He can't pay. Who pays for the time of the staff, the medication and supplies, the the radiology tests, the administrators who run the hospital, maintenance of the building, and the turkey sandwich? You do. Even when patients like this are not enrolled in medicare or medicaid, all of the costs of their care are born by everyone in society in the form of higher charges for paying patients and in the form of time diverted from other patients.
Don't think we can solve the problem of health care financing by creating some special program for the chronic alcoholics who can't pay, because the same principles apply to the stoic grandfather with atrial fibrillation, the hard-working college student who finds herself unexpectedly pregnant, and the cute two-year-old girl with congential heart disease. Since everyone already pays for everyone else's health care, we should at least make an attempt to do it more systematically.
Economist Paul Krugman agrees, but couches the question in moral terms, noting "The United States is unique in being a place where illness, the costs of medical expense, can bankrupt you, or where the inability to pay for basic medical care can lead to a downward spiral in your health and often to death."
Most physicians are very nervous about what health care reform will mean for them: will their reimbursement go down? Will their taxes go up? How will their patient satisfaction scores and malpractice liability be affected when they are forced to ration health care? I am nervous too, but I think that our current system is unsustainable, and I'm interested in seeing how it will evolve.
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