Saturday, July 07, 2007

Work the British Won't Do

In all the discussion about the drawbacks of single-payer health systems, there was one argument I had never considered before, in addition to the waiting lists, the criminalization of consensual trade between doctors and patients, etc. It was brought to my attention by remarks Mark Steyn made on the Hugh Hewitt show. He notes, incredibly, that 58 percent of Britain’s new doctors in 2003 came from other countries. Britain still produces native doctors to be sure, but many of the best ones come to the U.S. to practice.

While Mr. Steyn depicts this as a national-security issue, to me the most interesting part is what it says about future medical quality and innovation. Britain’s doctor shortage is essentially a price-control problem. That state-imposed price controls cause waiting lists for health services, especially in Britain, is a well-known problem. But perhaps a greater effect of nationalizing medicine is that medicine itself becomes seen to economic agents as a less useful activity, because the government is so big on controlling costs. And so medicine itself becomes less remunerative, and so the number of doctors declines, unless (as in Britain) low-cost doctors can be found overseas. To use the language of the American immigration debate, medicine in Britain is increasingly a job Britons are unwilling to do, like gardening in Los Angeles.

Prices tell us things – the value of using resources, including talent, for alternative activities, for example. Medicine is expensive in part because it’s so valuable (what is our willingness to pay, after all, to have our cancer put into remission or our painful hip replaced?), and “controlling costs” tells entrepreneurs that this is not such a valuable service after all. I have written before about how the U.S. switching to a single-payer system would be disastrous for medical innovation because the U.S. consumer’s willingness to pay in what is still a reasonably market-based system now motivates a huge amount of global medical innovation. The destruction of medical progress would be the greatest, although largely invisible, cost of completing the government takeover of the U.S. health system. Markets balance, as they should, cost of production and value to consumers. By obsessing only about the former, government-run health care destroys far too much of the latter.



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