I will not comment on the movie, because I haven't seen it. I probably will see it; Michael Moore is a clever and amusing filmmaker and polemicist. But the general commentary seems to be that Moore has set up an opposition between “socialized” medicine and a “fee-market” system, with the former defeating the later. However, this is a false dichotomy: the American system isn't “free-market” and the European system isn't socialism. Both are merely a different combination of private market and govmint management. But defenders of either system usually practice a kind of sycophancy which ignores the faults of one and recognizes only the faults of the other. The truth is that medical care is an inelastic product (sick people will pay whatever they are charged to regain their health) that is provided through a series of monopolies or oligarchies. Licenses, patents, technology, and endless regulations (many of them actually necessary) tend to limit entry into the market, thereby preventing even a semblance of a free market. On the other hand, when medicine is “free” it is over-consumed, and waiting lists, rather than high prices, are the allocation mechanism. The European system does seem to perform better than ours, by most social measures, but only because they consciously adopt social measures and work towards them; the idea of a “common good” has not completely disappeared from Europe. However, there is some doubt as to how long such systems can be maintained, and in any case they make each person a ward of the state rather than a citizen. True, when one has a life-threatening disease, one may prefer to be a living ward of the state rather than a dead citizen; nevertheless, it is not an ideal choice.

Is insurance the answer?

Can insurance function as a middle term between the market and socialism? Not really. Insurance can only be a means of cost-averaging; some must pay too much and others too little, but one way or another, the cost must be paid by the users, which will price many out of the market. And healthy purchasers will seek plans that eliminate as many “risky” applicants as possible; they will seek the safest “risk pool” which is reflected by the lowest cost. So nothing is gained towards a universal, affordable system. But how about if we made insurance mandatory and universal? Fine, but that's just another name for a tax, and you're back to the same problems. And if you are going to handle it through taxes, it would be better for the govmint rather than the Hartford to collect the taxes. We used to believe that “private” business could do public functions better than the govmint, but that was before we learned about Halliburton, where two contractors do the work of one soldier on a “cost-plus” basis, with both the cost and the plus being astounding numbers.

In any case, and however you collect the money, if govmint provides universal care without expanding the supply of such care, the immediate result will be to expand demand faster than supply, which is to say, to raise prices. And the higher prices will require more taxes (I mean, “premiums”) or will require price controls, which will dampen demand, leading to waiting lists, not to mention a vastly expanded bureaucracy.

I have no easy answers, but I do have some suggestions about increasing the supply of health care, which ought to go a long way (if it is really a market system) towards reducing the cost. There are three “easy” things we could do, two on the supply and one on the demand side.

Increase the Supply of Medical Practitioners

Getting an M.D. Is an expensive and arduous task. But not all health care requires an M.D., while other types require quite a bit more. There should be different levels of licenses: midwives, nurse practitioners, general practitioners, medical doctors, and more advanced doctors of medicine. First line care could easily be provided by NP's working in their own neighborhood clinics, perhaps in loose association with a hospital or a GP or MD. In fact, as most have us have discovered, even when we go to “our” doctor, most of the service is actually delivered by an NP. Another area where this applies is in orthodontics. The is no reason why we anybody needs a degree in dentistry to install orthodontics; the work could be as safely performed by orthodonturists, and at a far lower cost. It is only the legal monopoly that dentists have on the business which keeps the prices so high, thereby denying this useful and normally affordable service to many poor people, while charging the rest of us unreasonable prices.

In a “free market” increasing the supply should lower the price; in any case, if we are about to increase the demand, which seems inevitable and should happen, we had better have a means of increasing the supply.

Replace Patents with Licenses

Currently, when a company develops a new medicine that get a monopoly on that medicine for a period of time, and they charge monopoly prices. But this is not necessary to fund research and development. R&D can be funded with licenses; that is, when a firm develops a new medicine they get the right to license that product to any number of production firms. The licenses should be for a longer term than the current patents, which will provide R&D firms with a much more secure revenue stream from which to fund further research. Manufacturers, on the other hand, will have to compete on price and service, and will therefore have to find the most efficient ways to manufacture and distribute the medicines. This also provides an easy way to fund third world medicines; the first world could just pay the license fees for less-developed countries, which could then produce the medicines locally, providing both inexpensive medicines and local jobs.

Improve Education

In the bad old days, when we had mothers that actually had the time to attend to children, a lot of advanced medical care was actually given by these obviously backward women. Well, nobody has mothers like that any more, but every school seems to have a “health education” curriculum. My impression of these classes, perhaps an incorrect one, is that they have little to do with health and a lot to do with condoms. No matter. There is no reason why they couldn't actually teach something about how to care for one's self and one's family, about how to actually use easily available products (and I don't mean the detritus of the patent medicine industry) to both prevent and treat simple cases. Mothers and fathers would thereby be the first line of medical practitioners. After, sometimes, chicken soup really does do the job, and at others, other simple remedies exist, if anybody knew about them. But as long as medicine is the private preserve of licensed practitioners, no one will learn anything.

Perhaps these suggestions are not so easy after all. For one thing, expecting mothers to have the time to attend to these things would throw women back into the dark ages of the Eisenhower administration, and nobody wants that. And both the licensing of medicines and a diversity of medical practitioners would introduce competition into the free market, and wouldn't that be a horror.


Jeffrey Dach MD Monday, July 9, 2007 at 5:03:00 AM CDT  

Thanks for the best discussion of the economics of health care I have seen so far on the net.


What is the real solution, if Michael Moore’s government sponsored universal health care is not the answer?

The crux of the "SICKO" documentary is the disconnect between our expectations and the reality of health care. We are expecting compassionate care from another human being, and instead we get a faceless corporation. The person behind the desk or window is an agent of a health care corporation, which is not a human being, whose primary goal is to increase corporate profit.

This is America, and corporate profit is good, the profit motive forming the basis America’s greatness. The basic problem is that a corporation is not a human being. Therein lies the fallacy of replacing a corporation with a government agency, neither of which is a human being, when what we really want is a human being to deliver compassionate health care, and assist in serious health care decisions.

Review of "SICKO", by Jeffrey Dach MD

Jeffrey Dach MD

John Médaille Monday, July 9, 2007 at 8:37:00 AM CDT  

Thank-you Dr. Dach for your kind comments. Profit, as the just compensation for the entrepreneur, is just as necessary as the just wage. In fact, it is identical to the just wage.

But "profit" as the unending accumulation of rewards in the hands of a few, beyond the actual contribution they make, is not only unjust, it is economically inefficient. No system can survive it, not medicine, not transportation, not anything. The current situation in medicine is that of a network of anti-competitive market power and govmint-protected monopolies. End these, and you go a long way towards solving the problem.

Michael Bindner Monday, July 9, 2007 at 2:26:00 PM CDT  


As you know, I favor an ownership system where cooperatives provide all of the basic needs of their employees - from housing to education to finance to health. Under such a system, doctors would be employed by the cooperative and share in its profits, which can also be seen as a way to store obligations for future income.

If insurance is relied upon because vendors are outside, rates and copayments can be set by income (or rather the level of support which is taxed or tax credited) and employees can be given medical savings accounts and medical lines of credit to be able to get health care "right now" and pay back an amount in keeping with their ability to pay.

John Médaille Tuesday, July 10, 2007 at 11:34:00 AM CDT  

Dear Mike,

I certainly agree that if production were organized in cooperatives then most of the problems would go away just as they have with the Mondragon Cooperative, which manages to provide social services to its 80,000 owner-worker members.

However, production is not generally organized this way, and until there is greater equity in the distribution of rewards, we will have to deal with the problem with the tools we have.


distributist123 Sunday, July 29, 2007 at 10:55:00 AM CDT  

I have seen sicko and think Moore makes some very valid poiints. I also think that socialized medicinte may be be the only way to fix things despite its evils. at least it would give everyone something. Neverthelesss, I recently read Restoration of property and it inspired me with some ideas which would not fix the problem but may begin to help.

1. Pass a law requiring all doctors to take a certain percentage of pro bono and medicaid patioents. This is done in the legal profession and there is no reason why it can't be done in the medical feild as well.

2. Pass a law requiring that all health care decisions be made by a person's doctore not an insurance company. This would save many lives.

3. Reform the health insurance provacy act and allow doctor's to talk to health insurance companies without accessive beurocracy.

4. Amen to natural remedies! I am convinced that our grandparents knew many natural cures that are unknown to us today because of the dominance of the pharmacutical companies and that antibiotics have actually harmed us by leading to drug resistant strains of TB for example.

This would not totally solve the problem but would out a dent in the health care nightmare as belloc said his reforms would do for modern capatalism Bill

John Médaille Sunday, July 29, 2007 at 1:14:00 PM CDT  


The solutions you give would not, as you say, solve the problem, but they would sure humanize the system, and it would certainly to receive our medical care from humans rather than either govmint or corporate bureaucrats.


distributist123 Tuesday, July 31, 2007 at 12:37:00 PM CDT  

John very muc agreed We can humanize the health care system a bit that would be great! Unfortunately, modern capatalism has turned human life into a comodity and treated health care accordingly. Bill

Quintus Arius Tuesday, January 8, 2008 at 11:09:00 AM CST  

Nice work, John. I don't agree with all your points, but we are close enough. You now have the torch. Run with it.

If only our political elites were as enlightened. (But perhaps some are, but not much vote gathering spreading this wisdom.)

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