Some Not-so-NICE Realities about a National Healthcare System

Should we shout?
Should we scream?
What happened, to the Post-War Dream?
HT: Pink Floyd

In Great Britain, the people were sold the Social Welfare System, and its “costless” entitlements, as the ultimate fruit of their WWII victory. It was the ultimate in social evolution and true apex of the English State. In America, the analog was LBJ’s Great Society.

Then, the Post-War Dream and the Great Society run headlong into the brutal realities. These realities could genuinely care less what Britains felt entitled to after WWII or how wonderful LBJ thought social welfare programs to be. The foremost of these realities forces the statist to acknowledge that there really is no such thing as an entitlement.

There are goods and services that all of us would appreciate having. To get these goods and services, we have to either pay, or get subsidized. Paying has an advantage. He who pays the piper, does indeed call the tune. When I whip out cash, I get to set many of the transactional conditions.

Yet, I would have to admit that this was a personal decision, taken at my own expense. If I’ve been promised an entitlement, this isn’t it. It sort of leaves the person promised all of this largesse wondering what happened.

Rather than answer this sort of question, the government then attempts to subsidize all of these entitlements. This requires the exsanguinations of a willing tax base. Eventually, one of two things happens. Either the taxpayers go broke, or the taxpayers go Galt.

Assuming 100% of the tax base bins in either category is too simplistic to accurately model reality. However, assuming that each individual taxpayer will hit a point of strain where they choose one or the other gives a more accurate impression of reality. There exists a continuum, a trade-space if you will, along which varying masses of the tax-paying producers of a nation will eventually fall.

So once people have figured out that they really aren’t as “entitled” as Uncle Sugar Daddy told them, and once the taxpayers either go Geithner, go bankrupt or go Galt; Roger Waters then gets around to asking “What have we done to England?” At this point, the social welfare agencies responsible for Roger’s largesse face the Fundamental Problem of Economics.

Because of limited resources and infinite demands, society needs to determine how to produce and distribute these relatively scarce resources.

Great Britain has hit this wall with regards to its national healthcare system. In order to resolve this conundrum, they have empanelled a board of experts called NICE (National Institute for Health and Clinical Excellence). Excellence is defined by this board as a Pareto Optimal outcome through rationing.

Of course, the British try to elide this point by claiming they are here to provide higher quality, and that they issue recommendations, not orders. In an Orwellian turn of bureaucratic linguistic legerdemain, a NICE spokesman makes the following claim.

NICE cannot ban anything. It issues guidance, in the form of both clinical and public health guidelines, and on the use of technologies like drugs and medical devices. The guidance specifies the technologies in question, their dosages and frequency of use, the stages of a disease at which their use is most appropriate, counter-indications, and the patient groups for which they are likely to be effective. Local health care purchasers and providers must make any technology recommended by NICE available when it is required by a local physician. In this sense, NICE enables rather than commands – only physicians have powers to command…

NICE’s guidance to professionals is just that: guidance. The general expectation is that most professionals will follow the finest advice and guidance that can be mustered to support their work. This seems the right approach to m – the best way to encourage best practice is to provide the best information. (HT: Secondhand Smoke)

The manner in which NICE rations is by issuing euchastes that drive what gets included in a “benefits basket” to maximize a measure known as a Quality-Adjusted Life Year. They, independent of market forces, tell physicians and administrators what the British Treasury should be willing to pay for. Absent a robust private health system, this is what you can get at the doctor’s office.

The end result of this is a perpetual, nationalized system of triage. Based on cost, based on convenience, based on political whim, the availability of services will be set from on high. This will lead to a derived determination of which lives are saved and which are left to bleed out. There is no other possible outcome.

This, like abortion, euthanasia, and capital punishment, becomes an issue of sanctity of life versus its commoditization. When NICE recommends availability of treatment under the pressure of mandated budget frontiers, life has been shorn of its fundamental sanctity. The decision of life or death for the patient balances on the steelyard of political feasibility versus budgetary affordability.

The Post-War Dream and the Great Society both are contingent upon the infinite bounties of a functioning market economy. Yet each paradoxically constrains the wellspring of wealth required to jet-fuel the colossal expenditures intrinsic to either. In the end the rationing boards run out of rations. Operations Research algorithms fail in the absence of feasible solutions within the walled-off regions under constraint. Robert Samuelson brilliantly and grimly chronicles what happens as a result.

Any sober examination of figures like these suggests that the system has promised more than it can realistically deliver. We are borrowing not to finance investment in the future but to pay for today’s welfare—present consumption. Sooner or later, the huge debt will weaken the economy. Nor would paying for all promised benefits with higher taxes be desirable. Big increases in either debt or taxes risk depressing economic growth, making it harder yet to pay promised benefits.

The U.S. welfare state is inevitably weakening; insecurity is rising. The sensible thing would be to decide which forms of public welfare are needed to protect the vulnerable and to begin paring others. Our inaction poses another dreary parallel with GM. It was obvious a quarter century ago that GM the auto company could not support GM the welfare state. But the union wouldn’t surrender benefits, and the company acquiesced. Inertia prevailed, and the reckoning came. The same cycle, repeated on a national scale with sums many multiples higher, would be correspondingly more fearsome.

Reality, of which Roger Waters reportedly only occasionally holds cognizance of, is what happened to the post war dream. The Great Society stops being great when no one is left to pay for it.