Thus, I am glad to be home and not waiting in an emergency room, say, in London. Health care officials in Britain discovered that patients were lingering in emergency rooms for days before being treated. Incensed by this, the bureaucrats magisterially ordered that emergency room patients be treated within four hours . The consequences were reported in the Daily Mail. Hundreds of "seriously ill patients" simply were kept longer in ambulances before being admitted to the emergency rooms. Hence, there were fewer ambulances available for subsequent emergencies. As Herzlinger notes, the consequence of socialized medicine is "rationing."
Since President Harry Truman first envisaged socialized health care (sorry, we now say "single-payer" health care), the liberal wing of the Democratic Party sedulously has championed it as though nothing in the realms of economics or social innovation has changed. Milton Friedman, another illustrious free market economist in the long line extending from Smith, noted in a 2001 essay in The Public Interest that technological leaps in agriculture, transportation and communication have lowered prices and raised quality. Yet such technological leaps in medical technology have been accompanied by higher rather than lower costs. The reason, he explained, was single-payer health care -- that is to say, government-sanctioned employer-based health insurance, Medicare and Medicaid. These are not market solutions, so costs have skyrocketed.
Friedman estimated that had health care expenses been paid for according to free market principles, as they were in the first half of the 20th century -- before government involvement -- today they would be less than half what they are, and the quality would be no less than it is today, possibly better. The alternative to the European heath care system with its long waits and rationing is to seek market solutions, such as health savings accounts and increased competition among health insurance carriers unburdened by stat-imposed mandates.
The likely Republican presidential nominee, Sen. John McCain, proposes a health care package that would contain many of these alternatives. Modern-day heirs to the tradition of Smith have even more ideas. Yet as Philip Klein writes in a comprehensive report on the health care debate in the current issue of The American Spectator, conservatives simply have been lazy about taking up the debate. As he says, "The persistent indifference of conservatives will virtually guarantee that government will devour the private market for health care." It is time they take up the debate and argue for the same kind of free market solutions to health care that Adam Smith's acolytes have applied to other aspects of the economy around the world.