But Rich People Get Nicer Stuff!

When it comes to health care, some people get very upset that rich persons are able to get treatment that the average person or poor person can’t hope to receive. Now, I’m of the opinion that reasonable levels of health care are unreasonably priced; but let’s leave the particular details of our dysfunctional marketplace out and just sit back and look at the situation from a systematic and moral viewpoint.

Is it bad that rich people can consume more health care products than poorer people?

My opinion is no. It’s not inherently bad that rich people can (or do) consume more health care products than poor people. There’s nothing wrong with rich people consuming more in shoes or cars, either, and health care is a product just like any other: produced by workers for consumption by those who pay for it. It just happens to be a product category that everyone really, really wants to buy, generally speaking.

So what are the benefits of capitalism to health care? Well, first off, let’s establish that the United States’ health care system is not a free-market capitalistic system. The only parts of it that even approach free market are things like Weight Watchers, Jenny Craig, and Lasik. But there is more freedom in our health care than in other places, so we can see a little bit of what goes on, even though ridiculously excessive government regulation gets in the way of a lot.

So what happens in a free-market system? Well, like in other areas of the economy, health care is produced by businesses; there are health care product ventures just as there are cleaning product ventures. Now, the cost of researching and developing new health care products is extremely high, so there needs to be some mechanism for encouraging wealth to flow towards new ventures; as discussed in the previous essay, it’s nice for society in general if you can convince the rich guy to bankroll it with his own money and get that wealth moving around reproducing itself. Now, the cost of all that research and development is going to have to be covered somehow; so it’s divvied up and put into the price of the product. Not only that, but every health care product that does sell needs to make enough money for the business that produced it to cover the enormous costs of all the blind alleys and dead ends they encountered working on health care products that don’t pan out and never make it to market, because otherwise the company goes bankrupt and nobody gets any shiny new health care products at all.

There’s no getting around it: new health care products are going to be expensive at first, because all the cheap, obvious ones have been invented already. And, despite the FDA’s excessive testing for everything (which drives up prices), not all health care products that make it to market are going to be a success; they may not work very well for most people, or there may be side effects that drown out any benefit received from using the product. That means rich people are the ones affording the new health care product; rich people are the guinea pigs for the rest of us. If your purchasing power is limited, don’t you want to be sure that the product you’re buying is safe and effective? There’s no guarantee that the FDA trials caught everything, you know. That means waiting to see what happens; coincidentally, a functioning patent system means that the initial high price of the product drops as time goes by, as the original cost of R&D has already (in theory) been recouped, and now all you have to pay for is production cost. (This is what would happen on a regular basis if we had a functioning free(er) market system for health care. It’s exactly what happened for Lasik, which is a free-market health care product. The way the health insurance system is set up to eliminate accurate price information is a major reason why costs are so high.)

If you take away the incentives to make new health discoveries, will progress still be made? Maybe slowly, maybe not at all. Socialized medical communities don’t exactly have a reputation for producing miracle drug after miracle drug, and for good reason: it takes capitalism and a lot of rich people volunteering themselves as guinea pigs to do that. And if it turns out that the new, expensive health care product is a lemon – well, rich people who can more easily afford it in the first place are likely to have the resources to ease negative side effects. Is it more moral to have poor people suffer the effects of new drugs? More moral to short-circuit the process of discovering medical advances just to keep the rich from consuming more products than the poor? I don’t think so. Yes, it takes longer for poorer people to gain access to new medical advances, since they have to wait until the price drops to afford it. But waiting for something to become affordable is a lot better than never having it at all. And that’s exactly the choice at stake: innovations in any field don’t just happen. Progress is not inevitable. Advances are fueled by wealth; wealth that society needs to reproduce itself rather than being consumed. That’s what capitalism does.

Yes, that means richer people will get nicer stuff, and by the time that “nice stuff” is cheap and common so that pretty much everybody has it, the rich have gone on to have even better stuff. But it’s not more moral to cap everybody at “mediocre stuff” just because allowing capitalism to produce advances means the rich get the nicer stuff first. Let them test it out, and if it turns out it doesn’t work, or gives people cancer or heart attacks or hives, the rest of us “99%ers” can take advantage of proven medical care without having to bear the risk of “Oops, that didn’t happen during clinical trials!”

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About pancakeloach

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