If you don’t look after your health, you can’t expect free access to healthcare. Is this wrong? What are the economic arguments?

Cameron Lievesley, March 1, 2017

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Cameron Lievesley is an advocate for libertarian views in the UK and a member of the Ask A Libertarian team. Please note this article is written from the perspective of a UK citizen and hence is written in regards primarily to UK affairs and to their nationalised health service with concerns regarding support for the implementation of socialised medicine in the US, an important issue as socialised medicine has done great damage to the economy and has given government excessive powers in the UK.

A free-market system would be not only an efficient system, but a fair system in which individuals pay for their consumption rather than the taxpayer. Those who fall ill as a result of unwise lifestyle choices will become responsible for the choices they have made and would eliminate the burden on the taxpayer. 

It seems reasonable to suggest that those who have created their own health problems should not be granted access to the national health service. However, there are several problems with this argument. Firstly, given the individual in need of treatment has paid taxation in the form of income tax and national insurance, they have paid for the health care services which they are requesting and therefore should be granted access. Secondly, there is often no definitive way to prove that an illness has been caused by lifestyle choices and hence it would be difficult to differentiate between those who are ill due to their lifestyle choices and those who are unfortunately ill through no fault of their own. While I would agree that those who fall under the latter should be prioritized ahead of those who have made unwise lifestyle choices causing their illness considering both have similar illnesses in terms of the threat to one’s life, I believe a better solution for all could be provided through a free market healthcare system.

Economists such as Milton Friedman would argue that healthcare in a free market would be of a much higher quality and of a lower average cost than that of a centrally-planned health care system. One argument put forward by such economists is that healthcare costs are significantly increased and freedoms significantly more restricted by government intervention than they otherwise would be in the free market. For example, in the US, there are certain restrictions on the entering of new and potentially life-saving drugs to the market by the regulatory body known as the Food and Drug Administration (FDA). This also prevents patient access to certain drugs which without regulations could possibly save lives (Milton Friedman, 1978).

One example of the FDA’s failures, Friedman uses, is the restriction of beta-blockers (that are used to reduce blood pressure) from entering the market due to certain safety concerns, costing an estimated 10,000 lives each year. While the US’s healthcare system is far from perfect, I would argue it is preferable to a nationalised system like we have here in the UK. There are several reasons for this. Most importantly, it incentivizes research and development into new drugs and treatments since firms compete against each other to provide the highest quality of care. This also incentivizes investments into capital goods, which expands the production capabilities of the market, also producing a higher quality of healthcare. This leads to the creation of new, lifesaving drugs therefore further increasing the amount of lives saved by healthcare firms. Evidence of this can be shown in comparisons between lives saved in UK healthcare and US healthcare systems. US survival rates are better for leukemia, ovarian cancer, stomach cancer, liver cancer, breast cancer and prostate cancer (Ryan Bourne, 2017). Furthermore, a free market healthcare system would give consumers the freedom to choose the level of health insurance they would like, if any.

A free-market system would be not only an efficient system, but a fair system in which individuals pay for their consumption rather than the taxpayer. Those who fall ill as a result of unwise lifestyle choices will become responsible for the choices they have made and would eliminate the burden on the taxpayer. Some would argue that this could lead to a significant increase in prices, as the consumer is not protected by the government. However, in order for the healthcare providing firm to make a profit, they must supply their services at an affordable price which consumers are both willing and able to pay. It is in the interests of firms to provide their services at a rate which is affordable as this enables them access to a larger number of consumers. This system of healthcare would shift the burden of those who are ill due to their lifestyle choices from the taxpayer to the individual who made the choices. Furthermore, this would cut government expenditure by £142.7bn ($175.75bn USD) allowing the government to make tax cuts to individuals and firms, incentivize investments and create jobs, boosting the economy. This boost to the economy would create employment opportunities for those currently reliant on welfare, further reducing government expenditure. It would also enable the UK government to eliminate the budget deficit of £19.1bn ($23.58bn USD). In summary. I believe that a free market healthcare system would not only make individuals responsible for their lifestyle choices, but produce higher quality healthcare and create huge economic prosperities due to the tax cuts which are enabled by the decrease in government expenditure.

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