Regulation

The Rights Angle

Ideas and their health-care consequences

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President Clinton, who ran for office by attacking the hostile takeovers of the 1980s, is now proposing a hostile takeover of his own, a hostile takeover on a scale far beyond anything that Wall Street capitalists ever dreamed of, a hostile takeover of one-seventh of the nation's economy—the health-care industry.

The Clinton plan in its present form involves a massive increase in government control over physicians, insurers, employers, and—last but certainly not least—the patients who are supposed to be the beneficiaries of the plan. Most people will be forced to obtain their health insurance through purchasing cooperatives: government-backed monopolies that collect payments from consumers and set the terms on which medical providers can offer their services. Everyone will be forced to buy health care through these monopolies, with employers forced to pay the lion's share of the bill. Physicians, hospitals, and HMOs will be prohibited from dealing with patients directly; they will be forced to offer their services through the purchasing cooperatives, subject to highly restrictive rules.

What has brought us to this state of affairs? Socialism has collapsed in the Soviet Union. The nations of Western Europe are trying to trim back their welfare states, desperately looking for ways to privatize. Yet in this country we are on the brink of a massive increase in government subsidies and government controls. Why?

The full story is a long and complicated one, but the essential cause is simple. It is the assumption that if people have medical needs which are not being met, it is society's responsibility to meet them. In the current debate over health-care reform, universal access has become the unquestioned goal, to which all other considerations may be sacrificed. It is the one point on which the Clintons have declared themselves unwilling to compromise. The assumption is that the needs of recipients take precedence over the rights of producers—the rights of physicians, hospitals, insurers, and drug companies, as well as the rights of the taxpayers who are going to have to pay for it all. In other words, those with the ability to provide health care are obliged to serve, while those with a need for health care are entitled to make demands.

Indeed, it is often said that the need for health care constitutes a right. President Clinton campaigned with the slogan, "Health care should be a right, not a privilege." Opinion polls regularly show that the belief in such a right is widespread, even within the medical profession. If health care is a right, then government is responsible for seeing that everyone has access to it. It is this idea that has driven health-care policy for the past 30 years. A "right" to health care was granted to the poor through the Medicaid program and to the elderly through Medicare. Now the Clinton administration proposes to create a universal entitlement and vastly to expand government control.

But there is no such right. The attempt to implement this alleged right leads in practice to the suspension of the genuine rights of doctors, patients, and the public at large. Indeed, the very concept of such a right is corrupt in theory.

Liberty vs. Welfare Rights

A right is a principle specifying something that an individual should be free to have or do. A right is an entitlement, something you possess free and clear, something you can exercise without asking anyone else's permission. Because rights are entitlements, not privileges or favors, we do not owe anyone else any gratitude for their recognition of our rights. When we speak of rights, we invoke a concept that is fundamental to our political system. Our country was founded on the principle that individuals possess the "unalienable rights" to life, liberty, and the pursuit of happiness. Along with the right to property, which the Founding Fathers also regarded as fundamental, these rights are known as liberty rights, because they protect the right to act freely.

The wording of the Declaration of Independence is quite precise in this regard. It attributes to us the right to the pursuit of happiness, not to happiness per se. Society can't guarantee us happiness; that's our own responsibility. All it can guarantee is the freedom to pursue happiness. In the same way, the right to life is the right to act freely for one's self-preservation. It is not a right to be immune from death by natural causes, even an untimely death. And the right to property is the right to act freely in the effort to acquire wealth, the right to buy and sell and keep the fruits of one's labor. It is not a right to any kind of dowry from nature or from the state.

The purpose of liberty rights is to protect individual autonomy. They leave us responsible for our own lives, for meeting our own needs. But they provide us with the social conditions required to carry out that responsibility: the freedom to act on the basis of our own judgment, in pursuit of our own ends, and the right to use and dispose of the material resources we have acquired by our efforts. Liberty rights reflect the assumption that individuals are ends in themselves who may not be used against their will for social purposes.

We should consider what these liberty rights mean in regard to medical care. If we implemented them fully, doctors would be free to offer their services on whatever terms they chose. Prices in particular would be determined not by government fiat but by competition in a market. Patients would be free to choose the type of care they wanted and the particular health-care providers they wanted to see, in accordance with their needs and resources. They would be free to choose whether they wanted health insurance and, if so, in what amounts and for what risks.

Since this is an imaginary state of affairs, I cannot predict what mix of private practitioners, HMOs, and other sorts of health plans would emerge. But market forces would tend to ensure that patients would have more choices than they do now, that they would act more responsibly than many do at present, and that they would pay actuarially fair prices for health insurance—prices that reflect the actual risks associated with their age, physical condition, and lifestyle. No one would be able to shift his costs onto someone else. In a truly free market, finally, there would be no tax preference for obtaining health insurance through employers, so most people would probably buy health insurance the way they buy life insurance, auto insurance, or homeowner's insurance—directly from insurance companies. They would not have to fear that losing their job or changing jobs would mean losing their coverage.

That is what liberty rights—the classical rights to life, liberty, and property—would mean in practice. The so-called right to medical care is quite different. It is not merely the right to act—to seek medical care and engage in exchanges with providers, free from third-party interference. It is a right to actual care, regardless of whether one can pay for it. The alleged right to medical care is one instance of a broader category known as welfare rights. Welfare rights in general are rights to goods: a right to food, shelter, education, a job, etc. This is one basic way in which they are quite different from liberty rights, which are rights to freedom of action but don't guarantee that one will succeed in obtaining any particular good one may be seeking.

Another difference has to do with the obligations imposed on other people. Every right imposes some obligation on others. Liberty rights impose negative obligations: the obligation not to interfere with one's liberty. Such rights are secured by laws that prohibit murder, theft, rape, fraud, and other crimes. But welfare rights impose on others the positive obligation to provide the goods in question. Health care does not grow on trees or fall from the sky. The assertion of a right to medical care does not guarantee that there is going to be any health care to distribute. The partisans of these rights demand, with an air of moral righteousness, that everyone have access to this good. But a demand does not create anything. Health care has to be produced by someone and paid for by someone.

One of the major arguments offered by supporters of a right to health care is that health care is an essential need. What good are our other liberties, they ask, if we cannot get medical treatment for illness? But we must ask, in return: Why does need give someone a right? Fifty years ago, people whose kidneys were failing needed dialysis every bit as much as they do today, but there were no dialysis machines. Did they have a right to protection against kidney failure? Was Mother Nature violating their rights by making their kidneys fail without a remedy? It makes no sense to say that need itself confers a right unless someone else has the ability to meet that need. So any "right" to medical care imposes on someone the obligation to provide care to those who cannot provide it for themselves.

If I have such a right, some other person or group has the involuntary, unchosen obligation to provide it. I stress the word involuntary. A right is an entitlement. If I have a right to medical care, then I am entitled to the time, the effort, the ability, the wealth, of whoever is going to be forced to provide that care. In other words, I own a piece of the taxpayers who subsidize me. I own a piece of the doctors who tend to me.

The notion of a right to medical care goes far beyond any notion of charity. A doctor who waives his bill because I am indigent is offering a free gift; he retains his autonomy, and I owe him gratitude. But if I have a right to care, then he is merely giving me my due, and I owe him nothing. Thus if others are forced to serve me in the name of my right to care, then they are being used regardless of their will as a means to my welfare. The very concept of welfare rights is incompatible with the view of individuals as ends in themselves.

The difference between charity and rights is very well understood by the advocates of a right to health care. One of their main arguments for using the language of rights is that it removes the alleged stigma associated with charity. A right is something for which you don't owe anyone any gratitude. But notice the contradiction here. On the one hand, the advocates of this right argue that many people cannot provide for themselves, and are thus dependent on society—i.e., on other individuals—for their medical care. On the other hand, they insist on using the concept of rights to disguise the fact of dependence, to allow the recipients of government subsidies to pretend that they are getting something they earned.

It is also worth noting that the Supreme Court has never recognized a constitutional basis for any welfare right, including the right to medical care. The Court recognizes that the concept of rights embodied in our legal system is the concept of liberty rights. Welfare rights are a product of later movements to expand the role of government beyond its original conception. To appreciate the significance of this point, consider the following comment from an advocate of the right to medical care, William J. Curran, writing in the New England Journal of Medicine in 1989: "If such a right were recognized [as part of the Constitution], legislatures and public agencies would be required to provide access to health care. The defense could no longer be used that the legislature provided no funds for such services." In other words, if there actually were a constitutional right to health care, then any individual could bring suit to force the government to institute health-care programs and impose taxes to pay for them.

Effects of a Right to Health Care

No matter how a right to health care is implemented, through the courts or through an act of Congress, the results will be the abrogation of liberty rights. As with money, bad rights drive out good ones. Let's review the major consequences of implementing a right to medical care. I am going to use illustrations from our current situation, but these consequences follow inevitably from any approach: single payer, managed competition, or whatever.

To begin with, of course, the government has to tax some people to pay for medical subsidies offered to those it considers to be in need. So the first consequence of implementing a "right" to medical care is forced transfers of wealth from taxpayers to the clientele of programs like Medicare and Medicaid. And this inflates the demand for health-care services. It is possible that some of the wealth taken from taxpayers would have been spent on health care anyway. But offering free or heavily subsidized care to the indigent is inevitably going to increase overall use of the health-care system.

Figures from the early years of the Medicaid program indicate the vast increase in demand that can result. According to a Brookings Institution study, in 1964, before Medicaid went into effect, the non-poor saw physicians about 20 percent more frequently than the poor; by 1975, the poor were visiting physicians 18 percent more often than the non-poor. In 1963, among those with incomes under $2,000, there were only half as many surgical procedures as among those with incomes of $7,500 or more; by 1970, the rate for low-income people was 40 percent higher than for those with middle-class incomes. When Medicare was instituted in 1966, the House Ways and Means Committee estimated that by 1990, allowing for inflation, the program would cost $12 billion; the actual figure was $107 billion. (See "The Medicare Monster," January 1993.)

The cost explosion leads to the second major consequence of implementing a "right" to medical care: restrictions on the freedom of health-care providers. During the debate over health-care policy in the 1960s, proponents of Medicare and Medicaid assured doctors that they wanted only to pay for indigent care and had no intention of regulating the profession. Abraham Ribicoff, the Kennedy administration's first secretary of Health, Education, and Welfare, said, "It should be absolutely no concern to a physician where a patient gets the money."

But, of course, the surge in demand for medical care led to rapid price increases along with abuses of the system by clients of the government programs as well as by unscrupulous doctors and hospitals. These problems had to be addressed somehow, and the result was a growing web of controls: Professional Standards Review Organizations, Diagnosis-Related Groups, restrictions on balance billing, utilization reviews, certificates of need. As Nixon's undersecretary of HEW, John G. Veneman, said in 1971, "In the past, decisions on health care delivery were largely professional ones. Now the decisions will be largely political." The effects of the labyrinthine system of controls have been described very well by Dr. Maurice Sislen: "A huge, complex, policing system has taken the place of what used to be the doctor's responsibility to his patient. Probably only a practicing physician can fully appreciate the magnitude of the economic waste and moral degradation involved."

A third major consequence of implementing a right to health care is the increased burden imposed on consumers of health care—the ones who were originally not in need of government subsidies. As taxpayers, of course, they have to pay for all the programs. But as consumers, they are also affected by all the market distortions that these programs create. Everyone pays the higher prices caused by the inflation of demand for medical services, together with the increased costs of regulation and paperwork. As people are priced out of the system, they are forced into managed care systems that limit their choices of doctors.

Health insurance stipulations by states raise the cost of insurance, and discourage employers from hiring certain kinds of workers. For example, "community rating" laws require insurance companies to offer policies for the same price to all people, regardless of age, lifestyle, or physical condition. Since the actual risks depend on these factors, community rating means that the young must pay higher prices to subsidize the elderly, the well must subsidize the sick, and those with healthy lifestyles must subsidize those with unhealthy ones. As an indication of the kind of subsidy involved, community rating in New York nearly tripled the cost of insurance for 30-year-old males.

Yet another consequence is a growing demand for equality in health care. If something is a human right, after all, then it should be protected equally for all persons. Our system is based on the idea of equality before the law. If we plug into this system the idea that we all have a legal right to some good such as health care, the natural inference is that we all ought to receive that good on a more or less equal footing. Indeed, in a 1989 survey for the Harvard Community Health Plan, 90 percent of the respondents said that everyone should have "a right to the best possible health care—as good as a millionaire." Here's another example, a statement by Horace Deets, the executive director of the American Association of Retired Persons: "Ultimately, we must recognize that health care is not a commodity. Those with more resources should not be able to purchase services while those with less do without. Health care is a social good that should be available to every person without regard to his resources." This idea has worked its way into the Clinton plan, which declares that "equality of care" is among "the ethical foundations of health reform" and states that "the new health-care system…should avoid the creation of a tiered system."

To summarize, then, a political system that tries to implement a right to health care will necessarily involve: forced transfers of wealth to pay for programs, loss of freedom for health-care providers, higher prices and more restricted access for all consumers, and a trend toward egalitarianism. These consequences are not accidental. They follow necessarily from the nature of the alleged right.

The Clinton Plan

The Clinton plan for "managed competition" will not escape any of these consequences. On the contrary, it will magnify them. It will be far more destructive of our liberties than anything we have experienced so far.

The plan calls for a further extension of health-care subsidies to those who are currently uninsured and to those who have health coverage less extensive than the proposed standard package of benefits. Where are these subsidies going to come from? The administration has rejected the so-called single-payer system—that is, overtly socialized medicine, in which the government pays all the bills—because it knows that the government cannot pay all the bills. The necessary tax increases would be politically impossible. So the Clinton plan calls for a nominally private system in which regulations force some people to subsidize others.

At the heart of the plan are the local health alliances: government-protected monopolies which will collect premiums and negotiate with health-care providers to offer acceptable plans. Virtually everyone who lives in a given area will be forced to obtain health insurance through the local monopoly health alliance. Health-care providers—private practitioners, HMOs, and others—will not be able to deal directly with individuals. They can offer their services only through the health alliances, subject to the conditions it imposes.

One such condition is guaranteed access: Every plan must be willing to accept any individual who wants it; no one may be excluded for any reason. Another condition is community rating: The price of the plan must be the same for everyone. Consider the effects these provisions will have on incentives. If I know that when I get sick I will be able to enroll in any plan I want, at a price that does not reflect my condition, then I have no reason to pay for health insurance while I am well. If people are free to choose whether to obtain and pay for a policy, the only people enrolling will be the sick, and costs will go through the roof. So the system works only if everyone is forced to participate. That is exactly what the proposal requires, and although the details of the proposal keep changing, this is one point that cannot change.

At the national level, the system will be governed by a National Health Board whose two main functions will be to determine the standard package of minimum benefits and to limit health-care spending by imposing some form of direct or indirect price controls on drug companies, insurers, or health-care providers. The standard package of benefits—the same package for every individual in the country—will be set by interest-group lobbying, as every group in the health-care field will try to get its services included in the package. For example, the current definition of the package includes mental-health and substance-abuse counseling. You may feel that you do not need insurance for these services, but you are going to pay for them.

In short, the administration's efforts to implement a universal right to health care will require a massive exercise of coercion against individuals, far beyond anything we have seen to date.

Moral Foundation

If you believe in liberty rights, then it's inconsistent to believe that there's such a thing as a right to health care. The rights of liberty are paramount because individuals are ends in themselves. We are not instruments of society, or possessions of society. And if we are ends in ourselves, we have the right to be ends for ourselves: to hold our own lives and happiness as our highest values, not to be sacrificed for anything else, not subject to involuntary obligations to serve the good of others.

Many people are afraid to assert their rights and interests as moral absolutes, because they are afraid of being labeled selfish. So it is vital that we draw certain distinctions. What I am advocating is not selfishness in the conventional sense: the vain, self-centered, grasping pursuit of pleasure, riches, prestige, or power. Genuine happiness results from a life of productive achievement, of stable relationships with friends and family, of peaceful exchange with others. The pursuit of our self-interest in this sense requires that we act in accordance with moral standards of rationality, responsibility, honesty, and fairness. If we understand the self and its interests in terms of these values, then I am happy to acknowledge that I am advocating selfishness.

We have to draw the same distinctions when we think about altruism. For it is, in the end, the moral code of altruism that makes people think that need is primary, that need gives one a right to the ability and effort of others. In the conventional sense, altruism means kindness, generosity, charity, a willingness to help others. These are certainly virtues, so long as they do not involve the sacrifice of other values, and so long as they are a matter of personal choice, not a duty imposed from without. I might note in this regard that physicians have historically been extremely generous with their time.

In a deeper, philosophical sense, however, altruism is the principle that one person's need is an absolute claim on others, a claim that overrides their interests and rights. So, as Dr. Edmund Pellegrino declares in JAMA, "A medical need in itself constitutes a moral claim on those equipped to help." This principle has often been asserted by thinkers who are opposed to individualism, and it is the basis for the doctrine of welfare rights. It is the reason advocates of government involvement in health care can take for granted that the needs of patients are primary and that everyone else can be forced to provide for those needs.

No rational basis for this principle has ever been offered. In fact, our needs have to be satisfied by production, not by taking from others. And production comes from those who take responsibility for their lives, who apply their minds to the challenges we face in nature and find new ways of meeting those challenges. Ayn Rand said it best, in her novel The Fountainhead: "Men have been taught that the highest virtue is not to achieve, but to give. Yet one cannot give that which has not been created. Creation comes before distribution—or there will be nothing to distribute. The need of the creator comes before the need of any possible beneficiary." The creator's need, in any field, is the freedom to act, the freedom to dispose of the fruits of his labor as he chooses, and the freedom to interact with others on a voluntary basis, by trade and mutual exchange.

That freedom is a vital need, not only for doctors but for patients. It is only in a context of freedom that one person's need is not a threat to others. It is only in a context of freedom that genuine benevolence among people is possible. It is only in a context of freedom that the medical progress which has brought so many benefits to all of us can continue.

The problems of our current system were caused by government. More government is not the solution. But we must oppose the expansion of government control in principle, by rejecting spurious claims of a "right" to health care and insisting on our genuine rights to life, liberty, property, and the pursuit of happiness.

David Kelley is executive director of the Institute for Objectivist Studies, based in Poughkeepsie, New York.