Wednesday, November 12, 2008

The Importance of Guaranteed Health Care

It's odd that Max Baucus (D-MT), the centrist Democrat who assisted George W. Bush so much in pushing through his domestic agenda, is the Senator leading the progressive charge on health care reform. His plan, released today, is not a politically ambitious one -- it's essentially Hillary Clinton's health care plan, but its progressive credentials are something to take note of. Clearly the changing political winds have encouraged Baucus to reevaluate his political legacy, and in this election year's liberal wave it is predictable that a politician like Baucus would move to the left. Regardless of intent, that Baucus has submitted a generic Democratic health care policy outline is testament to the ramifications this year's electoral revolution will have on domestic policy.

Health care, especially in the United States, is a strange beast because it pervades so many aspects of social and economic life. Abstractly, a society that takes care of its denizens is one that is healthier not just in terms of protecting against illness, but in promoting a sense of social well being. The collective acceptance of the necessity of Britain's National Health Service in that country is telling, in that it reflects the societal benefits of a health care system that guarantees equal health care to every citizen, regardless of economic standing. Britains complain about the NHS incessantly, and the call for health care reform is strident, but suggest taking away their national health care service and across the board Brits will have a hissy fit. It's not even that the NHS is particularly effective, it's that it provides a social guarantee that has ramifications beyond simple treatment of disease and illness. Baucus does not call for a federally owned and operated health service (that would seem too European and socialist to be politically viable in the USA) but his plan is one that would guarantee health care to all Americans. That guarantee, solely for nominative and symbolic purposes, would be a boon for social and economic health. Take, for example, Americans' fervent support of social security. Social security is a European-inspired federal redistributionist program that has socialist overtones. Yet according to a recent CNN poll, fully 62% of Americans oppose privatising social security, let alone get rid of it entirely. This is astounding public support for a federal program that seems so at odds with the political climate of the day. Yet one cannot view public support of federal programs on an objective basis - rather, support for these programs amongst the public is emotional. This may not seem to be adequate justification for a program, but emotional support may be just as important as objective efficacy in determining the success of a policy.

The present economic situation in the United States is of particular note. There is no doubt that substantial structural flaws in America's financial system have led to economic crisis, yet the American public's lack of confidence in the economy is, by itself, a major contributor to economic decline. Many Americans have not been effected in the least by the financial crisis, but their sense of a worsening economic climate has led them to consume less, take money out of the stock market, etc., which all contribute to furthering the downturn. It's self-fulfilling prophesy at its finest, and a glaring example of the importance of public perception to policy. Classical economics has been thoroughly discredited over the last century because it assumes that humans are completely rational actors possesing symmetrical information. What is being realized now by the economic profession is that psychology has far more importance in determining an individual's economic actions than so-called rationality.

It is in this regard that health care is so important to economic well being. If adequate health care is guaranteed to all citizens, regardless of how wealthy they are and regardless of their employment, economic well-being will be more easily achieved. Individuals who know that no matter what, their health will be taken care of, will be far more likely to engage in the risks and endeavours that have made America's breed of capitalism so successful. Without social security, how many would-be middle-aged entrepreneurs not risk investing capital in their brilliant idea because they feared poverty in their old age? Baucus writes, "In the short term, health care reform would cost taxpayers more than the government can achieve in savings from all reforms and financing changes," which is obviously true. But an on-paper objective cost-benefit analysis is not nearly sufficient in determining the impact of a guaranteed health care program. Rather, it must be acknowledged that guaranteed health care for all Americans will undoubtedly contribute to a more conducive climate for economic growth, and therefore must be provided regardless of the estimated cost.

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