A classically trained economist will always remind you that, “there is no such a thing as a free lunch.” With debate swirling in leftist circles around single payer and “free” healthcare, we need reminders of the impact of the loss of the profit incentive and the loss of an actionable feedback loop that the free market effectively provides. With government run healthcare (which I would argue America already largely has), the loss of incentives to act and treat customers well is on full and heart-breaking display in this post.
Dan Mitchell makes his most salient point in the postscript:
To be fair, some screw-ups are inevitable, even in a perfectly designed healthcare system. But I would argue that horror stories are more common when the profit motive is weakened or eliminated. If you’re a Brit and you die or suffer because of crappy government-run healthcare, there’s no feedback mechanism to punish the doctor and/or hospital (or, in the above case, ambulance service). Their budgets already are pre-determined. Likewise, if you’re an American and you die or suffer because of sub-standard Medicare or Medicaid treatment, there’s presumably no effective feedback budgetary mechanism.
This reminds me of a recent experience in which my wife worked for days and was forced to make several trips to get her Texas driver’s license. The problem was that she kept getting documents refused by the friendly bureaucrats down at the Department of Motor Vehicles. The first refusal was related to one of her proof of address documents. Apparently, the fact that my wife’s name was under rather than above the address was a blatant violation of widely known and accepted rules. The second return trip (with four kids in tow) and refusal was due to a date on the mortgage statement meant to prove residency in which the statement date was March 1st while the actual date at the time of the DMV visit was February 27th. Apparently, these thoughtful and pure apparatchicks could not entertain a document whose date had magically leapt into the future.
As a local monopolist, the DMV really has no incentives to treat people well, efficiently, or to set absurd rules aside and use a bit of logic and understanding. Is this the type of organization that we really want to monopolize and run our life and death decisions?