Obamacare is about to bring the worst of Europe’s health care systems to the US.
Obamacare will introduce a health insurance offered by the state, paid for with taxes. The state will decide which drugs and treatments it will subsidize and at what price. If the European experience is something to go by, the first victims will be America’s elderly.
When the topic of health care crops up I always think of my grandfather, who lived in Belgium. My grandfather was 91 - when he died. He had been fortunate; he had never been seriously ill, never needed medical treatment. Upon reaching his 90s, however, he began to have a prostate problem and had to go to the hospital for surgery. Like all Belgians, my grandfather, throughout his professional life had paid into the health insurance system. Because he had never needed much health care, he had been a net contributor to the system. Now was the very first time he was going to claim something back.
My grandfather had his operation in May; in November he was dead. The prostate operation had gone well, but the hospital administered an antibiotic drug that caused complete deafness. Although there were other, but costlier, treatments, the hospital gave this drug to the old man. The hospital staff knew about the possible side effect, but it did not strike them as an unreasonable and unjust thing to do: A man who has already had 90 healthy years surely has no right to complain about deafness when some people get more seriously ill or die at a far younger age.
When my grandfather left the hospital, he was completely deaf. But his prostate problem had been cured. As far as the Belgian health-care statistics were concerned, the prostate operation had been highly successful. It also had been cheap. Statistics show that Belgium has a high quality of health care that is relatively inexpensive, available to all the country's inhabitants, and virtually free of charge for the patients. It is the kind of health care that Americans, looking for comparative statistics, would envy. It is the kind of health care that Obama wants to introduce. My deaf grandfather, however, lost his will to live. Six months after the operation, he was dead.
His predicament is not unique. Certain medical treatments or drugs are no longer available to Europeans above a certain age. Studies of kidney dialysis, for example, show that more than a fifth of dialysis centers in Europe and almost half of those in England have refused to treat patients over 65 years of age.
More expensive drugs and treatments with fewer side effects are set aside for younger patients. Political authorities prefer to spend on the young rather than the old. In Europe, old people increasingly receive less care than young people do. In the United States - at least until now - the situation is the reverse. Elderly Americans are entitled to universal health coverage via the Medicare program. In America, the bulk of government health-care expenditure goes to those over 65 years of age, while in Europe most of the government money is spent on those under 65. If European governments continue this policy, soon euthanasia will be the price that the European welfare states impose on the very old and the very sick. European doctors have already warned about “economic euthanasia.” There are indications that, although the topic is a taboo, health care budgets in some countries are already being cut through euthanasia.
Obamacare - imitating the worst of Europe - is not what America needs. Faced with large deficits, European governments regard health care as a drain on public budgets -- not as a promising growth sector. This is ironic because the major area of economic growth in Western Europe over the past decades has been in the service sector - and health care is one of the most desirable of services, one which could be of tremendous benefit to the economy. It offers jobs to people in caring professions but also to highly educated people. Moreover, it is a service which is to a large extent location bound. Foreign competition is only of marginal importance. Modern technology such as telemedicine will not alter this. When a patient is in need of medical treatment, the primary provider of these services has to be in the vicinity.
As a consequence, an expanding national health care market is a benefit to that country’s local labor market. For governments coping with high unemployment figures, growing health care needs should be most welcome. What is more, the health care market cannot be saturated. People will always want to avoid pain and death. Typically, the richer people get the more they will be able and willing to spend on their health. This makes health care into one of the most promising growth sectors of the economy - one which should act like a magnet to capital. For capital, more like gas than like water, always flows to the highest point.
In markets with a free supply of services and spontaneous competition, consumers have a real say. As they demand, choose and pay for a service, it had better be good and reasonably priced. What we see in Europe’s health care systems is different: The customer has no option. Instead of attracting more capital to the system - private capital, that is - by diminishing government regulation, governments do the opposite and step in to cut costs by curtailing the health care service. They starve health care systems of the money needed for investment in new buildings, technology and jobs; they prevent private spending from entering the system, by keeping the health care consumer trapped inside public insurance systems.
Unfortunately, America is about the follow Europe’s bad example. America’s grandparents will be the first victims. But, as in Europe, when the government harms the prosperity of the people by stifling one the economy’s most promising growth sectors, everyone will suffer.