The Conservative Argument Regarding Healthcare (and what is missing)

As a conservative, I feel other conservatives fall into a common trap regarding arguing healthcare. The mistake is arguing for the current American healthcare system (a progressive nightmare) vs Universal Healthcare (another progressive nightmare). In order to address the problems with the American healthcare system, you must look at what caused this crisis.

Many people haven't heard about mutual aid societies or fraternal lodge practice. Fraternal lodge practice was becoming a popular method for the poor to receive low cost medical care. The following is taken from Roderick T. Long's 1993 essay "How Government Solved the Health Care Crisis" (Some is cleaned up)

"In the late 19th and early 20th centuries, one of the primary sources of health care and health insurance for the working poor in Britain, Australia, and the United States was the fraternal society. Fraternal societies (called "friendly societies" in Britain and Australia) were voluntary mutual-aid associations. As recently as 1920, over one-quarter of all adult Americans were members of fraternal societies. Fraternal societies were particularly popular among blacks and immigrants.

The principle behind the fraternal societies was simple. A group of working-class people would form an association (or join a local branch, or "lodge," of an existing association) and pay monthly fees into the association's treasury; individual members would then be able to draw on the pooled resources in time of need. The fraternal societies thus operated as a form of self-help insurance company.

Turn-of-the-century America offered a dizzying array of fraternal societies to choose from. Some catered to a particular ethnic or religious group; others did not. Some "fraternal" societies were run entirely by and for women. The kinds of services from which members could choose often varied as well, though the most commonly offered were life insurance, disability insurance, and "lodge practice."

"Lodge practice" refers to an arrangement, reminiscent of today's HMOs, whereby a particular society or lodge would contract with a doctor to provide medical care to its members. The doctor received a regular salary on a retainer basis, rather than charging per item; members would pay a yearly fee and then call on the doctor's services as needed. If medical services were found unsatisfactory, the doctor would be penalized, and the contract might not be renewed. Lodge members reportedly enjoyed the degree of customer control this system afforded them. And the tendency to overuse the physician's services was kept in check by the fraternal society's own "self-policing"; lodge members who wanted to avoid future increases in premiums were motivated to make sure that their fellow members were not abusing the system.

Most remarkable was the low cost at which these medical services were provided. At the turn of the century, the average cost of "lodge practice" to an individual member was between one and two dollars a year. A day's wage would pay for a year's worth of medical care. By contrast, the average cost of medical service on the regular market was between one and two dollars per visit. Yet licensed physicians, particularly those who did not come from "big name" medical schools, competed vigorously for lodge contracts, perhaps because of the security they offered; and this competition continued to keep costs low.

The response of the medical establishment, both in America and in Britain, was one of outrage; the institution of lodge practice was denounced in harsh language and apocalyptic tones. Such low fees, many doctors charged, were bankrupting the medical profession. Moreover, many saw it as a blow to the dignity of the profession that trained physicians should be eagerly bidding for the chance to serve as the hirelings of lower-class tradesmen. It was particularly detestable that such uneducated and socially inferior people should be permitted to set fees for the physicians' services, or to sit in judgment on professionals to determine whether their services had been satisfactory. The government, they demanded, must do something.

And so it did. In Britain, the state put an end to the "evil" of lodge practice by bringing health care under political control. Physicians' fees would now be determined by panels of trained professionals (i.e., the physicians themselves) rather than by ignorant patients. State-financed medical care edged out lodge practice; those who were being forced to pay taxes for "free" health care whether they wanted it or not had little incentive to pay extra for health care through the fraternal societies, rather than using the government care they had already paid for.

In America, it took longer for the nation's health care system to be socialized, so the medical establishment had to achieve its ends more indirectly; but the essential result was the same. Medical societies like the AMA imposed sanctions on doctors who dared to sign lodge practice contracts. This might have been less effective if such medical societies had not had access to government power; but in fact, thanks to governmental grants of privilege, they controlled the medical licensure procedure, thus ensuring that those in their disfavor would be denied the right to practice medicine.

Such licensure laws also offered the medical establishment a less overt way of combating lodge practice. It was during this period that the AMA made the requirements for medical licensure far more strict than they had previously been. Their reason, they claimed, was to raise the quality of medical care. But the result was that the number of physicians fell, competition dwindled, and medical fees rose; the vast pool of physicians bidding for lodge practice contracts had been abolished. As with any market good, artifical restrictions on supply created higher prices — a particular hardship for the working-class members of fraternal societies.

Why do we have a crisis in health care costs today? Because government "solved" the last one.

After the death of Lodge Practice, there were several more government "solutions" that have excacerbated the healthcare problems of today

-Dependency on employee based healthcare was directly the fault of FDR.
In 1942 FDR passed wage controls and profit controls during the war. Employers couldn't pay their employee's any more money and they couldn't take too much in profit. The government paved the way for third-party healthcare coverage, even making it tax deductible. In 1940, 9% had employee based healthcare. In 1946 it was already up to 30%. It's only gone up since then. This policy is why healthcare has become permanetly linked with employment.

-Medicaid and Medicare in the 1960's came about because of the damage the government had done in inflating the cost of healthcare. A government solution to a government problem. It dramatically drove up the cost of healthcare for everyone as well as become the 2 biggest drivers(by far) of the national debt.

Universal Healthcare is just a hundred year progressive project. It will be the final blow for the US being a relatively free society. From my view, we need to stop arguing the American healthcare system vs universal healthcare. We have allowed progressives to destroy our system and then blame capitalism for it.