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July 29, 2009 - Freedomain Radio - Stefan Molyneux
23:05
1422 True News 46: Healthcare Part One
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Hello, everybody. It is Stefan Molyneux from Free Domain Radio.
This is True News, current events clarified, number 46.
On this day of our law, 28th July, 2009, U.S. healthcare, more guns, will solve everything.
Let's have a look at what is actually going on.
There's a pattern which is distressingly and depressingly similar whenever you study history and economics and statism, which is this.
A group of self-interested individuals claim to want licensing and a state monopoly in order to protect the public.
Conspicuously absent from these complaints is in fact any complaints from the public.
They just make up these complaints and say, in order to protect the public, we need to have state monopoly and licensing.
The state then grants licenses and monopolies to people like lawyers and accountants and doctors and teachers and postal workers and garbage men and all this kind of stuff.
And the result is the public in the long run gets completely screwed by these monopolies.
And the government, of course, always claims that this is going to lower costs and improve productivity, but it always increases costs and lowers productivity.
So, for example, the American Medical Association, early in the 20th century, the AMA, was openly discussing a health care crisis that cut them, yea, verily, to the quick.
Medical care was just too widely available for their members to make as much money as they really wanted.
So, responding to the demand for health care, many people were choosing to be doctors.
Others were providing simpler care, requiring less training.
There were midwives, pharmacists, and competition was keeping AMA member incomes lower than desired.
The AMA then successfully lobbied the brutal guns of the state in order to have the exclusive right to decide who could be a doctor and to require that many types of care be performed by an AMA licensed doctor.
They also obtained control over the licensing of medical schools and hospitals, which allowed them to throttle the supply of doctors by simply reducing the amount of enrollment that they would support.
So quickly, many medical schools were closed, including a disproportionate share of those accepting women and minorities as students, for which the AMA has recently apologized.
Nurse and midwife competitors were put out of business or restricted to limited subservient roles.
Because, you know, when you've got the guns, you can do quite a lot to prop up your own income and get rid of competition.
Large doctors, which refers to those who made contracts with the enormous number of mutual aid societies that served the needs of the poor middle-class working people, were threatened with the loss of their licenses or hospital privileges if they didn't cease providing low-cost care under these contracts.
For those who don't know about this, before the rise of the status welfare state, there was friendly societies, mutual aid societies, which provided insurance and welfare for those who fell upon hard times and personal support as well.
The problem is you just get a check from Washington or your state agency.
There's no personal touch.
It's just money, whereas these guys would actually get involved, which is what's really needed to help people who are stuck in poverty.
So today many procedures are performed by doctors which nurse practitioners, midwives, paramedics or pharmacists could completely competently perform.
Oh doctor, it hurts when I pee.
Well, here's a test. Ooh, E. coli.
Here's some antibiotics. I mean, how complicated.
Do you really need 10 years of medical training to have that interaction?
Oh, I have a sore throat.
Oh, let's take a swab.
Oh, there seems to be some bacteria.
Here's some antibiotics. Really not that complicated, most of the stuff that goes on in the GP's room.
The AMA is also currently trying to or recently trying to close down low-cost clinics that are being opened by nurse practitioners in department stores such as Walmart or at least require that doctors be hired to oversee operations because, you know, you don't want to be undercut.
So, the U.S. government has been protecting the consumer, i.e.
violently interfering in healthcare, the provision of healthcare, since the 19th century, when it concluded with doctors to create the state union monopoly of the AMA. Why are doctors so overpaid?
Because they have a state-granted monopoly.
It's like saying, why do postal workers earn more than guys who work in a factory floor, or guys who are non-unionized who work in a factory floor?
Because they have a state-granted monopoly of violence, so they can Hold the gun to the employer's head, in this case to the patient's head or to the competitor's heads, and jack up their rates.
It's pretty simple, really.
Milton Friedman wrote, 56% of all hospitals in America were privately owned and for-profit in 1910.
By 1970, after 60 years of subsidies for government-run hospitals, the number had fallen to about 10%, right?
So increased government Ownership from 44% to 90%.
Of course, according to what's being touted by Obamacare now, this should be a situation where costs have come down enormously.
Of course, it's not the case.
Whenever you pump more money into a violent monopoly, you get lower quality.
You can see this is absolutely true in education.
There is generally an inverse proportion between the amount of money spent per student and the quality of test results.
Between 1965 and 1989, medical expenditures rose by 224%.
The number of hospital beds per 1,000 population fell by 44%.
Higher costs, lower quality.
The more money you spend, the lower quality you get.
The number of beds occupied declined by 15%.
Also during this time of almost complete governmental domination of the hospital industry, 1944 to 1989, costs per patient day rose almost 24-fold after inflation is taken into account.
24 times the cost when the governments take over 90% of the hospitals.
Well, we'll get to that.
So, lower costs that will never happen.
This is what some people say should be done.
Well, says Milton Friedman, the AMA must cease restricting the supply of medical doctors.
Oh, milty, milty, milty.
The whole purpose of the AMA is to restrict the supply of medical doctors.
The Mafia should cease shaking down restaurant owners and should stop hitting people in the knees with baseball bats.
But that's sort of the point of what the Mafia does, right?
That's the whole reason there is a Mafia, is to do that.
Anyway, it's not going to happen.
The United States needs to rely on offshoring with a twist rather than sending Americans abroad seeking medical services, allow more foreign doctors to come to America to practice medicine.
A medically trained and licensed doctor from a developed nation will provide much better care to a poor American than no doctor at all.
Not going to happen. The whole point of the AMA is to keep its members prices high by using the violence of the state to restrict competition and entry into the field.
Too many services that could be easily provided by nurses are instead provided by doctors, a practice that is exceedingly wasteful.
Yet not. It's not at all wasteful for the doctors who get to rub themselves all over with money and a big giant bathtub made of gold and the tears of their patients.
So it's not wasteful for the AMA or for the doctors, which is why it's not going to change.
Ah, well, you see, the cost of healthcare is going to be brought down by this new socialized healthcare plan, right?
1970, the government forecasted the hospital insurance portion of Medicare would be only $2.9 billion annually.
Actual expenditures were $5.3 billion in 1970.
That was a 79% underestimate of costs.
Ah, but we're only beginning the cavalcade.
In 1980, the government forecast $5.5 billion in hospital insurance expenditures.
Actual expenditures were more than four times that amount, $25.6 billion.
This bureaucratic cost explosion led the government to enact 23 new taxes in the first 30 years of Medicare.
Whatever they tell you, they're completely and totally lying.
I mean, you don't even need to ask, don't even need to look it up.
They're lying because their lips are moving and they're telling you that, ah, I don't even need to say it.
Government solutions. So there were five budget and tax bills passed during the Reagan administration designed to help improve health care.
Senior citizens now spending about a third more than they used to for medical care.
The legislation encouraged states to curb soaring Medicare costs, leading to a 49% increase in out-of-pocket payments for hospital skilled nursing and home care from 80 to 85 adjusted for inflation.
Right. So when to curb soaring Medicare costs, you're supposed to crack down on fraud.
You're supposed to deal with wasteful overhead in administration.
You're supposed to streamline. But that never happens because those people will fight you tooth and nail.
Right. You start to lay off government workers.
The unions will descend on you like a plague of fat Scottish locusts.
But if you screw the elderly, they're not going to get together en masse in the same kind of way.
Right. And they won't even know particularly who it is Who is causing the problem, so you dilute it among the most vulnerable in society, and that's who always end up suffering, right?
Same thing with students in education.
Medicare has a $34 trillion unfunded liability, and because of rising unemployment, its hospital stay program will go broke two years earlier than previously predicted.
That's how much more Medicare money government has promised than it has budgeted.
That is the price of about 30 Iraq wars.
It's absolutely not going to last.
It is mathematically that which cannot continue, will not continue.
It is a total Ponzi scheme.
What do we send? We send Madoff to jail for 100 years for, what, $5 billion?
$34 trillion? Well, this is the state, right?
And it's good for the average Medicare beneficiary.
He or she collects two to three times more money than he paid in.
And of course, people have this illusion about Medicare and Medicaid like the Social Security.
Like you pay the government, the government sets the money aside and then pays you back later with the interest of the money.
It's... It's a complete nonsense.
It is a complete Ponzi scheme.
The young are being stolen from in order to pay the money that the old gave to the government, stolen from them by the government, and the government just blew it.
The government takes money from you for old age pensions and for health care and so on, and they just blow the money and leave an IOU for the next generations to pay.
I mean, the elderly in America, the richest generation the world has ever seen, and the young who are struggling are increasingly being preyed upon to pay their medical expenses because there's no means test for these kinds of things.
So, yeah, it's great for the old people.
You know, it's just our sympathy for them declines a little bit when we see what a ripoff it is.
Say, "Ahhhhhh!" In 1960, the government covered 21.4% of personal Medicare expenditures.
Americans covered 55.2%.
Most of the rest came from private medical insurance.
And I read somewhere online...
This is just anecdotal.
I'm not quoting it as any kind of certain proof.
The guy was saying, my dad...
When I was born, my dad said this was in the mid-1960s, just before the government really got into the healthcare system in spades.
My mother was put under general anesthetic for my birth.
She was in hospital because that's what they did back then.
She was in hospital for three days and it cost a hundred bucks.
Recently, for non-anesthetic birth where we were in hospital for one day, it cost $4,500, right?
Even accounting for inflation, that's a staggering rise.
And of course, some of it's due to tort law and lawyers and so on because the government has to bribe the lawyers as well as it has to bribe the doctors.
Anyway, this is the proportion.
The government did 20% in 1960.
In 2000, the government covered 43% of personal medical expenditures.
And out-of-pocket had gone from 55% to 17%.
So naturally, when you're not paying for it, you have less of an incentive to cap costs.
And costs would just go up because Magic Uncle Sam moneybags in the sky is paying for things, right?
Over the same 40-year period, total personal medical spending increased by more than 10 times from an inflation-adjusted $111 billion in 1960 to $1.13 trillion in 2000.
What is the common case here?
Well, escalating government involvement.
The more violence you put into any system, the more people will use that violence to protect themselves from competition and to jack up costs.
So, percentage of GNP of medical care expenditures, 1929 to 1990.
I won't read this in particular.
29 to 40, 4% hovers around the same until 1960 to 1970, when it goes to 7.3%.
Healthcare shares of GNP at the end of the period.
1989.1%, 1990, 12.2%.
I couldn't get any more recent information.
This stuff's 20 years old. But, as you can see, when the government gets involved in a very proactive way, the costs just go up and up and up because violent monopolies.
Well, do I have to say it?
I think not. Now, some say that it's because of increased technology that healthcare costs are rising so fast.
The purpose of technology is generally to lower costs over the long run, or at least increase your general income.
That, of course, is not really what's occurring.
So look at IT, right? Computers and gadgets.
Technology within IT has increased even more quickly and vastly than anything to do with medical, but it hasn't jacked up GDP consumption in the same way.
So I'm not sure. There's arguments for against this.
I'm sure there's maybe something to do with it, and please don't count me as any kind of expert, but...
I can't see the argument that it is responsible for all of this.
So, yes, technology has increased, but the purpose of technology, of course, is, you know, like an MRI is supposed to help pinpoint things so that you can go in and solve a problem more easily and more quickly.
And other kinds of screening tests and so on are supposed to be around prevention, right?
But it's not the way that it works that way.
In the real world, the costs just go up and up, although this technology is supposed to be around prevention.
And of course, the increase in drugs is supposed to be cheaper than surgery and so on.
So it doesn't make sense that technology would be solely responsible for all of these increases, at least to me.
If you know arguments to the contrary, please let me know and I'll deal with them in a future segment.
Drugs! Alright, the FDA Food and Drug Administration does not protect consumers but rather causes their deaths according to a number of researchers in the field.
The FDA has always been involved since its creation in testing whether drugs are safe but recently it moved into advertising and any kinds of descriptions and after 1962 the amount of regulations of red tape that it took to get a drug approved just went up enormously.
We'll talk about that in a sec.
So, in 1962, laws were passed making it almost impossible to get a new drug approved.
So, for instance, in 1948, one well-known pharmaceutical company, Park and Davis, had to submit 73 pages of evidence to secure the licensing of a drug.
In 1968, the same company had to submit 72,200 pages of data transported by a truck in an effort to have an anesthetic licensed.
And there's pretty strong evidence that something as simple and basic and incredibly life-saving as penicillin would no longer be approved by the FDA because it has negative side effects in some people.
1962 Kefauver-Harris amendments account for more than 85% of current pharmaceutical costs.
85% of current pharmaceutical costs.
Most pharmaceuticals, until the 1970s, had a 19-year patent, and it took 14 and a half years to get the drug approved.
So, of course, it had to be hugely expensive, because you'd only have a few years before it went to the open market.
These FDA amendments kill statistically over 100 times more people than they save, have probably doubled current healthcare costs, make treatment-not-prevention the cornerstone of medicine, So the lags in the FDR system,
as the FDA has grown larger and its regulations more detailed, the cost and time needed to approve a new drug Since 1962,
almost 5 million people have died who could have been helped by a drug in development.
And these are calculated not just pie in the sky stuff, it's drugs that have been approved in Europe or in other places that are disallowed in the United States.
For example, the FDA's tardy approval of the first beta blocker for heart disease needlessly killed an estimated 30,000 Americans during the three years it was available in Europe, but not in the United States.
And this is particularly tragic.
Statistically, someone you know has died needlessly because of the FDA. Someone, some loved one in your family, within your friends, statistically, you know someone who's died needlessly because of the FDA. And of course, if the FDA proves something and it ends up causing a problem in a minority, those minority will sue like crazy and will make a huge noise.
But if you don't get a drug that you don't even know is available because of the FDA, you probably don't even know it.
You just quietly expire into the black tube of history without making much of a squawk because you don't know what's missing, right?
So it's really tragic that way.
The FDA probably killed more people by delaying this single beta blocker than it saved during its entire existence.
Licensing laws are a cure worse than the disease because everything which is statist and violent is a cure worse than the disease.
Medicide. It's not a bad way of looking at it.
The death toll from losing half of our innovations from 1962 to 2003, right?
Because the amount of new drugs introduced after these 1962 acts were passed are cut significantly.
The death toll from losing half our innovations in drugs from 62 to 03 is somewhere between 4 and 16 million people, depending upon the assumptions used.
Adding 4.7 million deaths due to an extra 10 years of development time suggests that as many as one out of three people who died of diseases since 1962 may have done so needlessly.
Needlessly. How much extra did it cost for those 30,000 people to die of heart attacks rather than being able to take a pill to prevent those things?
This is the kind of stuff that statism produces.
Medicide. This is from Dr.
Mary Ruart, Ruart.com.
Well worth having a look at her website.
If pre-amendment, this is the 1962 FDA amendments, if pre-amendment trends had continued, drug prices would be about 15% of what they are today.
About 1515% of what they are today.
The 1962 amendments imposed a cost equivalent to 25-55% of today's healthcare costs.
It's a premium. This is why people can't afford insurance.
Because violence designed to keep people safe always puts them in greater danger.
This all came out of the thalidomide scare, which was an anti-nausea A pill that was given to pregnant women, which produced about 7,000 birth defects.
This is when the FDA went nuts on new drug development.
And the result, of course, is millions of deaths and vastly escalated health care costs, which pushes people out of the market to be able to afford health care.
So it's completely tragic what happens to people in these situations.
Today we'd have more innovation and twice as many drugs to choose from if these amendments did not be passed.
Pharmaceuticals can replace more expensive medical interventions like surgery so that every dollar we spend on drugs lowers healthcare costs by two to three dollars.
So having very high pharmaceutical costs and far fewer drugs available really causes really subsequent interventions like surgery and so on and much more common raises healthcare costs considerably.
We could go on and on, and Lord knows I've been known to, but I'll try and keep this relatively succinct.
What is the moral? The moral is the same.
If you've ever seen the House MD show, The Last Resort, this sick guy uses a gun to take a doctor and some patients hostage in order to get treatment.
Another doctor says, sorry, the immorality of this is clear.
Nobody says, well, that's really great.
I'm glad he does that. Let's give everyone a gun to hold it to the heads of doctors to get their cures.
One doctor says, if I strap a bomb to my chest, do I get seven doctors attending to me?
Well, if you use the government, kind of yeah.
Violence, violence, violence, violence, violence, violence, violence is not the way to solve problems, particularly problems as delicate and complex as healthcare.
You can't initiate the use of violence to solve problems like healthcare.
You can't use the initiation of violence to solve any problems.
But in particular, health care is just a desperately sad and difficult and murderous way.
It's a murderous situation that gets created by the initiation of violence.
Look, if you're into philosophy, you're into the long haul, there's no way to stop what's coming down the pipe.
There's just no way to stop. There's too many entrenched interests.
There's too many desperate people.
There's too much propaganda.
There's too much bullshit. You simply can't stop, in my opinion, what's coming down.
I'm telling you, I'm telling you, I'm telling you.
Statist violence escalates until the violence becomes visible.
Slavery continues until the humanity of the slaves becomes visible.
Aggression against women and children will continue until the humanity of women and children is seen to be visible by the majority of people.
Status violence will continue to escalate until the violence is visible, which is what I'm trying to do in these True News segments, is to point out the gun in the room.
There's a gun in the room. There's a gun in the room.
There's a gun in the room. And if you don't think there's a gun in the room, The violence will just keep continuing to, will just continue to escalate.
So my suggestion is keep talking about the gun in the room, right?
The AMA, the legislation, the restriction on the supply of doctors, the regulations, hundreds of thousands of pages of regulations that doctors have to comply with or face the threat of punishment, suspension of license, jail time, and so on.
You simply cannot create virtue by waving guns and screaming at people and throwing them in jail.
You just can't. Yet we continue to try to because we don't see the gun in the room.
We don't see the violence that our system is founded on.
Once people generally see the gun in the room, they will feel moral revulsion against the use of violence to achieve these ends.
And we just have to keep talking about the gun in the room that is the essence of statism.
And if we keep talking about that, the gun will be lowered.
www.fdrurl.com forward slash tn46 is where the references for this show are and I look forward to your feedback.
I will be doing another one of these.
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