Opinion

Marxism Stumbles On In Venezuela, North Korea And US Healthcare

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Dan Jones Physician

Marxism sounds wonderful on paper: “From each according to his ability, to each according to his needs.” Unfortunately, history has proven it to be a failed economic theory, incompatible with human nature and the real laws of economics. Consequently, Marxism has been abandoned virtually everywhere—except in Venezuela, North Korea, and the US healthcare system.

Yes, our healthcare system is a walled garden of Marxism in the midst of an otherwise efficient and thriving economy. Unless that is changed, healthcare will remain unaffordable, and costs will continue to escalate. Astoundingly, Congress continues to turn a blind eye to this elephant in the room.

Even its authors are finding it difficult to deny Obamacare’s failure. Yes, more people have insurance, but at what cost? Our liberty has been compromised, insurers are fleeing the exchanges, the net cost of healthcare continues to escalate, and on average, premiums have doubled for Americans who can (or once could) afford to buy their own insurance. Current efforts will fail just as dismally unless and until Congress expunges these Marxist drivers of hyperinflation and inefficiency from our healthcare system:

  1. price-fixing of medical goods and services
  2. central planning of products and services
  3. insurance-rigging

Let’s examine these individually:

Price-fixing of medical goods and services: The Federal Trade Commission long ago halted the AMA’s practice of fee-setting. But it has been oddly negligent in ignoring the comprehensive and collusive price-fixing by the CMS (Center for Medicare and Medicaid Services) and all major insurers. There is no price competition in our healthcare marketplace, because all prices are fixed by CMS bureaucrats and the major insurance companies. Such price-fixing is illegal in other markets, and clearly should be illegal in healthcare. It did not work in the old Soviet Union, it is not working in Venezuela, and it will never work in American healthcare. We cannot have affordable healthcare until price-fixing is ended so that free-market price competition can exist.

Central planning of healthcare goods and services: Currently no healthcare product or service can be paid by Medicare, Medicaid or the major insurers unless and until it has been approved by the CMS. Economically speaking, this is no different than Congress mandating that no new consumer electronics products can be marketed until reviewed and approved by federally appointed bureaucrats. This is how the Soviet Union attempted to create an efficient mix of products and services. It never worked in the Soviet Union, and it’s currently failing just a dismally in Venezuela and the US healthcare system. Certainly, new products should be required to meet safety standards. But as in other economic sectors, healthcare goods and services should be determined by the competition among innovators and providers to satisfy patient needs and preferences, at prices they are willing to pay. No other method has been shown to lead to efficiency and prosperity.

Insurance-rigging: Though not explicitly Marxist, this exemplifies the Marxist delusion that central authorities can re-define the fundamental laws of economics. The only economically valid and useful purpose of insurance is to value risk, so as to allow payment of a small fixed cost now, to avoid an unlikely but catastrophic loss in the future. But Congress has utterly destroyed that function by legislatively transforming health insurance into prepaid healthcare, guaranteed regardless of preexisting conditions. That is just as absurd as requiring auto insurance companies to sell you collision insurance after you’ve totaled your car, or that pays for new tires and oil changes. We cannot have an efficient healthcare system unless insurance is allowed to fulfill its valid economic function. Certainly, we must guarantee healthcare for the sick and needy. That should be addressed by subsidizing their purchases in a free market (as with SNAP or “food stamps”), not by redefining the laws of economics.

Until and unless these three economically disastrous practices are abandoned, American healthcare will continue down the same trajectory as the dead Soviet Union and contemporary Venezuela. Everything else is just re-arranging chairs on the Titanic.

Dan Jones, MD has over 35 years’ experience as a physician, businessman and technologist. He is the founder of Challenger Corporation medical education company, the author of American Healthcare Unchained, created a successful primary care clinic, and is board certified by the American College of Emergency Physicians.


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