How Capitalism provides for Social Needs

When I review the health care plan that was presented in Feb 2010: something I am in the process of doing; I will be judging it according to some very strict expectations about what is real and productive and what is not.

For example, It is real and productive to allow big tax breaks for people who contribute to non-profit hospitals such as The Shriner's to provide free care to very needy groups of health care consumers who could never afford the thing they need.

It is not real and productive to make promises that every single health gripe that anyone has will be immediately covered by the best possible care. There is not enough money or love in the world to provide that unless it is God's love. But in general, we are not allowed to count on the healing power of God for the poor or disenfranchised as an option for health care in The USA; so we must deal with lack of resources in spite of the fact that no one wants to come out and say who it is who will be on the short end of the lack of resources.

We have started thinking about health care like it is a right (noted in the 1963 article of my last blog) and since it is a right, whether or not one can pay is not to be considered. Instead, the problem is approached emphasising the need and assuming the resources for it will be provided. This is not practical. One of the major problems in health care is that it is not really a productive market upon which to exercise the economic principals of capitalism. Health care ultimately requires a contributor. Private ownership was the first contributor, charity was the second contributor, local government was the third, insurance plans were the fourth, and federal government plans were the fifth. When private ownership and charity were the economic force no speculation was involved, and services were limited to whatever was provided at the will of the provider. When insurance and local governments were involved speculation began to influence the factors of provision and services became a tug of war between expectations and resources. When the federal government became the provider it was PURPOSEFULLY set up to get more service than market price would provide and services were expected to be provided regardless of the will of the provider for recompense. Our own government defied the rules of our capitalistic system when they declared that Medicare and Medicaid would not expect to cover costs. They created a dysfunctional support that is now falling apart. Of course they did this because they were trying to address a social need. They were not saying that all health care should be given regardless of cost, they were trying to boost the cause of the disenfranchised by guaranteeing some money to those who cared for them. But breaking the rules is still breaking the rules. Doing a non-capitalistic exercise in the face of a very capitalistic system has simply made health care the dog of the day for the fleas to suck blood out of. The art of capitalism has inflicted the financial pain that health care is in because there was a source of money that was not subject to the restrictions of the market, and it attracted exploiters. Every exploiter had a good motive - look at what great gizmos and guarantees we have in our health care - but their good intentions have still paved the way to our health care hell.

So what is the proper way to handle social needs inside capitalism? The answer is non-profits. There has to be a way for people to block themselves from the ruthless realities of capitalism to have a sheltered way to manage their money for social need. And these non-profits have to have the right to govern themselves and choose the risks and coverage that they as a group want to take. In the old days we called such an organization a hospital, usually a religious hospital, that had a large doner base and people committed to the cause who productively managed the resources at hand and did not have to answer to anyone other than their own private management. Of course the advent of extreme insurance claims has broken down the barriers between non-profit right to control and public market, but that is a subject for a different day.

I am personally the third generation of people who ran and started such hospitals all around the world. These mission hospitals were started when national efforts of fund raising by churches provided the resources to set them up. But I can see clearly that such strong networks of related peoples do not exist anymore, and the social bases that supported these social institutions are just not there.

So how do we keep the economic structures pure and find the social support to run something that is not run by the government? Well, I think the Senator for North Dakota is on the right track.

The following is an excerpt from Senator Kent Conrad's website (Just Google it if you want to read it, I'm an old lady and don't have the URL handy)

Kent Conrad Promotes Co-op plans for health care reform:
"How would this be better than a government-run public plan option? The co-op plan aims to achieve the same benefits for consumers as a public option without government control of health insurance. It does so by creating private, consumer-driven, non-profit health plans. Because these plans will be owned by their members, they will focus on getting the best value for consumers, rather than maximizing plan revenues or profits. In addition, since the federal government would not be backing the cooperatives, there is no government liability or support beyond the seed money. Finally, the co-op plan uses the tools of the marketplace to address the health care reform principles of choice, quality and cost. "

I recognize this pattern. The government becomes the "church" that sets up the co-op, so in a way it is the contributor, but once the institution is set up, it is supposed to become self-sufficient - the goal of any good mission institution- and the government no longer has a fiscal responsibility for it and as such cannot dictate what will happen. The will of the group is the dictator of what will happen. Does this mean some inequality in health care will exist and some people will not have the resources? Yes. But the philosophy of capitalism is that when the rules are kept, human nature provides the best distribution of resources through capitalism because everyone has an ability to affect the outcome as opposed to faulty judgement of a few for the others. And one of the rules is that social need money must be protected from market money by non-profit status.

The Senator's co-ops will return us to the very productive pattern of health care where the provider decides what will be provided. If you want a good service, it is best to give the service provider control.