Mind Fog Revealed by the Murder of Brian Thompson

There is still a lot to know about the killer of UnitedHealthcare CEO Brian Thompson. I don’t know what ‘brain fog’ is and whether Mangione, the young man accused of the murder, suffered from it as was reported. But there is certainly a lot of fog in the mind support he received after his arrest and, more generally, in ideas about health insurance floating around in the zeitgeist.

For many people, health care and health insurance are special goods because they are more directly concerned with life, death, and bodily integrity. Food, clothing and housing would also be candidates. Furthermore, individuals make trade-offs between health and other goods or activities such as smoking, drinking, and mountain climbing. The source of the problem lies in the unbridgeable gap between scarce resources and infinite human desires – the subject of economics. The gap can only be partially bridged by wealth. For almost 100% of humanity before the Industrial Revolution, the partial solution did not exist, just as it still does not for many Third World residents exploited by their own governments.

A sign held by one of Mangione’s supporters during a demonstration read:

Privatized healthcare is a crime against humanity

Privatized? What was it like before it was privatized? And who privatized it? Perhaps the implicit, confusing model is that health care was made freely available by benevolent governments 100,000 years ago, but as “neoliberalism” began its assault on nirvana, they gradually began privatized it, or accepted its privatization, until crime reached its peak today after millennia of struggle between the individual and the collective.

Even in a wealthy society, health care is not a “right” except under at least one of three conditions. First, you obtain it through voluntary and private contracts. Second, you enslave someone (some doctors, nurses, shareholders, or taxpayers) to provide it to you. There is a third possibility: that one some public health insurance or health care is made publicly available on subsidized prices according to the rules of a ‘social contract’ a la Buchanan, for which unanimous consent is demonstrably plausible, or perhaps by rules of spontaneous order a la Hayek. The justifications for this third option are more demanding than most people think and must be treated with great care.

In rich countries, everyone can get a minimum of health care through a varying mix of the three conditions or justifications above. In the United States, publicly funded health care accounts for about half of total health care expenditures. But remember that these countries became rich because in economic life in general the first condition – private contracts – was privileged. In health care, the United States may remain the country that deviates least from the private contractual ideal.

Private healthcare companies are not in the business of denying what their contracts require them to provide to their customers, who can shop elsewhere. But they have to keep their costs under control, otherwise they would not be able to offer their services to anyone because no one would willingly invest in these companies. Economic analyzes show that competition between private insurers will yield the lowest prices reasonable insurance while offering a diversity typical of the markets. The more you pay, the more likely your insurance will cover a particular claim mutatis mutandis if you choose a policy with lower coverage. Also note that the more consumers in this market are subsidized directly or indirectly by the state, the more they drive up healthcare prices.

We can’t forget that the healthcare industry is one of the most regulated in America, and regulation limits competition. Most Americans get their health insurance from their employers, an unfortunate sequel to World War II wage controls. They have to change jobs to switch insurers. Moreover, it is often employers, not insurance companies, that try to control insurance costs. (To see “How America’s Health Insurance Became Such a Rage,” Wall Street JournalDecember 20, 2024.)

Partial or total nationalization of health insurance or benefits cannot solve the problem of the inescapable allocation, through prices or other means, of what consumers want given the necessarily limited supply. Not all Americans can get the health care that, say, Elon Musk or Bill Gates should get. If price-based allocation is abolished, queuing and bureaucratic decisions will be the new rationing mechanism. In Canada, where health insurance is a monopoly (at the provincial level), the average time between referral by a general practitioner and an appointment with a specialist is 15 weeks; There is another 15 weeks between the appointment and the start of treatment. These waiting times have tripled since 1993, despite repeated and major political attempts at internal reform of the system. (See Fraser Institute, Waiting your turn: healthcare wait times in CanadaReport 2024.) Not included are the delays in seeing a GP and the lack of facilities and privacy in hospitals, all of which, formally or informally, are public. These problems are endemic to nationalized healthcare.

We should beware of the simplistic argument that state takeover of health insurance and healthcare would solve all problems. That was certainly not the case in the Soviet Union. But even a much lighter implementation would likely increase dissatisfaction among Americans, who are used to being treated as customers, not public departments. It probably wouldn’t contain the mentally ill idiots and might even incite them even more – now against government officials. But the latter is not certain: once a society has reached that point, individuals may have become submissive and resigned.

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