Federalized Altruism and the Centralized Control of Health Care

The two most contentious issues in the health care debate today are how expanded coverage will be funded, and how more competition can be encouraged in the health insurance market to lower premium costs. Both of these have implications for the balance of federal versus state and local control of the health care system. My position on this is clear: I want the patient to be in charge of their health care, not the government. But the tradeoff between national and state/local control is also a factor in how this plays out with vested interests.

There are many arguments that play to the instinct for altruism to cover those less fortunate. This raises the question: what is the difference between federalized altruism and socialism? When I say federalized, I mean control of the health care system by the national government as opposed to state and local institutions. Socialism is a social contract to redistribute wealth and provide equality of social status, and makes the national government a caretaker of last resort. In the United States, we depend on a different model to take care of people in need, through non-profit organizations and state and local governments.

It is important then to measure the ratio of health care expenditures by the federal government versus the overall health care economy. If this ratio is changed too dramatically in the direction of federal control, it could jeopardize our individual freedom to control our own health care decisions. Besides being inefficient, concentration of power in such a large sector of the economy in federal hands would be detrimental in a number of ways.

Right now the debate is playing out as an increase in coverage for difficult to insure individuals versus the federal costs and taxation needed to insure them. But as we add more insurees to the national government rolls, we tip the balance toward federal control of the health care system. So our good intentions to be altruistic and help the less fortunate or even our neighbors who have become unemployed, combined with the trend of the aging of the population leads to a shift in the balance of power unless we take specific measures to prevent this. Once a substantial majority of the population is federalized, when combined with predictable budgetary constraints from taxation, we will end up with a nationalized rationing system of care.

So I am encouraged by the recent discussion of an alternative to a public option plan to compete with the health insurers (see Cooperatives Pushed as Alternative to Government Plan) based on local cooperatives or non-profit organizations. The most important aspect of this is that the health care system stays under local control. This is essential not only for preventing a shift in the balance of power toward centralization but also to ensure that our privacy and individual health care choices are maintained.