Monday, March 04, 2013

Why Health Care Should Be Privatized

It would be a risky claim to suggest health care should be privatized while education, from preschool to post-secondary, should be fully publicly provided, but considering the importance of education, what's really risky is that currently we have it the other way around.

To compare the importance of health care and education, ask yourself, would a nation that only had public health care be better off than one that only had public education?

Comparing such black and white societies may seem extreme, but it helps to clarify what is the more important public policy, health care or education. By the way, if you think its the former perhaps you should stop reading this, as it wasn't written due to any skills imparted by a government funded hospital.

Now in this imaginary binary world, where one country only funds health care, while the other only funds education, it would be helpful to consider the benefits each society receives from the policy its government focuses on.

In the Health Care nation all medical services are fully provided by taxpayers, no one has to worry about private insurance, and everyone especially the poor, the elderly, and the chronically ill are all taken care of. The sizable minority of the population that frequently uses health care is clearly better off under this policy.

In the Education nation, all young children have the benefit of being in school from their most impressionable years to the time they've developed necessary skills for any profession. With universal access to early education and post-secondary, inequality is reduced and social mobility increased. The work force is more skilled and higher incomes increase government revenue. Innovation from more graduates and more institutions of research and development lead to more technology breakthroughs, higher productivity and greater economic growth.

Unlike the country that only funds health care, every single person in this society is made better off by the government providing full education.

If the benefits contrasted the two policies, their different costs add kilometers between them.

In the Health care nation all parents pay the full cost of each school year, from preschool till whatever year they can afford (This itself tells of the importance of education. Since everyone needs it, there's no such thing as education insurance). If one was to assume $10,000 a year, the price of schooling approaches the cost of a house even before the end of high school. With such high costs many teenagers end up leaving well before they receive any diploma, creating a work force that is less skilled and even less productive. With only the rich able to afford schooling there is more inequality. And as the economy deteriorates so does everyone's well-being, but at least health care is free.

In the nation of full public education things are again different. With private health insurance much of the health care costs are mitigated. Higher incomes and a stronger economy also help compensate insurance premiums. Though there is a minority that doesn't have enough money to buy insurance, that segment of the population would be smaller than in other countries where there is a less skilled workforce and a weaker economy. It is easily admitted that those unable to buy health insurance are significantly worse off under this policy.

In this fictional world it is more than abundantly clear that the nation that endorse full public education is far better off than the one that only provides public health care, but of course in the real world, we don't have to choose one or the other, education or health care. We can choose a combination, or even, ideally, both.

The point here is that education is more important to a society than health care, and public policy should reflect that. At present, it doesn't. Health care can be universal, but until education is, from preschool to post-secondary, our priorities are misplaced. That needs to change.

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