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Do libertarians believe that it's government that has created an inequitable society where there is a subset of the population who can't afford adequate health care?
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Yes, as a result of "corporate welfare" and excessive regulation of the medical industry. Regulation drives up costs, which drives up prices. Likewise corporate welfare, by insulating some companies from market forces while -not- insulating others, and by providing Gov't assistance to companies which deserve to fail, has prevented innovation and kept prices artificially high.
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Or is it that government has caused the U.S. system to be the most expensive in the world?
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Again, yes, and for most of the same reasons. However, a secondary issue is the fact that US companies essentially bear the brunt of medical innovation and research. They pay for the research, development, testing, and licensure of new drugs for example: that is a cost which the originating company must bear, but which its' competitors do not have to. A pharmacy in France can afford to charge much less than a pharmacy in the US for the same medicine, because that pharmacy's parent company didn't spent the previous ten years and millions or billions of dollars developing the drug. Their per-unit cost is simple: the cost of the pill. The cost to the company which -developed- the thing, on the other hand, includes all the run-up charges as well. Kinda like how the F-35 is 1/10th the price of an F-22 while still utilizing most of the same cool technolgy: the development costs are built into the F-22 (because all that cool tech was developed while the F-22 was) while the F-35 uses what was by then off-the-shelf technology (which is of course much cheaper because it's already been developed).
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Do they believe that fully privatizing the system will make it affordable for everyone?
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Not necessarily, but neither do they believe that people who -did- look after their health and finances should be forced to subsidize those who did not. What many libertarians believe is that privitization would lower the cost of health-care enough for private charities, personal savings, and installment payment (which is how I've paid for my health-care since I turned 18) to cover the shortfalls. This would be because Doctors would be free to negotiate payment as they wished, free to carry (or not carry) malpractice insurance, etc.
On the balancing end, libertarians are big fans of consumer-advocacy groups (think J. D. Power & Associates): the kind of outfit who could rate doctors, give a good impression of their fees and services, and get the word out if a doc was crappy, dishonest, or an asshole. So: you find a nice, cheap doctor: he's got minimal insurance, but J. D. Power (or whomever) say he's a real top-flight cutter who's never needed it anyway. On the other hand, an expensive doctor might well be that way because he gets sued every 6mo and needs the cash to cover the settlements: our hypothetical advocacy group would be there to spread the word on that guy too.
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Are there any models that exist where this has happened?
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None within the western world within the last 50yrs or so, but there are older examples. Mutual-Aid Societies in the US were one archetype which lasted until around WW2, likewise the various left/right-wing anarchist groups in Spain had a rough (but workable) medical network which functioned along similar lines.
Granted, these are imperfect examples: medicine was much less complex and less expensive back then. However, the result of 50yrs of Gov't meddling in the US and Europe has been exploding costs, degradation of service, loss of the "personal touch," the rise of the HMO, and in much of the rest of the West a near-total stagnation in regards to medical innovation. An additional result has been the sorts of horror stories chronicled weekly in the Wall Street Journal: such as the London woman whose family called an ambulance and was asked whether they would prefer for the EMTs to try and save her life or "just make her comfortable" so she could die quickly and save the NHS some Pounds.
'We're Going to Let You Die' - WSJ.com
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Liz Hunt of London's Daily Telegraph reports on an even more chilling euphemism used in a country that long ago instituted "health-care reform":
"Mrs ------- has breathing difficulties," the night manager told her. "She needs oxygen. Shall we call an ambulance?"
"What do you mean?" my friend responded. "What's the matter with her?"
"She needs to go to hospital. Do you want that? Or would you prefer that we make her comfortable?"
"Make her comfortable." Here's what that meant:
Befuddled by sleep, she didn't immediately grasp what was being asked of her. Her grandmother is immobilised by a calcified knee joint, which is why she is in the home. She's a little deaf and frail, but otherwise perky. She reads a newspaper every day (without glasses), and is a fan of the darling of daytime television, David Dickinson. Why wouldn't she get medical treatment if she needed it?
Then, the chilling implication of the phone call filtered through--she was being asked whether her grandmother should be allowed to die.
"Call an ambulance now," my friend demanded.
The person at the other end persisted. "Are you sure that's what you want? For her to go to hospital."
"Yes, absolutely. Get her to hospital."
Three hours later, her grandmother was sitting up in A&E [the accident-and-emergency ward], smiling. She had a mild chest infection, was extremely dehydrated, but was responding to oxygen treatment.
As Hunt notes, "Withdrawal of fluids (and drugs) is one of the steps on the controversial palliative care programme known as the Liverpool Care Pathway, which has been adopted by 900 hospitals, hospices and care homes in England."
Former Enron adviser Paul Krugman disagrees: "In Britain, the government itself runs the hospitals and employs the doctors. We've all heard scare stories about how that works in practice; these stories are false." But is it possible that Reich is right and Krugman is wrong?
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