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The Gold-Plated Ambulance
The necessity of innovation and the social value of gazillionaires.


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Kevin D. Williamson

It is worth noting that the Seattle dilemma was created by Dr. Belding Scribner’s invention of a Teflon shunt that made dialysis a viable option for these patients. Teflon, a synthetic polymer, is the accidental byproduct of research conducted by a joint venture between General Motors and DuPont into yet another SVG-dependent millionaires’ extravagance grown into a commonplace necessity: automotive air conditioning. Automotive air conditioning is a luxury that made its first regular-production appearance in North America in the 1953 Chrysler Imperial, at the time by far the most expensive car Chrysler made, in inflation-adjusted dollars far more expensive than Chrysler’s current top-of-the-line sedan. And there is of course more to mobile cooling than ensuring the comfort of one’s chauffeur: Without refrigerated transportation, the delivery of medical supplies, organs for transplant, etc., becomes a much more difficult business, if not an impossible one. In 1954, moviegoers watching Humphrey Bogart and Audrey Hepburn in Sabrina were stunned by the telephone in Mr. Larrabee’s Rolls-Royce; today they use its descendant to call for help during a medical emergency, while hospitals use them to summon physicians and dispatch ambulances. The line from gold-plated Rolls-Royce to life-saving medical treatment is neither straight nor obvious, nor is it — most important — predictable, something utterly lost on those who believe that they can manage the U.S. health-care economy on a fly-by-wire basis from Washington. You never know where the next Teflon is going to show up — DuPont was more surprised than anybody — and the Obama administration’s record for picking promising technological investments is exceedingly poor. There is no reason to believe that a future Republican or Democratic administration would be any better.

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One of the critical long-term problems with U.S. health care is that short-sighted political fixes such as the woefully misnamed Affordable Care Act are oriented toward subsidizing the consumption of medical goods and services while doing nothing to encourage their production, indeed discouraging their production through things like price controls and punitive taxes on medical devices. When a growing number of dollars are chasing a supply of goods that is if not fixed then not growing nearly as quickly, the likely result is higher prices rather than wider consumption. Which is to say, it will encourage a move away from the sort of prosperity contemplated above — and that, not the operation of markets, is what is actually monstrous, because it makes people’s lives unnecessarily worse in order to satisfy various kinds of political ambition. Example: The ACA will increase demand for primary-care physicians, but by 2020, the United States will be 45,000 general practitioners short of its medical needs, and 65,000 just five years after that. The political response to that economic reality, in the ACA and elsewhere, is to attempt a restitution through fixing prices, organizing producers into cartels under political discipline, and further inhibiting the operation of the market. We have been doing that to U.S. health care for more than a half-century now, and the cost of those decades of stupidity is manifest in the current dysfunction of our medical markets, in which there is no strong relationship between the price of goods and the ability of consumers to pay for them.

To revisit the automotive analogy, if we subsidized and mandated Rolls-Royce levels of consumption without accounting for the fact that the gentlemen in Goodwood produce only so many cars each year, the result will not be more Rolls-Royces; it will be Honda Civics that cost $100,000. And that is approximately where we are with health care.

The goals of health-care reform are general and qualitative: that everybody should have access to some minimum acceptable level of health care without running the risk of personal financial catastrophe. Note that this goal implicitly accepts what Professor Cowen explicitly expressed: that our resources are not infinite, and therefore, short of the abolition of voluntary exchange in the field of medicine, wealthy people can expect better outcomes than poor people. But the tools the ACA creates to achieve its vague and qualitative goals are very specific and quantitative: X must be covered by all private insurance plans, Y will not be. Obamacare’s God Committee is known as the Independent Payment Advisory Board, and its primary means of rationing — the law says that IPAB’s policies “shall not include any recommendation to ration health care,” but that is its plain purpose — is price-fixing. Which is to say, the central structure of the ACA regime is an attempt to control the price side of the equation — with little or no attention to what effects that will have on the more important supply side of the equation. The inevitable long-term outcome of that model is the inhibition of innovation, meaning lower-quality care and higher real prices for everybody in the long term. You can blow up the gold-plated Rolls-Royce, but you can’t drive the pieces.

— Kevin D. Williamson is a roving correspondent for National Review and author of The End Is Near and It’s Going to Be Awesome.



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