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Ali: Healthcare Hysteria

02/16/11 5:55PM By Saleem Ali
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(HOST)  Commentator and UVM Professor Saleem Ali suggests why health-care eludes the efficacy of free markets.

(ALI) As the debate over health care resumes in Washington, and Vermont considers prospects for a single-payer health care system, it is worth humanizing the narrative beyond hysterical statements by politicians that healthcare reform compromises liberty. First of all, I am a firm believer in markets to create incentives for innovation, but there are certain aspects of human endeavor where markets are unable to create incentives for better performance - or can potentially compromise basic ethical values. Healthcare and its derivative industries are one such example. The challenge remains that market-driven health insurance will always favor the majority population dynamic that is healthy and often unconcerned over those who are seriously ill.  Alas! they are the ones who need the services of the system the most.

I was made aware of this situation seven years ago, when our older son was diagnosed with Type 1 diabetes at the tender age of five. His symptoms of excessive thirst during the winter months had mentally prepared me for the worst news to come from the doctor. My wife and I were caught in a torrent of emotional turmoil as we were told how his life would be dependent on a delicate balance of one indispensable molecule - insulin. The doctors assured us that there was nothing we could have done to prevent this illness, since the complex confluence of genetic and environmental factors that cause Type- diabetes are very different from those that lead to the far more common diet-related Type-2 diabetes.
 
Without regulated healthcare, insurance companies have little incentive to provide for the millions of Type-1diabetics and others with similar non-preventable illnesses to thrive in society. Even with an excellent health insurance plan, we have to budget at least $2500 per year in deductibles for our son's supplies. An American without healthcare would need to pay around 10 times that amount per year to simply keep their child alive. Philanthropy is unpredictable and simply cannot keep up with such numbers. With the new healthcare law, our son will be covered under my insurance until after college, and it will not be possible for health insurance companies to deny him coverage.

Diabetes also exemplifies the importance of government support for research funding, which Congress is intent on slashing. While private pharmaceuticals are well-suited to discover new drugs for chronic ailments, they have little incentive to actually find a cure for such diseases that provide a lucrative revenue stream for them. This is not to imply any pernicious intent - it is simply stating the market reality. So, as we ponder various options over healthcare, let us dispense with vacuous rhetoric over freedom of choice and remember that the freedom to be alive is perhaps the most noble of all liberties.
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