How Does Healthcare Reform Impact Liberty in Chile?

For more than three decades Chile has had a dual healthcare system consisting of both state-run and private health services, which has provided more Chileans with greater choice and better access to such services. Initially funded by way of a 4 percent tax on income, by the late nineties the public Fondo Nacional de Salud (FONASA) started running deficits as one in four Chileans opted for private insurance instead. Consequently the obligatory contribution was raised to 7 percent, helping force a significant chunk of people back into the old system. Unfortunately government meddling did not stop there.

1314902_99313658In 2005 a fresh round of regulations listed 56 priority health problems that all insurers must cover. Unsurprisingly, premiums spiked across the board that year as well as the following years. Unfazed, the first Bachelet administration expanded the list to cover a total of 80 medical conditions. The result is as predictable as it is inevitable, and the unfortunate thing is it usually leads to more demonization of the market and increased calls for more heavy-handed government intervention. Considering the aforementioned developments it seems as though that process is already playing out.

Needless to say, the selfless crusaders for more equity – be it in healthcare or whatever other area of life – make no mention of inflation, currently estimated at 4.5 percent, that is stealthily yet ceaselessly robbing all Chileans of their purchasing power. Nor is there any mention of the fact that patent laws are artificially propping up drug prices, or that compulsory medical licensing is keeping competition out of the market. Experiences with “free” state-run healthcare and the resulting long waiting lines and other unintended consequences such as in Canada and the UK are equally overlooked if not purposely left out of the debate.

To point the finger to the market as the source of inequality merely reveals one’s intellectual laziness, if not dishonesty. Moreover, it is to deny the fact that free market type policies have made Chile the most prosperous Latin American nation in known history, slashing poverty from 50 to 11 percent while raising per capita income fivefold. In other words, being poor in today’s Chile generally means owning a used sedan rather than a new SUV, whereas just a few decades ago it was the difference between having three meals a day or going hungry.

Extracting wealth from the SUV driver in the name of equality is not only immoral; it has historically never lead to anything but equal misery for everyone, wherever it has been tried. Besides, the case of the United States shows that simply increasing spending on health by no means guarantees a healthy population. After all, when government policies make healthcare more expensive that inevitably leads to more spending, yet as a measure of effectiveness or efficiency that metric is of no use at all. It does, however, achieve the exact opposite of the stated goal of making healthcare more affordable. Where have we heard that before?

Bachelet’s healthcare reform falls squarely into the category of just another excuse for more government intervention to solve the problems created by previous intervention.


Brazil’s Most Controversial Government Program

A common characteristic of developing nations is the high rate of urbanization and subsequent disparate development between regions. Brazil being no exception to this rule, the effect is quite far-reaching in the healthcare industry. More than 90 percent of medical professionals are concentrated in areas that cover less than 10 percent of the country. A program launched by the federal government in 2011 to address this problem failed to attract but one third of the required number of doctors to address this problem. Consequently, it was replaced with a new program: Mais Médicos (more doctors).

Overseen by the World Health Organization, this three-year program aims to alleviate the unequal geographical distribution of healthcare professionals by bringing them in from abroad. Fifteen thousand doctors from Cuba, Portugal, Argentina, and Spain were to work in these remote areas. Yet while government initiatives with such laudable goals generally tend to garner plenty of popular support among Brazilians, Mais Médicos has been shrouded in controversy from its inception. Industry representatives, students and the Ministry of Labor have taken aim at the program, A conservative magazine even went so far as to accuse Cuban doctors of being “communist spies” infiltrating the country.

Mais_MédicosIn a mere 12 months (Mais Médicos went into effect in July 2013) the program has become arguably the most controversial one implemented by the Dilma administration. While the Cuban healthcare system has a relatively good reputation the fact that a significant chunk of Brazilian tax money directly funds the communist Cuban state makes some feel quite uncomfortable. The Brazilian Medical Association and the Federal Council of Medicine have been encouraging healthcare professionals to voice their opposition in the form of protests and strikes. They even went to the Supreme Court last August in an attempt to roll back the program, stating foreign doctors were illegally practicing medicine without a license.

When the Court ruled in favor of the government, critics started taking another angle, claiming Cuban doctors were being exploited and comparing them to feudal serfs. At a university ceremony in Fortaleza where newcomers were to take classes for three weeks prior to becoming part of the public healthcare system, the doctors were harassed by a group of unionized healthcare workers calling them “slaves” and “incompetents”.

Controversy and name calling aside, the solution is really very simple. Extraordinarily high tuition fees for Brazilian medical schools have largely restricted access to the medical profession to the upper class. Though annual fees ranging from approximately $18,000 to $54,000 may not seem exorbitant to a Western mind, a GDP per capita of only $12,100 makes going to medical school a pipedream for the average Brazilian. Without a university degree, however, one is not licensed to practice medicine. It should be no surprise, then, that graduates start their careers in the major cities where demand for their services – and consequently the monetary incentive – is the highest.

Given the Brazilian government’s close ties with the pharmaceutical industry one might not be surprised to find out that the playing field is heavily tilted in favor of those doctors taught to adopt the “pill for every ill” mentality. But it’s curious to see how the Brazilian government – just like many or all other governments – restricts competition on the one hand through a system of licensure, while artificially introducing competition from abroad through the Mais Médicos program. After all, if people did not have to ask permission to be compensated for helping others heal there might not be any need for foreign doctors. Besides, the fact that wages are relatively meager would be less of a concern if Brazilians did not have to spend a fortune on a medical degree.

As usual, freedom is the answer. The only problem is there is no special interest group lobbying politicians for more freedom, because who but the ordinary man or woman benefits from that? As liberty-loving folk it is our job to inject this line of thinking into the public debate.


Constitutionally Protected Corporatism

The seventh and current Brazilian Constitution dates back to 1988, when it was written from scratch by a Constitutional Congress elected two years earlier. It contains a whopping 250 articles making it about as thick as the Bible. As its length might indicate it was not exactly written in the traditional sense, for the purpose of outlining what government can and cannot do to ensure the rights of the people.

Drafted after a period of military dictatorship with a constitution that severely restricted the rights of the people while expanding government power, the current one is also known as the Citizen Constitution. Did the Constitutional Congress in the late eighties feel the need to allay people’s fear of having their rights stripped away anew? Perhaps, but entrusting the very same institution that trampled all over the rights of the people with a litany of new powers does not seem to make logical sense. Couple this flawed logic with collectivist egalitarian rhetoric and what results is not exactly a recipe for freedom.

OLYMPUS DIGITAL CAMERAMany classical liberals and libertarians understand the inherent contradiction in constitutionally protecting positive rights; that protecting someone’s “right” to force a doctor to provide healthcare services inevitably ends up violating the doctor’s rights. Yet much less thought seems to be given to the practical implications, not to mention how it warps the general perceptions of capitalism. Whether one calls it corporatism, crony capitalism, or state capitalism, it certainly is anything but capitalism. Yet it is written right into the “law of the land” and few seem to take notice.

The constitutionally guaranteed “right to healthcare” apparently includes – among other things – free drugs for those suffering from hypertension, diabetes and asthma, as can be seen advertised in and around pharmacies here. While perhaps seemingly laudable at first glance, the true beneficiary of this constitutional provision is the pharmaceutical industry. After all, only their drugs are provided for free. This gives them not only a government-granted competitive advantage, but also an infinite revenue stream complete with heavily inflated prices. In that light it is no surprise that there are other reasons to believe the Brazilian government has a very cozy relationship with the pharmaceutical lobby.

Contrary to popular belief the average Brazilian, who might be thought of as the main beneficiary of a constitutionally guaranteed “right to healthcare”, is not at all helped by the situation. After all, since government has no money of its own to finance this system of cronyism, funding has to come from taxation, borrowing, or the printing press. While the former is not generally the preferred method for obvious reasons, the other two options are at least as detrimental to the people’s civil liberties and financial well-being. Brazilian inflation figures since the adoption of the current constitution serve as an indication of how the government likes to keep the scheme going.

In short, the constitutional provisions on healthcare and subsequent laws amount to nothing less than a giant handout to the pharmaceutical industry. Imagine running a business whose only customer consists of uninterested bureaucrats who don’t care how much you overcharge and whose end users have no clue how badly they are getting ripped off by the system. How easy it is to make a killing when the government is holding your hand!

It would serve Brazilian liberals well to emphasize this point when debating their detractors who claim to oppose corporate power.

The Libertarian Case Against GMOs

This Tuesday, November 5th, the state of Washington might become the first to mandate the labeling of genetically modified organisms (GMOs). Known officially as Initiative 522 or I-522, the bill would enable residents of The Evergreen State to find out whether or not the food they buy in the grocery store contains genetically modified (GM) ingredients by reading the label.

A similar bill by the name of Proposition 37 was defeated in California last November, though 64 countries on all different continents already require labeling and some have imposed outright bans. A New York Times poll conducted this year revealed 93 percent of Americans want GMO labeling.

Yet many a libertarian feels uneasy advocating for a government-imposed mandate, and rightly so. This might lead some to think that libertarians would advocate for the biotech industry’s “right” to poison the food supply with genetically altered foods that have never been proven safe for human consumption and despite the litany of documented health risks surrounding these foods.

But in order to come to such a conclusion one would have to ignore one of the cornerstones of libertarianism. After all, at the core of libertarian philosophy lies the non-aggression principle, which rejects any initiation of physical force against persons or property, the threat of such, or fraud upon persons or their property, as inherently illegitimate. And in the case of GMOs, barely scratching the surface is enough to reveal mountains of fraud and deceit, as detailed elsewhere on this website.genetic_modification

The White House and Monsanto have for decades had a very cozy relationship, leading the Food and Drug Administration (FDA) to consider GM foods just as safe as natural, non-GM foods[1]. Despite the injection of foreign genes into such crops as corn, cotton, soy and canola the FDA allowed them to be introduced into the U.S. food supply, claiming there was no information showing that GM foods were “substantially different from conventionally grown foods”. In doing so the agency also ignored serious safety concerns among its own scientists, and hid this fact from the American people. In other words, the United States federal government and the biotech industry have for decades been involved in a massive conspiracy against the people.

In fact, all governments that allow the cultivation of GM crops are conspiring with the biotech industry to deliberately put the health of billions of people at risk. Clearly this constitutes fraud upon persons, which libertarians – i.e. proponents of the non-aggression principle – regard as inherently illegitimate: the libertarian case against GMOs in a nutshell.

The practical implications of the aforementioned are obvious. What happened to Bernie Madoff when his cleverly constructed Ponzi scheme came tumbling down? The former stockbroker’s crimes were condemned as “extraordinarily evil” by a Federal District Judge who handed him a prison sentence of 150 years for having committed the largest financial fraud in U.S. history.

Still, the number of victims Madoff made pales in comparison to the billions of lives that have been and continue to be jeopardized by GMOs. Just consider the estimated 250,000+ Indian farmers that committed suicide after being robbed of their livelihoods by Monsanto.

Without the cloak of government approval the genetic modification of our food supply likely would never have gathered any steam to begin with. In addition, an objective review of the scientific data available today would very quickly come to the conclusion that the risks far outweigh the potential (though highly debatable) benefits. Unfortunately this government complicity also begs the question whether justice will indeed prevail. After all, what incentive do people – even good people – in a centralized bureaucracy have to indict their own colleagues, especially their bosses?

Even though one would have to be delusional to look to government for the solution to a government-created problem, initiatives such as I-522 in Washington are a testament to the growing awareness about and resistance against GMOs. Libertarians should stand together with those opposing genetically modified foods – without calling for government intervention, of course – and take a principled stance against the fraud that has been perpetrated by government and the biotech industry.

[1] Smith, J.M. (2003). Seeds of Deception: Exposing Industry and Government Lies About the Safety of the Genetically Engineered Foods You’re Eating. Fairfield, IA: Yes! Books. p. 130



How Affordable is “Affordable Healthcare”?

After the Obama administration announced new delays in the implementation of the Affordable Care Act (ACA), causing small business and Spanish-language health insurance enrollment services to not begin on October 1, the administration was quick to add that the new healthcare “benefits” will still kick in on January 1. But exactly how beneficial are these so-called benefits?

It turns out these benefits may not be viewed as such even – or especially – by those who were affordable_healthcaresupposed to be helped most by Obamacare. One family of four in Kentucky, for instance, received a letter from their insurer saying that the cost of their low-premium, high-deductible insurance plan will almost triple next year. Many more families across the United States will run into the same issue as premiums will rise by double digit percentages in 45 states. For many the healthcare overhaul will force them to get a new healthcare plan even if they like their current plan, despite President Obama’s promise to the contrary. In the words of Mary Taylor, Lieutenant Governor of the Ohio Department of Insurance, “consumers will have fewer choices and pay much higher premiums for their health insurance starting in 2014”. As mentioned above, this phenomenon is not limited to the state of Ohio.

Let’s take the state of Washington as an example. In 1993 it adopted the most extensive healthcare reforms ever enacted by a state, promising near-universal coverage at affordable rates. Sound familiar? The only difference with the ACA is that there was no mandate, causing healthy (younger) people to drop their health insurance and those in need for medical care paying significantly higher premiums. Needless to say, no rise in premiums could possibly keep up with the increased claims and insurers were eventually forced to pull out of the individual insurance market. This turn of events became known as the ’94 “death spiral”.

At first glance one might not expect a repeat of this death spiral scenario on a national scale with the Affordable Care Act. After all, the Supreme Court upheld the individual mandate. But what does its decision on the constitutionality of the mandate as a tax really mean? First of all it means the Internal Revenue Service – besides having access to Americans’ medical records – will effectively be in charge of enforcing Obamacare, administering 47 tax provisions including the mandate. Non-compliers will have to pay the fine, or to use IRS terminology “the shared responsibility” payment when filing a federal income tax return. However, the fine is waived for some, “if coverage is unaffordable, if they spend less than three consecutive months without coverage, or if they qualify for an exemption for several other reasons, including hardship and religious beliefs”. As such, the IRS expects fewer than 2 percent of Americans will have to pay the fine, which would seem like a very optimistic prediction to anyone who has been keeping up with the news.

Over time, as the rate hikes start to hit and coverage becomes unaffordable for many, Americans will basically have two options: apply for an exemption or pay the fine. It remains to be seen how exactly the IRS will define “unaffordable” but what’s even more doubtful (given the puny fines of $95 per adult or 1 percent of taxable family income) is if anyone will even bother to apply for an exemption. True, the penalty is set to go up marginally over the years yet not nearly to the same extent as premiums. And since insurers are legally barred from discriminating against people with pre-existing conditions anyway, why get insured before you need medical care?

This is exactly what happened in Washington state two decades ago as demonstrated by a pregnant woman who bought an individual policy a few months before giving birth, only to drop it right after the insurance company had paid her hospital bill. When she became pregnant again the same scenario unfolded, resulting in a total cost of over $7,000 to the insurer versus $1,807 in premiums. As things stand now, the ACA incentivizes people to use the same or a similar strategy to keep health insurance affordable.

And what if you don’t file a tax return? If your gross income is below a certain threshold you don’t have to, and so many people don’t. What means does the IRS have to enforce the healthcare law on those people? Besides, keeping in mind the 2014 Senate and 2016 presidential elections, who is to say Obamacare will even be around long enough for people to see the fines go up? Given the projected massive rate hikes widespread non-compliance and protests are to be expected.

The technical glitches preventing people from signing up for Obamacare online have still not been resolved (as this CNN reporter found) and might very well cause further delays. Nonetheless, what the IT people working for the administration apparently have been able to do, is quietly delete any reference to “free health care” from the website. Probably a smart move..

Crushing Health Freedom in the Name of Protecting Your Health

It has been mentioned before on this blog that contrary to the impression one might get from listening to politicians and the media, there really is no free market in healthcare today – which would explain the high prices and poor results that are typical of this “modern” industry. As if to illustrate that point, the U.S. Supreme Court ruled last week that pharmaceutical drug manufacturers cannot be held liable for adverse events caused by their drugs, thereby effectively determining that eighty percent of all drugs are exempt from legal liability from now on.

Crushing Health FreedomThe highest court ruled that a New Hampshire woman who had previously been awarded $21 million in compensation by an appeals court has no legal recourse for the serious injuries she suffered from taking an anti-inflammatory drug called Clinoril produced by Merck & Co. Specifically, the drug caused an extremely painful condition known as toxic epidermal necrolysis whereby a person’s skin literally starts to peel off, exposing one’s flesh in the same fashion a third degree burn would. The drug maker knowingly hid this fact from its customers until it was forced to include it on the warning label. Yet according to the ruling, the victim has no legal grounds to sue Merck because its drugs are exempt from lawsuits.

That same corporation reportedly spent over $9.5 million last year lobbying U.S. politicians, by the way. A shining example of the corrupt gang we call government is Texas Governor Rick Perry, who issued an executive order in 2007 mandating that all teenage girls in the state be given Merck’s HPV shot. He also received tens of thousands of dollars from the company over the course of many years for his gubernatorial campaigns. Just a coincidence? These are just some examples of a most common practice in what we dare call the “healthcare” system. As I pointed out previously the pharmaceutical industry has some very valuable connections in government as evidenced by their lobbying spending which far exceeds that of any other industry.

The underlying theory of the Supreme Court’s verdict is that only ‘name brand’ drugs (the original manufacturers of the drug) can be sued for mislabeling, fraud or adverse reactions and side effects. After the patent has expired and the State-granted temporary monopoly ceases to be, manufacturers of generic versions of the same drug cannot be held liable provided that they use the same formula and have the same warnings on the label. In other words, as soon as the Food and Drug Administration declares a drug safe anyone taking that drug does so at their own risk; both the drug maker and the government are absolved of any responsibility for adverse events, including death. The State has spoken; end of debate.

On the other hand, if you just so happen to be selling a natural product that effectively cures a disease or ailment without any side effects whatsoever, thereby threatening the State-granted pharmaceutical monopoly, you are prohibited from advertising it as such. In fact, making the claim that natural product X can cure or help treat condition Y magically turns the product into a “drug” and said statements into “unauthorized health claims”, even if these are backed up by solid scientific evidence. The lengths that regulatory agencies will go to in their efforts to protect and expand this pharmaceutical monopoly are a testament to the enormous power the industry has through government; leading to such absurdities as declaring walnuts “illegal drugs”, forcibly shutting down farms for selling raw unpasteurized milk and (under international Codes Alimentarius regulations) banning traditional herbal remedies that have been used safely for thousands of years.

One of the biggest objections people especially on the left side of the political spectrum seem to have against downsizing or eliminating government is that it is necessary “to protect us from those evil corporations!”. The reality is, however, that not only does the State fail to protect people from that perceived threat, it actively encourages unethical and dangerous behavior on the part of those corporations, pharmaceutical or otherwise, and even goes so far as to shield them from any legal consequences. So much for “protection”.

Monsanto: Poster Child of Corporatism (Part II)

My last blog post summed up some of the risks of genetically modified organisms (GMOs) foreseen by some even prior to the introduction of GMOs into the food supply. Since going over all of the risks could easily turn this blog entry into a book, I would advise those interested in learning more about the issue to visit the Institute for Responsible Technology’s website for more information. For now, suffice it to say that a recent landmark study involving lab rats exposed just some of the long-term effects of consuming genetically engineered foods, including but not limited to premature death, severe organ damage and massive, horrifying tumors. This, by the way, is the sort of study that has never been conducted to unequivocally show the safety of eating GM foods. You read that right; to this day there has not been a single impartial (i.e. non-Monsanto funded) study providing solid evidence to back up the claim that these Frankenfoods are “as safe as natural foods”.

So let’s be clear: the very existence of genetically modified crops on planet Earth is arguably the biggest Stop GMOthreat mankind faces in modern times; orders of magnitude bigger than the bogus global warming scare or the latest phony flu pandemic scare. As shown by the recent genetic pollution of conventional U.S.-grown wheat, genetically modified food crops can and do escape even when grown experimentally, as was the case in Oregon. Never mind the GM crops being grown out in the open such as corn, soy, cotton, canola, potatoes and sugar beets.

On that fateful day when sanity returns to a critical mass of people and it dawns upon them that Monsanto has been playing God with our food, we might come to find out that it is already too late. After all, undoing the damage is not as easy as just issuing a worldwide recall. Now that genetically modified seeds have been flying through the air cross-pollinating conventional crops for decades, who’s to say there’s still a corn kernel or sugar beet left on the planet that is completely free of genetic pollution?

Hopefully nature will somehow find a way of repairing the damage and prove that prediction to be incorrect, but there are no guarantees. The first thing to be done when the genetically modified chickens come home to roost, though, is to prosecute the perpetrators of this sick genetic experiment. Aiding and abetting the enemies of creation is a despicable and intolerable act of aggression against all mankind that cannot go unpunished. All the debate over the labeling or outlawing of genetically altered products will pale in comparison to the outrage that will be visited upon the biotech industry when the truth comes to light. Until that time the industry and its cronies in government will frantically continue to try to keep the genie in the bottle – which is all the more motivation for people like myself to shine the light of truth on the matter.

Finally, here’s a reality check for those who would rush to Monsanto’s defense in the name of capitalism or freedom. The biggest discreditors of liberty and free enterprise today are not the socialists or communists arguing for the total abolition of the free market and the establishment of a centrally planned economy. As believers in centralized force, fraud and coercion they would never make an honest attempt at advocating for freedom, let alone profess a belief in it.

Rather, the biggest discreditors of the message of freedom today are the Big Business apologists, the defenders of corporatism who would dare call themselves freedom lovers. They are the wolves in sheep’s clothes who will defend the likes of Monsanto tooth and nail and side with those that have bought and paid for congresses and parliaments the world over a long time ago. There is no excuse for that level of ignorance and dishonesty, so whenever you come across one of them, please ask that they get educated and stop making fools of themselves. Those of us who are serious about freedom will thank you for it.