Shapiro: We're basically at the worst available point.
If privatization is here and nationalization is here,
we are here.
We're just at the low point of the curve.
Student: My question is actually
about your opinion on healthcare,
because I know that you believe
that privatization of healthcare is the most effective means
to solve the problems that we have.
Yet besides thought experiments,
I really haven't seen any evidence for that.
For me, when you look at the facts,
you look at more socialized programs, such as Canada,
they spend 10 percent of the GDP on healthcare,
and yet their life expectancy is in the low-to-mid eighties.
You look at the UK,
and they spend 8.8 percent of their GDP on it
and the life expectancy is also in the eighties.
But then look at the United States,
we have a more privatized system.
We spend 15.4 percent of our GDP on it,
and yet our life expectancy is lower.
My question is basically, if you look at all that,
what it tells me is socialization of healthcare
covers more people, makes life expectancy longer,
and it's just more effective all around.
Do you have any evidence or examples where privatization
has actually increased healthcare?
Shapiro: The truth is that we haven't actually seen
a move from a socialized medicine system
to a privatized system.
So it would be hard to find an example
where moving from one of those examples
to a privatized system works.
And we haven't really seen even a system
where we move from privatization to universal health care
in the sense that the system has never been deregulated.
My basic premise is that what we have now
is almost the worst system.
We have a mixed system, which has driven up costs
because of subsidizations from Medicare and Medicaid,
and has also driven up cost because of regulation.
And then it's still privatized.
Doctors are still charging a lot of money.
The best example that I can use is a small-scale example,
because it doesn't exist in large scale.
By the way, we can talk about problems
in socialized medicine systems.
We can talk about the fact
that there is rationing of healthcare that does occur
in places like Canada and Britain
in a way that doesn't with regard to surgery,
particularly in the United States.
We can talk about cancer survival rates
in the United States,
which are better than cancer survival rates
in socialized medicine countries.
We can talk about the fact that
you really shouldn't statistically compare life expectancy
between Canada and Britain and the United States
because the populations are incredibly different,
not just in terms of ethnic diversity.
The ethnic diversity in the United States is very different
from the ethnic diversity of Canada.
Canada is nearly homogenous.
The ethnic diversity in the United States is very different
and different ethnic groups
do have different health problems.
For example, heart disease is more prevalent
in black men than it is in white men.
That's just a fact that has nothing to do
with moral culpability or anything.
That's just a reality that is taught in medical school.
It's the way they profile patients.
So you have to find a comparable population to start.
Then you'd have to actually model it out.
Let me backtrack for one second
before I get to the example.
The theory is that the shortages in healthcare
are largely driven by lack of supply,
not rationing of supply.
So there aren't enough doctors is the problem.
If you had more doctors and open competition
it would drive price down.
Now the best example of this is in laser eye surgery.
So laser eye surgery, in the United States,
is almost entirely deregulated.
It's not covered by insurance for most people,
it's considered an elective surgery.
And that means the doctors
actually have to compete on the open market.
One of the big problems in our healthcare system
is if you walk into the doctor's office and you say,
I want an x-ray, how much will it cost me?
The doctor literally will not tell you.
The doctor literally can't tell you,
because they have to run it through the insurance company.
They have to bargain with the insurance company.
They may be covered by this insurance company,
that insurance company.
In the socialized medicine system, they just say zero.
Well, that leads to an increased demand
because there is an elasticity of healthcare demand.
And that leads, in essence,
to shortages in healthcare supply.
Overall, that means that people may live longer
because people can access healthcare
whenever they want supposedly.
But it also means that when it comes to elective surgeries
or when it comes to surgeries that can be delayed,
those are delayed very often
and that's something you see
from the National Health Service.
When it comes to completely privatized systems,
if there were complete transparency and price,
then you would see an actual supply-demand curve.
This is what you see in laser eye surgery,
which used to cost $20,000 an eye, $10,000 an eye.
Now it costs $2,000 an eye because every single doctor
went into ophthalmology or optometry.
All of them.
There are four different fields in medicine.
My wife's a doctor as everyone knows
and I've said a thousand times.
So that means that virtually everyone in her class
went into what they call the road system, right?
Radiology, ophthalmology, anesthesiology, dermatology,
mainly because those are the least regulated areas
of the healthcare system
where you have to deal less with insurance.
So I think that there's almost two separate questions
with regard to healthcare.
How well are the systems in Britain and Canada working?
And by the way,
if I were going to pick a socialized health care system
that I think works best, I pick Switzerland actually,
where there's an actual mandate,
but I think that because it actually is more privatized
and there is some competition in the marketplace.
But if you're just talking about what could you do
to make the American healthcare system better?
We're basically at the worst available points.
If privatization is here and nationalization is here,
we are here.
We're just at the low point of the curve.
So I think if you move in either direction,
it will get better probably in certain ways,
in certain ways worse.
I'm also very much afraid of a government
that comes in and is going to have to mandate
how doctors care for patients.
Because one of the problems that nationalized systems
have had is people opting out of that.
Doctors opting out of caring for patients in this way.
They've had to import doctors, for example,
in places like Britain,
there's a shortage of doctors in places like Israel,
because who wants to go through a thousand years
of medical school to make sixty grand a year.
[applause]