Is Inequality of Health Care Unjust? Part 1.

Last updated on: August 13, 2009 at 2:14 pm by Timothy Dalrymple

Is Inequality of Health Care Unjust? Part 1. 2009-08-13T14:14:25-04:00 Timothy Dalrymple

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One of the basic concerns underlying the health care debate today is health care inequality. Health care inequality is a species of economic inequality. In the next entry in this reflection, I will ask what we should think specifically as Christians of health care inequality. Here I want to pose four questions. First, is economic/health-care inequality unjust in itself? Is the inequality unjust in its extent–that is, is it so severe that it has become unjust? Would we be better to focus not on inequality but on the poverty of care received by the poor? And, if economic/health-care inequality is unjust or even undesireable, is it the government that should rectify the situation?

Luke the Physician

One of the reasons the health care debate is so intractable is because the disagreement is not only over strategies for providing health care, but over fundamental ideological differences regarding the role of government, the nature of freedom and the in/justice of inequality. Rather than the usual back-and-forth, I thought today we could focus on the deeper questions–and, when one wants to consider an issue fairly, one should always seek out the best spokespeople for the different sides.

So let’s begin with Paul Krugman’s 2006 piece in Rolling Stone on the new inequality (or look here for much the same). Krugman, to my mind, often plays a little loose with his figures (the comparison of average incomes between production workers at GM in the 1970s with non-supervisory workers at Walmat today, for instance, is a comparison of apples and oranges; also income inequality rose far more quickly under Clinton than it did under Bush, and the Bush tax cuts saved more money for the rich simply because the rich pay far more in taxes). Still, he is certainly correct that income and wealth inequalities have increased since 1970–a subject I addressed in part in an article for Patheos.

The change in income inequality, however, is exaggerated if we look too much at CEO salaries and the like. The richest 20 percent of households in 1975 earned 43.6 percent of the nation’s income, and the lowest quintile earned 3.3 percent. In 2006 the highest quintile earned 49.6% of the nation’s income and the lowest quintile 3.3%. In other words, the disparity, by this measure, increased from 40.3% to 46.3% over the course of thirty years.

When measured broadly, then (that is, not measuring the compensation for CEOs at Fortune 500 companies, but focusing on quintiles), the increase in disparity is not as great as it is sometimes made out to be. And in fact, the disparity today is nothing like “the Gilded Age” that Krugman so likes to evoke. The superrich (the richest .1%) today earn about half as much of the national income as they did in 1916, largely due to sharply progressive taxation. Also, one of the benefits of a capitalistic market with high concentrations of wealth at the top is that a lot of that money is given to charities–and a lot of it is invested, leading to innovation and the production of new technologies, new products, and cheaper products. It’s one of the reasons why, even though real income (in constant dollars) has not much increased since 1970, even the poor have far more stuff (computers, cell phones, ipods, flat-screen televisions, etc.) Thus the disparity is lesser if one focuses on consumption per person, in part because the rich pay so much more in taxes, and because the highest quintile tend to be families with children while the lower quintile tends to be singles and unmarried or childless couples

Yet the disparity itself is still distressingly large.

What does this have to do with the health care debate? Health care reform is driven by the perception of a moral imperative to provide all people with quality health care. ‘Quality’ health care is measured according to, and already enjoyed by, the wealthy. The real moral imperative is not so much toward quality of health care as it is toward equality of health care. It is perceived to be unjust that the poor receive worse health care than the middle class or the rich. By increasing the quality of health care for the poor and the lower-middle class, we can counter-balance the effects of economic inequality. Improving care for those who cannot afford Cadillac health care plans is a sort of proxy for income redistribution, or accomplishes much the same thing indirectly as wealth redistribution would accomplish directly.

The first question, then, is whether such economic disparity in itself is unjust. This piece from Will Wilkinson of the Cato Institute puts forward what might be regarded as one classic conservative perspective on economic inequality. Inequalities of income and wealth, he argues, are not unjust in themselves. It it not unjust that a person who works harder, has made better decisions and brings greater value to an employer should earn more. The problem, then, is in the causes of economic inequality–specifically, conservatives desire a rough equality of opportunity (I say ‘rough’ because enforcing equality of opportunity, past a certain point, may cost more than it is worth in government intrusions and losses of freedoms).

Finally, to read a liberal riposte to Wilkinson, click here. And for something still funner, watch the video of Jonathan Chait and Wilkinson carrying the argument further. Chait tries to paint Wilkinson and his ilk as simply not caring about the poor. But that’s not true. Conservatives care about inequalities at the beginning, less so at the end. So if you do not have the freedom to become a doctor and earn more, conservatives will object; they will not object if you choose not to become a doctor and then complain that the doctor makes more than you do. Yet where I find Chait and his ideological brethren more persuasive–and what I see as the second ‘justice’ question here–is in the contention that the amount of economic inequality is gratuitous and unjust.

Yet this is not something we can simply blame on political or economic ideology. It is, at least in part, a factor of broader changes in our culture, a reflection of what we value. As I argued in the article cited above, even if it is not economically unjust, it points to a moral failing in our society that we (we are the market; the market is a collective, not an impersonal entity) reward the teacher and soldier with $40K while we reward the CEO with $40M. We reward equity fund managers even more, even though they purchase companies, slash their payrolls and cut their wages and benefits, and sell the companies for extraordinary profits. Yes, the companies that emerge are more competitive nationally and internationally, but presumably that is not the only value by which we should judge companies. We, as consumers and investors, continue to reward and tolerate this, so that the 20 highest-paid fund managers made an average of almost $660M in 2007; a worker earning the average US salary would have to work for 22,255 years in order to make the same amount. (Also, due to tax loopholes, those equity fund managers pay a lower percentage in tax on their incomes than you do.)

I would tend to agree with Will Wilkinson, to a point. The problem is not economic inequality itself. The problems are poverty, inequality of opportunity, and systemic injustice. Yet the amount of economic inequality is worrisome, especially (a point which Wilkinson dismisses too quickly) when it comes to political influence, and conservatives would bolster their case if they did more, and publicized their efforts better, to address systemic injustices and inequalities of opportunity.

To return to health care, I agree with Gerald Seib at the WSJ that the debate over health care is largely a debate over how far government should reach into our lives in order to correct social inequalities. Especially in the current environment, where the government can fire auto-company executives, take over auto companies entirely and force financial firms into buyouts, the public is concerned by the creeping rise in government ownership of the economy.

Is it unjust that the wealthy can pay more and receive better health care than the poor? And even if it is not unjust–if it is only undesirable–is it more desirable, or less, that the government should intrude into the health care market even further than it already does? As in economic injustice, I don’t find injustice in the inequality itself, but the severity of the inequality is worrisome, and the ‘poverty’ of care for the poor needs to be addressed. I would improve the quality of the care received by the poor, but the fact of inequality would be a lesser concern. It is certainly telling that so many Congressmen and Senators have refused to commit their families into the care of the ‘public option.’

There is one further question that is especially important, I think, for Christians, and I will address it in the next entry on this theme. What should Christians and the Church do in response to health care needs, and what should we encourage the government to do on our behalf? It may be hard to remember this in today’s “big government” atmosphere, but the government is not the only solver of problems. What is the role of Christian businesspeople and Christian doctors in developing high-quality care at low cost? What is the role of the Church in making sure that those who need care receive it?

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