Healthcare Is Infrastructure

You don't shop for an ambulance

Try this. You're having a heart attack. You call 911, the ambulance arrives. At what point during that sequence do you comparison-shop? When do you check Yelp reviews for the nearest ER, or weigh the cost-benefit ratio of various cardiac surgeons and make a rational consumer decision?

You don't, and you can't. That single fact demolishes the framework we've built around healthcare in the United States.

We treat healthcare like a consumer good, something you choose and evaluate and purchase in a competitive marketplace. But it doesn't behave like a consumer good. It behaves like infrastructure: like the electrical grid, the highway system, the water supply. You need it, you can't predict when, you can't refuse it when the moment comes, and the consequences of going without are catastrophic.

Kenneth Arrow figured this out in 1963.

The Arrow problem

Arrow was an economist, a Nobel laureate, not exactly a radical. His 1963 paper, "Uncertainty and the Welfare Economics of Medical Care," is among the most cited economics papers ever written, and its argument is simple: healthcare markets are fundamentally different from other markets, and treating them as equivalent produces bad outcomes.

He identified the core asymmetries. Patients don't know what they need; doctors do. You can't test a surgery before buying it or return a misdiagnosis. Demand is unpredictable and often involuntary. The stakes are life and death, which means the normal assumption about consumer behavior, that people make calm comparisons and walk away when the price is too high, falls apart completely.

Every first-year economics student learns the catalog of market failures. Healthcare hits every entry on the list: information asymmetry, externalities, barriers to entry, non-competitive pricing, inelastic demand. It's a textbook case, taught in the same textbooks that somehow never persuade anyone in Congress.

The numbers are obscene

The United States spends more on healthcare per capita than any other country on earth. In 2022 that number was $12,555 per person, according to CMS data. Germany spends about $7,383. The UK spends about $5,138. Japan spends around $4,691.

What do Americans get for the extra money? Worse outcomes. Life expectancy in the US is lower than in every other high-income OECD nation. Infant mortality is higher. Maternal mortality is dramatically higher, more than double the rate in France or the UK. Preventable deaths from treatable conditions happen at significantly higher rates here than in peer countries.

We pay the most and get the least. This isn't a controversial claim. It's the data, compiled by the OECD, the Commonwealth Fund, the WHO, and pretty much every organization that has ever compared healthcare systems across borders.

So where does the money go?

The 34% problem

Roughly 34% of US healthcare spending goes to administration. Billing, coding, insurance processing, prior authorizations, claims denials, appeals: the bureaucratic apparatus required to maintain the fiction that this is a functioning marketplace.

Canada's single-payer system spends about 12% of total spending on administration. Taiwan, which rebuilt its system in the 1990s partly by studying what not to copy from the American model, runs lower still.

A 2019 study in the Annals of Internal Medicine by Himmelstein, Campbell, and Woolhandler estimated that the US spends over $812 billion a year on healthcare administration, more than enough to cover every uninsured American. We aren't short the money to provide universal coverage. We're spending it on paperwork.

Duke University Hospital has 900 beds and 1,300 billing clerks. That ratio should make you angry, not confused, not resigned. Those are human hours and talent devoted not to making anyone healthier but to navigating a billing system so complex it requires more administrators than patient beds.

Why markets fail here

Market defenders have a ready answer: more competition would fix this. Let people buy insurance across state lines, increase price transparency, give consumers better information.

That misses Arrow's point. The problem isn't insufficient competition. The problem is that healthcare isn't a market good in the first place.

You don't choose when you get cancer. You don't shop around during a stroke. Your four-year-old with a 104-degree fever at 2 AM is not a rational economic actor. The whole premise, that consumer choice drives efficiency and lowers cost, depends on conditions healthcare by its nature cannot satisfy.

Price transparency is the clearest example. Hospitals are now required to post prices. Have you looked at a hospital chargemaster? It's thousands of pages of CPT codes that mean nothing to anyone without billing training, and even if you could decode it, the number you see bears no relationship to what you'll actually pay, which depends on your insurance, your deductible, your network status, and whether the anesthesiologist at the in-network hospital happens to be out-of-network. The complexity would be farcical if people weren't going bankrupt from it. Two-thirds of bankruptcies in the US involve medical debt. That's a market failing its most basic obligation.

What infrastructure thinking looks like

When we treat something as infrastructure, we accept a few principles: universal access, public funding, standardized quality. You don't prove your creditworthiness to drive on an interstate. You don't get a faster fire department response for being richer. Your library card works whether you're rich or poor.

We made those decisions about roads, water, electricity, fire protection, and public education because some goods are too essential and too poorly served by markets to be left to market logic.

Healthcare clears that bar. It's essential, because people die without it. It's universally needed, because everyone requires medical care eventually. And it's badly served by market logic, as sixty years of evidence since Arrow's paper have shown past any reasonable dispute. Every other wealthy democracy has worked this out. Single-payer, multi-payer with heavy regulation, a national health service: the structures vary, but every peer nation has decided that access shouldn't hinge on employment status or ability to pay. The US stands alone in pretending otherwise.

The real objection

The objection to treating healthcare as infrastructure is rarely economic. The economic case for universal coverage has been made, repeatedly, by researchers across the political spectrum. The Congressional Budget Office has scored various single-payer proposals and found net savings. The Mercatus Center, a libertarian think tank funded by the Koch network, accidentally produced a 2018 study showing that Medicare for All would cost less over ten years than the current system.

What's left is ideological: the belief that government shouldn't provide things even when public provision is more efficient and more equitable, that market logic is morally superior to public provision regardless of what the outcomes say. It's a theology, not an analysis.

And people die for it. Not metaphorically. A 2009 study in the American Journal of Public Health estimated that lack of insurance contributed to roughly 45,000 deaths per year. The figure has been updated and argued over since, but even conservative estimates land in the tens of thousands. These are people who had treatable conditions and went untreated, because we've decided healthcare is something you earn rather than something you're owed.

Stop pretending

Healthcare is not a television or a car. It isn't something you evaluate, compare, and buy according to your preferences and budget. It's something that happens to you, usually without warning, and the cost of not receiving it is suffering and death.

We know this. We've known it since Arrow, since every international comparison study, since the first person went bankrupt for the bad luck of getting sick in the wrong country.

Treating healthcare as infrastructure wouldn't be radical. It would be obvious. The radical position is the one we already hold: that a system costing twice as much and delivering worse results is acceptable because it conforms to an ideology about markets. That's not pragmatism. It's faith, and it's killing people.