Healthcare Is Infrastructure

You Don't Shop for an Ambulance

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

You don't. You can't. And that single fact demolishes the entire framework we've built around healthcare in the United States.

We treat healthcare like a consumer good, something you choose, evaluate, and purchase in a competitive marketplace. But healthcare doesn't behave like a consumer good. It behaves like infrastructure. Like the electrical grid. Like the highway system. Like the water supply. You need it. You can't predict when you'll need it. You can't refuse it when you do. And the consequences of not having it 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 one of the most cited economics papers ever written. Its argument is simple: healthcare markets are fundamentally different from other markets, and treating them as equivalent produces bad outcomes.

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

Every first-year economics student learns about market failures. Healthcare hits every single criterion. Information asymmetry. Externalities. Barriers to entry. Non-competitive pricing. Inelastic demand. It's a textbook case, taught in the same textbooks that somehow never convince 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 all that 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 occur at significantly higher rates in the US than in peer countries.

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

So where does the money go?

The 34% Problem

Here it is: roughly 34% of US healthcare spending goes to administration. Billing. Coding. Insurance processing. Prior authorizations. Claims denials. Appeals. The bureaucratic infrastructure required to maintain the fiction that this is a functioning marketplace.

In Canada's single-payer system, administrative costs eat about 12% of total spending. In Taiwan, which rebuilt its system in the 1990s partly by studying what not to do from the American model, admin costs are even lower.

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

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

Why Markets Fail Here

Market defenders usually have a ready response: more market competition would fix this. Let people buy insurance across state lines. Increase price transparency. Give consumers better information.

This misses Arrow's point entirely. The problem isn't insufficient competition. The problem is that healthcare isn't a market good.

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 entire premise (that consumer choice drives efficiency and lowers costs) requires conditions that healthcare by its nature cannot satisfy.

Price transparency is a perfect example. Hospitals are now required to post prices. Great. Have you looked at a hospital chargemaster? It's thousands of pages of CPT codes that mean nothing to anyone without medical billing training. And even if you could decode it, the price you see has no relationship to the price you'll pay, which depends on your insurance, your deductible, your network status, whether the anesthesiologist at the in-network hospital happens to be out-of-network, a level of complexity that would be farcical if people weren't going bankrupt from it.

Two-thirds of bankruptcies in the US involve medical debt. That's not a market functioning well. That's a market failing its most basic obligation.

What Infrastructure Thinking Looks Like

When we treat something as infrastructure, we accept certain principles. Universal access. Public funding. Standardized quality. You don't have to prove your creditworthiness to drive on an interstate. You don't get a better fire department response based on your income. Your library card works whether you're rich or poor.

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

Healthcare meets every one of those criteria. It's essential; people die without it. It's universally needed; everyone, at some point, requires medical care. And it's poorly served by market logic, as sixty years of evidence since Arrow's paper have demonstrated beyond any reasonable dispute.

Every other wealthy democracy has figured this out. Whether it's single-payer, multi-payer with heavy regulation, or a national health service, every peer nation has decided that healthcare access shouldn't depend 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 about economics. 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 study in 2018 showing that Medicare for All would cost less over ten years than the current system.

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

And people are dying for it. Not metaphorically. A 2009 study in the American Journal of Public Health estimated that lack of insurance contributed to approximately 45,000 deaths per year. That number has been updated and debated, but even conservative estimates put it in the tens of thousands. These are people who had treatable conditions and didn't get treated, because we've decided that healthcare is something you earn rather than something you're owed.

Stop Pretending

Healthcare is not a television. It's not a car. It's not something you can evaluate, compare, and purchase according to your preferences and budget. It's something that happens to you, often without warning, and the consequences of not receiving it are suffering and death.

We know this. We've known it since Arrow. We've known it since every international comparison study. We've known it since the first person went bankrupt because they had the bad luck to get sick in the wrong country.

Treating healthcare as infrastructure wouldn't be radical. It would be obvious. The radical position is the one we currently 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.