(MINNEAPOLIS) – This is Part II of an indepth look at the debate over how to provide health care as part of a series discussing the issue of universal health insurance in the United States. The Red Herring of Socialized Medicine Most any effort to expand the coverage of insurance to more Americans will be attacked as […]
(MINNEAPOLIS) – This is Part II of an indepth look at the debate over how to provide health care as part of a series discussing the issue of universal health insurance in the United States.
The Red Herring of Socialized Medicine
Most any effort to expand the coverage of insurance to more Americans will be attacked as “socialized medicine.” We all agree that “socialism” is bad, just one step up from “communism.” But what socialism really means is a system where the government owns the means of production and allocates goods and services.
If the term “socialized medicine” meant anything, it would refer to a system where doctors were government employees and hospitals and other providers were government agencies like the Treasury or the National Park Service. And there are two, seemly contradictory things to say about that. First, we already have that form of medicine in the U.S. (and it seems to work well), and secondly, pretty much no one is advocating expanding it.
There are two parts to the issue of health care: how we pay for it, and how we provide it. Advocates of universal health insurance by and large are not advocates of having the government “run” and own health care providers. Socialized medicine is a smear term, a straw person attack.
The best health care system in the world?
As Americans, we’re justifiably proud of our country and all it has accomplished. But pride often spills over into claiming that we’re the best. However, any claim that the U.S. health care system is other than average runs into a blizzard of data.
What about cost? The World Health Organization finds the U.S. is among the most expensive systems in the world. At 15.3% of GDP in 2006, only Timor-Leste was higher. Other highly industrialized, wealthy, nations were much lower: France at 11.0%, Switzerland at 10.8%, Germany at 10.6%, Canada at 10.0% and the United Kingdom almost half the U.S. figure at 8.2%. Looked at another way, the average U.S. citizen spent $6,719 a year on health care (in direct expenditures or taxes) whereas in Canada it was $3,673.
High cost might be justified if our outcomes were superior to all those other countries. But it is well-known that this is not the case. Comparisons here are complicated due to the diversity of the U.S. population and legitimate arguments over how the comparison should be judged. But some figures give one pause. Again from the World Health Organization, life expectancy at birth in the U.S. is 78, which is certainly well above the third world average, but not any different than other industrialized nations. An earlier report of the WHO in 2000 rated the U.S. system at 37th best in the world, well behind the U.K (18th) and Switzerland (20th). More embarrassingly we were bested easily by Greece (14th) and Italy (2nd.)
On top of this empirical data is an avalanche of anecdotes: I’d wager that the majority of Americans over the age of 30 have at least one health care horror story of dealing with an insurance company or not getting the care they needed.
While we find it hard to say it in public, a considerable fraction of U.S. citizens are not happy about our system. The Gallup polling organization reports that between 70 and 80 percent of respondents are dissatisfied with the cost of health care, and about 70% say the system is either in a “state of crisis” or has “major problems.” Despite that, a strong majority say the quality of health care is either “excellent” or “good.”
Providing health care: four models
In his well-regarded book on the U.S. health care system, The Healing of America, T.R. Reid surveyed the world’s systems, divided them into four categories, and identified a country that exemplified each of the systems. They were:
- The Bismark model: private health insurance, private health care providers, exemplified by Germany.
- The Beveridge model: taxes cover health costs, health care providers work for the government, exemplified by Great Britain.
- The National Health Insurance model: a universally mandidated health insurance program, with privately owned providers of health care, exemplified by Canada.
- The Out-of-pocket model: people pay for their own health care out of their own pocket, and providers of health care are privately owned, exemplified by Cambodia.
The unique aspect of the U.S. system is that we have elements of all of these models. As Reid indicates, for most employed people under 65 we’re like Germany, for those over 65 we’re like Canada, for people without health insurance we’re like Cambodia.
But the biggest shock to most Americans is to realize how many Americans are covered under truly socialized medicine, like the U.K. If you’re in the military or a vet, or a Native American you are covered by government operated health care. And no one seems inclined to get rid of those systems. Despite all the anger from the right about Obamacare and clarion calls about creeping socialized medicine, few seem to think there is any harm in it for our military.
Why is health care so expensive? And why can’t we cure that problem by the great talisman of “competition” and the “free market” as so many think? The problem is identified by a concept called “market failure.”
It is an article of faith in America that markets are perfect and self-regulating and that if there is a crash or any problem in the economic system it can be cured by making the market more free.
But this isn’t universally true. For markets to work, the consumers have to have choices. They have to be able to decide how much to buy and where to buy it from. If they are forced to buy, or have no chance to choose, the market can’t be efficient.
What about health care? The consumer of health care is not like the consumer of a certain food or a type of clothing. If the cost of sugar goes way up, you can decide to buy less sugar, signaling the producers of sugar that they might need to lower their prices. But if the cost of treating a heart attack goes up, it doesn’t mean that people with heart attacks can just decide they won’t get it treated. Nor does it mean that they can shop around for the lowest bid on heart by-pass surgery or decide to buy some other health care product instead.
There is no doubt that competition has its place in providing health care, but it is not going to work the way it works in the markets for computers or clothing.
Can we learn from others?
If we’re serious about getting better health care we ought to begin by studying other countries for both what works and what doesn’t. But that would require us to admit that other countries could teach us something.
The views expressed in this article are the author’s own and do not necessarily reflect Mint Press’s editorial policy.