Socialized Medicine

President Obama is attempting to push us to one of the ultimate dreams of the left – socialized medicine. He even claims that he can pay for it. That would be quite an accomplishment considering that the Congressional Budge Office has estimated the cost over the next ten years to be $1.6 trillion. Of course, this doesn’t include the inevitable cost overruns that occur every time the government proposes a new program. For example, when Medicare was introduced in 1965, the estimated cost in 1990, as adjusted for inflation, was $12 billion. The actual cost in 1990 was $98 billion. Not exactly within the margin of error.

Every one an a while, Congress attempts to rein in the costs of Medicare by reducing the payments to doctors and other health care providers. This creates an incentive on the part of these providers to schedule unnecessary tests or to send patients from specialist to specialist in order to increase revenue. This also forces these providers to charge more from private insurance companies in order to offset the low rates of Medicare.

This causes damage to the entire society. Those covered by Medicare are hurt because the medical profession is less efficient. Those not covered by Medicare are hurt because they are charged more to offset the lower rates paid by Medicare.

The American norm of having employers pay for their employees’ health insurance is a relic of the 1940s when the federal government imposed wage controls. In order to attract employees, businesses were forced to offer non-cash benefits, such as health insurance. The government allowed the businesses to deduct these insurance payments without a corresponding inclusion of these payments in the taxable income of the employees. This, of course, distorted the traditional fee for service system. It also created the incentive to get medical care through employers rather than each person obtaining it on his own. As RSP founder and managing editor, The Daily Pander, points out, employer provide health insurance has really become employer provided pre-paid health care. The insurance component, as traditionally defined, has been lost.

Think about government provided health care as a large buffet in Las Vegas. You pay a relative small fee compared to the amount that you are allowed to consume. Sure, if everyone eats a lot, the cost will increase, but it will be defused over all of the customers at some point in the future. It has no effect on the cost that you are going to pay now. Therefore, you are incentivized to consume as much as you possibly can. Once small passing twinge in your chest, go see a cardiologist. Your nose is running, you’ve got to the infectious disease specialist. There is no incentive to compare costs among providers.

In order to control costs, the government will impose rationing. This has happened in both Canada and the United Kingdom. In Canada, the rates of death from colon cancer is 25% greater than in the US. In the UK, Her Majesty’s government recently announced that they will not make state of the art breast cancer drugs available to those women suffering from that disease because of the cost.

Government imposed rationing sacrifices quality and innovation. It also imposes long wait times. There is no way to control costs without long lines and a lack of incentive to innovate. Can anyone name the last major medical breakthrough or new drug that occurred in either Canada or England?

If our medical system is so bad, why to foreigners come here for treatment that is unavailable in their home countries. Canada can ration its health care in large part because we act as their safety net. Remember all of the royals that have come to the US for treatment when they are sick – Jordanian and Saudi kings ring a bell?

President Obama’s plan will eliminate all that is best with our health care system. We must ask ourselves if this is worth covering the relatively few who are truly uninsured. I think not.


Anonymous said...

1. HR 676 is a single payer bill. It would socialize health insurance, not medical providers. This is similar to Canada, France, and Germany. England, with its National Health Service, really does have socialized medicine.

2. Obama is not supporting HR 676 or socialized medicine. He is supporting a public option as part of health care reform.

I can't tell you the last medical breakthrough from Canada or England, but that doesn't mean it wasn't recent. Why don't you do some research and tell us.

"The relatively few who are truly uninsured" is a another rhetorical trick, second cousin to "The relatively few who are truly overtaxed." Few relative to what standard?

Regarding cancer survival, see http://www.guardian.co.uk/society/2008/jul/17/health.cancer. Particularly note the comments

"the most interesting finding from the study is how, in some countries patients appear to get good care wherever they are - which is not the case in the US, despite its apparently good performance."


"The results see the US take pole position in breast and prostate cancer survival and second place in colorectal cancer survival for both men and women. On the numbers alone Cuba beats the US, with the best survival rates in all but prostate cancer."

Steven L. Baerson said...

The Democrats in Congress have said the the "government option" is the first step toward a single payer system. The President has favored that plan in the past and I'm sure he will again. There is no rhetorical trick as to the relatively few who are truly overtaxed. We are all over taxed!

Anonymous said...

Those whose incomes are sufficiently low to not pay income tax are overtaxed?

Some single payer advocates see the "public option" as a step towards single payer, some don't. The phrase "strong public option" has become part of the debate among them.

Steven L. Baerson said...

Those whose incomes are sufficiently low so as not to pay income tax are, in fact, overtaxed. Think of sales tax, payroll tax, utility taxes, gas tax, real estate taxes...