Nationalized Health Care is a Disaster
A friend of mine sparked the following essay on why a universal health care program in the United States is a horrible idea. Apparently he's taking a class which required him to watch Michael Moore's Sicko movie. He asked me what I thought about it and I responded with an earlier version of the essay below. Please note that I've never seen Michael Moore's movie and I refuse to watch the nonsense he produces. He's neither a journalist or an economist and has a highly skewed sense of entitlement.
Health care should not be nationalized in the United States. The current system is far from ideal thanks to an already overbearing government involvement. Making the government the universal provider of health care will not make things better. Rather the costs will sky rocket and the quality of health care will plummet.
There are heart wrenching stories everywhere, regardless of what system is in place. Looking at healthcare from an emotional standpoint, like anything, shrouds the facts. Sure, I would like for no one to ever get sick and we could all live forever. The truth is that we don't live forever. No system will ever grant us an eternal life or the perfect health care solution.
What people like to think about health care is that it is different from other resources. You pointed out that the industry is a business and people aren't in business to lose money. This is true, but the economics behind health care are the same as in any other industry.
All resources are finite and therefore a price dictates the allocation of such resources. What defines the finite resources in health care? The number of hospitals, doctors, nurses, and available drugs.
What private health care does is allows price for drugs, the doctors visit, the hospital stay and surgery to be governed by true supply and demand. This ensures that those who need the surgeries the most get it and those with the flu are placed lower on the priorities list. How? Well if it costs you money to go see a doctor then you're not going to just go see him for any old cold. You'll wait for it to be serious enough.
Once health care is nationalized, the priorities that are set for the allocation of resources (by supply and demand) are completely changed. All of a sudden people will go to the hospital for every little reason... why? Because there is no cost to individuals. To the average individual, health care is now "free."
So as we extrapolate the burden on already finite resources we need to think about the cascading effect we'll see. Doctors, surgeons and nurses will be overwhelmed and the priorities of who they'll see will change. All of a sudden the government, who's paying for the cost of the healthcare will institute benchmarks of how many people are seen in a day, who gets seen first, what the government is willing to pay and the associated bureaucracy. Inevitably four things will happen once these price controls go into place: demand will increase, there will be a shortage of supply, quality will deteriorate and a black market will be created. This is true of any price control on any industry (check out Venezuela and Zimbabwe).
Let's examine what each of these means in the health care industry:
1). Demand will increase: Supply and Demand models demonstrate that as the price for x decreases, the demand for x increases. If a person no longer has to pay for visits to the hospital, doctors office, etc, then that same person will go to the doctors office a lot more often, even for non serious reasons.
2). Shortage of supply: As people go to the doctors a lot more often, doctors, staff, beds, will be used a lot more often. Since the government will undoubtly demand a lower price than supply and demand will dictate, there will be less incentive for private companies to keep up with the increased demand (due to profit losses). Since there is no economic incentive, supply will continuously run shortages in all areas. A long term effect will be over all higher health costs for us as a nation as we will have fewer doctors (what's the point of 8 years of school if the money's crap?), fewer hospitals (who's going to open a money losing enterprise?), and health care will decline in quality in this nation.
3). Quality will decrease: As demand is not met, quality will decrease. Doctors who have to see more patients (because demand has increased) and therefore will get less time to spend with each patient. Procedures will take longer to have because waiting lists will develop. Eventually there will be fewer people entering the profession because the incentives will decrease. This could lead to less qualified individuals entering the industry.
4). A black market will appear: People who have the money will bribe doctors to get procedures done quicker and private practices will emerge in violation of the law. The government will end up subsidizing a decrepit system while those who can afford to will pay their own way (as they do now).
These aren't just theories. These are economic principles which predict what will happen. No matter how much we want things to be universally great, that's not how it will happen. All the good intentions in the world won't make it so. The world does not run on hugs and hope.
Rudy Giuliani recently gave a speech in which he cited the fact that he was diagnosed with prostate cancer a few years ago. He said that in the United States, prostate cancer has a much higher survivability rate than in the UK under nationalized healthcare. It's the same illness. What's the difference?
What people like to think about health care is that it is different from other resources. You pointed out that the industry is a business and people aren't in business to lose money. This is true, but the economics behind health care are the same as in any other industry.
All resources are finite and therefore a price dictates the allocation of such resources. What defines the finite resources in health care? The number of hospitals, doctors, nurses, and available drugs.
What private health care does is allows price for drugs, the doctors visit, the hospital stay and surgery to be governed by true supply and demand. This ensures that those who need the surgeries the most get it and those with the flu are placed lower on the priorities list. How? Well if it costs you money to go see a doctor then you're not going to just go see him for any old cold. You'll wait for it to be serious enough.
Once health care is nationalized, the priorities that are set for the allocation of resources (by supply and demand) are completely changed. All of a sudden people will go to the hospital for every little reason... why? Because there is no cost to individuals. To the average individual, health care is now "free."
So as we extrapolate the burden on already finite resources we need to think about the cascading effect we'll see. Doctors, surgeons and nurses will be overwhelmed and the priorities of who they'll see will change. All of a sudden the government, who's paying for the cost of the healthcare will institute benchmarks of how many people are seen in a day, who gets seen first, what the government is willing to pay and the associated bureaucracy. Inevitably four things will happen once these price controls go into place: demand will increase, there will be a shortage of supply, quality will deteriorate and a black market will be created. This is true of any price control on any industry (check out Venezuela and Zimbabwe).
Let's examine what each of these means in the health care industry:
1). Demand will increase: Supply and Demand models demonstrate that as the price for x decreases, the demand for x increases. If a person no longer has to pay for visits to the hospital, doctors office, etc, then that same person will go to the doctors office a lot more often, even for non serious reasons.
2). Shortage of supply: As people go to the doctors a lot more often, doctors, staff, beds, will be used a lot more often. Since the government will undoubtly demand a lower price than supply and demand will dictate, there will be less incentive for private companies to keep up with the increased demand (due to profit losses). Since there is no economic incentive, supply will continuously run shortages in all areas. A long term effect will be over all higher health costs for us as a nation as we will have fewer doctors (what's the point of 8 years of school if the money's crap?), fewer hospitals (who's going to open a money losing enterprise?), and health care will decline in quality in this nation.
3). Quality will decrease: As demand is not met, quality will decrease. Doctors who have to see more patients (because demand has increased) and therefore will get less time to spend with each patient. Procedures will take longer to have because waiting lists will develop. Eventually there will be fewer people entering the profession because the incentives will decrease. This could lead to less qualified individuals entering the industry.
4). A black market will appear: People who have the money will bribe doctors to get procedures done quicker and private practices will emerge in violation of the law. The government will end up subsidizing a decrepit system while those who can afford to will pay their own way (as they do now).
These aren't just theories. These are economic principles which predict what will happen. No matter how much we want things to be universally great, that's not how it will happen. All the good intentions in the world won't make it so. The world does not run on hugs and hope.
Rudy Giuliani recently gave a speech in which he cited the fact that he was diagnosed with prostate cancer a few years ago. He said that in the United States, prostate cancer has a much higher survivability rate than in the UK under nationalized healthcare. It's the same illness. What's the difference?
The five-year survival rate for prostate cancer in the U.K. is 74 percent. Of course, it is 98 percent in the U.S. {http://www.cato.org/pub_display.php?pub_id=8775}
Consider this excerpt regarding nationalized healthcare in Canada:
Canada currently spends more on healthcare as a share of our economy, adjusting for differences in ages, than any other industrialized country that guarantees access to care regardless of the ability to pay. In return for being a big spender, Canada is plagued with poor results on access to doctors and new technologies, worsening waiting times, and only moderate health outcomes. { http://www.fraserinstitute.org/Commerce.web/article_details.aspx?pubID=3461 }
Or the NHS (National Health Service) in the UK:
The BBC reported that in September 2006 more than 6,000 patients in eastern England had to wait more than 20 weeks to begin treatment already prescribed by their doctors, and over 40,000 patients in Wales had to wait more than six months for an outpatient appointment. Recently, there was also a London Times story in which Britain's Department of Health admitted that some patients will have to wait more than a year for treatment, and that 52 percent of hospital inpatients are currently waiting more than 18 weeks to receive treatment. Wait…I can go on…There are countless stories, like the 23 year-old with mild endometriosis who was told to have a full hysterectomy, because treating her illness with birth control pills or minor operations was "too expensive;" or that of a suicidal woman who was told it would take six months to see a psychiatrist. Also, NHS hospitals have notoriously poor hygiene, and the increasing prevalence of antibiotic-resistant MRSA and other infections throughout the National Health Service hospitals was blamed for 20 percent of the 5,000 British hospital deaths in 2005. I won't even start on the French…but they do consume some of the highest doses of tranquilizers and antidepressants in the world. Yea socialized healthcare! {http://www.vutorch.com/vutorch/2007/10/a-universally-b.html}***Beyond the debate over numerical minutiae, the basic fact is that Britain's system of socialized medicine is bad for your health. As of this writing, as many as 750,000 Britons are waiting to be admitted to NHS hospitals. Cancer patients can wait as long as eight months for treatment. Delays in receiving treatment are often so long that nearly 20 percent of colon cancer cases considered treatable when first diagnosed are incurable by the time treatment is finally offered. About 40 percent of cancer patients never get to see an oncologist. {http://www.cato.org/pub_display.php?pub_id=8775}
Or Belgium:
When conversations turn to health care, I am always reminded of my grandfather. He was 91 when he died. He had never been ill. He had never needed medical treatment in his whole life. Upon reaching his nineties, however, he required prostate surgery.Like all Belgians, my grandfather had paid wage-related contributions to cover health insurance throughout his entire professional life. The Belgian health care system is a so-called pay-as-you-go system. Today's young and healthy do not set money aside for their own future needs, but are compelled to pay for today's sick and elderly. As my grandfather had never needed much health care, he had been a net contributor to the system. Now was the first time he was going to claim something back.He had his operation in May. In November he was dead. The prostate operation had gone fine, but afterwards the hospital had given him an antibiotic drug that caused complete deafness. Though there were other, but costlier, drugs available, the hospital gave the old man the cheapest one. They knew about the side-effects, but it did not strike them as an unreasonable and unjust thing to do. Why should it? A man who has already had 90 healthy years of life surely has no right to complain about deafness when some people get more seriously ill or die at a far younger age. When my grandfather left the hospital he was completely deaf. He lost his will to live. Six months later, he was dead. {http://www.brusselsjournal.com/node/504}
Health care in this country is already being ruined by government programs. There is lots of room for improvement, but it is only available by leaving the government out of the loop.
Nationalized health care will deteriorate the quality of health care you receive and it will NOT provide quality health care to everyone. Over time the costs of health care will rise for all of us, and not just monetarily.
Nationalized health care will deteriorate the quality of health care you receive and it will NOT provide quality health care to everyone. Over time the costs of health care will rise for all of us, and not just monetarily.
Here are some interesting books & articles on the subject:
Applied Economics: Thinking Beyond Stage One by Thomas Sowell
The Cato Institute: http://www.cato.org/subtopic_display_new.php?topic_id=80&ra_id=6
Health Care Cuts in Europe: http://www.brusselsjournal.com/node/504
Best Buy: Privatized Healthcare Systems in Europe: http://www.brusselsjournal.com/node/665
Health Care Cuts in Europe: http://www.brusselsjournal.com/node/504
Best Buy: Privatized Healthcare Systems in Europe: http://www.brusselsjournal.com/node/665
National Health Tax: Another Bad Idea: http://www.fraserinstitute.org/Commerce.web/article_details.aspx?pubID=3461
A Universally Bad Idea: http://www.vutorch.com/vutorch/2007/10/a-universally-b.html
Rudy Knows Cancer: http://www.cato.org/pub_display.php?pub_id=8775
Economists say there's no such thing as a free lunch where as politicians get elected by promising free lunches. - Thomas Sowell
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