One of the most talked-about issues in Sacramento, Washington, D.C., and all over the U.S. this past summer was health care reform. Between the politicking of presidential candidates, Michael Moore’s health insurance exposé “Sicko,” and a battle between the Governor and state Democrats right here in California, it almost seemed as if the American medical industry was on the verge of collapsing.
A common refrain heard among this cacophony of impassioned polemics was that the U.S. should adopt a single-payer health care system similar to that of Canada, and to a lesser extent, the U.K.
One of the more prominent voices in this choir belonged to California state Sen. Sheila Kuel, who is expected to soon resurrect SB 840, a bill vetoed by Gov. Schwarzenegger last year that would mandate government-provided universal health insurance for everyone in the state.
Despite the noble sentiment behind such a bill, its passage into law would constitute a terrible mistake. In every country that has tried to adopt it, socialized medicine has been a disaster.
Not because there’s something inherently wrong with socialized government services; health care is in some ways a natural monopoly that is able to produce more efficiently under a one-firm system than under competition. In fact, according to a study conducted by Harvard Medical School, nearly 30 percent of U.S. health care dollars are spent on administrative overhead costs that could be eliminated through consolidation.
No, the fundamental flaw behind socialized medicine is that it assumes the problem to be allocation, rather than production. Any universal health insurance program will naturally boost demand for medical services, thereby inflating prices. If taxpayers wish to avoid paying through the nose, the government will have to set price ceilings on things like doctors’ and nurses’ salaries, prescription drug costs, and medical bills. Such a policy can only yield two possible results.
In the best case scenario, the quality of health care simply declines. Fewer, less qualified medical personnel are available to treat patients, drug companies produce progressively less innovative treatments, and hospitals invest less money in technology.
These claims aren’t theoretical: In Canada, the average waiting time to see a specialist is 17.6 weeks. In the U.S., only 23 percent of patients wait longer than a month. In France and England, the mortality rate for prostate cancer is nearly one in two. In the U.S. it’s one in five. Canadian Medicare has three PET scanners. The U.S. has 1000.
In the worst case scenario, corruption becomes rampant because there’s no mechanism for allocating products and services, a role previously filled by equilibrium pricing. Bureaucrats, in charge of determining who gets what of the little that’s available, become susceptible to bribes and influence.
Health care in America is not in shambles, but it certainly could be better. High costs have resulted from unhealthy lifestyles, ignorance of preventative medicine, and a broken insurance system. And, even though the current estimate of uninsured Americans (approximately 16 percent) is highly inflated, we should make sure that the number is down to zero.
There are many ways to fix these problems, but trading private incompetence for incompetence by the government just isn’t one of them.
