RALEIGH – It turns out that socialism doesn’t work better than capitalism in getting people what they need and want at the lowest possible cost.
I know this may come as quite a shock to some readers. But I’m just reporting the facts, as laid out by Dr. John Goodman of the National Center for Policy Analysis. In a new paper, he punctures the myths most commonly perpetrated by advocates of a government-run system of health insurance in the United States.
You’ve no doubt hear some of these arguments in the past. If America’s (somewhat) more private-oriented system for financing health care is better than government-run systems in Europe and Asia, why do Americans not live longer and healthier lives? Why don’t they get better-quality medical care? Why does American health care have a much higher administrative cost?
Goodman has answers to all these questions – and many more. On the matter of the longevity and overall health of national populations, they are influenced far more by economic, social, and cultural conditions than they are the financing system for health care. Life expectancies are higher in many countries than in the U.S., but that’s because of issues such as diet and exercise. For medical care, the more-relevant comparison would be the morality ratio for major diseases – that is, the percentage of those diagnosed who die of the ailment.
American health care stacks up well by this measure, which involves the actual quality and delivery of medical services. The mortality ratio for breast cancer is nearly 50 percent in Britain and New Zealand, 35 percent in France, 31 percent in Germany – but only 25 percent in the U.S. For prostate cancer, the ratios are even more disparate: 57 percent in Britain, 49 percent in France, 44 percent in Germany, 25 percent in Canada, and only 19 percent in the U.S.
Residents of countries with nationalized, socialized health insurance are far more likely to have to wait for hospital beds, for exams, and for medical treatments than Americans are. While 30 percent of Americans spend more than 20 minutes with their doctor on average, 20 percent of Canadians and just 5 percent of Brits do. Those with socialized health insurance pay plenty, but the price tag is as much in pain, suffering, and convenience as it is in currency.
But what of administration? Critics complain that private insurers junk up the system with excess paperwork, bureaucracy, and marketing costs. They point to lower apparent administrative-cost ratios for Medicare (2 percent) and for national health systems elsewhere (17 percent in Canada) compared to the U.S. health care sector as a whole (31 percent). But, as Goodman notes, these are faulty comparisons. Monopoly systems can impose significant compliance costs on providers and patients that never show up in dollar accounting. They also rely on higher tax collections, which have their own costs not usually included in the calculation. A study by Milliman & Robertson estimated that Medicare and Medicaid actually spent or imposed 27 cents in administrative cost for every dollar of benefits, while the ratio was 16 cents for private insurance.
Socialism generates poor outcomes at higher real costs. Who could have guessed that?
Hood is president of the John Locke Foundation and publisher of Carolina Journal Online
p.s. The release of Goodman’s paper turns out to be excellent timing, as the John Locke Foundation just happens to have another expert on single-payer health insurance, Sally Pipes, in town on Wednesday to talk about, among other things, the Canadian health care system — and why we don’t want to copy it. Sally is the head of the Pacific Research Institute in San Francisco and a Canadian herself. We may still have a few seats available for the luncheon over at the Brownstone Hotel in Raleigh at noon, though you better call ahead (828-3876 in the Triangle area) just to make sure.