Obama’s Waterloo
From the April 19, 2010, issue of NR.


The second great difference is that the introduction of the NHS reflected the settled opinion of almost the whole of British society. Elite opinion was concerned about the health of the poor, and Tories as much as Labour were prepared to use state power to improve it. Neville Chamberlain, as health minister in the inter-war years, had brought in measures to boost working-class health. World War II promoted collectivism: By 1944, only a few classical-liberal eccentrics (Hayek being the best-known) objected to compulsory collective social provision. And thus, the main legislative lineaments of the 1948 National Health Service were actually drawn up by the Conservative Henry Willink, health minister in Churchill’s coalition government, and presented to Parliament in 1944. Small differences separated the two versions — Labour nationalized the hospitals that Willink had wanted to keep independent — but they were essentially the same comprehensive health service.

Obamacare is plainly not the result of universal agreement — and not merely because Republicans oppose it. Most Americans do so, according to most polls. Nor is it the practical expression of a universally accepted collectivist philosophy; even after the financial crisis, more Americans support free-market ideas than favor government intervention. It cannot therefore expect the instant but lasting popularity of the NHS.

The third difference between the two systems is the patients. Brits in 1948 were a deferential people in a much more hierarchical society. Rationing was part of their everyday lives. They believed a doctor when he said that nothing could be done for them. Most modern Americans get good health care. They have learned to expect it. They will complain if they don’t get it. So they will be much more critical of Obamacare than Brits have been of the NHS.

A final difference is that the NHS and Obamacare were introduced under very different financial conditions. The NHS was initially cheap — and it was forecast to get cheaper as people’s health improved and they needed less medical treatment. This forecast proved wrong for a devastating reason — namely, Powell’s first law (yes, it’s that man again), which states that spending on health care, unless restrained by price, is capable of rising to consume the entire national income. Thus, as patients demanded more, and as scientists invented more (and more expensive) treatments, there was a tendency for health-care spending to rise indefinitely.

This was disguised for a long time by various clever devices. Not until 1962 did a British government embark on a hospital-building program. It devoted almost all available finance to current spending. The NHS also succeeded in underpaying doctors by importing them from poorer countries (while British doctors left for Australia and the U.S.). And a local GP explained to me in the 1960s that he dealt with the problem of too many patients arriving in his surgery by simply assuming that they were healthy — unless they returned for a second visit.

By such devious methods, NHS spending was held down to 6 percent of Britain’s GDP as late as the 1970s. That helps to explain how Britain, though burdened with socialized health-care spending, was able to maintain a decent defense structure. America’s spending on health care even before Obamacare starts is in the mid-teens as a percentage of GDP. Even if that percentage falls, as the Democrats forecast, the federal share of it will almost certainly rise sharply — with the malign consequences for America’s world role that Mark Steyn forecasts.

And rise it will, as Powell’s first law predicts. As the British became less deferential, they demanded better services. NHS spending has risen to more than 9 percent of GDP. It will rise further. But because the system is inefficient, productivity is static. When asked what improvement a patient might personally see from this massive extra spending, a skeptical wag replied: “He’ll be treated by a richer doctor.”

Brits accept this because they were long ago corrupted by the free-lunch aspect of the NHS. Yet Obamacare is not even advertised as a free lunch. Unlike the NHS, it rests on people’s being required to pay. Is there an example of what happens when people are required to pay for health care? Well, yes: In 1988, Congress passed the Medicare Catastrophic Coverage Act to provide insurance for catastrophic illnesses and long-term nursing care. The act had bipartisan support. But seniors eligible under the law were asked to pay a premium ranging from $4 per month to $800 per year. When they rioted and attacked Rep. Dan Rostenkowski’s car, Congress promptly repealed the law.

Repeal is not impossible. It may even be Obama’s Waterloo.

Mr. Hume is the pseudonym of a European writer on politics and health care. This article first appeared in the April 19, 2010, issue of National Review.


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