Magazine | June 03, 2019, Issue

Socialized Medicine Is Bad for Your Health

(AJ Photo/Science Photo Library/Getty Images)
Imagine a shoe store with just one brand of sneakers; now apply that to medical care

Of all the forms of socialism that persist in the West, socialized medicine may well be the most persistent — and the most consequential.

But first, it’s worth defining exactly what “socialized medicine” is, and what it is not. “Universal coverage,” a system in which everyone has health insurance, is not necessarily socialized.

Switzerland, for example, has a system of universal coverage in which Swiss residents buy private insurance and receive treatment from private physicians and private hospitals. In contrast to the United States, there are no government-run insurers in Switzerland.

Canada, on the other hand, has socialized, or “single-payer,” health insurance, in which the government is the only meaningful health insurer. But Canadian-style socialized health insurance is still a minor-league version of socialized health care, because single-payer health insurance can — and frequently does — tolerate the existence of privately owned hospitals and physician clinics.

The standard-bearer of truly socialized medicine is the United Kingdom. In Britain, as in Canada, health insurance is the province of the government. But, as it is not in Canada, the delivery of health care is also socialized in Britain. That is, a government health-insurance agency pays a government-employed doctor to send Britons to government-owned hospitals.

The British National Health Service was conceived by William Beveridge, a fellow traveler of the Fabian Society, an influential group of British socialists who helped found the Labour party and the London School of Economics. During World War II, the wartime government invited Beveridge to chair a committee that would help plan the post-war British welfare state. His 1942 report to Parliament, Social Insurance and Allied Services, argued that “restoration of a sick person to health is a duty of the State . . . prior to any other consideration.” He proposed a “compulsory social insurance scheme without income limits” that would establish “a comprehensive national health service [to] ensure that for every citizen there is available whatever medical treatment he requires, in whatever form he requires it, . . . provided where needed without contribution conditions in any individual case.”

The British NHS is funded entirely by taxes, and is thereby “free” to patients at the point of care. There are no premiums, no co-pays, no deductibles. In theory, the economic result of such a system should resemble me at an open bar on a National Review cruise: excess consumption without respect to need or price. The NHS compensates for this problem in two principal ways: first, by centrally controlling the fees that doctors, hospitals, drug manufacturers, et al. receive for their goods and services; and second, by aggressively restricting the consumption of costly services that would otherwise blow up the British health-care budget.

The aggression and dictation have worked, in a sense. The NHS is kept on a strict budget and has not yet run out of other people’s money. In 2013, the United Kingdom subsidized health care to the tune of $3,057 per Briton; by comparison, American-government entities subsidized $4,207 of care per U.S. resident: 38 percent more.

But the NHS is no paradise. Open a random edition of a British daily newspaper and you will likely encounter an article about some egregious problem that the NHS has failed to solve. For example: NHS doctors routinely conceal from patients information about innovative new therapies that the NHS doesn’t pay for, so as not to “distress, upset or confuse” them; terminally ill patients are incorrectly classified as “close to death” so as to allow the withdrawal of expensive life support; NHS expert guidelines on the management of high cholesterol were intentionally not revised after becoming out of date, putting patients at serious risk in order to save money; when the government approved an innovative new treatment for blindness in elderly patients, the NHS initially decided to reimburse for the treatment only after patients were already blind in one eye — using the logic that a person blind in one eye can still see, and is therefore not that badly off; while most NHS patients expect to wait five months for a hip operation or knee surgery, leaving them immobile and disabled in the meantime, the actual waiting times are even worse: eleven months for hips and twelve months for knees (compared with a wait of three to four weeks for such procedures in the United States); one in four Britons with cancer is denied treatment with the latest drugs proven to extend life; those who seek to pay for such drugs on their own are expelled from the NHS system for making the government look bad, and are forced to pay for the entirety of their own care for the rest of their lives; and Britons diagnosed with cancer or heart attacks are more likely to die, and more quickly, than citizens of most other developed nations — Britain’s survival rates for these diseases are, according to an OECD survey, “little better than [those] of former Communist countries.”

One “success” of socialized medicine in Britain is that it has proven impervious to reform. In an attempt to reduce lengthy wait times for emergency-room service, Tony Blair’s Labour government introduced a mandate requiring that patients admitted to an NHS emergency room receive treatment within four hours. Some British hospitals responded by instructing their ambulances to drive around town with ailing patients inside, so as to minimize the number of patients technically waiting for care inside the emergency room. This year, the NHS announced plans to abandon the four-hour guarantee.

These problems — aggressive limitations on access to care, imperviousness to reform, dishonest statistics — will be familiar to those enrolled in America’s homegrown version of socialized
medicine: the Veterans Health Administration. As with the NHS, delays and denials of treatment have long been endemic at the VA. In response, the VA installed performance metrics to ensure that veterans were treated without delays; VA hospitals responded by lying on official reports about wait times for treatment.

Understandably, American health-care socialists aren’t campaigning on “VA care for all.” Instead, their tagline is “Medicare for all,” in the hope that Medicare’s popularity with seniors can be manipulated to abolish private insurance altogether.

And it is true that the traditional Medicare program is a form of socialized, single-payer health insurance. Indeed, between Medicare, Medicaid, the VA, and other programs, more than 110 million Americans are enrolled in single-payer health insurance today.

It’s useful to compare and contrast Medicare with Canada’s single-payer system, which by coincidence is also called “Medicare.” Canadian Medicare, like the British NHS, makes health care “free” at the point of care, without co-pays or deductibles. Like the NHS, the Canadian system is infamous for its long waiting lists; a 2018 report from the Fraser Institute found that waiting times to see specialists have doubled in the last 25 years; on average, Canadians now wait 20 weeks to see a specialist physician after being referred by their general practitioner. Canadians have long waits not just for treatment but even for basic diagnostic technologies; the average wait time for an MRI scan is 10.6 weeks, and a month for an ultrasound or CT scan. (Wealthy Canadians, of course, have the luxury of being able to hop across the border for needed care, something that nearly all Britons lack.)

American Medicare works in a different way. When Medicare was being designed in 1965, the American Medical Association was concerned that it would lead to federal control over the practice of medicine. Lyndon Johnson, that crafty S.O.B., promised the AMA that if it at least remained neutral about his Medicare bill, he would allow doctors to charge their “usual, customary, and reasonable” rates — that is, whatever they wanted.

Both sides kept their promises, for the most part. American Medicare contains few restrictions on specialist care or expensive technologies. The American Medical Association and other doctors’ lobbies, through a secretive group called the “Specialty Society Relative Value Scale Update Committee,” effectively determine how taxpayers pay physicians for Medicare services.

These features of Medicare — heavily subsidized premiums and unlimited access — make the program highly popular with seniors. On average, seniors receive more than three dollars in benefits for every dollar they pay into Medicare.

But Medicare’s lack of Canadian- or British-style controls has turned the program into an oppressive fiscal burden. Today we spend more on Medicare than we spend on national defense. The program is the biggest driver of our deficits and debt. The Medicare hospital trust fund is already sending out more money than it takes in; according to its trustees, it will run out of other people’s money in 2026.

Advocates of so-called Medicare for All are, of course, being dishonest about its unaffordable $30 trillion price tag. But they are also being dishonest about the nature of today’s Medicare program. Of the 60 million Americans on Medicare, 22 million are enrolled in a market-based version of Medicare called “Medicare Advantage,” in which private insurers compete on price and value to enroll seniors in modernized health coverage, with better health outcomes, lower out-of-pocket costs, and broader benefits than Medicare’s single-payer version.

Since 2014, enrollment in traditional, single-payer Medicare has actually declined, from 38.4 million in that year to 38.2 million in 2019. But Medicare Advantage enrollment has soared, from 15.7 million in 2014 to 22.4 million today. “Medicare for All” would abolish these plans, literally ending Medicare as we know it.

Medicare Advantage has rapidly evolved in a way that traditional Medicare cannot, because private insurers tweak their benefits and features in real time, in response to consumer demand. Single-payer Medicare can do that only through acts of Congress and bureaucratic diktats.

Medicare Advantage highlights socialized medicine’s biggest lie: that “Medicare for All” expands Americans’ health-care “rights.” The Anglo-Canadian version of socialized medicine tramples on individuals’ rights to seek the care and coverage that they want. The U.S. version tramples on Americans’ right to the fruits of their own labor, conscripting them through taxes and debt to fund an unsustainable system.

Health care is indeed a right, in the same way that any use of liberty is a right. And that liberty — to freely seek the care we need, to pay for it in a way that is mutually convenient for us and our doctors, in a system that is sustainable for the generations to come — is one that we must not merely defend, but expand.

Avik Roy is the President of the Foundation for Research on Equal Opportunity (FREOPP.org), a non-partisan, non-profit think tank.

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