Nationalized Health Care

The topic of nationalized healthcare evokes visceral reactions from supporters and foes alike. The rational argument for such a program is often lost in emotional rhetoric. Those who don’t have access to good health care want it. Those who can take advantage of the latest innovations want to continue to do so.

The morality of the issue, however, is irrelevant until we answer a few basic questions. Would nationalized healthcare bankrupt America? Would the quality of care be good? Would innovation be stalled in a federally controlled system? These questions have been debated before, but it is rapidly becoming apparent that America will have to move toward such a system in order to have a healthy, productive workforce in the 21st century. Evidence shows that it can be done, and at a lower cost than what might be expected.

Arguments against NHC

Opponents of a nationalized health care system fear the creation of a vast federal bureaucracy. The bureaucracy itself would result in severe tax raises. By its nature, they say, a federal bureaucracy of this size cannot operate efficiently and effectively. Decisions on personal health care should not be put into the hands of the federal government.

Profit drives innovation. For this reason, it is no surprise that the majority of medical advances have been made in the United States. A federally controlled system will, by its nature, restrict the profits of firms engaged in medical research. Harvard University economist Kenneth Rogoff was quoted in a recent issue of Reason Magazine:

 If all countries squeezed profits in the health sector the way Europeand Canada do, there would be much less global innovation in medical technology.(Bailey, 2005)

Reports of long waiting times for care in nationalized systems such as Canada’s have further energized opponents of NHC. Americans deserve the best in healthcare. How can a system that relies on rationing of health care provide the best in care? Those who can afford it have access to the best health care in the United States. For those who cannot, there are already many options. Health insurance pools, Medicare, Medicaid, hospital and corporate assistance programs provide a safety net for those without standard insurance. The overwhelming cost of heath care simply cannot be borne by the federal government. Tax increases will cause the loss of jobs and create a drag on the economy that benefits no one.

Arguments for NHC

Many Americans assume that they are getting the best health care in the world. This is not necessarily true. Mortality rates and other measures of overall health lag behind other countries that have nationalized single-payer systems.

The cost of health care has also become a major issue that will have ripple effects through the economy. A recent article by Julie Appleby in USA Today cites evidence that should concern employers trying to maintain a productive workforce:

Already the average yearly cost of the most popular type of insurance plan offered by employers hit $11,765 this year…Average premiums have risen 87% since 2000, while workers earnings have risen 20%. (2006)

The multi-payer, multi-layered system of healthcare in the United States generates billions of dollars of waste. In fact, enough money could be saved by moving to a single-payer structure to pay for the health care of the 46 million Americans who are not insured.

A New York Times article cites evidence from a New England Journal of Medicine study that a single-payer system could actually cost less:

 …administrative costs represented 31 percent of total health care spending in the United States, about double the proportion in Canada, which has a single-payer system. (Lohr, 2004)

In our current system, claims are shuffled back and forth between insurance agencies, employers and the government. The cost of this paper shuffling cannot be underestimated. The time involved also penalizes the provider who may have to wait for months to get paid for services as each agency tries to negotiate a favorable price.

Dr. Himmelman, a co-author of the NEJM study concludes that:

The savings from moving to a single-payer system, estimated, would be roughly $375 billion a year. That allows you to cover everyone. (Lohr, 2004)

Spreading the risk among the entire population would also reduce costs. This, in fact, is how insurance companies make money. With the entire adult population paying premiums to the government in the form of taxes, the cost for any one individual is held to a minimum.

Innovation can, and does, still exist under a single payer structure. Drug companies, for example, will still have access to federal funds for research and development. They still can reap tremendous profits by developing widely used medicines. Patient financial assistance programs, which most drug companies have, would no longer be necessary in a fully insured nation. They will also save money from only having to deal with one entity. That money can then be used for R & D.

Innovation has not dried up in countries that have single-payer systems. For example, many of the recent advances in the treatment of juvenile diabetes have originated in Canada or Europe. The Edmonton protocol provides hope for a cure through islet cell transplants. Their studies are now being replicated in the United States. Profits are still enormous for innovative companies in those countries. In the U.S. the profits for these innovative firms are not necessarily as high as one might expect. The lions’ share of health care profits in our system goes to the insurance companies. Those companies make money, in effect, by rationing health care, thereby spreading their risk. Predictably, they are against a nationalized system that would cut them out of the loop.

Analysis and Conclusion

Powerful insurance companies and other lobbying interests have been able to forestall a nationalized health care system. The last major attempt was made early in the Clinton presidency. Our country has changed dramatically even since then. The robust economy has drawn millions of new workers. At the same time, health care costs have spiraled to unprecedented levels. Continued economic growth requires a productive, permanent workforce.

The Census bureau estimates that 46.6 million Americans are without health insurance, greatly limiting their access to preventive care. Preventive care is the single most important element to maintaining long-term health. Millions more people are under insured. Who are the uninsured? According to the New York Times:

 Eighty percent of the uninsured are members of working families.But either their employers do not offer health insurance or they find their share of the employers’ plans too expensive.(Lohr, 2004)

Some who resist a national system argue that individual health savings accounts can be an effective way of paying for health care. In some cases, this is true. A question arises, however: Can health savings accounts keep up with the spiraling cost of health care? For most people, it is unlikely.

A single-payer, nationalized health care system would have multiple benefits for the United States. Employer costs would be reduced, freeing them to expand their businesses and create more jobs. The administrative costs of a single federal system would be enormous, but still less than the multi-payer system we have today.

Individuals would have guaranteed access to preventive care, an act that has been proven to save money in the long run for both the person and the system.

More healthy days for the workers means more production at work and more growth of business. That, in turn, brings more tax revenue to the government. If tax increases are necessary for the initial set-up of the system, they will be more than offset by the decreases, or elimination, of health care premiums.

Given the nature of our global, competitive economy, it just makes good sense to keep as many people healthy and productive for as long as possible. This means that everyone has to have access to health care. Unfortunately, this is getting progressively more difficult. Eventually, the nation will pay an economic price for this.

The good news is that the evidence shows us that national health care is not as expensive or substandard as we may think. The United States can afford a national health system. Instead of being a drag on the economy it would be a stimulant. Sooner or later it will become necessary.

Sources

Appleby, Julie. “Consumer unease with U.S. health care grows”. USA Today, 16 Oct.

2006.

Bailey, Ronald. “2005 Medical Care Forever”. Reason Magazine, 15 Jun. 2005.

Clancy, James. “U.S. should adopt Canada’s public health care model”. National Union

of Public and General Employees [online] 2004. Accessed 27 Nov. 2006 from <

http://www.nupge.ca/news_2004/n22se04c.htm >

 Lohr, Steve. “The Disparate Consensus on Health Care for All”. The New York Times

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