Archive for Socialized Medicine

But I thought their healthcare was so much better than ours, Part 10

Posted in Economics of Health Care with tags , on October 22, 2009 by drbobbs

BardotA Russian coal miner with a lung disease is trying to sell his autographed photo of Brigitte Bardot to pay for his treatment.  The picture is said to be valued at about $45.

John Stossel and Penn Jillette on Canadian Healthcare

Posted in Economics of Health Care with tags , , , on July 18, 2009 by drbobbs

More “free” health care nonsense

Posted in Economics of Health Care with tags , , on March 26, 2009 by drbobbs

House Speaker Nancy Pelosi on the economics of health care:

This is not only about the health of individuals in our country, which will be justification enough [to expand governtment programs to provide health care]. It’s about the competitiveness of our businesses to make them globally competitive because they are competing with companies and countries where the federal government — their governments — pay for health care. They don’t have to bear those health care costs.

They don’t?  Then who does?  Someone is paying for that health care.  The recipients of said health care and/or their fellow taxpayers are paying for it.  But if we use the word “competitive” frequently enough, maybe no one will notice we are ignoring inescapable economic realities.

But I thought their health care was so much better than ours, Part 3

Posted in Economics of Health Care, Health Care Policy with tags , , on December 24, 2008 by drbobbs

More news of health care reform from our neighbors to the north.  John R. Graham at blogs about a story from Canada’s National Post about health savings accounts and private insurance:

Finance Minister Jim Flaherty will today launch a much narrower tax-free savings account, aimed at families of people with disabilities, that is available through banks like BMO Financial.

But the insurance industry is pushing for a hugely more far-reaching scheme, not totally dissimilar to the model advocated on the campaign trail by John McCain, the failed Republican candidate for the White House.

It seems like socialized health care delivery systems are becoming more privatized and private systems are becoming more socialized.  The cynic in me interprets this to mean than neither system works very well and policy makers under both systems are trying to implement the opposite of whatever the dominant delivery model paradigm is in hopes of making the system work better.

The myth of “free” health care

Posted in Economics of Health Care with tags , , , on December 2, 2008 by drbobbs

It's Free!Bill Anderson posting at the Lew Rockwell Blog spotlights one of modern America’s most persistent medical economic myths:

It seems that [Nobel Prize-winning economist Paul] Krugman really does believe that government magically provides free health care, and even though doctors and other medical personnel continue to be paid, apparently such a system has no opportunity cost. Granted, he has written elsewhere that a “universal” system would be less costly than what we have now because profits are “costs” to the economic system. A system that does not have profit by definition will be less costly, and that everything else will operate just as it did before the nationalization. (Yep, he really seems to believe this nonsense.)

A few quotes from chapter 6 of economist Thomas Sowell’s fantastic book Basic Economics: A Citizen’s Guide to the Economy will show where Mr. Krugman has gone astray:

Socialists have lon regarded profits as simply “overcharge,” as Fabian socialist George Bernard Shaw called it, or a “surplus value” as Karl Marx called it.  Only after socialism went from being a theory to being an actual economic system in various countries did it become painfully apparent that people in socialist countries had a harder time trying to afford things than most people in capitalists countries…

The hope for profits and the threat of losses is what forces a business owner in a capitalist economy to produce at the lowest cost and sell what the customers are most willing to pay for.  In the absence of these pressures, those who manage enterprises under socialism have far less incentive to be as efficient as possible under given conditions…

In short, while capitalism has a visible cost — profit — that does not exist under socialism, socialism has an invisible cost — inefficiency — that gets weeded out by losses and bankruptcy under capitalism.

It is a constant source of amazement how large a subset of the population believes that health care — a highly visible and pervasive profession involving millions of extensively trained people and much advanced technology, and costing at present well over $2 trillion a year — can somehow be made totally free of charge by government decree.

As American humorist James Thurber once quipped, “You can fool too many of the people too much of the time.”

Arizona’s Proposition 101 appears to be defeated

Posted in Economics of Health Care, Health Care Policy with tags , on November 11, 2008 by drbobbs

From The Arizona Republic:

Vote counts suggest that Proposition 101, dubbed the health-care choice initiative, will be defeated.

The most recent count shows that 50.3 percent voted against the measure that backers said would prevent a government-run universal health plan in Arizona.

The Arizona Academy of Family Physicians opposed Proposition 101 as well.  I guess the majority of Arizonans are opposed to having the right to independently contract with providers or insurance companies for their health care.  Or perhaps they think the government health care gravy train is about to arrive and they don’t want to be left behind at the depot.

Arizonans might want to look at Hawaii and Massachusetts‘ experiments along the same lines before they purchase their train tickets.

Is socialized medicine on the horizon? (Part 2)

Posted in Economics of Health Care, Health Care Policy with tags , , on November 6, 2008 by drbobbs

Dr. Rich at the Covert Rationing Blog sets out a scenario:

So if you are a health insurance executive, you are probably looking at your current broken business model, lamenting that your savior Mr. Obama is probably not going to be able to come to your rescue with the one last windfall he has promised, and observing what is happening with other “vital” American industries in similar straits. DrRich imagines that these executives have already resolved themselves to a government takeover (indeed, this was the end-game they have long planned once their last Obama windfall played itself out), and that they are merely calculating the right moment for it. How best to divest their stock before hinting that such a takeover is in the works? With careful planning and negotiation, can some of the takeover money be parlayed into executive bonuses, or at least into one last, extravagant junket (a la AIG)? There is no real hurry, after all – whenever the health insurance industry says it just can’t do this any more and that the government needs to take over healthcare, then no matter which other industries the government will have already acquired, what choice will the feds have?

This could happen, although I still contend that in the long run we will have to return to a more market-based health care delivery model.  One of the fundamental problems with the current American health care delivery system is that there are way too few primary care providers.  Whether you’re a government bean counter, a corporate bureaucrat, or a private pay patient, the fact is utilizing primary care medicine is just plain cheaper than the alternatives.  We should be grateful that we have specialists like cardiologists and ER docs who heroically snatch patients from the jaws of death every day in this country.  But we should keep in mind that many or most of those patients wouldn’t have needed such tremendously expensive and valiant health care if they had a family doc prescribing them a $4 generic antihypertensive or antilipid drug.

Another fundamental problem with our health care system is the predominance of the third party payor model.  Whether that third party is a private insurance company or a government agency matters less than a lot of people realize.  As the late Nobel Prize-winning economist Milton Friedman observed,

“Two simple observations are key to explaining both the high level of spending on medical care and the dissatisfaction with that spending. The first is that most payments to physicians or hospitals or other caregivers for medical care are made not by the patient but by a third party – an insurance company or employer or governmental body. The second is that nobody spends somebody else’s money as wisely or as frugally as he spends his own.”

Friedman went on to acknowledge that this by itself does not explain why health care costs in the United States are so much higher than in other countries.  Other factors, like the tax exemption of employer-provided medical care, also raise the cost of health care.  But couldn’t the lack of primary care providers be another major factor in the high cost of health care in the United States?  Sepulveda, Bodenheimer and Grundy writing in Health Affairs (27, no. 1 [2008]: 151-158) noted

Dozens of studies show that a strong primary care sector is associated with lower health care costs and improved quality. Peter Franks and Kevin Fiscella examined surveys from a nationally representative group of 13,270 adults who were asked if their personal physician was a PCP or a specialist. People with a PCP rather than a specialist as a personal physician had 33 percent lower annual health care spending and 19 percent lower mortality; cost and mortality data were adjusted for age, sex, ethnicity, health insurance status, reported diagnoses, and smoking status. Other studies confirm that patients with a regular PCP have lower health care costs than those without.

We may or may not take a detour into socialized medicine, but ultimately we will have to greatly increase the number of primary care physicians in the U.S. and rely less on third party payors, both private and governmental, to pay them.