Socialized vs. Privatized Medicine

In the midst of election season, ObamaCare remains a hotly debated issue. It has become clear, though, that both Romney and Obama want at least some form of socialized medicine.Neither of them appears to believe that the free market could offer a solution to the country’s health crisis. That begs the question: would America really be better off with a European-style socialized healthcare system?

Rather than “pass the bill so that you can find out what is in it”, as Nancy Pelosi suggested in 2010, the American people would have been far better off if legislators had critically reviewed it and weighed the pros and cons of socialized versus privatized healthcare. In that case the Patient Protection and Affordable Care Act probably never would have passed in the first place.

Proponents of socialized medicine like to point out that the U.S. spends more per capita on healthcare than any other country yet it consistently ranks below other developed countries. However it would be too short-sighted to blame the free market for this fact by assuming that the U.S. system is somehow too free market oriented. Indeed, to do so would be to disregard the fact that American rates of obesity and diabetes are the highest in the world. Or that the National Institutes of Health receives tens of billions of taxpayer dollars annually to support scientific research across the United States and even abroad. To make matters worse, research by PricewaterhouseCoopers presented in April of 2008 found that up to $1.2 trillion of health spending – more than half of the $2.2 trillion federal budget – was being wasted on things like unnecessary tests and procedures and inefficient healthcare administration. Not to mention the hundreds of millions of taxpayer dollars spent through NIH grants on unapproved pharmaceuticals, a failed anti-smoking vaccine or penis pumps for elderly men.

Both in the U.K. and the U.S., the economic downturn has caused a shift from expensive pharmaceutical drugs and interventions to natural remedies. In fact, as shown by poll data collected as part of the 2007 National Health Interview Study, U.S. health-care workers are more likely than the general public to use alternative medicine options. Poll data collected as part of the 2007 National Health Interview Study found that 76 percent of health-care workers used “complementary and alternative medicine” in that year, compared to 63 percent of people working in other occupations. In other words, those people who have arguably the most extensive first-hand experience with conventional health care would rather spend their money on alternative forms of healthcare. Could this be because they witness every day how conventional health care fails to cure any of the major diseases we are dealing with in developed countries? Isn’t this a much more reliable kind of anecdotal evidence than the postulation that the so-called “free market” U.S. healthcare system is to blame for the ill-health of Americans?

Deloitte’s 2011 Survey of Health Care Consumers Global Report surveyed people in ten different countries in North-America and Europe on what they believed most health care money was wasted on. Lack of responsibility by individuals for their own health and redundant paperwork were the most common sources of waste cited by the respondents, exactly those factors that would be affected most positively by a free market healthcare system. After all, in a free market system a smoking binge-drinking junk-food addict with a sedentary lifestyle would pay a much higher premium than his or her fit and health-conscious counterpart. Besides, if the government stayed out of healthcare there would be no need for much paperwork at all

In addition, a free market system can be expected to further reduce costs by encouraging people to shift from expensive pharmaceutical drugs to cheaper alternative medicine that are often shown to be at least as effective, if not more so. Also, a free market healthcare system is fairer as it is based on personal risk and needs and does not force people to pay into a system that facilitates such practices as abortion and euthanasia, practices some people may not agree with for religious or other reasons. Competition would increase, costs and waiting times would decrease and the quality and efficiency of care would go up as consumers would become more critical of their healthcare providers. As a result of people taking charge of their own health, fewer people would need health insurance and premiums would go down. This downward pressure on premiums would partly offset the higher premiums for those still in need of health insurance.

A number of Latin-American countries have adopted health sector reforms facilitating a public as well as a private system, with Chile being the most famous example. In 2009 these countries spent eight to nine percent of their GDP on health while the United States spent over sixteen percent. Furthermore, their dynamic healthcare systems are attracting foreign investment, increasing competition and thereby reducing prices. The U.S. healthcare industry, on the other hand, attracts very little foreign investment, if any. A Department of Commerce publication on Foreign Direct Investment (FDI) in the United States makes no mention of healthcare at all.

The Supreme Court’s recent ruling on the constitutionality of ObamaCare is unlikely to change that for the better. Though word has already come out that the Affordable Care Act will make health care less affordable, to most people it will only become fully clear when it is already in place. By which time the socialists will be tripping over each other to tell you how unfair it would be to get rid of the system now that people have come to rely on it.


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