SOCIALIZED medicine. we will get what we deserve

[rainstorm]

PAY MORE WHILE YOU'RE WORKING, PAY MORE WHEN YOU RETIRE

The compromise plan for the largest expansion of Medicare since it's inception would require wealthier seniors to pay more for visits to the doctor. If you are a senior citizen designated as "wealthy," it is probably safe to assume that you were earning higher incomes while you were working. Since you pay Medicare taxes on every single dollar you earn, it's safe to assume that these wealthier seniors paid much more in Medicare taxes during their working years. Now they'll have to pay more to visit doctors during their retirement. In the private sector the more you pay, the greater the benefits you receive. In the government sector the more you pay, the lower the benefits. In the private sector the less you pay in insurance premiums the lower the benefits. In the government sector the less you pay, the better the benefits. It really makes you wish for more government doesn't it?

WHY DEMOCRATS MAY TRY TO BLOCK THE MEDICARE PRESCRIPTION BENEFIT

Two reasons ... first, to deny any sort of a victory on this issue to President Bush. Second, because this plan has a role for private insurance companies; it's not a total government solution.

Under the plan currently on the front burner the actual drug benefit for seniors would be provided by private insurance companies. There is also a provision to allow seniors to choose an option that would allow private insurers to provide both the health coverage and prescription coverage. Add another provision that sets up a Medicare pilot program wherein Medicare would compete directly with private health plans in six American cities by 2010, and you have all the reasons you need for Demcorats to oppose the program.

The ultimate Democratic goal is socialized medicine. Democrats think that America is great because of government, and that government is the only way to provide essential medical care to Americans. These leftists know full well that an unfettered and competitive free market would do a perfectly adequate job of delivering affordable medical care to all American citizens. For decades Democratic-socialists have pursued a game plan that promotes government solutions to health care needs while blocking every initiative that could possibly make it easier for the individual to meet their own health care needs through the private sector. Just ask yourself why the tax breaks are so much more generous for an employer who provides you with health care benefits than they are for the individual who goes into the private market to obtain those benefits for himself. Individual initiative is to be discouraged and punished, reliance on others, either your employer or the government, is to be encouraged and rewarded.

The prescription drug benefit plan currently under consideration, as flawed and as unnecessary as it is, contains private sector options. Reason enough for Democrats to kick it to the curb.

Remember, though ... all of this is merely academic. Socialized medicine is an absolute inevitability in the United States. It is inevitable because the average American does not believe it is his responsibility to provide for his own health care. It's either his employer's job, or it's the government's responsibility. Every time you see some article in the press about long waits to see experts or for surgery in places like Britain or Canada, study hard. That's the certain future of health care in America.

[stormchazer]

I could not say it any better.

[rainstorm]

thanks jara

[mf_dolphin]

Helen, the following statement of yours..

"These leftists know full well that an unfettered and competitive free market would do a perfectly adequate job of delivering affordable medical care to all American citizens"

has to be one of the biggest pieces of nonsense that I have ever seen. The Americam medical community has done just the opposite. The number of people without adequate healthcare in this country is deplorabe. As a country we should be ashamed of ourselves. Between the runaway court awards and the greedy physicians, our cost of healthcare is far exceeding the ability of most individuals and companies to afford quality care.

I for one experienced socialized healthcare first hand while in England. To be seen in a hospital took less than 15 minutes and one 3x5 index card worth of paperwork. Try that anywhere in the US.... While I don't have a lot of confidence in our government's ability to not screw up things, if we don't put some controls on the rising costs of healthcare in this country we won't be able to afford it soon!

[rainstorm]

i completely disagree. our medical system is the best in the world. once the govt takes over, see how bad it gets. there is no such thing as controlling health costs. once the govt gets involved, they will just keep raising taxes. and the wait list for surgery? good luck.

[rainstorm]

when the govt puts price controls on anything, one thing always results. shortages!!!

[mf_dolphin]

Like I said I experienced it first hand for 2 years in England. What you are saying about the long waits just isn't the norm no matter what you read. A little bit of second hand knowledge is a dangerous thing...

I agree that the quality of care is high in the US but at what cost. Since I'm in the healthcare business, do you know who the largest provider of healthcare in the US is??? The good old US Government! If your going to take a radical stance you might just want to do some research before repeating the far right mantra. BTW, the far left is just as bad about spouting half truths...

[sunnyday]

And which party will be the one that brings about the socialized medicine?

[coriolis]

I wouldn't support a govt-run system, however the private insurance system is no prize either. I think that a big component of the rising costs has to be the paperwork and review process. I am amazed when I get my statements from my insurance. The doctor has to know what's covered and what's not, (and each insurer has different rules) the doctor's office must properly code it and submit it to the insurance company, the insurance company has to determine what they'll pay, then pay the doctor, and if there's a difference the doctor bills me. In those 6 steps there's about 4 steps too many. When I get the bill, there's no way for me to know whether or not it's correct, without calling the insurance company and staying on hold for about 30 minutes. I imagine that more health care dollars go to bean counters and administrative staff than to doctors!

Meanwhile someone I know that's on welfare, goes to the doctor, flashes the card, and that's the end of it. I don't know what happens behind the scenes, but it's a lot easier for the consumer. And maybe that's the allure of a national system.

But then I think of the state highway workers leaning on their shovels, and I think: that could be doctors too!

[mf_dolphin]

The Democrats are a lot more likely to suggest a variation of socialized medicine. I don't think that we'll see a system like England's in my life time though. What really needs to happen is for the cost of healthcare to be brought under control. This means reasonable limits awards on jury awards and controls placed on malpractice insurance. Basic healthcare coverage should be available to every American!

[Guest]

What really needs to happen is for the cost of healthcare to be brought under control. This means reasonable limits awards on jury awards and controls placed on malpractice insurance. Basic healthcare coverage should be available to every American!

I couldn't agree more.

[rainstorm]

The Democrats are a lot more likely to suggest a variation of socialized medicine. I don't think that we'll see a system like England's in my life time though. What really needs to happen is for the cost of healthcare to be brought under control. This means reasonable limits awards on jury awards and controls placed on malpractice insurance. Basic healthcare coverage should be available to every American!

democrats are controlled by trial lawyers. that will never happen

[rainstorm]

price controls = shortages. simple as that

[mf_dolphin]

More and more jury award limits are being enacted in states across the country. Yes it is happening Where you get that trial lawyers control the Democratic party is beyond me. When you make generalized statements without any back-up you diminish the validity of the valid points of your arguement.

One of the things impacting healthcare availability is the cost of malpractise insurance. Every week there are posts about Doctor's closing their offices because they can't or won't pay the escalating insurance rates. That's a painfull fact. Your point that controlling the costs will equate to shortages is just inflamatory rhetoric IMO

[Amanzi]

Helen, the following statement of yours..

"These leftists know full well that an unfettered and competitive free market would do a perfectly adequate job of delivering affordable medical care to all American citizens"

has to be one of the biggest pieces of nonsense that I have ever seen. The Americam medical community has done just the opposite. The number of people without adequate healthcare in this country is deplorabe. As a country we should be ashamed of ourselves. Between the runaway court awards and the greedy physicians, our cost of healthcare is far exceeding the ability of most individuals and companies to afford quality care.

I for one experienced socialized healthcare first hand while in England. To be seen in a hospital took less than 15 minutes and one 3x5 index card worth of paperwork. Try that anywhere in the US.... While I don't have a lot of confidence in our government's ability to not screw up things, if we don't put some controls on the rising costs of healthcare in this country we won't be able to afford it soon!

I can vouch for this MF. My best friend who is working in London just had a baby. She never paid one cent, and the midwife even comes to her house once a week to check up on her and the baby. THere was no waiting either when she had a bit of an emergency that needed to be seen to.

Compared even to South Africa Medical and Dental costs are way high in the US.

I was wondering how do hospitals justify this. I phoned the local hospital here in Flagler to find out how much a sonagram was. $745.00 I just could not afford that, so I found a clinic in Volusia county (same qualified doctors and technitians) cost $125.00!

[Stephanie]

I couldn't agree with you more Marshall.

[j]

There are other things that are going to have to change starting right at your own Doctor's office. How many times have you gone to your doctor and walked away with a prescription, for example..a bacterial infection...when you don't have one? It's called appeasement, and doctor's do it all the time, because people want something for their visit, and doctor's comply. Prescription drugs are handed out like candy and it gets worse with the elderly who often become addicts. (I know..I have one in the family).

[stormchazer]

Here is some interesting stats from the NATIONAL CENTER FOR POLICY ANALYSIS

[b]
NATIONAL CENTER FOR POLICY ANALYSIS
HOME / DONATE / ONE LEVEL UP / ABOUT NCPA / CONTACT

Twenty Myths About National Health Insurance
NCPA Policy Report #166
December 1991

Executive Summary

by John C. Goodman and Gerald L. Musgrave

Countries with national health insurance make health care "free" to patients and at the same time limit spending and access to modern medical technology. As a result, there is widespread rationing, bureaucratic inefficiency and a lower quality of care.

A citizen of the United States is twice as likely to have open heart surgery as a Canadian and four times as likely as a Briton.

Although computer scanning (in place of conventional x-ray) is routine diagnostic procedure in the United States, a patient in Ontario can wait as long as a year and four months for an MRI scan.

Britain, where the CAT scanner was invented, has one of the lowest rates of CAT scanner use in western Europe.
When access to modern medical technology is rationed, who receives care? Mounting evidence suggests that the wealthy, the powerful and the sophisticated find ways of moving to the head of the waiting lines, while the poor, the elderly, racial minorities and rural residents wait longer.

Studies show that the Inuits (Eskimos) and Crees in Canada and the Maoris in New Zealand receive less health care and have worse health outcomes than other citizens of those countries.

The most recent studies of kidney dialysis show that more than a fifth of dialysis centers in Europe and almost half in England have refused to treat patients over 65 years of age.

Studies in almost every country with national health insurance find that low-income families often have less access to care in relation to their need for it than higher-income families.
Almost every developed country with national health insurance has pledged special efforts to create equal access to health care, and these commitments are periodically and publicly repeated. Yet the rhetoric is very different from the reality.

Despite 40 years of promises to create regional equity, Britain spends least on hospital services in those areas which are most underserved.

Despite 40 years of promises to create equality of access to health care, spending per person varies by a factor of two to one across the regions of New Zealand, and the number of surgeries performed varies by more than six to one.

Despite 20 years of promises in Canada, the distribution of physicians per capita among the provinces varies by almost three to one and within Ontario by a factor of more than four to one.
Canadian provincial governments restrict modern medical technology to hospitals, usually in large cities, and actively discourage outpatient surgery. Rural residents must travel to the cities for the services of most specialists and for most surgical procedures. But considering the inconvenience of travel and the fact that specialized services are rationed by waiting, how often do rural residents actually get care? Consider that:

Total per capita spending on physicians' services among British Columbia's 30 regional hospital districts varies by a factor of six to one, and spending on the services of specialists varies by a factor of 12 to 1.

Spending varies by a factor of almost 4 to 1 for obstetrical/gynecological (OB/GYN) services, 8 to 1 for the services of internists and 35 to 1 for the services of psychiatrists.
Despite many recent claims, there is little evidence of efficiency in countries with national health insurance. While people wait for months and even years for hospital admission, hospital managers appear uninterested in admitting more patients.

While more than 50,000 people wait for surgery in New Zealand, at any point in time one in five hospital beds is empty and one in four is occupied by a chronically ill patient using the hospital as an expensive nursing home.

While more than one million people wait for surgery in Britain, at any point in time about one-fourth of all beds are empty and another one-fourth are being used by nursing home patients.

While more than 250,000 people wait for surgery in Canada, at any point in time almost one in five hospital beds is empty and a fourth of all beds is being used by nursing home patients.
Although countries with national health insurance frequently proclaim that health care is a right, available regardless of ability to pay, increasingly the reverse is true. Access is often guaranteed only to those with private health insurance or the ability to pay out-of-pocket.

Although health care is theoretically free to all in Britain, 10 percent of the population has purchased private health insurance, and one-fifth of all elective surgery is performed in the private sector.

Although health care is theoretically free to all in New Zealand, one-third of the population has private health insurance, and one-fourth of all surgery is performed in private hospitals.

As Canadian waiting lists for surgery grow, increasing numbers of Canadians are coming to the United States for health care.
The lessons from other countries teach that America would not be well-served by an expansion of government bureaucracy or by any greater government control over the U.S. health care system. Instead, what is needed is to limit the role of government and allow the private sector new opportunities to solve our health care problems.


Introduction

In virtually every country with national health insurance, politicians, health ministers and other government officials are searching for ways to reform their health care systems. Increasingly, the reforms being adopted seek to replace socialism in medicine with privatization, competition and market incentives.

In 1989, the British government introduced radical market-based reforms in health care and began to allow private hospitals to compete against public hospitals for National Health Service funds.1

In 1987, the Netherlands introduced a voucher system which allows consumer choice among private and public insurance funds.2

In 1987, Germany introduced a new policy which encourages competition among hospitals.3

More recently, the government of New Zealand has signaled its intent to end 40 years of socialized medicine by giving people tax incentives to purchase private health insurance and by introducing market-based reforms in the public sector.4

Sweden, along with other European countries, has already introduced some "managed competition" into its national health insurance system, and with the recent change of government those reforms will undoubtedly continue.5

In Canada, pressures mount to allow private health insurance options and to institute user fees, and the father of Quebec's health care system (the oldest national health insurance scheme in Canada) has called for privatization and competition in the supply of health services.6

The Soviet Union's new health care reform plan calls for decentralization, "enterprise" and the introduction of financial incentives into health care.7

Chile has given its citizens financial incentives to opt out of national health insurance for the last decade, and most other Latin American countries are seeking ways to partially privatize their health care systems.8
As other countries struggle to reform their health care systems, they often look to the United States for guidance. Yet, many in this country are encouraging us to copy the health care system of some other country. Unfortunately, the advocates of national health insurance have painted a rosy picture of how it works elsewhere - often ignoring the many problems and failures.

National health insurance promises to make medical care a right and to grant all citizens equal access to it. Yet in those countries which have adopted national health insurance people are often denied access to modern medical technology, and the distribution of health care resources is far from equal. The special victims of national health insurance are the poor, the elderly, members of minority groups and residents of rural areas.

This report does not focus on minor blemishes or easily correctable problems in the health care systems of other countries. Instead, it seeks an understanding of fundamental principles - by identifying common patterns that tend to emerge in all countries with national health insurance and explaining why those patterns emerge inevitably from the politics of medicine.


Twenty Myths About National Health Insurance

As the United States wrestles with the problems of its health care system, it is tempting to look elsewhere for solutions. In general, countries with national health insurance spend less per person (and less as a percent of national income) on health care than does the United States. Those unfamiliar with other systems assume that the United States can control health care costs through national health insurance without any loss of benefits or deterioration of quality. In what follows, we briefly discuss this and other common myths about national health insurance.

MYTH NO. 1: Countries with national health insurance have been more successful than the U.S. in controlling health care costs.

The United States spends more on health care than any other country in the world, both in dollars per person and as a percent of gross national product (GNP). Does this mean that the United States, with a predominantly private system, is less able to control health care spending than are developed countries with national health insurance schemes?

As we shall see, international comparisons of health care spending are difficult, not least because of differences in measuring techniques. But first we should note that the United States is wealthier than other countries. Almost without exception, countries with more income spend more on health care. In fact, health economists have discovered that 90 percent of the variation in health care spending among developed countries is based on income alone.9

This should give pause to anyone who believes that the United States will significantly lower health care spending by adopting the system or institutions of some other country. Apparently, as people have more income, they spend more on health care, whether their spending takes place through the market, the political system or quasi-public institutions.

United States vs. Canada: Growth in Spending. In 1987, the United States spent $2,004 per person on health care, whereas Canada spent only $1,520. Some people argue that if the U.S. adopted Canada's health care system, it could cut health care spending by 25 percent. They buttress their argument by looking at the record over time. In 1967, the United States and Canada spent virtually identical proportions of GNP on health care (6.33 percent in the United States, and 6.38 percent in Canada). Canada's system of national health insurance was implemented between 1968 and 1971. Since then the U.S. has surged ahead. In 1987, the United States spent about 11.1 percent of its GNP on health care, whereas Canada spent only 9.0 percent.10

The problem with those comparisons is that health care spending as a percent of GNP is a fraction. If the fraction grows over time, we need to know whether the growth is being caused by changes in the numerator (health care spending) or in the denominator (GNP). As it turns out, the above differences can be almost totally explained by the behavior of the denominator. Over the 20-year period (1967 to 1987), Canada's real GNP per capita grew 74 percent, while the U.S. figure grew only 38 percent.11 If we look at health care spending alone, rather than its relationship to GNP, we discover that:

Before Canada implemented its system of national health insurance, the country was spending 75 percent of what the United States spent on health care per person.

In 1987, Canada continued to spend 75 percent of the U.S. level.

Over the 20-year period, real increases in health care spending per capita have been virtually the same in both countries. (The increase was 4.38 percent in the United States versus 4.58 percent in Canada.)
Canada has been no more successful than the United States in controlling health care spending. As Figure I shows, in recent years it has been less successful.12

United States vs. Canada: Levels of Spending. There are other problems in comparing United States and Canadian health care spending:

First, the Canadian number doesn't include capital spending to the same extent that the U.S. number includes it.

Second, the U.S. number includes research and development (R & D) costs. Canada engages in very little R & D spending, while U.S. R & D spending results in technological innovations that benefit Canada as well as the rest of the world.

Third, the U.S. population is slightly older, and older people inevitably consume more health care.

According to one study, correcting for these differences between the two countries cuts the gap in the fraction of GNP spent on health care in half.13
Other adjustments also must be made. In both countries, the costs of administering government health care spending are largely hidden. For example, the cost of collecting tax dollars to pay for health care does not show up in the health care budgets of either country, whereas the cost of collecting private insurance premiums is counted as part of U.S. health care costs. Similarly, auditing expenses are usually included in the budgets of other public agencies. But since Canada's public sector is relatively larger than that of the United States, far more of Canada's costs are buried in bureaucratic budgets.

United States vs. Canada: Differences in Health Care Needs. Because of historical and cultural differences between the two countries, the need for health care spending is often higher in the United States than in Canada. For example, the United States has a much higher violent crime rate, heavier illegal drug use and a greater incidence of AIDS - all of which generate more health care spending. According to Leroy Schwartz (Health Policy International):14

The U.S. male homicide rate is five times that of Canada, and for every homicide there are 100 assaults reported to hospital emergency rooms.

The U.S. rate of incidents of AIDS is three times that of Canada, and the lifetime cost of treatment is about $85,000 per patient.

More than 25 percent of the 10,000 to 15,000 annual spinal cord injuries in the United States are due to violent assaults, and treatment and rehabilitation costs are about $600,000 per patient.

There are about 375,000 drug-exposed babies in the United States with an average treatment cost of $63,000 per baby.
This problem is negligible in Canada. The United States also has health care costs related to war injuries (including those of Vietnam veterans), which Canada does not have. And Figure II illustrates another important difference: U.S. teenage women have almost 2 1/2 times the pregnancy rate of teenagers in Canada, twice the birthrate, about three times the abortion rate and more than twice the miscarriage rate. Because teenage mothers are more likely to have premature babies and other complications, these differences cause higher health care spending in the United States.

Other Comparisons. No one has tried to sort out these differences to arrive at a bottom line. But there is considerable anecdotal evidence that the real cost of U.S. health care may actually be lower than Canada's. For example, hospitals in British Columbia contract with U.S. hospitals across the border in Seattle to perform heart surgery on Canadian patients.15 There is a similar arrangement between Ontario hospitals and those in Detroit. Canadian hospital managers apparently have concluded they make a "profit" on these transactions, and at the same time reduce the public outcry over long waiting lists.

Another way of comparing the two nations' health care costs is to compare Canada with some of the largest health maintenance organizations (HMOs) in the United States. The "managed care" programs of HMOs, like the cost controls imposed in Canada, demonstrate a commitment to control spending. Moreover, some HMOs are as populous as Canadian provinces. About half of Canada's provinces have a population of one million or fewer people, while seven HMOs in the United States have more than one million. Although people enrolled in HMOs may not be a random sample of the U.S. population, Figure III shows that large HMOs in the United States have lower costs per person than Canada has:

The Harvard Community HMO in Massachusetts spends only 73 percent as much per person as Canada spends.

Both the Kaiser Permanente and Cigna HMOs spend about 65 percent as much per person.
To summarize, we can draw at least four important conclusions. (1) It is not clear that Canada has done a better job than the United States at controlling health care spending over time. (2) Canada's spending on health care - under both a private and a public system - consistently has been about 75 percent of what the United States spends. (3) Although international statistics show that the United States spends more per capita on health care than Canada, these statistics can be very misleading. (4) There is some evidence that U.S. health care is less expensive when the comparison is made on a more level playing field.

The United States vs. Other Developed Countries. In comparing United States health care spending with that of other developed countries, we encounter the same difficulties. In addition, most international statistics on health care spending are produced by the Organization for Economic Cooperation and Development (OECD). Yet because of differences in reporting standards of different countries, OECD statistics are not always reliable.16

Table I shows the results of an attempt to develop more accurate health care spending measurements among OECD countries:

Using more precise measuring techniques, we find that the United States spends more of its income on health care than other countries - but the difference is smaller than people commonly believe.

During the 1980s, the real growth rate for health care spending was higher in 11 of 15 countries than in the U.S.

In per capita terms, most countries had real growth rates that were more than double the U.S. rate.
Many believe that countries with national health insurance have an "advantage" the U.S. does not. In those countries the government can, in principle, limit health care dollars and tell hospital managers to ration the money they are given. But that power is more apparent than real, and politicians who exercise it risk being replaced by their competitors. In the political systems of other countries, as in the U.S., there is unrelenting pressure to spend more on health care.

MYTH NO. 2: Although the United States spends more on health care per capita than countries with national health insurance, Americans do not get better health care.

This myth is often supported by reference to two facts: that life expectancy is not much different among the developed countries and that the U.S. infant mortality rate is one of the highest among developed countries.

Mortality Rates and Health Care. General population mortality rates tell us almost nothing about the efficacy of health care systems because, throughout the developed world, there is almost no relationship between health care and general mortality - either among or within countries. General mortality rates are far more closely related to socioeconomic factors and lifestyle.

For example, in Sweden, there are striking differences in health outcomes between Stockholm and Hollard, a rural, agricultural area in the nation's south:17

Infant mortality in Stockholm is almost twice as high as in rural Hollard, and mortality among 40-year-olds in Stockholm is 50 percent higher.

Even the middle-class suburban area outside of Stockholm city (Stockholm county) has an infant mortality rate 71 percent higher than Hollard's.

Yet no one has seriously claimed that these differences are the result of the Swedish health care system.
In Norway, people in the urban areas of Oslo and Akershus have the most contacts with physicians. But infant mortality in those areas is still higher than in, say, Hordaland in western Norway.18 In virtually every country, there is a positive relationship between income and health status and between social class and health. Lifestyle also appears to matter. For example, in Norway, children born to unmarried women between 1971 to 1975 had a 55 percent higher (perinatal) mortality rate than children born to married women. Between 1976 and 1980, the rate for unmarried women was 40 percent higher.19

Where Health Care Makes a Difference. A population's general mortality, then, is affected by many factors over which doctors and hospitals have little control. For those diseases and injuries modern medicine can affect, however, it makes a big difference where a patient lives. For premature babies, for children born with spina bifida or for people who have cancer, a brain tumor, heart disease or chronic renal failure - the chances of survival are best in the United States.

Access To Modern Medical Technology in Canada. Figure IV compares the availability of modern medical technology in the United States and Canada. As the figure shows:

On a per capita basis, the United States has eight times as many magnetic resonance imaging (MRI) units - which use magnetism instead of x-rays - as Canada.

The United States has seven times as many radiation therapy units (to treat cancer) per person.

The United States also has about six times as many lithotripsy units (to destroy kidney stones and gallstones with sound waves) per person.

And, per capita, the United States has about three times as many open-heart surgery units and cardiac catheterization units (for the treatment of heart disease).
Note that the figures contrast the United States with Canada two years later. Contrasting the two countries in the same year would reveal an even greater disparity. While critics of the U.S health care system claim that we have too much technology, all the evidence suggests that Canada has too little - as a result of the conscious decisions of government officials. Doctors in British Columbia have taken out full-page newspaper advertisements warning that their patients' lives are endangered by government's refusal to purchase lifesaving medical technology. It is easy to understand why these and other Canadian doctors are complaining. Consider what the shortage of diagnostic equipment means for patients:20

Seattle, Washington (pop. 490,000) has more computerized axial tomography (CAT) scanners (used, for example, to detect brain tumors) than the entire province of British Columbia (pop. 3 million).

There are more MRI scanners in Washington state (pop. 4.6 million) than in all of Canada (pop. 26 million).

The province of Newfoundland (pop. 570,000) has only one CAT scanner, causing patients who need a CAT scan to wait an average of two months.

Prince Edward Island (pop. 128,000) has no CAT scanner, and patients who need a CAT scan must leave the province in order to obtain one.

Because of a shortage of laboratory testing equipment in 1988, women in Newfoundland wait up to five months for a Pap smear (needed to detect cervical cancer) and two months for an "urgent" Pap smear.

Also because of an equipment shortage, women in Newfoundland waited as long as 2 1/2 months for a mammogram (used to detect breast cancer).

Women on Prince Edward Island wait from four to eight months for mammograms, and even "emergency" patients can wait as long as one month.
Access To Modern Medical Technology in Britain. In an extensive study of Britain's National Health Service (NHS), Brookings Institution economists estimated the number of British patients denied treatment each year, based on U.S. levels of treatment. Most of the patients suffered from life-threatening diseases and the denial of treatment meant certain death. Table II presents these estimates, along with estimates of what it would cost the NHS to bring British treatment up to U.S. standards. As the table shows:

Each year, about 9,000 British kidney patients fail to receive renal dialysis or a kidney transplant - and presumably die as a result.

As many as 15,000 cancer patients and 17,000 heart patients fail to receive the best treatment modern medicine can offer.

As many as 1,000 British children fail to receive lifesaving total parenteral nutrition (TPN) therapy and about 7,000 elderly patients are denied pain-relieving hip replacements.
Willingness to Adapt to New Technology. Some argue that countries with national health insurance delay the purchase of expensive technology in order to see if it works and is cost-effective. If true, the downside of this approach is that patients are denied access to lifesaving treatment while government bureaucracies evaluate it.

During the 1970s, for example, lifesaving innovations were made in kidney dialysis, CAT scanning and pacemaker technology. Yet as Table III shows:21

The rate of implants of pacemakers in the United States during the mid-1970s was more than four times that of Britain and almost 20 times that of Canada.

CAT scanners in the United States were more than three times as available in the United States as in Canada and almost six times as available as in Britain.

The treatment rate of kidney patients in the United States was more than 60 percent greater than in Canada and Britain.
There is considerable evidence, however, that cost-effectiveness is not what drives the bias of other governments against modern medical technology:22

CAT scan technology was invented in Britain, and until recently Britain exported (probably with government subsidies) about half the CAT scanners used in the world. Yet the British government has purchased only a handful of the devices for the National Health Service and has even discouraged private gifts of CAT scanners to the NHS.

Britain also was the codeveloper of kidney dialysis, a lifesaving method of treating patients with chronic renal failure; yet Britain has one of the lowest dialysis rates in Europe.
One could argue that the "need" for technology varies from country to country. For example, the incidence of chronic renal failure may be higher in the United States than in other developed countries. Even if this were true, however, a comparison of Table III and Table IV shows that every country had substantially increased the number of patients being treated by 1984, when even East Germany was treating more patients than Britain or Canada had treated eight years earlier.

The Politics of Medical Technology. It would be a mistake, however, to think of the current U.S. health care system as ideal. The United States has not always been the first country to adopt new technology (even technology that works and is cost-effective). We do not always purchase the most technology. And we have not always made cost-effective choices among competing technologies.

In 1970, before a dialysis benefit was extended to the entire population under Medicare, the U.S. treatment rate for patients with renal failure was on a par with Britain's and less than half that of Sweden and Denmark. Only after Medicare provided a virtual blank check did the U.S. treatment rate soar.23

How we treat kidney patients was also dictated by government reimbursement policies. Studies show that home dialysis is less expensive than dialysis in a hospital or clinic and, prior to the Medicare expansion, about 40 percent of U.S. dialysis treatment was home-based. But because Medicare gave physicians incentives to avoid home-based dialysis, the rate fell to 12 percent by 1978. There is also evidence that kidney transplants are more cost-effective (over the long run) than dialysis. But because Medicare reimbursement policy favored dialysis, the United States was 12th of 20 developed countries in the percent of kidney patients treated by transplant in 1985.24

A more recent technological innovation is extracorporeal shock wave lithotripsy (ESWL) to disintegrate kidney stones and gallstones and eliminate the need for surge government policies toward technology is in terms of the politics of medicine. As the role of government expands, health care tends to evolve from a pro-technology phase to an antitechnology phase. In the first stage, government tends to spend on items perceived as under-provided by the market or by conventional health insurance. Thus, practically every less-developed country has used government funds to build at least one modern hospital, usually in the largest city, and to stock it with at least one example of each new technology - even though the vast majority of citizens lack basic medical care and public sanitation.

As government's role in medicine expands, more and more interest groups must be accommodated. In this stage, government policy tends to be antitechnology because the small number of people who need the technology are so heavily outnumbered. Along the way, these general trends may be violated with respect to any particular technology because of the varied, even random, ways in which special interest pressures are exerted. We analyze the politics of medicine in more detail below.

When the United States had a pure cost-plus health care system, technology tended to be adopted quickly because physicians - unconstrained by considerations of cost - found the technology useful. When the role of government was minimal, it was easier to acquire public funds where conventional insurance coverage was lacking (e.g., kidney dialysis and organ transplants). It is not surprising that the United States made great use of technological innovations.

Our experience in the future may be very different, however. In the United States we pay more for health care. We also get more. And what we get may save our lives. But increasingly, our health care system is acquiring the characteristics of the health care systems of other countries, in which access to medical technology is determined by rationing and politics.26

MYTH NO. 3 In countries with national health insurance, people have a "right" to health care.

Virtually every government which has established a system of national health insurance has proclaimed health care to be a basic human "right." Yet far from guaranteeing that right, most national health systems routinely deny care to those who need it. Not only do citizens have no enforceable right to any particular medical service, they don't even have a right to a place in line when health care is rationed. The 100th person waiting for heart surgery is not "entitled" to the one hundreth surgery, for example. Other patients can, and do, jump the queue for any number of reasons.

By U.S. standards, one of the cruelest aspects of government-run health care systems is the degree to which these systems engage in non-price rationing. Take the health care systems of Britain and New Zealand, for example. In both countries, hospital services are completely paid by government. Both also have long waiting lists for hospital surgery:

In Britain, with a population of about 57 million, the number of people waiting for surgery is more than one million.27

In New Zealand, with a population of about three million, the waiting list is more than 50,000.28

In Canada, with a population of about 25 million, the waiting list is more than 250,000.29
On the surface, the number of people waiting may seem small relative to the total population - ranging from 1 percent in Canada to almost 2 percent in Britain. However, considering that only 16 percent of the people enter a hospital each year in developed countries30 and that only about 4 percent require most of the serious (and expensive) procedures,31 these numbers are quite high.32 In New Zealand, for example, there is one person waiting for surgery for every three surgeries performed each year.33

In Britain and New Zealand, elderly patients in need of a hip replacement can wait in pain for years, and those awaiting heart surgery often are at risk of their lives. Perhaps because Canada has had a national health care program for only half as long, the rationing problems are not as great as they are in Britain and New Zealand, although all three countries have similar cultures. But because the demand for health care has proved insatiable, and because Canadian provincial governments severely limit hospital budgets, the waiting lines for surgery and diagnostic tests are growing:

As Table V and Figure V show, patients in British Columbia wait up to a year for routine procedures such as cholecystectomies, prostatectomies, hip replacements and surgery for hemorrhoids and varicose veins.

In Ontario, patients wait up to six months for a CAT scan, up to a year for eye surgery and orthopedic surgery, up to a year and four months for an MRI scan and up to two years for lithotripsy treatment.34

All over Canada, patients wait for coronary bypass surgery, while the Canadian press tells of heart patients dying on the waiting list.35
MYTH NO. 4: Countries with national health insurance hold down costs by operating more efficient health care systems.

The defenders of national health insurance often point to the low level of health care spending in other countries as "proof" of efficient management. Nothing could be further from the truth. By and large, countries that have slowed the growth of health care spending have done so by denying services, not by using resources efficiently.

How much does it cost a hospital to perform an appendectomy? Outside the United States, it is doubtful that any public hospital knows. Nor do government-run hospitals typically keep records that would allow anyone else to find out.36 One reason why Margaret Thatcher called for systematic health care reform was that even Britain's best hospitals did not have computerized records, and it was not uncommon for the head of a hospital department to be unaware of how many people the department employed. In organizational skills and managerial efficiency, the public hospitals of other countries are far behind hospitals run by Hospital Corporation of America, Humana or American Medical International.

More often than not, government-run hospitals in other countries are disastrously inefficient. It is not unusual to find a modern laboratory and an antiquated radiology department in the same hospital. Nor is it unusual to find one hospital with a nursing shortage near another with a nursing surplus. Where excellence exists, it usually is distributed randomly - often the result of the energy and enthusiasm of a few isolated individuals rather than decisions by hospital managements. Moreover, even when specific inefficiencies are acknowledged, it is often impossible to eliminate them because of political pressures. For example, health economist Alain Enthoven reports that "it is more difficult to close an unneeded [British] hospital than an unneeded American military base."37 What about bed management? Consider that:

While 50,000 people wait for surgery in New Zealand and 250,000 wait in Canada, at any point in time one in five hospital beds is empty.38

While one million people wait for surgery in Britain, at any point in time about one in four hospital beds is empty.39

Moreover, in Britain, New Zealand and Canada, about 25 percent of all acute-care beds are occupied by chronically ill patients who are using the hospitals as nursing homes - often at six times the cost of alternative facilities.40
In Canada, hospitalized chronic patients are known as "bed blockers," and they are apparently blocking beds with the approval of hospital administrators - who may believe that such patients, because they use mostly the "hotel" services of the hospital, are less draining to limited hospital budgets.41

One widely used measure of hospital efficiency is average length of stay. In general, the more efficient the hospital, the more quickly it will admit and discharge patients. By this standard, U.S. hospitals are far in front of most of their international rivals.42 As Figure VI shows:43

The average hospital stay is 39 percent longer in New Zealand, 42 percent longer in Canada and 61 percent longer in Britain.

The average hospital stay among all OECD countries is 76 percent longer than in the United States.
Almost all health care economists agree that widespread inefficiencies exist in the U.S. health care system. But we will not improve our efficiency by adopting the practices of other countries.

MYTH NO. 5: In countries with national health insurance, all people have equal access to health care.

One of the most surprising features of European health care systems is the enormous amount of attention given to the notion of equality and the importance of achieving it. Aneurin Bevan, father of the NHS, declared that "everyone should be treated alike in the matter of medical care."44 The Beveridge Report, a blueprint for the NHS, promised "a health service providing full preventive and curative treatment of every kind for every citizen without exceptions."45 The British Medical Journal predicted that the NHS would be "a 100 percent service for 100 percent of the population."46 The goal of NHS founders was to eliminate inequalities in health care based on age, sex, occupation, geographical location and - most importantly - income and social class. As Bevan put it, "the essence of a satisfactory health service is that rich and poor are treated alike, that poverty is not a disability and wealth is not advantaged."47 Similar statements have been made by politicians in virtually every country that has established a national health insurance program.

Inequality in Britain. Such rhetoric rarely relates to the facts. Britain's ministers of health have long assured Britons that they were leaving no stone unturned in a relentless quest to root out and eliminate inequalities in health care. But, although an unofficial government campaign tried to suppress it, an official task force report (the Black report) concluded that there was little evidence of more equal access to health care in Britain in 1980 than when the NHS was started in 1948.48 Virtually every scholarly study of the issue has pointed to a similar conclusion.49 For example:

One study of health care spending across geographical areas of England found no relationship between any measure of medical need and the amount spent.50

Another study found that people in Britain's highest social class received 40 percent more medical care (in relation to their need for it) than people in Britain's lowest social class.51
Inequality in New Zealand. Other studies have documented widespread inequalities in health care in Sweden,52 Canada,53 New Zealand54 and elsewhere. For example, New Zealand's health care system is virtually identical to Britain's and the goal of equal access to health care ranks just as high. Yet as Table VI shows:

Among the geographical regions of New Zealand, spending on health care per person varies by a factor of almost two to one.

Surgeries per capita vary by a factor of more than six to one, doctors per occupied bed by almost six to one and the number of patients waiting for surgery by almost two to one.
Inequality in Canada. Canada is another country that puts a high premium on equality of access to medical care, if the official rhetoric is to be believed. How well have the Canadians done? Table VII compares the amount of spending on the services of physician specialists for two areas in British Columbia: Vancouver, the largest city with a population in excess of one million, and Peace River, a rural area of about 51,000. As the table shows:

Residents of Vancouver receive about three times more specialist services per person than residents of Peace River, and this inequality holds for both males and females across all age groups.

The differences are even more striking for specific specialties, with an eight-to-one difference in the services of internists and a 35-to-one difference in the services of psychiatrists.
One might suppose that the lower level of specialist services in Peace River would be offset by a higher level of general practitioner (GP) services. That is not the case. As Figure VII shows, Vancouver residents also enjoy about 50 percent more GP services.

Effects on Low-income Families. There is substantial evidence that when health care is rationed, the poor are pushed to the rear of the waiting line. In general, low-income people in almost every country see physicians less often, spend less time with them, enter the hospital less often and spend less time there - when the use of medical services is weighted by the incidence of illness. In Canada55 and other countries with national health insurance, there is no national waiting list to assure that the sickest people get care first. Even in the same hospital there are instances where elective patients get surgery while those in much greater need are forced to wait.56 Moreover, anecdotal evidence suggests that the wealthy and powerful do not wait as long as others. As one study of the Canadian system noted:

"Critics charge that those who are rich, influential, or 'connected' often 'jump the queue,' which changes Canadian health care into a two-tier system - precisely what the government wanted to avoid."57
Interestingly, among the patients who jump the queue in Canada are Americans who pay out-of-pocket for care. U.S. patients add to hospital revenues, so hospital administrators value them. Since Canadians cannot legally pay for care at a national health insurance hospital, the typical Canadian patient must wait in line.58

How does access to health care for low-income people in the United States compare with access in countries with national health insurance? Our poorest citizens - those on Medicaid - probably have more access to better health care than low-income citizens in any other country. Being on Medicaid usually means access to all the technology of the U.S. health care system; such technology is more available in the United States, and Medicaid will usually pay for it. Even though Medicaid rationing is becoming more prevalent, the U.S. probably has far less rationing than most other countries.

International opinion surveys show that, in the U.S., 7.5 percent of people say they do not receive needed care for financial reasons compared to only 0.6 percent in Canada and 0.1 percent in Britain. A somewhat smaller percent of people in the United States (5.1 percent), but a much larger percent in Canada (3.1 percent) and Britain (4.6 percent) say they cannot get care for nonfinancial reasons, including inability to get an appointment, unavailability of services, lack of transportation, etc.59

It is not clear what these responses mean. In the United States we more frequently ask people to choose between money and health care. In Britain and Canada, people more frequently must choose between health care and other (rationing) costs. We do not know if those surveyed would have obtained health care if they had perceived their medical needs as being more urgent, but that must often have been the case. Two-thirds of the people in the United States who said they did not get needed care for financial reasons had health insurance.60

A different way of comparing the United States and Canada is to look at medical care received by income group. As Table VIII shows, the differences are not that great. Low-income Canadians make more trips to physicians, but low-income Americans are slightly more likely to spend time in a hospital.

In every country, some people slip through the social safety net. But for the most part, the United States has already made considerable progress toward the goal of socialized medicine: the removal of financial barriers to health care. And, considering the rationing of medical technology in countries with national health insurance, the United States may have gone further in removing barriers to medical care than any other country in the world.

MYTH NO. 6: Countries with national health insurance make health care available on the basis of need rather than ability to pay.

Most people in Britain, Canada and other countries that ration health care believe that the wealthy, the powerful and the sophisticated move to the head of the rationing lines. Because government officials have little interest in verifying this fact, few formal studies exist. There is considerable evidence, however, that in the face of health care rationing those who can pay find other ways to obtain health care.

In response to severe rationing by waiting, both Britain and New Zealand have a growing market in private health insurance - where citizens willingly pay for coverage for private surgery, although they are theoretically entitled to "free" surgery in public hospitals. As a result, the privately insured pay for health care twice - through taxes and through insurance premiums.

In Britain, the number of people with private health insurance policies has more than doubled in the last ten years, currently totaling about 10 percent of the population with about one in every five elective surgeries performed in the private sector.61

In New Zealand, one-third of the population is covered by private health insurance, and private hospitals now perform 25 percent of all surgical procedures.62
Since Canada does not allow private health insurance, if Canadians go to the less than 1 percent of the private physicians or less than 5 percent of private hospitals, they must pay the full bill out-of-pocket.63 An exception is the small number of outpatient surgery clinics operated by entrepreneurial physicians. Government will pay the surgeon's fee but not other costs. Canadians who receive cataract surgery on an outpatient basis, for example, must pay from $900 to $1,200 out of pocket.64 In addition, Canadian citizens are increasingly entering the United States to get health care they cannot get at home. In some cases, the Canadian province pays the bill. In other cases, patients spend their own money.65 In either event, patients must bear the costs of travel. For example:

About 100 Canadian heart patients go to the Cleveland clinic each year because they cannot get timely treatment in their own country.66

A volunteer organization, "Heartbeat Windsor," arranges for Ontario heart patients to get treatment at Detroit hospitals (which accept the Ontario rate as payment in full), and Alberta has indicated it will accept a similar arrangement.67

Because there is only one lithotripter in all of Ontario, many lithotripsy patients cross the border; at Buffalo General Hospital in New York, for example, half of the lithotripsy patients are Canadians.68

Because of the inadequate facilities in Canada, about half of the in vitro fertilization patients at the University of Washington Medical Center are Canadians, paying $5,000 out of pocket for each procedure.69
In general, the Ontario government will pay 75 percent of the standard U.S. hospital charges and the same physician's fee it would have paid had the service been provided in Ontario. Apparently, many American hospitals and physicians believe they can make a profit at those rates. U.S. drug dependency centers are actually marketing their services to Canadian citizens. Although the number of Canadian patients who cross the border is small, it is growing:70

In 1990, the Ontario Health Insurance Plan paid about $214 million to U.S. doctors and hospitals - up 45 percent over the previous year.

Of that amount, 40 percent went to Florida, 9 percent to New York, 5 percent to Michigan and Minnesota and 4 percent to California.
MYTH NO. 7: Countries with national health insurance maintain a high quality of health care.

Americans repeatedly have been told that the quality of care in Canada has not suffered because of national health insurance. Yet there are increasing reports by doctors and the news media of patient deaths and near-deaths, precisely because of the government's limits on access to technology and the resulting health care rationing. Here is one doctor's report of what conditions are like in Quebec:

"In my academic practice at a teaching neurologic hospital in Montreal, the wait for the treatment of a "minor" medical problem (e.g., carpal tunnel syndrome) could be half a year or longer. What I considered essential services were unavailable. I recall losing an argument with the radiologist on call over whether a patient with a new stroke should have a CT scan at 5:05 p.m.; he judged that the situation was not an emergency serious enough to warrant performing the procedure after regular hours."71
Among the victims of Canada's system of health care rationing are the following well-known cases:

Malcolm Stevens of British Columbia died of a heart attack after two months on the waiting list. Ironically, that same day his doctor bumped another patient from the surgery schedule in order to make room for Stevens.72

Charles Coleman, a 64-year-old man, died shortly after a heart operation at Toronto's St. Michael's Hospital. Coleman's operation had been postponed 11 times.73

Stella Lacroix's death started as a suicide. Moments after she swallowed a quart of cleaning fluid she raced to the nearest emergency room. Because the hospital wasn't equipped to perform the surgery she needed to stop the internal bleeding, the emergency room physician spent 3 1/2 hours contacting 14 hospitals in an effort to secure emergency surgery and an available intensive care bed. By the time she arrived at Ontario's York County Hospital, it was too late. She died that night.74

In January 1990, two-year-old Joel Bondy needed urgent heart surgery that was repeatedly postponed. Alarmed at their son's deteriorating condition, his parents contacted Heartbeat Windsor, an underground railroad for Canadian heart patients, to arrange for the surgery in Detroit. Embarrassed by media coverage of Joel's situation, Canadian officials promised Joel would be moved to the top of the waiting list. After a four-hour ambulance ride to a hospital which lacked an available bed, the family had to spend the night in a hotel. The next day Joel Bondy died.75
These examples are far from unique. Indeed, the Canadian press has produced scores of similar stories. The following are some additional examples:

According to one report, 24 people died in 1989 while waiting for heart surgery in British Columbia.76

At Winnipeg's Health Science Center, Manitoba's largest hospital, six heart patients died in 1988 before they reached the operating room.77

In Toronto, where about 1,000 people are facing waits as long as a year for bypass surgery at three hospitals, two patients died in two months.78

In January 1989, long waiting lists forced Toronto's highly respected Hospital for Sick Children to send home 40 children who needed heart surgery.79

At Moncton Hospital in New Brunswick, some patients were kept in hallways and even in closets, while 2,300 people were on the waiting list for surgery.80

Because of a four-month wait for mammograms at St. Clare's Hospital in Newfoundland in 1988, preventive screening became impossible and the hospital could handle only women who needed an immediate diagnosis.81

In September 1989, Princess Margaret Hospital in Toronto announced it would not accept new cancer patients requiring radiation therapy for a six-week period in order to clear up a 300-patient backlog.82

In 1990, the only hospital doing cardiovascular surgery in northern Alberta had 210 adults and children on its waiting list - with some patients waiting as long as a year.83

In 1989, doctors at Brandon General Hospital said bed closings had left 91 patients, including cancer victims, waiting up to six weeks for urgent surgery. Most of the patients had cancer of the breast, bowel or lungs.84

In 1989, the Health Minister of Newfoundland announced the closure of more than 400 beds due to lack of funds - one-eighth of all beds in public general hospitals in the province.85

In an interview with reporters on a Canadian Broadcasting Company program, ambulance drivers recounted how a patient's condition steadily deteriorated as they traveled from one emergency room to another in search of one that would take him. The patient died.86
MYTH NO. 8: Countries with national health insurance eliminate unnecessary medical care.

A frequent criticism of the U.S. health care system is that it is wasteful because a considerable number of procedures are "unnecessary." For example, Dr. Robert Brook of the Rand Corporation maintains that "perhaps one-fourth of hospital days and two-fifths of medications could be done without."87

One source of evidence for unnecessary medical care is a series of studies that show wide variations in the rate of treatment among different U.S. communities, with no apparent justification. Another major study, conducted by the Rand Corporation, concluded that 40 percent of medical procedures were "inappropriate" or "questionable."88

One might suppose that in countries where health care is rationed and many medical needs are unmet, doctors would tend to provide only "necessary" care. That turns out not to be the case. As in the United States, considerable variation in treatment rates exists. For example, in Britain there are widespread differences in the referral (to specialists) rates of general practitioners and in their prescribing habits:

One study found a four-to-one difference in the number of prescriptions per patient among British doctors, and for prescriptions to treat specific diseases the differences were even greater.89

The difference in the rate at which British general practitioners refer patients to hospital specialists varies by at least four to one - according to one study by 25 to one - and there is a high correlation between referrals and subsequent hospital admissions.90
Figure VIII shows that the practice patterns of physicians vary widely in Canada as well. For example:

There is a four-to-one difference among Canadian counties in the rate of cesarean sections.

There is a four-to-one difference in rates of tonsillectomy and hysterectomy and a two-to-one difference in the rates of mastectomy, prostatectomy and cholecystectomy.
Figure IX and Figure X compare the rates for surgeries over which doctors exercise a great deal of discretion. There is no common pattern except that British rates are generally lower - as they are for almost all types of surgery.

Close inspection of the Rand study reveals the major reason why there are such variations in medical practice in the United States: doctors frequently do not agree on what should be done and there is often is no objective, "right" answer. Indeed, when the Rand researchers went to great lengths to get consensus, a panel of experts was able to agree on a procedure's appropriateness less than half the time.91 Medicine, it seems, is often more art than science.

Interestingly, the panel did agree that 12 percent of the time certain procedures were clearly inappropriate. But the cases studied were in the early 1980s, and undoubtedly less inappropriate medicine is practiced today. The reason is that the United States has devoted considerable resources to monitoring the behavior of physicians to insure high-quality care. Most countries with national health insurance have done little along these lines.92

MYTH NO. 9: National health insurance would reduce the administrative costs of the U.S. health care system.

The administrative costs of any production system can be reduced by firing all of the administrators and abolishing all reporting requirements. But most systems would perform far less efficiently as a result. The real goal is not to get administrative costs as low as possible but to make the system as a whole perform as efficiently as possible.

A similar observation holds for marketing and other costs of competition. Money could be saved by, for example, abolishing all car dealerships and all advertising by auto producers. Money could also be saved by producing a single model car and eliminating competition among different models and different producers. We could simply pay taxes and have government provide us with a new automobile every few years. But th countries would not have collapsed.

A number of studies have claimed to show that the administrative costs of the Canadian system are well below those in the United States.93 One problem with these studies is that government accounting techniques invariably underestimate the real cost of government provision of goods and services.94 A more basic problem is that the studies look only at one aspect of administration (e.g., administrative salaries, costs of paperwork, etc.) while ignoring the effects of administration (e.g., how efficiently the health care system meets consumer needs).

The costs of rationing by waiting and the waste of resources caused by perverse incentives are costs of administering the Canadian system. One can not legitimately calculate administrative savings in the system without including the adverse effects on patients.

Moreover, many administrative costs in the U.S. system exist not merely to oversee the exchange of money between suppliers and third-party payers, but also to prevent inappropriate care and maintain quality. Even if the United States adopted a program of national health insurance, it is unlikely that we would follow the Canadian practice of giving hospitals global budgets and forcing physicians to ration care with few questions asked.

How the U.S. Tax System Encourages High Administrative Costs. The administrative costs and paperwork burdens of our system are much too high. That is a consequence not of private provision of health care but of federal policy. Under our tax system, employees (through their employers) can spend unlimited amounts on third-party health insurance. At the same time, any funds employees set aside as self-insurance for small medical bills face a 28 percent income tax, a 15.3 percent FICA tax and, usually, a 4, 5 or 6 percent state and local income tax.95

As a result of federal tax policies, most employees are overinsured - using third parties to pay for routine checkups, diagnostic tests and other small medical bills. Not only does too much insurance encourage people to be wasteful consumers in the medical marketplace, it also adds to administrative costs:

Studies show that physicians spend about $8 to process a single insurance claim.96

Most third-party payers spend another $8 for every check they write, and if the insurer makes an additional effort to verify the claim, the costs can be much higher.

Thus, a $25 physician's fee can easily become $50 of total costs when third-party payment is involved - effectively doubling the cost of health care.
Reducing Administrative Costs With Medical Savings Accounts. A different approach is used in Singapore, where people are required to deposit 6 percent of their salaries each year in personal medical savings accounts, called Medisave accounts. When Singapore residents are hospitalized, they pay the bills from their Medisave funds and avoid many of the administrative burdens of health insurance.97

If the U.S. government gave as much tax encouragement to self-insurance through Medisave accounts as it now gives to third-party insurance for the employers and employees of large companies, the administrative costs of U.S. health care could be cut in half.

Whereas the administrative costs of private health insurance average about 11 to 12 percent of premiums, payment of medical bills with Medisave funds could be accomplished by use of health care debit cards - with administrative costs between 1 and 2 percent.

There is no economic reason why we could not move to a system in which most medical bills are paid by patients with health care debit cards, relying on third-party insurance to pay only catastrophic expenses.98
Health Care Debit Cards. A general system of Medisave accounts would lead naturally to the use of health care debit cards. Patients could, for example, pay for physician visits by using their cards just as people now pay for merchandise at retail stores. Several health care debit card companies already exist, including Pulse Card, headquartered in Kansas City, Kansas, and Security Plus, headquartered in Newport Beach, California.99

Health care debit cards could be combined with another technological innovation to reduce other costs and improve the quality of care. Several companies are experimenting with technology that would put a patient's entire medical record on a credit card.100 This would allow physicians immediate access to each patient's complete medical history. Putting medical records on a credit card could be costly. But it might be less costly than the current system under which physicians treat patients about one-third of the time without access to their records.101

The Benefits of the Canadian System Without the Costs. Advocates of the Canadian system of national health insurance cite two principal benefits: (1) patients entering the health care system need produce only a national health insurance card in order to receive care, and (2) the administrative costs of the system are lower because the paperwork is reduced and other costs - such as marketing - are eliminated. Fortunately, the United States can enjoy these advantages, without the disadvantages of the Canadian system.

Table IX shows three estimates of how much U.S. administrative costs could be reduced by adopting the Canadian system. The estimates range from a Lewin/ICF estimate of $34 billion to a General Accounting Office (GAO) estimate of $67 billion. As noted above, we believe these estimates are too high.102 But they may serve as an indicator of potential administrative savings - to the degree medical bills are paid with health care debit cards.

Table IX also shows the additional cost in the United States of making health care absolutely free at the point of consumption as it is in Canada. The estimates are based on the GAO's interpretation of a Rand Corporation study, which found that making medical care free greatly increases the amount consumed - even though the additional consumption has little impact on the patients' health. As the table shows, the additional cost of making health care free for everyone more than offsets even the most optimistic estimate of administrative savings.

We used the GAO method to estimate the potential reduction in administrative costs under a system of Medisave accounts and health care debit cards, and the Rand Corporation's method to estimate the likely reduction in health care spending if people had high-deductible health insurance. Table X shows the probable effects of a generalized system under which everyone (including Medicaid and Medicare patients) has third-party catastrophic insurance and uses health care debit cards to draw on individual Medisave accounts for small medical bills. As the table shows:

The widespread use of Medisave accounts would reduce administrative costs by as much as $33 billion.

Because high deductibles would make patients more prudent purchasers of health care, total spending would go down by as much as $147 billion.

Overall, universal catastrophic health insurance combined with Medisave accounts would reduce total spending by $168 billion - almost one-fourth of what the United States currently spends on health care.
MYTH NO. 10: National health insurance would benefit America's elderly.

If the experience of other countries is any guide, the elderly have the most to lose. In general, when lifesaving care is rationed, the young get preferential treatment. Take chronic kidney failure, for example:103

Across Europe, 22 percent of the dialysis centers reported that they refused to treat patients over 55 years of age in the late 1970s.

In Britain, 35 percent of the dialysis centers refused to treat patients over the age of 55, 45 percent refused to treat those over 65 and those over 75 only rarely received treatment.
Table XI, which shows treatment rates by age for four European countries, illustrates two pertinent features of nonprice rationing of medical care. First, when resources are limited, middle-aged patients get priority over older patients. In Germany, France and Italy, the treatment rates were highest among those aged 55 to 64. In Britain, the treatment rates were highest among th

[stormchazer]

Sorry that was long. Here are a few more:

http://www.lgreen.net/commhlth/CommHeal ... EBATES.htm

http://oldfraser.lexi.net/publications/ ... on_02.html

the opinion

How the Government Caused the Health Care Disaster
by Kevin Beane
Tuesday, October 31, 2000

We hear from talking heads that we have 40 million citizens in this country that can't afford health insurance...with usually the implication that the government needs to do something about it. I assert that government was the entity that made health care so expensive and terrible in the first place. First, the income tax code allows employers to deduct employee health costs from the employers' taxable income, but doesn't allow employees and self-employed individuals to deduct much of their costs. This drives up the prices of health care for those who weren't wearing the right business clothes to work. Second, the laws on the books force insurance companies to cover various treatments, instead of giving the consumer the choice of what kind of coverage they feel is appropriate. The government dictates to the industry that they must load your policy with benefits that you don't want or need...and will certainly reflect that in the price of your premium, driving up the cost for everyone. The third major way the government created today's health care crisis, which will comprise most of the rest of this discussion, is the counter-productive Medicare system.


The Medicare Bill


Medical costs seriously skyrocketed with the advent of Medicare. Why?


Consider this: Suppose you never had to pay for any doctor visit, health, or medical coverage ever again. Would you visit the doctor more, or less? More, most likely. We usually don't consider visiting a doctor when we are afflicted with what we think is the common cold. However, if I don't have to open my wallet when I visit the doctor, then I might take a trip to his office. It could be the flu...I could get a shot for that just in case. There's a possibility it could be mono...let's get some free blood work done for that too. Maybe he could take a look at this ugly hangnail, there's a popping noise in my jaw, and it hurts when I do this.


This is obviously exaggerated for simplicity. But the principle here is that when someone ELSE pays for your doctor visit, the doctor is going to be seeing quite a bit more patients and handing out quite a bit more medicine. When medicines are handed out like candy, then the disease will become resistant to the common cures faster, making it difficult for the producers of drugs to keep up with the mutating germs. Medicare isn't free though. That somebody else who is paying for those doctor visits is us. We pay taxes for all the new superfluous health care expenses that your fellow Americans are making...and we are paying more…a lot more. When the government is billed for health care, such as the case in Medicare or Medicaid, the doctors, clinics, and hospitals can only collect as little as 25% to 50% of a normal bill. In order to stay in business, they have to make up the difference by overcharging their paying customers -- including you.


All these, and many more left unmentioned because it would take up way too much space, have destroyed the health care industry. These costs translated means that today's seniors pay at least twice as much for health care as seniors did before Medicare, even AFTER allowing for Medicare's contribution AND after adjusting for inflation.


The Medicare Behemoth


Medicare is so complicated; no one person could ever possibly explain the complete system to you. The rules, guidelines, and instructions cover 111,000 pages. That's probably equivalent to about a hundred bibles. They are also probably written in legal mumbo-jumbo, meaning your average doctor probably can't even understand it anyway. Whenever you hear that Congress has reformed the system to make it easier to deal with, to eliminate waste and corruption, or to provide more choice, you can assume that it has become even more complicated. Because Medicare regulations are so extensive, ignorance of the law could easily get you or your doctor in legal trouble for doing something that's against the law. Penalties for mistakes include fines and imprisonment. Your Medicare doctor could have his hard earned money taken away from him or be put behind bars because he failed to adhere to every word written in The Medicare Behemoth.


Does that make YOU want to be a doctor? Not me. Someone with the inclination to pursue clinical healing might choose not to for this very reason. The supply of health care providers must inevitably drop, or at least grow at a slower rate than the rest of the economy due to the complicated law. In fact, this will probably encourage more people to become lawyers instead, to extort even more money from the health care professionals. That's just what this country needed to improve the health care industry...more lawyers. And lawyers often end up in politics to write more laws, completing the circle of utter corruption. But I digress.


Medicare Consumers Have My Sympathy.


Medicare routinely turns down roughly 20% of all the procedures physicians decide are needed. That means that if you are in the waiting room with four other Medicare consumers seeking a necessary procedure, one of you will go home without it. The good news is that you can appeal your denial. The bad news is it can take as long as a year for your appeal to be processed. If Medicare refuses your request for a particular test or treatment, even one your doctor thinks is essential, you can't pay your doctor directly for it. If the doctor were to accept your money, he would be expelled from Medicare and lose all his other Medicare patients for two years thereafter.


The "Medicare + Choice" bill in 1997 included demands that managed-care providers add more services without being compensated for them. This pushed so many providers into a loss position that over a hundred of them chose to leave the Medicare system entirely -- making over 400,000 senior citizens search for new plans. The result has been less choice for the elderly, not more.


FDA, Go Away!


The delays caused by the Food and Drug Administration regulations likely cost many more lives than they save. Especially for the terminally ill, like my own father with colon cancer, denying access to drugs that could potentially save their lives, prolong their lives, or make them more comfortable, is especially cruel. For an example with just one drug, the FDA's three year delay in introducing Propranolol after it was sold in Europe, cost (conservatively) 30,000 U.S. lives. I consider this nothing less than mass murder upon the American people. I wonder why we dropped bombs in the Balkans on the other side of the planet when we continue to practice genocide in our own country.


HMO, Oh No!


Even after reading all this, you may still believe that HMOs are even worse than government involvement in medicine. And you could be right. But consider this...what made the HMO industry so powerful to begin with? In 1973 Congress passed the HMO Act -- which subsidized HMOs and forced any company providing employee health insurance to offer an HMO as an option. That's right, HMOs became powerful because the Government made them so.


The Solution


America had the best health care in the world until the 1960's...about the time the politicians got their greedy hands all over the industry. It's time to get the government completely out of the health care business, and leave it to doctors and pharmacists, and not the likes of Al Gore, George Bush or Hillary Clinton. As a libertarian, I believe that YOU should have the right to make your own decisions on such an important issue as your health care, not a government bureaucrat.

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Note: The opinions expressed on The Opinion are not necessarily the opinions of The Opinion.

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