“SOCIALIZED MEDICINE”, ANYONE?
Definitions
Any time a progressive administration proposes a system of health care that guarantees all citizens the right to such care, Republicans shout “socialized medicine!” That exclamation is supposed to end the argument with no further investigation. Apparently, Republicans have been using this boogeyman to scare the American public for 70+ years. It was invented by an ad firm working for the American Medical Association in 1947 to kill President Truman’s plan for a national health care system[1]. Republications never say exactly what “socialized medicine” is because it is more useful for their purpose of killing any health care plan to leave the meaning nebulous. If there is any follow-up at all, Republicans ask the ominous question, “Do you want your health care to be decided by a government bureaucrat who comes between you and your doctor?” Actually, your health care now is decided by an insurance company bureaucrat who is rewarded for denying claims, thereby increasing company profits. Republicans will also claim that any government plan will ration health care, all the while ignoring the fact that health care is rationed now by wealth. Basically, any endeavor that is not for-profit is “socialism” to Republicans.
In this paper I will be specific about what I mean by “socialized medicine” and other similar terms.
1. Socialized medicine will mean herein a health care system in which the medical facilities are government owned and the medical providers are government employees. Costs are paid (or mostly paid) by general government revenue, that is, taxes. In the U.S., the prime examples are the armed forces medical system and the VA medical system. So we already have socialized medicine for some citizens. Other countries that use some form of this system are the United Kingdom, Italy, Spain, and the Scandinavian countries.
2. National health insurance is not “socialized medicine” but rather a not-for-profit health insurance plan run by the government. Medical facilities and providers remain private. Medicare in the U.S. is a notable example, so we have a national health insurance plan for seniors. These plans are usually funded by premiums paid by the enrollees, payroll taxes, and some general revenue. Countries on this sort of plan include Canada and South Korea.
3. The Bismarck Model uses private medical facilities and providers, and also private insurance companies for payment. Obviously the American Affordable Care Act (or “Obamacare”) is closest to this model. Other countries that use some form of this are Germany, France, Belgium, Switzerland, and Japan. One major difference from the ACA in other countries is that every insurance company has to offer a basic plan (for a government set price) similar to our Medicare coverage. This basic plan is a not-for-profit one. Then the companies can offer whatever additional coverage they want for any price they want. These plans are often financed by payroll deductions like Social Security in the U.S.
Every major industrialized democracy except the U.S. has declared that health care is a basic right of its residents and provides equal access to health care regardless of wealth. There are zero bankruptcies in U.K., France, Japan, Germany, the Netherlands, or Switzerland due to medical expenses. This record is unlike the U.S. where 530,000 bankruptcies per year are linked to illnesses or medical bills even after the ACA, according to a February 2019 article in the American Journal of Public Health.
The remainder of this study examines the costs and benefits of the health care systems in the U.S. and other countries (what Republicans would call “socialized medicine”). To compare like with like, I consider only industrialized democracies, or First World countries.
The OECD Countries
There are 36 member countries in the Organization for Economic Cooperation and Development (OECD). All the countries normally thought of as First World countries are included, plus others that are more like “wannabes”: Turkey, a member, is now pretty much a straight dictatorship although all members are supposed to be committed to democracy. The member nations are listed below.
It is these countries, particularly the wealthier ones, which will be used for comparison.
Adverse Selection
Every First World country has a health plan that includes guaranteed acceptance and the individual mandate: no one can be turned down for the health plan even if they are in poor health, and everyone has to join. The two things go together to make a viable health care plan. If pre-existing conditions are not to disqualify participants, then there must be a large pool of healthy participants also; that large pool is provided by the individual mandate.
If the individual mandate is removed while pre-existing conditions are still covered, then the plan is subject to what is called adverse selection (which will kill the plan in the long run). People will learn to wait to join until they have a serious illness or injury. The ratio of healthy participants to those needing expensive care will drop, eventually bankrupting the plan.
That is exactly the Republican plan for killing the ACA. They removed the individual mandate under the guise that people don’t like that part of it, but kept the coverage of pre-existing conditions. They know full well, that this will kill the plan in the long run as insurance companies drop out, but they are too cowardly to do what they really want: kill the ACA altogether and go back to the pre-Obamacare days when health insurance companies could say to the American public, with impunity, “Your money or your life.”
Costs
The U.S. spends much more on health care than any other nation in the world. Figure 1 shows per capita spending on health care for the OECD countries. I have left out four countries that have dubious “First World” status in order to make the figures less crowded. Those omitted are Chile, Latvia, Mexico, and Turkey. They are all near the bottom of the spending list.
FIGURE 1
Figure 2 shows spending as a percent of GDP. Note that Switzerland is second in spending on both lists, but still not close to the U.S. Also the countries with real socialized medicine (U.K., Italy, Spain, and the Scandinavian countries, are all well down the list in spending.
FIGURE 2
Overhead
Another aspect, related to cost, is overhead or administrative costs. Conservatives will insist that private, for-profit, enterprise is always the most efficient way to accomplish anything. Either they haven’t looked at the actual numbers or they are lying. The private, for-profit health plans offered by insurance companies in the U.S. have an overhead of around 20%. That is, only 80% of what they collect in premiums goes to actually pay medical claims. Compare that figure to Medicare overhead of about 3%. France’s non-profit private health insurance industry comes in around 5% overhead. Taiwan’s national health insurance system comes in around 2%. Britain’s National Health Service, true socialized medicine, has about 5% overhead. America’s cost is so high because we are the only major country that allows private companies to make a profit on basic health insurance. It is inescapable that systems with 5% overhead will be able to offer the same coverage for less money, or more coverage for the same money, as one with 20% overhead. All these government-run systems are 4 to 10 times more efficient than the private, for-profit, U.S. health insurance systems.
Benefits
So what health outcomes do the various countries get for their expenditures? The broadest measure of national health outcomes would be simply life expectancy, that is, life expectancy at birth. Figure 3 shows this variable for the 32 OECD countries of Figures 1 and 2. The differences are exaggerated by starting the bars at 70, since all life expectancies are above 70, and male and female are lumped together.
The U.S is far from first place by this measure, ranking 26th out of the 32 countries, even though we spend a lot more money. Japan (Bismarck model plan) has the highest life expectancy. Also many truly socialized medicine countries beat the U.S. (Spain, Italy, Iceland, Sweden, etc.).
FIGURE 3
One reason that we don’t make a very good showing on life expectancy is because our infant mortality rate is high for a developed country. It doesn’t take many infant deaths to quickly pull down life expectancy at birth. Infant mortality is defined as the number of Infant deaths before one year of age per 1000 live births.
Figure 4 shows infant mortality for the 32 countries. To our shame, the U.S. is the worst of the 32. We know how to save these infants and we could, but we don’t provide free pre and post-natal care like the other advanced nations do. “Too expensive” say the conservatives. But how much is the life of a baby worth?
FIGURE 4
There are health measures that are more specifically designed to shed light on how well a nation’s health care is working. One is called “Amenable mortality for persons under 75 years of age”. This refers to illnesses and conditions that are serious but amenable to medical intervention. This is, after all, what we want a health care system to do: not let those who are saveable, die. Figure 5 shows this measure for 19 of the OECD countries[2]. The U.S. is the worst of the 19 at saving those who should be saved by medical care.
FIGURE 5
However, this measure can still be affected strongly by the high infant mortality rate in the U.S. because it considers all residents 0 to 74 years of age. Another measure of how good a national health care system is (and which avoids infant mortality) is “healthy life expectancy at age sixty”. Clearly infant deaths can’t affect this one, because it only starts looking at people at age 60. This measure does not recommend our way of doing things either. The data is only given to a precision of one year[3], but out of the 32 OECD countries we have been using for comparison, there are only 6 that have lower healthy life expectancies at age 60 than the U.S.; 3 countries have the same as the U.S. (23 years) and 22 have a greater life expectancy, with Japan topping the list at 26 years.
There are two rather specific measures of health care for which the U.S. ranks first. One would certainly hope so, considering the money we spend. They are the 5-year survival rates for both breast cancer in women and prostate cancer in men. The same is not so for other cancers nor other diseases like heart disease and diabetes.
Conservative Arguments I Have Heard
After the usual “socialized medicine” scarecrow, you often hear, “We can’t do that – it costs too much.” Actually, Figures 1 and 2 show that our present system, relying on for-profit private health insurance companies, is what costs too much. The American public is pouring its health care dollars into profits for private companies, which happens in no other advanced country in the world. When a politician says that any one of these plans used in other countries, “costs too much” what he or she really means is, “it would cost our dear friends in Big Insurance and Big Pharma too much.”
Related to “costs too much” is the threat that we would have to (horror!) raise taxes. Yes, but the increase needed would be far less than Americans are paying in health insurance premiums now, and those would be gone. Besides, of the 32 countries in Figures 1 and 2, only South Korea had a lower tax burden than the U.S. – and that was before the tax cuts of 2018.
Conservatives don’t use quantitative data and statistics much, either because they don’t understand them or because they do and know such data will contradict the point they are trying to make. Often they rely on “horror stories” that happened to sick people in other countries, like, “so and so died while on a waiting list to see a specialist.” Every country has medical horror stories – some are even true. The U.S. has plenty of its own (some people die because they don’t have the money to see a doctor at all). That’s the trouble with anecdotes: for every one you can tell about a foreign medical system, I can tell one about the U.S. system, and nothing is ever resolved. That is why I try to use quantitative statistical data whenever possible; it is just more objective. So instead of anecdotes I present here the results of a survey of how satisfied citizens are with the health care in their own countries. Only 17 of the 32 countries we have been using were included in the survey. These results were obtained by a team at the Harvard School of Public Health[4] around 2000 (before Obamacare) so the U.S. may show up better now. At the time the U.S. showing was quite poor compared to other advanced countries, 14TH out of 17 as illustrated by Figure 6.
FIGURE 6
There are a few conservative arguments that do actually use quantitative data, but they are highly misleading. Dr. Kevin C. Fleming, a health care analyst for the Heritage Foundation, a conservative think tank, says, “Today, the United States has high neonatal intensive care capacity, with 6.1 neonatologists per 10,000 live births; Australia has 3.7 per 10,000; Canada has 3.3 per 10,000; and the United Kingdom, 2.7 per 10,000.” He then goes on to compare neonatal intensive care beds[5]. I have seen other arguments like this, basically inventories of some medical equipment or facilities, that purport to show that the U.S. is actually number 1 in health care. Such arguments are ludicrous. It is exactly as if the Lombardi Trophy were awarded each year, not by playing the Super Bowl game, but rather to the team with the best weight room, training facilities, whirlpool baths, etc. You’ve got to play the game! And when the health care game is played, the U.S. loses to countries with what Republicans (and Dr. Fleming) call “socialized medicine” pretty much every time.
A related conservative argument insists the U.S. health care system must be best because princes, potentates, and plutocrats travel here for treatment when they have serious health problems. Yes, the U.S. health care system is pretty swell for the 1%. For the other 99% of us, not so much. The Question in the Title
Socialized medicine (in the Republican sense), anyone? More satisfied participants? Better health care for less money? Yes, please.
Gary Waldman
April 2019
[1] T.R. Reid – The Healing of America – Penguin Books, New York, N.Y. (2010), p. 17
[2] Ellen Nolte & C, Martin McKee – Measuring the Health of Nations: Updating and Earlier Analysis – Health Affairs, vol. 27, no. 1, Jan/Feb 2008, Exhibit 5
[3]www.helpage.org/global-agewatch/population-ageing-data/life-expectancy-at-60/
[4] www.healthaffairs.org/doi/full/10.1377/hlthaff.20.3.10
[5] Ref. 1, p.234
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