The Myth of Socialized Medicine

Almost a decade ago the chattering class claimed the answer to American's health care crisis was a government-controlled managed competition monopoly. Today, socialized medicine has again become an issue. You may recall the Harry & Louise ads which explained that managed competition was just a euphemism for socialized medicine delivered by an HMO. Next we were told managed care was the answer to our health care needs.

Lately, however, managed care has lost some of its luster as a "cure-all" for the U.S. health care system-mainly due to consumer dissatisfaction. Now, the left is again talking about the United States adopting socialized medicine, although they no longer call it that. The current euphemism for socialized medicine is a "single-payer" health care system.

Essentially liberals are saying that we need to replace our heavy emphasis on managed care with a system that has few of its benefits, but all of its flaws. Managed care was developed largely to hold down rising health care costs by aggressively controlling them-so aggressively as to build a smoldering anger of alleged abuses, which manifests itself in today's consumer dissatisfaction with HMOs.

Why do some people hate their HMO? The most common complaints are that HMOs deny care and don't provide a high level of quality of care. I'm not out to bash managed care – if you like your HMO, that's fine with me. Managed care gets a bad rap for "rationing" care, but that's exactly what it's designed to do. An HMO is supposed to underwrite the health risk of a given population and then provide only care that is medically necessary to maintain the health of that population. This is precisely what a single-payer system of national health insurance does as well. The difference is the way in which they ration (e.g. allocate) resources.

My colleagues at the National Center for Policy Analysis are about to publish an updated study called, "Twenty Myths About National Health Insurance." They found that all (single-payer) systems of national health insurance hold down costs partly by delaying care (or denying care) to those in need. For instance, these systems always under-invest in diagnostic equipment. Not only do they reduce the cost of capital acquisitions, but they also reduce the cost of treating the patients who need those services. In the process of having to wait in line for an MRI or CT scan, some patients get well, or die, or just go away. Many patients who don't want to enter the juggernaut of waiting lines simply don't seek help for health problems that are supposedly covered. What kind of way to save money is that?

Anecdotes like these make the most egregious HMO practices pale in comparison. National health insurance shortchanges patients in other ways. Since doctors are the gatekeepers to care, most curtail the number of practicing physicians by paying them only a fraction of what their American counterparts earn. Having fewer doctors reduces costs by reducing care. Getting to see a family doctor is relatively easy, but getting to see a specialist requires a long wait. In Canada the average wait to see a specialist is around two months. Once seen by a specialist, a patient might wait another two months before receiving a treatment.

National health insurance also skimps on other high-tech treatments. A report by the World Health Organization recently found that around 25,000 British patients die of cancer each year because they did not receive the highest quality treatments routinely available to Americans with the same disease.

Another scary thought is how, in countries with socialized medicine, the politics of medicine determines which types of care are available. Consider my earlier example of cancer care in Britain. The reason British patients often lack the best cancer treatment is because the politicized health care system prefers to spend money on primary care. It's not about patients – it's about votes. When medical care is funded by taxation and allocated by government, those most likely to vote are the ones who receive the best care.

Americans think Socialized medicine are dirty words for good reason. Without exception, every country around the world that has nationalized its health care sector has eventually had to ration care. Our current system may not be perfect, but nationalizing health care would make matters infinitely worse.