Monday, June 14, 2004

Conservative Myths about Single Payer

At, Paul Jacob makes the conservative case against single payer health care. There are a couple points where his numbers or his reasoning are just plain wrong.

First, he says:

In Canada, on the other hand, it's pretty much government through and through. Though "free medicine" sounds great, its implementation has led to more than a few problems. For something "free," it comes with a high price tag: Canadians pay for the service in extremely high taxes.

Really brief numbers for you. U.S. per capita health spending in 2001 was $4,887. In Canada it was $2,792. (Stats here, courtesy of OECD). According to Mr. Jacob's own citation, 45% of U.S. health care spending is by government (I realize that the percentage is a 2002 figure, but let's assume, arguendo, that there was not a substantial change in one year). With my trusty calculator, I see that 45% of $4,887 is $2,199.

In other words, the U.S. federal and state governments spend about $600 less per person than Canada does. However, every Canadian is insured. In 2001, we had about 41 million uninsured people. Add to that the fact that we are privately paying an additional $2600 per person on average and you see that we are paying drastically more per person and still not insuring everyone.

Next, he argues:

Calling something "free" and paying for it with taxes doesn't take away the need to make hard choices. Demand for medical services is almost limitless, especially when you make the "demand" little more than a request. So some means of rationing has to be put in place. And in Canada, doctors and administrators naturally choose the easiest method: delay.

Like socialist systems elsewhere, Canada's health care system rations by procrastination.

We'll call this the rationing argument. The problem with the rationing argument is not that it is not correct, as far as it goes. It misstates the problem. The U.S. health care system rations care, too, but we do it on the basis of wealth, rather than on the basis of a wait. If you are poor in this country, you often don't get any medical care at all until it becomes an emergency, and then you receive poorer care.

The evidence of this is primarily anecdotal, but anyone who has had to obtain care from an urgent care center of an HMO or from a hospital ER will tell you that very often you don't even see a doctor, but a Physician's Assistant. When you complain of any sort of illness symptoms, these PA's are likely to throw antibiotics at the problem rather than engage in any sort of protracted diagnostics.

Furthermore, if we were to fund a single payer system at our current per capita spending, we could cover the cost of the uninsured portion of our population and still have significantly less delay than Canada. The average privately spent insurance dollar in our country yields only 70 cents of medical care, with 30 cents going to administration and shareholder profit. Medicare, on the other hand, runs at about a 3% overhead. When we eliminate profit for the insurance company and simplify the administration to leverage Medicare efficiencies, we can apply an additional 27 cents on each private dollar to patient care. I'm sure that Mr. Jacob would agree that additional capital outlays could alleviate the shortages that Canada faces.

The rest of Mr. Jacob's cricisms are confined to faults with the Canadian system, such as the long waits leading to preferential treatment for the wealthy (who can bypass the waits by being connected). To some extent this will happen in any universal system, but it can be reduced with shorter waits (as we would have in a similarly funded U.S. system), and, at any rate, is not really a strong enough criticism to derail the vision of universal health care.

UPDATE: One last point. Another crucial factor in holding down costs in any health care system is education, and any redefinition of health care (or, for that matter, maintenance of the status quo) will demand that we devote at least some resources to administratively simplifying the process of obtaining care. Single payer again triumphs in this arena.


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