The Paradox of Government-Monopoly Medicine
Why in the USA is health care a federal case? The nature of health care is that it is something you need at random, and when you need it, you've got to have it even at a high price. We also need food, but that we get on a regular basis, with no big surprises.
by Fred E. Foldvary, Senior Editor
But while a health emergency can strike you at any time, like a tiger pouncing out of the dark, what appears random to the sufferers is a regularity for the population. We know that some regular percentage of folks will have injuries and illnesses during a year. That's why we can insure for it, just like we have life, home, and car insurance. So why don't folks just buy insurance privately?
In the USA, many do, only it's often done through the employer, since the boss gets a tax deduction and the worker does not. But many people are considered too poor to get insurance, so the federal government insures the poor with Medicaid and the old folks with Medicare. Now they want to expand the benefits to drugs. It is the nature of medicine that we can never have enough if it's user-free, so the push is to ever expand government coverage.
In Great Britain they decided that since everyone needs insurance, the national government may as well provide it to all. According to a poll by the Times of London, 46 percent of Britons regard their National Health Service as the greatest achievement of the British government in the 20th century (NCPA Policy Digest 2-10-00).
Is it not wonderful to get free health care? But it is not free - the British pay for it from taxes. As for the poor, government could instead give them health vouchers for private medical care. So the great benefit of government-provided medicine must be its monopolization, since if it is just a problem of money, then transfers or the redistribution of income would solve it.
The facts indicate that British health care is a wee bit short of utopian. The British NHS has 1.1 million patients on its hospital waiting lists, and half as many doctors per capita as the U.S.(1).
In cancer treatment, problems in the NHS include a chronic lack of funds, specialists, and treatment centers; unequal treatment throughout the country; and in some cases the postponement of aggressive treatment until it is too late. According to the World Health Organization, 25,000 Britons die of cancer unnecessarily each year. Britons are not provided with drugs that are routinely administered in the U.S. for colon cancer, leaving British subjects with a survival rate of 41% versus 64% for Americans. For women with breast cancer, the five-year survival rate is 67% in Britain compared to 84% in the U.S.A.
As for the totality of health care, the United Kingdom spends about 6.8% of its gross domestic product on health care, versus 14% in the USA. In the UK, some 500 people a year die while on the national waiting list for heart operations (2).
Evidently just making medicine a government monopoly does not improve service. Why then do so many Britons regard nationalized medicine as their country's crowning achievement? Partly it may be ignorance of how their system compares with that of the US, where the government provides subsidies rather than direct service. But mainly it may be that subsidies, vouchers, and income transfers are politically more volatile and subject to cuts than the outright entrenched provision of the service by government.
So it seems the British want security in medical provision, even at poorer service, and at the root of their insecurity is poverty. It is not the abject poverty of being hungry and homeless, but the middle-class privation of insufficient purchasing power and the fear of losing employment.
Nationalized medicine treats the symptoms of middle-class privation, but at a cost of substandard care. The cause of middle-class privation is the poison of taxation and economic restriction. The effective remedy is true free trade and the removal of the poison by totally untaxing wages and shifting public revenue to the rent of land. Wages would gush up by eliminating the hemorrhage of taxation, removing blocks from circulation, and making the economy ever so much more productive by the better use of space.
With high wages and the security that comes from a high demand for labor, Britons would be able to scrap their nationalized health monopoly and would well afford a full choice of insurance, mutual aid, and fee-paid plans. Ultimately nationalized medicine is kept in power by the greed of those who profit from land and the ignorance of the public that does not see the economic reality behind the superficial money transactions of daily life.
1. Paul R. McGinn, "Brits Rate NHS as Top Achievement," American Medical News, January 31, 2000.
2. Sarah Lyall, "In Britain's Health Service, Sick Itself, Cancer Care is Dismal," New York Times, February 10, 2000.
British health care
National Center for Policy Analysis
-- Fred Foldvary
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Copyright 2000 by Fred E. Foldvary. All rights reserved. No part of this material may be reproduced or transmitted in any form or by any means, electronic or mechanical, which includes but is not limited to facsimile transmission, photocopying, recording, rekeying, or using any information storage or retrieval system, without giving full credit to Fred Foldvary and The Progress Report.