Thoughts, essays, and writings on Liberty. Written by the heirs of Patrick Henry.

“Wise men talk because they have something to say; fools, because they have to say something.”     Plato

January 2, 2007

The True Cost Of “Free” Health Care

by Doug Mataconis

In Great Britain, doctors at the National Health Service are being ordered to delay surgeries for as long as five months to save money:

LONDON, Jan. 2 (UPI) — Hospitals in Britain have been told to hold off operating on some patients until they’ve been on a waiting list for 20 weeks, documents show.

The instructions for delaying treatment as long as possible were included in letters sent to hospital managers, who also were told how many operations could be postponed until after the new fiscal year, which starts in April, the Telegraph said Tuesday. The instructions indicate the seriousness of the health services financial crisis, observers said.

Patients were having their treatment artificially delayed because the trusts that provide local medical care for National Health Services had to ensure they would break even, political leaders said. The trusts are in the throes of a $2.6 billion deficit.

In one letter, a health manager for East of England trust, outlined a plan to ensure hospital operations were “restricted to the minimum required to meet required access targets” regarding elective activities.

It’s called rationing, and it’s inevitable in any single-payer health care system. Even if Ted Kennedy, Hillary Clinton and the rest of those who advocate such a system will never admit it.

TrackBack URI: http://www.thelibertypapers.org/2007/01/02/the-true-cost-of-free-health-care/trackback/
Read more posts from
• • •

23 Comments

  1. Aren’t you being a little selective in your reporting of the relative problems of the UK v non-single-payer health care systems like the US? The Institute of Medicine estimates that at least 18,000 Americans die prematurely each year solely because they lack health insurance. Does that happen in the UK? Why not ask why this happens in the US rather than concentrating on the relatively trivial delays in the UK for elective or less urgent surgery.

    http://www.nationalacademies.org/headlines/20050920.html

    Or perhaps you should ask why the US spends over twice as much per capita on health care than Britain, and yet people in the US are likely to live less long and spend more years in ill health than people in Britain. Wouldn’t that challenge your negative views on single-payer health care systems?

    Comment by Skeptico — January 2, 2007 @ 10:11 pm
  2. There is rationing here in both systems of health care. It is not noticed until one gets sick. Health care systems of any kind I have seen so far are for the healthy.

    Comment by VRB — January 3, 2007 @ 3:30 am
  3. In Britain, if you have hemmorhoids, you wait behind the person with a bad heart. In the US, if you have hemmorhoids and money, you get to skip ahead of the poor guy with a bad ticker, who just dies.

    Whoo! Money!

    Comment by Aaron — January 3, 2007 @ 6:54 am
  4. Aaron,

    Are you saying that in the UK the same doctor who treats hemorhoids also treats heart disease?

    Wow!

    Comment by tarran — January 3, 2007 @ 7:40 am
  5. Apparently, according to Aaron, the same doctor treats all sorts of things, in both the US and the UK.

    The fact is that healthcare, like any other market, has limited resources available. Single payer and nationalized health insurance systems do nothing to resolve this problem. They simply divvy up the resources according to a bureaucrat’s sense of how they should be divvied up.

    The fact is that the US system is still the model held up for excellence, quality and timeliness …… and not just for elective healthcare. It costs more because of government intrusion into the marketplace NOT because it is a free market system. As a side note, all socialized systems, including the UK, Canada, France, Australia, etc. have costs that are hidden from view. The “twice as much” claim is incorrect if you can account for those costs. However, it is in the best interest of those governments to make sure those costs stay hidden.

    Before all you “I want my free health care” folks go too far down this road, I highly recommend reading Hayek’s “The Road to Serfdom” and this post on Q and O.

    VRB, markets are a tool to ration limited resources. Government central planning is also a tool to ration limited resources.

    We have 100 years of experience with central planning and how inefficient it is. What makes all you socialists think that central planning is suddenly going to be better? Some miracle, I guess. And, even if it worked as well as the marketplace (which it doesn’t), you still have violated my liberty. Did you know that in the UK, if you suffer from Macular Degeneration (a progressive disease that ultimately leaves you blind) you can only have one of your two eyes treated? Yep, I’d sure rather let a bureaucrat choose which eye I get to keep.

    Comment by Adam Selene — January 3, 2007 @ 8:47 am
  6. Adam Selene:

    Re: the US system … costs more because of government intrusion into the marketplace NOT because it is a free market system.

    Evidence of this please. Please show why the US system costs twice as much.

    Re: all socialized systems… have costs that are hidden from view. The “twice as much” claim is incorrect if you can account for those costs.

    Again, evidence please.

    Re: What makes all you socialists think that central planning is suddenly going to be better?

    First, I’m no socialist. Not even close. But my reasons for favoring universal healthcare were given in my comment at the top.

    Re: Did you know that in the UK, if you suffer from Macular Degeneration (a progressive disease that ultimately leaves you blind) you can only have one of your two eyes treated? Yep, I’d sure rather let a bureaucrat choose which eye I get to keep

    Personally I’d prefer that to being one of the 18,000 who die each year because they have no healthcare. Only one eye treated or die? Tricky one.

    Comment by Skeptico — January 3, 2007 @ 9:41 am
  7. Evidence of this please. Please show why the US system costs twice as much.

    You are asking me to prove a negative. The US healthcare system is not a free market, ergo market forces cannot operate to reduce cost and allocate resources most efficiently. Here’s simple evidence that requires no links, just logical, rational thinking.

    1. Medicare and Medicaid distort the pharmaceutical by requiring, by law, that drug manufacturers give them the lowest price they give any other consumer of their product. This is called price controls. Price controls have been demonstrated many times over to cause higher prices and resource scarcity.

    2. Approximately 50% (perhaps more) of the healthcare spending in this country is federal, state and local tax dollars. Hayek demonstrated in “The Road to Serfdom” that once government involvement in a market approaches 50% it is a de facto centrally planned system, not a free market.

    3. Medicaid, Medicare, HIPAA, the wage controls of WWII that led to healthcare as an employment benefit (and thus the creation of Kaiser) have so regulated the market that it is not a free market, but rather a fully regulated and centrally planned market. It should be noted that once you have given rule making capability to an unaccountable bureaucracy rather than an accountable legislature (i.e. Fed HHS), you have ensured arbitrary rule making, a key feature of socialism, not free markets (see Hayek again).

    These three points, alone, demonstrate that the healthcare market is not a free market. This doesn’t even take into consideration that the consumer is not the purchaser, which is a sure sign that we don’t have a free market. Add that into the mix and you do not have a market that allows for competition, price negotiation or consumer/purchaser choice. Please study a bit of economics before claiming that the US system of healthcare costs more because it is NOT centrally planned. That is precisely why it costs more, very poor central planning and arbitrary rule making.

    As to your assertion that I must provide evidence that there are hidden costs in the socialized systems of other countries. I just gave you a good set of reasons why the US system is not a free market, leading to higher costs. I leave it to you to work out the logic of how there could possibly be hidden costs in other countries and why it would be in the best interests of those governments to hide the costs. I suspect you won’t and will simply claim that I am “full of it”.

    First, I’m no socialist. Not even close. But my reasons for favoring universal healthcare were given in my comment at the top.

    Socialism covers a wide variety of possible government and social structures. However, the key facet of all of them is central planning by the government rather than a free market and Rule of Law. If you favor universal healthcare, which requires a government mandate, then you are, by definition, in favor of central planning and a socialist. Socialists have been successful in the past 75 years in renaming themselves as populists, progressives and even liberals. That doesn’t change what you want in practice, which is central planning and an end to the free market.

    Skeptico:

    Personally I’d prefer that to being one of the 18,000 who die each year because they have no healthcare. Only one eye treated or die? Tricky one

    So many problems with this I hardly know where to start. Let’s try this.

    1. How many people die in countries with socialized medical systems because of untimely access, poor facilities, inadequately trained medical staff, etc.
    2. The choice is not death or loss of an eye. People do not die of Macular Degeneration. The choices are: a) loss of two eyes due to lack of treatment; b) loss of one eye due to central planning by government c) sight in both eyes because a free market allows you that choice.
    3. Your emotional appeal provides no objective basis for decision making and is akin to the “for the sake of the children” so beloved of those who wish to give the government more power.

    I would challenge you to provide evidence for the “twice as much” claim you have made first, since you made it first without evidence.

    P.S. have you read the link I provided? Have you ever read Hayek? You are arguing on an emotional basis for something that will have unintended consequences. You will then, 10 years later, complain about the government’s unintended consequences, never realizing that you gave away your own birthright and ensured just such an outcome. What makes you think that some central planner can know better what you need than you do?

    Comment by Adam Selene — January 3, 2007 @ 9:51 am
  8. Adam,
    I didn’t think my statement was socialist, just saying it like it is.
    You have not detailed any plan, not even a theory, just very broad statements. That is where the discussion needs to go; into some details. Nothing will change arguing about other systems. What exactly would your alternative be? The pragmatic version, something you could offer, that might work in the real world. One you would need to take into consideration; what happens to the sick while your plan is being implemented?
    I have been reading recently about someone who has cancer and is uninsured. This person is not covered by government either, because they had a pension and property. This person not only has to battle against illness, but also the result of going broke. I imagine that there are quite a few people like this. The system we have in place now not only rations, but prices some people totally from any healthcare provider.

    Comment by VRB — January 3, 2007 @ 10:28 am
  9. Dying For Universal Healthcare?
    Will Hillarycare Be Returning? -

    In 1993, Bill Clinton proposed a health care reform package plan to provide Universal Healthcare for all Americans. The proposed package was over 1,000 pages, yet buried in those pages were restrictions and aspects of the plan which were truly troubling. The plan aimed to cut the number of doctors (called ‘cost centers’) by one quarter in order to cut demand by limiting supply. It also aimed to cut costs by cutting the number of specialists in half.

    The following fines were also prescribed under the plan:

    * $5,000 for refusing to join the government mandated health plan.
    * $5,000 for failing to pay premiums on time.
    * 15 years to doctors who receive “anything of value” in exchange for helping patients
    short-circuit the bureaucracy.
    * $50,000 for unauthorized patient treatment.
    * $100,000 a day for drug companies that improperly filed federal claims.

    So, what exactly would this Universal Healthcare plan really be like if it ever returns and becomes mandated? The average wait time for treatment, would dramatically increase. In Canada for instance, the average wait time if you go to an emergency room , depending on urgency is anywhere between 8-10 hours for a doctor to see you. The Fraser Institute’s annual waiting list survey found that Canada-wide waiting time for surgical and other therapeutic treatments increased in 2006. The total waiting time between referral from a general practioner and treatment increased from 17.7 weeks in 2005, to 17.8 weeks in 2006. Some surgeries have up to a one year wait time.

    Throughout Canada, the total number of procedures for which patients are waiting for surgeries in 2006 is 770,641. http://www.fraserinstitute.ca/admin/books/chapterfiles/wyt2006.pdf

    Many patients die while waiting to have surgeries.

    Recently in Canada, a patient complained to his doctor that he had headaches, and was having seizures. His doctor determined that he possibly had a brain tumor, and an MRI was needed to be sure. He was then told his wait time to have an MRI was 4 months. Frustrated by this, he went to New York, and within days had an MRI. He returned to Canada with the results from his MRI, showing he did have a brain tumor. He was told that he would have to wait 8 months for surgery. He ended up having surgery in the U.S., and he now is trying to sue the Canadian government because they refused to reimburse him for the surgery.
    Link to video: http://www.onthefencefilms.com/video/brainsurgery.html

    So, why is the wait time so long in Canada? Many doctors are leaving Canada because of the long time it takes for them to be paid by the government. Many doctors from Canada, come to the United States so they can be paid faster. Canada’s shortage of physicians arose to government intervention.

    With the United States population fast approaching 300 million people, one can only wonder what the wait time would be for surgeries here in the United States since Canada’s population is less than half. Under the 1993 plan, the number of doctors would be reduced by one quarter, and the number of specialists to be cut in half. But they say that Universal Healthcare will be free to all. Is it really? No. You’ll pay for it in taxes.

    While healthcare costs are rising in the United States, we must remember that the U.S. has some of the finest doctors, hospitals, and facilities in the world. Many doctors from all over the world come to the U.S. to practice medicine because it has the best hospitals and healthcare systems. So will Hillary try to emulate Canada’s Universal Healthcare system? Let’s hope not. You won’t know what you’ve got until it’s gone.

    http://www.americandaily.com/article/17014

    Comment by Kathy Holland — January 3, 2007 @ 10:40 am
  10. VRB, sorry, I’m not saying you are a socialist. I’m merely pointing out that all possible ways of implementing a market, whether central planning, government ownership or free market, are about rationing resources. There is no solution that will not result in some people with poor outcomes. The utilitarian solution is the one with the least number of poor outcomes. Single Payer and Nationalized have this advantage: they cost less for the poor outcomes than the centrally planned and arbitrarily regulated US approach. However, they still have poor outcomes and it is far from demonstrated that they have fewer poor outcomes than the US does. Skeptico is essentially claiming that single payer in the UK is the sole factor leading to longer life expectancy than in the US.

    There are a huge number of factors that can be (indeed are) contributing to that, such as obesity, smoking, a larger, much less homogeneous population, illegal immigration, to name a few.

    Right now, VRB, I’m addressing why there is still value in the current US system, as poor as it is and why I don’t think we should adopt a single payer or nationalized system. I’m also defending my contention that the costs of the US system are primarily because it is not a free market system. Buried in all of that, of course, is a theme that should be obvious: I favor a deregulated free market.

    One you would need to take into consideration; what happens to the sick while your plan is being implemented?

    Hmmm, I’m not a central planner, I would leave that to the market place to solve. By asking me that question you leave me in the position of having to be a central planner or cruel to my poor victims of deregulation. It is a purely emotional appeal to create more central planning. I recognize you may not have intended it as such, but that is what it becomes. A utilitarian (and you appear to be a utilitarian) approach with value would be to ask whether my solution will result in better outcomes for those who have poor outcomes today, or not.

    Comment by Adam Selene — January 3, 2007 @ 10:54 am
  11. Adam,
    No, it is an appeal for someone to do something about the cost of health care. It affects me and especially in my retirement. Healthcare is the big unknown. I don’t relish going into with this unknown and I think discussions should be going toward more conrete aspects of how to change healthcare. If you can’t speak to a plan, you could at least point to some system.

    Comment by VRB — January 3, 2007 @ 11:49 am
  12. Skeptico replies to Adam Selene

    Re: You are asking me to prove a negative.

    No I’m not. I’m asking you to back up your positive claim, which was “the US system … costs more because of government intrusion into the marketplace”.

    Re: 1. Medicare and Medicaid distort the pharmaceutical by requiring, by law, that drug manufacturers give them the lowest price they give any other consumer of their product. This is called price controls.

    No, it’s called negotiating a better price with your vendors. All good corporations operating in the free market do it. Are you saying they shouldn’t use their market clout to get a better deal? Are you saying the UK NHS doesn’t also negotiate lower prices? Because if they do (and I can assure you, they do), then this factor is exactly the same in a centralized system such as the UK, and so is not a “hidden cost” applicable to the US system alone.

    Re: These three points, alone, demonstrate that the healthcare market is not a free market. This doesn’t even take into consideration that the consumer is not the purchaser, which is a sure sign that we don’t have a free market.

    As with the above point – all those factors will also apply to the UK system. Since I’m sure you will agree that the centralized NHS is not a free market but a government controlled one, these three points are not reasons why the US system costs twice as much.

    Re: Please study a bit of economics before claiming that the US system of healthcare costs more because it is NOT centrally planned.

    I am not claiming that. I am just pointing out that it costs twice as much for a worse service.

    Re: That is precisely why it costs more, very poor central planning and arbitrary rule making.

    Except you have failed to demonstrate that. Clearly centrally planned systems like the NHS suffer the same problems. (Arguably more so.)

    Re: As to your assertion that I must provide evidence that there are hidden costs in the socialized systems of other countries. I just gave you a good set of reasons why the US system is not a free market, leading to higher costs. I leave it to you to work out the logic of how there could possibly be hidden costs in other countries and why it would be in the best interests of those governments to hide the costs. I suspect you won’t and will simply claim that I am “full of it”.

    So you are arguing the US system is not a free market which is why it costs more, while simultaneously arguing the UK system is not a free market which is why it costs less. And you think this argument is logical?

    Re: Socialism covers a wide variety of possible government and social structures. However, the key facet of all of them is central planning by the government rather than a free market and Rule of Law. If you favor universal healthcare, which requires a government mandate, then you are, by definition, in favor of central planning and a socialist.

    Whatever. If it makes you feel better to label me with a pejorative title then be my guest. I guess it’s easier than actually providing evidence to back up your claims. I am not a socialist but I am prepared to question the free market in instances where it appears not to work as well. Show me evidence instead of labels and I’ll consider it.

    Re: Personally I’d prefer that to being one of the 18,000 who die each year because they have no healthcare. Only one eye treated or die? Tricky one

    So many problems with this I hardly know where to start. Let’s try this.

    1. How many people die in countries with socialized medical systems because of untimely access, poor facilities, inadequately trained medical staff, etc.

    I don’t really know – perhaps that’s a question you should look into yourself, since you think universal healthcare is bad. Don’t forget to allow for the number of people in the US who die for the same problems you identified above for socialized medicine. Or are you saying the US system has none of those problems?

    To answer your question, my guess is the number is fewer than those who die because of no healthcare cover at all.

    Re: 2. The choice is not death or loss of an eye. People do not die of Macular Degeneration. The choices are: a) loss of two eyes due to lack of treatment; b) loss of one eye due to central planning by government c) sight in both eyes because a free market allows you that choice.

    Yes but 18,000 people die in the US for lack of insurance, so that is a difference between the US system and the UK. I do agree though that those who died had no choice. Bummer.

    Re: 3. Your emotional appeal provides no objective basis for decision making and is akin to the “for the sake of the children” so beloved of those who wish to give the government more power.

    Emotional appeal? Hardly. I provide data while you provide merely assertion. You are the one using emotional appeals – for example, “socialism”.

    Re: I would challenge you to provide evidence for the “twice as much” claim you have made first, since you made it first without evidence.

    http://www.timesonline.co.uk/article/0,,8122-2162674,00.html

    Rates of diseases such as diabetes, lung cancer and high-blood pressure among Americans aged between 55 and 64 were up to twice as high as those in England. Americans also had higher rates of heart disease, heart attack and stroke.

    The diabetes rate in America, at 12.5 per cent, was double that in England, at 6.1 per cent. Heart disease was 50 per cent higher among middle-aged Americans. The proportion suffering from high blood pressure was about 10 per cent less in England. In both countries lower income and education levels were associated with poorer health, according to the study by the Rand Corporation and the Institute for Fiscal Studies at University College London.

    But the healthiest Americans in the study — those with the highest income and education levels — had rates of diabetes and heart disease similar to the least healthy in England.

    The disparities occur even though medical spending per person is more than twice as high in the United States.

    (My bold.)

    Abstract.

    Re: P.S. have you read the link I provided?

    Yes. A lot of straw man arguments. For example universal healthcare having a lack of objective standards (clearly not true). Also this:

    the freedom to pursue “additional sacrifice” in terms of spending more on your health is removed from your array of choices

    Also not true – I guess he’s never heard of BUPA.

    Plenty of assertion without evidence, such as:

    Why the US continues to be the gold-standard for the most progressive and best medical care available instead of the British National Health Service..

    I agree that the NHS isn’t prefect and that there is rationing. I was merely pointing out that given the choice of a system where a few thousand people have to wait until next year for their hip replacement, or a system where millions have no healthcare and 18,000 per year die because of it, I prefer the former. Oh, and the US system has rationing too.

    Re: Have you ever read Hayek? You are arguing on an emotional basis for something that will have unintended consequences. You will then, 10 years later, complain about the government’s unintended consequences, never realizing that you gave away your own birthright and ensured just such an outcome.

    You need to start looking at data rather than just parroting economic theory. I spent the first 40 odd years of my life in the UK, and the last 12 in the US, so I think I can uniquely understand the pros and cons (and consequences) of both systems. My views are based on hard data – higher costs in the US while many people are not covered. You are the one relying on emotional appeals. For example, from above: “you gave away your own birthright” – hard to imagine a more emotionally charged but ultimately meaningless comment.

    Re: What makes you think that some central planner can know better what you need than you do?

    The NHS isn’t run by “some central planner”. If you knew anything about it you would know most of the decision making is diversified. Show me some data that demonstrates the US system does not cost twice the amount for a poorer system and I will look at it.

    Comment by Skeptico — January 3, 2007 @ 11:58 am
  13. VRB,

    I think Kathy just provided you with the evidence you are looking for.

    Comment by Doug Mataconis — January 3, 2007 @ 12:16 pm
  14. VRB, would you, approaching retirement, really wish to cut costs in exchange for poorer quality care? When you are 20, 30, 40 years old timely access to care is not a big deal, but low cost is. A 25 year old could care less (as a general rule) if the care is good, or not, because they don’t need it. All they care about are their costs, and rightly so. A 75 year old, on the other hand, needs timely, quality care (as a general rule). The retiree does need to care about cost, obviously, as well. But, remember, you are asking for a 25 year old’s health plan when you ask for a system that is only concerned with lowering cost.

    Consider, alternatively, this. Single Payer and Nationalized systems require central planning. How can that central planner adequately account for all of the variability in a market place involving trillions of dollars and 300 million people? The answer is, they cannot without arbitrary rule making. That sounds fine as long as you are getting what you need and paying a price you like. But, how are you going to feel when it is you that is the victim of the arbitrary rule making?

    De-regulation of the healthcare market is the answer you seek. Consider that in 1980 I could purchase phone service for about $15 a month and what I got was …….. phone service. Now, I can purchase no frills phone service, 26 years later, for about $15 a month. For a few dollars more I can get call waiting, voice mail, caller ID, etc. After adjusting for inflation, my current phone service is cheaper than my Ma Bell monopoly service was in 1980. Why is it cheaper? Well, the one thing we can point to easily is deregulation and the break up of the Bell monopoly. How about airlines? We pay much less, adjusting for inflation, for airline service today than we did in 1980, even though fuel, employees, airplanes all cost more. How’s that possible? Again, deregulation is a key factor.

    Why am I so convinced that deregulation and free markets are the healthcare answer? Because everytime we’ve deregulated we’ve improved service and driven down cost.

    Comment by Adam Selene — January 3, 2007 @ 12:51 pm
  15. No, it’s called negotiating a better price with your vendors.

    This was related to the impact of Medicaid/Medicare intervention in the pharmaceutical. So it would seem, until you consider that the prices for pharmaceuticals went up, not down. Fixing the price, by law, is not negotiating. Price fixing always results in scarcer, more expensive resources. We have good examples of this, historically, such as gasoline prices in the US. As long as price controls were in place in the 70′s, we had rising prices and scarce supply. As soon as price controls were removed, prices dropped, supply increased. What the US government did is price fixing, not negotiating.

    I asked you to prove that US healthcare costs twice as much on some objective basis, which you did not do. You simply proved that the rate of certain illnesses was twice that of another country. I never disputed that. Again, you asserted, without evidence, that healthcare in the US costs twice what it costs in the UK. Fine, show me some evidence of that. Then tell me what basis you are using for the comparison. For example, does the same procedure cost twice as much? Or do we spend twice as much per person annually? Those are two very different things.

    The NHS isn’t run by “some central planner”. If you knew anything about it you would know most of the decision making is diversified.

    I do know something about it, just because it is a larger group of people does not change the fact that it is central planning and arbitrary rules and regulations.

    I’m making two separate arguments that you are unwilling to get past:

    1. US healthcare costs are higher because we do not allow a free market to dictate prices.
    2. UK healthcare provisions are poorer because they are centrally planned and managed.

    There is no contradiction in this. Each country has chosen a different approach to healthcare, neither country has chosen a free market approach. With two different approaches it is not unreasonable to anticipate two different outcomes. Neither outcome can be shown to be optimal. One provides poorer, centrally planned choices, the other provides higher cost choices. I would prefer the US system to the UK system, at least I still have the choice to pay more for better quality care. But, I really prefer neither because they both have poor outcomes and the utilitaritarian in me believes the option that provides the most choice is also the one with the best outcome, which is a truly free market.

    You don’t like the word socialist, do you? I’m not using it as a pejorative or to call names, as you say. I’m using a defined term for what you would like to see in healthcare. I’m using the word correctly. If you don’t like that, stop and consider why you don’t. I’m a classic liberal, and I’m damn proud of it. To call me that would not bother me at all. You could call me a libertarian and I wouldn’t take it as an insult, even though I’m not one. If you called me a conservative, I’d just shrug because you would be wrong. But I wouldn’t be insulted. Apparently, you feel insulted even though I simply used the word to accurately describe what you are calling for, which is central planning and management of healthcare.

    You need to start looking at data rather than just parroting economic theory.

    The data you have given is incomplete and inaccurate. Like most statistics, it can be made to show whatever we want it to show. Here’s some data I would like to see:

    - How much does procedure X cost in the US, UK and Canada
    - In 100 cases of that procedure being performed, how many outcomes are positive and how many are negative, by country
    - How long do I have to wait for that procedure in each country, on average
    - If a country’s national system doesn’t allow the procedure, can I spend my own money, in that country, to get the procedure. What if I want to get it faster.

    As far as economic theory, surprisingly it works. Economic theory says that if we deregulate a market place, the free market and competition will achieve the lowest marginal cost for a given good or service. We have two very good historical examples, the telephone system and airlines, in this country, to look at. And, amazingly, economic theory proved itself. So, if we have good theory that holds up in the real world why wouldn’t I want to follow it? You don’t like it because it contradicts your desire for a nationally managed healthcare system. You believe that the US has a free market for healthcare when it does not.

    Just because you lived in both systems doesn’t mean that you understand the underlying reasons why they work as they do. In fact, you don’t seem to understand them.

    Comment by Adam Selene — January 3, 2007 @ 1:56 pm
  16. Perhaps this is not the place to discuss what I asked? I have merely asked what plan, I have not stated any plan I would prefer; but to state some positions that I or others may be in. I was not looking for *evidence*. I have used medicare because of my disease. I don’t see it as the be all or end all of how to set up a medical plan. I am most interested in a system that would not leave me like that person I described. I have been given the promise of prolonging my life and I don’t want to resort to begging at the end of my life. No I am not a 25 year old and most of the nation isn’t either. If you have ideas you will have to put them in concrete terms or you will have what you don’t want as a health care system. People don’t want to die and will grasp at what they can get and the next generation will be on their own. I don’t know how to make this any clearer, something has to be done. If you want anything to change you have to have a plan that the average person can understand, not some theoretical reasons of why things are not working well now. Even discussing “The true cost of “free” health care” demands it.

    I remember when my brother and sister were ill as children. There was no medicade and no medicare part D, so why were the pharmaceuticals high then.

    Comment by VRB — January 3, 2007 @ 3:30 pm
  17. Skeptico replies to Adam Selene

    Re: I asked you to prove that US healthcare costs twice as much on some objective basis, which you did not do.

    I provided a LINK that for some reason you ignored:

    The disparities occur even though medical spending per person is more than twice as high in the United States.

    The “twice as high” figure is used virtually everywhere. Hard to see how you can deny it, but if you don’t like the above link here’s some more:

    Link 2

    On a per capita basis, health care costs in the US are more than twice the median level for the 30 industrialized nations in the OECD even though the health outcomes associated with this higher spending are no better, and by some measures, worse than outcomes in nations that spend much less./blockquote>

    Link 3 – the OECD

    Total health spending accounted for 15.3% of GDP in the United States in 2004, the highest share in the OECD and more than six percentage points higher than the average of 8.9% in OECD countries. By comparison, Switzerland and Germany allocated 11.6% and 10.9% of their GDP to health, respectively, and France 10.5%.

    Or perhaps you’d believe Link 4 – The WHO

    Scroll down to page 64:

    USA spends 15.2% of GDP
    UK spends 8% of GDP

    Re: I’m making two separate arguments that you are unwilling to get past:

    1. US healthcare costs are higher because we do not allow a free market to dictate prices.
    2. UK healthcare provisions are poorer because they are centrally planned and managed.

    I am “unwilling to get past” them as you say because you have been 100% unable to justify either statement. In fact, the arguments apply equally to the UK as the US. I realize you have to ignore this reality because it conflicts with your prejudice, but that is not my fault.

    Re: You don’t like the word socialist, do you? … Apparently, you feel insulted even though I simply used the word to accurately describe what you are calling for…

    Actually I wasn’t insulted – I don’t care at all. I was pointing out that you were putting a label on me rather than addressing my actual arguments. Attacking the person rather than the arguments presented is a logical fallacy called ad hominem. Up to you though.

    Re: As far as economic theory, surprisingly it works. Economic theory says that if we deregulate a market place, the free market and competition will achieve the lowest marginal cost for a given good or service.

    Yes I agree it does work in most cases – and there is data to support the view that telephones and airlines provide a better service since deregulation. What you are ignoring is the data shows it doesn’t work in healthcare. I don’t know why (although I have some suspicions), but the data show healthcare is different. But of course, I am looking at the data to inform my opinion; you are trying to fit the data to the conclusion you had already drawn.

    The indicators show no evidence that US healthcare is any better than in the UK – arguably they show it is worse, but I think I’ll just stick to saying there is no evidence it is any better. That wouldn’t matter too much except for the fact that the US spends twice the amount per capita than in the UK. Now, for spending double the amount I would damn well expect some evidence that people are getting better healthcare, but with millions uninsured and the lack of data showing better health in the US, I think it is clear there is something wrong with the US system. The burden of proof is firmly upon those who think the US system is worse than UK. Pointing out that some people in the UK are having to wait for some non-urgent procedures comes nowhere near.

    Comment by Skeptico — January 3, 2007 @ 4:42 pm
  18. Oops – typo above.

    I meant to write: The burden of proof is firmly upon those who think the US system is better than UK. Apologies.

    Comment by Skeptico — January 3, 2007 @ 7:31 pm
  19. Let’s try one last time, although I don’t think you will hear me. The US healthcare system has:

    1. Arbitrary regulation by government agencies that have no accountability to voters
    2. Price fixing by a wide variety of state and federal government agencies
    3. Nearly half of all health care expenditures (perhaps more, depending on how you count) come from government sources.
    4. The consumer is not the purchaser.

    The US system IS NOT a free, deregulated market. There is ample evidence for this. You cannot use the US system to prove that a free market health care system will not work. This would be like arguing that high prices and scarce supplies of gasoline in the 1970′s indicated that a free gasoline market had failed.

    Saying that something is socialist is not “putting a label” on it, it is using a simple, easy to understand word that describes what the thing is. Of course, most people consider socialism to be a bad thing, which is why most people that want socialist systems won’t call them that and get defensive when called on it. I refuse to keep going round and round about this. Single payer systems are socialist. Objectively speaking, they cannot work as well as a free market can, under the same conditions. The one thing a free market cannot deal with, externalities, are dealt with even worse by socialist systems.

    Now, you can use data comparing two systems that are more, or less, socialist to each other and claim that one is free market and one is not all you want. It doesn’t change what they objectively are, though. So, this conversation is pretty well pointless.

    Comment by Adam Selene — January 3, 2007 @ 9:25 pm
  20. [...] Adam Selene: Let’s try one last time, although I don’t think you will hear me. The US healthcare system has: 1…. [...]

    Pingback by The Liberty Papers»Blog Archive » Specific Healthcare Changes — January 4, 2007 @ 8:33 am
  21. Skeptico replies to Adam Selene

    In your original post you claimed:

    The fact is that the US system is still the model held up for excellence, quality and timeliness …… and not just for elective healthcare. It costs more because of government intrusion into the marketplace NOT because it is a free market system.

    The problems with this are:

    1) You have offered not one shred of evidence that the US system is better, and I have offered much evidence it is (if anything) worse.

    2) You are using “government intrusion into the marketplace” as the reason the US system costs more than the UK system. However, since the UK system is a government system, you are comparing like with like vis-à-vis the amount of “government intrusion into the marketplace”. (Actually the UK has more government intrusion, but lets ignore that for now.) Therefore it seems blindingly obvious that you cannot use “government intrusion into the marketplace” as the reason the US system costs more than the UK. I do note though, that you now seem to have accepted that the US does indeed spend almost twice as much, as I stated.

    I accept that the US system has a government controlled element to it. However, not all of it is under central control – I would guess it has a bigger free market element than in any other major industrialized nation. So comparisons of the US system with that in the UK are not pointless. In fact, when looking for explanations as to why the US spends more, you need to look at where the two systems are different. One major difference is the large amount of private insurance in the US as opposed to the UK.

    Of course, if you think the US system is more or less socialist you could always provide some data on a healthcare system in a country where the healthcare is truly free market, and demonstrate how it is better. So what major country has a healthcare system that you would regard as truly free market? One that is significantly more free market than the US?

    Comment by Skeptico — January 4, 2007 @ 1:04 pm
  22. Alright, let’s try once more, although it’s still pointless.

    1. I never said the US did not spend more as a percentage of GDP. That said, no piece of data that you provided does the US spend twice as much, although the figure comes close in a couple instances.
    2. You have not offered any evidence that the US system is worse, except that folks in the US don’t live as long as in the UK. There are so many other factors besides the hospitals and doctors that this particular data point is a strawman of little value. For example: higher rates of diabetes due to obesity rates (not controllable by quality of healthcare, it should be noted) and the same thing for heart disease.
    3. In fact, I would argue that the high cost in the US system is due to inconsistent, patchwork, contradictory government intrusion and NOT private insurance.
    4. There has yet to be a situation I have ever known of where a free market was less efficient than a government managed market, with two exceptions. The exceptions are when the market has externalities (healthcare does not, any more than other major markets) or when the market suffers from a tragedy of the commons. When you remove economic incentive from the consumer, you create a commons. That is precisely what we have done in this country. There is no economic incentive for the average healthcare consumer to NOT go to the doctor for the common cold. So, they do. This is a major contributing factor to the cost.
    5. I don’t believe you can measure quality of the system using the data you provided, for the reasons I’ve given. The outcome data shows little evidence that it is linked to the spending data. Life span is not governed solely by quality of the hospital or doctor.
    6. There is ample evidence that longer waiting times, fewer procedures, less choice, lower quality of doctors is the result in the UK and Canada. The article linked in the original post and the information provided by Kathy Holland are two good examples. Examples you have airily waved away. Examples from Canada’s mess have been ignored as well.
    7. You cannot show me a free market healthcare system in an industrialized nation, as far as I know, because they don’t exist. In fact, if we measure the amount of regulation, oversight and dollars in the US system and compare that to the UK, we find that the US system is not significantly more open than the UK. It simply has all the problems of the UK’s system times 51 (1 federal government, 50 states, each with their own regulatory agenda and ability to spend money in the system). This is, without a doubt, one part of the reason for the higher expenditures, as a percentage of GDP.
    8. I would love to see real data about the cost of procedures, outcomes and wait times for them. That would be a much better indicator of healthcare quality than the data you chose.

    Comment by Adam Selene — January 4, 2007 @ 1:38 pm
  23. Re: You have not offered any evidence that the US system is worse, except that folks in the US don’t live as long as in the UK. There are so many other factors besides the hospitals and doctors that this particular data point is a strawman of little value. For example: higher rates of diabetes due to obesity rates (not controllable by quality of healthcare, it should be noted) and the same thing for heart disease.

    Er, no. From my link:

    The diabetes rate in America, at 12.5 per cent, was double that in England, at 6.1 per cent. Heart disease was 50 per cent higher among middle-aged Americans. The proportion suffering from high blood pressure was about 10 per cent less in England.

    […]

    The differences between the two countries in smoking, obesity and alcohol use did not explain the differences.

    Anyway, I didn’t claim that the US system provides a worse service, I was pointing out that the evidence does not support your position that the US system is better – “still the model held up for excellence, quality and timeliness” as you put it. You have not supported that claim.

    However, I provided more than just length of life data. I provided a whole slew of information, including from this Institute of Medicine study that estimates an additional 18,314 deaths in the US in the year 2000 due to lack of medical insurance. Admittedly you did not airily wave that away – you just ignored it.

    I note you cannot show me a free market healthcare system working in an industrialized nation, “because they don’t exist”. Which is as I thought – no one has done it. The problem I have with your approach is that (if I understand you correctly) you want to do away with what guaranteed healthcare there is in the US (Medicare and Medicaid), and move to a complete free market system, despite the fact that nowhere in the world has this ever been done, and despite the likelihood that one result would be an increase in the 18,000 deaths attributable to lack of insurance. That’s a pretty big change with risk of enormous downside, based on just a belief that the free market is bound to work, and without knowing anything of the consequences. I too would welcome more data about costs and outcomes under differing systems – I would certainly want a lot more honest and unbiased information before even considering the sort of change I think you are proposing.

    Comment by Skeptico — January 4, 2007 @ 2:49 pm

Comments RSS

Subscribe without commenting

Sorry, the comment form is closed at this time.

Powered by: WordPress • Template by: Eric • Banner #1, #3, #4 by Stephen Macklin • Banner #2 by Mark RaynerXML