Heres something I've been wanting an answer to for some time.
Im from Sweden. In Sweden we have socialized medicine, and all the problems associated with that. In general, though, Swedish health care is ok, if you are lucky enough to actually get it in time. We have long lines, inefficient allocation of resources, its costly, and a bunch of other things associated with socialized medicine. But once you actually get the care, its at least ok.
Most people in Sweden agree that it is bad, at least the people I debate with, but when the alternative comes up (being "private medicine"), the one and only argument you hear is: "Ok, but look at USA... they dont have socialized medicine, and look how bad it is there".
I dont know that much about US health care, but I do know its not socialized in any sense comparable to Swedish medicine, even though you have some things such as medicare. It is also my understanding that US health care is not working that well either, which is why this argument always seems to have some weight in discussions.
So why is the US health care system not working that well? Or am I wrong, and it is working well? Please enlighten me.
Don't you still have some private hospitals there? In here, there is one particular hospital enterprise that started in a small town, and is florishing because there is little wait time, from exams to operations. I have heard complains of some medics (in here, there is a shortage of medics, so I guess it must be hard to have enough of good ones), but the wait time and the quality service (nurses are very attentious, and the place is very clean). You could point out how a much smaller organization can compete with a big government one (I do have insurance, so I'm not sure how expensive it is for someone that doesn't have one).
Public hospitas are a mess here. Sometime ago, they tried to implement devices to check the ponctuality of the medics in one hospital as an experiment. In the end of the day, they were banalized. The health minister threaden with putting cameras there, but he was put out of office shortly after. I have a few medics in my family, so I know they don't exactly feel pressured to be ponctual. :P I have been wanting to document how things are organized in some hospitals here...
Anyhow, do you have some horror stories to share? :/ Here, just this month, a woman found her husband dead when, after sometime, she impatiently entered in the emergency room, and he was lying in the floor dead, alone. You could also compile those to make your case...
Edit: in case you don't notice, I'm from Portugal. I too am curious to know how are things in the USA.
Equality before the law and material equality are not only different but are in conflict with each other; and we can achieve either one or the other, but not both at the same time. -- F. A. Hayek in The Constitution of Liberty
Yeah we do have some private hospitals, but not that many. And they are fairly expensive (which is not so strange really). A couple of years ago a law was passed, or almost passed, called the "stop law" which prohibited running a hospital profitable. You could run a hospital privately.You just werent allowed to run it with profit. Its not like that now though, since we have some private hospitals. And they are very regulated.
And of course, when I make my case there are loads of horror examples to choose from. People waiting 3-4 months to get cancer aid (and then, of course, die becuase they get help to late). Or machines used to combat cancer that stand inoperable in hospital rooms, because there is a shortage of personell. The former swedish prime minister, a socialist, who spoke highly of the swedish health care system, had to have a hip surgery. He waited and waited, and got no help... so after I dont know how long, he went ahead and paid for it. Something he wanted to be against the law.
But bringing up those horror stories doesnt do much good, because people look with shock to USA and dont want it like that. The arguments range from
Basically, I want to know why US health care is expensive and why it isnt working particularly well. Despite it being more privatized than Swedish health care.
The problem with US healthcare isn't the quality, it's the cost. Although there is alot of gov interference in the U.S system which the high costs can partly be attributed to.
Thanks! That was a good blog post my Stefan. It just occured to me that one of the reasons why Sweidsh health care costs are comparatively lower than in USA is due to the fact that the medical professionals in Sweden get paid a lot less, due to the fact that they work in public hospitals. Thats actually a good point Stefan makes, one which I have failed to think of myself.
Also, I didnt know that 45% or more of the health care in USA was funded by the government. Thats really a lot higher than I thought it would be.
Another problem is that the medical providors are more or less employed by the insurance companies, which are effectively extensions of the state. In the first place, insurance is basically a means of socializing risk, which would drive prices up anyway. But more than that, they are heavily subsidized in some cases, required by law in others, and heavily entangled with the government in all. It is they who are driving the cost of medical care up, and they would not be able to do it if they didn't have the state as an accomplice.
Pro Christo et Libertate integre!
The U.S. health care system is not broken. Everyone who needs care gets care. The care is very fast and excellent.
The only people pushing for socialized medicine are:
InalienableRights: The only people pushing for socialized medicine are: The Socialists who want to control the lives of the people. The large corporations who are currently paying the cost of most medical insurance. The people in item #5 above.
And the AMA.
xahrx: InalienableRights: The only people pushing for socialized medicine are: The Socialists who want to control the lives of the people. The large corporations who are currently paying the cost of most medical insurance. The people in item #5 above. And the AMA.
And the government-subsidized insurance companies.
US health care is the best in the world...if you can afford it. The problem with our current health care system is a few things:
1) Heavy regulations. We have so many different regulations that hospitals, doctors and insurance companies must spend billions and billions of dollars to comply.
2) Government subsidized insurance companies. Medicare/Medicaid and SCHIPS pay out billions of dollars to health insurance companies and doctors who jack up the rate because We the People are footing the bill.
3) It is illegal to turn someone away when they come to the emergency room. So when one of the 30+ million illegal aliens decides to have another kid or gets sick they go to the ER and receive top notch medical care -- and they don't pay for it. Because they don't pay for it hospitals and doctors have to raise their rates to cover these people who don't pay up. But it's not just the illegals who do it. There are lots of citizens who do it as well.
This is the SINGLE BIGGEST REASON why medical insurance is expensive in this country and I'm surprised no one mentioned it.
4) The dollar. The dollar has lost over 20% of its value since last year and it keeps falling. As everyone knows as the dollar falls in value to "cost" of goods and services go up. It takes more money to buy the same amount of medical care today than it did yesterday. The problem is no ones wages are really keeping up with "inflation." I just got a wopping 75 cent an hour raise the other day! Woo! I wonder what the extra $125 a month is going to buy me? Oh right! Nothing because the dollar is dropping like a rock in value! A weakening dollar is directly responsible for the rising cost of health insurance, the rising cost of gasoline, the rising cost of food and the rising cost of education and other goods and services.
If the dollar was strong we could deal with the other problems in our health care system. But we have a weak dollar and it's only getting weaker. That is what's wrong with the US health care system.
"It does not require a majority to prevail, but rather an irate, tireless minority keen to set brush fires in people's minds. " -- Samuel Adams.
I couldn't agree more kingmonkey. I would just add, that it is not toooooo expensive quite yet. I am buying my own insurance (BCBS) here for $270 a month, full family (wife and two children), and a $5,000 deductible. I checked for my cousin, a single guy, and he can get insurance (Medica) for $129 a month, with a $2500 deductible. That isn't unreasonable.
Oh, one other thing to add, another problem with our system, is the insentive for the third party (employer covered). If we all had personal policies, there would be no issues with people losing insurance when they change jobs, due to "previous conditions" uncoverable under a new policy.
Wow thanks. I didnt know that 3 was the case. Seems obvious that if its illegal to turn people away, at all (even people who wont pay), its gonna lead to over usage. Also, I suppose, its bad for the ER and people coming in to the ER if there is a long line there, since it after all IS for emergencies.
Exactly how are the insurance companies subsidized? They are not government run, correct? But they receive grants from the state in order to insure people that can not afford to insure themselves?
To add to what Inquisitor said, I don't think the formal 'ownership' of health care is as important as who controls it. In many ways its run by the state, and many regulations are stricter in the US than in Europe (e.g. its much harder to become a doctor or get prescription drugs approved). If I had to guess, I'd say that private ownership combined with state planning and control (which is what the US has) is actually worse than complete state ownership in a democracy, because of the health care provider's large rent-seeking incentives. I have no data to back this guess up.
I'd also guess that the quality of government in the US is significantly worse than western Europe's, but I have no data to back that up either.
Can't be as bad as for a Dr. in Cuba - who can't get a second date:
" One Cuban young woman complains to another. "He lied to me! He told me that he was a luggage handler! It turns out, he's nothing but a neurosurgeon!"Luggage handlers working the tourist hotels often make more in one day than medical doctors receive in a month."
http://econlog.econlib.org/archives/2008/03/life_under_soci.html
Joakim: Wow thanks. I didnt know that 3 was the case. Seems obvious that if its illegal to turn people away, at all (even people who wont pay), its gonna lead to over usage. Also, I suppose, its bad for the ER and people coming in to the ER if there is a long line there, since it after all IS for emergencies. Exactly how are the insurance companies subsidized? They are not government run, correct? But they receive grants from the state in order to insure people that can not afford to insure themselves?
Well, that, and the government mandates that "insurance" cover several ridiculous accidents, thus raising rates.
One factor in the cost of US healthcare that I haven't seen mentioned here yet is tort abuse. Many doctors pay more than their own annual salary in liability insurance to cover themselves against lawsuits.
DBratton:One factor in the cost of US healthcare that I haven't seen mentioned here yet is tort abuse. Many doctors pay more than their own annual salary in liability insurance to cover themselves against lawsuits.
Good point. And probably many, many other factors. If one were to list all the ways government failure has driven the cost of healthcare up, they could easily write a treatise-length book.
Hmm.
Jeffrey Tucker, call your office!
Look into Indian healthcare here in the US. What you have is socialized, free healthcare.
The consequences are painful.
InalienableRights: The U.S. health care system is not broken. Everyone who needs care gets care. The care is very fast and excellent.
If $4000 for six IV's and a few stupid tests and a three month wait to see an OBGYN is not "broken", then I do not know what is.
At most, I think only 5% of the adult population would need to stop cooperating to have real change.
Joakim: So why is the US health care system not working that well? Or am I wrong, and it is working well? Please enlighten me.
As others have already said or referred to, ~50% of our healthcare is paid for by the government, the other 50% is so heavily regulated/mandated by the government that we do not have a free market in healthcare. I mean, you cannot even compare prices! Not only that, but the government limits the number of doctors and as someone else already stated, lawsuits can cost quite a bit as well.
If insurance is a terrible way to pay for health care, why would it work differently when paying for protection, like Rothbard and Hoppe visions it would? Strikes me as odd, that the reason that health care costs are high is simply because they are paid for by insurance. Also, it does not resonate very well with the Rothbardian idea of protection in a free society. I could definately never make that argument, and then in the next sentence blame insurance companies for raising the health care costs. I'd get eaten alive :)
So, do you mean it is insurance, per se, that raises the costs, or do you mean that its because of the heavy regulations of the inusrance industry? If you mean the former, please elaborate.
I hope nobody minds since I am lazy but I posted this on an older thread from some of the details for the modern US healthcare mess. Here it is:
Well, First off States have unconstitutionally placed barriers to the sale of health insurance across state lines, yet congress and the supreme court have done nothing to lower these barriers since the passing of a 1945 law explicitly allowing states to control their insurance markets. Then the state governments create on average up to 1,200 or more mandates on local insurance companies, forcing them to offer particular services to their customers regardless of if the customer wants them or not. So we cannot shop outside of our states for health insurance like we can with mortgages and loans and nearly every other product. On top of this the insurance premium we pay is hiked up by politically well connected interest groups wanting a guaranteed consumer market by forcing health insurance to cover things such as chiropractors, viagra etc (and a myraid of things that other Nationalized health services don't even cover but our private health insurance must cover by law). So essentially our private insurance has to a cover detailed list of things in everyone's health plans and on top of it things such as managed care and HMO's are government mandated health insurance cartels to regulate the insurance industry which only aids the poltically connected health insurance companies on the inside and raises barriers to entry for competition. For instance Blue Cross Blue Shield is the name of my health insurance and they refuse to allow ANY sort of deregulation in the market, even getting rid of mandates, since they know it would introduce competition. Also they oppose any full blown government Health insurance such as the United Kingdom's NHS. Lets not forget that mutual aid societies/ friendly societies use to provide doctors for their members that would visit patients at home but this practice was outlawed by the American Medical Association by creating strict licensing regulations through state governments and hence eventually creating a government/private doctors cartel that controls the licensing of medical schools and doctors themselves. And for the record this is just a very brief summary of the state of United States health care. The mandates alone create all sorts of markets problems. I suggest you read the link I will provide, that talks about what Health insurance Vs. a hypothetical Hunger Insurance would teach us about American Health care. Here is the link below.
http://www.fee.org/publications/the-freeman/article.asp?aid=2114
Inquisitor:Hoppe addresses the nature of insurance in Democracy - the God that failed. He provides arguments to the effect that the type of insurance involved is not one in which there is a socialization of risk. It's been a while since I've read it so I can't recall the specifics though. That is where I'd recommend going to further pursue the topic.
I ordered it from the Mises store on Sunday. I'll recieve it tomorrow if the fates don't despise me.
Definately interesting. But how do you propose health care is paid for? By the individuals at the time they want to use it, like most other goods on the market? If If I want a bypass surgery, should I pay for it in full when I need it? Would you argue that this would be a better way?
Isn't part of the reason insurance is good, that the future is uncertain? Having an insurance can be a good way to minimize risks. The money I pay for insurance is not just to pay for health care in case I need it, but also to pay for the good "mimizing risks".
Yeah, I've read it too, but can not recall the specifics of the argument, other than that he proposed that insurance companies should, or at least probably would, be responsible for protection. I'll have to go look in the book and find the argument then.
Presently, the only use that insurance has in health care is distributing a large payment over time, including the possiblity of being compensated immediatey.
In a private defense context, defense insurance is actually a part of health insurance, because your health is benefitted by keeping you safe.
The insurance industry is prevented from functioning properly as is.
Spideynw: InalienableRights: The U.S. health care system is not broken. Everyone who needs care gets care. The care is very fast and excellent. If $4000 for six IV's and a few stupid tests and a three month wait to see an OBGYN is not "broken", then I do not know what is.
The costs can indeed be outrageous. I completely agree with that part of the statement. However, if you show up with enough cash, you can get attention immediately. This is one function where US health care acts like a free market.
But I think that it is important to distinguish between the medical quality of care that is available (which I would argue is among the, if not the, best in the world), and the insurance/payment/costs/regulations that surround the care. Focusing on the latter, other threads have described typical health insurance as a "buffet dinner" - why would a consumer be satisfied with minimal consumption (the minimum use of health services) when they have already paid for "all they can eat" (as much and as expensive health care usage as they can get). I can state that my own experience has been that my friends and colleagues did not opt for the "minimum", but that few are overtly abusive. However, very few do any shopping to get a good deal, or actually know what the care will cost prior to receiving it. I work for a large American corporation in the midwest that is self-insured, perhaps in an industry/area/population that is more fiscally conservative than others.
The AMA (American Medical Association) functions as a cartel that, with the backing of government, limits access to people who would provide medical care. The public reason for this is to protect consumers from hucksters that will advertise care they can not safely provide. But the cartel certainly limits competition directly.
Legal practice surrounding health care has become crazy. In my home state, laws were passed to allow unlimited* liability to the doctor for providing health care. The obvious result is that the doctor must pay more for malpractice insurance to cover the liability. Doctors in the state are "fleeing" the regulation because of the onerous costs - our OB/GYN paid $650000 in 2006 for malpractice insurance. She is a great woman who loves to help families bring children into the world, but even she has considered the financial risks of her business. The people really benefiting are the malpractice lawyers - they get to line their pockets with 50+% of the damages from malpractice cases. Of course, most of the people who make and interpret the laws are lawyers, so this may be another instance of a cartel (the Bar) taking care of their own with self benefiting legislation.
One of the major complaints is that the insurance company or HMO does not provide the care it stated it would. There are two parties in these cases, whom are both at fault part of the time. The HMO/insurance companies sometimes (or frequently, depending on the company) do not provide the coverage that their contracts say they should. If they deny service in violation of the contract, then they should be guilty of fraud. This guilt (proved in a civil court) should be used to sanction the offenders. However, the insured party often does not understand what care they are entitled to based on their contract. When they are denied uncovered care they need, or think they need, they complain about the insurer defrauding them (even though based on the contract the denial of coverage is legitimate).
Add on top of all this that health care and the grave consequences thereof (quality of life and death) are incredibly emotional issues, and a recipe for pandering and emotional appeals against reason is generated. No one asks "Is it ok to rob someone to pay for my surgery?", because most would answer NO. However, if you ask instead "Is it right for my grandma to die because she can't pay for her surgery?", the answer given is also almost always NO. The latter question is the emotional appeal that is used to override and suppress the first question, thus forcing other people to pay for grandma's surgery.
*I did not actually research the specific wording of the law - but this is the spirit. There are a number of midwestern states that have similar laws - many of them have private action groups that advertise to overturn the laws, since the lawsuits are driving various specialty doctors out of those states to the point where that type of care is no longer available.
One hundred trillion Zimbabwe dollar note
Joakim:Definately interesting. But how do you propose health care is paid for? By the individuals at the time they want to use it, like most other goods on the market? If If I want a bypass surgery, should I pay for it in full when I need it? Would you argue that this would be a better way?Isn't part of the reason insurance is good, that the future is uncertain? Having an insurance can be a good way to minimize risks. The money I pay for insurance is not just to pay for health care in case I need it, but also to pay for the good "mimizing risks".
Health insurance should really only be used for major things such as surgery or cancer treatment or something like that. Using insurance for just visiting your family doctor is crazy. I pay $40 to see my doctor and that's not bad. It would probably be less if he didn't need to pay crazy rates on insurance for himself. And in reality I could go to a nurse practitioner instead of a medical doctor. Instead of paying $40 I'd probably pay somewhere around $25. I figure if more people did that then the cost of health insurance would go down as insurers aren't paying billions and billions of dollars every year just for someone to go have a routine check up. So basically pay for it when you need it.
But I think the single biggest factor in all of this is the value of your currency. A strong currency makes affording health care much easier. We all know this. If we had a commodity backed currency, such as gold or silver, then health insurance and health care in the US and other places would be cheaper. I think the single biggest factor in nearly every problem with have can be attributed to weak fiat currency.
I recall that he made a distinction between two broad types of insurance, pointing in the direction of which security would fall under. When I first read the book I couldn't see why this mattered, but I suppose I can now. Apparently Hoppe and one of the Spanish "Austrians" (some of the most innovative members of the school) had a debate over the nature of private security, i.e. what form it'd take. Unfortunately, what came out of this is nowhere to be found online.
I like what Salerno wrote in the postscript of Economic Calculation in a Socialist Commonwealth
As the parasitic welfare state expands its power of monetary inflation and of regulating and intervening into its host "mixed" economy, we can expect productive activities to become more chaotic and guided less and less by socially-determined market prices. In fact, long before a state of complete socialization is achieved, economy and society will begin to disintegrate amid failure of markets to clear, increasing barter, less efficient sizes and forms of business organizations, misallocation, and technical inefficiency of productive resources and disastrous declines of gross capital investment, labor productivity, and living standards.
Another area in which we face the prospect of calculational chaos is health care. By wildly subsidizing and stimulating the demand for health care services of selected special interest groups beginning in the mid-1960s, the United States government precipitated a never ending and catastrophic upward-spiral of health care costs.
In addition, the irrational and labyrinthine structure of regulations and prohibitions imposed by government on the industry has massively distorted resource allocation, restricted supply, and further driven up the costs of medical care. The tragic but predictable result of such intervention is that many of the unsubsidized members of society have been effectively priced out of the market for health care. The simple and humane solution to this tragedy is to quickly terminate these antisocial subsidies and dismantle the destructive regulatory structure, permitting the competitive price appraisement and resource allocation process too operate unimpeded.
But, of course, the internal dynamic of the welfare state is never to retrench and risk disaffection of its pampered and powerful constituencies, for example, the American Medical Association, the American Association for Retired Persons, the entrenched bureaucracies of nonprofit hospitals, and so on. And so we face the prospect of "national health care insurance" which is a euphemism for the thoroughgoing socialization of the health care sector, with its resultant shortages, further suppression of competitive incentives, and deterioration of quality. But this is simply another example of the mad logic of the welfare state: since the government produces nothing that is valuable in terms of social appraisement, it can only supply welfare to some by siphoning off the resources and destroying the economic arrangements that support the welfare of others. In attempting to repair the politically unpopular destruction of its earlier policies, it is driven to further isolated acts of destruction until it arrives, with cruel and ultimate irony, at the policy for the systematic destruction of society and human welfare, that is, socialism.
some good reads I found...
A Four-Step Health-Care Solution
Socialized Medicine in a Wealthy Country
Why is Medical Care so Expensive?
Oh, and I really adore Dr. Block, this is a good listen Health Economics
Well, I wish full coverage meant just that. I'm afraid to seek medical help, the charged to the hilt non-competitive prices, make me dislike being practised on.
Individualism Rocks