In an ABC News/Washington Post poll last fall, 62 percent of the respondents favored a universal, government-run medical insurance program. Such surveys reflect a widespread frustration with a health care system that is too expensive, too uncertain, and too complicated.
The answer proposed by John Kerry and John Edwards is to continue the creeping socialization of medicine that Americans have been experiencing since the 1960s. That course would mean the end of private health care in the U.S., and with it the unparalleled medical progress that has benefited patients in this country and throughout the world. It would have a disastrous impact on medical innovation and the quality of care.
The Bush administration, for its part, has failed to offer a coherent alternative to piecemeal nationalization of health care. But the increasingly successful campaigns to privatize Social Security and expand school vouchers suggest a way out: mandatory private health insurance. Under this system, in effect, purchasing health insurance would be not much different from buying car or homeowner's insurance today. As a result, we could preserve and extend the advantages of a free market with a minimal amount of coercion.
The current system poses three main problems. First, it's expensive. In 2003 total spending on health care was $1.7 trillion, some $5,800 for every man, woman, and child in the nation, accounting for more than 15 percent of the U.S. gross domestic product (and up from 14.1 percent of GDP in 2002).
Second, despite all the spending, many Americans don't have health insurance. A May 2003 Congressional Budget Office study estimated that 59 million Americans are uninsured at some point in the course of a year, while 21 million to 31 million are uninsured for the whole year. According to a June 2003 report from the Institute of Medicine, the U.S. loses between $65 billion and $130 billion annually as a result of poor health and early death due to lack of insurance. The uninsured impose costs on the rest of us, too: A 2003 Kaiser Commission report to the Urban Institute estimated that uninsured Americans each year receive about $34.5 billion in uncompensated health care while paying $26.4 billion out of their own pockets.
Third, health care is a paperwork nightmare for patients, doctors, insurers, and employers. In 1999 The New England Journal of Medicine published a study that found it cost $300 billion annually to administer various health insurance plans. It takes some 3 million clerks and managers to run our health care system; that's nearly four times the number of doctors practicing medicine in the United States. It costs between $8 and $18 to file each insurance claim, and a third of them have to be refiled. In a survey published last year by the American Hospital Association's Trendwatch, 64 percent of doctors said they were either extremely or very concerned about the level of paperwork and administration they have to deal with.
Fed up with the whole mess, 82 percent of Americans rank health care as one of the most important issues in the 2004 presidential election, according to a Gallup poll conducted in February. A Pew Research Center for the People & the Press survey conducted in the summer of 2003 found that 67 percent of Americans favored "the U.S. government guaranteeing health insurance for all citizens, even if it means raising taxes." In last fall's ABC News/Washington Post poll, 79 percent of respondents said it was more important for the government to provide health care coverage for all Americans than it was to hold down taxes.
Politicians pay attention to the polls. The compassionate conservatives in the Bush administration tried to neutralize a traditionally Democratic issue by ramming a new $530 billion Medicare drug benefit program through Congress last fall. They have also offered various half-hearted market-oriented baby steps that do not add up to a plan that can compete with the Democrats' vision of "affordable, quality, and reliable health care coverage" for all.
John Kerry vowed at the Democratic National Convention, "When I am president, we will stop being the only advanced nation in the world which fails to understand that health care is not a privilege for the wealthy and the connected and the elected -- it is a right for all Americans." His running mate has declared, "I want to make health care a birthright for every single child born in this country, period. I want to make sure all of us vulnerable adults are covered." The main thrust of the Kerry-Edwards reforms is to extend the coverage offered by various government health insurance programs to more and more Americans. The candidates want to enroll nearly everyone under age 18 in the State Children's Health Insurance Programs (S-CHIPs) and allow Americans to join Medicare at 55.
These Democratic health care proposals are a continuation of the socialization trend that began with the adoption of Medicare and Medicaid in the 1960s. Despite the breakdown of the ambitious Clinton health care plan in 1994, we have seen gradual adoption of elements of that proposal, including the S-CHIP program in 1997 and the new Medicare drug benefit. What remains of private medicine is being slowly strangled by the mandates and regulations that come with growing government health care spending. In fact, we're already nearly halfway to a completely centralized, government-funded medical system. Since Medicare was enacted in 1965, the federal and state portion of medical expenditures has risen from 24 percent to 45 percent.
A decade after Bill Clinton almost forced through his all-embracing health care plan, government-run medicine is once again becoming a respectable public policy idea. Last year a coalition called Physicians for a National Health Program launched a new campaign for universal single-payer health insurance. In the August 13, 2003, issue of The Journal of the American Medical Association, the coalition proposed what "in essence would be an expanded and improved version of traditional Medicare," covering "every American for all necessary medical care," funded through a new tax on income. The proposal, which has been endorsed by 8,000 physicians, has been introduced in Congress as a bill that aims to establish "a new American national health insurance program by creating a single payer health care system."
Advocates of a single-payer system often cite the lower medical costs of the completely nationalized health care systems in Canada and Britain, which spend less than 9.6 percent and 7.7 percent of their GDPs on health care, respectively. Despite the lower spending, the average life expectancy at birth is 79.8 years in Canada and 78.2 years in Britain, higher than America's 77.1. What explains the differential? As University of Iowa health economist Robert Ohsfeldt notes in the fall 2003 issue of The Independent Review, if higher U.S. accident and homicide rates are taken into account, our life expectancy numbers match those of Britain. The difference is also partly due to a slightly higher infant mortality rate in the U.S.: 6.8 per 1,000 live births, compared to Canada's 4.9 and Britain's 5.3 rate per 1,000. (That seems largely related to racial disparities -- the white U.S. infant mortality rate in 2000 was 5.7 and the black infant mortality was 14.4.
Another factor is improvements in fetal medicine that have allowed infants who would otherwise have died before delivery to survive into the early newborn period. Canada too has racial disparities; the infant mortality rate for aboriginals is 8 per 1,000 live births -- nearly double that of the white population.)