2005 Medical Care Forever

What universal health care would really bring


"The United States is the only industrialized nation that does not have some kind of universal health care," is the oft-heard mantra of progressive activists and politicians. It is, of course, understood that that means a socially backwards U.S. should adopt a system of government-financed health care immediately. In support of their campaign for universal health care, progressives cite the fact that more than 40 million Americans do not have health insurance. They also point out that 15 percent of the country's GDP is spent on health care while countries with nationalized health care spend only around 10 percent of theirs. And they note that American life expectancy and infant mortality rates are worse than in most countries that furnish government health care. Finally, polls show that more than 60 percent of Americans favor some kind of universal government health care. Nationalized health care sometimes seems all but inevitable in the United States.

Undeniably, the United States has seen the steepest rise in health care expenditures over the past half century or so, growing from 1.3 percent of gross domestic product (GDP) in 1960 to 4.2 percent in 1980; they now stand at 15 percent of GDP. But even in nationalized systems, health care costs are rapidly escalating as a proportion of GDP. For example, Canada spent 2.4 percent of its GDP on health care in 1960 and 5.6 in 1981; health care spending now stands at 9.9 percent of Canada's GDP. Britain's health expenditures were 3.4 percent in 1960, rising to 5.4 percent by 1981 and are now 7.7 percent.

Health expenditures in nationalized systems are kept lower chiefly by price controls and the frank rationing of services. In Canada waiting lines for many medical procedures are legendary. Last year, lawyers in Quebec filed a class action suit on behalf of 10,000 breast cancer patients who contend they had to wait too long for radiotherapy. The story is the much the same for Britain's National Health Service where more than 800,000 patients are waiting for NHS operations.

US life expectancy does lag Britain's (77.7 versus 78.4 years), but Britons are four times more likely to die than Americans while undergoing major surgery. Furthermore, the most seriously ill NHS patients were seven times more likely to die than their American counterparts.

A 2001 poll of Britons found that 40 percent would consider opting for private health care. In a 2004 poll, 51 percent of Canadians said that they would support the creation of a private health care system parallel to the government health care system. The first crack in the Canadian provincial monopolies that banned almost all private health care opened last week when the Supreme Court of Canada ruled that private health care was a constitutional right of Canadian citizens. And in Britain the NHS is increasingly contracting out to private providers for surgeries, MRI scans, and radiology treatments in order to cut its monumental waiting lists. Wouldn't it be ironic, if America embraced nationalized health care, just as such systems crumbled abroad?

Harvard University economist Kenneth Rogoff sees health care expenditures rising to perhaps 30 percent of a country's GDP over the next 50 years. If the US adopts a nationalized health care system, taxes will have to double for pay for it. Rogoff also observes, "[I]f all countries squeezed profits in the health sector the way Europe and Canada do, there would be much less global innovation in medical technology. Today, the whole world benefits freely from advances in health technology that are driven largely by the allure of the profitable U.S. market. If the United States joins other nations in having more socialized medicine, the current pace of technology improvements might well grind to a halt."

Which suggests the following thought experiment—what if the United States had nationalized its health care system in 1960? That would be the moral equivalent of freezing (or at least drastically slowing) medical innovation at 1960 levels. The private sector and governments would not now be spending so much more money on health care. There might well have been no organ transplants, no MRIs, no laparoscopic surgery, no cholesterol lowering drugs, hepatitis C vaccine, no in vitro fertilization, no HIV treatments and so forth. Even Canadians and Britons would not be satisfied with receiving the same quality of medical care that they got 45 years ago.

Everybody pays more to obtain improved pharmaceuticals, imaging technologies, cancer therapies, and surgical techniques. The happy result is that average life expectancy has increased by about eight years since 1960.

As Rogoff suggests, the nationalized health care systems extolled by progressives have been living off the innovations developed by the "only country without a universal health care system." I wonder how Americans would vote if they were asked if they would be happy freezing medical care at 2005 levels forever?