The Capitalist's Case for Socialized Medicine

[RobinFinderson]

Outside of the freak-wing of the conservative movement, most people realize that some services are socialized and others are left to the private sector because the right balance achieves the most robust economy. For example, sure we could privatize our roads and highways, but it is generally believed that having a free and open network for roads will better serve everyone (imagine truckers having to wait in toll lines every fifty miles).

When we collectively select some aspects of society to 'socialize,' in America, it is never about working toward some communist lifestyle. It is about striking the best possible balance so that those un-socialized sectors of the economy can focus on what they do best of all.

We could certainly privatize roads, bridges, education, the military, fire fighters, police, sell off all of our public lands and public mineral rights, and get rid of investments in technology, but most reasonable people believe that in all of these areas we should strike a balance between public and private enterprise.

The capitalist's case for socialized medicine is simply this -- with our medical system gobbling up ever-increasing portions of our GDP, socializing medicine for most people would improve the private sector (outside of the health industry itself, of course). Only a socialized system would provide the tools necessary to prevent costs from continuing to spiral upward and out of control.

The arguments against a socialized system fall into two broad categories. 1. It would cost too much. 2. The private sector is better at innovating, and American innovation is why America's best medical services are the best in the world.

Regarding cost, I'm not sure that anyone has created a decent model of the cost of a socialized system. It would obviously cost more to cover every single person in the United States, but it would also save businesses from having to provide health insurance for their employees (a practice that would disappear in a hurry if the tax incentives were taken away for providing these benefits). It would also cut out the profits associated with a private insurance agency, and no public system could work without serious tort reform, so there would be savings in that. Also, insurance for everyone would (likely) improve the general health of our work force, improving productivity, and it would decrease the cost born by the public for individual's catastrophic health crises.

But more than these obvious pluses and minuses, the benefit I'm most interested in is how a public system would free people to take more entrepreneurial risks. If the innovation bubbling up through America's small businesses is one of our great strengths, then it would stand to reason that separating a need like 'insurance' from one's gainful employment would be a force that would improve American entrepreneurialism. More people would feel 'safe' taking business development risks if they didn't feel that their own and their family's health was part of the gamble.

In short, sure many people would stand to lose billions of dollars associated with the private health care and insurance industries, but an efficient national health care system would work like an efficient national road system, providing private industry with a more efficient business environment.

[CardiacCoug]

Good post. There are millions of Americans who stay in jobs they hate because they can't give up health benefits for themselves or family members. That has to put a damper on the economy at large.

It would be pretty cool to put every health insurance company out of business. And there is certainly no way that I can see that the current system or a minor modification of the current system will ever contain costs -- health care costs will continue to eat up a larger and larger percentage of our national economy and the income of every family unless we move radically toward either a free market system with insurance only for major health events (my preference) or a single government payer system (my second choice).

If we ran the police the way we run health care, then if you called the police because your relative was killed, you would then expect $100K plus of bills to roll in over the next 6 months from various parts of the police department. You would get a bill from the officers who responded initially, the detectives, the forensics guys, the police station itself for their services, etc. None of the costs would be disclosed ahead of time and they would all be completely out of your control. The amounts charged would vary widely -- one police department might charge 5 times as much as another police department for the same service. And you would have no way to compare the cost and quality of various police departments prior to asking for their services. Does that system make sense?

[All-American]

Good post. There are millions of Americans who stay in jobs they hate because they can't give up health benefits for themselves or family members. That has to put a damper on the economy at large.

It would be pretty cool to put every health insurance company out of business. And there is certainly no way that I can see that the current system or a minor modification of the current system will ever contain costs -- health care costs will continue to eat up a larger and larger percentage of our national economy and the income of every family unless we move radically toward either a free market system with insurance only for major health events (my preference) or a single government payer system (my second choice).

If we ran the police the way we run health care, then if you called the police because your relative was killed, you would then expect $100K plus of bills to roll in over the next 6 months from various parts of the police department. You would get a bill from the officers who responded initially, the detectives, the forensics guys, the police station itself for their services, etc. None of the costs would be disclosed ahead of time and they would all be completely out of your control. The amounts charged would vary widely -- one police department might charge 5 times as much as another police department for the same service. And you would have no way to compare the cost and quality of various police departments prior to asking for their services. Does that system make sense?

There are also millions who stay in jobs they hate because they can't afford to take a lower-paying job.

But I'm sure you're both right, and that we should pattern our health care system after our road construction and law enforcement systems. Not only is the nature of the work they do extremely analogous in the lack of a market alternative, the latter two are paradigms of efficiency.

[CardiacCoug]

But I'm sure you're both right, and that we should pattern our health care system after our road construction and law enforcement systems. Not only is the nature of the work they do extremely analogous in the lack of a market alternative, the latter two are paradigms of efficiency.

You honestly think that health care is delivered more efficiently than roads are built in this country? When was the last time you were in a hospital or had to deal with bills from a medical event?

There are outrageous inefficiencies in health care delivery in this country. These inefficiencies are primarily the result of our patchwork system of private and public insurance and complete lack of transparency regarding the true costs of health care.

Forgive me if I incorrectly assumed sarcasm.

[CardiacCoug]

There are also millions who stay in jobs they hate because they can't afford to take a lower-paying job.

Did somebody highjack your login, AA? Sorry for being a jerk, but that is the type of thing Hallelujah would post. What the hell are they doing to your brain at that school?

Risking the loss of health insurance that provides medical care for a sick spouse or sick child is in no way comparable to choosing to take a job with a lower salary without risking the loss of insurance. Are you really arguing that losing your health insurance isn't a big deal or is comparable to a modest decrease in salary?

[All-American]

Did somebody highjack your login, AA? Sorry for being a jerk, but that is the type of thing Hallelujah would post. What the hell are they doing to your brain at that school?

Risking the loss of health insurance that provides medical care for a sick spouse or sick child is in no way comparable to choosing to take a job with a lower salary without risking the loss of insurance. Are you really arguing that losing your health insurance isn't a big deal or is comparable to a modest decrease in salary?

I grant you this: they are doing horrible, horrible things to my brain. Hopefully, when they give it back, it won't be beyond repair.

But risking the loss of health insurance is in many ways comparable to choosing to take a job with a lower salary. People often take jobs that they hate because they need the compensation, whether it comes in the form of salary or other benefits such as insurance. It's just a matter of degrees-- a point you skirt when you use the term "modest".

[All-American]

You honestly think that health care is delivered more efficiently than roads are built in this country? When was the last time you were in a hospital or had to deal with bills from a medical event?

There are outrageous inefficiencies in health care delivery in this country. These inefficiencies are primarily the result of our patchwork system of private and public insurance and complete lack of transparency regarding the true costs of health care.

Forgive me if I incorrectly assumed sarcasm.

I honestly think that road construction is not the model we ought to be mimicking in designing our health care system.

Yes, there are terrible inefficiencies in health care delivery. Socialization would solve some of them, fail to address the rest, and present others. I don't know which fall into what category, but I remain unconvinced that of the arguments in favor of socialized medicine (of which I acknowledge that some are good and compelling), efficiency is one.

[CardiacCoug]

I honestly think that road construction is not the model we ought to be mimicking in designing our health care system.

Yes, there are terrible inefficiencies in health care delivery. Socialization would solve some of them, fail to address the rest, and present others. I don't know which fall into what category, but I remain unconvinced that of the arguments in favor of socialized medicine (of which I acknowledge that some are good and compelling), efficiency is one.

I think it's the term "socialization" that is confusing.

Health care for everyone over age 65 is "socialized" in this country. Health care for everyone who is either unwilling or unable to pay for health care is "socialized" in that it is passed on to the rest of us who have health insurance and pay taxes. It's already a fairly small percentage of the total population (the taxpaying and insurance-buying folks) who are financing the entire health care system for everyone else. Except the health care dollars are channeled through hundreds of insurance companies and redistributed by overpricing of procedural and radiology services in order to subsidize other poorly reimbursed, patient-care services.

Meanwhile, WellPoint insurance is raising its rates 39% in California this year alone and around 20% across the country. And frankly, it needs to increase its rates to maintain profits. The fundamental problem of runaway health care costs can't be solved without blowing up the current American health care system. As I have said, I would prefer a free market solution. But moving to a single government payer is probably a more practical way of fixing things. Until we do something, we will continue to see yearly, double-digit increases in health insurance rates and total health care spending.

By the way, if we financed road-building the same way we finance health care it would work like this:

We would pay road builders $500 for every streetlight they put along a road and that would be the only factor for which road builders were paid. And the road builder could put as many streetlights up as he wanted and you still had to pay for each streetlight. We wouldn't pay based on the quality of the road or how long the road lasted.

Then we would be shocked when we learned that every road had 10,000 streetlights per mile and was full of potholes.

In case the analogy isn't obvious: I don't get paid much of anything for taking good care of patients and making the right decisions regarding their health care. I do that because it's my duty and the right thing to do. But I get paid for doing angioplasty and stenting, which is only a small component of providing good health care. I'm like a road builder who only gets paid for the streetlights.

[Mormon Red Death]

Outside of the freak-wing of the conservative movement, most people realize that some services are socialized and others are left to the private sector because the right balance achieves the most robust economy. For example, sure we could privatize our roads and highways, but it is generally believed that having a free and open network for roads will better serve everyone (imagine truckers having to wait in toll lines every fifty miles).

When we collectively select some aspects of society to 'socialize,' in America, it is never about working toward some communist lifestyle. It is about striking the best possible balance so that those un-socialized sectors of the economy can focus on what they do best of all.

We could certainly privatize roads, bridges, education, the military, fire fighters, police, sell off all of our public lands and public mineral rights, and get rid of investments in technology, but most reasonable people believe that in all of these areas we should strike a balance between public and private enterprise.

The capitalist's case for socialized medicine is simply this -- with our medical system gobbling up ever-increasing portions of our GDP, socializing medicine for most people would improve the private sector (outside of the health industry itself, of course). Only a socialized system would provide the tools necessary to prevent costs from continuing to spiral upward and out of control.

The arguments against a socialized system fall into two broad categories. 1. It would cost too much. 2. The private sector is better at innovating, and American innovation is why America's best medical services are the best in the world.

Regarding cost, I'm not sure that anyone has created a decent model of the cost of a socialized system. It would obviously cost more to cover every single person in the United States, but it would also save businesses from having to provide health insurance for their employees (a practice that would disappear in a hurry if the tax incentives were taken away for providing these benefits). It would also cut out the profits associated with a private insurance agency, and no public system could work without serious tort reform, so there would be savings in that. Also, insurance for everyone would (likely) improve the general health of our work force, improving productivity, and it would decrease the cost born by the public for individual's catastrophic health crises.

But more than these obvious pluses and minuses, the benefit I'm most interested in is how a public system would free people to take more entrepreneurial risks. If the innovation bubbling up through America's small businesses is one of our great strengths, then it would stand to reason that separating a need like 'insurance' from one's gainful employment would be a force that would improve American entrepreneurialism. More people would feel 'safe' taking business development risks if they didn't feel that their own and their family's health was part of the gamble.

In short, sure many people would stand to lose billions of dollars associated with the private health care and insurance industries, but an efficient national health care system would work like an efficient national road system, providing private industry with a more efficient business environment.

socialized medicine is different than a national health insurance. socialized medicine means all the doctors work for the government. which do you prefer?

[CardiacCoug]

socialized medicine is different than a national health insurance. socialized medicine means all the doctors work for the government. which do you prefer?

I'll answer for him: Having the government build every hospital and actually provide the health care (as in the VA system) wouldn't work. There would be huge shortages and deficiencies in care. And the government would actually have to take physical possession of every hospital and clinic, which is ludicrous.

I think RF is talking about government financed but privately delivered health care because that is the only thing that makes sense -- basically expanding Medicare to the entire population.

[RobinFinderson]

I think RF is talking about government financed but privately delivered health care because that is the only thing that makes sense -- basically expanding Medicare to the entire population.

Yes, that in a nutshell. Thanks, Cardiac, for your work here. Your analogies to the problems of the existing health care system are awesome. Most importantly, your posts serve as a reminder that the system really needs to be overhauled. I don't expect Obama and friends to really do anything but apply another bandage to the hemorrhaging hole. My best hope is that they will create a system that will apply the real fix (Medicare for all) once the new patchwork inevitably fails... a built in trigger for a public option.

On a side note, I have to imagine that the current climate of health care saps much of the joy out of the profession. What a mess.

[Mormon Red Death]

Yes, that in a nutshell. Thanks, Cardiac, for your work here. Your analogies to the problems of the existing health care system are awesome. Most importantly, your posts serve as a reminder that the system really needs to be overhauled. I don't expect Obama and friends to really do anything but apply another bandage to the hemorrhaging hole. My best hope is that they will create a system that will apply the real fix (Medicare for all) once the new patchwork inevitably fails... a built in trigger for a public option.

On a side note, I have to imagine that the current climate of health care saps much of the joy out of the profession. What a mess.

your first post was about why capitalist should want universal health care. what about the capitalist in Health care?

[woot]

I'm also fairly convinced of what Robin is advocating here, and like the way he couched the discussion. I'm definitely against socialism, but am also against the "tragedy of the commons" that happens so often when industry isn't sufficiently regulated. There aren't that many people that are actually advocating for anything like actual socialism, so the constant cries of socialism from the right are nothing but attempts to discourage rational conversation.

Universal healthcare seems to have worked in many different situations, including in Hawaii today. That doesn't mean it will work for all of the US, but it means that anyone saying it can never work are absolutely wrong.

I have no confidence our government is capable of fixing health care on the first try, but it's time for change to begin.

[CardiacCoug]

On a side note, I have to imagine that the current climate of health care saps much of the joy out of the profession.

It really doesn't. I love my job. But the more I learn about how I am reimbursed for the things I do and about the way health insurance works, the more I just scratch my head about what a ridiculous system has evolved over the years.

One of my sons had a long hospitalization and has had 3 surgeries over the past few years. Even as a physician, I find the medical bills we have received over the course of my son's illness to be a source of either comedy or great annoyance depending on my mood at the time. We had $80K of charges related to his initial hospitalization (for which we were luckily well-insured) and after sitting down with the bills for over an hour I still had no idea what a lot of the charges were for.

[RobinFinderson]

your first post was about why capitalist should want universal health care. what about the capitalist in Health care?

There would still be many oportunities for the capitalist health care professional... well not for the health insurance professional. Those dudes would have to find a different line of work.

But for example: The entrepreneurial doctor would still get paid based on the number of patients she served (and on positive outcomes). If she worked hard and saw twice the patients as some other doctor, and if she was able to document that she provided professional services, she would get paid twice as much.

I teach product design. Some of my students develop health care products (like insulin monitoring systems). The design professional would develop the next killer product, demonstrate that it greatly improves outcomes, and if the product proved to be more than marketing, the government might include it on a list of approved medical devices covered by the the single payer system.

Think of all of the entrepreneurs providing services for the US military. This may spell the death of private insurance (though I imagine that the wealthiest class would still buy premium health insurance for the myriad unnecessary health services they want, for which tax payers should not be left with the bill).