Why Socialized Health Care Is Unjust

By Hadley Heath Manning

Friday, February 19, 2016

Sen. Bernie Sanders’s presidential campaign is exceeding expectations and drawing large support from young and blue-collar voters. At the center of his policy platform is a plan to completely socialize the U.S. healthcare system, turning it into a “single-payer” program, or a single government fund that pays for all citizens’ health costs.

The argument for this kind of system is simple. Supporters say it will enable everyone to access health care and cost less than our current mix of private and public health expenditures. Most of all, they argue this system would be morally superior to others.

All of those claims are dubious, but the last is the biggest whopper. In fact, socialized medicine is immoral. It relies on coercion and results in shortages and long wait times, which means worse care. It is rife with inequality and inefficiency, leading to serious harms.

This Would Ratchet Up the Doctor Squeeze

Consider how a socialized system would cut costs. Single-payer advocates brag that having one, national fund for health costs would allow the government to “negotiate” health-care prices down because it would essentially have prevented everyone else from bidding to pay for them. In other words, government would have control of an entire industry and be able to dictate the terms of work and trade for everyone within it. How is this morally superior to allowing free people to negotiate arrangements on their own?

Unfortunately, America hasn’t had a truly free, market-based health system for decades. Many people feel the outsized power of insurance companies has allowed them to dominate and unfairly control doctors and hospitals. This is true: Insurance companies, thanks in large part to regulations from the Affordable Care Act, are consolidating and using their growing market shares to bargain, and perhaps bully, health-care providers and dictate the terms for everyone.

We already see the bullying of providers in the single-payer systems that exist in the United States, including Medicare. Doctors consistently complain about the ways Medicare makes practicing medicine hard, from bureaucratic paperwork and compliance burdens to low pay.

Socialism Means Force, and Force Is Wrong

In fact, each year more and more physicians opt out of the Medicare program altogether. It’s become so bad in Hawaii that legislators have proposed a bill that would force providers to accept Medicare or else lose their medical licenses! This is always the end of government-controlled health care: coercion.

As Dr. Jim Geddes, a trauma surgeon near Denver, CO, recently told Medscape.com, “The only way physicians can afford to participate in Medicare is that they get higher payment from commercial insurers. Single-payer advocates talk about ‘Medicare for all,’ but if Medicare were standing alone, it would fall flat.”

But at least some choice remains: Doctors today can still choose not to participate in certain plans or programs. If single-payer were the law of the land, no health-care provider could engage in his profession without having to bill the government, as government would be the only payer for these services in most cases.

Health-care providers would be forced to accept a government-set price for their services. This would inevitably harm the quality of care we receive by locking in current ways of doing things instead of allowing people to try new ones, and discouraging people from pursuing grueling, expensively learned work in the medical field because of low pay and bad working conditions.

We’ve seen how a similar standardized compensation system has worked for public-school teachers. It effectively punishes excellent teachers and rewards mediocre ones. It’s helped create a bifurcated education system, with private schools delivering higher quality to families that can afford to pay tuition on top of taxes, while too many families are left to attend low-quality public schools.

The same phenomena would take place in medicine. Under a government-dominated system, excellent health-care providers wouldn’t be rewarded and would suffer new burdens, while mediocre and even poor providers would receive the same payments as those that provide high-quality care.

DMV-Style Health Care Means Rationing and Shortages

Patients too would suffer at the hands of a single payer, due to the rationing and shortages that always result when government sets prices. That is, of course, unless you are wealthy and can find a concierge medical practice to sell you some special service. Single-payer systems always unravel, giving the rich a chance to buy superior care, and thus creating tremendous economic inequities in the system.

In fact, it may shock some single-payer advocates to hear, but the National Bureau of Economic Research has found that health outcomes are more strongly tied to income in Canada (already a single-payer system) than in the United States.

Single-payer would also lead to waste and great inefficiency, which can have serious health consequences. If government sets a price for a certain service that is too high, providers may over-prescribe it and patients may over-consume it. If the government sets a price for a certain service that is too low, then too few providers will offer it, and there will be a shortage.

In a market system, higher prices signal shortages and give providers an incentive to adapt to meet people’s actual needs. In a government-based system like single-payer, patients always face the same price—zero—so government has to limit what services are available to whom based on data. This is straight-up rationing.

But single-payer also results in implicit rationing, which manifests in long waiting lists for the desired service or treatment. Long waits, common in other countries with government-controlled health-care systems, can lead to inferior health outcomes. To be blunt, this means more pain and suffering. In some cases, this even means more death.

That was the case for Laura Hiller, an 18-year-old Canadian with leukemia who died in January for lack of a hospital bed. Numerous bone marrow donors were ready and willing to assist her, but because her hospital could only perform about five transplants per month, Laura died while waiting for her turn. Stories like this are not uncommon in countries with single-payer health-care systems.

Better Idea: A Medical Free Market

Surely there is nothing moral about this. Americans shouldn’t accept that either insurers or government must dominate the health-care market or set the prices and payments for everyone. Rather, we should reform our health-care system to give individuals more power and choice.

Patients should pay providers directly for any services that are routine and not catastrophic, and patients could carry low-cost insurance policies to protect them in the event of catastrophic health-care costs. This is how it works for house and auto insurance, which almost everyone can afford even though cars and houses are frequently as expensive as many medical services.

A direct-pay model would create an incentive for providers to offer more pricing information, and to compete with one another on price. Market competition would drive prices down without the need for coercion. Quality would go up, prices would go down, and, just as importantly, this would be a morally superior system free of the coercion and domination implicit in a government-run socialized system.