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Socialized Medicine Resurrexit By: Jeffrey Miles
FrontPageMagazine.com | Friday, June 13, 2003

The left-wing has revived its fight to control health care in the United States. Presidential candidates Dick Gephardt, Howard Dean and John Kerry have all released plans to subject this sector of the economy to varying degrees of political micromanagement. They employ phrases like “universal healthcare,” “pay or play” and “single payer healthcare.” However, socializing medical care would deteriorate the high level of health care enjoyed in America today, institute destructive rationing and transform the patient-doctor relationship into a patient-State relationship. What this is really about is money - lots of it – and federal control. 

Health care makes up about one-seventh of the total economy. Due to the increased longevity, our insatiable appetite for care (beyond that of any country in the world) and our high-tech medical treatments, that sector is growing rapidly.   Health care must be differentiated from health insurance in that care is always readily available, but paying for that care is the crux of the health debate going on in Washington, D.C, and in state houses all over the country.  It is complex, but we will try to de-mystify that complexity here.

Since the passage of the Employee Retirement Income Security Act (ERISA) in the 1970’s, which federalized the regulations for pensions and other employee benefit plans, employer-based health insurance has flourished.  Virtually all major U.S. corporations have sponsored health insurance programs for their employees and their dependents, while smaller companies have struggled, but for the most part succeeded, in trying to provide competitive benefits in order to compete with larger businesses.  Due to a 30 year evolution, the job based system of health insurance has taken hold and is now the primary method by which most Americans get health insurance.

With some flaws, it is a system that works.  The facts are that roughly 90 percent of Americans have health insurance and 90 percent of those like what they have.  Those are pretty significant numbers for any business.  Yet there are forces in America who hate this success, as they hate the basic fundamental system we live under.  Special interest groups representing “social change” believe that we all should live under Canadian/European/Cuban/Soviet-style health care systems, which cost more, deliver less, and change the doctor/patient relationship to one between the patient and the state.

This health “fifth column” perpetuates many myths about health care and health insurance in particular.  Among those myths are that there are 40-60 million Americans without insurance, that socialized systems spend more on care and less on administration or “middlemen,” and that the care rendered is plentiful, cheap and excellent.  Nothing could be further from the truth.  These myths are spread with funding from some very influential sources such as the Robert Wood Johnson Foundation and the Kaiser Family Foundation.  These groups bankrolled the recent “Cover the Uninsured Week,” which was designed to illuminate the plight of the 60 to 70 million (see how easy it is to increase the size of this population?) citizens without insurance.  Their congressional proponents include Senator Edward Kennedy, Rep. Jim McDermott, and Sen. Hillary Rodham Clinton.

In fact, this propaganda campaign was designed to nudge the public to support full government takeover of health insurance, regardless of the negative aspects of such a scheme.

“Crisis” of the Uninsured

Let’s examine the issue of the millions without insurance.  The numbers need to be examined as to who is chronically uninsured, versus those who are without insurance for a short period of time.  Repeated studies show that the number of chronically uninsured is around 10 million people.  Most of those people simply cannot afford individual coverage, are suffering with health conditions that make them ineligible for individual coverage, or they do not work for an employer who provides them job based insurance.  The problem of individuals with pre-existing conditions making them uninsurable can be dealt with through the use of high risk pools, such as those already developed by many states.

Many more uninsured are lower paid workers who, while they may have coverage provided for them by their employers, cannot afford the contributions required to cover their dependent family members. These “unaffordables” can be served by transferable tax credits that can be used to buy individual insurance or to participate in an employer group plan.

There are also the “refusniks” who are usually young and healthy and therefore cannot fathom that they should contribute to the cost of health insurance as “nothing will ever happen to them.”  (Ah, youth!)  The balance of the uninsured are people who are usually between jobs, or in waiting periods for new employer-based coverage to begin.  The average period of time citizens like this are uninsured is less than two months. These situations are easily solved with temporary insurance plans designed to fill the gap while in a waiting period, and are readily available.   Is there really a “crisis” here such as the Left continuously tells us?

Single Payer

With regard to the costs, single payer health care such as the Canadian system is the most expensive form of insurance in the world.  Repeated studies show that in the provinces of Canada, the taxes have been increased disproportionately to pay for the bloated administration of the system.  Government-provided health care costs all Canadian 21 cents of every dollar they earn.  That means Canadians earning $35,000 in 1999 dollars are paying $7,350 for the government system.

This doesn’t begin to frighten as much as the lack of technology and the rationing of care.  Canada ranks 20th out of 30 in the availability of MRI machines, and 22nd in the number of CT scan devices. As a specific example, Ottawa has only one MRI machine for 555,000 residents, and several thousand are currently on the waiting list.

The Canadian government will not allow hospitals in Canada to develop services such as open heart surgery and transplantation because of cost. Patients who can afford it can still get this needed by going south to the United States, where there is no rationing. Significantly, most physicians travel to the United States to seek care for themselves and their families.  Additionally:

·        More than 1.3 million Canadians (out of a total population of 26 million) are waiting for medical services, and the latest survey data indicate that 212,990 Canadian patients are waiting for surgical procedures.  (Source: National Center for Policy Analysis (NCPA) and Fraser Institute.)

·        45 percent of Canadians who are waiting for services describe themselves as “in pain.” (Source: Statistics Canada.)

·        Canadian patients wait an average of 6 weeks after referral from a primary care physician to see a specialist, and then wait another 7.3 weeks on average before they receive treatment.  Total waiting time has jumped 43 percent since 1993.  (Source: Fraser Institute.)

The poor access performance of single-payer systems can be seen in higher mortality rates for treatable diseases, compared to the United States. Take cancer, for instance:

·        For breast cancer in the United States, the cancer-mortality ratio, or death rate divided by the incidence of disease, is 25 percent.

·        In Canada and Australia, it is 28 percent; in Germany, 31 percent; in France, 35 percent; and in New Zealand and the United Kingdom, 46 percent.

·        For prostate cancer, the U.S. mortality ratio is 19 percent; in Canada, 25 percent; in New Zealand, 30 percent; in Australia, 35 percent; in Germany, 44 percent; in France, 49 percent; and in the United Kingdom, it is 57 percent.
Source: Linda Gorman (Independence Institute), "Road to medical hell," Perspective, Denver Post, January 12, 2003.

The two most ridiculous items I have seen utilized by the health bureaucrats in Canada is the leasing of technology to veterinarians, and the “baby limits.” Canadians in Ontario can get a CT scan for their pet, but can’t get a scan for themselves.  Why?  Because as a cost-cutting measure, Saint Joseph Health Centre decided to lease out their CT scan machines for use by veterinarians.  You see, pet lovers pay for services for animals at the time they are rendered, while the government wont allow its citizens to do this for themselves or their family members at any price. In Ontario, if you need the diagnostic services available by a CT scan, you need to get in line and wait.  With some luck, you will get the test done before the situation becomes critical.  The baby limit is so-dubbed because of a limitation imposed by the Ottawa-based Queensway-Carlton Hospital.  Their facility has the ability to deliver 2,700 babies per year, but the government said no more that 2,100 would be allowed in the year of 2001 due to cost.  I guess the message is don’t get pregnant in Ottawa.

“Pay or Play”

Back in 1994, the Clinton administration attempted to impose “HillaryCare” on the nation.  It was, in essence, an employer mandate to provide health benefits to all employees. Now, legislators in Washington and many state capitols are reintroducing this scheme under the term as “pay or play.” In simple terms it employers either to buy insurance for all of their employees or pay a tax to the state to finance a “basic” health insurance program for employees and their families.  No discussions ever seem to include exactly what a “basic” plan is in the eyes of these legislative staffers. This also serves as the fundamental basis of Rep. Dick Gephardt’s health care plan and that of the other plans offered by several Democratic presidential hopefuls.  Note the way Hillary has distanced herself from these new versions of her previous proposal so as to not be the “lightning rod” on the proposals being considered.

These employer mandates are back breaking to employers who don’t make enough money to afford such a large increase in the cost of doing business.  Also remember that each state regulates insurance in its own fashion.  In liberal states such as mine (California), we have dozens of mandated, special interest benefits included in all the plans sold in our state.  This drives up the cost of insurance to employers and drives insurance companies out of the market place, dramatically impacting the free market competitive forces in a negative way.

Group health insurance is already mandated to take all applicants, pick up virtually all pre-existing conditions, is fully “portable” to an employee who leaves the company, and provide for “cradle to grave” access to maintain health insurance.  The problem is that employers just can’t afford to provide it due to the fact that no affordable, “basic” coverage is good enough for the left-wing dominated political infrastructure in most state houses.  They want the minimum benefits to be like Canada or Cuba, in which the insured pay nothing.  Unfortunately, someone does pay: the taxpayer.

While it is true that most Americans polled believe that we all should have health insurance, the polling numbers change dramatically when the cost of providing coverage to a small slice of the population called “the uninsured” is explained to them.  It’s not that they have no concern for their fellow citizens; it’s that they know the costs will be unbearable if government has anything to do with it. Just look at the Medicare tax on your paycheck and you see why the fear factor kicks in.  


There are problems in our system for health delivery.  The quality is unsurpassed in the world, but the costs are keeping many uninsured.  These problems can and should be addressed with a scalpel, not with a sledgehammer.  We already have a system that covers its poor (Medicaid), its old (Medicare), and its young (CHIP).  These programs have many of their own problems, but let’s focus on what needs to be done now to fix the problems at hand.

First, we need to strengthen the employer-based system.  It can be strengthened by implementing the proposal for refundable, exchangeable tax credits to the working poor for purchase of individual or employer-based coverage.  This is the primary obstacle to employers buying coverage for their employees.  President Bush supports tax credits for buying insurance and has signed into law funding for high risk pools for individuals who are uninsurable and have no access to employer-sponsored plans.

Second, we need to stop the shifting of medical costs from government to the private sector.  By dictating to medical providers what they can charge, and driving that amount lower every year, these costs are shifted to private patients covered by commercial insurance. It makes the playing field un-level, thereby creating a hidden tax on all insured people to subsidize financially unsound government programs.  This disgrace should be exposed for all Americans to see.

Third, we should encourage our state legislatures to drop their pet projects and allow bare bones plans to be sold without the many mandates for everything from acupuncture to zenith therapy. (Yes, there is actually such a thing.)  Basic coverage that protects you from hospital and surgical expenses that could be bankrupting would cost much less that a fully loaded, mandate-heavy plan.  This would also encourage more competition, bringing more insurers into the marketplace.  That can only benefit consumers. 

Finally, tort reform is necessary.  Legal costs are skyrocketing as fast as the cost of delivering care.  Unfortunately, most law makers are lawyers too; reforming their own profession is unlikely in the near future. Don’t count on tort reform to solve the problems of the health system anytime soon.

Jeffrey Miles is a Registered Health Underwriter and benefits consultant in Marina Del Rey, California. He is also President of the California Association of Health Underwriters and a regular speaker on health insurance issues. He can be reached by e-mail at jeff@milesorg.com.

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