Socialized Medicine Failing

It is well known that the architects of ObamaCare favor the socialized models of health care. No less than President Obama, Senate Majority Leader Harry Reid, and House Minority Leader Nancy Pelosi, are all on record as favoring single-payer or socialized medicine systems. They have admitted they would have pushed such a program for the United States if it was politically feasible when reforming our health care system during the debate in Congress in 2009 and 2010.

Evidence of their proclivity for socialized medicine is the Obama nomination of Tom Daschle, an outspoken advocate of Britain’s socialized National Health Service (NHS), for the position of Health and Human Services Secretary in 2009. Daschle, the former Senate Majority Leader, failed the nomination process when he was criticized for non-payment of taxes. Instead, Kathleen Sebelius was nominated, another proponent of socialized medicine. Another advocate of the Britain NHS, Donald Berwick, was appointed interim director of the Centers for Medicare and Medicaid Services.

If you looked only at the report of the Commonwealth Fund, a private foundation focused on health care, you might think they were on the right track. Commonwealth issued a report this summer ranking the NHS as the best medical system among those in eleven of the world’s most advanced nations, including Canada, France, Germany, Switzerland and Sweden. They ranked the United States last of the eleven.

But statistics can be misleading, as Dr. Scott W. Atlas of the Hoover Institution points out in a Wall Street Journal article. He says the Commonwealth rankings are contradicted by objective data about access and medical-care quality in peer-reviewed academic journals. For instance, Americans diagnosed with heart disease receive treatment with medications significantly more frequently than patients in Western Europe, according to Kenneth Thorpe in Health Affairs  in 2007. In Lancet Oncology in that same year, Arduino Verdecchia published data demonstrating that American cancer patients have survival rates for all major cancers better than those in Western Europe and far better than in the United Kingdom.

It seems the Commonwealth Fund rankings reflect subjective surveys about “perceptions and experiences of patients and physicians” more than statistical analysis. But just to be fair, let’s look closer at the top-rated NHS system in Great Britain.

Great Britain’s NHS

Britain’s NHS was founded in 1948. It provides free health care for all citizens of Great Britain. NHS England receives about 100 Billion British pounds a year from the Department of Health to run England’s healthcare system. They reported this month that its hospital waiting lists soared to their highest point since 2006, with 3.2 million patients waiting for treatment after diagnosis. According to a June report by NHS England, more than 15% of patients referred by their general practitioner for “urgent” treatment after being diagnosed with suspected cancer waited more than 62 days to begin their first definitive treatment.

I was traveling this summer in Europe and had dinner several nights with two couples from England. One of the men had a total knee replacement recently and had to wait ten months for the surgery after diagnosis. He said the wait would have been much longer but he got special treatment because the surgeon had a close relationship with his rugby team. The usual wait can be up to two years.

The Swedish Experience

What about Sweden? They were ranked 3rd by the Commonwealth Fund. Many people tout Sweden as the best example of a socialized system that works. But what do the Swedish people say?

Per Bylund, Swedish economist and professor at Baylor University’s Hankamer School of Business, tells a different story. Writing in The Wall Street Journal, Bylund says the overall quality of medical services delivered by Sweden’s universal public health care is consistently among the world’s best. But the problem is access to care. According to the Euro Health Consumer Index 2013, Swedish patients suffer from inordinately long waiting times to get an appointment with a doctor, specialist treatment, or even emergency care.

He gives examples. Sweden’s National Board of Health and Welfare reports that as of 2013, the average wait time from referral to start of treatment for “intermediary and high risk” prostate cancer is 220 days. In the case of lung cancer, which is much more deadly, the wait between an appointment with a specialist and a treatment decision is 37 days. A 42 year-old woman in Karlstad seeking care for meningitis died in the ER after a three-hour wait. A woman with colon cancer spent 12 years contesting a money-saving decision to deny an abdominal scan that would have found the cancer earlier. The denial-of-care decision was not made by an insurance company, but by the government healthcare system and its policies.

Rationing of Healthcare

In both Great Britain and Sweden (and our own VA system) there is a problem with access to care. The people get free coverage of their healthcare – when they can get it! Economists call this rationing – the delay or even failure to provide care due to government budgetary decisions. Expect the same in this country soon with ObamaCare.

We will experience the same problems of rationing of healthcare because ObamaCare increases the number of people with health insurance without increasing the supply of healthcare providers, nor increasing their incentives to provide that care. There are no provisions in ObamaCare to increase the number of doctors at a time when we already have a doctor shortage. In fact, the onerous provisions of ObamaCare have led about 40% of the existing doctors to plan early retirement or a change in professions to non-clinical care. This number shows up repeatedly on surveys of doctors. The result will be a much greater doctor shortage than we already have. Combine this with an increased volume of patients demanding healthcare (due to increased numbers with government subsidized health insurance or Medicaid) and you have a big access to healthcare problem. The only way to deal with this problem is rationing of care by delays in treatment.

Ironically, at a time when America is moving more toward socialized medicine, Great Britain and Sweden are moving away from it; at least in practical if not ideological ways. Both countries are looking to private medicine to provide for the backlog of treatment the public medicine can’t handle.

In Sweden, Insurance Sweden, the country’s national insurance company trade organization, reports that in 2013 12% of working adults had private insurance even though they are already “guaranteed” public healthcare. The number of private policy holders has increased by 67% over the last five years, despite the fact that an average Swedish family already pays nearly $20,000 annually in taxes toward healthcare and elderly care. Almost 600,000 Swedes now use private insurance even though public healthcare is free.

In Great Britain, about six million British citizens buy private health insurance and about 250,000 choose to pay for private treatment out-of-pocket each year – though NHS insurance costs $3,500 annually for every British man, woman, and child. The backlog for NHS treatment is so long that NHS actually funds some private treatment. The share of NHS-funded hip and knee replacements by private doctors increased to 19% in 2011-12, from a negligible amount in 2003-2004.

Bylund sums up the situation well: “It is possible to have truly affordable, qualitative and accessible care. But the only way to get this result is through a system where providers freely compete with each other to lower costs and raise quality. There is no short cut to well-functioning, affordable health care. Sweden’s undesirable experience shows this very clearly.”

The answer is not socialized medicine. We’ve seen in the recent VA system scandals what socialized medicine leads to – people dying while they wait to receive health care. The answer is a competitive system that incentivizes doctors to provide more care at lower cost and higher quality and gives patients the freedom to choose their own doctor and their own treatment.

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