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Health Care Reform and Socialized Medicine

A review of
Introduction to US Health Policy: The Organization, Financing, and Delivery of Health Care in America
(Author: Donald A. Barr)

Democrats will be pushing health care reform for 2020.  “Universal” health care is a buzzword that energizes their base, though it remains to be seen whether many independent voters will be persuaded.  Some independents, certainly, have doubts as to whether reform would advantage or disadvantage them personally.  But almost all independents reason ideologically as well.  Most are “conflicted conservatives” who, in widely varying degrees, may resonate to conservative one-liners about big government, bureaucratic inefficiency, stifled innovation, or—most dramatically—socialism.

Donald Barr recounts a century of trying to achieve health care reform in the US, beginning with a failed proposal for national health insurance by Theodore Roosevelt in 1912.  Similar failures reoccurred every decade or two afterwards.  When Franklin D. Roosevelt tried to include national health insurance as part of the New Deal in 1938,

Once again, fears that “governmental agency power” over the financing of health care would lead to “state medicine” and “socialized Medicine” were sufficient to derail Roosevelt’s efforts.

And in response to a similar effort during the Truman administration, an American Medical Association spokesman wrote

“…nations that embark on such programs move inevitably into a socialized state in which … practically all public services become nationalized, private responsibility and ownership disappear, individual initiative is destroyed and the result is a socialized state”.

Is health care reform in fact needed today?  To my mind, two strong arguments stand out.  The first is the excessive suffering experienced by the uninsured and their families.  Not being able to afford insurance leads to delaying of health care visits until problems worsen.  Inability to work can result, and often bankruptcy.  Illness and injury are usually a matter of bad luck rather than of moral failing.   The Affordable Care Act has been successful at reducing the number of uninsured Americans, but there is still quite a ways to go.

The second argument is the out-of-control cost of health care in the US.  In 1970, just 7% of our GDP was spent on health care; today it is 18%.  This percentage is far above what any other developed country spends, and yet our aggregate health outcomes for the most part are worse or no better than theirs.  The ACA failed to address the cost problem.

Information asymmetries and monopoly power in various parts of the system may partly explain the cost increases.  And still-prevalent fee-for-service models—coupled with the threat of costly malpractice suits—push doctors towards defensive medicine.

Perhaps the most important cause, though, is cultural: Americans do not want cost-benefit analysis.  This is manifested in the way we’re enamored of the newest technology, including the newest drugs; if it’s newer technology, it’s automatically better and we insist upon it.  And, more generally, there is an unwillingness to scrimp on any procedure if there is even a tiny possibility that it could help.

ACA leaves unanswered the question of when, if ever, it is appropriate to deny a patient care that has some small yet well documented marginal benefit, but an extremely high marginal cost. It also leaves unanswered the question of how the medical profession, for decades invested in the belief that more care is better care, will shift its institutional belief system to one that accepts health care resources as scarce, and not only supports but expects physicians and other providers to balance costs and effectiveness when making clinical recommendations for individual patients. As described by Alexander and Stafford, “Despite the allure, no amount of comparative effectiveness data alone, regardless of how rigorously assembled, will suffice to fundamentally transform clinical practice … The primary problem is not the absence of knowledge regarding comparative effectiveness, but the absence of the necessary mechanisms to put this knowledge to work” (Alexander and Stafford 2009, p. 2490).

These obviously are thorny challenges, though unavoidable if costs are to be reined in.  Increasing costs lead to higher premiums, regardless whether insurance is public or private.  Profit-maximizing private sector actors have no incentives to self-regulate or self-reform, except as cosmetic gestures to forestall regulation.  It is hard to see any long-term solution that avoids granting the government monopsony power over health care coverage.  Also known as single-payer.

But voters cannot possibly understand all the nuances of health care policy.  They certainly pay no attention to specific proposals published by policy organizations (even if politicians do occasionally cherry pick and highlight striking numbers that will bolster their own case.)  Yet, without some kind of popular understanding, popular support will be lacking, and legislative action unlikely.

If independent voters are to be persuaded, explanations would need to be targeted very strategically.  And doubts would need to be addressed.  Certainly the bugaboo of socialized medicine is chief among them.   A variety of tactics are imaginable.  One could be to entice them to consider a spectrum of models, from

  1. direct government provision of health care (all doctors are employed by the government, all drugs are produced in government-owned enterprises, etc.); to
  2. a mixture of government-run and private provision, with the private portions heavily regulated; to
  3. private provision, but with government administration of all financing and insurance (i.e. single payer); to
  4. a default public insurance option, with private insurance allowed but heavily regulated; to
  5. the current approach, with federal programs limited to only insuring the poor and the elderly.

In this light, single payer can be properly seen as a “middle ground” that, by generally accepted definitions, in fact is not socialized medicine.

Another could be to raise awareness of the fallacy involved in equating single payer with Stalin’s Russia or with Venezuela.  The word “socialism” of course has strong negative associations (especially for those who lived through the Cold War) which could be weakened only by enticing voters into making side-by-side comparisons between the US, Soviet Russia, and modern Venezuela.

Yet another could be to debunk the nebulous assumption that the market is always best.  Voters could be shown the ways in which health care is different from other kinds of products and services, and the reasons why in the real world a pure market approach cannot work well (doctors as agents, adverse selection, imperfect competition, externalities, etc.)

The overarching challenge, clearly, is enticing independent voters put a modicum of real thought into some of these questions.  Few of them will read policy papers (and even if they tried it, they likely would not be able to reach conclusions, given how deep “in the weeds” such proposals generally are.)   And politicians’ sound bites will do no more than trigger mental shortcuts to pre-existing biases and tropes.  Other approaches would be required to persuade enough independents that health care reform is desirable.

The only approach that is scalable and can actually entice such voters, I believe, is via a heavily-promoted site that uses multimedia to explain the importance of reform, visually and at the right level.   It has to explain the problems as much as (or even, more than) solutions.  It has to be easy, enjoyable, quick, substantive, objective, and satisfying.  Such an approach has the potential to generate the requisite popular will.

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