Though most are unaware of their existence, there is a medical establishment and they want a single payer system of health insurance. Who are the medical establishment? They occupy leadership positions such as Deans, Presidents, and Chancellors of medical schools. They have leadership positions in prestigious professional organization, they are in the Institute of Medicine, they edit important journals – they are the high visibility physicians who typically speak for the profession. They belong to a variety of elite “secret” societies that no one outside of medicine (and most inside the profession) has heard of. While there is some diversity among them, they have one common characteristic – they don’t see patients very often, sometimes not at all.
Thus the most visible physicians, those who speak for the profession have little or no regular contact with patients. They little resemble the vast majority of doctors whom they claim to represent. My guess is that 90% or more of the high profile low patient contact doctors are strongly in favor of a single payer government run health insurance scheme. I also guess that the percentages are reversed among practicing physicians.
William Osler the quintessential American physician (he was Canadian), said “He who studies medicine without books sails an uncharted sea, but he who studies medicine without patients does not go to sea at all.” He was commenting on medical education, but the same advice is relevant to analyzing how medical care should be organized and funded. If you’re a physician not seeing patients regularly you really don’t know what’s going on in the clinic and at the bedside no matter how many students and residents you’ve trained nor how many papers and books you’ve written nor how many departments and organizations you’ve run. Your opinions are certainly of interest, but they’re apt to be one sided and sometimes astonishingly naive. Contrary opinions from within the profession should also be able to find a place in the debate.
The desire for a top down, centralized, government run medical system ignores the 20th century’s repeated demonstration that such systems don’t work. Friedrich Hayek spent most of his career explaining why. It’s impossible for any group of planners no matter how dedicated and intelligent to predict or understand how a complicated system will play out. Placing all of medical care under the control of the same bureaucracy that runs the IRS, FEMA, the NTSB, should give one pause before creating the largest bureaucracy in the history of the world.
Let’s consider three reasons often given for fitting medicine into a single payer system. First, the free market system of medical care hasn’t worked. How can we know this? We haven’t had a free market for medical care within living memory. Neither the buyer nor the seller of medical care negotiates its price; they don’t even know what it is. Every provider charges exactly the same for any given service as any other provider. There is virtually no price competition. Consider the cost of whole body electron beam tomography (EBT) and a whole body MRI. The former costs $100 and the latter has a price tag of $9,000. Medical insurance and Medicare won’t pay for an EBT, so if you want one you have to pay up front. An MRI is paid by someone else, so why worry what it costs. There is not much difference in the technological sophistication between the two techniques – only who pays. This is a rare example of what price competition does to medical costs. And finally the biggest customer is the government. Some free market.
Second, there are 47 million people in the US without health insurance. A single payer system would provide them with medical care. There’s a difference between not having health insurance and not getting medical care. I’ve spent my whole career taking care of people without insurance and not getting reimbursed for it. Go to any teaching hospital in the country and you’ll find tens of thousands of doctors doing likewise. Break down the characteristics of these 47 million and you find that 19 million are between the ages of 18 and 34, 10 million are not citizens, 9 million come from households with more than $75,000 a year and more than 8 million are children under 18. That’s almost the entire total. Of course there’s some overlap, but the problem doesn’t seem so vast when it’s analyzed. We already have SCHIP for children. Young people are making a wise financial bet by not buying health insurance as they’re not likely to need it. And people who make more than $75,000 a year could buy health insurance on their own. This problem doesn’t seem to justify radical surgery on the nation’s medical system.
Last and most important is cost. In 1961 medical care was about 5% of US GDP. Today it is close to 18%. There are many reasons for this sharp, and continuing, rise. But the two most important are Medicare and technology. Before the enactment of Medicare in 1965 only about half of Americans 65 and older had health insurance. After, it rose to 97%. Obviously the elderly are more likely to get sick than the young. With vast sums available for the care of the old inevitably Medicare proved extremely inflationary. It continues to drive costs today despite all the government’s efforts to contain them. This should raise a flag about government as a medical provider.
New medical technology is often cited as a main cause of increased costs. But this argument doesn’t survive scrutiny. In every other endeavor technology makes things cheaper, not more expensive. Look at computers. Each year computers get more powerful and have more features. Yet there cost either stays the same or falls. The reason why medical technology increases costs, as cited above for EBTs and MRIs, is the absence of price competition.
The cost of medical care is rising at the same rate as in the US in every other country all of which have national health programs. We started at a higher level than everyone else and thus medical care here costs more than anywhere else and likely always will. But whatever the merits of a single payer system may be, cost containment will not be one of them. Those who favor such a system often argue that the federal government can save money on health care because Medicare’s overhead costs are 2-5% whereas those of insurance companies are about 25%. Unfortunately, Medicare has no idea what its administrative costs are. Medicare mandates an almost infinite number rules and regulations which are implemented and the cost borne by providers. Medicare has even regulated the form and use of a medical student’s note in a patient’s chart. Armies of billing clerks, coders, and managers are employed solely to meet Medicare’s rules. All these costs eventually are paid by someone, but Medicare doesn’t count them. There is nothing the government can do for less money.
So when next you hear that a medical expert or group of physicians wants the government to take over medicine consider the source.