In 1972 the nephrology community convinced congress to pay for the treatment of patients with end stage renal disease (ESRD). Thus, the federal government assumed fiscal responsibility for chronic dialysis and kidney transplantation. We sold the program by telling congress that it would save lives (true) and that it would not be very expensive (decidedly not true).
The program effectively socialized the care of patients with renal failure. It serves as a very good model for the nature of a single payer (the federal government) medical system. This “relatively inexpensive” program has grown to over $110 billion per year — more than the government spends on the National Institutes of Health, the Department of Homeland Security, and NASA combined, said Joe Grogan, head of the White House’s Domestic Policy Council to reporters. He was talking about President Trump’s executive order signed Wednesday, directing the Department of Health and Human Services to develop policies addressing three goals: reducing the number of patients developing kidney failure, reducing how many Americans get dialysis treatment at dialysis centers, and making more kidneys available for transplant. I hope the order succeeds; but don’t place a bet on it. More than 661,000 Americans have kidney failure. Of these, 468,000 individuals are on dialysis, and roughly 193,000 live with a functioning kidney transplant.
Medical care and its provision have been the subject of intense debate for years. A government mandated single payer system seems attractive to some. Before coming up with a solution to a problem, we should first define it. People are concerned about medical care because it’s very expensive and they worry that they might find themselves in a situation that could bankrupt them. Thus, the first question that should be asked prior to suggesting a solution, is why is it so expensive?
Sixty years ago medical care was no more expensive than any other service. You could argue that over the ensuing six decades the vast advances in medical technology have raised its cost. But technological advance in all other spheres of endeavour make things cheaper while simultaneously increasing their efficacy. The essential reason for the catastrophic increase in medical costs is the separation of the service from its payment.
It’s insurance that is the culprit. Health insurance in the US started during World War II when wage and price controls were in effect. Workers who were denied increases in salary were pacified with health insurance that was tax exempt. The advent of Medicare and Medicaid cemented the public’s remove from what the service they received cost. Today neither physician nor patient knows what anything costs when they meet in clinic or hospital.
The cost of Medicare keeps increasing despite increased government regulation designed to curtail price increases. The VA keeps spending more money every year even though the number of veterans is rapidly declining. Believing that a single payer government medical scheme can provide prompt and effective medical care while curtailing costs is a form of mysticism akin to believing that lead can be transformed to gold in limitless amounts without affecting the price of the yellow metal.
I began with the cost of the ESRD program. it serves as an avatar for government run medical care in general. Free market economics is under attack by many Americans who don’t understand how prices are set. Returning medical care to such a market in today’s environment seems impossible. So what’s the solution? Right now there isn’t one. When the economic walls fall we may build a system based on rational assumptions. For now we’ll muddle through as best we can.