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America’s health care sytem is socialized

One tactic that statists use to expand government welfare (and government power in general) is to blame whatever vestige of capitalism there is for all our economic woes. They do this knowing that we no longer have a purely capitalistic system and knowing that the burdens of over-regulation and welfare are the real culprits behind rising costs.

How often do you hear someone say that America’s health care system is in shambles because it is a private system?

This same person will go on to cry that the entire free market system needs to be handed over to the government to run. (Never mind that the government doesn’t run anything very effectively or efficiently. Somehow they will get health care right.)

They’ll cite high costs, high deductibles and sky-rocketing premiums as evidence that a free system of health care simply does not work.

But, as Michael Cannon argues, our health care system is not a free market system. It is essentially already socialized medicine.

In fact, health care in the U.S. has been regulated to some degree since 1935 — (since 1917 if you count workers’ compensation) — and federal and state regulatory control has steadily increased ever since.

Government mandates include urgent care laws, like the Emergency Medical Treatment and Active Labor Act, and administrative regulations like Clinton’s Health Insurance Portability and Accountability Act of 1996.

There are laws regulating pharmaceutical prices, hospital rates, organ transplants, and even the construction of new health care facilities, just to name a few.

A Cato handbook (pdf) prepared for the 107th Congress identifies this trend toward ever-increasing health care regulation:

Since rejecting the comprehensive Clinton plan in 1994, Congress has lacked its own consistent and coherent vision of free-market health care reform. Instead, it has essentially implemented a series of modified versions of the president’s downscaled agenda.

Those ‘‘incremental’’ health care measures included portability reforms and risk classification limits that expanded federal regulation of private health insurance (1996), federally mandated coverage of mental health and maternity benefits (1996), and a new subsidized insurance program for children (1997).

In another Cato study (pdf), Christopher Conover details the costs of all this regulation. Conover writes:

When estimates across all five major categories of regulation are combined, the expected costs of regulation in health care amounted to $339.2 billion in 2002…benefits are estimated to be $170.1 billion, leaving a net cost of $169.1 billion.

And, these figures do not include costs for Medicaid and Medicare. Conover estimates costs for these publicly-funded programs to be over $300 billion in 2002.

He goes on to identify the three costliest sectors of regulation: 1) the medical tort system, including litigation costs, court expenses, and defensive medicine; 2) FDA regulation; and 3) health facilities regulation.

Despite being touted as the “freest” in the world, our health care system is arguably the most regulated U.S. industry.

Welfare provided by the government is not a new idea. All modern European welfare systems basically follow the same blueprint that Otto von Bismarck implemented in Germany in the late 19th Century.

If you look at the intentions behind Bismarck’s welfare plan — (which included workers’ compensation and old age disability insurance) — you’ll find his main goal was to create a near unlimited bank account that he could access without approval from parliament. (Bismarck was trying to raise money for armaments and found the pool of insurance payments quite sufficient.)

Most modern politicians touting welfare programs are usually motivated by an additional goal: To gain favor with constituents.

Incidentally, (though not coincidentally), Lenin was the first ruler to reach total nationalization of health care. And, in 1917, the U.S. started down the welfare state road with Roosevelt’s plan for workers’ compensation insurance.

Roosevelt, like the Clintons, wanted a totally nationalized system, but his critics refused to accept a “German” scheme. He had to settle for a quasi-American prototype.

In 1935, Roosevelt introduced the Social Security Act, which now taxes wage earners at 7.65% — (15.3% if you’re self-employed) — to help fund Medicare (started in 1965), unemployment benefits and retirement plans.

What we have is a quasi-socialized system in effect, and a “free market system” in name only.

If Hillary Clinton is elected, you can be sure she will implement nationalized medicine, and an even higher percentage of your money will go to pay medical bills — extremely large bills run up by people who will go to the doctor every time they feel woozy or need a massage because it will be “free.”

The increased burden on the industry will necessarily result in diminished quality. Good doctors will run from forced income caps and total regulation.

Considering the failings of the socialized systems today, I question the motives of the Clintons to move the U.S. toward more welfare programs and higher taxation.

What we need is a candidate who will not compromise on free market principles and who will take us in the direction of a capitalistic medical system.


[My friends in Colorado have been waging a battle against socialized medicine in their state and have compiled an impressive amount of research and writing on this topic. Their website is FIRM, www.westandfirm.org.]

2 comments to America’s health care sytem is socialized

  • Allison,
    On socialized medicine, you don’t seem to have hauled in that no one is “free” without food, housing, shelter, education, transportation, roads to drive on, and medical care. We live in a “free” country so the government needs to supply those things to everyone. The fact that mutual enslavement is required to pay for all this is not to be mentioned in polite, or politically correct company. (And when it is mentioned by rude interlopers it is exactly as if nothing was said.)

    Hillary just announced, as you predicted, that she will introduce universal health care. She invoked the fatuous work around of requiring everyone to have medical insurance. I might guess that those that can’t afford this, and therefore don’t already have it, will have to have it supplied to them at the expense of others. Only fair, no? I can’t be sure how she’ll scratch the itch of her desire for a national system of government doctors and hospitals, but she’ll think of something. Maybe the VA system can be opened to those illegally uninsured, and then mushroomed into a full blown, monster system…. Hmm.

    Best, Todd F.

  • Allison

    The Clintons are smart and know that implementing a nationalized system can be done only in incremental steps. Your VA hypothesis sounds like something they might think of.

    And, I agree, people don’t seem to realize that the government is not a productive entity. All the money that the government spends comes from taxpayers. The more the government provides to you, the more you work for the government. And the politicians will gladly keep deficit spending and promising more to get elected. Thanks for your insights.