But, in the end, nothing rescues—and the six flaws remain.
1. Unsustainable
A bottomless treasure of government insurance creates its greatest flaw in over-use or “use abuse” to the point of self-destruction. It creates an attitude of, “Because it’s free, take all you can get.” This human phenomenon is best illustrated by Garrett Hardin’s The Tragedy of the Commons.480 In this classic 1968 economic parable, Hardin meant to promote population control. However, he also showed how socialism failed to serve his fictional group of cattle herders.
Things in Common: The story starts with Hardin’s herders sharing a pasture in common. Naturally, each man works to keep as many of his cows grazing there as possible. Over the decades, wars, theft, and disease keep the numbers of man and beast well in check, so the pasture manages to carry the same load of animals for centuries.
And Then Peace Arrives: With the wars over, each herdsman decides that to advance himself, to grow his prosperity, he will bring one more cow to graze. This seems to work well, so he decides to add another, and then another. He is not unique in that pursuit—all other herdsmen do exactly the same, for the very same reason.
Suddenly, there are a lot more cows grazing the commons than were initially anticipated.
Ruining the Commons: In a few short weeks, the grassy green meadow is reduced to a barren overgrazed patch of brown muddy waste. Had the commons been divided among the herdsmen, each man would have tended his place with an economy of care, protecting it from overgrazing so it would serve him in the future. Without specific ownership, assumption of equal access is used to advance self-interest. With each herder so engaged, the property in common is ruined for all. Socialized medicine is no different—it’s all about use abuse.
Examples: The destruction from “overgrazing” the benefits of free or subsidized health care can fill volumes. Some samples:
E.R. Re-runs: Dr. Edwin Leap (South Carolina) reported that his emergency room received 37,000 patients each year, but in 2010, some 200 of those patients averaged 27 visits each—that’s 5,400 visits in one year. Their most requested medical help? Pain medication—most often narcotic.481 The emergency rooms of America have absorbed a lot of abuse ever since the government forced them to take all visitors, regardless of problem or ability to pay, emergency or not. California: In 2004, a report revealed that 250,000 California adults and 60,000 children use high-cost emergency rooms for their regular, routine medical care. The ER costs are about six times those of a regular doctor’s office visit.482
Georgia: In 2006, Northeast Georgia Medical Center’s emergency department had 97,000 visits. About 26,000 were non-emergencies, and 40,000 had to be written off because the patients didn’t pay the bills.483
Texas: In 2009, an investigation revealed that nine people made 2,678 visits to an Austin, Texas emergency room over a six-year period, costing taxpayers $3 million. Some of the diagnostic bills totaled $20,000 in one visit. Of the 750,000 under-insured in the surrounding region, 900 were frequent users who racked up 2,123 preventable visits in 2009 costing taxpayers another $2 million.
Given enough time, “free” government care brings out the worst in people. It creates dependency, fear and panic in otherwise good and honorable people. A spirit of consumer frenzy is one of the private shambles resulting from socialized medicine, for example—
Austria: A woman from Vienna was quoted in 1962: “My man and I are seldom ill. We were used to sending our Krankenscheine (sick tickets) to one particular doctor. We considered him our family physician. We wanted to help him. Every three months as we got the tickets I would send them to the doctor whether we were sick or not. Everybody does it. Then one day I really needed a doctor. I had an infection in my eye and he swabbed it out. Then he told me, ‘Don’t think that your two tickets are enough for this treatment. Send me your father’s ticket, too.’”484 Greed knows no loyalty.
United States: Howard E. Kershner, the editor of Christian Economics, reported on a personal experience with the free-for-nothing attitude: “Many people still believe that money from Uncle Sam is free and costs nobody anything. That’s why otherwise honest people seem to have no conscience about the charges they run up against Medicaid and Medicare. It is widely believed that some druggists and doctors join in the scramble to get as much as they can of Uncle Sam’s ‘limitless’ money.
“The writer went recently to buy a wheel chair for his wife, who had an injured knee and ankle. He picked out a good serviceable chair, but the dealer urged him to buy a far more costly one, saying, ‘Medicare will pay 80 percent of it, so why not have the best?’ We replied that we did not want to take advantage of the public even by reporting that we had purchased the chair. To this the dealer replied, ‘You’re very foolish. You’ve been paying in all your life, so why not take the benefits?’
“That spirit is rampant in America today and it is growing at an astonishing rate of speed. The more socialistic measures we adopt, the more we centralize the government, the more opportunity there will be for individuals and especially strong pressure groups to wangle more and more money out of the taxpayers ...”485
United Kingdom: Dr. E. Lloyd Dawe, formerly with the NHS, wrote in 1961 regarding his decision to move his practice to America. “A curious demand came one day in London from a patient of mine, a middle-aged factory worker. He wanted me to prescribe for him ten pounds of absorbent cotton, which is used in packing open wounds and which could be ordered almost free under Britain’s program of nationalized medicine. ‘What on earth do you want with that absorbent cotton?’ I asked. ‘I want to restuff a sofa,’ he replied.
“When I refused to approve this improper request, he angrily threatened to withdraw his whole family of six who were my regular patients. This attitude of disdain for the British health-care program and the doctors who serve under it became widespread soon after the National Health Service was established in Great Britain. It is only one—perhaps the least important—of the potential dangers America faces if a system of nationalized medicine is adopted in this country.”486
In 2013, the world’s media watched in breathless anticipation as Kate Middleton awaited delivery of her baby, a royal heir standing third in line for the throne. Instead of using Britain’s hugely promoted and highly touted (but failing) socialistic National Health Services for the historic event, she went to the privately funded Lindo Wing of London’s St. Mary’s hospital for the better services offered there.487
Sweden: On the ten year anniversary of Sweden’s compulsory health insurance, U.S. News & World Report said, “...The present system is proving anything but a clear-cut success. The average patient here finds his situation is worse rather than improved. It is more difficult for him to get a doctor. He must wait longer to get into a hospital. And he may be forced to leave the hospital before he is medically ready for discharge. The shortage of nurses is acute.
“Over-burdened doctors must turn away thousands of patients annually—many of them old people who badly need medical care ... these crippling shortages are the result of vast increased demands for medical services since the start of Medicare, Swedish authorities say. They point out that since 1950 the total number of practicing doctors has doubled, the number of nurses has nearly doubled. The number of hospital beds has increased by more than 25 per cent. During the same span, population has gone up less than 10 per cent. Yet shortages grow worse ... Everyone, young and old, is demanding more medical services, now that it is free ....”488
Soviet Union: Famed Soviet nuclear physicist Andrei Sakharov was outspoken about the broken Soviet health system. He told American reporters, “The deplorable condition of popular ... health care is carefully hidden from foreign eyes....”
Russian writer Alexander Solzhenitsyn expressed more of the same in his novel, Cancer Ward: “What does ‘free’ mean? The doctors don’t work for nothing, you know. It only means that they’re paid out of the national budget and the budget is su
pported by patients. It isn’t free treatment, it is depersonalized treatment ... You would be ready to pay goodness knows how much for a decent reception at the doctor’s, but there’s no one to go to get it. They all have their schedules and their quotas, and so it’s ‘Next patient, please.’”489
The resulting inferior care in Russia drove American embassy personnel out of the country. News reporter Allan H. Rvskind was in Russia for two weeks in 1974. He wrote, “American doctors in Moscow, in fact, are not high on Soviet health care and U.S. Embassy personnel advised us that they go to Finland or to other countries when they are hit by serious illness and have to be hospitalized. They go to Finland for the dentist, too ...”490
2. Flawed Incentives
The dangerous possibility of failure constantly haunts the owners of privately-run clinics and hospitals. They must therefore work harder to achieve maximums, stay efficient, reduce waste, and encourage more customers with the lure of excellent quality care. Government operations have no incentive to achieve superlatives. They don’t have to worry about losing business, being closed, or a sudden collapse of funding. They have no real incentive to climb any higher than society’s legal minimums because the pay is the same, regardless of how hard they try.
United Kingdom—A 2011 study examining incentives showed that doctors who were promised a bonus for performing certain treatments demonstrated a consistent 4 percent increase for those treatments after three years. They also showed a 5 percent decrease for treatments with no bonus attached. Quality of care that was rewarded went up while non-rewarded care went down.491
Germany—Two health-care options are available, both public and private. It turns out that those opting for private care are healthier, and on average make more money. Although private care is more expensive for them, they also don’t use as much. This leaves more money in the private health sector to develop superior services, technology, and pharmaceuticals. The power of incentive is seen every day as doctors are observed giving preferential treatment to patients with high-paying private insurance, over those on the lower-paying public option. Meanwhile, over in the socialized sector of Germany—the other 90 percent of the population—premiums are based on income. When the rich opt out, the remainder with lower incomes suffer through fewer resources, longer waits, and poorer service.492
China—Despite China’s amazing and recent economic growth, medicine has not kept up. Only one percent of China’s medical doctors earn a PhD-level education, and nearly all are very underpaid. The other 99 percent go straight from high school to medical school (no 4-year college program) and emerge as practicing doctors with the equivalent of a U.S. pre-med experience. Very few pursue the PhD programs because there is no financial incentive. Chinese law allows physicians to earn extra cash by selling pharmaceuticals. This gives them an incentive to overprescribe medicines—which they do. The lucrative drug market also tempts most medical school graduates to abandon medical practice and go straight to the higher-paying drug companies.493
3. Net Loss
The history of politicized, government-run national insurance programs shows that they repeatedly fail to reach an equilibrium with need. Growing population, new innovations and treatments, and longer life spans are all good things, but they also put more demand on insurances. Every time a government tries to intervene, the whole system slows down, bogs down, and finally breaks down.
Around the world, various incarnations of the bad idea have been mulching national treasure for decades. Some samples:
United Kingdom: At its outset (1946), promoters of the British National Health Service (NHS) promised costs would be £260 million per year ($409 million). That very first year (1948-1949), costs grew to £359 million ($565 million).494 By 1960, costs rose to £820 million ($1.29 billion).495 By 2010, costs exceeded £105 billion ($166 billion).496 On the 30th anniversary of NHS, the British Medical Association reported there were too many defects in the system to list, and it was facing bankruptcy in 1978. Surveys revealed that the hospitals were outmoded, repairs were minimal, and modern equipment was lacking. Also, strikes were common and very long waits were typical.497
Canada: As of 2010, health care was consuming 40 percent of provincial budgets, and was growing by 6 percent a year, much faster than the rate of inflation and the population. Spending had passed $5,400 per person.498
United States: In 1965, Congress promised that a major component of Medicare—the hospital insurance program—would cost $9 billion by the year 1990. It was $67 billion. Two years later (1967), Congress estimated the entire Medicare program would cost $12 billion by 1990. It was $98 billion. The facts listed below are taken from the U.S. Senate’s 2009 Joint Economic Committee report, “Are Health Care Reform Cost Estimates Reliable?”499In 1987, Congress promised that Medicaid’s special relief payments to hospitals would never exceed $1 billion by 1992. It exploded to $17 billion.
In 1988, Congress promised that Medicare’s home-care benefits would slowly and predictably creep up to $4 billion by 1993. It blew past $10 billion.
In 1997, Congress promised the children’s health insurance program (SCHIP) would cost only $5 billion each year. Every year Congress must supplement it with hundreds of millions ($283 million in 2006, $650 million in 2007). In 2009, President Obama signed a $33 billion bill that would open SCHIP to four million more children and legal immigrants.500
In 2000, the Health Care Financing Administration estimated an increase of only 1 percent a year for children enrolled in Medicaid, growing from 22.6 million that year to 23.8 million five years later. It ended up at 29.9 million.
In 2010, the new so-called ObamaCare national health-care plan promised $569 billion in higher taxes, $529 billion in cuts to Medicare, 16 million new recipients of Medicaid, and creation of two bureaucracies, the “Patient-Centered Outcomes Research Institute” and the “Independent Payments Advisory Board” with power to ration the resources.501 As of this writing, government’s record of reliability on any project puts ObamaCare into the trillions of dollars projected to be squandered on a national, unconstitutional extravagance that the free and unhindered market clearly handles with greater efficiency. In 2012, the U.S. Supreme Court invalidated ObamaCare as an action permissible under the Welfare Clause in Article 1.8, but allowed it to stand under Congress’s power to tax—a legitimate power, the Court said. The Founders would not recognize the America that has been created by progressive congresses, presidents, and Supreme Courts that combined to bring about ObamaCare.
4. Waste, Fraud and Abuse
Regardless of how rigid or lax the controls are on socialized health care—be it dictated from Moscow, London, or Washington—people will always find a way to steal, abuse, or manipulate the system. Some samples:
World: A multinational health-care fraud organization concluded in 2010 that outside of the United States, at least $260 billion in fraud and error is stolen from health-care systems worldwide every year. That’s more than the GDPs of at least 160 countries around the world. This works out to be about 5.6 percent of the $4.7 trillion spent globally on health care.502
United States: In 2008, the FBI estimated $234 billion was stolen from the American health-care systems, representing as much as ten percent of the $2.34 trillion spent on health care that year.503 Abuse of the socialized U.S. system is rampant—Massachusetts: In 2009, Massachusetts taxpayers funded millions in false, bogus, or unnecessary procedures: $7 million in claims by non-Massachusetts residents (including foreigners); $18 million for fraudulent claims such as foot X-rays for headaches and gynecological exams for men; and $6 million wasted on duplicate claims.504
Kansas: A Kansas doctor and his wife were convicted in 2010 of illegally dispensing controlled prescription drugs, collecting more than $4 million from 93 different insurance companies. The doctor was found responsible for 68 deaths from overdoses over a six-year period.505
Detroit: In 2011, nine health-care professionals, with the aid of 12
others, filed false Medicare claims to the tune of $23 million for bogus home health care, psychotherapy, physical therapy, and podiatry.506
Los Angeles: Five people were indicted in 2011 for stealing $28 million from Medicaid with false claims for medical equipment and home health care.507
Brooklyn: Four health-care professionals with six accomplices were indicted in 2011 for submitted $90 million in false Medicare claims for fraudulent physical therapy, proctology, and nerve-conduction testing.508
Japan: In 2004, Japanese dentists lobbied, invested, and worked hard to buy political influence in local elections. They wanted to make sure that government-set fees stayed high. Influence peddling has been a way of life for so long, people in Japan assume it is part of the cost of receiving dental work.509
Cuba: Medicare thieves found safety in Cuba’s cash-hungry economy after stealing millions from Americans. In 2009, the FBI closed in on a group that had stolen at least $420 million from Medicare with false companies and claims. All but one fled from Florida to Cuba, and he was arrested at the airport. Their scheme involved 85 medical equipment companies that never provided a single piece of equipment to anyone.510
Former Soviet States: An underground system for circumventing socialist health care is institutionalized in the former Soviet empire. It grew out of frustration from such things as poor facilities and long waits to be paid. For example, during the 1990s, caregivers in Lithuania and Ukraine waited up to three months for a paycheck—even longer in Russia. Dissatisfied with their government-set fees, doctors and nurses began supplementing their income by demanding under-the-table compensation. These “informal payments” are the expected norm across eastern Europe. The degree of these informal exchanges is difficult to measure, but estimates made in 2006 include:511
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