Bulgaria: Doctors reportedly ask—and get—up to $1,100 to augment their average monthly salary of $100. As much as 80 percent of that extra cash reportedly comes from surgeries, thereby creating an incentive for excessive surgeries. These informal payments are now a way of life, averaging 4.4 percent of household income spent on medical care.
Czech Republic: Informal payments are not high because doctor’s salaries are rising faster than the rate of inflation. In 2000, five percent admitted they gave medical care in exchange for “something more” than a small gift.
Azerbaijan: An estimated 84 percent of all health-care expenses are “informal” and “under the table.”
Georgia: People pay out of pocket 70-80 percent of their health-care costs, and about half of that is “informal.”
Romania: Patients pay 41 percent of all out-of-pocket expenses “under the table.” A recent survey showed that 39 percent of those with high incomes paid under the table for health care, while 33 percent of the poor did too. The country adopted a national health insurance program hoping that would help stem the “deal making,” and forced everyone to pay monthly. This has not significantly reduced informal payments.
Kazakhstan: In 1991, the government promised that citizens did not have to pay anything out-of-pocket for health care. Within five years, however, a third of all doctor visits required both formal and “under the table” on-the-spot payments. The informal system extracted a greater price from those least able to pay. The poor spent 252 percent of their monthly wages for hospital care compared to the middle class, who paid 52 percent for the same service.
Lithuania: An experiment in freedom is bearing good fruit. Government permission for doctors to open private practices apart from the government is spreading. As the number of those practices increased, the number of “under the table” arrangements correspondingly decreased.
Czech: Similar to Lithuania, a new private sector is growing, and the line between government doctors and private doctors is sharpening. The private doctors make more money than their government counterparts—no surprise there—and the quality of care is superior.
Government Spawns Cheating: Desperate people will go to any lengths to get the things they want. The normal growth of bureaucratic institutions always leaves holes the desperate will exploit.
Socialized medicine and its many fatal flaws inadvertently generate an underground market of exchange, influence peddling, and outright theft. The free-market private insurance companies, on the other hand, are better motivated to protect profits, and are more efficient at catching abuse and dishonesty.
5. Death Panels
There is a misunderstanding about “panels” in the political dialogue of health care. Many Americans understand the panel to be a committee controlling medical decisions between doctor and patient—making life-and-death choices by restricting access to certain life-saving medical treatments.
In Europe, the traditional panel system is different. In the 1800s, workers formed voluntary associations to meet the needs of emergency illness or disaster. Control was local and managed by the participants. These were the original “panels”—German krankenkassen, the French caisses de maladie, the Dutch ziekenfondsen, Danish sick clubs, Swedish orders, the Friendly Societies, and more.512 They formed the backbone of voluntary care for the sick and needy.
In England, for example, the Friendly Societies were 100 percent voluntary and grew to 14 million members by 1909. They pooled the risk of medical care without government “help.”
Eventually, European governments got involved and made panel membership compulsory, laying the foundations for most national health care throughout the continent. Exceptions include the U.K., where the panel system was completely abandoned in 1946 and replaced by the National Health Service.
The panel system evolved to the point where managers could mix and match the various patients so no single doctor had all the rich and healthy who paid their bills, and no one doctor was stuck with all the poor and sick who didn’t pay. This created opportunity for graft where a doctor sought to negotiate (or bribe) his way into being assigned a “good panel.”
Today, government interventions in most panel systems worldwide have destroyed them. Regulations have created exactly what people feared—“death panels,” committees rationing resources to save money, to weigh one expensive treatment against another. In essence, to decide between life and death. For example—
Fat People Lose Out: In 2011, three Suffolk (U.K.) primary care trusts started rejecting patients because of their weight. They produced a list of ten procedures (such as knee and hip replacement) that they would no longer perform if a patient’s body mass index (BMI) was over 30. Average BMI is 18.5-24.9. Officials admitted this was a cost-cutting decision.513In 2007, New Zealand denied permission to Richi Trezise of the U.K. to immigrate because he was too fat. With more than half of New Zealand’s adults and a third of the children overweight or obese, the country’s health-care system cannot afford to add overweight immigrants. After Trezise lost some pounds, he was allowed to resettle, but his wife remained overweight and had to stay in Wales until she worked her weight down. High blood pressure and diabetes is over-taxing New Zealand’s socialist health-care system.514
In 2008, Japan imposed a maximum waistline standard (age 40 and older) of 33.5 inches for men and 35.4 inches for women. This was part of a national campaign to reduce health-care costs. Those who grow too fat must, by law, undergo counseling. Companies that fail to reduce the number of overweight people on their payrolls are penalized with higher payments into the national health-care program.515
Babies Lose Out: Abortion is permitted in most countries, and proves—with ultimate finality—the power of government over life and death. In 2011, Russia reined in its policy of free abortion at any term in the pregnancy to rescue its shrinking population. The new rules made abortion permissible only during the first 12 weeks (longer for the poor). The law was intended to stem the steep decline in population, attributed to an estimated 6 million abortions per year. Since 1992, Russia’s population has declined by 5.7 million to 143 million.516
MS Patients Lose Out: In Sweden, a man with multiple sclerosis was denied a new drug that cost 33 percent more than the older drug because it was too expensive. When the patient offered to pay for the drug himself, he was denied—regulators said it would lead to unequal access to medicine, a bad precedent for the whole country.517Are they Really Death Panels?
“Death Panels” is a term spawned by the idea that committees will rise up to ration health care based on cost, leaving some without—to die. In reality, all health care is rationed one way or another, both private and public—there is no such thing as an unending supply of medical care. Rationing, however, comes in two forms:
1. Public Minimums: The government is motivated to ration health care for a minimum level of care for a maximum number of people—typically paid for by the most inefficient means possible—taxes. Are taxes any different from co-pays and premiums universally extracted from everyone? No. As long as payments, by whatever name the regime gives them, continue to flow, public caregivers have no fear of ever going out of business, and therefore have little incentive to maximize their efforts.
2. Private Maximums: The private sector is motivated to ration health care so there is a maximum level of the best care money can buy. It is paid for by as many participants as the insurance companies can entice. It is persistently motivated by competition with other companies to be efficient, affordable, and innovative—or it goes out of business.
Health care is a luxury. It always has been. Whether paying the local shaman to offer chants in exchange for a dead chicken, or mortgaging the house for chemotherapy, the same principle applies: health care is a needful luxury, not a personal right.
Excellent health care is available because of the hard work and unleashed creativity of doctors, chemists, nurses, inventors, business developers, and other professionals, all uniti
ng their efforts to make a living. While rationing is a harsh reality for health care, stepping aside and allowing free-market incentives to induce both the giver and receiver to participate creates more advantage, progress, participation and cooperation than the stagnation of compulsory care.
6. Administrative Failure
Top-down control of health care is pure Marxism: “Each patient gets care according to his needs from each doctor according to his ability.”518 Here are some samples of administrative failures that the vibrant, unhindered free-market approach is better at eliminating.
A comparison of Canadian national health care vs. U.S. regulated health care reveals government meddling created a surprising difference in wait times for doctor appointments—
To see a doctor in 2005, about 36 percent of Canadians waited 6 days or more. Only 23 percent in the U.S. waited that long.
When Canadian patients raced to the emergency room for urgent help, 24 percent had to wait more than 4 hours to be seen. Only 12 percent in the U.S. waited that long.
Specialists: If Canadians required a specialist, 57 percent had to wait 4 weeks. In the U.S., only 23 percent waited that long.
Elective: If Canadians wanted elective surgery, 33 percent had to wait 4 months. In the U.S., only 8 percent waited that long.
Rising Costs: On the 20th anniversary of Canada’s national health-care services (1978), hospital costs had already skyrocketed 424 percent, and costs of doctor care were up 71 percent. They had too many specialists and not enough general practitioners. Doctors were hard to find in rural areas, and non-existent in inner cities. It was also found that Canadians were paying more for “free” government health care than they would have paid for a free-market system.519
“Adverse Events”: This term means mistakes, errors, poor management, or out-right mismanagement of health care leading to unnecessary illness, injury, or death. Government impositions destroy local efficiencies. Some samples:
United States: A Harvard study showed that 3.7 percent of hospital admissions in New York had adverse events. Most of the problems were minor, but 7 percent created permanent damage, and in 14 percent of the cases, the patients died.520 A study in Colorado and Utah showed similar results.521
A Health and Human Services study in 2011 found that hospital employees reluctantly reported only one out of every seven medical errors they made at hospitals receiving Medicare funds. HHS estimates 130,000 Medicare patients experience some type of adverse event per month, such as over-medication (pain killers, usually), hospital-acquired infections, and severe bedsores. Some of the more serious adverse events led to death.522
United Kingdom: A 2001 study of two London hospitals found almost 12 percent of the patients experienced adverse events—at least half of these were judged preventable. A third of the mistakes led to greater disability or death. The researchers estimated the added costs for such problems would exceed £1 billion ($1.6 billion) a year.523
Australia: Almost 17 percent of hospital admissions in New South Wales and South Australia experienced adverse events—half of them were considered preventable. About 14 percent were permanently disabled and 5 percent died. Keeping people in the hospital longer than originally planned because of preventable adverse events accounted for 8 percent of Australia’s total hospital bed days, adding $4.7 billion a year in unnecessary costs.524
Sweden: In 2006, a couple rushed to the emergency room with their 3-year-old son who was suffering from diarrhea and had been vomiting for two days. A doctor sent them to a pediatric clinic for intravenous fluids, but the nurses there had no time for him—too many patients, too little time, they said. The parents’ repeated pleas were met with the same excuses. Six hours later, the boy died of heart failure. This event is one of too many that result from budget cuts meant to somehow meet national needs for full medical coverage in socialist Sweden.525
In 2007, Sweden’s third-largest city, Malmo, had only two public clinics available to serve its 280,000 residents. The clinic visit was required before a patient would be allowed to see a specialist. Only one clinic is open after business hours. It becomes so crowded, security guards are stationed in the waiting room to keep the crowds from becoming unruly after waiting several hours to see the doctor—and to prevent new patients from entering. The government limits how many can wait.526
China: In 2009, China abandoned a medical system they called ‘capitalistic’ and ‘profit driven,’ and started implementing a top-down, government-run regulated system. According to several interviews by Jeffrey Kaye for PBS,527 the transition has been anything but smooth—
In an interview with Dr. Chen Zhu, Chinese Minister of Health, the country now boasts about 94 percent of the population with insurance coverage—that’s about 1.2 billion people. One of the architects of China’s health reforms, Gordon Liu, said the overcrowding at the health-care facilities is so severe, even those with money in their pockets and insurance cannot get into a hospital quickly for a diagnosis. People start lining up early in the morning to get appointments for the following day.
Doctors see 50 or more patients a day.
Emergency rooms become so crowded, the staff is forced to set up beds in the hallways.
In 2008, before the transition to socialized medicine, Meng Xianan, a freelance writer in Beijing, said going to the hospital would take up to half a day.528
Until recently, hospitals made 60 percent of their income from prescribing and dispensing medications. China is the world leader in per capita use of I.V. fluids to dispense drugs, and patients everywhere are seen hooked up to the bottle. To combat the abuse, the government limited the price on such drugs, and hospitals may not make more than 50 percent of their incomes from the sale of pharmaceuticals.
The principle underlying good medical care, good government, and good economic growth is the same—local control. When the people most affected by any issue are empowered to deal with it on their lowest possible local level, the most efficient solutions emerge.
A doctor and a patient are the most qualified people to make important medical decisions. A government employee in some office a thousand miles away giving the stamp of approval or rejection based on a balance sheet of check boxes is not.
U.N. Calls for Socialized Medicine
In 2010, the World Health Organization (WHO) published its World Health Report. The Director-General of WHO, Dr. Margaret Chan, wrote a message pleading with the world to adopt socialistic measures for medical care. She declared socialized medicine to be the best solution to world health needs. She was proud to declare that the work to achieve a new world order of medicine was well underway. She wrote:
“Concerning the path to universal coverage, the report identifies continued reliance on direct payments, including user fees, as by far the greatest obstacle to progress. Abundant evidence shows that raising funds through required prepayment is the most efficient and equitable base for increasing population coverage. In effect, such mechanisms mean that the rich subsidize the poor, the healthy subsidize the sick.”529
On page 1: In the first sentence, she calls the free-market system “the greatest obstacle.” In the second sentence she states that “required prepayment” (that is, forced) is the quickest way to get everyone insured. In the third sentence she channels Marx, declaring that taking from the “haves” and giving to the “have-nots” is perfect for health care: “...the rich subsidize the poor,” in her words.
On page 13: “...Contributions need to be compulsory...” [forced]
On page 14: “Ultimately, universal coverage requires a commitment to covering 100 percent of the population....”
On page 19: “To allow the poorest countries to scale up more rapidly, external partners will need to increase contributions ...” In other words, the U.S. taxpayer, she implies, has a moral obligation to pay more for everyone else. Socialism at Work
The power of national health care to ruin individual rights is already at work in the welfare-state natio
ns. The economist Melchior Palyi points out this corruption is ancient. He called it “the systematic dispensing, through political channels and without regard to productivity, of domestic wealth.”530 Dispensing wealth, he said, could one day control the world:
“All modern dictators have at least one thing in common. They all believe in Social Security, especially in coercing people into governmentalized medicine.”
“The essential idea of the Welfare State is as old as known history. Its concept and mechanism ... were at the very core of the Greco-Latin city states, of the medieval city, and of the post-Renaissance absolute monarchy.”
“In the city republics ... their constantly recurring violent quarrels about constitutional issues [caused] bitter class-warfares to seize the power that was dispensing all benefits. Most of them went on the rocks of their internal struggles for economic privileges.”
“Once the principle is accepted that the general taxpayer has to participate in the cost, the basic barrier to expanding the system—from a limited medical insurance to an all-embracing medical security—is scrapped.” Expanding welfare coverage requires enormous taxes and tight control of the national treasury. How would the agents of socialism get control of the money? They found a way, a clever way, almost by accident. It started with a man named John Law.
Learning to Recognize Socialism
List Melchior Palyi’s eight reasons why national health care must fail. How many of the seven pillars of socialism are involved?
What is the “tragedy of the commons”? What is “use abuse”? How does this apply to national health care?
What are the top 6 flaws in national healthcare?
What role did more money play in medical service provided by doctors in the U.K., Germany, China? Did more money help or hurt?
Some people claim that Canada’s health care system is superior to America’s free-market system. True or false? Explain.
The Naked Socialist Page 43