Nationalizing health care in the U.S. would increase its cost

1. The resolution we are debating is "Nationalizing health care in the U.S. would increase its cost." Con seems to agree, saying, "Since most people in the U.S. obtain private insurance over Medicaid, even if costs were to increase by nationalizing health care, thus making the government have to pay more, it would actually be DECREASING the cost for those who are privately insured." Con is confusing what the costs are with who pays for the costs. She concedes that costs rise, but says its no problem because the government can always raise taxes to pay whatever it costs. Con endorses the illusion that if the government pays, it really doesn't cost anything. This untrue, it costs more. Con argues that polls show that people like to get "free" stuff from the government, in keeping with the illusion that free stuff from the government really is free. I don't doubt that is what people say. 2. I claimed that one reason that Medicare administrative costs are lower is that they do not examine claims for mistakes and fraud. Con counters that they do examine claims. I grant that Medicare has stepped up attempts to detect fraud, compared to a few years ago when they did nothing. The results have been ineffective, and is mainly harassment about conformance with the Medicare flat rate rules. Medicare fraud is rampant [1]. "More than one-fourth (26%) of physicians who restrict services to Medicare patients do so because of "hassles and/or threats from Medicare.".." [2] 3. Con maintained that a single payer system can lower drug costs by refusing to pay even enough to cover manufacturing costs, let alone investment costs for drug R&D. She supposes that drug companies will continue to develop drugs at a loss. Con points to $80 billion in drug company profits, implying that drug companies will continue to invest if profits are substantial reduced or eliminated. The drug business is both highly competitive and highly profitable. Because of competition, half of drug company profits are reinvested in new drug development [3]. Drug companies also suffer enormous risks from lawsuits that could at any time cause investors to lose all their money. Nationalizing health care does not lower the investment costs nor reduce the lawsuit risks. They will not invest without reward. Price controls in Canada keep drug prices a mere 5% lower than the U.S., but Canadian drug companies consequently only invest half in R&D at half the rate of US companies [8]. The NIH budget of $28 billion includes only a small amount for drug development. The costly part of drug development are clinical trials, and NIH does very little of that. NIH licenses it's drug patents and gets a few tens of millions in royalties, basically nothing compared to the industry. 4. Con asserts that "If it weren't for for public health care, the cost of private insurance would be significantly higher." The government forces drug development costs and hospital overheads costs on to private insurers. Con claims that the government is free from competitive pressure, so they can pay only whatever they choose. So therefore they don't pay their fair share of drug costs, emergency rooms, and equipment. That will show up later when government takes over. "The American Hospital Association reported that its member facilities provided $21 billion in uncompensated health-care services last year." [10] "Moreover, the government can hire people to be innovative and lower costs however and whenever possible." Private enterprise has a profit motive for hiring and rewarding people for innovation and cost savings. Imagine an entrepreneur with a brilliant new idea in coat-saving medical technology. Will he ever say to himself, "I want to cash in on this, so I think I'll join the government bureaucracy, where innovation is really rewarded."? Con supposes that the next government bureaucracy will be completely different from every government bureaucracy that has ever existed in the past. This will never happen, because bureaucracy succeeds only by getting larger and controlling more things, not by efficiency. A gave explicit examples of competition driving down costs, with more competition driving down costs the most. Con never refuted any example, and offered no examples of government bureaucracies driving down costs. 5. Con argues, "The type of 'peer review' I have advocated for encourages doctors to be prudent stewards, and to make sure their colleagues are as well, because any doctor doing unnecessary procedures will be taking money away from colleagues." The assertion is completely false, because as Con asserted, the government does not provide a limited pool of money that must be shared. The price reimbursed for an office visit does not increase if there are fewer office visits. Gaming the system is inherent in government attempts at price controls. It is a constant feature of government health care [5,6,7]. I argued that private insurers have a profit motive to use preventive care to drive down costs. This is unrefuted. 7. I argued that government health care will follow the pattern of other government agencies and boost the salaries of low-skilled workers. I understated the case. The recent stimulus package included a provision that all funded public works projects must pay full union wages, lowering the products delivered to the taxpayers by thirty to forty percent. This is done to curry favor with unions, who favor socialist-style elitism over competition. Con claims without a plausible reason that it won't happen in government-controlled health care. He is making another "the next bureaucracy will be magically efficient" argument. The precedent is to increase labor costs by 30 to 40 percent. [4] Pro argues for magical bureaucracy, claiming "In other words, if in a governmental bureaucracy the law-makers are those in most direct contact with customers (the public), than it is the law makers and politicians who will make it a priority to keep costs down. Reducing a lot of fluff Middle Management may be the way to go." So is this why the Post Office pays labor 30% above market, while FedEx and UPS pay slightly below market, and why as a result FedEx and UPS provide much better service? Con's theory is also not working in the Internal Revenue Service, the FAA, your local Motor Vehicle Bureau, and every other government service that one can name. The problem is that managers of private companies are held acutely responsible. If they don't perform they will ultimately be replaced, or their company will go under. Elected officials are elected mainly on generalities and on a handful of hot issues. Congress funded a study about what happens worldwide when nations nationalized their oil production. The production costs stay about the same, but production drops by two-thirds. That's about what we can expect from nationalized medicine. The cost per unit of delivered care will increase dramatically. Con has provided references that are mainly partisan opinions, without references to factual evidence such as government statistics, independent studies, or other data. R1 [1] establishes that people like getting free stuff from the government. True. In R1 [2] there is a CBO graph showing that Medicare reimbursement increases tend to track private insurance increases. True, but it doesn't deny they are underpaying. R1 [3] has no factual reference. I like R2 [1] although it's an argument, not a factual reference. It argues that government needs a vast bureaucracy not needed by private enterprise. That is true, and it is therefore a large unnecessary expense that will increase health care costs. R2[2,3] are blog opinions. Government will stifle competition, bloat bureaucratic administration, encourage fraud and gaming, and raise basic labor costs. The resolution is affirmed.