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

Nationalizing health care" includes any universal system by which the Federal government provides and sets payment for health care. This includes systems that both employee health workers directly or regulate the delivery of health care to the extent that costs are not determined primarily by market forces. Costs may always be reduced by limiting the amount of health care that is provided, and every nationalized health system established elsewhere uses some form of rationing to minimize costs. For this debate, however, the assumption is that we are talking about the unit cost of delivered health care. The reasons why costs will rise are: 1. Currently the fees paid by Medicare (the current government health care system for those over 65) are inadequate, so that the private insurance ends up paying a disproportionately high fraction of the overhead costs of hospitals and physicians. When the private payers are eliminated, those costs will be realized in government costs. 2. Medicare, the model, pays only five or six percent in administrative fees compared to around eleven to thirteen percent for private insurers. The reason Medicare admin costs are low is that they do not examine claims either for validity or fraud. There are provisions to report fraud, but cases of large scale fraud are referred to the Justice Department. The Justice Department costs for investigation come out of the Justice Department's budget and are not counted. Thus the costs are there, they are just not counted. 3. Bulk purchases of drugs do not lower the costs of the drugs. The costs of development and manufacturing are the same regardless of how they end up at the patient. Currently, R&D costs are borne disproportionately by private payers. If the government takes over all drug purchases, then all the development costs will be borne by the government, or, more likely, investment in new drugs will decrease because pharmaceutical companies cannot cover the R&D costs. New drugs cost about a billion dollars apiece to develop. With the likely result of fewer newer drugs, health care costs will rise substantially. Drugs are cheaper in Canada because Americans pay the R&D costs. 4. Nationalized health care destroys competition, thereby increasing costs. Some aspects of medicine, cosmetic surgery and laser eye correction, are firmly in the free market. Neither private nor government insurance pays for them. costs in those areas half dropped by half while other health care costs have risen sharply. this happened despite the desire to make profits. In fact, costs dropped because of the desire to make profits in the face of competition. That motivates an endless search for cost savings. This is being seen in the current expansion of the "mini-clinic" industry in which small clinics are being built into drug stores to provide routine care, preventive medicine, and child health care at low fixed prices. the savings are achieved through high automation of routine services, with many services provided by nurses rather than physicians. Overhead is low. 5. Bureaucratic payment systems shift the emphasis from providing care to gaming the system. For example, Medicare pays by the office visit, so matters that could be handled in one or two visits are typically stretched into many visits. this is inconvenient for the patient and increases costs overall due to the decreased efficiency. 6. The claim is often made that a national system would increase preventive care, but it does not. My private health insurer tries very hard to make sure I take my pills and get preventive care. They know full well that lowers costs in the long run. A bureaucracy, however, only "succeeds" by expanding, and success within the system depends upon gaming the system. Neither motivator promotes preventive care. Preventive care would certainly be paid for by the government, but it wouldn't be promoted. That's evident in the Medicare system. 7. A national health care system will end up paying unskilled and low-skilled workers considerably more as a mechanism for politicians to buy their votes. That's why government contracts often require that union wages be paid, and why government employees are the largest class of union workers. For example, the Postal Service pays 30% above market rates for labor while FedEx and UPS pay slightly below the average rates. 8. There are two main reason health care costs are so high in the United States. One reason is that there is an elaborate and expensive emergency health system in the U.S. that is not paralleled in other countries. This is needed because of the very high incidence of traffic accidents, drug overdose, suicides, and criminal violence. There are also many heart attacks, which relates to the other cost factor: very poor lifestyles, characterized by obesity, poor diet, and lack of exercise. These cost factors are not treated at all by a national health care system. They are without question problems, and they may well deserve national programs, but they are social problems, not medical care problems. Costa Rica has virtually no health care system, and costs are around $350 per year per person. U.S. costs are around $8000 per person. Yet the life expectancy in Costa Rica is only about three years less than in the United States. Clearly, the main cost driver is lifestyle, and a national system does not improve that. 9. About 16-17%, about 50 million, of the U.S. population is currently uninsured. The uninsured comprise about 15 million are illegal aliens, 10 million are eligible for Medicaid but haven't applied because they are not sick, and about 5 million are people who can afford insurance but elect not to buy it (typically young self-employed people). Illegals should be given humane emergency care and then sent home to be cared for by their home countries. That leaves about 7% of the population without health insurance. They mainly receive free health care through the emergency room system, and that is not an efficient way to deliver ordinary care. They could be covered by extending Federal aid to support Medicaid in poor states. That would improve efficiency without engendering the needless high costs of a nationalized health system. ------------------- It is fundamental that increasing demand without increasing supply increases costs. It is also fundamental that nothing increases efficiency like the profit motive. Bureaucracy only "succeeds" by growing, further increasing costs. The resolution is affirmed.