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

1. I argued that private individuals and insurers are now paying a disproportionate share of medical costs, in effect subsidizing the government-paid health care. Thus current health costs borne by the government are lower than they would be if the government took over and had to bear all the costs. Con argued that's not a problem because the government can always raise taxes to pay for what it costs. Fine, but the debate is about what health care costs, not whether the government can extract taxes to pay the higher costs. He is granting costs would be higher. Also, Con grants that demand would increase. Increasing demand without increasing supply always increases unit costs. We are debating unit costs not total costs. I argued that Medicare administrative fees are lower than private insurers because they do not examine claims and because the investigation of large fraud cases is left to the Justice Department. Con did not dispute either point. He did not deny that paying claims without examining them results in extra costs due to error and fraud. Whether or not people understand the limits of insurance coverage versus Medicare coverage is irrelevant. The item that people often think is covered but is not is birth control. Medicare recipients are too old to be concerned with birth control. Pro claimed that nationalized health care would be different from Medicare. How so? What will it solve? Pro claims that forcing doctors into large health centers would reduce costs. Why would a larger bureaucracy, with more layers of management, reduce costs? In any case, America has a very large rural population, so replacing local care with a large center a hundred miles away would dramatically reduce the quality of care. Reducing the care delivered by a large percentage to obtain a small percentage of administrative efficiency raises the unit costs. The new government requirements for digital record keeping vastly increase the costs of record keeping. The government requires far more paperwork than any insurance company. The government is requiring that vast amounts of information now kept in the doc's filing cabinet, and mailed to the patient's next physician, be laboriously digitized and stored on line. The government needs all that information so a bureaucrat can ration health care, deciding what you really need. Moreover, non-uniformity of forms among insurers poses no cost problem. They all want about the same information, so the format is not a major cost item. If it could be shown that it saved a lot of money by always having the date in the same place, or whatever, that could be accomplished with a law far short of nationalizing health care. 3. Con claims that monopsony power can force low drug prices, without any regard to whether the company making the drugs can recover their costs. Refusing to pay the manufacturing and R&D costs obviously does not lower manufacturing and R&D costs. So if Con is correct, then the government will end the development of new drugs and will drive drug companies out of business. I agree that the government can do that by refusing to cover costs. However, the subject of this debate is that costs will increase if services are provided. No one doubts that if drugs are not developed or manufactured that the cost of drugs can be brought to zero. what currently happens is that drug companies can recover their R&D from American private insurers and individuals. They can then afford to sell to Canada and the VA so long as they get more than their manufacturing costs. That system disappears when the government gets total control of pricing, and the drugs will simple disappear. Con has proposed magic by which huge investments will be made and not recovered, and drugs will be manufactured at a loss. There is no such magic. 4. We have three cases: (1) medical services totally in the free market, where costs have dropped dramatically due to competition, (2) medical services covered by insurance, where competition is limited and costs are rising, (3) medical services where there is no competition. The principle is that competition drives down costs, while eliminating competition causes costs to rise. Nationalized health care eliminates competition. The government will decide what will be done and exactly at what price. If some innovated to lower costs, all that could happen is that the government would pay less. The incentive, therefore, is to keep costs high and game the costs. Con did not address the competitive pressures of the free market. I gave the example of innovative competing low cost mini-clinics. Con argued that giant medical centers would lower costs, contrary to competitive principles. 5. Of course doctors are gaming the system. Because Medicare doesn't pay enough, they create extra office visits. That's the only way to survive under the rule of government masters. That is not an argument in favor of making the system more arbitrary and bureaucratic. Con asserts without proof that small doctor's offices (a) buy expensive unnecessary equipment, and (b) then succeed in passing those costs along to customers. This is false. Private insurance firms contract separately for the use of expensive medical equipment like scanners, and they obtain the services from the lowest bidder. Con believes that government can buy, allocate, and schedule equipment more efficiently than the free market. Bureaucrats have no incentive to increase efficiency or to be concerned with efficiency. the interest of bureaucrats is in expanding the bureaucracy and in replacing judgment with universal rules. Universal rules are extremely inefficient. Con claims that inefficient doctors will be discovered, investigated, and rooted out by the government. Is this why Medicare makes no examination of claims whatsoever? They do not even check for accidental mischarges. An enduring fantasy of socialist thinking is that the very next bureaucracy will be brilliantly efficient, even though it has never happened in the past. Bureaucrats are not rewarded for being efficient, they are instead punished for making waves. A bureaucrat who falsely accuses a doctor would bring bad publicity to the agency. He won't be rewarded for rooting out inefficiency. there is only downside risk, no upside reward. In private enterprise, the rewards make taking risks worthwhile. 6. I argued that private insurance, having a profit motive, urges preventive care that lowers costs. This is evident from what private insurers do now. Con says I shouldn't have made the argument, because he supposes it violates some principle that he thinks I ought to have. That does not make the argument false. Con argues that he thinks a government bureaucracy without a profit motive would care as much about preventive care. But when we examine current systems like Medicare, it's clear that they don't. Con is having another dream about the efficiency of future bureaucracies. 7. I argued that government health care will follow the pattern of other government agencies and boost the salaries of low-skilled workers. It seems that Con is saying it is unreasonable to suppose that the new massive government-controlled establishment won't be at all like every other government-controlled establishment, per the Post Office paying 30% more than FedEx. Is it realistic to suppose that the next new bureaucracy will defy the logic of all previous bureaucracies? No, it is the nature of the beast. 8. I made the point that health care costs in the US are high due to unique aspects of American society. Thus one cannot say the US system is now less efficient than other countries where costs are less. Con did not respond to the point. He said that costs are rising because of equipment and procedures. True, but that is not why they are high in the first place. I'll respond to references when they are put in the debate rather than in comments. I have the same problem with space as Con.