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Universal Health Care

by

Pedro Rosario Barbosa

Introduction


The first time ever I ever heard about an universal health care system I thought the idea was not plausible, even I got to the point when I believed it was simply crazy from a financial point of view.  The first time I saw that proposal was in the political platform of my political party (the Puerto Rican Independentist Party).  At the time I saw that proposal I was a hardcore socialist, and believed that everything should be administered by the state, and not let the market dictate anything.  An universal health care system would be completely consistent with socialism, no problem there.  So why was I concerned?  It was the time I began to have my serious doubts against Marxism as such and hardcore socialism.  The Puerto Rican Independentist Party itself is not a hardcore socialist party, it leaves much space for free market.  For example, it advocates the creation of small and medium sized businesses, cooperatives, the attraction of capital from the United States and many other countries of the world, the use of the U.S. dollar under independence, free trade policy with the U.S., free entrance to the U.S., etc.  However, it also believes that essential corporations and services should belong to the state, such as water service, electricity, phone service, etc.  Among the services that the state should have, it says, should be health care.

In principle, I was not against that, my only concern was only financial.  Much has been said about the Canadian Health Care system, but I reasoned that Canada had a less population density than either the United States and Puerto Rico.  There are about 4,000,000 people living in Puerto Rico, and universal health care insurance card should be given  o each and every one of them, to be provided with very expensive services by physicians and hospitals, which generally costs from hundreds to thousands of dollars.  Even in some cases like special kinds of transplants, it can cost about half a million dollars.  Knowing this, and knowing that in an U.S. colony like Puerto Rico, we are not free to attract enough capital from the U.S., needless to say to attract capital from anywhere else, where the state lacked resources, even with Federal funds, I thought that the best possibility for being covered, at least for the time being, was using private insurance, even though I recognized the intrinsic injustice in the system:  those who pay more can have better health care services and can have the most expensive procedures they need, those who pay less ... well ...  were condemned to receive some services, but would not have access to all of them. 

However, in recent years I have been aware of some virtues of the universal health care system.  For example, friends that I have in Canada have told me about their experiences there, compared to their experience in United States' hospitals.  Among many of the things they told me were:
These facts caught my attention immediately.  I still have to find one Canadian who can tell me that the United States' system is better (I know there are Canadians who think that way, but still haven't  found one).

Another incident caught my attention.  An active member of the Puerto Rican Independentist Party (PIP), has multiple sclerosis.  He went to Germany for a meeting of The Socialist International (of which the PIP is a member).  There also was an universal health care system, and he was cared for in a hospital temporarily.  When he asked how much did he have to pay, the hospital said that no payment was needed!  That the state was going to take care of the expenses.  Of course, this was a big surprise to him.  Germany is one of the richest countries in the world, and has a prominent leadership in the European Union.  Other countries like France, Spain, Japan, Great Britain, etc. have universal health care.

So, I wanted to learn more from them.  And to be "fair and balanced" as a certain news network claims itself to be, I usually hear both sides of the issue and decide for myself.  Here in this article, you will find my conclusions about it.


Points Against Universal Health Care Coverage

Of course, the U.S. media, specially Fox News, mention several issues linked to universal health care, and specially the Canadian experience.  Here are some arguments presented there and elsewhere:
  1. Canada is confronting a serious financial crisis due to its universal health care system.

  2. It is a socialist proposal, and therefore completely against free market.

  3. There are many Canadians who are fleeing from Canada to receive services not offered in Canada.  In fact, the United States has far more equipment and technology than Canada.

  4. Even doctors are fleeing from Canada to have more money in the United States.

  5. Competition should be the basis of any economy, and in such an environment, there can be indeed low costs with private insurance.

  6. There should be "moral personal responsibility" and there should not be a state which finances the "irresponsibilities" of everyone.
I wish to point out that as a socialist I did not care for many of these arguments.  Sometimes free market can be good, sometimes it can be bad.  But if I were to seriously investigate these claims, I wanted to know where free market was good in medicine, and where was it bad.  But I found out that even if I was pro-capitalist, I think that I would have favored universal health care as a way to guarantee such a free market.  Many will find this surprising at best, even absurd and contradictory, but hear me out on this one.


Private Insurances as Parasites of Free Market

Despite what people believe, in a society like the United States where free market is praised up to the point of being almost equal to a divine truth, and sometimes I think even superior to that.  In the United States you mention the phrase "free market" and all sorts of positive thoughts and emotions go through the mind of the American.  You say the word "socialist", and immediately the American usually feels horror, just thinking about the atrocities and lack of human rights experimented in the U.S.S.R. as well in many other communist countries.  So, if you say that private insurance is good for free market, the Americans will think:  "Wow!  With private insurance, there is competition, therefore cheaper prices, better quality care....  and even civil liberties!"  If you say that universal health care is a "socialist" measure, they will think:  "My God!  What the heck is that?  Every single American covered?  Do you know what that means?  More expense from the government, an increase in the inefficiency in hospitals, .... and it's socialist, that means less civil liberties!!!  No free market!!!  Are you crazy???"

Because of this emotional response from Americans' guts, you can sell them anything you want just as long as you keep the label "free market" to whatever you choose.  This has been the case, for instance, with software patents.  Practically software patents is exclusively used for two things:  if the owner of the patent is a person, then that person will spend at least 20 years suing people and corporations.  They do this in the name of "protection of property", when in reality they are just parasites of the patent system. Software patents are also used for disloyal competition to crush other smaller competitors and give the entire software market in a handful of corporations.  This leads eventually to oligopolies, which are as harmful to the economy as monopolies.  Also software vendors refuse to make them free software (or open source software) so that they can monopolize the service:  No wonder Microsoft's service, or Corel's service, or any other proprietary service is so bad!  If there was a true service competition, not only would they be obliged to reduce considerably the price of the service and licenses, but would have to increase their quality because a client can always potentially go to someone else for the service.  Also, music has been monopolized (or better "oligopolized") by a handful of companies belonging of the Recording Industry Association of America (RIAA), who are doing their best not to pay artists, to blame the consumers (specially accusing them of "piracy" if they share) and blocking as much as possible any kind of independent artist who wish their work be known.  Also, with the Digital Millennium Copyright Act (DMCA) companies have complete control over communications, restrictions, etc. which cannot be circumvented by anyone, even for investigative research.  This has seriously jeopardized, not only the rights of consumers, but also security measures.  If a security circumvention is forbidden, a researcher cannot find at all the security holes of a system, and therefore cannot propose any solutions to the potential security holes.  All of these measures actually are contrary to free market.  However, companies have been so successful in labeling oligopolical or monopolical behavior as "free market" practices, that Americans have lost all notion of what free market is all about.  Of course, the greatest danger of all of these measures is that instead of promoting ease of flow of capital, or less government and corporate expense, they increase it exponentially.  These measures have increased bureaucracy incredibly, and has given jobs to all sorts of parasites in the system, such as lawyers as middlemen, such as bureaucrats who evaluate what is "intellectually protected" and what is not, patent clerks who know absolutely anything on innovation (think that recently the Australian patent office patented the wheel), and all sorts of lawyers who are paid by corporations to sue anyone who commits copyright infringement, as well as government sponsored agents to intimidate people who do that (such as F.B.I. agents). 

Contrary to what most American think, private insurers do exactly just that.  Most Americans favor them because it promotes "free market", when in reality it does just the opposite.  First, it promotes an oligopoly of very big insurance companies who are mostly interested in profits, trying to crush any other small or medium-sized insurance companies.  Secondly, it promotes a huge bureaucracy.  For example, the Bureau of Labor Statistics and the NCHS released a report that states from 1970 to 2000 in the U.S. there was a growth rate of physicians of more than 100%, while the number of administrators increased to more than 2,200%.  This monopolization of health insurances which has led, not only to the bureaucratization of medicine, but it has restricted people's access to health care.

So in what sense is this "free market"?  Well, let's examine the issues more closely to see how much "free market" can this be.


A.   The Costs of Health Care in the United States

Of course, it is often repeated like an infallible truth of faith that fomenting freedom of market will mean low costs and better health care.  If this is true, then U.S.'s government expenses should be expected to be less than those countries which have universal health care insurance for the entire population.   I'm going to give some numbers, but as you see them, remember that the U.S. government does NOT spend on everyone, that there are uninsured people in the U.S. (about 40,000,000 people have no insurance at all) and that most of those who are insured only have very limited cover.  Those countries which have universal health insurance do spend on every single person who inhabits them.

Spending on Health Care
Per Capita - 1998
(in U.S. dollars)
(source:  OECD.  Health Care at a Glance.  Paris. 2001)
United Kingdom
$1,510
Japan
$1,795
France
$2,043
Canada
$2,360
Germany
$2,361
United States
$4,185

So, it seems that the United States, which doesn't spend on every single citizen for their health care, spends more per capita than all industrialized countries who have universal health insurance.  In fact, the next country in line for those countries that spends on health care considerably (Switzerland), only spends almost 67% per capita of what the United States spends (about $2,800).  There is another very interesting data which reveals how much the United States spend on its "efficient" health care system:

Percent of GDP Spent on Health Care - 1998
(source:  OECD. OECD Health Data 2000.  Paris 2000)
Germany
10.6%
Canada
9.5%
United Kingdom
6.7%
United States
13.6%

So again, the United States spends more percent of its GDP than countries which have universal health care.

Of course, there is also the argument, that the United States is the richest country in the world, and not other countries I just mentioned.  Part of their reasoning is that private health care insurance companies make much profit for the United States, and in the long run this benefits the people.  But is this true?  First, I wish to point out that it can be true that the United States is the richest country in the world in terms of the amount of capital it invests and profits from.  However, when we make an analysis of comparison of the Gross National Product per capita, the United States is no longer the richest country in the world.

Richest Countries in the World
GNP Per Capita
(in U.S. dollars)
(source:  World Reference Atlas.  Covent Garden Books, 2004)
Luxembourg
$45,360
Switzerland
$44,350
Japan
$40,940
Liechtenstein
$40,000
Norway
$34,510
Denmark
$32,100
Singapore
$30,550
Germany
$28,870
Austria
$28,110
United States
$28,020

Notice that the vast majority of the countries richer than the United States have also universal health systems:  Luxembourg, Switzerland, Japan, Liechtenstein, Norway, Denmark, Germany and Austria.  So, even from this point of view, countries who spend on health care can be richer than the U.S. and this is no surprise.  Canada, even though is poorer in relation to the U.S., contrary to the claims of the right wing in the U.S., has a high competitive ranking.  According to the World Competitiveness Report 1991, one of the reasons why Canada remains so competitive is because it has an universal health care system funded publicly (World Economic Forum.  World Competitiveness Report 1991.  Lausanne, Switzerland, 1992).  It is ironic that most of these countries are called "socialists" by the conservative media in the United States, and still are free democratic countries which are richer than the United States.  It is ironic also that the European countries forming the European Union have an universal health care system and together have accomplished what a few years ago would have been thought as impossible:  to make the euro stronger than the U.S. dollar.  In fact, it is during a conservative government, that the U.S. has had its highest deficits, making the U.S. dollar to be devalued.

Why public universal health care is so effective?  There are many answers to that, as we shall see later in this article.  However, one of the answers is that an effective universal health care can guarantee people's productivity, and can mean less spending, and less bureaucracy.

So, all of this data blows up completely the argument of the fiscal crisis confronted by countries who have universal health care!  In fact, it seems that the United States compared to other industrialized in the world has the greatest health care crisis!


B.  Why are the Costs in the U.S. so High?

The idea of the state being the sole-payer of health care and spending less than today in the U.S. is really counter-intuitive.  But if we look at the system carefully, we will see that it makes sense.


       1.   Administrative Costs

One of the first things that distinguishes the United States' health care system from those which have universal health care is the amount of bureaucracy.  The United States' health care system creates a huge bureaucracy.  To give the reader an idea, I offer you some data about it:

Administrative Staff in Canada and U.S., 1971 and 1986
(Full-Time Equivalents per Million Population)
(sources:  David U. Himmelstein, James P. Lewontin and Steffie Woolhandler, "Who Administers?  Who Cares? Medical Administrative and Clinical Employment in the United States and Canada." American Journal of Public Health 86:2.  Feb. 1996, table 2)


1971
1986

Canada
United States
Canada
United States
Managers & Related
569
974
1425
2634
Admin. Support, except financial
3082
3123
3778
4593
Admin. Support, financial
430
280
604
999
TOTALS
4081
4377
5807
8226

So, from 1971 to 1986 the administrative staff in the United States increased far more than in Canada (it increased about 42%), and from then until today, it has also increased exponentially.  Why in such a "free market" environment in insurance policies is there so much spending in administrative personnel?  Why is there so much spending on papers?

Let's compare how things are in the United States, and how things are in Canada.  In United States' hospitals and doctor offices have records of each patient, and also there are bills they send to each of the patients.  Of course, to keep up with all of this information is immensely hard for two reasons.  Obviously records and bills increase incredibly the amount of official documents a doctor or a hospital has to deal with, but also the inherent problem of bills.  When a doctor or a hospital sends someone the bill, then there is a risk factor:  that the patient won't pay, either because he or she won't, or (as it is often is the case) the patient has no money and the private insurance doesn't cover some expenses.  This means, an increase in the cost of service by the doctor or by the hospital.   In Canada, the expenses are low because they don't have detailed accounts of each patient, and also by sending the bill, they don't have to worry about not getting paid.  So, in Canada the doctors and hospitals save money:

1.   Because the bureaucracy is greatly reduced

2.   Because the risk expense is almost none, the state will pay your bills

3.   Because people in an office don't have to spend too much time trying to find out if a patient is covered or not.

Having the state as the sole-payer of health care expenses means that the doctors and hospitals won't separate the patients into different categories, nor are they subject to any kind of risk.  The state practically pays everything.  This is the reason why the operation expenses in a doctor's office in the United States is about 50%, while in Canada is 36%.


        2.   The Basis of Competition in Medicine:  Definitely NOT the Price

One of the huge problems with the "more competition means cheaper prices" argument is that the basis of the competition among hospitals is not the price, it is the prestige.  In a capitalist point of view, it is generally believed that cheaper means "crappy", while more expensive means "high quality".  An example of this is the free software and open source softwares available.  Most people think that because most of them are obtained for free means that free software is simply worthless, even though it has empirically been demonstrated that it tends to be better than very expensive proprietary software.  Well, hospitals go through that same principle.  To compete among one another they want to buy the most expensive equipment, or the most expensive technology, so that the prestige of the hospital increases in the market and people say:  "Wow, this hospital is one of the best in the world!"

What does this all lead to?  To the increase in hospital costs.  Why?  Precisely because of the presence of that useless equipment.  Of course, I already hear most of you say:  "Useless???"  Well... yes... Useless!  One of the arguments of people who are against universal health care is that in the United States there are far more technology and equipment than in Canada.  This gives Americans the impression that in Canada there are very few equipments and technology, and therefore far behind from the United States.  In fact, it is the opposite.  The amount of technology that Canada has is just about the amount it needs.  It is the United States' hospitals which have too much equipment and technology

Take these examples, for instance:

[There is a 1990] study which showed that there were 10,000 mammography machines in the United States.  It would have taken only 2,000 machines to meet the needs of the women who were obtaining mammograms regularly.  If all women got all of the recommended screening exams, only 5,132 machines would be needed. Because there are too many machines, each exam costs more.  Many mammographers perform too few exams to maintain their competence, thus the quality of the exams they perform suffer.  Competition creates duplication of expensive technology in health care, not cost effectiveness (Armstrong and Fegan XIII).

At a conference in Canada recently, a woman claimed that her husband's case demonstrated the need for more MRI's [Magnetic Resonance Imaging].  He had been diagnosed with a malignant brain cancer on the basis of multiple tests and by several doctors.  His doctors in Canada did not think his case warranted moving him to the front line for an MRI, given that there was no treatment for his condition.  Desperate, her husband paid a thousand dollars for the procedure in the United States.  The MRI confirmed the diagnosis of the Canadian doctors.  The technology did not improve the quality of care he received, but its very presence suggested that something else could be done.

    It is only the presence of these technologies that may result in inappropriate use.  It is also the money to be made.  As an article in the New England Journal of Medicine points out, the proliferation of cardiac characterization facilities in the United States may well be connected to the fact that a "high volume of procedures brought prestige and financial rewards to hospitals, physicians, and the vendors of medical equipment." The more expensive the equipment, the greater the prestige associated with using it, even if the use is not warranted by existing evidence (Armstrong and Fegan 87).

Therefore, more equipment and more technology doesn't necessarily mean better health care.  In practice, this just means less access of patients to proper care.  In fact, using this technology properly has placed Canada many times in the first place in terms of high technology management of its hospitals.

Canadian hospitals have ranked first in the world in some very high-tech areas.  The Grace Hospital in Ottawa is a world leader in cataract surgery, offering training in some of its techniques to doctors from the Mayo Clinic.  Canada has pioneered in doing some kinds of transplants (Armstrong and Fegan 88).

We can conclude, then, that an universal health care (at least Canadian style) could save a lot of money, not only in bureaucracy, but also in high cost of new technology.  It would mean that hospitals would have to be regulated to have the high tech and equipment that patients really need.


       3.   Profit Based Insurance Corporations

Another thing that rises up the costs considerably are precisely the private insurance corporations.  As I've stated before, the problem with private insurance policies is that they are actually parasites of the medical system.  What do parasites do?  They live of an organism without any kind of benefit in return.

Of course, my claim would sound outrageous to anyone, but think about it:  you pay so that an insurance can cover your health expenses.  But since it is for profit, part of the money will go to someone's pocket, another part of your money will go to the gigantic bureaucracy I talked about, and whatever is left is directed towards your care. This means that the majority of the money you give to an insurance company will not be invested in your care, and there's the problem.  There's another thing that makes health care expenses so high.

Now, for profit insurances have another problem:  they want to maximize profits by minimizing the expenses.  Therefore, they will do everything possible to actually not give proper finance for hospital care in case something serious happens, like needing a heart or liver transplant.  Each time there are more and more patients who are underinsured, specially those who are poor or even middle class.  Insurance companies, each year want to cover less and less to increase the savings, and quite often they can change their policy without notifying their clients.

Like leeches, they only suck money out of the whole system.  Of course, there are the so-called "safety nets" for the poor like Medicaid.  For the low middle class there are HMOs (Health Maintenance Organization), who are the very big promoters of "managed care".  This model of managed care has been the main source of criminal behavior, excessive salaries, administrative abuses among others.  For example, managed care has been practically the main reason of a certain behavior of HMOs, in which they award doctors a certain amount of money for not testing patients thoroughly enough.  Why?  Because, once again, they want to save money to maximize their profits.


C.   Are Doctors Fleeing from Canada Desperately?

Well, yes, there are doctors fleeing from Canada, but not desperately.  However, these doctors are constitute only 1% of all the doctors in Canada.  They are usually doctors whose practice has little supply in the United States, but great demand.  So, if there is little supply, and great demand, then that means, a great opportunity for earning lots of money (perhaps even millions of dollars).  If a doctor like that stayed in Canada would have to have definitely a vocation for helping patients.  If they go to the United States, then they are interested in money.  So, the environment of "free market" in the United States make possible the oligopolization of medicine, few doctors can have lots of money, while doctors like pediatricians or generalists don't have the slightest hope of earning at least half of that small sector of specialists.  One way to eliminate that monopoly would be to have an universal health care, where doctors can indeed negotiate their salaries and benefits with the state.  At least in Canada, doctors can't be millionaires, but one thing you won't hear is that they don't have decent salaries.


E.   How Can an Universal Health Care be Financed?

One of the things that characterizes universal health care is that it should be funded by the state, to make the state the sole payer of that health care system.  This doesn't mean that there can't be other kinds of contributions to it.  For example, in Canada, there are contributions to universal health care from the private sector.  First of all, there are contributions made by supervisors to their employees.  The private model used in the United States generate too much conflict with respect to coverage.  For example, in some cases, health care is provided by the employer but only covers any accident in their job; outside of work, it is another story.  The person may have to also pay another insurance so that he or she is covered outside his or her work.  In the case of universal health care, the employer can pay for a health care that covers the employee inside and outside of work, and this kind of pay in Canada is not as expensive as in the case of the United States.  Part of the reasons why private companies don't want to pay for health care to their employees is because it is expensive.

Also, private companies can make voluntary contributions to the health care system.  Contrary to what people in the U.S. might expect, private companies find attractive to invest in the health care system, because it eases their employees concern on insurance, their health care is guaranteed, and their efficiency is much better.  There are also cases of individuals who wish to make contributions to health care, as well as voluntary work in hospital which reduces the expense of pay to hospitals.


Conclusion

It seems to me that universal health care is much better to solve health care problems than the privately based business of health care insurance.  At least in countries where they have tried it, it seems to be much better, less expensive, and leads to less problems than in the case of U.S. medical system.  Unfortunately, the myths that surround this subject in the U.S. endure.  I hope that this article helps a little bit to demystify all of these wrong notions about Canada and its universal health care system.


References

Armstrong, Pat and Hugh, and Claudia Fegan.  Universal Health Care:  What the United States can Learn from the Canadian Experience.  NY:  The New York Press, 1998.

Haiven, Judy. "MediScare". Mother Jones. Mar.-Abr. 1991: 52.


Kassirer, Jerome P. "Access to Specialty Care." New England Journal of Medicine.  Oct. 27, 1994: 1151-53.

LeBow, Robert H.  Health Care Meltdown:  Confronting the Myths and Fixing our Failing System.  Pennsylvania:  Alan C. Hood & Company, Inc., 2003.

Nair, Ciril and Rezaul Karim. "An Overview of Health Care Systems." Health Reports 5:3, 1993.

Visit also these sites:

Physicians for National Health Care
Canada's Health Care System Site
John Q:  Official Site




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