Government-run health care? No thanks

By Stephen Bowen | Jun 12, 2009

Supporters of what has come to be called “single-payer” health care -- but what ought to be called “taxpayer-payer” health care -- have been out in force of late. At a rally in Augusta a week or two back, over a public address system powered by a carbon-spewing gasoline-power generator, single-payer advocates called for the nation’s health-care system to be taken over and run by the government.

Single payer, and its advocates, are wrong for the most basic of reasons -- the government-run model won’t work. Indeed, those who think that having the government run things makes running them less expensive would be hard pressed to produce even a single instance of such a thing ever happening.

Single-payer advocates, though, claim that government-run systems such as Medicaid and Medicare are already more efficient than the private sector, what with its contemptible profit motives. Yet their accounting of the administrative efficiency of these programs is seriously flawed. Private insurers such as Anthem, for instance, have among their administrative expenses the cost of collecting and processing premiums. Medicaid and Medicare are funded almost exclusively from state and federal treasuries, and thus do not incur such costs. The IRS does not bill Medicare for the collection, out of virtually every paycheck in the nation, of the taxes that fund it.

Medicaid and Medicare also keep administrative costs down because they accept a scandalous level of waste, fraud and abuse. In a 2007 news account, MSNBC reported that fraudulent use of the Medicare program alone is estimated to cost taxpayers $60 billion a year. The Government Accountability Office reports that fraud alone accounts “for 10 percent of all health-care expenditures.”

These government programs also appear cost-effective on paper because they routinely underpay health-care professionals, as a matter of policy, for the services they provide. The Maine Hospital Association estimates that Maine’s Medicaid program, when it does pay, pays about 75 cents for every dollar of care hospitals provide to its enrollees.

It is widely acknowledged that hospitals and other health-care providers compensate for the underpayment losses from Medicare and Medicaid by overcharging those with private health insurance plans. If doctors and hospitals are only able to stay in business because of this cost-shift, who is going to make up for the underpayment by government programs once everyone is on a government program?

What is even more amazing is that despite the fact that they dramatically underpay for the health-care services that are provided to their enrollees, both Medicaid and Medicare are going broke. According to its recent trustees report, Medicare alone will exhaust its Part A trust fund in 2017, and faces a deficit over the next 75 years of an unimaginable $37 trillion.

If we can’t pay for Medicare now, when it covers only 15 percent of the population, how will we pay for it once everyone is on the program? To find the answer, one need only look at what government-run systems in other countries have done to contain their rising costs. First and foremost, they severely limit access to health care through rationing. As researcher John Goodman observed in a recent issue of National Review, for example, “Britain has only one-fourth as many CT scanners per capita as the U.S. and one-third as many MRI scanners.” At any given time, he notes, “1.8 million Britons are waiting for hospital or outpatient treatment.” Additionally, “only 5 percent of Americans wait more than four months for surgery, compared with 27 percent of all Canadians and 36 percent of Britons.”

America’s government-run health programs suffer from access issues as well. Because Medicaid and Medicare underpay care providers, it has become tougher and tougher for those enrolled in these programs to even find a health-care professional to provide them with the care they need. A 2006 study found that “only 52 percent of physicians reported accepting all new Medicaid patients who came to them and 21 percent reported that they were not accepting any new Med­icaid patients.”

What good is government health coverage if health-care providers either refuse to see you or can’t provide you with the care you need because the government won’t let them?

Uneven access to care may also explain why those on government-run health programs tend to have poorer health outcomes. According to analysts at the Center for Health Policy Studies, recent research has found that “Medicaid patients who were diagnosed with breast, colorectal, or lung cancer had a two to three times greater risk of dying from their disease than patients with other types of insurance,” and that “Medicaid patients received fewer evidence-based therapies than patients with private insurance coverage.”

So what will government-run health care look like? It will be far more expensive and provide less access to care that is not nearly as good.

The “taxpayer-payer” advocates are right, of course, that the nation’s health-care system is badly broken. While their proposed solution is beguiling in its apparent simplicity -- we’ll all get the health care we need, free, from the government -- the truth is that such a system would be a costly and cataclysmic failure.

There are better alternatives out there, alternatives that empower patients and their doctors rather than bureaucrats. That is the direction the nation needs to take in order to bring needed reforms to a health-care system in crisis.
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