What's Wrong with Government-Run Healthcare?

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Oct 15, 2018

If you get sick or suffer a serious injury, you not only want medical care, you want quality medical care. What’s the best way to get it? Through a government-run program like Medicare for All or through our current free market system? Stanford policy expert Lanhee Chen has the answer in this video from Prager University. Get informed. After all, this is your health we’re talking about. 

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If it’s better for the government to control healthcare, why do people come to America for high quality care, not the other way around?

  • People from countries that provide single-payer healthcare come to America for high-quality care, not the other way around.View Source
  • The U.S. healthcare system scores highly against other countries in innovation, patient centered care, and preventive health,” Hoover Institute scholar Lanhee Chen writes.View Source
  • The U.S. has operated a single-payer healthcare system for veterans through the VA, which has been a complete failure.View Source
  • Another state-run health care system, Medicaid, is convoluted and fiscally irresponsible.View Source
  • WATCH: “Why Is Health Insurance So Complicated?” – Lanhee ChenView Source

Government-run single-payer healthcare takes medical decisions away from patients and puts them in the hands of bureaucrats.

  • The United Kingdom’s National Health Service (NHS) is an example of a single-payer healthcare system in the midst of a crisis.View Source
  • Because it has finite resources, the U.K.’s NHS sharply restricts access to treatments like hip replacements.View Source
  • In the U.K., NHS bureaucrats, not patients and doctors, determine who should have access to MRI machines.View Source
  • Cataract surgeries, without which a patient could go blind, are rationed by the NHS.View Source
  • Even prescription drugs to deal with common conditions like arthritis are withheld by the NHS.View Source
  • In a January 2018 article in the New York Times, patients in emergency rooms around London are described as having “to wait 12 hours before they are tended to.” “Corridors are jammed with beds carrying [the] frail and elderly.” To deal with the situation “hospitals [were] ordered to postpone non-urgent surgeries until the end of the month.”View Source

Single-payer healthcare is extremely expensive. The Democrats’ Medicare-for-all plan would cost over $30 trillion over 10 years.

  • A recent study by the Mercatus Center at George Mason University found that a Bernie Sanders-style “Medicare-for-all” health system would cost $32.6 trillion over ten years.View Source
  • A study from the Tax Policy Center and the Urban Institute corroborated the Mercatus Center’s findings about Sanders’ single-payer healthcare plan.View Source
  • Charles Blahous, the author of the Mercatus study on the costs of a single-payer healthcare system, says, “even a doubling of all projected individual and corporate income taxes would be insufficient to finance these added federal costs.”View Source
  • The federal government spent more than $980 billion on healthcare in 2015. A single-payer system would massively expand those costs.View Source
  • Emory’s Kenneth Thorpe found that Sanders’ plan was underfunded by $1.1 trillion per year.View Source

The U.S. leads the world in medical research, surpassing all government-run single-payer healthcare systems. 

  • The U.S. publishes more medical research and spends more on research and development than any country with single-payer health care.View Source
  • Americans “have benefited from having the best and, usually, the earliest access to the latest medical technologies and innovations,” writes Emory’s Kenneth Thorpe, a former Clinton administration health policy official. “In large part, this is because they were discovered, developed and produced here in America.”View Source
  • A majority of biomedical research and development spending in the U.S. – over $70 billion in 2012 – comes from the private sector.View Source
  • Discovering new cures and technology is profitable, thus the free market drives innovation in healthcare. Between 2008 and 2014 research investments from drug companies increased from $3 billion to $8.1 billion.View Source

Despite the failures and overwhelming costs of single-payer healthcare, Democrats push it. Why? It massively grows government. 

  • In 2016, presidential candidate Bernie Sanders pushed for single-payer health care in the US.View Source
  • One-third of Democratic senators support single-payer healthcare.View Source
  • Supporters of a single-payer system ignore the high projected costs.View Source
  • Support for Bernie Sanders’ single-payer healthcare system is inseparable from socialism and its widespread economic consequences.View Source
  • Due to high costs, very few countries have complete single-payer systems.View Source
  • WATCH: “Government Can’t Fix Healthcare” – Bob McEwenView Source

Should the U.S. adopt Medicare-for-all? Ontario’s single-payer healthcare takes up 43% of its budget and has grown at an unsustainable rate.

  • Canada already experiences the costs of “Medicare-for-all.” In Ontario, the country’s biggest province, healthcare costs took up over 40% of its entire budget in 2017. The rate of growth of healthcare expenses in Canadian provinces since 2001 has been “unsustainable.”View Source
  • If you are going to [adopt Medicare for All],” said Emory’s Kenneth Thorpe, a former Clinton administration health policy official, “the tax increases are going to be enormous.”View Source
  • WATCH: “Why Is Healthcare So Expensive?”View Source

The lion’s share of biomedical research and development spending in the U.S. comes from the private sector.

  • A majority of biomedical research and development spending in the U.S. – over $70 billion in 2012 – comes from the private sector.View Source
  • Discovering new cures and technology is profitable, thus the free market drives innovation in healthcare. Between 2008 and 2014 research investments from drug companies increased from $3 billion to $8.1 billion.View Source
  • The U.S. publishes more medical research and spends more on research and development than any country with single-payer health care.View Source
  • Related reading: “Rx for Rose-colored Glasses” – Lanhee ChenView Source

It’s very easy for a politician to stand up before voters and say, “Health care is a right,” and then passionately advocate for “single-payer” or “free health care” or “Medicare for All”—whatever term they might use.

But before we consider the merits of the government managing your health care—and that’s what this all boils down to—maybe we should ask a more basic question:

What do we mean by “health care”?

Because if you get sick—and here, we’re talking major illness—or you’re in serious pain, you don’t just want health care; you want quality health care. 

And where is your best chance of finding that?

The answer is right here in America.

For skilled doctors, cutting-edge medical treatments, and care without long delays, no other country rivals the United States. Not even close. Nobody from Texas is going to Canada for medical treatment. It’s almost always the other way around.

Sure, our health care system has lots of issues—and we should address them—but do we really want to upend all the advantages that we do have and start from scratch? Because that’s what would have to happen if we completely turn health care over to the government.

So, let’s imagine we make the change. We hear a lot about how great free health care would be, but it’s only fair we look at the downside.

The first is that government-run health care takes medical decisions away from patients—that means you—and puts them in the hands of bureaucrats.  They decide, for example, how many MRI machines are going to be available, or under what conditions you can get back surgery or a bypass, or even whether you qualify for cancer treatment.

That’s how it works in the United Kingdom under its single-payer system. Because it has finite resources, the National Health Service, or NHS, sharply restricts access to treatments like hip and knee replacements, cataract surgery, and even prescription drugs to deal with common conditions like arthritis and diabetes. If you suffer from any of these ailments and many others in the UK, you may just have to live with the pain. 

And let’s hope you don’t have a medical emergency.

In a January 2018 article in the New York Times, patients in emergency rooms around London are described as having “to wait 12 hours before they are tended to. Corridors are jammed with beds carrying [the] frail and elderly.” To deal with the situation, “hospitals [were] ordered to postpone non-urgent surgeries until the end of the month.” That hardly seems like an improvement over what we have in the US.

A second big problem with single-payer systems is that they are expensive—really expensive. 

A recent study by the Mercatus Center at George Mason University found that a Bernie Sanders-style “Medicare-for-All” health system would cost a tidy $32.6 trillion over ten years. That’s on top of what the federal government spends on health care today. And this is not a new number. Other studies have found the cost to be roughly in the same range. 

So, how would we pay for it?

Kenneth Thorpe, a professor at Emory University and health policy official in the Clinton Administration, spells it out: “If you are going to go in this direction [Medicare-for-All]… the tax increases are going to be enormous.” Not just for the rich, Thorpe estimates, but for working Americans and the poor, too.

Charles Blahous, the author of the Mercatus study, puts it this way: “Even a doubling of all projected individual and corporate income taxes would be insufficient to finance these added federal costs.” And he considers that a conservative estimate.

Canada knows all about exploding health care costs. In Ontario, the country’s biggest province, those costs took up 46% of its entire budget in 2010. By 2030, that number is projected to be 80%. In other words, in a few years, Ontario will have little money to pay for anything except health care.

Finally, and perhaps most importantly, government-run systems depress the search for new cures. Biomedical research spending in the US far outpaces that of any country with nationalized health care, even when you account for differences in population or size of economies. That’s one reason medical breakthroughs rarely come from countries where the government controls health care; they come from the United States, where the government doesn’t.

The lion’s share of biomedical research and development spending in the US—over $70 billion in 2012—comes from the private sector.  Discovering new medical cures and technology is a profitable business—and thank goodness it is. Those profits drive innovation. Take away the profits and you will surely take away the innovation. 

Single-payer, free health care, Medicare-for-All: they might sound great, but like all visions of utopia, they ultimately produce a lot more harm than good.

I’m Lanhee Chen, fellow at the Hoover Institution at Stanford, for Prager University.

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