The Cost of Free Government Health Care

Thursday's Editorial   —   Posted on June 11, 2009

(by David Gibberman, – Proponents of government-run health care like to point out that countries with such a system spend a smaller percentage of their gross domestic product on health care than the United States. What they don’t like to mention is how those savings are achieved. For example: 

Patients Lose the Right To Decide What Treatment They’ll Receive. Instead, patients receive whatever care politicians and bureaucratic number crunchers decide is “cost effective.”

Britain’s National Institute for Health and Clinical Excellence usually won’t approve a medical procedure or medicine unless its cost, divided by the number of quality-adjusted life years that it will give a patient, is no more than what it values a year of life in great health – £30,000 (about $44,820). So if you want a medical procedure that is expected to extend your life by four years but it costs $40,000 and bureaucrats decide that it will improve the quality of your life by 0.2 (death is zero, 1.0 is best possible health, and negative values can be assigned), you’re out of luck because $40,000 divided by 0.8 (4 X 0.2) is $50,000.

There Are Long Waits for Care. One way governments reduce health care costs is to require patients to wait for treatment. Patients have to wait to see a general practitioner, then wait to see a specialist, then wait for any diagnostic tests, and then wait for treatment.

The United Kingdom’s National Health Service recently congratulated itself for reducing to 18 weeks the average time that a patient has to wait from referral to a specialist to treatment. Last year, Canadians had to wait an average of 17.3 weeks from referral to a specialist to treatment (Fraser Institute’s Waiting Your Turn). The median wait was 4.9 weeks for a CT scan, 9.7 weeks for an MRI, and 4.4 weeks for an ultrasound.

Delay in treatment is not merely an inconvenience. Think of the pain and suffering it costs patients. Or lost work time, decreased productivity, and sick pay. Worse, think of the number of deaths caused by delays in treatment.

Patients Are Denied the Latest Medical Technology and Medicines. To save money, countries with government-run health care deny or limit access to new technology and medicines. Those with a rare disease are often out of luck because medicines for their disease usually cost more than their quality-adjusted life years are deemed worth.

In a Commonwealth Fund/Harvard/Harris 2000 survey of physicians in the United States, Canada, New Zealand, Australia, and the United Kingdom, physicians in all countries except the United States reported major shortages of resources important in providing quality care; only U.S. physicians did not see shortages as a significant problem. According to the OECD (Organisation for Economic Co-operation and Development) Health Data (2008), there are 26.5 MRIs and 33.9 CT scanners per million people in the United States compared to 6.2 MRIs and 12 CT scanners in Canada and 5.6 MRIs and 7.6 CT scanners in the United Kingdom.

Breakthroughs in Life-Saving Treatments Are Discouraged. Countries with government-run health care save money by relying on the United States to pay the research and development costs for new medical technology and medications. If we adopt the cost-control policies that have limited innovation in other countries, everyone will suffer.

The Best and Brightest Are Discouraged from Becoming Doctors. Countries with government-run health care save money by paying doctors less. According to a Commonwealth Fund analysis, U.S. doctors earn more than twice as much as doctors in Canada and Germany, more than three times as much as doctors in France, and four times as much as doctors in Finland, Norway, and Sweden. The best and brightest will be encouraged to go into professions where they can earn more money and have more autonomy.

Is Government-Run Health Care Better? Proponents of government-run health care argue that Americans will receive better care despite the foregoing. Their main argument has been that despite paying more for health care the United States trails other countries in infant mortality and average life expectancy.

However, neither is a good measure of the quality of a country’s health care system. Each depends more on genetic makeup, personal lifestyle (including diet and physical activity), education, and environment than available health care. For example, in their book The Business of Health, Robert L. Ohsfeldt and John E. Schneider found that if it weren’t for our high rate of deaths from homicides and car accidents Americans would have the highest life expectancy.

Infant mortality statistics are difficult to compare because other countries don’t count as live births infants below a certain weight or gestational age. June E. O’Neill and Dave M. O’Neill found that Canada’s infant mortality would be higher than ours if Canadians had as many low-weight births (the U.S. has almost three times as many teen mothers, who tend to give birth to lower-weight infants).

A better measure of a country’s health care is how well it actually treats patients. The CONCORD study published in 2008 found that the five-year survival rate for cancer (adjusted for other causes of death) is much higher in the United States than in Europe (e.g., 91.9% vs. 57.1% for prostate cancer, 83.9% vs. 73% for breast cancer, 60.1% vs. 46.8% for men with colon cancer, and 60.1 vs. 48.4% for women with colon cancer). The United Kingdom, which has had government-run health care since 1948, has survival rates lower than those for Europe as a whole.

Proponents of government-run health care argue that more preventive care will be provided. However, a 2007 Commonwealth Fund report comparing the U.S., Australia, Canada, Germany, New Zealand, and the United Kingdom found that the U.S. was #1 in preventive care. Eighty-five percent of U.S. women age 25-64 reported that they had a Pap test in the past two years (compared to 58% in the United Kingdom); 84% of U.S. women age 50-64 reported that they had a mammogram in the past two years (compared to 63% in the United Kingdom).

The United Kingdom’s National Health Service has been around for more than 60 years but still hasn’t worked out its kinks. In March, Britain’s Healthcare Commission (since renamed the Care Quality Commission) reported that as many as 1,200 patients may have died needlessly at Stafford Hospital and Cannock Chase Hospital over a three-year period. The Commission described filthy conditions, unhygienic practices, doctors and nurses too few in number and poorly trained, nurses not knowing how to use the insufficient number of working cardiac monitors, and patients left without food, drink, or medication for as many as four days.

Does Government-Run Health Care Provide Everyone Access to Equal Care? Proponents tout government-run health care as giving everyone access to the same health care, regardless of race, nationality, or wealth. But that’s not true. The British press refers to the National Health Service as a “postcode lotter” because a person’s care varies depending on the neighborhood (“postcode”) in which he or she lives. EUROCARE-4 found large difference in cancer survival rates between the rich and poor in Europe. The Fraser Institute’s Waiting Your Turn concludes that famous and politically connected Canadians are moved to the front of queues, suburban and rural residents have less access to care than their urban counterparts, and lower income Canadians have less access to care than their higher income neighbors.

Ironically, as we’re moving toward having our government completely control health care, countries with government-run health care are moving in the opposite direction. Almost every European country has introduced market reforms to reduce health costs and increase the availability and quality of care. The United Kingdom has proposed a pilot program giving patients money to purchase health care. Why is this being done? According to Alan Johnson, Secretary for Health, personal health budgets “will give more power to patients and drive up the quality of care” (The Guardian, 1/17/09). It’s a lesson we all should learn before considering how to improve our health care system.

This article was first posted at on May 15, 2008.   Reprinted here June 11, 2009 for educational purposes only.