19 July 2009

Globalizing Government Healthcare

In the hurry to pass a 2-foot tall bill that no one has read (again), it is interesting that other countries are not speaking out against Obamacare. I would think practically every other country would have something to lose if the US nationalizes healthcare. Let’s look at a few of the issues:


Two countries primarily used when discussing nationalized healthcare are Canada and the UK. Canada has 34 million citizens while the UK has roughly 61 million citizens. That’s roughly one TENTH and one FIFTH, respectively, of the US population of 307 Million.

In the US in 2008, an estimated 42-45 million are said to be uninsured. So comparing the proposed US plan with nationalized healthcare in those countries is not even apples and oranges. We have, on average, as many uninsured as they have total citizens! It’s more like grapes and watermelons!

So, it stands to reason that if healthcare in those countries is already less than desirable (see side note below) for the fraction of citizens each country has, then it will be up to TEN TIMES worse in the US! It would also be TEN TIMES as expensive… and that’s based on Congressional estimates which are usually dramatically underestimated. You can expect quality issues here to be exported to countries that depend on our medical system to run their own.

Side note: When a Canadian government entity has a publication on wait times for healthcare and the BBC is reporting on average wait times, no matter how you position it, you have de facto rationing of care.


New medical innovations will suffer as a result of national healthcare reducing or eliminating the profit motive. Glenn Reynolds provides firsthand experience with today’s healthcare systems. While I’m certain there are physicians who choose to work simply to heal and help, those who make the tools of the trade are mostly capitalists. They don’t come cheap. So then, who will provide the government plan with all the cutting edge technology that no one will be interested in investing the time and energy in just to have it bought at lowball prices from (or stolen by) a government bureaucracy?

Legislation currently in Congress (HR 3134) seeks to establish “Healthcare Innovation Zones”. This legislation is designed to encourage “innovative models of care that improve quality and decrease costs” and create “a provider network that will provide the full spectrum of care.” And if national public healthcare – as proposed – passes, who do they think will be left to participate in these programs? Already in the pocket of the Obama administration for cap and trade, General Electric can’t expect to also solve the world’s healthcare needs as well.

HR 3134 gives the appearance of government bribes for those who want to stay fully funded as their national program slowly kills provider incentives and private plans. The intent appears to be asking medical communities to recommend to the government how to run its nationalized program. This gives them “expert” cover in selling the idea to the public. Like other government incentive programs, it too will fail.


But what will happen to the rest of the world’s healthcare programs when our incentive to innovate goes away? For all the countries that have socialized medicine - ones that adopt technologies developed by for-profit pharmaceutical companies and medical equipment companies in the US - how bad will things get for them if they no longer have innovative programs their governments can buy from the US? Do they have money to invest in those technologies themselves? Likely not. Will they foster innovation in their own countries to provide the medical advances they will need? Doubtful. So, our newest export will be self-inflicted misery.


Ultimately, I predict there will be a shortage of medical professionals who refuse to work for the government program (unless perhaps they unionize to protect their interests). But more than that, these are EXACTLY the “rich” people the government plans to increase taxes on to pay for the national program. Medical students from around the world aren’t lining up to get into US schools because they can make more money at home.

How does the government expect physicians and other professionals in the medical field to feel about being taxed at rates of 50-60% of their incomes, which are most likely going to be negatively impacted (as they already are) when single-payer programs pay them pennies in reimbursement due to lack of competition? Never mind that tort reform or the soaring costs of malpractice insurance haven’t crossed a Congressional mind as a much needed part of controlling costs…


Quite frankly, I’m shocked that the rest of the world is not rising up against this fiasco as it will have ripple, or should I say tsunami-like effects throughout the world’s healthcare systems. Surely other countries realize how important the current US system is to their own. Given that the administration is doing all they can economically to devalue our currency, once they devalue our healthcare and energy systems, there will be no one to pick up the slack. Things will not get better for Americans, it will get worse because those who have depended on us for so long will now abandon us and perhaps even turn against us.

As they say today, when the US sneezes, the world catches a cold. If this healthcare plan goes through in the US, when the US sneezes, the world will be hospitalized forced to rely on their own failing programs.


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