Is Government-Managed Health Care Affordable?

Posted: March 22, 2017 by Nazim in Abortion, ACA, Money Money!


Since Obamacare causes such controversy, and for good cause, it’s worth trying to untangle some of the issues presented by what I’m generically going to call government-managed health care. I’m using this umbrella term to cover anything that remotely resembles Medicare, the Veterans Health Administration, and the myriad of similarly large health care systems managed by governments across the world. Given the amount of debate on the issue, some other clarifications seem necessary. This article isn’t looking at the quality of the care, or whether it has any private components to it. These are certainly very important issues, but I’m only human, okay? One thing at a time.

Unless there are gross inefficiencies, which government is often unjustifiably famous for, the government’s overhead for administering health care is dramatically lower than private entities’ because profit and marketing are less important factors. This is even true for Medicare, despite the ridiculously high cost of health care in the US. But this only gets us a half way to the answer. The question is perhaps better measured by how much we currently spend on health care, and how much of that is paid for by the taxpayer.

First, although some struggle with costs, governments across the world already shoulder this burden. So it’s definitely possible. And before someone compares the cost of care in the US to the cost of care elsewhere, many, if not most, of the medication used elsewhere is also used here. Since private companies do not sell medication at a loss, it follows that the sales in other countries also operate profitably, and therefore, those costs are necessarily similar. The truth may be that US patients may be the victims of broadly-orchestrated price-gouging, but that’s beyond the scope of this article. In the US, taxpayers already fund over 60% of all health spending. And that number doesn’t account for the discounts on taxes that we give to companies operating emergency rooms, which is one of the main ways health care is provided to Americans. The US tax code grants non-profit status to hospitals that have emergency rooms. So, in effect, we’re saying, you don’t have to pay the government money you’d normally owe it if you’re spending it to run emergency care. This kind of quid pro quo is about the same as if the government taxed the entities and then spent money to provide similar health care. The amount of money spent on emergency care may not be much, but that’s, in part, because the uninsured, which are most of the emergency care patients, simply don’t seek medical care that much. I can’t really blame them, given the prices they have to pay, and the fact that the median household wealth for those without insurance is less than $20,000 (as opposed to over three times that if you’re insured).

So, it’s likely that US taxpayers already cover about 70 or 80% of US health care costs. Given the difference in overhead mentioned above, it’s easy to imagine that a government-managed health care system would incur lower costs, and therefore the percentage of actual health care costs covered would rise very close to 100%.

Another point that nudges the equation towards “why aren’t we already doing this?” is the fact that health problems are a significant drag on the economy. This works out in several ways. It might be the fact that the guy making your lunch can’t afford to get treatment for whatever contagious disease he might be tossing into your salad. Or the notion that employers have to, whether required by law or as a draw for employees, frequently offer health care coverage, which is a cost they incur. Or the number of medical bankruptcies. Or the vast number of other costs associated with preventable or treatable disease.

Given the above, recognizing that taxpayers already foot most of the health care bill and changing things simply so that the money is spent more efficiently would not only alleviate one of the biggest concerns for Americans, it would also probably galvanize the economy and productivity in a big way. Fiscally speaking, it seems like a no-brainer, and it appears that Congress is only against it because there are very wealthy donors that profit under the current scheme. Sorry, I’m contractually required by Brett to go there.

More info, if desired, at the Physicians for a National Health Program.

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