Krugman on socialized medicine

Systems of actual socialized medicine, like Britain’s, are actually
very good at saying no: there’s a limited budget, and the medical
professionals who run the system set priorities. That’s the reason
British health care delivers results better than ours, at only 40
percent the cost – there are long waits for elective surgery, but
that’s because doctors think that it’s not a high priority…

Krugman gets points for a mostly honest description but he is a lousy salesman. Is there any doubt that most people reading this will say "no way, not in America."?


Isn't the first step of choosing a system to select the goals?

Being a Canadian, I like the Canadian health care system because it provides (to my mind), the best bang-for-the-buck while providing a reasonable level of health-care. (Pulling numbers out of the air, we get 90% of the outcome for 40% of the dollars). In other words, it provides the best possible outcomes for the amount of money that the people as a whole are are willing to spend.

However, if your goal is maximum possible health-care regardless of cost, the American system is obviously the way to go. Likewise, if your goal is to allow each person to determine how much they are willing to spend on healthcare, non-socialized healthcare is the only option.

What socialized systems are good for is rationing health-care in as humane and efficient way as possible. If rationing is not your goal, then socialized medicine has all its own down sides (occasional mis-allocation of resources, etc.) without any of its strengths.

"there are long waits for elective surgery": this can be made much more reasonable and accurate by pointing out that there are long waits for PUBLICLY FUNDED elective surgery. Private elective surgery (and private supplemental insurance, which could pay for it) is also available.

Tom: the American system gives "maximum possible health-care regardless of cost" to an elite, not to everybody. The number of uninsured is steadily growing, and they (on average) do not get even basic health care.

the reason British health care delivers results better than ours, at only 40 percent the cost

Actually, just last week the Telegraph reported a Lancet Oncology study that said that NHS had one of the worst cancer survival rates in Western Europe and all of Europe had worse survival stats than the US.

Telgraph article

More details (5-yr survival statistics cancer-by-cancer) here.

Mike: read the cancer studies - it's not just the elites in America doing better, the vast majority in America are getting better health care than the vast majority in Europe.

Can there be any doubt health care here is rationed. We Americans just
dont like to view it as such. Forty nine million Americans without
health care (Stat from NPR this morning), many of whom have incomes that
would be classified as middle class. All markets/systems ration health
care since not all those seeking it can afford it or take advantage of

For the defenders of the US system (please assuage my pc feelings and don't use the term Americans unless you are including Peruvians);

1. How do you solve the problem of increasing costs? We currently spend 16% of GDP on health care and this has been increasing at 2.5% about GDP growth for a generation.

2. How do you feel about lack of good care for poor people (or poor children if you think that poor adults have it coming).

I think we need to change to something. Staying with the same system is only an option for ostriches.

The easiest way to boost cancer survival stats is to increase the rate of diagnosis, which the US has done to a tremendous extent in the last 60 years without even slightly reducing the cancer death rate at any given age except for a few cancers (lung, stomach, leukemia, am I missing one or two?)

In general, the cancer data is consistent with my hypothesis that the US system actually does a better job delivering health care, but that Europeans and other nations with nationalized health care keep their spending low and outcomes high through very high sin taxes.

A state-sponsored system is nice in theory (mostly), but in practice it typically falls far short. Regardless of my own personal feelings and experience in both US and European (only UK and Italy) healthcare systems, shifting from one to the other seems next to impossible.

These arguments seems to distill to which "is better." It's fine to argue the merits/demerits, but does anyone really think the US can just scrap what it currently has and start over? That seems to be the assumption and it seems naive and, frankly, rediculous.

In practice, it means a relatively gradual or dramatic shift of the healthcare care system, quite likely creating many more headaches (excuse the pun) than either (pure) healthcare system offers.

One non-trivial issue that no one seems to offer an answer to: how do the hundreds of thousands of healthcare providers (physicians, nurses, etc) willingly accept a dramatic cut in their salaries. That will have to be done and without such, it seems a non-starter.

A "mostly honest" description would have said that there are long waits for non-elective surgery and elective surgery is only available in the private health care system for those who can afford it.


John Thacker - "Forty nine million Americans without health care (Stat from NPR this morning), many of whom have incomes that would be classified as middle class."

Not having health insurance doesn't mean you don't get health care. two different things

clark: " Forty nine million Americans without health care (Stat from NPR this morning), many of whom have incomes that
would be classified as middle class. "

Is there a single resident in the U.S. who has NO access to health care? Perhaps someone who CHOOSES to live in very remote parts of the country may not have access. Anyone living in or near cities has access to free clinics and to the services of non-profit hospitals.

Isn't what you mean that 49 million "Americans" (residents in the U.S.?) have no health INSURANCE?

Millions of U.S. citizens choose to have no health insurance. Many of those are young people for whom the costs of health coverage would be quite low. They take the gamble that health insurance is a losing proposition, especially since they know that non-profit hospitals cannot turn them away if their condition is life-threatening.


A libertarian will not countenance the taking of one's property to give to another by coercion. It is that simple. Nothing in the libertarian ethos prevents people from "band[ing] together for the greater good", and libertarianism does not preclude the existence of moral responsibilities to help those unable to help themselves, but you cannot coerce people into cooperation. One of my pet peeves is the constant refrain from statists that their willingness to tax me, or others, for the social good is a measure of their compassion and charity.

Sadly, Krugman's brand of natural philosophy/economics has gone from creme de la creme to kooky.

Some quotes from a recent John Stossel article:

Speaking of differences in life expectancy:
"We have far more fatal transportation accidents than other countries. That's not a health-care problem. Similarly, our homicide rate is 10 times higher than in the U.K., eight times higher than in France, and five times greater than in Canada. When you adjust for these 'fatal injury' rates, U.S. life expectancy is actually higher than in nearly every other industrialized nation. Diet and lack of exercise also bring down average life expectancy."

People without health insurance:
"Even with these interventions, the 45 million figure is misleading. Thirty-seven percent of that group live in households making more than $50,000 a year, says the U.S. Census Bureau. Nineteen percent are in households making more than $75,000 a year; 20 percent are not citizens, and 33 percent are eligible for existing government programs but are not enrolled."

On the rationing issue:

All desired goods and services are rationed, regardless of whether the system is socialized, completely free market, or a mix of the two. There are no exceptions. In a free market, price serves as the rationing mechanism, in a socialized system the rationing is performed by both price and law.

As one commentator alluded to earlier, the HMO movement of the late 80s and early 90s faced fierce consumer resistance as it attempted rationing by decree. Unless Americans (sorry, RobbL, but "American", by itself, does refer to residents of the United States, but the terms "North and South American" are the general, continental labels) have changed in their expectations of service in the last 15 years, a government attempting rationing by decree will face similar resistance.


The free market answer to the problems of the healthcare system of the United States would be, simply stated, to introduce some actual free market principles into the system. First and foremost, I would remove all artificial barriers to the provision of medical education, medical supplies, and medical services. The supply of healthcare is limited by various laws at the national and state levels so that those in the field can collect outsized, non-free-market rents.

If you want to lower the prices people pay for goods and services and lower the societal cost, you must either increase the supply, or decrease the demand. Government is really only capable of performing the latter of these two solutions by positive action.

How about this comment:
apparently you have to physically destroy a U.S. city in order to get its emergency-room waiting times up to one hour (for the uninsured). I don't think I've ever waited less than an hour or so for care in an ER; maybe a hurricane would help?
That's how a Canadian reacted to reading a negative story about healthcare in New Orleans post-Katrina.

Has anyone noticed that the U.S. government already spends nearly as much of GDP on healthcare as countries with nationalized care? Why can't the U.S. government provide national coverage now? It already has all of the money it supposedly needs. There can easily be a two-tiered system like Canada is moving towards. The government can make a tax contingent on the number of people enrolled and provide national care. Given that safety net, there should then be a totally free market system for anyone who wants to opt out of the government plan. Let this system operate for 15 years, then see which one is doing better.


"Or to put it another way, food is even more important to life than health care, why not socialize the production and distribution of food? What has been shown to happen time and time again over the "long term" when socialized provision of food is applied? Why would this be different from socialized provision of medicine?"


Why? Because on welfare you can afford enough food to survive, but not, say, cancer treatment. Get it?

BTW I heard a while back that many Great Britain citzens were flying to India to usa Apollo healthcare for elective surgery or to jump the queues. Does anybody know anything about that?

"When we talk about socializing medicine, we're going to force doctors, physicians, nurses, etc. to all take pay cuts, some of which would be drastic."

Couldn't we keep physician's pay level high and reduce cost to the consumer (and society) by eliminating the many levels of for-profit entities between the two (i.e., HMO's)?

I agree that talking about completely changing the US system is a waste of time, because it won't happen. But how could it improve? Should medical decisions be made by people whose sole responsibility is turning a profit?

Much of the discussion has revolved around the relative quality of healthcare, but it's the cost that seems so outlandish in the US. Why do you pay $60 for an ace bandage? Why do we keep expanding patent rights for pharma when they have the biggest profit margins of any industry and spend way more on advertising than research? Can't anyone in the US get it up anymore?

Might tort reform contribute? (For the record, I didn't see Sicko.)

Why? Because on welfare you can afford enough food to survive, but not, say, cancer treatment. Get it?

But yet our population-wide cancer survival rates our better than the more socialized health care versions. Get it?

An apples-to-apples NB: Giving people cash which they can spend on anything (ala welfare) is a *very* different policy prescription than the government provisioning food for everyone.

I'm ok with health-care vouchers (and educational vouchers), but I would prefer a generic lump-sum payment (which is the closest analogy to using welfare checks to buy food). But that's not what NHS is (topic of this thread) nor what is discussed by socializing health care proponents.

I thought the RAND health care study effectively showed no link between health insurance and quality of life? Why isn't it quoted/opposed more publically?

For those interested, here's an American Academy of Actuaries report on the composition of those without health insurance. They break it down into 5 groups - voluntarily uninsured (such as young adults), uninsured due to expense, high-risk (individual underwriting would exclude them, conditions such as Type I diabetes), eligible for public programs, and poor non-citizens (not eligible for public programs). As an example, they estimate 0.5 - 3.5 million people falling into the "high-risk" category.

Interesting facts, Floccina! I'll have to look for the "Eight Americas" study.

Here's a bit of anecdotal evidence related to your last paragraph. I know a young man who refused his employer's offer to split 50-50 the cost of health insurance. His reasons: he needed the $60 a month as he was about to buy a new home; emergency rooms weren't going to turn him away; and his parents would step in if his medical bills got too high. In effect, his medical "insurance" was being provided unknowingly by his parents. My guess is that they would have gladly paid his $60 monthly share of the premium.

John Dewey my business partner is thinking about taking out a policy for his adult son. He is doing this to protect his assets as you described. If the son gets a huge bill he thinks that he will end up paying one way or another and the policy will be very cheap like $60/month.

I'm so happy that conservatives are taking the lead in keeping free market health care in the United States. It's so important to show how little you care about the welfare of Americans. Kill Americans! That's a great motto, and privatized health care is a great way to do that. There was an NSF study that came out before Bush bashed Kerry last time that said 17K Americans died every year for lack of health insurance. YAY! Way to go: die, Americans, cause you're too poor for health care - you don't deserve to live.

The son of a friend of mine actually died in an emergency room because he lacked health insurance - at 20. A former boss committed suicide because of bankruptcy after a health crisis. Way to go, conservatives! Show your true colors. Dip those pale fleshy hands in American blood.

There might be a way to get a lot of the benefits of socialized medicine within the US system. What about opening a few medical free trade zones in the US, in partnership with countries that have socialized medicine? It would make a license to practice worth more to residents of the socialized-medicine country, because they would have the option of working in the MFTZ for a few years for more than they would make at home. And it would allow US insurers to offer low-priced plans, where you pay less for insurance, but you have to go to the MFTZ for anything that's scheduled in advance.

What about opening a few medical free trade zones in the US, in partnership with countries that have socialized medicine?


I have no idea if this is feasible (politically it isn't) but one idea is that we enter a deal with Canada to open a trans-national healthcare system. Since Canada already has socialized care, the U.S. government would allow any Americans who want socialized medicine to enter the Canadian system, with the government picking up the tab for poor Americans. Since it costs far less, many Americans might freely join, and since it costs less the government can cut payroll taxes. Any Canadians who want American style care can opt out. We open their market to American business and entrepreneurship and they get a much needed infusion of capital into their system.

Government operated health systems have a time "deductible" built into the system. Most minor illness are self correcting in 7-10 days and if you have a time delay for non-emergencies of 7 days, many health care expenditures dwindle away.

A larger percentage major medical expenses occur in the last 30 days of life. If you delay all major operations and expenditures by even 5 days at that point, you can cut outlays by 20+% without a significant reduction in life.

Everyone I've spoken to about socialized health care thought HMO time "deductibles" were a horrible idea but considered government imposed procedural delays a benefit of the system. Hard to have an honest discussion with that thought process.

Reality is that in the US the only reasonable socialized system would be a vast expansion of Medicaid to include many more people. Since this is a state managed system, federal bureaucrats are highly unlikely to find this solution appealing. The most likely result is shifting everyone into Medicare with supplemental insurance as the rule for anyone who can afford it. Since Medicare is about to go bankrupt it really isn't a solution at all.

Is the case for socialized medicine in this country all that strong? Lets consider several points.

1. Most people would argue that the U.S health care system has unnecessary regulations which dampens if not ruins competition across state lines. As a result upward pressure is unnecessarily exerted upon health insurance prices.

2. When people compare the flawed U.S market for insurance to the usual crowd of nationalized examples there is never any adjustment made for the free rider problem. Meaning if nobody puts a value on the innovative capacity of the U.S system which in turn creates public goods used by nationalized systems which would never be able to create such innovations, then what good is the comparison? If anything this reality greatly greatly overstates the efficacy of the nationalized examples because they are not being discounted for their use of free riders.

Show people a world where the global output of public health goods is reduced as a result of U.S nationalization and they will be much more inclined towards a market oriented health system.

There is an issue that no one seems to understand or consider outside the "rich vs. poor" healthcare issue.
Preexisting conditions: two years of coverage before they are removed.
What do you do for these people? Too bad?
Insurance companies are not interested in covering anyone who has the slightest risk....I know it. I am a victim of it. And I'll bet everyone has someone, relative or friend, who has the same issue.
Private insurance will never cover these people.
We need a better way!!!

City Journal has an article worth checking out:

The Ugly Truth About Canadian Health Care

Gratzer points out, among other things, that Americans appear to have the highest life expectancy among western nations when you exclude homicides and deaths from traffic accidents. Five-year survival rates for various types of cancer are also much higher in the U.S. than in Europe.

Michael Moore claims that Canada doesn't really have a problem with capacity or waiting lists, but when a Canadian couple recently had quadruplets, they had to drive over 300 miles to the U.S. to find a hospital that could take them.

I just wonder if health care does not fall into the same realm as law enforcement, national defense, etc. where their provision allows us to live freely.

Those are examples of public goods from which everyone "benefits" and no one can be excluded. In general, I'm ok with the government providing these public goods (and I'm a pretty hard core libertarian) as while suffering from the inherent difficultues of public choice theory (see Iraq or see a contentious HOA meeting) a) it's virtually impossible to provide these goods to any without providing these goods to all and b) they're both goods for which the external benefit greatly outweighs the internal benefit.

Health care is more like education where there is a very small positive externality, but the vast majority of the benefit accrues to the individual receiving the good. For example, the world is probably a little better off that I got a PhD, but I'm a lot better off for it than what the world received; similar argument, if I hypothetically had cancer, the world would see a little benefit if I survived, but my private benefit would be shloads more. Further, both are routinely denied to people (see expulsion from school or the cost controls in NHS) so they don't as neatly satisfy the traditional public good definition (non-exclusivity).

So because of the internal benefits outweighing the external benefits, I don't think health-care if treated as a purely private good would face underprovision (the typical rationale for providing a good via the govenment). And because of that same internal/external ratio and the fact that people are so easily excluded from a public health-care provision (see NHS again where not only are services denied or delayed, but there's discussions of excluding whole classes of people such as smokers or the obsese) it's very very easy for the government to underprovision health care (again, see NHS). (Some would say that education is also underprovided. I would say the problem is it's being forced on customers who don't value education and the good is insufficiently differentiated)

That being said, I agree with you that employer provided health insurance is a bad situation because of the job lock-in effects. However, I would also add that it's a bad situation because of the socializing effects. See the "in-network" and low-deductible features of virtually every employer-provided plan which together have the effect of making every insurance provider their own little NHS. Fortunately, because there's several NHS's running around, so there's some competition (employers/insurance companies), but not as much as if most people had private catastrophic insurance.

In my perfect little world, the tax incentive for employers would be done away with (actually in my perfect little world, the only domestic tax would be the Fair Tax), everyone would receive a voucher approximately equal to the cost of catastrophic insurance premiums + private school (they would be free to spend it as they saw fit, however, as they may not value those services or value them at that time), and there would be no restrictions on the types of health insurance that could be bought or sold.

"Gratzer points out, among other things, that Americans appear to have the highest life expectancy among western nations when you exclude homicides and deaths from traffic accidents."

Are we excluding homicide and deaths from traffic accidents in both the US and the other countries? Is that how we are making the comparison? Or are we excluding those deaths only from the US life expectancy analysis?


I have seen this claim a lot lately, but still haven't found an analysis of the numbers. I will assume they adjust for all countries. It is true that the US has more homicides and deaths by accidents than similarly industrialized countries, and by a significant factor in most cases. Since murder victims and automobile accident victims skew much younger than other medically related deaths, this factor will have a relative negative impact on US life expectancy that is greater than the actual numbers of such deaths would indicate at first glance- an impact that will be almost completely unrelated to the medical care system. Would such adjustments bring US life expectancy up to par with most Western European nations? Possibly, since the US is not more than 2 years behind most such countries. Countries like Japan are likely still well out of range (4+ years ahead). Still, I would like to see some actual analysis rather than bald assertions. I tried finding numbers myself a couple of nights ago, and for the US, I can easily find numbers for the causes of death from such events, but it is not easy to find the average ages of such victims, and it is not easy find even the numbers of victims for coutries of comparison. Anyone??

where babies could be deemed uninsurable at birth via DNA testing

In a pure market, everything has a price so uninsurable is not quite right. But we're pretty far from a pure market. Personally, I believe there's a reason we deem some people "charity cases". More generally, I also believe systems should be designed for the typical case and special cases handled as special cases.

An odd mix to encounter with a hard core libertarian, I'm also somewhat of a Christian fatalist (quasi-panglossian). The upshot being I tend to believe the world tends to work out with minimal human interference. Consequentially, I hold the nearly baseless belief that by the time (or shortly thereafter) that we're doing genetic testing at birth, we'll be doing gene therapy too. (I say "nearly baseless" as I can put together a coherent case baesd on the historical linkage of manipulation following cheap observability and the general acceleration of technology, but I recognize that my belief is strongly colored by unrelated beliefs.)

I think that there is an easy way to solve the problems in the US health system. Privatize it. Eliminate medical licensing and all other rules and costs will go down because the labour supply problem will be solved. Done

The trouble with lump sum payments is that the reality is that for the most part we are not willing to let people who make catastrophically bad choices pay for them with their lives. (Okay, I know *you* are, but voters don't seem to want to live in a society where people perish because of bad choices who could have been saved. It's why if you blow all your welfare money on drugs, it's likely you still won't starve to death.)

As for fruitless arguments about which system is "better", shouldn't we first define what "better" means. Otherwise we're just wasting our time.

Among the possibilities (and their can be multiple metrics):

  1. Everyone receives approximately equal healthcare regardless of their financial situation.
  2. People should be allowed to spend as much money as *they* see fit on their healthcare.
  3. Individuals should be insulated from their healthcare costs, just are they are insulated from their child's grade school costs
  4. The medical system should encourage as much scientific development as possible
  5. The medical system should be designed to obtain the minimal citizenry demanded healthcare for the minimal overall cost
  6. The medical system should be regulated heavily so that cannot make catastrophically bad medical choices.
  7. The medical system should offer maximal freedom so that people can exercise their intelligence in choosing the best healthcare for themselves.
  8. The medical system should not allow people to have the choice between ruinous debt and letting a loved one die.

By carefully choosing amongst these metrics, just about every system can come out on top. The real question is what metrics matches the general voters views in each country. To be honest, I think most countries have the medical system that matches their voters temperament (no surprise).

Actually perhaps the US sytem is just too damn good. Here's my thinking:

What the US should do is go to a strict nationalized healthcare system, like, tomorrow. What transpires?
Service is rationed and outcomes deteriorate.

The thinking is to force US citizens into healthy lifestyles and healthful living. Scare the weight off!

I'm talking to you, Michael Moore: get rid of those GM tires! Banish those fifty pounds of Flint flesh!!

Considering the U.S. healthcare system has the highest survival rates in the world, the shortest wait times, and the most new drugs we should be figuring out how to cover those who cannot afford coverage rather than throwing the baby out with the bathwater by going to a socialist system. Haven't we learned by now that socialism doesn't work? If Medicaid doesn't cover enough people, state governments can simply give health care vouchers to those who still need help paying for coverage.

12.5% of households that make $50,000 to $75,000 don't have health insurance. 8.2% of households that make $75,000+ don't have health insurance. Millions of the uninsured are illegal immigrants who have no claim to government health care coverage. A huge chunk of those considered "uninsured" are only uninsured for 4 months or less between jobs because of the way our system works.

We should also allow people to buy health insurance from outside of their own state and allow health care to be deductable from taxes so that people just buy their own health care insurance so that they don't lose it when they lose their job.

Tom West,

#1 and #2 of your suggestions are at odds with each other.


That's not true. You will have to carry your risk though. I know that sounds unreasonable to you, but the rest of us don't want to pay for you. This is insurance, not charity.

Regardless of which way people want to go, we need to go somewhere with our healthcare industry.
Either bring in the totalitarian Socialist systems of Europe and Canada with all their good and ill, or bring back a truer free market in Health Care. This half-ass socialism-by-regulation is killing people.

And my opinion revolves around how the bureaucrats have handled the VA Hospitals. Given past performance, I'm not sure I want to give them More control...

Tom West,

Fair enough.

chairman mao: "If you are not affiliated with any organization by occupation or old age, you fall through the cracks. Solution: liberate health insurance from such linkages, and have the government require a minimum amount of coverage."

And suppose some employers and workers do not wish their health insurance to be "liberated"? Would you use government force to prevent employers from offerring health insurance?

Competition in healthcare in America has led to improvements in the quality of care and to reduced costs. Socialized medicine does not offer this competition. The healthcare system has begun to change; many hospitals are merging and incorporating new technologies to be more competitive. These changes are costly, causing prices to increase. Yet, I still feel that we have the best system because individual providers of healthcare HAVE to improve to compete.

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