By ETIENNE DEFFARGES
The November midterms elections are approaching, and one of the major topics is health care. Democrats are campaigning on retaining Obamacare, in many cases advocating that we move towards universal health care.
That would be pure socialism, retort Republicans, who would rather repeal the Affordable Care Act as they attempted in 2017, even if this leads to 20 million Americans losing coverage.
Is Universal Health Care Socialism?
Only if we believe that every other developed market-based economy in the world is socialist since the U.S. is the only one without universal coverage. We spend almost $10,000 per year per capita on health care, about twice as much as most developed countries. However, in terms of major health outcomes, such as infant mortality or life expectancy, we are laggards. In a recent OECD survey, we ranked 27th out of 35 countries in life expectancy. Japan spends about $4,000 per year per capita in health care, yet the average Japanese has a life expectancy of 84 years, versus 79 for the average American. Why?
Every developed country other than the U.S. has had universal care for decades. While Prussia’s “Iron Chancellor” Otto Von Bismarck implemented the first universal care system…in 1883, our health care history is a patchwork of partial reforms, an inefficient collage of private and public institutions. We first tied health insurance to employment in 1946, because business and conservative opposition would not allow universal coverage; then added Medicare in 1965 so that our seniors would have coverage after they retired; then Medicaid, a different one for each one of our fifty states; Continue reading…
In a recent Health Alert I evaluated Paul Krugman’s claim that ObamaCare is going to save “tens of thousands of lives” and the repeal of ObamaCare will lead to the death of “tens of thousands” of uninsured people.
Krugman’s bottom line: Mitt Romney wants to let people die. The economics profession on this same subject: Krugman’s claims are hogwash.
But there is something that does cause people to die: socialism. More precisely, the suppression of free markets (the kinds of interventions Krugman routinely apologizes for) lowers life expectancy and does so substantially.
Economists associated with the Fraser Institute and the Cato Institute have found a way to measure “economic freedom” and they have investigated what difference it makes in 141 countries around the world. This work has been in progress for several decades now and the evidence is stark. Economies that rely on private property, free markets and free trade, and avoid high taxes, regulation and inflation, grow more rapidly than those with less economic freedom. Higher growth leads to higher incomes. Among the nations in the top fifth of the economic freedom index in 2011, average income was almost 7 times as great as for those countries in the bottom 20 percent (per capita gross domestic product of $31,501versus $4,545).
What difference does this make for health? Virtually, every study of the subject finds that wealthier is healthier. People with higher incomes live longer. The Fraser/Cato economists arrive at the same conclusion. Comparing the bottom fifth to the top fifth, more economic freedom adds about 20 years to life expectancy and lowers infant mortality to just over one-tenth of its level in the least free countries.
Am I a socialist? I don’t think so, but I did inch in that direction during the four days I spent in northern Norway last week, visiting the local hospital in Bodø and speaking to about 20 of the nation’s hospital CEOs. Here’s what I learned.
First, a word on visiting northern Norway – above the Arctic Circle – in summertime.
I’d rank experiencing the midnight sun (your wristwatch says midnight, but the sky looks more like late afternoon) as among the most awe-inspiring things I’ve seen in my travels, up there with Xian’s terra cotta warriors, Scotland’s Isle of Skye, Masada at sunrise, and the 8th hole at Pebble Beach. And the people are a delight – unpretentious, outdoorsy types who were far less reserved than I’d been led to expect. It is well worth a visit.
But the medical piece was what fascinated me – particularly as it reflected the country’s broader societal values. Norway is a wealthy country, owing both to the miracle of oil reserves and to an industrious and well-educated population. Belying the notion that capitalism is the only way to achieve prosperity, the country is unabashedly socialist. Although the tax rate is high (about 50 percent for top earners), this level of taxation is an accepted part of life, the subject of absolutely no political debate. When the economy dipped a couple of years ago – a mere blip by world standards – it was a given that the government would pump in money to rebuild roads and improve the infrastructure.