Cato Institute
Policy Analysis
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limited to a few supplemental services not cov-
is positively correlated with income. As
ered by the government plan. The government
incomes rise, people want more of that good.
would control costs by setting an overall
Because we are a wealthy nation, we can and
do demand more health care.7
national health care budget and reimburse-
ment levels.
But because of the way health care costs
However, a closer look at countries with
are distributed, they have become an increas-
national health care systems shows that those
ing burden on consumers and businesses
countries have serious problems of their own,
alike. On average, health insurance now costs
including rising costs, rationing of care, lack of
$4,479 for an individual and $12,106 for a
access to modern medical technology, and
family per year. Health insurance premiums
poor health outcomes. Countries whose
rose by a little more than 6 percent in 2007,
faster on average than wages.8
national health systems avoid the worst of
these problems are successful precisely because
Moreover, government health care pro-
they incorporate market mechanisms and
grams, particularly Medicare and Medicaid, are
reject centralized government control. In other
piling up enormous burdens of debt for future
words, socialized medicine works--as long as it
generations. Medicare's unfunded liabilities
isn't socialized medicine.
now top $50 trillion. Unchecked, Medicaid
A closer look at
spending will increase fourfold as a percentage
countries with
of federal outlays over the next century.10
Measuring the Quality of
At the same time, too many Americans
national health
Health Care across
remain uninsured. Although the number of
care systems
uninsured Americans is often exaggerated by
shows that those
critics of the system, approximately 47 million
Americans are without health insurance at any
Numerous studies have attempted to
countries have
given time.11 Many are already eligible for gov-
compare the quality of health care systems.
serious problems
In most of these surveys, the United States
ernment programs; many are young and
fares poorly, finishing well behind other
healthy; many are uninsured for only a short
of their own.
time.12 Yet there is no denying that a lack of
industrialized countries. This has led critics
of the U.S. health care system to suggest that
insurance can pose a hardship for many
Americans pay more for health care but
receive less.
Finally, although the U.S. health care system
There are several reasons to be skeptical of
can provide the world's highest quality of care,
these rankings. First, many choose areas of
that quality is often uneven. The Institute of
comparison based on the results they wish to
Medicine estimates that some 44,00090,000
annual deaths are due to medical errors,14 while
achieve, or according to the values of the com-
parer. For example, SiCKO cites a 2000 World
a study in The New England Journal of Medicine
Health Organization study that ranks the U.S.
suggests that only a little more than half of
health care system 37th in the world, "slightly
American hospital patients receive the clinical
standard of care.15 Similarly, a RAND Corpora-
better than Slovenia."18 (See Table 1.)
tion study found serious gaps in the quality of
This study bases its conclusions on such
care received by American children.16
highly subjective measures as "fairness" and
criteria that are not strictly related to a coun-
Many critics of U.S. health care suggest that
try's health care system, such as "tobacco con-
the answers to these problems lie in a single-
payer, national health care system.17 Under
trol." For example, the WHO report penalizes
the United States for not having a sufficiently
such a system, health care would be financed
progressive tax system, not providing all citi-
through taxes rather than consumer payments
zens with health insurance, and having a gen-
or private insurance. Direct charges to patients
eral paucity of social welfare programs. Indeed,
would be prohibited or severely restricted.
much of the poor performance of the United
Private insurance, if allowed at all, would be