Universal Coverage Makes Medicine More Expensive and Less Safe

September 16, 2008 • Speeches

We have a moral obligation to provide medical care to those in need. That is not where the disagreement lies. Where we disagree is whether universal coverage would fulfill that moral obligation or, as I will argue, the very pursuit of universal coverage makes that obligation harder to fulfill. 

You have heard that universal coverage would be all things to all people. But what is universal coverage likely to achieve?

You’ve heard that universal coverage costs less. Other countries do achieve universal coverage for a fraction of what we spend. But expanding insurance coverage means more medical services and more spending. Researchers from the Urban Institute estimate that universal coverage would cost $123 billion – minimum. 

And with government in control, the health‐​care industry will block spending reductions just as they have throughout the history of America’s great experiment with universal coverage, Medicare. The reason is every dollar of health care spending is a dollar of income to somebody, and that somebody has a lobbyist whose job it is to block spending reductions. 

The idea that the United States can achieve universal coverage with cost savings is pure fantasy. It would be easier to move the uninsured to Switzerland than to move Switzerland’s spending levels here. Spending more on health care isn’t necessarily bad. But the cost will show up in your tax bill and your health insurance premiums. 

You have heard that universal coverage would improve quality. The uninsured only get recommended, high‐​quality care about half of the time. 

But quality problems are systemic in universal coverage systems. People in Medicare, in Medicaid, and in the UK’s universal‐​coverage system also get also get recommended care only about half of the time. Government doesn’t pay for quality and has been lagging the private sector in coming up with quality‐​improving innovations.

A big quality problem is that we have alarming rates of medical error. Universal coverage is not going to help prevent medical errors that occur when nurses can’t read doctors’ chicken scratchings, or when clinicians don’t wash their hands between patients. Nor will universal coverage prevent errors by encouraging doctors to follow a standardized protocol when inserting a central line.

The same Institute of Medicine that estimates 18,000 annual deaths due to lack of insurance also estimates that as many as 100,000 annual deaths due to medical errors. All universal coverage will do is give more people access to a broken system, without doing anything to fix that system. It might prevent one death over there, but it would ignore five deaths over here.

Another quality problem are the alarming disparities in health outcomes. We have life expectancy gaps within the United States of 15–20 years, and some Americans face mortality risks similar to those in Russia and sub‐​Saharan Africa. 

Universal coverage is not going to solve that problem. According to Columbia University’s Sherry Glied, “Socioeconomic differentials in health are large and appear to be growing…Differentials are growing in countries that have universal coverage as well as in those that do not.”

True, universal coverage may save some lives. But even there, the news isn’t so good. There is no evidence that a dollar spent on universal coverage will save more lives than a dollar spent on clinics, or reducing medical errors, or nutrition, or fighting poverty, or even improving education. 

Ironically, to vote for universal coverage does not show how much you care about your neighbor’s health, but how little you care, because you’re willing to forgo other uses of that dollar that might make your neighbor even healthier.

There is something very wrong with America’s health care sector, something that universal coverage will not solve. You can see what’s wrong when you look at the Veterans Health Administration. But the VA’s successes do not tell the story that supporters of universal coverage think it does.

The VA has made impressive strides, using electronic medical records to focus on preventive care, to improve quality, and to avoid medical errors. The reason is not some inherent superiority of government, but two features of how the VA is organized, known as “integration” and “prepayment.” 

Those features are not unique to the VA. They exist in private health plans all over the country. You know them as health plans like Group Health Cooperative and Kaiser Permanente. And those plans are also using health information technologies reduce costs, improve quality, and reduce errors.

Why don’t you have electronic medical records like you have electronic financial records? Why doesn’t the hospital remember your medical history, or your child’s allergies? The reason is universal coverage. 

Medicare is America’s great experiment with universal coverage, and it is also the largest purchaser of medical care in the nation. Medicare actually penalizes doctors and hospitals if they use electronic medical records to reduce costs and prevent medical errors.

Electronic medical records help avoid duplication, but Medicare pays for duplication and penalizes providers that use electronic medical records. Health information technologies prevent medical errors, but Medicare pays for medical errors, and therefore penalizes the use of health information technologies.

Meanwhile, supporters of universal coverage are actively trying to prevent private plans that use those technologies from participating in Medicare.

Why doesn’t Medicare stop paying for duplication and medical errors? Why doesn’t Medicare start paying for health information technologies? Because universal coverage resists change. Medicare has financially rewarded providers who injure their patients for 40 years, despite the fact that private health plans like Kaiser and Group Health licked that problem more than 60 years ago.

Tommy Douglas, the father of Canada’s Medicare system, described the delivery of medical care in Canada as horribly out of date. Douglas made that observation in 1982. Michael Rachlis and other idealistic supporters of Canada’s Medicare system are still waiting for reforms that would make the very strides that private health plans in the U.S. are making right now.

The VA’s successes do not demonstrate government’s brilliance. They demonstrate how government actually impedes the pursuit of affordable, high‐​quality medical care.

What’s wrong with America’s health‐​care sector is not the lack of universal coverage, but the pursuit of universal coverage – which is making medicine more expensive and less safe for everyone. 

Michael F. Cannon delivered these opening remarks at the Intelligence Squared Oxford‐​style debate on the motion ‘Universal Health Coverage Should Be the Federal Government’s Responsibility.’ Here is a summary and audio excerpts of the debate, which included Nobel Prize‐​winning economist Paul Krugman.

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