Throughout the Twentieth Century into the new millennium, academia has been the incubator for a flood of ideas on how to nationalize health care. Now, it seems, academics themselves are admitting that it doesn’t work, even as various presidential candidates still float ideas to provide “universal health care.”
The National Bureau of Economic Research (NBER) at Harvard recently compiled a survey of 20 developed countries. As relayed by John Goodman of the free-market National Center for Policy Analysis, the NBER concludes that:
1. There is no general relationship between the way in which countries pay for health care and their ability to control costs. Public v. private financing, general revenue v. payroll taxes, third-party v. out-of-pocket spending – nothing seems to matter very much.
2. Government provision of health care is only modestly progressive. In Canada, people in the bottom two income quintiles – with 40% of the population – get about 50% of the health care benefits. Moreover, relative to health care needs, Canada’s health care spending may not be progressive at all. For OECD countries generally, among people with similar health conditions, “higher income people use the system more intensively and use more costly services than do lower income people.”
3. Marginal increases in health care spending may actually be regressive. This is especially true if extra spending buys specialist services and elective procedures. “In Canada, high income people make disproportionate use of elective surgical procedures, such as hip and knee replacements.”
4. Government provision of health care has little impact on the distribution of well-being in society. When economists assign a monetary value to health care and add it to money income, national health insurance has very little impact on overall economic inequality.
5. Increases in health care spending crowd out other government spending. Redistribution through government-funded health care partly replaces other redistributive government programs. What low-income people gain in health services may be offset by reductions, say, in housing or education benefits.
Malcolm A. Kline is the executive director of Accuracy in Academia.