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V O LU M E 3 N U M B E R 1
Catos
Letter
A Q U A R T E R LY M E S S A G E O N L I B E R T Y
I
n the United States there are about 14 million peo-
plemore than a third of the uninsuredwho are,
in principle, eligible to get free medical care by
joining either the Medicaid program or the State
Childrens Health Insurance Program. And yet they
dont bother to enroll.
To understand why they dont, you might go to
the emergency room of Parkland Hospital in my
hometown of Dallas. The uninsured and Medicaid
patients come there to get their medical care. They
all see the same doctors. They get the same treat-
ment. If theyre admitted to the hospital, they stay in
the same beds. From the patients point of view,
there is no real reason to join Medicaid, because they
get the same care whether or not they are formally in-
sured. The doctors and nurses get paid the same re-
gardless of who is enrolled in what plan.
The only people who really care whether or not someone
is enrolled in Medicaid are the hospital administrators, be-
cause that determines how they get their money. So they actual-
ly have paid employees who go through the emergency room and
try to get people to sign up for
Medicaid. Over half the time they
Friend
heart surgery. You dont
to a even have a right to a place
in the waiting line.
To give free gift subscriptions to If youre the hundredth
friends who will enjoy receiving Catos person waiting for heart sur-
Letter, please fill in the attached gery, youre not entitled to
subscription form or enclose a list of the hundredth surgery. Other
individuals (holiday card list, etc.) in people can and do get in ahead
the envelope. Or visit www.cato.org of you. From time to time, even
and click on the subscriptions tab. Americans go to Canada and jump
the queue, because Americans can do
something that Canadians cannotAmeri-
cans can pay for care. Canadian hospitals love
fail. Then they literally go hospital room by to admit American patients, because that
hospital room, trying to get admitted pa- means cash into their budgets.
tients to enroll in Medicaid. And even then The British government says that, at any
they dont always succeed. one time, there are about a million people
Now, its not that unusual for people to waiting to get into hospitals. According to
go to hospital emergency rooms for their the Fraser Institute, almost 900,000 Cana-
care. Its a common feature of health systems dian patients are on the waiting list at any
around the world. It may not be an efficient point in time. And, according to the New
way to deliver health care, but the same Zealand government, 90,000 people are on
thing happens in Toronto and London.
the waiting lists there.
Canadians take pride in the fact that
Those people constitute only about 1 to
patients who get free care in Toronto
2 percent of the population in those coun-
emergency rooms are insured. But in
tries, but keep in mind that only about 15
2 Dallas, were ashamed to say that our pa-
tients are uninsured, even though the percent of the population actually enters a
care they receive in Dallas is probably hospital each year. Many of the people wait-
better than the care they get in Toronto. ing are waiting in pain. Many are risking
their lives by waiting. And there is no mar-
MYTH: A RIGHT TO HEALTH CARE ket mechanism in these countries to get
People who believe in socialized medicine care first to people who need it first.
have come to believe many myths. One is
that socialized medicine gives you a right to MYTH: HIGHER QUALITY
health care. If you ask the head of Parkland Another myth has to do with the quality
Hospital and his counterpart in Toronto or of care that patients receive. British minis-
London what the difference is in these sys- ters of health have told British citizens for
tems, I think all three would say that in years that their health system is the envy of
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C A T O S L E T T E R
V O LU M E 3 N U M B E R 1
the world. Canadian ministers of health say MYTH: MORE BANG FOR THE
much the same thing. In fact, Canadian and BUCK
British doctors see 50 percent more patients Yet another myth is that although the
than American doctors do, and, as a conse- United States spends more on health care,
quence, they have less time to spend with we dont get more. That argument is often
each patient. In Britain, the typical general supported by pointing to life expectancy,
practitioner barely has time to take your which is not that much different among
temperature and write a prescription. And developed countries, and infant mortality,
even if they discover something wrong with which is actually higher in the United States
you, they may not have the technology to than it is in most other developed countries.
solve your problem. What do we get for our money? The
Among people with chronic renal fail- first thing we need to do is separate those
ure, only half as many Canadians as Amer- phenomena that have little to do with
icans get dialysis, and only a third as many health care from those that do. In the
Britons on a per capita basis. The Ameri- United States, life expectancy at birth for
can rate of coronary bypass surgeries is African American men is 68 years, while for
three or four times what it is in Canada, Asian American men its 81 years. We find
and five times what it is in Britain. wide differences in life expectancy among
Britain is the country that invented the women, too. Nobody thinks that those dif-
CAT scanner, back in the 1970s. For a ferences are due to the health care system.
while it exported more than half the CAT What, then, would we want to look at if
scanners used in the world. Yet they we really wanted to compare the efficacy
bought very few for their own citizens. of health care systems? We would look at
Today, Britain has half the number of CAT those conditions for which we know med-
scanners per capita as we do in the United ical services can make a real difference.
States. A similar problem exists in Canada. Among women who are diagnosed with
388
U.S. Canada U.K.
3
203
87 81
65
46 41 51
27
4
do better. There were a lot of
articles written, a lot of confer- Leave a
ences, and a lot of discus-
sions. Another 10 years
Legacy of
passed and they pondered
another report, which
said that things had dete-
Liberty
riorated further. Today Are you concerned about the future of
we are long overdue for liberty in America? To leave a lasting
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C A T O S L E T T E R
V O LU M E 3 N U M B E R 1
51%
U.S. Canada U.K.
40%
23% 23%
Long Wait for Difficulty Seeing a Long Wait for Serious Inadequate Outpatient
Nonemergency Surgery Specialist Surgery Services
Source: Cathy Schoen et al., The Elderlys Experiences with Health Care in Five Nations,
Commonwealth Fund, May 2000.
show that senior citizens in the United with chronic patients who really dont need
States say its much easier to get surgery, the services of hospital; theyre simply using
see doctors, see specialists, and enter hos- the hospital as an expensive nursing home.
pitals, than say seniors in other countries. So, effectively, almost one-third of the beds
are closed off to acute care patients.
MYTH: LESS RED TAPE A study compared Kaiser in California
Then we have the myth that national with the NHS and concluded that, after
health insurance is an efficient way to de- you make all of the appropriate adjust-
liver health care. I hear this frequently re- ments, Kaiser spends about the same per
peated by advocates in the United States. capita on its enrollees as Britain spends on
Probably the most telling statistic for its population. But the Kaiser enrollees
hospitals is average length of stay. In gen- were getting more care, more access to
eral, efficient hospitals get people in and specialists, and other services. 5
out more quickly. By that standard, the We often hear that Medicare and Med-
U.S. hospital sector is the most efficient icaid are efficient. The government says
in the world. And I think by many other Medicaid only spends about 2 percent of
standards it would not be much in dispute its budget on administration. But that ig-
that the U.S. hospital sector is far more nores all the costs that are shifted to doc-
efficient than the hospital sectors of other tors and hospitals. When you incorporate
countries. all those costs, it turns out that actually
In Britain, where at any one time there Medicare is not very efficient at all.
are a million people waiting to get into
British hospitals, 15 percent of the beds are WHATS MISSING IS CAPITALISM
empty, and another 15 percent are filled While our health care system is more
market-oriented than in most industrial- They all believe that all the failures
ized nations, we dont really have a free that they write about can be reformed
market in health care in the United away. They all believe that we just havent
States. Half the spending is done by gov- tried hard enough to reform the system
ernment. Most of the rest is done by bu- and make it work. Sadly, they are wrong.
reaucratic institutions. The cosmetic sur- Virtually all of these problems are in-
gery market is about the only market evitable consequences of the politiciza-
where patients are really spending their tion of medicine. Why do these systems
own money. And guess what? It works overprovide to the healthy and underpro-
like a real market. People get package vide to the sick? Well, in the United
prices. They can compare prices. And States, about 4 percent of the patients
over the decade of the 1990s, the average spend half the money. If youre a politi-
price of cosmetic surgery actually went cian allocating health care dollars, you
down in real terms, even as there were all cannot afford to spend half your money
kinds of technological innovations that on 4 percent of the voters4 percent
we are told drive up costs elsewhere. who may be too sick to go to the polls
Most of what Im telling you here and vote for you anyway.
6 today I learned, not from right-wing crit- Why is the hospital sector so ineffi-
ics of national health insurance, but from cient? Because its in the self-interest of
people who believe in it. If you look at my hospital managers to be inefficient. The
book, there are probably a thousand dif- chronic care patients and the empty beds
ferent references, and 95 percent of them are the cheap beds. Its the acute care pa-
are references to government reports, ac- tients that cost money.
ademic studies, and newspaper investiga- Why can the rich and powerful jump
tions. And in almost every case, the au- to the head of the waiting lines? Because
thor of those reports is someone who those are the people who control the sys-
believes in national health insurance. No tem. They can change the system. If
matter how many problems they docu- members of parliament, the wealthy, and
ment, no matter how many failures they the powerful had to wait for care along
write about, they dont give up their faith with everyone else, these systems would
in the system. not last for a minute.
C A T O S L E T T E R
V O LU M E 3 N U M B E R 1
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