The Basic Economics of National Health Insurance

I want to talk briefly about the basic economics of national health insurance. The United States is one of the very few advanced industrial countries that does not provide, as a matter of right to all of its citizens, a national governmental run health insurance system. One that is available to you whether you're employed or not, whether you have a job don't have a job, are changing jobs, one that gives you the guarantee that -  just like you have the right to vote, and the right to go into a public park and the right to call for police, or fire people to help you when you have a need - you also have the right to seek and find professional medical care as and when you your body and your mind need it. Why does the United States not do it? Well, one answer is often given that it is somehow "too expensive." Tthat it is somehow a privilege that will be abused by people who visit the doctor too often, or seek frivolous medical care, and so on.

It's also claimed that our old people are somehow to numerous, or too needy, or too sick. None of those things are true. We do have the most expensive medical care system in the United States but it's not because our medical care is the best. Far from it.

The United States does not rank high on - for example-  the average age of death. How old are you when you die? Americans don't live as long as other people in these countries that have national health. The number of children that make it to their first birthday it's not so great in the United States. We're way from far below number one.

So we don't have a medical care system that justifies the enormously higher amount of money we spend in this country compared to other countries whose medical results are as good or better than our own. I think the problem lies in the medical cost side of the equation. It's not that we have too many old people and it's not that we give them too much care - it's that we pay too much. Let me go through that with you.

First, in many countries the government goes to the drug companies and medical companies companies that make medicines and medical equipment and it buys in bulk from them, and then it turns over the savings, it passes them on from buying in bulk; and you know if you buy medical equipment you get the same discount if you buy a lot of it that you do if you go to a discount store and buy a lot of rolls of toilet paper. It's cheaper per roll then if you did it one by one. The government comes in, buys on mass drug companies make a modest profit, but not the one they can if they sell each individual roll or each individual bottle of pills. If we did that in the United States - which we don't do - the cost of medicines and the cost of medical equipment would drop drastically.

That's an important thing we ought to do. Two, we ought to rationalize the system of hospitals we have in many communities. Competing hospitals. You might want competing stores for certain kinds of things but a competing hospital a situation in which two, three, four hospitals in an area all have the same equipment.

Very expensive, that they each use one quarter of the time. Imagine the savings if we had a rational system in which a key machine a scanner - or any one of the major kinds of machines - were available in a rational basis. Huge saving in cost. Three, doctors are the highest paid professionals in the United States.

They earn much more than lawyers and all kinds of other professional people whose training is just as important. Takes just as long. There's no reason for that. Pay the doctors well if you want but there's no reason for the outlandish salaries and payments many of them get that would save us an awful lot of money.

Finally, insurance. It is crazy to have five, six, seven, ten, twenty medical insurance companies each with their bureaucracy, each with their headquarters, each with their landscaped corporate headquarters; what is this? This ought to be rationalized in the way, for example, that the Veterans Administration as long ago handled the care for the veterans and so on. We should have a national health insurance it would make the cost of insurance much, much less than we now pay with competing private companies. You put all those together and we could have a medical insurance system that could do at least as well as the one we have and cost us a great deal less, and that would mean that all the current discussion about solving our national financial problems by cutting Medicaid (the program to help the poor) and cutting Medicare (the program to help those over 65) that is to damage their health to solve our economic problems.

We wouldn't be in that situation. We wouldn't have to do such drastic things that are so cruel to the neediest amongst us. So these are good reasons to address the long deferred real problems of the excessive cost of our health insurance and our health care in the United States..