Sunday, July 15, 2007

Health insurance is NOT health care, I

Single-payer, government-administered health insurance plans have one thing going for them: they're simple to explain. That is, what could be simpler than dealing with one organization, the government, when it comes to health insurance claims? The government isn't out to turn a profit nor is it motivated by looking for ways to avoid taxes or to satisfy stock holders. None of that rubbish.

But perhaps things aren't quite so clear. In a paper posted on the Free Market Cure web site, author David Gratzer examines the issues that make "simple" government-run health insurance a tad more complicated. Here's his summary:
[P]rominent politicians recognize the angst of middle America and flirt with single payer. "I think we've reached a point where the entire health care system is in impending crisis. I have reluctantly come to the conclusion that we should begin drafting a single-payer national health plan," former Vice President Al Gore stated in the fall of 2002. His comments weren't greeted with a sea of enthusiasm but the fact that a serious contender for the Democratic presidential nomination would flirt with the idea suggests that single-payer health care is at least a possibility.

And it is. True, there is limited enthusiasm on the part of federal politicians to take on a sweeping new initiative after the grand failure of Clinton-care. True, too, that American journalists increasingly report the problems of single-payer systems like Canada's medicare. But Americans wouldn't completely dismiss the idea.

It lives on because of its simplicity. Those who promote single payer present the idea as a magic bullet. Why fuss with the sticky economics of health care when all you need is a simple government initiative? Indeed, the word simple (and its derivatives) seems to appear as often in Himmelstein and Woolhandler's book as motivation speakers shower their talks with the word empowerment.

In this paper, we explore the government temptation. Far from being an elegant solution, we find that government-run health care systems are universally plagued with deep problems. Whether we look to Canada or Britain or Germany, we find that single payer is a fanciful temptation, like hoping that a new house will save a troubled marriage.

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