Volume II,
Number 2

March 1998

Socialized Medicine
vs. Private Health Care

edited by Robert Knautz


Contents


The Issue

"[Classical] Liberalism is distinguished from socialism, which likewise professes to strive for the good of all, not by the goal at which it aims, but by the means that it chooses to attain that goal."
--Ludwig von Mises, "Liberalism: The Classical Tradition"

Around the world, health care costs are spiraling upwards. There are more uninsured people than ever before. National health systems are running low on funds and being forced to ration care.

China has had to reduce the level of benefits for its citizens and require them to pay for some of their own medical supplies. They have even been encouraging private and charitable organizations to provide health care to the Chinese people in order to reduce the burden on the state.

But less government involvement isn't viewed as the right solution everywhere.

The number of Canadians traveling to the U.S. to seek better medical care or to avoid wait times has been increasing every year. But groups like Physicians for a National Health Program hold up the Canadian system as a model for reforming the U.S. system.

Always ready to serve, the Clinton administration is implementing socialized medicine in the U.S. one step at a time. Despite their plan for national care being exposed and defeated in 1994, they are now succeeding by presenting it in a less overt manner.

The existing national health insurance programs for the elderly and the poor -- Medicare and Medicaid -- are being expanded to cover more and more Americans. "Kidcare," tacked on to the Balanced Budget Act of 1997, expands Medicaid to uninsured children of families earning as much as $75,000 per year. A recent plan was introduced to lower the age requirements for Medicare eligibility for certain uninsured populations.

What if you don't want more government control?

There are private doctors who see patients on a fee-for-service basis. However, the Balanced Budget Act of 1997 effectively eliminates this option for American Medicare recipients by forcing doctors who treat patients outside of the system -- even once -- to exclude themselves from receiving payments from Medicare for two years.

Private insurance is under attack as well. Clinton's proposed "Consumer Bill of Rights" is a series of mandates that will control what insurance companies can sell to their customers.

One of the leading public policy alternatives to government control is the medical savings account (MSA).

MSAs are tax-free savings accounts that can be used to pay for medical care. Supplemental insurance is purchased for catastrophic care such as hospitalization, surgery or major illness. These policies have a deductible equal to or slightly greater than the maximum amount that can be saved in the MSA. The entire plan, including the savings account, can be provided by employers for close to the same cost as managed care plans.

In some MSA proposals, unspent funds can be rolled over from year-to-year and at some point can be withdrawn for any purpose. This type of plan eliminates the over-utilization problem in some managed-care programs that occurs because the patient, not the insurance company, is responsible for the first dollars that are spent. A person is therefore less likely to see their doctor for a condition that does not require it.

This month, we present a large number of articles on the problems of socialized medicine as well as some of the alternative policy proposals, such as MSAs. In his Media Spotlight, J.D. Tuccille looks at how the mass media is treating MSAs and the health care debate. When all this makes you sufficiently upset, vent your anger in the Spotlight discussion forum.

The Solutions

Free-Market.Net Partners

Cato Institute

Cato has worked on preventing the nationalization of the U.S. health care system for many years. From the publishing of "Patient Power: The Free-Enterprise Alternative to Clinton's Health Plan" to exposing Kidcare and the recent Medicare changes, Cato has provided quality research and ammunition on the subject.

Although from 1992, Michael Tanner's Health Care Reform: The Good, the Bad, and the Ugly presents a good general overview of the policy options. Cato's current strategy for practical health care reform is presented in its Briefing Book for the 105th Congress.

As an intro to medical savings accounts, Why Health Care Costs Too Much, discusses the factors that cause higher costs and over-utilization of health services.

More Than a Theory: Medical Savings Accounts At Work discusses how MSAs work and how several companies have already implemented MSA-like plans for their employees.

Restoring Health Freedom calls for MSAs and universal tax credits as the way to ensure that patients have access to the best health care available.

Many of the criticisms of MSAs are addressed in The Establishment Strikes Back: Medical Savings Accounts and Adverse Selection and Medical Savings Accounts: Answering The Critics.

The Cato Journal offers an interesting concept for managed care in Buy Health, Not Health Care. In this scenario, you would contract for life and health insurance from the same company and they would have the incentive to keep you from prematurely claiming the life insurance benefits.

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Reason Magazine

The new stealth approach to nationalized medicine is exposed in an editorial from the February 1998 issue, ClintonCare Lite. The article includes a discussion of president's new Bill of Rights and the Patient Access to Responsible Care Act (PARCA).

John Hood of the John Locke Foundation explains how the government kept him from providing an MSA plan for his employees in Health Nuts. He also examines the issues surrounding Kiddie Care and the "crisis" created by the Clinton administration to justify its creation.

Regina Herzlinger's "Market Driven Health Care" is reviewed by Michael Lynch. The book presents a grand vision for the U.S. health care system, but little in the way of concrete proposals for reform.

Editor Virginia Postrel examines Medical Meddling, i.e. regulation of the health insurance industry.

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Institute for Objectivist Studies

In Is There a Right to Health Care?, David Kelley explores the issue from a philosophical perspective. He argues that there is no right to health care and that the creation of that right necessarily limits the rights of others.

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International Society for Individual Liberty

ISIL summarizes the libertarian perspective on health care in We Can Have Affordable Health Care, part of their Educational Pamphlet Series.

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Laissez Faire Books

If you really want to sink your teeth into the issue, Laissez Faire Books offers a variety of titles on health care reform.

Richard Epstein explores the effect of government intervention in the health care industry in his 1997 book, "Mortal Peril."

"Politicized Medicine" and "The Dangers Of Socialized Medicine" are two more general collections on the issue. They feature articles by Milton Friedman, Thomas Szasz, Richard Ebeling and others.

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Other Groups and Individuals

Many other groups have done research on this topic. Below are some highlights.

National Center for Policy Analysis

NCPA has the largest collection of papers and articles on health care policy in the world. Some highlights are also listed below.


Fraser Institute

The seventh edition of Waiting Your Turn: Hospital Waiting Lists in Canada analyzes the wait for care by specialty and other statistics.

The troubles of the Canadian system are also exposed in Canada's Health Care System: Affordable and Effective? and Outside the City Walls: Not so Equal Access to Health Care in Canada.

Visual Difficulties are Impeding Health Reform in Canada discusses the single vision for reform of the system and why that is not the answer.


Heartland Institute

Conrad Meier explores the options on How States Can Reform Health Care in the November/December issue of Intellectual Ammunition.

Heartland's 1993 book "Why We Spend Too Much on Health Care" looks at the policies that have caused health care spending to increase at phenomenal rates and how to solve the problem through market-based reforms.


Heritage Foundation

In a report released in late February, Heritage looks at the Progress of the Clinton Health Plan.

Rollover Flexible Spending Accounts: More Health Choices For Americans calls for a change to the existing MSA tax laws to allow accounts to rollover without penalty.

This set of papers highlights government meddling in health insurance:

More information can be found in Heritage's indexes of Health Care Reform and Medicare.


Citizens for a Sound Economy

A wealth of information is available from CSE's Campaign to Reform the Nation's Health Care.

The implementation of ClintonCare is detailed in Stealth March of ClintonCare and Dr. Ganske's Prescription for Government-Run Health Care.

An excellent analysis of Clinton's Health Care Bill of Rights exposes the effects of too much regulation.


Association of American Physicians and Surgeons

AAPS was featured in the recent issue of Forbes for winning its lawsuit against the Clinton Administration for concealing the truth about who was working on the Task Force on Health Reform. A complete account of AAPS vs. Hillary Rodham Clinton, et al is available on their Web site.

Executive director Jane Orient M.D. is very active in promoting free-market health policy. She has written a Patient's Handbook which covers all aspects of health care and insurance. She also testified before the White House Task Force on Health Reform stating the AAPS position on reform.

Other Highlights:


Americans for Free Choice in Medicine

AFCM provides the full text of Leonard Peikoff's Health Care is Not a Right speech, delivered before a town hall meeting on the Clinton health care plan in 1993.

Paul Blair's article on The Incremental Assault on Health Care from the Intellectual Activist details the step-by-step implementation of ClintonCare and alternative market-based policy ideas.

A list of insurance companies that provide MSAs and catastrophic coverage is also provided.


American Enterprise Institute

James Glassman exposes Bill Clinton, M.D. and his plans to implement ClintonCare in a piecemeal fashion. A New Kind of Medicare advocates modeling Medicare on the Federal Employee Health Benefit Program, which is a smorgasbord of different private plans that cover nine million current and former employees.

A summary of AEI's recent conference on The Future of Medicare that featured Senator Phil Gramm is also available.


Alexis de Tocqueville Institution

John Berthoud, vice president of AdTI, discusses the freedoms lost through so-called health care reforms in Security, At What Price?. He also states unequivocally that More Government Isn't the Answer to Americans' Health-care Woes.


Policy.Com

Reform of U.S. state-run health care has been featured three times in Policy.Com's issue of the week:

The Resource Bank contains additional reports on Health-related issues.


Cascade Policy Institute

Medical Savings Accounts Trump Managed Care discusses the positive benefits of MSAs versus traditional managed care plans. Health Insurance Premiums for Palm Readers? explores the extent of government mandated coverage by private health plans.

Closer to home for Cascade, Peter J. Ferrara analyzes the Oregon Health Plan and suggests alternatives to eliminate the bureaucratic mess that it created in Power to the People.


Nevada Policy Research Institute

Hillary-Care for Kids Through the Backdoor details the changes to the Nevada Medicaid system after the Kidcare legislation last year.

A complete analysis of MSAs, including premium comparisons and case studies, is available as The Arrival of MSAs.


Independence Institute

Colorado's free-market think tank explores Medicaid vouchers in Privatizing Medicaid in Colorado.

Six Myths about the U.S. Health care System is great ammunition for those fighting socialized medicine.


Miscellaneous Resources

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Related Links

Government Links

Medical Groups

Other Links




In December 2004 this page was modified significantly from its original form for archiving purposes.

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