Three Different Health Care Systems

Folks,

I keep hearing the term "socialized medicine" and "socialism" tossed around with regard to health insurance reform, and I get the sense that a lot of people don't really understand the terms, so I wanted to give a little primer.

There are three different systems that people talk about.

Socialized Medicine

In a fully socialized medical system, health care is not in any way a commodity. Doctors all work for the government, and are paid a salary. Hospitals are owned and run by the government. Pharmacies are owned and run by the government. This is the sort of health care system they have in Britain, their "National Health Service", the one that according to Investors Weekly, would have never allowed Stephen Hawking to survive (although it turns out he's a British citizen, and so has been under NHS care his entire life).

Regardless, that argument was spurious on its face, because at no point since the last election has anyone seriously suggested such a system be put in place here in the U.S.

Single Payer

This is what Canada and much of the rest of Europe has. Doctors and hospitals are still private enterprises, paid by a single health care insurance system run by the government. In the U.S., Medicare, Medicaid and the Veterans plan (which I believe is called "TriCare") are all examples of single payer systems.

In some countries and some systems you can "opt out" of such a system, in others it's just part of your taxes, there is universal coverage in much the same way we have universal roads. You can't "opt out" of the road system here, because you don't have any way of figuring out what portion of your taxes go to road building and maintenance, and you can't get out of paying that portion even if you wanted to.

Such a system has no competition, of course, but it's not run for profit, and spreading insurance over as wide a population as possible, it works in the way insurance is meant to work: Everyone pays into the system whether they need it or not. The ones who get unlucky and need it, get to use it without having it ruin them financially on top of their physical malady. Those who are lucky and don't need it in their entire lives lose, but they still gained the comfort of knowing that IF they got sick, it wouldn't be an additional fiscal burden on top of the physical.

Such a system has been debated, but was taken off the table in the very first compromise the Democrats made with the Republicans (the same Republicans who will look at a bill with tens or hundreds of Republican amendments to it and say "See! The Democrats aren't willing to negotiate or compromise!"). None of the current proposals contain a "single payer" system, although there are those who believe it should.

Public Option

This is what's actually being proposed, and even that is under extreme risk of going away, with all this talk of "socialism", in favor of a watered down bill that will solve no problems and potentially cause more.

Under a public option plan, the government provides a plan such as the "single payer" plan above, but runs it as any other insurance policy, paid for by premiums, and available as an option only. Under such a system, there is no mandate for people to use that particular plan; if a person (or more likely, a company) likes the service they're getting from a private insurer, they're welcome to stay with that private insurer. It just provides a non-profit baseline for comparison, and being government-run, will generally accept people on to its rolls that the private insurance companies deny coverage to.


And by the way, it turns out that we are the only westernized nation that allows insurance companies to be for-profit entities, which is (at least in part) the problem. Competition has been minimized and insurance companies are one of the few industries not subject to anti-trust legislation, meaning that in some places one company can hold a virtual monopoly.

As a result, we have an industry that can afford to spend (according to PBS) $1.4 million every day to fight health insurance reform. Think about that: Their profits are so large, that they can both afford to spend, and are WILLING to spend the equivalent of half a billion dollars per year to defend their cash cow.

Now, decide as you will. But to me, the current system is untenable, and we either need to break down the barriers to competition (which the industry will fight), add in a new option for competition (which the industry will fight) or pass a law disallowing insurance companies from being for-profit companies (which the industry will fight).

A lot of this "socialism" stuff is coming from the PR campaigns bought by that $1.4 million dollars each day ($1.4 million that isn't going to pay for someone's health care, as it would be with a non-profit).

Finally, if we decide to break down the barriers to competition, as some have suggested, take away the states' rights to regulate who can operate in their state and what restrictions they'll be under, we also have to remove the anti-trust exception for insurance companies. Without that, likely we'd have a little bit more competition, but because most health care insurance policies are written by one of four or five major companies, they would likely just agree among themselves to divvy up the territory and maintain the status quo.