NCPA - National Center for Policy Analysis


August 27, 2009

In an August 18 editorial, the New York Times made it explicit how their preferred version of a government-run health insurance scheme, a.k.a., the public option, would compete with private health insurance: through imposing lower payments.  Yet, experience with government funding reveals a never-ending spiral of decreased reimbursements in the name of restraining costs.  In the end, this will come out of the care we all receive.

Government health care price controls will ultimately mean that we all get the same low-quality health care for eternity, says Ronald Bailey, a science correspondent for Reason Magazine.

According to Harvard University economist Kenneth Rogoff:

  • Health care expenditures may rise to 30 percent of a country's gross domestic product (GDP) over the next 50 years.
  • If the United States adopts a nationalized health care system, taxes will have to double for pay for it.
  • If all countries squeezed profits in the health sector the way Europe and Canada do, there would be much less global innovation in medical technology.
  • Today, the whole world benefits freely from advances in health technology that are driven largely by the allure of the profitable U.S. market.
  • If the United States joins other nations in having more socialized medicine, the current pace of technology improvements might well grind to a halt.

What if the United States had nationalized its health care system in 1960?  That would be the moral equivalent of freezing (or at least drastically slowing) medical innovation at 1960 levels.  There might well have been no organ transplants, no MRIs, no laparoscopic surgery, no cholesterol lowering drugs, hepatitis C vaccine, no in vitro fertilization, no HIV treatments and so forth.  Even Canadians and Britons would not be satisfied with receiving the same quality of medical care that they got 45 years ago, says Bailey.

Source: Ronald Bailey, "New York Times Wants To Stop Medical Innovation Forever; Uh, I mean, Adopt Health Care Price Controls," Reason Magazine, August 20, 2009; based upon: Editorial, "The Public Plan," New York Times, August 18, 2009 and Marshall Ackerman, "Devaluing Doctors -- and Care," Washington Post, August 20, 2009.

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