Motley Moose – Archive

Since 2008 – Progress Through Politics

Socialist Health Care

(Image taken from Nat Silver’s Blog Heathcare Spending and Life Expectancy)  

Some of the Obama’s more incoherent detractors have labeled his health care plan as “socialized medicine.” It is assumed, naturally, that socialism is Bad (with a big B).

While socialism may be less effective in many industries and fields (just look at the Soviet Union’s fate, after all), the insurance industry as a whole is rather different. Think for a moment – how is capitalism supposed to work? The company that makes the most profit wins. Companies make profit by selling goods and services to consumers; the better the product, the more consumers buy it, the more money said company makes, and the more effort said company puts into making an even better product. Society as a whole benefits from this invisible hand.

With insurance, on the other hand, companies don’t make profit by selling consumers the best product. Instead, they make money by denying insurance claims from consumers. The incentive is perverted; the insurance company that does the best denies the most claims. And because one has to begin with a lot of preexisting money to start an insurance company, it is very difficult for competition to emerge. Meanwhile, the customer is trying to make insurance companies pay for something (a medical crisis, for instance) he or she could not afford on his or her own. It is as if both sides are continually trying to rob the other.


Obviously, this is Bad (with a big B) for society.  

Partly as a result of the above problem, the United States spends far more than its peers on health care and gets far less for its cash.

Does this mean that the United States ought to switch to a socialist health care system? Doing so would certainly constitute a wretching change. Terrible mistakes could be made with implementation; moreover, other failings of the U.S. system (e.g. malpractice lawsuit costs) are just as or even more responsible for its high costs.

Yet nations with socialist systems, such as Britain and France, tend to have far “healthier” health care by most measurements – especially cost per capita. As even the most persistent free-market advocates acknowledge, some fields  (e.g. the financial industry) are simply not suited to capitalism. Health insurance seems like one such domain.

To switch or not to switch? At the very least, it’s worth considering.

By: Inoljt


  1. Strummerson

    The whole point of a public option or extending medicare (which if it goes far enough amounts to roughly the same thing) is both to provide a non-profit option to compete with insurance companies and hopefully bring costs down across the board.  One of the reasons that many Americans oppose this is they see it as a slippery slope towards socializing medicine in the US.  They are likely right.  For this is also what many progressives hope it does.  

    These folks cannot imagine the uproar that right of center European leaders such as Cameron and Merkel would face inside their own parties if they proposed full privatization of medical care.  Proposing the abolition of the NHS is about the only thing that could keep Conservative leader Cameron from becoming the next PM of the UK.  

    Regardless, a public option would enable a test case and perhaps make such a transition feasible.  We aren’t going to get it this round.  But it should remain a priority going forward.

  2. Yet nations with socialist systems, such as Britain and France

    Britain has a true socialized health care system, including government ownership of hospitals and employment of doctors and other health care workers. France, on the other hand, does not have a fully socialized system. Canada has socialized health insurance, which is where we will probably end up some day, although there are other possibilities. I actually believe we will end up with something more like the Swiss or German systems.

  3. Charles Lemos

    I think now that the best avenue  for the US because we really do have a failure of the Federal Government (the Senate is 18th Century institution and it’s showing its age) is push for single payer system at the state level. If we can get one single payer system enacted in one state, others will follow. The cost savings are too great.

    Basically that’s what the Canadians did. Tommy Douglas and Saskatchewan got the ball rolling in the 1940s but Canada didn’t fully enact its system until the early 1980s. It was a near 40 year battle.

    I don’t like the healthcare bill overall but there is merit to it. The Community Health Clinics (thank you Bernie!) are going to be critical.

    Again so much else needs to be done. Tackling diet, food subsidies, even urban sprawl all have an impact on healthcare.

  4. 8Bama

    Great article. It would be quite interesting to really track down where the brainwashing for socialism = bad comes from. Sure, a lot probably stems from the cold war era but what Im wondering is when the equation socialism = communism happened? Cos they’re not the same thing. I find it so ironic – once health care reform has been in place for a couple of years I bet you will hear a lot of repubs says “Ah well, this isn’t so bad after all..actually I’m better off now than before”. roll eyes

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