Tag: Socialized Medicine

The Price of Socialism

The Sanders campaign has released some details about his socialized medicine system. Vox conveniently lays out just how much your taxes will go up to pay for “Medicare for all” (which will actually be “Medicaid for all”).

sanders-taxes5002

Now it’s easy to get caught on that top-line marginal rate of 77%, which is truly astonishing. But note that taxes will go up for everyone. Even the lowest income bracket will see their taxes go up ten percentage points. This reinforces a point I’ve been making for along time — you can’t pay for all this crap just by taxing “the rich”, with “the rich” being defined at whatever income level your focus group thinks is “rich”. You have to tax everyone. It’s the only way it works. At least Sanders is being honest about it.

Or is he? Sanders’ plan anticipates big savings from nowhere. He anticipates that he will cut healthcare spending by about 20% (this being approximately the difference between Medicare rates and typical insurance rates). But he never really gets into details. And as we’ve discovered with Obamacare, these mysterious savings never do seem to show up. Obamacare was supposed to save us money with fewer ER admissions. But ER admissions went up. It was supposed to save money with electronic medical records. But those medical records systems turned out to be very expensive. It was supposed to save money with more preventative medicine. But preventative medicine, while a good thing, does not save money.

(All of this was pointed out in advance by critics of Obamacare. Repeatedly. And we were bashed as callous tools of the insurance industry who hated poor people.)

Sanders has mentioned having Medicare “negotiate” lower prices for prescription drugs (i.e, forcing them to sell their drugs cheaper). But apart from the damage it would do to pharmaceutical innovation, prescription drugs are a small part of the healthcare bill. Eventually, you’re going to be forcing doctors and nurses to take pay cuts, something the Left has long wanted. If you read any article about the glories of universal healthcare, you will eventually come across the part where they lament that American doctors make a lot more money than doctors in socialized systems.

And that really cuts to the core of it. This isn’t really about providing better healthcare to the poors. It’s not even clear that expanded insurance will improve healthcare outcomes. This is about class warfare. It’s about raising taxes on the hated rich to “fair” levels. It’s about cutting pharma profits to “fair” levels. It’s about cutting doctor’s salaries to “fair” levels. It’s about hobbling “rich” people under the deranged notion that this will somehow help everyone else. Look at that chart again. The astronomical tax rates in that chart aren’t a bug, they’re a feature.

Don’t be fooled. Don’t be fooled when this gibberish comes from Democrats. But especially don’t be fooled when this gibberish comes from, oh, let’s say, the Republican front-runner.

Wishful Thinking

So the consensus, even among liberals, is that Obamacare did not have a good week at the Supreme Court. It was so bad, in fact, that I heard people speculating that the Solictor General deliberately did a bad job to get it struck down.

Huh?

The thinking is that if Obamacare is struck down, this will pave the way for … a single payer system. Seriously:

In the face of a total strike down, single payer probably becomes the best option. But it’s not an easy one. The hurdles to passing Obamacare were that Democrats needed to have a majority in the House, the presidency, and 60 senators. The good news to passing single payer is that they probably would only need 50 senators. (Single-payer could be done simply by expanding Medicare, a pure fiscal change that could be accomplished through a budget bill that can pass the Senate with a majority vote.)

I tweeted about the absurdity of the other night, but I thought I’d expand on that thought. The idea that striking Obamacare will pave the way for single payer is ludicrous. It is based on two bogus schools of thought that run through liberal thinking.

First, liberals are big believers in political determinism. They believe that their idea are so wonderful and fabulous that it is only a matter of time before everyone realizes it and we finally evolve into a liberal utopia. This line of thinking can be traced to Marxism, which posited that the forces of history were leading to the inevitable collapse of capitalism and the inevitable rise of communism. Just as the communists predicted that labor relations would get worse and worse until we had the inevitable worker revolution, liberals are now predicting (hoping) that our healthcare system will get worse and worse until we have the inevitable single payer revolution. All they had to do was stand back and let it happen.

But they are just as deluded as Trotsky was. First, it is not inevitable that our system will get worse without Obamacare. It is possible, if we allow competition across state lines and move people toward more consumer-controlled system, that we could turn the tide. And even it our system does continue to get worse, why would this lead to a surge in support for single payer? Why would people who have vehemently opposed single payer suddenly favor it in the wake of an Obamacare defeat? Liberals want single payer. Indeed, their biggest problem with Obamacare was that it was not single payer. But conservatives and libertarians opposed Obamacare because we saw it as leading to single payer.

The second problem with this line of thinking is that it completely misreads the political situation. To listen to the Left, Obamacare was passed over the fierce opposition of the health insurance companies, pharmaceutical companies and physicians. This is complete bullshit. The insurance industry favored Obamacare. Big Pharma was bought off with promises of no price controls. The doctors and hospitals were bought with promises of a permanent stay of the SGR cuts. All kinds of special interests favored Obamacare because they knew precisely what would happen: healthcare would become even more politicized. More money would flow to companies that were politically connected. Do you think Big Pharma is mad that HHS is mandating that their most expensive birth control pills be covered? Do you think the insurance companies hate it that people are being force to buy insurance? Give me a break.

Obamacare was a product of industry, a distillation of what they wanted out of healthcare reform. And they supported it heavily. They will not, however, have such a love affair with a single-payer system. Such a system will put private insurers out of business, set the stage for price fixing in all branches of healthcare and, given Medicare’s horrific finances, necessitate massive cuts in physician and hospital reimbursement. The special interests will unite against single payer just as they united for Obamacare.

At most, striking down Obamacare may set the stage for an Australian-type system where the government provides basic insurance and everything else is private. Or it may set the stage for the Ryan plan of breaking the federal monopsony that already controls half the healthcare system. But the idea that this sets the stage for single payer is pure Left Wing fantasy.

(And since we’re on this, it’s always worth pointing out that the contention that Medicare is more efficient than the private sector is bullshit.)