Is Medicare-for-All “socialism” or just socially responsible?
Is Medicare-for-All Socialism, or is it a socially responsible part of a Hybrid Healthcare System? The U.S. healthcare system is already a mix of private and government payers, practitioners, drug companies, testing companies, and medical equipment providers. But with so many Americans without care, it’s hardly socially responsible.
Today’s editorial hopes to challenge your views of socialism and capitalism and is based on my response to an online debate with a Democrat friend who argued against using the terms “socialist” or “socialism.” I disagreed.
DON’T CONFUSE SOCIAL RESPONSIBILITY WITH SOCIALISM – the political ideology associated with Karl Marx or Communism – and don’t let others do that either.
SOCIAL RESPONSIBILITY IS AN ETHICAL FRAMEWORK – a moral obligation to act for the benefit of society at large, and to stand up for those less fortunate. I encourage you to read my related article, The Moral Dilemma of Health Care, for how it speaks to social responsibility.
Many of the government owned or run services that we rely on today, besides being socially responsible, are also economically sound. Listing them may help us understand the proper role of government and differentiate between social responsibility and socialism. Here are a few:
MILITARY DEFENSE – We collectively fund each branch of the military for national defense. It’s much better than relying on individuals to defend themselves, an ill-advised alternative given the high cost of modern warfare and need for coordinated efforts.
PUBLIC SAFETY – Fire and police protection are seen as a social responsibility too, even as we see examples of private police services and volunteer fire departments.
PUBLIC SCHOOLS – After WW-II, we decided as a nation to invest in public K-12 education, and that decision helped drive economic growth and is largely responsible for our nation’s economic success. Now given that 90% of future jobs will need at least 2 years of college or technical training, it makes sense to extend that model with more public funding. Because research shows the critical role preschool has in preparing students for success, it also makes sense to direct public funding to that too. It’s not socialism but socially responsible and economically sound.
PUBLIC INFRASTRUCTURE – Not only would it be costly for public sector organizations to build their own airports, seaports, and interstate highway systems; but allowing that would pose economic problems. Consider the impact if American Airlines owned DFW Airport and charged higher gate fees to competitors, or if FedEx charged UPS and US Postal to use its highways.
PUBLIC UTILITIES – Utility services such as water, sewer, power, and Internet access can be offered by either for-profit or public sector organizations. The cost of building nuclear power plant or hydroelectric dams can be too much for private sector companies, exacerbated by the politics of acquiring the land or relocating families; so governments took on the projects as a public service. Cable-TV is another example. As it became popular, many smaller cities offered incentives for providers that otherwise couldn’t profit from serving their communities. They granted franchised monopolies in exchange for commitments to connect schools, police/fire, and municipal locations, and carry PEG (public, education & government) channels.
The list goes on and on, but let’s now shift to a different discussion: INCENTIVES. Any debate of Socialism versus Capitalism should look at the different incentives of public- and private-sector organizations.
PRIVATE SECTOR INCENTIVES – In a free-market society, private companies are most efficient when there’s vibrant competition on a level playing field. That competition causes them to improve service & product quality while driving down prices. These private companies, answering to shareholders and driven by profit motives, measure success in business terms such as Revenue, ROI, Payback Period, Stock Price, and Quarterly Stock Price. That leads to relatively short-term decision-making.
PUBLIC SECTOR INCENTIVES — Public entities, on the other hand, measure success differently. Without profit constraints, they can often make longer-term investments that are more strategic in nature and fund them with bonds and tax revenues. While some people may see public services as having large and inefficient bureaucracies, their large economies of scale and lack of profit motive can actually make them more efficient than in the private sector.
Medicare, for example, is sometimes viewed as an entitlement program that’s a drain on the economy, but Steven Brill argues that “it’s probably the most efficient part of our healthcare system.” Medicare’s administration and management cost of processing over one billion claims a year is less than $3.80 and in some cases as low as $0.84. Compare that to Aetna’s much higher cost of processing its 229 million claims, which is about $30. So, would Medicare-for-All be socialism? Or would it be both socially responsible and economically efficient?
USE FASCISM INSTEAD – While I can agree that Democrats should avoid referring to themselves a socialists, I strongly argue against abandoning socially responsible positions and encourage them to take on the framing debate head-on. Whenever Republicans refer to Democratic candidates as socialists, use the opportunity to label President Trump and the current crop of Republican politicians supporting him as elitist Fascists — in bed with American oligarchs and the wealthy corporations that fund their campaigns. They’ve not been working on behalf of society or defending our Constitution.
Wayne Caswell, Founding Editor
The issue that Obama alums think could doom Elizabeth Warren (POLITICO) How I commented:
Would Bernie Sanders’ Medicare-for-all save Americans money? (6/4/2019)
QUESTIONABLE MOTIVES — Be very suspicious of articles and ads like this, promoted by an industry that profits so perversely from treating illness and injury but has little incentive to prevent or cure it. Watch out, because this industry has an incentive to mislead and a history of paying doctors to publish academic papers with half-truths that appear credible but hide their true intent.
WHAT’S AT STAKE? Well over $1.5 trillion/year if disruptive reforms are able to cut spending by half to match other advanced nations with their better longevity and outcomes. That estimate is based on the fact that we spent almost $3.65 trillion last year. What might we expect from the medical industrial complex with so much at stake?
OVERUSE — Sanders stretches the truth too, with a motive to get elected. His generous benefits and the elimination of cost-sharing would cause overuse and likely would not pass, but most of his other arguments are sound.
EFFICIENCY — Compared to private insurance, Medicare has immense negotiating power, far more efficient claims processing, and no profit motive; so extending that single-payer model makes good fiscal sense. But it alone won’t cut costs in half. For that we must go beyond how we PAY for care and also improve delivery and other parts of the system, including hospitals & clinics, drug companies, testing companies, and medical equipment providers.
HOLISTIC VIEW — We must address the entire system and know “Why American Healthcare is So Expensive” to begin with. (https://mHealthTalk.com/expensive/)
HERE I AGREED — “There is really only one certainty when making big changes to the health-care industry: There will be unintended consequences. Medicare-for-all would involve disruption in the health-care market much larger than what the United States experienced with the implementation of the Affordable Care Act, Medicaid or the original implementation of Medicare.”
Industry insiders see that disruption as bad, because it threatens their jobs and perverse profits. The rest of us see it as good, because we imagine how our nation might use $1.5 trillion/year in savings. We also know a healthier workforce would increase workforce productivity, company profits, wages, GDP, and global competitiveness.