Myths of Socialized Medicine Lead to Bad Health Care Policies

Advocates of socialized medicine generally claim administrative costs are lower, quality of care is higher, and access to care is more equal in Canada than in America.

These claims are myths, and they lead to bad government policies in the United States.

Myth of Admin Savings

In a series of articles, all published in medical journals, Harvard Medical School professors David Himmelstein and Steffie Woolhandler claim the administrative costs of the Canadian system are much lower than our own--so much so that we could insure the uninsured through administrative savings alone.

However, these two doctors are not economists. They count the cost of private insurance premium collection (e.g. advertising, agents' fees, etc.) but ignore the cost of tax collection to pay for public insurance.

Economic studies show the social cost of collecting taxes is very high. Using the most conservative of these estimates, economist Ben Zycher has shown the excess burden of a universal Medicare program would be twice as high as the administrative costs of universal private coverage.

Myth of High Quality

Canadian life expectancy is two years longer than ours, and left-wing critics frequently imply the health care systems of the two countries have something to do with that result. Yet doctors don't control overeating, excessive drinking, smoking, and other bad habits.

And where doctors do make a difference, the comparison does not favor Canada. In a September 2007 National Bureau of Economic Research study, David and June O'Neill drew on a large U.S./Canadian patient survey to show the following:

• The percentage of middle-aged Canadian women who have never had a mammogram is double the U.S. rate.

• The percentage of Canadian women who have never had a pap smear is triple the U.S. rate.

• More than eight in 10 Canadian males have never had a prostate screening exam, compared to less than half of U.S. males.

• More than nine in 10 Canadians have never had a colonoscopy, compared with seven in 10 in the United States.

These differences in screening may explain why U.S. cancer patients do better than their Canadian counterparts:

• The mortality rate for breast cancer is 25 percent higher in Canada.

• The mortality rate for prostate cancer is 18 percent higher in Canada.

• The mortality rate for colorectal cancer among Canadian men and women is about 13 percent higher than in the United States.

There are quite a few people in both countries who are not being treated for conditions that clearly require a doctor's attention, but the problem is much worse in Canada:

• Among senior citizens, the fraction of Canadians with asthma, hypertension, and diabetes who are not getting care is twice the U.S. rate.

• The fraction of Canadian seniors with coronary heart disease who are not being treated is nearly three times the U.S. rate.

Apparently, putting everyone in (Canadian) Medicare leads to worse results than having only some people in (U.S.) Medicare, ensconced in an otherwise-private system.

Myth of Equal Access

The most common argument for national health insurance is that it will give rich and poor alike the same access to health care. Actually, there is no evidence of that outcome. Indeed, national health insurance in Canada may have created more inequality than otherwise would have existed. Similar results have been reported for Britain. The O'Neills' study shows that:

• Both in Canada and the United States, health outcomes correlate with income--low-income people are more likely to be in poor health and less likely to be in good health than those with higher incomes.

• However, there is apparently more inequality in Canada: Among the non-elderly white population of both countries, low-income Canadians are 22 percent more likely to be in poor health than their American counterparts.

The U.S. health care system has more than its share of problems. We will not make our system better, however, by copying Canada's system of national health insurance.

John C. Goodman (john.goodman@ncpa.org) is president of the National Center for Policy Analysis. His blog is available at http://www.john-goodman-blog.com/.

For more information ...

"Comparing Public and Private Health Insurance: Would a Single-Payer System Save Enough to Cover the Uninsured?" by Ben Zycher, Manhattan Institute, October 2007: http://www.heartland.org/article.cfm?artId=22538

"Health Status, Health Care and Inequality: Canada vs. the U.S.," by June and David O'Neill, National Bureau of Economic Research, September 2007: http://nber15.nber.org/papers/w13429.pdf(abstract only without subscription)