At present, America spends more per capita on healthcare than any other nation in the world at a rate of $7,600 per person. The California HealthCare Foundation estimates the U.S. spent 4.3 times more on healthcare than on national defense. By the year 2016, spending is expected to reach 20 percent of the gross domestic product (GDP) or approximately $4.2 trillion. The cost of healthcare in America has prompted legislators at both the state and federal levels to consider government socialization of the industry to ensure that all persons have access to timely, affordable, and patient-friendly service. While the promise of such government sponsored services often proves to be an effective electioneering device for politicians, the actual implementation of a comprehensive social healthcare program may prove ineffective at reforming the industry and could lead to higher costs and lower quality of care.

The first and most obvious reason against socialization of any industry is that all spending, especially government spending, is inflationary. This effect was evidenced in the years following the implementation of President Johnson’s progressive Great Society initiatives., Such initiatives included “the capital pass through” provision of Medicare allowing hospitals to practically purchase capital upgrades without limit, and the “cost plus” system of reimbursement based on internal cost estimates that encouraged physicians to create extravagant care pathways in which lengthy hospital stays and unnecessary procedures were rewarded, not discouraged. Because the United States government has the power to increase taxes whenever it needs more money, the Great Society reforms had the unintended consequence of not only increasing the cost of healthcare, but simultaneously increasing the collective burden on taxpayers.

Under optimal free market conditions, individuals would pay the full cost of healthcare themselves and only utilize healthcare services when ill or requiring the occasional consultation. Persons who are genetically less prone or resistant to illness and infirmity and individuals wishing to use alternative medicine have the option of healing their own way. Today, whether we are sick or not, because of the outrageously high cost of healthcare, Americans have to enroll in costly private insurance plans requiring them to pay whether they are sick or not. To provide universal coverage to all Americans through a government insurance program would revisit the failures of the Great Society’s inflationary spending effect even further.

The second and most important argument against socialized medicine is that all government programs require regulation, legislation, and taxation. Government cannot do anything without creating new laws and hiring new employees to enforce those laws. Complaints already abound regarding the impact of the U.S. Food and Drug Administration’s lengthy certification process and strict regulations on the cost of developing prescription medicine. The bureaucratic structure needed to manage a universal healthcare system would worsen the economic burden for those least able to pay for it and would injure the very people who such a program is intended to help: those with fixed or low incomes. Because all government programs operate on the principal of “spend all your money by the end of the fiscal year or receive less next year,” there is never any incentive for cost efficiency, and there is all the more reason to spend more money to receive higher appropriations. No department head, no director, no secretary of any agency will ever testify before a Congressional committee that their organization is receiving too much money. As Ronald Reagan humorously observed, the closest thing to eternal life on Earth is a government agency.

The solution to our healthcare crisis will not come about by the intervention of government and the well-intentioned but ultimately disastrous policy of forcing everyone into a mandatory social insurance program. To do so would be to repeat the same mistakes made by the Great Society’s planners on a much wider scale. In order to alleviate the high costs of healthcare, we must return to a system in which the burden of paying for healthcare rests upon the individual: fee for service, period. As with any industry, , when cost becomes too prohibitive for enough individuals to maintain a high level of demand, providers will have no choice but to lower the cost of service and find cheaper, more cost effective ways of providing quality healthcare.

-GIR-

Daniel P. de Gracia, II is an ordained minister and a former policy advisor at the Hawaii State Legislature to the chair of Human Services and the chair of the International Affairs Committee. He holds a master of arts in political science from Southwest Texas State University and a bachelor of arts in political science and public administration from the University of Texas at San Antonio. He's also the son of the former president of the American Academy of Medical Administrators, Daniel P. de Gracia, Sr.