Nothing destroys a nation’s healthcare system more thoroughly than mandating free care

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Nothing destroys a nation’s healthcare system more thoroughly than mandating free care

Man­dat­ing that health­care be pro­vided for free appears to be
a noble and wor­thy goal for any gov­ern­ment, one that pro­gres­sives have been
advo­cat­ing for decades. When put into
place, man­dat­ing free health­care has always pro­duced dis­as­trous results. The pro­gres­sives run­ning for pres­i­dent should
take care­ful note of this before con­tin­u­ing to call for Medicare for All.

This Mises arti­cle titled The Truth
About Swedan­Care
doc­u­ments Sweden’s
ruinous attempt.

Free uni­ver­sal health­care came about in the 50s as part of the Social Demo­c­ra­tic project to cre­ate the “People’s Home” (Folkhem­met). This grand effort also included free edu­ca­tion on all lev­els, mod­ern hous­ing for the poor, manda­tory gov­ern­ment pen­sion plans and more. Let us grant ben­e­fit of the doubt and assume that some of its pro­po­nents had good inten­tions; as so often, these inten­tions paved the road to a hell­ish destination.

Prior to the 1950s, Swe­den
was a pros­per­ous nation with a healthy free mar­ket econ­omy and a fully
func­tion­ing health care sys­tem. That all
changed with the intro­duc­tion of social­is­tic like poli­cies, includ­ing free
healthcare.

Before the utopian project got under way, Swe­den had some of the absolute low­est taxes in the civ­i­lized world and, not sur­pris­ingly, was ranked at the top in terms of stan­dard of liv­ing. The project changed Swe­den into a coun­try with the sec­ond high­est tax rate in the world (Den­mark is higher), peri­ods of ram­pant infla­tion, and a steadily dete­ri­o­rat­ing economy.

There is noth­ing eco­nom­i­cally mys­te­ri­ous about health care — it is just another ser­vice. Like any other it can be plen­ti­fully pro­vided on a free mar­ket at afford­able prices and con­stantly improv­ing qual­ity. But like every­thing else, it breaks down when the cen­tral plan­ners get their hands on it, which they now have. To claim that the prob­lems are due to a “mar­ket fail­ure” in health care is like say­ing that there was a mar­ket fail­ure in Soviet bread production.

As with Oba­maCare here, the Swedish ver­sion was only meant
to help the poor. Because of the chaos
caused by gov­ern­ment inter­fer­ence the entire pri­vate health­care sys­tem soon
col­lapsed. I believed that was what
pro­gres­sives were hop­ing would hap­pen here with the imple­men­ta­tion of
ObamaCare.

First it was under­stood in Swe­den that free health­care was only for the poor. It would not affect those who were happy with their exist­ing provider. But when gov­ern­ment sud­denly offers a free alter­na­tive, many will leave their pri­vate prac­ti­tioner in favor of the free goods. The pub­lic sys­tem will have to be expanded, while the pri­vate doc­tors will lose patients. The pri­vate doc­tors are then forced to either take employ­ment within the pub­lic sys­tem or leave the pro­fes­sion. The result is one sin­gle pub­lic health­care monolith.

The free mar­ket is always supe­rior to gov­ern­ment bureau­cra­cies and other
forms of gov­ern­ment inter­ven­tion. The Swedish attempt proves this true
for the fol­low­ing reasons.

Thus, free-​market sys­tems sys­tem­at­i­cally allo­cate capac­ity (“sup­ply”) and real­lo­cate it quickly to sat­isfy patients’ needs (“demand”). Due to com­pe­ti­tion it has the added advan­tage of always striv­ing for lower prices and higher qual­ity. This prin­ci­ple is as true for med­ical ser­vices as it is for cell phones or gar­den­ing services

The bureau­cracy of a pub­lic health­care sys­tem can­not use mar­ket prices to allo­cate resources. It must use some other means. First it will try to plan accord­ing to esti­mated demand. It will try to guess the num­ber of bone frac­tures, open-​heart surg­eries and kid­ney trans­plants in the com­ing year. The esti­mates will invari­ably be wrong, caus­ing short­ages in some places and over­ca­pac­ity in oth­ers — at the same — which trans­lates into human suf­fer­ing and eco­nomic waste.

With­out the profit motive, there is no incen­tive to adapt to real­ity, to uti­lize expen­sive equip­ment to the opti­mum capac­ity, to improve the level of ser­vice, or treat patients with dig­nity. All change will have to be pushed down from the plan­ners above by decree. Doc­tors and nurses will be frus­trated because they are not free to exer­cise their art to the best of their abil­ity and help peo­ple as much as they would like to. Many of the best leave for other fields.

After the orig­i­nal col­lapse, the Swedish gov­ern­ment
attempted half­heart­edly to restore a free mar­ket sys­tem. Of course this failed because the sys­tem was
still rife with gov­ern­ment intervention.

Plan­ning always fails. The plan­ners come to real­ize that the mar­ket is supe­rior but they will not back off. Rather they will try to mimic a mar­ket, using trendy tech­niques such as “New Pub­lic Man­age­ment,” voucher sys­tems, or health­care exchanges. The results of these solu­tions are usu­ally even more dis­as­trous than out­right plan­ning. In order to work, they will have to reduce every med­ical con­di­tion to a code, every patient to an ID num­ber, and every pro­ce­dure to planned (arbi­trary) cost and income numbers.

Like all other gov­ern­ment inter­ven­tions into health­care, the Swedish attempt pro­duced dis­as­trous results.

For non-​emergency cases in Swe­den, you must go to the pub­lic “Health­care Cen­tral.” This is always the start­ing point for any­thing from the com­mon flu to brain tumors. You must go to your assigned Cen­tral, accord­ing to your health­care district…This health­care “bread line” is where peo­ple die. It hap­pens reg­u­larly that by the time a patient gets to see an expert, his con­di­tion has pro­gressed beyond rem­edy. It also hap­pens fre­quently that refer­rals get lost. Bureau­cra­cies cre­ate list­less employ­ees, who don’t care, who refuse to go the extra mile, and who are never respon­si­ble for failures.

The most recent push by Pro­gres­sives in this coun­try for a
com­plete take over our health­care sys­tem is the result of high med­ical
costs. The pro­gres­sives blame the free
mar­ket. The free mar­ket deserves no
blame for this because:

The rea­son Amer­i­can insurance-​based health­care is so expen­sive is that it is heav­ily reg­u­lated and legally con­nected to the equally-​regulated insur­ance indus­try. Both are well pro­tected from com­pe­ti­tion by reg­u­la­tion. Oba­macare will make them even more expen­sive, bureau­cratic, and inac­ces­si­ble. The way to fix U.S. health­care is by excis­ing the cen­tral plan­ners and reg­u­la­tors from it, not by implant­ing droves more of them.

Remov­ing all gov­ern­ment inter­fer­ence into health­care and health insur­ance will make health­care truly afford­able. Imple­ment­ing sin­gle payer here will cause a down­ward spi­ral of our entire health­care sys­tem as has hap­pened in Eng­land, Canada, Cuba, and so many other nations

Mandating that healthcare be provided for free appears to be a noble and worthy goal for any government, one that progressives have been advocating for decades.  When put into place, mandating free healthcare has always produced disastrous results.  The progressives running for president should take careful note of this before continuing to call for Medicare for All. 

This Mises article titled The Truth About SwedanCare documents Sweden’s ruinous attempt.

Free universal healthcare came about in the 50s as part of the Social Democratic project to create the “People’s Home” (Folkhemmet). This grand effort also included free education on all levels, modern housing for the poor, mandatory government pension plans and more. Let us grant benefit of the doubt and assume that some of its proponents had good intentions; as so often, these intentions paved the road to a hellish destination.

Prior to the 1950s, Sweden was a prosperous nation with a healthy free market economy and a fully functioning health care system.  That all changed with the introduction of socialistic like policies, including free healthcare.

Before the utopian project got under way, Sweden had some of the absolute lowest taxes in the civilized world and, not surprisingly, was ranked at the top in terms of standard of living. The project changed Sweden into a country with the second highest tax rate in the world (Denmark is higher), periods of rampant inflation, and a steadily deteriorating economy.

There is nothing economically mysterious about health care — it is just another service. Like any other it can be plentifully provided on a free market at affordable prices and constantly improving quality. But like everything else, it breaks down when the central planners get their hands on it, which they now have. To claim that the problems are due to a “market failure” in health care is like saying that there was a market failure in Soviet bread production.

As with ObamaCare here, the Swedish version was only meant to help the poor.   Because of the chaos caused by government interference the entire private healthcare system soon collapsed.  I believed that was what progressives were hoping would happen here with the implementation of ObamaCare.

First it was understood in Sweden that free healthcare was only for the poor. It would not affect those who were happy with their existing provider. But when government suddenly offers a free alternative, many will leave their private practitioner in favor of the free goods. The public system will have to be expanded, while the private doctors will lose patients. The private doctors are then forced to either take employment within the public system or leave the profession. The result is one single public healthcare monolith.

The free market is always superior to government bureaucracies and other forms of government intervention.  The Swedish attempt proves this true for the following reasons.

Thus, free-market systems systematically allocate capacity (“supply”) and reallocate it quickly to satisfy patients’ needs (“demand”). Due to competition it has the added advantage of always striving for lower prices and higher quality. This principle is as true for medical services as it is for cell phones or gardening services

The bureaucracy of a public healthcare system cannot use market prices to allocate resources. It must use some other means. First it will try to plan according to estimated demand. It will try to guess the number of bone fractures, open-heart surgeries and kidney transplants in the coming year. The estimates will invariably be wrong, causing shortages in some places and overcapacity in others — at the same — which translates into human suffering and economic waste.

Without the profit motive, there is no incentive to adapt to reality, to utilize expensive equipment to the optimum capacity, to improve the level of service, or treat patients with dignity. All change will have to be pushed down from the planners above by decree. Doctors and nurses will be frustrated because they are not free to exercise their art to the best of their ability and help people as much as they would like to. Many of the best leave for other fields.

After the original collapse, the Swedish government attempted halfheartedly to restore a free market system.  Of course this failed because the system was still rife with government intervention.

Planning always fails. The planners come to realize that the market is superior but they will not back off. Rather they will try to mimic a market, using trendy techniques such as “New Public Management,” voucher systems, or healthcare exchanges. The results of these solutions are usually even more disastrous than outright planning. In order to work, they will have to reduce every medical condition to a code, every patient to an ID number, and every procedure to planned (arbitrary) cost and income numbers.

Like all other government interventions into healthcare, the Swedish attempt produced disastrous results.

For non-emergency cases in Sweden, you must go to the public “Healthcare Central.” This is always the starting point for anything from the common flu to brain tumors. You must go to your assigned Central, according to your healthcare district…This healthcare “bread line” is where people die. It happens regularly that by the time a patient gets to see an expert, his condition has progressed beyond remedy. It also happens frequently that referrals get lost. Bureaucracies create listless employees, who don’t care, who refuse to go the extra mile, and who are never responsible for failures.

The most recent push by Progressives in this country for a complete take over our healthcare system is the result of high medical costs.  The progressives blame the free market.  The free market deserves no blame for this because:

The reason American insurance-based healthcare is so expensive is that it is heavily regulated and legally connected to the equally-regulated insurance industry. Both are well protected from competition by regulation. Obamacare will make them even more expensive, bureaucratic, and inaccessible. The way to fix U.S. healthcare is by excising the central planners and regulators from it, not by implanting droves more of them.

Removing all government interference into healthcare and health insurance will make healthcare truly affordable.  Implementing single payer here will cause a downward spiral of our entire healthcare system as has happened in England, Canada, Cuba, and so many other nations