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