Socialized medicine

Socialized medicine or state medicine is a term used principally in the United States to describe health care systems which operate by means of government regulation and subsidies derived from taxation. Socialized medicine can refer to any system of medical care controlled and financed by the government. This includes many health care systems from the United States' Medicare program, to the Cuban national health care system and the British National Health Service, which is the world's largest socialized health care system.

The Canadian health care system is sometimes referred to as socialized medicine because it is funded and heavily regulated by the government. However, it is more accurately categorized as single-payer health care because health care is provided both publicly and privately.

Most industrialized countries, and many developing countries, operate some form of socialized medicine, though the term is often used pejoratively in political discourse.

History
The first system of socialized medicine was created by Otto von Bismarck after the Franco-Prussian war of 1870. Socialized health care was implemented by the Soviet Union in the 1920s. . After world war II in the 1940s the British began their National Health Service. A socialized model was used in China in from the 1950s to the 1970s during the first two decades of communist rule. Cuba adopted socialized medicine in the 1960s under the new leadership of Fidel Castro. Also in the 1960s, the United States initiated its Medicaid program to help poor mothers and their children.

Usage of the term
The term began as a pejorative phrase first popularized in 1920s and 1930s United States politics by conservative opponents of publicly operated health care with a hostility to programs similar in nature to socialism and communism. Publicly operated health care was first proposed during the administration of U.S. President Franklin Roosevelt and later championed by many others, but ardently opposed by the American Medical Association (including distribution of posters to doctors with slogans such as "Socialized medicine ... will undermine the democratic form of government." )

Hostility to socialism remains a common basis of objection to universal health care by those generally opposed to expansion of government social services and other redistributory policies. For example, in a July 2007 campaign speech, Republican presidential candidate Rudolph Giuliani made a direct connection between socialized medicine and socialism, saying "the American way is not single-payer, government-controlled anything. That's a European way of doing something; that's frankly a socialist way of doing something. That's why when you hear Democrats in particular talk about single-mandated health care, universal health care, what they're talking about is socialized medicine."

The term is widely used by the media and pressure groups. However, medical staff, most professionals in the field and international bodies such as the WHO tend to avoid its use. Outside the U.S., the terms most commonly used are universal health care or public health care.

Popular support for socialized medicine
Popular support for socialized medicine in the UK is evidenced by the policies of the main political parties and even the fringe parties. The UK's center-right Conservative party says its policies are aimed at "Protecting and improving our health service by putting patients back at the heart of the NHS, and trusting the professionals to ensure that they are able to use their skills to make the fullest possible contribution to patient care." . Even the ultra-right-wing British National Party says that "socialised medicine is not just a hallmark of a decent society, but economically rational as well. If one leaves behind capitalist-romantic theories about private-sector efficiency and looks at real-world privatised medicine, which may be observed in America, it is an obvious disaster. It is vastly more expensive and delivers mediocre results outside of luxury care. Britain spends about ⅓ (!) the money per person and we have public health statistics roughly equivalent to America. Except for the fact that the bottom ¼ of our population is vastly healthier."

A member of Margaret Thatcher's government, Nigel Lawson, described the NHS in his memoirs as "the closest thing the English have to a religion." The Thatcher administration made only minor changes to the system, and although many state industries were privatized, the state health sector was not one of them.

The Health Care Commission undertakes regular surveys of patients' opinions of the NHS. In its recent survey, care in NHS hospitals in England was rated by patients as follows: “excellent” (41%), “very good (36%)”, “good”(15%), Fair (6%) and “poor” (2%).

Criticism of socialized medicine
Before examining the criticisms often made of socialized medicine, it is worth noting that the term is often used to criticize socialized health care outside the US, but rarely to describe socialized health care programs in the U.S. such as the Veterans Administration clinics and hospitals, the Army Medical Service nor the single payer programs such as Medicaid and Medicare.

The criticisms that are often levelled against socialized medicine are are as follows


 * Higher Taxes:

All thing being equal, a country which adopts a totally tax funded socialized form of health care will have to increase the average tax rate by an amount equivalent to the cost of providing health care and the overhead in administering the system. Offsetting this will be savings equivalent to the entire revenues of the health insurance industry, which will cease to exist all together, and all other direct medical fees paid to medical providers such as non-insured treatement, co-payments and deductables, and prescription drug costs.

The degree to which the adoption of tax as a funding method for health care is re-distributive will depend on the method of tax raising. Some countries use a payroll tax in whole or in part to fund health care which may be levied on both employers and employees. Other countries however (e.g. Switzerland) use a compulsory national insurance funding model with a flatter rate contribution system less related to income. Contributions for such programs can be considered as a form of taxation even if the funds do not pass through government hands.


 * Waiting times: Critics often contend that socialized medicine is characterized by long waiting times for treatment.

For example, the National Health Service reports that the median admission wait time for elective inpatient treatment (non-urgent hospital treatment) in England at the end of August 2007, was just under 6 weeks, and 87.5 per cent of patients were admitted within 13 weeks. 0.04% of those waiting were waiting more than 26 weeks. The median wait time has reduced slowly over a 3 year period from about 10 weeks in 2004 to its present level of about 6 weeks. Similarly, the median wait time for a first GP referral to a specialist was just over 3 weeks. 92% of patients were seen within 13 weeks.

Supporters of socialized medicine would respond that there is also waiting in free market medicine either because of normal scheduling or because the price mechanism can force some to wait. Those that cannot afford their treatment at the price level determined by the free market (or by a combination of the free market and state regulations that are common in most countries) because they cannot afford insurance premiums, are denied coverage by their insurer, or cannot afford to take out loans to cover their medical costs, or cannot obtain private charity, have to wait until they can afford their treatment. The numbers of people waiting in the free market is only known to hospitals and the insurance companies and is not recorded in governmental statistics. In socialized medicine, it is not the price mechanism but the relative need of the patient as determined by medical professionals (and/or civil servants) that determines waiting times. In a socialized system, the numbers waiting are recorded in governmental statistics which informs the public debate about how much national funding should be provided for health care.

Certain surveys which have been focussed on those actually kept waiting for certain elective procedures, suggest that whereas such respondents are intolerant of long waits, exceeding three to six months, they can be quite sanguine about short and moderate waits, depending on the severity of the symptoms.

Critics would contend that the patient's "need" as defined by a doctor constitutes an arbitrary criterion for the distribution of health care.


 * Rationing: In any health system, there is a scarcity of resources that are available to provide everyone with the care they need, so health care resources must be rationed.

In socialized systems where health care is mostly free at the point of use and paid for by taxpayers, politicians and medical professionals ration the availability of health care. In such systems, the people, through the democratic process, determine how much of their money should be spent on health. Once the allocation of public funds has been made, it is then up to the civil servants to determine how they will be allocated to each of the different sectors (such as health education, mental health, GP services, community medicine, surgical). Once each sector has a specific allocation, doctors are then entitled to determine how those resources are to be used and prioritize patient access.

Both the allocation of overall funding to health and the allocation between areas and within an area to individual patients can become a topic of ending political debate. Within the medical profession, professional bodies may established bodies (such as NICE in the UK) which examine the cost effectiveness of treatments and set 'rational' guidelines as to how allocations should be made.

If a person is "rationed out" of the national health care service in the socialized system that they paid for, they may have to seek alternative treatment in the private sector (where such an alternative is legal). If they cannot afford private care, they may have to go without.

In a purely free market, the price mechanism determines how health care is rationed. In most countries that do not have a socialized health care system, however, there is a significant degree of government intervention which distorts the price mechanism and pushes it in an upwards direction. Those that cannot afford health care or the requisite insurance may also have their health care needs satiated.


 * Cancellations: Critics of socialized systems say that cancellations are a feature of the system. For instance, the Manhattan Institute once reported:
 * "One (British) cancer patient tried to get an appointment with a specialist, only to have it canceled -- 48 times"
 * However, the patient received a letter apologizing for the cancellations which blamed the difficulties on a new appointments system. The Manhattan Institute failed to reveal this fact as the cause of the cancellations, even though it was reported in the original news story. Thus problem was not an endemic failure of socialized medicine, but rather than a localised problem in one hospital.

As an incentive to reduce cancellations in UK NHS hospitals, regulations were introduced to force the NHS trust to perform a cancelled operation with the following 28 days or else give the patient the opportunity to have the surgery done at a private hospital of his own choice at the trust's own expense. As a result, the percentage of operations carried out on time has risen to almost 99%. .


 * Bureaucracy: Critics in the United States often claim that "socialized" or public medicine would introduce government bureaucracy to health and increase costs.
 * However, the U.S. (with a semi-socialized model) spends more per capita on health than any other nation and more than twice as much as the country with the next highest level of spending (which has a form of universal health care).

Administrative costs in the U.S. health care system are higher than in other countries and an important factor in U.S. spending, and administrative costs in the private sector are higher than in the public sector health care system. One often-cited study by Harvard Medical School and the Canadian Institute for Health Information put the total administrative costs at 31 percent of U.S. health care spending.

Supporters of the free market medicine would point out that the healthcare industry is one of the most heavily regulated industries in the United States. According to a Cato Institute study, this regulation provides benefits in the amount of $170 billion but costs the public up to $340 billion.


 * Choice: Critics sometimes argue that choice is restricted in socialized systems because individuals are not allowed a public sector alternative or are required to pay twice when one is available--once to subsidize the socialized system and a second time for their private care.


 * However, in the UK, patients have a choice of general practitioner, all of whom are self-employed or work in private partnerships employing all practice nurses, doctors and clerical staff. Many hospital services are sub-contracted to the private sector, patients can choose from a range of providers, and will soon be able to choose to use a private sector provider at public expense provided it matches NHS standards and prices. International comparisons of quality of care and health outcomes generally rank the UK above the U.S.

The degree to which waiting in a socialized system affects choice varies from country to country. In the UK for example, a person is free at any time to seek treatment faster in the parallel free market medical system, but they will have to pay the full cost of their private treatment on top of their contribution to the national health care service. In Finland, it is possible to get some funding from the National Insurance System to get private sector care. In Canada the right to jump the queue in this fashion is typically severely restricted by the government.


 * Capacity: Critics argue that central planning is inefficient and under investment leads to capacity shortages and that a lack of willingness to invest in expensive technology leads to shortages in areas such as MRI scanning. Some would argue that only the price mechanism in free market health care can allocate resources efficiently and that political pressure often leads to shortages in socialized systems. Countries with socialized systems do seem to spend much less on health care than countries with free market systems but the reasons for this are not entirely clear.

It is true that investment resources in socialized systems are often used more intensively in socialized systems. Reports in the press and emanating from pressure groups are sometimes distorted and misleading.

For example the Centre for Policy Analysis stated that-
 * "In France, the supply of doctors is so limited that during an August 2003 heat wave -- when many doctors were on vacation and hospitals were stretched beyond capacity -- 15,000 elderly citizens died."
 * The article connects two truths...that the hospitals were stretched in the heat wave and that an extra 15,000 elderly people died during this period. But these two truths are only connected to the heat wave, not to each other.
 * High temperatures are known to increase mortality rates for the elderly and those living alone. The scale of the deaths was not known about until the statistics were analyzed. Statisitical analysis of the cause of death showed a general rise in the cause of death from all conditions whether at home or in hospital. The inquiry resulted in the French government setting up a National Heat Health Watch Warning System to alert the authorities and the public to the dangers associated with heatwaves . A further statistical anlysis concluded that "Our study identified 2 factors that independently contribute to mortality in patients with heatstroke: coming from an institution for elderly patients and long-term use of antihypertensive medication. In this population, it appears essential to prevent heat stress during heat waves by optimizing, as much as possible, the use of antihypertensive medication and by facilitating heat acclimatization, ideally provided by air conditioning. Drinking additional water, reducing the level of physical activity during warmer times of the day, and increasing the amount of time spent in air-conditioned environments are also recommended."  Although the warning system prepares hospitals, the main problem was in the community and not in the hospital system per se.


 * Government role in health: This claim is often made that doctors and not the government should determine what health care is provided to the individual and what is not.


 * In most socialized systems, doctors and not administrators are the only decision makers about the care of patients and doctors and health professionals play a key role in determining how best to allocate funding within the health sector. The overall allocation of national budget to health is determined by government based on a wide range of political factors and political direction of health policies is part of the democratic process. Most countries with socialized health systems also offer a private sector alternative to the publicly funded system so people can opt for private care if they wish.

Critics would contend that the nature of socialized medicine forces doctors to act as administrators.

Benefits of socialized medicine

 * In some socialist countries, health care is supposed to be distributed according to need rather than the ability to pay.


 * Limited or no coverage caps:

In some countries with a socialized health service, the state assumes the full cost of all medical treatment and medicines. In others, patients are required to pay a capped contribution before the state begins to assumes the remaining costs of their treatment.

Low value capped contributions are a common feature of free market health insurance, but there is usually a cap on the total cost treatment. If the cost of treatment is greater than that covered by the policy, the person must pay for treatment from his/her own resources.


 * No exclusion for pre-existing conditions/premium loadings

Under some socialist health care systems, people are free to change employer, move to a new location, without ever leaving the risk pool and in the knowledge that a pre-existing condition will not affect the ability to get treatment and will not affect their future medical expenses.

Critics would contend that this creates incentives for individuals to engage in unhealthy activities, because individuals do not have to bear the costs of their own behavior. What's more, critics would contend that this creates an unfair system that requires individuals who take care of themselves to pay for the carelessness of others.


 * Bulk purchasing

If purchasing is centralized, through the government or a centralized agency, it is possible to negotiate bulk discounts on drugs and other consumable with pharmaceutical companies, and other suppliers, which smaller free market health care providers would not be able to do. There is considerable evidence that countries with centralized purchasing or licencing have achieved substantial discounts compared to countries that do not. The issue is controversial as drug companies often argue that these discounts impair profits that in turn impair further research.

Other types of health care systems

 * Single-payer health care
 * Two-tier health care
 * Social health insurance

Related topics

 * Health care politics
 * Publicly-funded health care
 * Welfare state