The Idiocy of Single Payer

With the rising popularity of Medicare-for-All, it wouldn’t be too much of a jump for me to say I’m a contrarian in defending a market based system. At this point, the vast majority of people support Medicare for All – according to a Reuter-Ipsos poll, 85 percent of Democrats and 52 percent of Republicans. Yes, that’s right. Over half of America’s primary right wing party, the Republicans, now support a completely public healthcare program. As support grows on both sides, it seems appropriate to show why this is a no-good idea.

For this, I’ve split the arguments up into a few basic chapters:

  1. Healthcare Deaths
  2. Supply and Demand
  3. Mortality Rates
  4. Conclusion

Healthcare Deaths

So, one of the most common things said about America’s healthcare is it is highly prone to deaths because people can’t afford it. This on its own sparks debates about why people can’t afford it, but regardless you’re always going to get someone who says “Oh, well no one should die from lack of ability to afford healthcare”. This isn’t even something I disagree with, but it’s hardly addressing the issues at hand.

So, how many deaths are there from American healthcare? According to a popular study promoted by the left: 45,000. This number seems high – and it is! Less people die from vehicle accidents per year.

Fortunately, this number is unreliable. Megan McArdle from The Atlantic points out some major issues in methodology, saying,

“Those studies are very shoddily done, with parameters that somehow always conspire to produce the maximum possible number. In the first study, they set an absurdly low threshhold for what constituted a “medical bankruptcy”. In the second, they chose 2006, the year after the 2005 bankruptcy reform act had driven an unprecedented spike in filings. It seems pretty likely that medical bankruptcies were bound to be overrepresented in 2006, since most financial events are easier to see coming than illnesses. But even if you disagree–and the authors offered an incredibly wan explanation of why they did–it’s very clear that the people who filed in 2006 were not going to be a representative sample of bankruptcies in a normal year.”

In addition, it’s been widely reported there are some 40 million people in America who don’t have health insurance. At any moment, supposedly 40 million people will be killed by the system because they couldn’t afford healthcare. This is less a problem of prices and the system, and more a problem with the people (as harsh as it sounds here, this is the truth a lot of the time). Johnathan Yates writes for the Des Moines Register,

“There is also no need for a single-payer system as the purported 40 million uninsured in the USA has never held up to research. About 11 million of those are illegal immigrants. Another quarter qualify but can’t be bothered to fill out the paperwork. Then there are those who make easily enough to buy health insurance, but prefer to go without it and pay for their medical costs as they arise. Survey after survey reports that at any one time about 80-90% of Americans are insured, with the same amount being satisfied with their health care.”

So, the amount of deaths in America is heavily overblown. How many deaths do you get with a single payer system? There are plenty of ways we can calculate this – for the examples here, I’ll present both differences in cancer treatment and wait times.

For wait times, we find a fairly high death count. A 2014 study from the Fraser Institute shows the effect of wait times on mortality rates in Canada over a fifteen year period. They find the wait times in Canada’s healthcare system caused between 25,456 and 63,090 female deaths with no significant effect on men. So, divide that by fifteen and extrapolate to America’s population size and we end up with a middle estimate of (drumroll please) roughly 26,000 female deaths per year.

These systems are largely held down by the government having control over them, and in effect, cause more people to be killed by their own health treatment.


Supply and Demand

The argument against single payer healthcare can be made simply through the basic economic law of supply and demand. Unfortunately, as simple as it sounds, there is a good amount of background to cover in advance, so bear with me. To begin, let’s look at a simple graph of the average cost of healthcare per individual over time:

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Clearly the price of healthcare has been rising disproportionately rising since the sixties. In this section, I’ll cover both the supply-demand argument as well as provide the case that regulations hurt the healthcare market and increase prices.

College Graduates vs. Population and Growing Demand

It shouldn’t come as any surprise the single payer system would reduce the supply of doctors if it was implemented now. England’s NHS system is a perfect example of this, considering it now finds itself short 42,000 nurses for a country with a population of 55 million. England has gone into a state of national emergency because of this lack of supply in medical services. In addition, the UK (which contains England) faces an issue similar to the United States in that its population is ageing quickly.

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As is, America is facing a massive supply-demand problem. Let’s turn to a study done which looks at the amount of people graduating from medical school by year from 1982-2012. In the study, the actual amount of people graduating from medical school has stayed generally the same since 1982.

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And, while it looks like the amount of physicians has increased largely since 1960, it has not been nearly the degree necessary to accommodate for the population. For instance, a recent AAMC study shows that the US will have a shortage of over 100,000 doctors by the year 2030.

In contrast with the stagnant amount of people graduating from medical school, the population in America has blown up, and has also gotten older:

Dec 1, 2018 329.10 million
Jul 1, 2018 328.03 million
Jul 1, 2017 325.72 million
Jul 1, 2016 323.41 million
Jul 1, 2015 321.04 million
Jul 1, 2014 318.62 million
Jul 1, 2013 316.23 million
Jul 1, 2012 313.99 million
Jul 1, 2011 311.64 million
Jul 1, 2010 309.34 million
Jul 1, 2009 306.77 million
Jul 1, 2008 304.09 million
Jul 1, 2007 301.23 million
Jul 1, 2006 298.38 million
Jul 1, 2005 295.52 million
Jul 1, 2004 292.81 million
Jul 1, 2003 290.11 million
Jul 1, 2002 287.63 million
Jul 1, 2001 284.97 million
Jul 1, 2000 282.16 million
Jul 1, 1999 279.04 million
Jul 1, 1998 275.85 million
Jul 1, 1997 272.65 million
Jul 1, 1996 269.39 million
Jul 1, 1995 266.28 million
Jul 1, 1994 263.13 million
Jul 1, 1993 259.92 million
Jul 1, 1992 256.51 million
Jul 1, 1991 252.98 million
Jul 1, 1990 249.62 million
Jul 1, 1989 246.82 million
Jul 1, 1988 244.50 million
Jul 1, 1987 242.29 million
Jul 1, 1986 240.13 million
Jul 1, 1985 237.92 million
Jul 1, 1984 235.82 million
Jul 1, 1983 233.79 million
Jul 1, 1982 231.66 million
Jul 1, 1981 229.47 million
Jul 1, 1980 227.22 million

This creates an obvious issue. If you implement a single payer system, how would you plan on increasing the amount of people going through medical school or the amount of people becoming doctors? Nobel-prize winning economist Milton Friedman has noted the exact same issue in one of his own essays on healthcare which makes this debate so plainly simple. The way we lower prices and maintain a stable healthcare system is to increase supply enough to make up for demand.

Fertility Rates and Changing Demographics

Let’s talk about America’s demographic shift. This is important because it plays a very important role is how much supply and demand there is.

According to the US Census, 23 percent of people in the United States (one in four) will be over 65 by 2060. This means a quarter of people will be at or over retirement age. In the same report, we find that by 2060, the elderly population will double. Every group grows in population size, but the working population, people aged 18-65, will only grow by 14-15 percent, in contrast with a 92 percent increase in elderly people. The amount of people aged 85 and over will quadruple in size. This means there will be less people working and more people needing care.

That is 40 years away. While the long term completely matters, the short term might make this situation a little more important in your head. By 2030, just ten years away, one in five people in America will be an elderly person. We are already facing shortages, and a good part of it is going to be caused by this demographic shift.

How will the ethnic/racial makeup change? By 2050, America’s white population is going to go into decline because of their very low fertility rate. The country will be officially minority-white and Hispanic populations will have roughly doubled. The importance of this will be explained in the next section.

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Education Rates by Race/Ethnicity

So, why have I been on about racial/ethnic demographic change? The point about ageing populations might have been enough to cover everything right? Well, not really. One argument could be made that, since minority fertility rates are high and we do have the ability to bring in more minorities into the country, we can fix the healthcare system. But, this is largely problematic. The education level of most immigrants and minorities in general is not very high and not enough become doctors that it could count. Arguments will be made against this such as that we could increase education funding to help bring them up. I argue the point that this won’t help. It also might be said we could expand the amount of them brought into college by affirmative action, but that is just as problematic.

First, there is plenty of data to suggest the education level of both immigrants and minorities in general is not very high. Pew Research Center shows the education level of immigrants is on the rise, which is true among all types of degrees. The percentage of immigrants receiving bachelor’s degrees for example has 2.5% to 17.2% since 1960. In terms of post graduate degrees, the increase has been much more moderate since 1980, having raised from 8.7% to 12.8%. Fair to point out though, that about only about 44 percent of immigrants are Hispanic and 9 percent are black, and hence we are unsure from this data which immigrants are most responsible for the rise in education levels (27 percent of immigrants report being Asian and 46 percent report being single-race white, but some of those whites are double counted as Hispanic).

A 2003 Census report might make things more clear for us. According to the report, Hispanics were consistently far less likely to be educated than any other race. Only about 10-11 percent had a bachelor’s degree or more. The lack of education among Hispanics should cause us to believe there is a low chance the Hispanic population waves can help replace the United States’ doctor shortage.

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The NCES shows that using 2003 might not be the best idea for us, though. Between 2004-2005 and 2014-2015 the amount of Hispanics with master’s and doctor’s degrees doubled. It might be argued, though this is largely because of affirmative action. Now, the liberal reader might exclaim “So what?! They still made it through!” which I will address shortly.

We also have data of college enrollment rates by race/ethnicity. Even if Hispanics are less educated in general, maybe they are enrolling in college at a high rate and we can expand affirmative action programs to bring more into medical school. According to the NCES, Hispanics do apply to college at around the same rate as whites and black people. The case could be made that as their population grows and the amount of them being educated grows, affirmative action programs for medical school could expand to increase the amount of doctors the US has.

But is this the greatest idea?

Hispanics are already accepted into medical school disproportionately higher than whites are. The Center for Equal Opportunity shows that, in general, Hispanics are “substantially” overrepresented in medical school when looking at applicants’ GPAs and test scores. These results are replicated by the American Enterprise Institute. They find that Hispanics in the same MCAT score range are over 2x more likely to be accepted in medical school than whites are. These results might only underestimate the issue by lumping in some Hispanics with whites (since some do identify as white even if they really aren’t).

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Now that evidence shows Hispanics are overrepresented in medical school admissions, we can look to data as to why this isn’t good. The first source is a meta-analysis overviewing ethnic differences in job performance. This study shows that standardized group differences (typically in tests such as SATs, IQ, etc.) correspond to the black-white differences in job performance. They also exist for Hispanics and whites, just to a lesser degree. This might suggest that in the medical field, Hispanics are going to do worse in general, particularly if they are accepted through affirmative action.

In “Death by affirmative action: race quotas in medicine” Emil Kirkegaard has provided a good amount of data to measure the effect of affirmative action in the medical field. To sum up the argument I’m going to make, I’ll refer to a description he gives,

  • “Affirmation action is used in admission to medical schools, i.e. they practice race quotas in favor of less intelligent races, in particular blacks and hispanics, and discriminate against whites and especially (East) Asians.
  • Affirmation action results in less intelligent people getting into schools.
  • Less intelligent people tend to drop out more, so we expect and do see higher drop out rates among blacks.
  • Even with differential drop-out rates by race, affirmative action results in less intelligent people graduating and eventually practicing medicine.
  • Less intelligent people have worse job performance in every job type. This is especially the case for highly complex jobs such as being a doctor which results ultimately in patient suffering including untimely death.
  • Thus, bringing it all together, affirmation action for race results in less intelligent blacks and hispanics being admitted to medical schools, and when they don’t drop out, they end up practicing medicine, and in doing so, they do a worse job than white and Asian people would have done, thereby killing people by incompetence.”

Essentially, using affirmative action to bring more doctors about is just going to get people killed and is a very silly idea for increasing supply to meet the needs of the demand.

(A full case against affirmative action can be found here, if interested.)

Education isn’t helped by more funding

It also might be said that if we increased education funding, then their would be more educated Hispanics and we wouldn’t “need” to rely on affirmative action. This doesn’t seem to be the case for anyone else, so I’m not sure why it would be so great for Hispanics.

Plenty of studies have confirmed the non-link between education funding and education outcomes. The left wing Brookings Institute shows that districts attended by poor students receive more funding than districts attended by non-poor students. Since blacks and Hispanics are more often poor, they’d likely receive more funding by this logic.

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And, my “by this logic” holds empirically. As the Heritage Foundation finds, black people get more education funding per individual than whites and Asians. While I’m guessing, it’s not a far leap to guess Hispanic funding per individual is in between blacks and whites, considering everything else is too.

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Another study by Heritage shows spending on education doesn’t correspond to greater academic achievement. These results are replicated by the CATO institute.

Also, for the person saying we just need to increase the amount of applicants to college, we need to bring about a free college system, this doesn’t work. The OECD provides data on countries with free college systems and they found the effect on the amount of people graduating from college is marginal, for some countries only around 2-3% of an increase.

Overall, the evidence supports the case that you aren’t going to have any sort of successful single payer system with this demographic change and the educational system is not what is screwing people over.

Quick Point: Are We Screwed Regardless?

Yes. Even if a market healthcare system is kept in place or expanded, there still aren’t enough educated people to keep it stable, let alone the nation stable. White people should probably start having more kids; otherwise I fear for the elderly people in fifty years in America.

To Clarify What All This Means

This whole supply-demand section basically makes one thing clear for us: there is too little of a supply and too large of a demand, the former decreasing and the latter increasing while we’re at it – furthermore that the demographic change exacerbates this issue, regardless of whether or not there is a single payer system.

In fact, I would make the argument a single payer system is going to make things worse.

There is evidence to suggest regulating healthcare would only decrease the amount of supply. Medicaid and Medicare were established in 1965. From 1965 to 1989, the price of hospital stays increased over sevenfold, but the amount of hospital beds decreased 50%. This may be considered a plus, suggesting people became healthier and more preventative care was provided. But Milton Friedman found that there was no evidence of the development of medical care during that time.

As I said in the last, small section, we’re screwed regardless. This is true, but at the very least, expanding a market healthcare system might make it last long enough to help people for a little longer. Yes, things are bad, but might as well try and make them a bit better for a while.

In addition…

Regulations like this only make healthcare more expensive and less efficient, regardless of the supply-demand problem.

From 1950 to 1990, the method of paying for hospital stays largely changed as shown in this next graph:

Healthcare Expenditures (graph taken from The Right Data by Edwin Rubenstein)
$ Billions
Percent Financed By:
Year Total ($ bils.) Percent of GDP Government Private Insurance Out of Pocket
1950 12.1 4.6 25.3 15.8 58.9
1960 27.1 5.3 24.3 26.7 49
1965 41.9 5.9 26.2 28.1 45.7
1970 74.4 7.3 37 28.6 34.4
1980 250.1 9.2 42.2 34.1 23.7
1990 666.2 12.2 42.4 37.2 20.4

The bill switched from being largely paid out of pocket at hospitals to being a mix, where the largest portion is paid for by the government. With this, the total billions of dollars America has spent has become much larger, and people have not become healthier, only to pay more money for their hospital visits. This data seems to imply regulations and socialization of healthcare programs only go south.

Mike Holly’s article“How Government Regulations Made Healthcare So Expensive” also highlights this issue, showing that essentially every government regulation of healthcare has been followed by a large increase in prices for the consumer. For example, in 1984, the Reagan administration extended the length of patents on prescription drugs. This has, in turn, created large monopolies and massively increased the prices of pharmaceuticals, a problem we all know too well today:

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All in all, the case can very clearly be made that regulations hurt supply and make the healthcare market move much less efficiently in general. This causes prices to disproportionately go up and is not met with any substantial increase in the quality of healthcare. On this basis, it is tough to support any socialized healthcare system without a proper solution to all of these problems.


Mortality Rates and Healthcare Quality

A study published in Health Affairs looked at countries in the OECD and found America had among the highest infant mortality rate, despite being the most wealthy:

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This point is regularly made against conservatives to promote the argument that other healthcare systems are superior. But it doesn’t take into account some America-specific issues.

First of all, America has far more c-sections than the average country. America produces about 32% of c-sections in the world. About a third of women in America give birth by C-section, despite the WHO saying it shouldn’t be higher than 10-15%. This is important because C-sections are generally more dangerous to the child’s life (and the mothers) than typical vaginal birth and over two times more likely to create a stillborn.

Another big part of it is the amount of unplanned pregnancies in America. About half of pregnancies are unplanned in the US, which means less mothers are able to get prenatal care for their children. This is another suspect factor that would bring America’s infant mortality rate is so high.

Finally, there’s the drug problem in America. 1 in 14 American mothers still smoke while pregnant, despite the harm it does to the child. One of the big ones is of course how it increases the chances of death for the child at birth. Americans are more likely to do meth and opioids in general than other developed countries. The meth that the cartels send to America is also considered to be among the deadliest meth in the world (kind of related, but also just interesting). These heavily increase the risk of birth. This would also largely play into why the American mortality rate is so high.

From this, we can tell there are a lot of external factors at play which drag our infant mortality rate up. Regardless of this, there is no reason to say that it is our healthcare system that does this. Among the points about mortality rates are other arguments against the quality of our system. Many on the left will point out that the US leads in death in a lot of areas. The problem with this is that, once again, it largely comes down to America-specific issues. One in particular being obesity, which America has the most of.

Let’s look at the areas where America is largely lacking in its quality. America’s mortality rate is slightly above that of the comparable country’s average. It used to not be the case, back when there were less regulations and less socialization, but now it is the case. Besides that what is the culprit? Not the system itself, the far majority of the time – in fact it is largely a factor of Americans.

Some of the reasons America’s mortality rate is higher and the quality is considered worse according to the Peterson-Kaiser Healthcare System Tracker are 1) worse rates of amenable mortality, 2) hospital admissions are higher for preventable diseases, particularly congestive heart failure, asthma, and diabetes, 3) the US has higher rates of mortality for endocrine, nutritional and metabolic diseases and respiratory diseases. These are among some of the bigger causes and they aren’t a function of the current system at all.

These are largely caused by the simple fact America is fat. Amenable mortality has largely to do with diseases like diabetes and appendicitis. Hospital admissions are particularly higher for congestive heart failure, asthma and diabetes. What do you know? These are largely caused by people being fat, eating too much, and not working out. Mortality rates are much higher in America for nutritional, metabolic, and respiratory diseases, all of which are largely caused by being fat. This is incredibly simple and it is largely glanced over. In fact, a recent paper finds that the increase in BMI has been responsible for a significant amount of increase in mortality rates in America.

While we’re on the topic, why don’t we point out how America’s cancer treatment knocks other countries’ out the park:

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FEE did some basic calculations on how America would be doing death-wise if we had other countries’ cancer treatment and they say,

“Similarly, cancer-survival rates are considerably higher in the US than in other countries. Check out this data cited by the CDC, which comes from the authoritative CONCORD study on international cancer-survival rates. The US dominates every other country in survival rates for the most deadly forms of cancer.

If we weight the CDC-quoted survival rates for different forms of cancer in accordance with their contribution to overall cancer mortality, we find that, with the UK’s survival rates, there would be about 72,000 additional deaths annually in the United States. There would similarly be about 21,000, 23,000, and 31,000 additional deaths per year with Canadian, French, and German survival rates.”

It seems this debate comes to a non-recognition of large differences between countries.


Conclusions

I feel like I’ve added more to the debate by referring to the demographic change beyond ageing populations. By bringing race into the matter, we not only think about the danger of socialization but the general change that comes to healthcare quality with non-whites and non-Asians. This should hopefully make things more interesting.

So what does this all come down to? Simple – single payer sucks and America should expand a more market based healthcare system if they want it to last. No argument holds up against these core points and the whole thing about “less deaths in other countries” has been proven to be BS. I’ll make it short and sweet for you. America, if it wants to preserve a stable healthcare system, can not go to single payer, and should become far more market based.

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