Socialized Medicine is Less Efficient and More Expensive

Emailed by’s Daily Grind


A compelling – and somewhat shocking – new report has revealed that taxpayer-funded universal healthcare could wind up being more costly and less efficient than its private sector alternatives.

What makes the report compelling is that it comes at a time when the leading left-wing politicians are falling all over themselves to promise just the opposite. What makes it shocking is where it comes from: Harvard University.

John Goodman at the National Center of Policy Analysis (NCPA) has summarized the findings of Harvard’s National Bureau of Economic Research (NBER), which note that:

  • Publicly-financed healthcare systems throughout the world have not shown any evidence in the ability to control the healthcare costs;
  • Those systems only seem to be modestly progressive because while the rich may, in fact, end up paying more, the limits of taxpayer funding will limit the options for everyone else;
  • Marginal increases in government spending, if used on specialists and elective procedures, may actually be regressive because it deprives the poor of costlier treatments;
  • Public healthcare has little impact on economic inequalities;
  • And, increased government spending on healthcare tends to reduce financing of other public services.

In other words, the promises Americans have heard that universal healthcare will keep costs down, would bring better healthcare to the poor, will be more efficient, will help bring economic equality to our society, and will be affordable by taxpayers – these are all a sham.

The author of the study notes that publicly-provided healthcare is less efficient at providing and delivering services than private healthcare:

“In general, financing systems are more efficient the less they distort individuals’ choices (around work, consumption, investment, etc.) In this sense, private insurance … and out-of-pocket payments are fully efficient.” (Glied, 6)

It appears that Harvard, for far too long a veritable bastion of socialist balderdash, has dusted off its motto and retrieved its legacy: Veritas – for the health of all involved.

ALG Perspective: Universal healthcare will mean longer waits for treatment, because there will be more use of unnecessary elective procedures. It will mean that costs will go up because it will limit competition. It will mean that overall everyone will receive poorer quality of care. And generally speaking, the larger government bureaucracies become, the less they are able to help those who cannot help themselves. Those who can afford healthcare should be allowed to continue to do so without having to subsidize the weight of a universal system which will undermine everyone’s care including their own.

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5 Responses to Socialized Medicine is Less Efficient and More Expensive

  1. Chris says:

    Thanks for posting this, not enough people realize just how bad socialized medicine would be. If the government pays for my healthcare, then the government is more important to the doctor than me – because that’s his source of income. And just how demanding can you be when something is free? If you pay for something with your own money out of your pocket, you better believe you’ll be keeping your service providers on their toes because you worked hard for that money. You have someone else pay for it, all the sudden nobody is even paying attention to the costs, and patients have lost all power. In competitive markets, prices go down and quality goes up. Look at what happens to health care.

    Now, private insurance is part of the free market, but I think we can learn from the problems there and see how much worse it might be with government providing care. A doctors visit might cost $100 for just a few minutes! But nobody cares, because we just paid the $20 co-pay. Could you imagine what would happen to the market if there were no health insurance? Think doctors would be able to get away with charging that much for a 3 minute visit? Sure they could try, but people would be a LOT more price conscious and I can guarantee you things would get a lot more competitive.

  2. Neil says:

    I am sorry but as a person who lives in a Country with socilized medicine I find it so laughble when I read these articles. If I am hurt I go to the hospital im in the emergency room being treated usually within a half an hour. There are teams of doctors taking care of me and I dont pay a thing. The care is very professional and everyone is entitled to it. Unlike in the states where millions dont have access to it and millions more cannot afford the treatment. So I would like to know how the conclusion is made that Socialized medicine is less efficent if it treats everyone instead of a few and treates them more quikly then private health care where the doctors are in it for profit and not to help people. Good try tho was definatly an amusing read but really wrong.

  3. freethoughts says:

    i’m glad you have positive experience, but I can assure that socialized medicine means long waiting lists and malpractice. I suffered both on my and my relatives’ own skin and this is daily news in Italy.

  4. Lauren says:

    I agree with every point said. To Neil 2 comments up, I am sorry for how narrow minded you are 🙂

  5. […] realize just how bad socialized medicine would be. If the government pays for my healthcare, ……Linda Hirshman: Liberal Principles II: People Are Political Animals HuffingtonPostLike the centrism […]

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