What Is Socialized Medicine?

Washington, D.C.    On March 25, Vermont Senator Bernie Sanders, the only Independent in Congress, introduced the American Health Security Act (S. 70) which provides every citizen with health care coverage and services through a state-administered, single-payer program.  It fully funds the community health center program, addresses the shortage of primary care medical and dental professions, and establishes federal boards for developing national guidelines, and developing minimum competence criteria.  Yet, it gives the states flexibility to carry out the federal mandates.  A similar law was introduced in the House by Democrat Jim McDermott of Washington.

Radio host Rush Limbaugh was widely off the mark when he denounced single-payer health insurance plans as “socialized medicine.”  Only in the Soviet Union and its satellite states did I ever experience a completely nonprivate system of health care.  The state itself was in the business of dispensing all medical services.  Physicians were trained in state-financed medical institutes, then deployed and salaried as state employees.  All hospitals and other medical institutions were built, owned, and managed by the state. The health system operated under the supreme authority of a commissar of public health, always a physician.

In 1948, Britain passed its National Health Service (NHS) Act that provided free physician and hospital services for all citizens.  It is funded by a health insurance tax.  Later amendments required patients to pay a fee for prescription medicines, eyeglasses, and dentures.  While most hospitals operate under the NHS, private hospitals specialize in routine surgery but often do not have the range of equipment available in NHS hospitals that most patients prefer.  Contrary to the all-encompassing system of socialized medicine in the Soviet Union, however, the British government is the facilitator rather than the deliverer of health care while the private practice of medicine continues for those who prefer it.

Canada has a publicly-funded system, with most services rendered by private providers.  The various levels of government pay for about 70 percent of the population’s health care costs.  Under the terms of the Canada Health Act, the publicly funded insurance plans are required to pay for medically necessary care, but only if it is delivered in hospitals or by physicians.  There is considerable variation across the provinces and territories as to the extent to which outpatient prescription drugs, physical therapy, long-term care, home care, dental care, and ambulance services are covered.  Canada also has a publicly funded Medicare system whose services are provided mostly by the private sector.  Each province may opt out, though none currently does. 

In the United States, government-run health care is well-established in the Veterans Health Administration and the medical departments of Army, Navy, and Air Force.  Medicare and Medicaid are federally funded programs: Medicare for those over 65, Medicaid for the poor.  Nevertheless, the United States remains the only major Western country without government-guaranteed care for all of its citizens.

The health care reform proposals currently under consideration on Capitol Hill would ensure that patients can make their own choice of physicians and hospitals.  Most working Americans would continue to receive health insurance through their employer.  If Congress passes a competing government-run insurance plan, private plans would continue to be available.

Whether health insurance is offered by private providers or government, cutting rigorously down on the bloated bureaucracies in either system will be crucial if costs are to be cut.  The Organization for Economic Co-operation and Development (“OECD Health Data 2008”) has published the following table which shows how unfavorably the cost of American health care compares with other economically developed countries.