Thursday, August 19, 2010

Socialized Medicine, Fish and Chips Edition

It is not uncommon for proponents of socialized medicine to point to centralized government health care systems in other countries. Theodore Dalrymple, retired doctor and psychiatrist from England, reveals that not all is well with Britain's National Health Service. In a piece from this March, he cites a news item from the Guardian that should give us pause:
[W]hile spending on Britain’s National Health Service had increased by 60 percent under the Labour government, its output had decreased by 4 percent. No doubt the spending of a Soviet-style organization like the NHS is more easily measurable than its output, but the former minister’s remark certainly accords with the experiences of many citizens, who see no dramatic improvement in the service as a result of such vastly increased outlays. On the contrary, while the service has taken on 400,000 new staff members—that is to say, one-fifth of all new jobs created in Britain during the period—continuity of medical care has been all but extinguished. Nobody now expects to see the same doctor on successive occasions, in the hospital or anywhere else.
Note that spending went up while output fell. Cost per-patient necessarily increased. Certainly one can find people who have had positive experiences with the NHS. However, economic theory provides us with good reasons to believe that the more centralized the health care industry becomes, the more it will generate higher costs and disappointed patients. This is not what was promised when health care reform was passed.

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