Now first of all, the healthcare system in the US is not something I've researched in detail. Don't expect me to break new ground in this essay. But I'm reasonably well-informed, and I've conducted empirical research, thoroughly understanding research design and applied statistics. I have a perspective within a market-oriented framework. From an ideological perspective, I feel that a minimally-regulated, decentralized marketplace of 328M consumers is more responsive to consumer wants and needs; market competition drives innovation, more supplies and variety of goods and services, and lower prices. Centralized/national healthcare is intrinsically ineffective; it's largely rationalized on presumed economies of scale (e.g., lower administrative and/or marketing costs), uniform/simpler decision making criteria and efficiency in propagating policy changes through the hierarchy. This is all built on notions which Hayek would call the "fatal conceit": the idea than an elite of "experts", unmotivated by the "pernicious notion of profits", is an effective surrogate for millions of transactions of buyers and sellers in the private marketplace.
But public choice theory and related market perspectives point out the incentive structures in government, whether we are discussing elective office or bureaucracies, are different than in the private sectors, especially under government monopoly. Politicians may act to further their political agenda (maintain their current position (with high visibility, a comfortable lifestyle and pension system) or advance to higher office, get credit for legislative accomplishments, etc; in short: longevity, power and fame). Bureaucrats of course are motivated by their own interests, including job security and advancement, increased span of control; their livelihood is not enhanced by making waves and challenging the status quo, taking highly-visible responsibility, say, for approving a drug that later has unintended or unexpected side effect or unexpected fatalities, or pointing out their and/or other staff positions are redundant/unnecessary. Quite often future budgets are positive offsets of current budgets. There is no incentive to drive down costs for the taxpayer, because there is no alternative government for the taxpayer to choose. Termination rates in civil service are a fraction of that you find in the private economy. For example, my Dad and baby brother, both career USAF enlisted retired, had to wait some time to land positions in the USPS and civil service respectively. At my last full-time job, my federal contractor "supervisor"/point of contact had worked for 7 years in his position before a civil service job opportunity was available.
So what motivated this particular rant? Over the weekend, a niece, the "progressive" daughter of my middle brother (about 3 years younger) published on Facebook a tweet or excerpt from Comrade Bernie Sanders, basically arguing the US is an anomaly among developed economies, paying twice or more per capita what other economies with worse outcomes. I'm not going to reproduce the thread here (cf here). I've mentioned this niece in the past; she was an Obama supporter who sent a blistering email to my Mom (an obsolete email address) and ccing me, attacking McCain for supporting stem cell research (because of his friendship with mentor Dem Mo Udall, who had developed Parkinson's). This was particularly galling because Obama and the Dems heavily promoted stem cell research as the Holy Grail for at least 2-3 POTUS election cycles. We had sharp exchanges when my disagreeable sister-in-law, no progressive but playing Mama Bear, intervened. I had left Facebook for about a year around the turn of the decade, and several weeks back, my niece sent me a new friends request which I accepted. For the most part, her posts have focused on things like hiking in Colorado and improving her running time in various competitions (I know my brother had run in a few marathons and other contests, not as a top contender, so that's where she probably picked that up). I thought maybe she had outgrown her progressivism, like I did by my mid-20's, but no. I think this was only the second or third political post from her that got in my Facebook feed. She hasn't really commented on any of my libertarian meme reposts, so she probably isn't following me; I may need to do likewise, because I found myself in the middle of an unwanted escalated exchange. There really wasn't anything new in what she had to say; I've seen the same arguments and sources for years, and I don't really feel like repeating what I've already said on dozens of posts and tweets. She was basically challenging me to provide comprehensive evidence disputing all these bullshit international comparative studies; even when I cited sources like here, she was dismissive of the evidence as "anecdotal". You really can't argue with progressive propagandists; they'll never concede they are wrong. They simply dismiss inconvenient facts.
The progressives are simply in a state of denial over history. The often repeated lie, for instance, is that the Depression was the result of laissez faire government run amok. In fact, the Federal Reserve engaged in rapid credit expansion during the Coolidge Adminstration; this resulted in escalating stock/asset valuations, and when the Fed finally took its foot off the gas, the result was the inevitable stock market crash. And then Hoover responded to the crisis with a series of blunders, including jawboning companies against cutting wages and protectionist measures like Smoot-Hawley; the ensuing global trade war collapsed American agriculture exports. This in turn made it difficult for farmers to service their debts. The ensuing glut of supply depressed commodity prices; FDR would later attempt to stabilize agriculture prices through market manipulation, capping production to cause artificial scarcity. Hoover responded to the crisis with the typical Keynesian tools, including tax increases, infrastructure spending, and massive spending. If you review the 1932 election, you'll find Hoover accusing FDR of intending (gasp!) to cut the government budget and its workforce. (Never mind, that's what the Harding-Coolidge administration did during the brief post-WWI depression.) In fact, FDR supersized Hoover's policies; there was nothing laissez faire about the money supply sugar high in the 20's, the trade war, tax hikes, massive federal spending, etc.
On top of everything else, FDR, in the midst of high unemployment into his second term, introduces social security (via a rubber-stamp one-party Congress), funded by a payroll tax on employees. Raising labor prices in the middle of a depression had expected adverse results on the labor market.
Now flash forward to the WWII years. Heavy conscription of young male workers basically resulted in a labor shortage, which led to inevitable pressures on wages. Certainly FDR didn't want the Fed pushing up rates to control inflation, so he implemented (with Congress' consent) a wage-price control system. Basically the political workaround to wage controls was a gimmick to increase tax-favored treatment of benefits, including health insurance. And this was the government's toehold into the healthcare sector of the economy. I think the government sought to repeal this perverse incentive after the war but it was too popular.
(I am not an economics historian, but for a fuller explanation of the Depression, see sources like Murray Rothbard, Higgs, Milt Friedman, D. McCloskey and others.)
We know had the perverse notion of having employers and unions trying to take advantage of tax-free basis to shift routine health care expenses to benefits; employees had less incentive to switch employers due to the risk of more expensive or inferior coverage. For example, larger companies could exploit economies of scales for lower rates from private providers.
Now this post would have to go into a very long discussion of all the issues involved with counterproductive public policy. But let's address some clear examples, just the tip of the iceberg. First, a significant component of provider costs is labor. The government has negotiated with doctors to cap med schools/enrollments. This artificially creates a shortage, boosting physician compensation. Not to mention they may resist delegating routine care, say, to less expensive nurse-practitioners. Second, certificate of need laws in various states allow hospital incumbents, concerning with competitive cost pressures, to veto new facilities, essentially allowing prices to increase by manipulating an artificial storage. Third, government policies have sometimes restricted public access to procedure, physician, and other healthcare prices, impeding competition for consumers. Fourth, the consumer has little direct influence over prices under bundled "all-you-care-to-use"/"use-it-or-lose it" plans. Fifth, the government often imposes costly bookkeeping, regulatory restrictions, and other costs on providers, often imposing price/lengthy reimbursement schedules which provide market-specific distortions for any static list, i.e., driving shortages or surplus procedures. Government beneficiaries (e.g., Medicare and Medicaid) may find it hard to find physicians who are willing ti accept delayed, below-market compensation with high paperwork requirements and other strings tying physician hands. Sixth, the government tends to be a laggard in deploying private sector security standards, including safeguards against fraud, updating software, and deploying best practices. This cannot be understated; fraud in the private sector hurts the bottom line and there is an incentive to invest in solutions to minimize risk. In the case of government, it's more of a case of the tragedy of the commons; if everybody owns it, effectively nobody owns it. If fraud happens, basically few, if any federal workers (short of corruption) are going to lose their jobs. Seventh, we often see bureaucratic "not invented here" syndrome. Take the role of CDC and the FDA during the COVID-19 crisis and the lack of diagnostic tests. The CDC did not seem to reference external sources in developing their own kits, lacked sufficient capacity to handle demand, sent out a large proportion of unusable tests, did not import tests from international suppliers, and did not engage the domestic private sector. (There have been some accommodations since the start of the crisis, but as I write, we still have a shortage, and we lost weeks in slowing the virus' propagation curve.) A similar point can be made about foreign-approved meds; there are no reciprocity agreements. Obviously this is a factor in market-based competition and related lower prices for costly prescription drugs.
As I've discussed, the above list is hardly comprehensive. The fact of the matter is almost any sector that the federal government has intervened in has become inflation-bound, e.g., the healthcare sector, college tuition, housing bubbles, etc. Zoning laws and rent control policies have made California real estate unaffordable. Even vast amounts of money thrown at public education and the War on Poverty have not yielded significant benefits over and beyond existing trends in the private sector. And the national experience with ObamaCare has hardly made health insurance more "affordable"; many households have seen skyrocketing deductibles and much higher premiums, never mind declining vendor competition in the ObamaCare markets. Not to mention ObamaCare consolidated expensive nonessential benefit mandates and ordinary expenses like "free" annual exams. Health insurance, properly conceived, involves shared risk of low-probability catastrophic events, like cancer and major strokes. We don't need an insurance middleman in procuring an ordinary expense like birth control pills or erectile dysfunction tablets.
As I've already pointed out repeatedly in tweets and posts, we've already seen the example of a socialized healthcare system in America--namely, the scandal-prone VA hospital system. It's not just that veterans often have to drive some distance to go to a relevant hospital from their homes, but in many cases certain services were backlogged/rationed, to the point several veterans died on waiting lists. Resource allocation issues in government are the precise things Mises warned against in the socialist/economic calculation problem.
My niece went on: whereas she disliked the idea of tying one's health insurance to a job (she had no clue it was related to FDR's disastrous wage/price controls), she obviously saw the issue as not having a single-payer, namely the government. She saw government healthcare as FDR's aspiration (no doubt under his positive-rights Second Bill of Rights), deferred until the JFK/LBJ's implementation of Medicare and/or Medicaid. Her unstated advocacy was Comrade Bernie's populist extension of "Medicare For All", a euphemism for nationalized healthcare. She obviously doesn't share my personal assessment of FDR as one of the worst, most evil Presidents in US history.
Medicare was based on a myth that elderly people couldn't get medical care, which I discussed earlier. (Ron Paul, as well as others, has busted this myth.) Let's put in this way: even if elderly poverty and healthcare were issues, it would have been much more efficient to provide vouchers under the control of the elderly than the folly of micromanaging elderly healthcare. (Of course, I would expect that providers would quickly reap the benefits of vouchers, much like colleges exploit readily available student loans. The real solution is the free market.) Of course, the EXISTING Medicare system is a house of cards which will exhaust its reserves this decade without reforms. I don't believe Congress wants senior citizens to rebel if the program is endangered, but without reforms, it'll have to cover the funding gap from existing payroll taxes from general revenues.
My niece no doubt believes like in the case of the myth that Hoover was a laissez faire capitalist, that the current issues of the healthcare are with the "free market", the profit motive, and related rubbish. I suspect that Friedman's Law, i.e., it costs government twice what it costs the private sector to do something, especially when you take the economic losses of taxation into account. At last glance, almost half of the healthcare sector involves government funding, including strings attached. When you add in the costs of government regulation at the federal, state and local level, anyone arguing this is a "free market" is in a state of denial. The profit motive bogeyman is particularly pernicious; the profit margin of insurers has been around 3.4%, putting it in the middle third of industries.
Finally, let us look at a theme I suggested in the title of this post--the apples and oranges of international statistics. The argument seems to be that we are spending so much more and our results are lagging other countries. Some relevant points are identified in the Forbes article cited in my post linked above. For one thing, mortality rates are influenced by events outside the healthcare system, e.g., disproportionate gun violence and auto fatalities. Also, other countries do not compute statistics based on US measures. For instance, the US will often include fatalities among preborn infants, which other nations do not include in their statistics. Cost drivers include higher US compensation for providers (see my earlier point on supply caps), relatively higher numbers of high-cost procedures (like knee or hip replacements), US drug development costs largely born by US consumers, and a price/quality and accessibility trade-offs (e.g., shorter wait times to see a specialist; ideally you should identify economic benefits, say, for a shorter absence from fungible work activities) By any objective measure, US patients have access to world-class medical professionals and quicker access to new, life-saving meds with favorable apple to apple comparisons.
Like my niece, you may not be impressed by "anecdotal" evidence. But we have seen first-hand failed government disaster planning during the COVID-19 crisis. Agencies were slow to open markets to the private sector or international suppliers, and that exacerbated the crisis. The idea of rewarding that dysfunction by expanding government involvement, to me, is irrational.
