The Specter of Socialized Medicine

What Is It and Is It Invading Our Country?

By Marla Bizzle, Denise Fraga, Laurie Seremetis, Jeanne Lambrew | May 14, 2008

In This Issue

• Background Basics on Socialized Medicine
  
• The Real Situation in the United States
• Point-Counterpoint: Is The “S” Word Such a Dirty Word?
• In the News
• The Last Word

Background Basics on Socialized Medicine

Politicians have recently used the term “socialized medicine” to describe everything from the public-private plans that insure all Americans to the reauthorization of the Children’s Health Insurance Program. It’s a concept that has been embraced, demonized, and misunderstood since the early 20th century in the United States. We’ve stood by and watched the entire industrialized world turn to varying forms of government-supported health care systems for all their citizens. But, in part because of fears about socialized medicine, similar policy changes have been blocked here. What exactly is socialized medicine, and why is it slander in the current health reform debate?

Textbook Definition

The Columbia Encyclopedia defines socialized medicine as “a system of health care delivery in which care is provided as a state-supported service.” In a strictly defined socialized system, the government controls all means and methods of delivering, financing, and allocating health care. In practice, the government role in socialized medicine systems ranges from complete government ownership and salaried facilities and providers to public financing of private insurance and providers. The loosest interpretation—used most often to scare Americans—applies to any government involvement in health care. In fact, just last year President Bush called reauthorizing the State Children’s Health Insurance Program, which would have increased access to health care for millions of children, a “move toward socialized medicine.”

The Spectrum of “Socialized” Health Care

There are a variety of ways that governments can finance and deliver health care. Government financing for health care systems is typically achieved through tax revenue and/or compulsory national health insurance plans. Scandinavian countries such as Sweden and Finland are examples of strictly socialized medicine systems, in which the government operates all aspects of the delivery of health care and uses tax funding to disburse medical services to their citizens. Similarly, the United Kingdom’s National Health Service is completely financed via taxes and National Insurance contributions; the government also employs doctors and nurses at NHS-run facilities. They do allow some private insurance to augment national services.

Another model is a compulsory national insurance system, like those in Germany, Japan, Switzerland, and, most recently, Massachusetts. Individuals must purchase health insurance under this type of system. The government typically provides a base amount of support plus additional financing for low-income and high-cost individuals. Such systems tend to be managed by employers, insurers (sometimes called “sickness funds”), and other non-governmental actors.

In reality, most countries have some type of private/public balance. This usually entails public funding for commercial and non-profit providers, and/or an allowance for the purchase of private insurance for services not covered through public funding. Examples of this kind of arrangement vary with the degree to which the government is involved. Australia’s publicly funded Medicare program pays for doctors and public hospitals for all citizens, with incentives for people to purchase private insurance for private hospitals and services that are not covered (for example, dental exams, cosmetic surgery).

The fact is that socialized medicine in its purest form is difficult to come by in the real world. Some sort of private entity operates or is allowed to operate within almost every health system. These private-entity roles mean that many systems are better classified as single-payer and universal health care systems, which differ from socialized medicine. The chart below details these differences:

What’s in a Name? Defining Health Care Systems

The Situation in the United States

The United States relies primarily on employer-based and private insurance to cover the costs of patients receiving medical services. However, the United States does provide certain populations, such as seniors and low-income children with government-subsidized health care or insurance that, in at least one case, is analogous to socialized medicine.

The Veterans Health Administration, which is similar to the British system, actually qualifies as a socialized system of medicine under the strictest definition. The VHA provides medical services to retired, disabled, or recently discharged military personnel who are eligible to receive benefits. VA medical benefits are only redeemable at VA hospitals and medical centers, which are owned and operated by the government; health care providers working within the VHA are government employees.

The U.S. version of Medicare is best characterized as a single-payer system. The government provides Medicare to all citizens over the age of 65 (with various exemptions and exceptions) using public funding that reimburses public and private providers of medical services. Medicare is financed through general tax revenues, a 2.9 percent dedicated payroll tax split evenly between employers and workers, and monthly beneficiary premiums.

People who use Medicare may also supplement the program’s benefits by purchasing private insurance, known as Medigap, taking advantage of employer-based plans, or opting to buy into Medicare Parts C and/or D (which refer to the Medicare Advantage and Prescription Drug plans respectively). Though Medicare Parts C and D are private plans, they are still contracted through the Medicare program, meaning that health care professionals are paid with government funds that are allocated to private insurance providers.

Fear and Smear of “Socialized Medicine”

The political definition of socialized medicine in the United States differs wildly from the textbook one. Politicians like to claim that “big government” programs are a disruptive hindrance to the American ideal of free-market capitalism and individual choice. The threat of socialized medicine has been used to block numerous reform efforts, as it plays on fears of the United States becoming a communist or socialist state on par with China, Cuba, or the former Soviet Union.

In the 1950s and 1960s, physicians called the move toward health care reform a “Communist plot,” impeding progress during the Truman administration. In the 1960s, opponents of Medicare employed Ronald Reagan in their “Operation Coffee Cup” initiative. The future president recorded an LP denouncing the proposed expansion on the basis that it was essentially the “first step toward government control over every aspect of an individual’s life."

The public’s view of socialized medicine is no longer rooted so heavily in the fear of our country becoming a communist or socialist state. The new specters conjured by enterprising politicians are bureaucratic inadequacies that lead to poor medical outcomes, horrendous waiting periods, lack of choice of providers, overuse and abuse of limited resources, excessive taxation, and damage to private, free enterprise. As in past debates, the reality of health reform proposals is far from the truth: none of the presidential candidates supports a government run or single-payer system. Nonetheless, accusations of socialized medicine will likely continue to be raised about any reform proposal that is not based entirely on letting private insurance companies rule our health care system.

For further reading:

“What is Socialized Medicine?” The New International, December 1938.

“What Socialized Medicine Is, Isn’t,” Rome News-Tribune, March 5, 2008.

“Universal Healthcare is not Socialized Medicine,” Times Union Albany, March 24, 2008.

“The Best Care Anywhere,” Washington Monthly, January/February, 2005.

Point-Counterpoint

Socialized Medicine: Is The “S” Word Such a Dirty Word?

Additional readings:

David Greenberg, “Who’s Afraid of Socialized Medicine?” Slate, October 8, 2007.

Jacob S. Hacker, Ph.D., “Socialized Medicine: Let’s Try a Dose. We’re Bound to Feel Better,” The Washington Post, March 23, 2008.

Ezra Klein, “How Europe, Canada, and our own VA do health care better,” The American Prospect, May 7, 2007.

Michael F. Cannon, “Socialized Medicine is Already Here,” Cato Institute, September 6, 2007.

Arnold Kling, “Is Socialized Medicine the Answer?,” Cato Institute, March 14, 2006.

Robert Moffit and James Frogue, “Government-Run Health Care: A World of Hurt,” Heritage Foundation, September 29, 2000.

In the News

In the Frontline Documentary “Sick Around the World” on PBS, T.R. Reid brings us commonsense and successful solutions to health insurance and delivery from around the world. Watch it here.

Paul Krugman of the New York Times discusses the disgrace in having thousands of preventable deaths each year related to the lack of universal health care in the United States. Read it here.

A Health Affairs interview with Germany’s long-serving minister of health Ulla Schmidt reveals her country’s experience and achievements in balancing the goals of social solidarity and high-quality health care for all with the power of market forces. Read more.

An NPR piece attempts to clarify what the term “socialized medicine” is (and isn’t) and how it is being used (and misused) on the campaign trail. Hear more.

Sharon Begley’s Newsweek article details new research showing that the United States is behind other countries in cancer survival, diabetes care, and more. Read it here.

A new poll by the Harvard School of Public Health and Harris Interactive showed that 70 percent of Democrats thought socialized medicine would improve U.S. health care, and 70 percent of Republicans thought it would worsen it. Miranda Hitti reports on this partisan split for WebMD Health News. Read more.

The Last Words

Then: “One of the traditional methods of imposing statism or socialism on a people has been by way of medicine,” warned Ronald Reagan in 1961, when he was enlisted by the American Medical Association to alert Americans to the dangers of socializing health care as part of “Operation Coffee Cup.”

Now: “Those who are advocating a government-run health plan are offering a naïve and destructive vision…the counterfeit compassion of a utopian government-run health care system. This legislation will help us reverse our slide toward socialized medicine…” says Senator Tom Coburn (R-OK) re: his Tax Equity and Affordability Act of 2007.