Myth 23. Private insurance and self-payment are relics of an oppressive past, confined to the United States and backwater, poorly developed nations.

We constantly hear that the United States is the only nation in the “developed,” or “industrialized” world (we no longer say “civilized” world or “free” world) that doesn’t have taxpayer-funded medical care for all.

It is therefore past time for the U.S. to relinquish the traditional idea that “the voluntary way is the American way” and join the “progressive” march to coercive, state-funded and state-directed medicine—as instituted by Chancellor Otto von Bismarck in Germany in 1884. These days, the state-owned variant, adopted by Britain in 1948 based on a model developed by Lenin in 1911, is considered “politically unfeasible” in America.

We need to give up our own perception of having the best medical care the world has ever known (in the eyes of individual American citizens and foreign visitors) and aspire to move from the 37th position closer to the 1st position held by France in 2000 (in the eyes of the World Health Organization, which prefers equal misery to unequal blessings)—or so say advocates of “reform.”

Meanwhile, countries outside the U.S. are moving away from failing single-payer systems. “Health insurers worldwide added over 100 million covered lives in 2008 in one of the strongest markets since health insurance was invented in 1880s, according to official government statistics” (HealthPlanWire 8/24/09). The number is projected to exceed 1 billion by 2012.

Single-payer systems are declining because they are based in countries with static or declining populations—many of which are also adopting market-based reforms. Private insurance is growing rapidly in countries with the fastest growing populations. Building a health financing system for the first time, countries on five continents are choosing the private way. Examples include China, South Africa, Mexico, India, Australia, and most of eastern Europe. But in at least 25 of the 125 nations with national health systems, private insurance is growing faster than the government-run system (ibid.).

Democrat-proposed reform plans would restrict out-of-pocket payment for “covered” services—while U.S. patients already have the lowest out-of-pocket costs (OOP) as a percentage of total national health spending of any developed country except France, Luxembourg, the Czech Republic, and Ireland. They are even lower than in Canada. OOP spending in the U.S. represented about 60% of real per-capita spending on medical care in the U.S. in 1960, and dropped to 10% by 2002. This surely has a lot to do with escalating costs. But Democrat reformers would eschew financial incentives to patients in favor of “health information tools” enabling payment denials right in the doctor’s office (Scott Gottlieb, Wall St J 8/15-16/09).

A few facts about private insurance and self payment in nations with national health systems (Gregory Dattilo and Dave Racer, Your Health Matters, Alethos Press; 2006):

  • Health Canada pays about $1 billion for services purchased in the U.S. because of a shortage of facilities in the country. It is not known how much Canadians spend abroad beyond this amount.
  • In the UK, 13% of its residents own private insurance, enabling them to bypass waiting lists.
  • The Japanese face a coinsurance cost of up to 30%, and pay an average of 44% of employer-based premiums. Childbirth, check-ups, vaccines, and prosthetics are not covered. The maximum OOP for a Japanese worker, if copied in the U.S., would expose the average worker to a potential health cost exceeding 50% of his disposable income. Japan relies largely on market forces to restrain expenditures.
  • About 85% of French citizens buy private supplemental insurance. Because of escalating costs, the government increased copayments to as much as 30% to 40%.
  • Germany is the only [European] country where high-income people, self-employed, and civil servants may opt out of the compulsory social security system and join private health insurance. (See comments by German physicians, with English subtitles, and Myth 20.)
  • Per capita spending rates are increasing as fast in most national health systems as in the U.S. Increases between 1990 and 2003 were: U.S., 28%; Germany, 30.5%; France, 17.4%; Canada, 10%; Japan, 33%; and England, 28%.

The French system, held up as the example now that Canada and Britain have lost appeal, is also in trouble. “Citizens must pay more and doctors must alter their behaviour” said a government-commissioned report (BBC News 1/23/04). In 2009, the total cost of the system, from employee and employer combined, is more than half the worker’s wages (Investors Business Daily 8/26/09).

“In France, the supply of doctors is so limited that during an August 2003 heat wave when many doctors were on vacation and hospitals were stretched beyond capacity—15,000 elderly citizens died,” wrote David Gratzer (ibid.).

While upcoming nations are choosing the private, voluntary path, American “reformers” are pushing for a regression to 19th century, consistently failed systems of centrally planned coercion.

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2 thoughts on “Myth 23. Private insurance and self-payment are relics of an oppressive past, confined to the United States and backwater, poorly developed nations.

  1. One will never convince a person he should have a medical system based on private property until or unless he believes that a man has a moral right to his own life, liberty, property, and the pursuit of happiness. Only then will he fight for his property rights, which includes the right to trade for his medical care, value for value, with a physician.

    In America, the only thing holding up the Leftist argument for the government takeover of medical care is the morality of altruism: that a man has no right to live for his own sake; that service to others is his only moral justification to remain alive in a semi-human state.

    Sadly, it is that argument that prevents Americans from reclaiming their heritage: private property. The Left tells Americans that they are “too selfish”. Indeed! Americans have not been selfish enough! Since days of the Roosevelt Administration, Americans have been conned into the moral sewer of altruism – and they have taken it, with very few who have had the courage to denounce it on moral grounds.

    It’s time for everyone with an ounce of self-respect to denounce the morality of altruism and replace it with the morality of self-interest (rational selfishness). I don’t mean that selfishness is a form of cut-throat action; it isn’t. Rational selfishness means that there are no masters or slaves, no rulers and serfs. It means that you have a right keep what you earn and can trade it in a free market of private traders.

    If medical care is to survive as human action, it will survive as private property and private action. Tell that to your Congressmen. Tell them that, in the long run they have no real chance to defeat freedom unless free men give up or give in. Tell them that if they want to be on the side of the Good, they will return to individual rights, private property, and the free market in medical care.

    Mark A. Hurt, MD
    Creve Coeur, MO

  2. Man’s progression from a state of savagery to the founding of America and our industrial revolution that made our country the envy of every rational man alive is the existential expression of the power of the human mind in man’s existence when he is left free to think and act in his own selfish interest and to act as the trader that Dr. Hurt so cogently defines. I too know that the anti-human life morality of Altruism is the cancer destroying our country. America will acheive undreamed of heights of benevolence, prosperity and happiness when Ayn Rand’s objectiveist ethics become dominant in our culture. Look forward to that day!

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