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Saying Government-Funded Healthcare’s Too Costly is Nuts…Unless You Think the US Uniquely Can’t Do It

Photograph Source: Molly Adams – CC BY 2.0

The new corporate media and conservative Democratic argument against front-runner Bernie Sanders’ eminently logical proposal for creating a single-payer government health insurance program that he calls “Medicare for All” is that it would destroy the huge health insurance industry and put 1.8 million insurance industry employees out on the street.

That is about the stupidest argument for not making an urgent reform of an outrageous pirate-capitalist system I can imagine!

To get a sense of how crazy this argument is, let’s look back at the history of capitalist development. When the steam engine was invented and ships started using motors instead of being drawn through canals by mule or sailed across the sea by wind-power (a labor-intensive process), did anyone worry about all the mule-drivers or sailors being put out of work by the technology shift?  When the automobile was invented, did anyone worry about the collapse of the horse-breeding business, which at the time was huge, or the collapse of the passenger rail and trolly industries?  When oil was discovered and refineries began cracking crude into useable oil, gasoline and kerosene, did anyone worry about the rapid collapse of the whaling industry? When electronics and the internet made operators redundant, did anyone worry about an army of unemployed switching and information-assistance operators? No, of course not! All of this “creative destruction” was viewed as progress. Losers from such shifts were expected to suck it up and find new employment.

Currently we are realizing that the coal, oil and gas industries are threatening to destroy the earth, so nations (excepting the US) are working to shut down those industries as quickly as possible, replacing the with clean energy alternatives like solar and wind power. It would be ludicrous to say (as the Trump administration, and some conservative Democrats do), “Well, we can’t save civilization and indeed the entire biosphere of the earth because energy workers will lose their jobs.”

Healthcare in the US needs a revolution

Well, health care is the same. The US health care system is a top-heavy, over-priced disaster costing some $3.5 trillion a year in public and private funds, and about $12,000 a year for a family of four, if you count privately paid insurance premiums, company-paid premiums (which come out of profits, competitiveness and of course worker salary budgets), co-pays, deductibles and out-of-pocket costs. It’s a system that despite costing twice what any other modern nation spends on its health care leaves 30 million or one-in-ten Americans without any insurance coverage and another 50 million with costly insurance that doesn’t really cover expenses because of absurdly high deductibles that need to first be met, and because of so many needed procedures and drugs are excluded from coverage.

We can fix that, just as all other modern nations have already done, but to do so means getting rid of private health insurance — an industry best viewed as parasitic, not functionally useful. First of all, that is simply a fact that cannot be rationally refuted. But let’s also note that most insurance companies are not simply selling health insurance. They also sell life insurance, business insurance, house insurance, car insurance, etc. So these companies wouldn’t simply close their doors and go bust because of Medicare for All. They’d just have to figure out new markets to enter to make money. Sure a lot of people would lose their jobs under Medicare-for-All, but most of those who would lose their jobs are the people who spend their days at the office working to deny coverage to people who are trying to get care under the plans they pay premiums for. The rest do the bookkeeping for all the paperwork involved in reimbursing doctors and hospitals for care they deliver to patients. All of those jobs are essentially parasitic. They have nothing to do with delivering health care, and getting rid of them will be a good thing.

Let’s also remember that because in the US, employers are the main place Americans get their health insurance, health care for workers represents a huge cost of production for American companies. It is a primary reason that US companies find it hard to compete with other nations — including high-wage nations like Canada, Germany, France  and others. Take that cost out and US companies will become much more formidable in international markets, and will no longer need to ship their production abroad.

Why do people think that so much auto  production has been shifted across the border from Detroit into Ontario, Canada?  I’ve asked, and the answer I get from the managers of US automotive subsidiaries in Canada is always the same:  no health care costs for workers, who basically earn the same as their remaining fellow UAW brothers and sisters back in the US.

The propaganda against Medicare for All is not reality-based

Paul Starr, a health economist who helped develop Hillary Clinton’s failed attempt at health care reform in the first year of the presidency of Bill Clinton, just was interviewed for an article in the Philadelphia Inquirer, and opined that Sanders’ Medicare for All plan could “never happen,” because it would so expensive it would turn the US into little more than “a health insurance company with armed forces.”

It’s a witty line but Starr, who knows better, is being hugely deceptive. He assumes first of all that the cost of the program would be roughly the same as it is now, which is absurd. With the government the sole payor for hospitals, doctors, drug companies and medical equipment makers, prices would be costs for all those things would be pushed  down to the much lower to what they are in other countries that have government-funded health care, meaning roughly 50% or even less of what they are in the US. Second, all the current absurdly high costs paid for Medicaid for the poor, charity care provided by private hospitals which are currently passed along into higher insurance premiums for insured patients, and also the high costs of emergency care and late treatment for diseases that should have been treated sooner (and more cheaply) but weren’t because people without insurance or with inadequate insurance put it off, would be gone if everyone received high quality care through Medicare for All.

The other thing being assumed by Starr and other critics of Medicare for All is that the US military budget, which when all tallied up is currently more than $1.3 trillion a year, is a given. It certainly is a policy backed by both Republican and neoliberal Democratic governments and has been since the end of World War II. It has been considered necessary because of the US economy’s insatiable demand for oil, requiring military control of oil-producing states, and also because of the uncompetitive US economy’s need to exploit other nations for cheap imports, favorable tax deals for overseas US firms, and to keep competing nations like China down through military threats since the US cannot compete with them on equal footing economically (in significant part because of our colossal medical costs). But military budgets should not and do not need to be so colossal. If they were significantly cut there would be plenty of money to fund single-payer health care.

Sanders needs to clearly link Medicare for All to deep cuts in military spending

This is one aspect that I fault Sanders on. He should make it clear that slashing military spending is a pre-requisite for making Medicare-for-All work financially. If Russia, our supposed existential enemy, can be so allegedly threatening with a military budget of $66 billion, and if China, which is a totalitarian state that feels the need to maintain an almost one-million-man domestic “armed police” military force just to control a restive population, can stave of US threats too with a total military budget of $200 billion, surely the US could get by with a similarly tiny budget, cutting its spending by $1 trillion a year!

Finally, Starr and other critics ignore another thing. So let’s be clear: Sanders himself says he’s not talking about coming into the White House and magically kicking off a transition to Medicare for All on his first day — or first year — in office. He’s talking about accomplishing that goal over the course of his first term, which in itself would be incredibly ambitious. More likely he’d have to make a start and campaign for it during the 2022 off-year election when it will be necessary to elect enough supporters in Senate and House get the changeover approved.

Sanders is correct in saying, as he did at NBC’s Nevada candidates’ debate, when asked about the cost of his Medicare-for-All proposal, the it is ridiculous to claim that when Canada, Britain, the Scandinavian countries, Germany, France and Italy can all operate a government-funded health care system at half the per person, and half the GNP share of the US’s corporate-run for-profit-based system, the US somehow could not do the same thing. Of course we could do it too! But as Starr points out correctly, it would mean upending a huge and powerful industry, which some have correctly dubbed the Medical Industrial Complex, like its namesake the Military Industrial Complex, a web of companies that use their wealth to legally bribe and own most members of Congress and every president elected to the White House.

Indeed, the reason Starr and his then boss, Hillary Clinton, failed in their effort to reform the US health care system precisely because the Clintons didn’t even consider the idea — didn’t want to consider the idea — of taking on the health insurance, hospital, physician and pharmaceutical industries. They brought them in on the planning, with the result that they could not come up with an affordable, workable reform.

The Affordable Care Act, foundered on the same shoals. When Obama called together “experts” to help him develop his plan, ultimately dubbed Obamacare, he specifically excluded groups like Physicians for a National Health Program who were proposing a kind of Medicare-for-All single-payer government-insurance approach. Incredibly, he never even invited experts from our neighbor Canada, to explain about how their excellent single-payer program (called Medicare like our single-payer program for the elderly and disabled) actually works, and how they got it going back in the mid-1970s.

The unspoken reality is the the US already had two socialized medical systems

Most Americans are smart enough to know that the current health system we have, based upon profit and virtually unlimited greed, is not working, costs to much, and leaves far too many of us without access to quality, timely medical care. They need to know, though, that the solutions already exist, not just abroad but as models domestically too. The Veterans Administration health care system, at some $200 billion a year, for example, is almost as big as Britain’s National Health System, and is operated on that model with government-owned hospitals and doctors on salary. Many studies have shown that it is as high quality as the best private and not-for-profit hospital consortiums in the country, and that it is a low-cost provider of care. (Problems with the VA Health System have to do with the difficulty veterans have getting admitted, which has to do with chronic underfunding, but once admitted most veterans say their care is excellent.)

Medicare itself, our single-payer health insurance system for the elderly and disabled, works excellently and is loved by patients, even though it is woefully underfunded and weakened by ideologically motivated privatization initiatives. It’s a kind of socialized healthcare system, but you have to be old or disabled in order to qualify.

Basically all Medicare for All would do is expand on what we know works already, extending it to cover all Americans, and improving the coverage so that people don’t need to pay premiums for parts that currently aren’t covered like doctors and pharmaceutical drugs, which the elderly and disabled now need to buy insurance for.

Straight talk and common sense are what are needed now to combat the welter of dishonest propaganda that is going to increasingly obfuscate what candidate Sanders is talking about doing as perhaps the single most important goal of his presidential campaign.

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Dave Lindorff is a founding member of ThisCantBeHappening!, an online newspaper collective, and is a contributor to Hopeless: Barack Obama and the Politics of Illusion (AK Press).

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