Monday, August 24, 2009

When Medicine is Socialized

From the Mises Institute:

In 1918, the Soviet Union became the first country to promise universal "cradle-to-grave" healthcare coverage, to be accomplished through the complete socialization of medicine. The "right to health" became a "constitutional right" of Soviet citizens.

The proclaimed advantages of this system were that it would "reduce costs" and eliminate the "waste" that stemmed from "unnecessary duplication and parallelism" — i.e., competition.

These goals were similar to the ones declared by Mr. Obama and Ms. Pelosi — attractive and humane goals of universal coverage and low costs. What's not to like?

The system had many decades to work, but widespread apathy and low quality of work paralyzed the healthcare system. In the depths of the socialist experiment, healthcare institutions in Russia were at least a hundred years behind the average US level. Moreover, the filth, odors, cats roaming the halls, drunken medical personnel, and absence of soap and cleaning supplies added to an overall impression of hopelessness and frustration that paralyzed the system. According to official Russian estimates, 78 percent of all AIDS victims in Russia contracted the virus through dirty needles or HIV-tainted blood in the state-run hospitals.


Socialized medical systems have not served to raise general health or living standards anywhere. In fact, both analytical reasoning and empirical evidence point to the opposite conclusion. But the dismal failure of socialized medicine to raise people's health and longevity has not affected its appeal for politicians, administrators, and their intellectual servants in search of absolute power and total control.

Most countries enslaved by the Soviet empire moved out of a fully socialized system through privatization and insuring competition in the healthcare system. Others, including many European social democracies, intend to privatize the healthcare system in the long run and decentralize medical control. The private ownership of hospitals and other units is seen as a critical determining factor of the new, more efficient, and humane system

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