Socialized Medicine
We will have socialized medicine. The reasons offered are the following 2 reasons 1) the costs are astronomical 1) it’s unfair that there are 40 million uninsured

Costs vs prices
Prices are the rationalized form of costs. Any impediment to your doing something that you want to do is a cost. An impediment might be waiting 6 months to get surgery to relieve pain, or going down to Indiana to get lithotripsy. Service organizations usually impose costs on callers by using a automated phone answering system, or by imposing bureaucratic hairsplitting, or by not having anyone responsible for stuff that is done. We will hear nothing of costs and everything about prices during the debate on socialized medicine. Prices can be measured by accountants (sometimes) and bragged about by politicians and business people.

Economics as a factor in government programs.
1) What is free is worthless to the person favored.
2) Rich people and corporations do not pay taxes, they collect taxes by setting prices so that they make the profit that they must have to rationalize their acts. Poor people pay all taxes and costs (in the form of regulation etc) that their governments impose in either direct taxes, as in the form of high prices
3) Cost of all sorts are not only impediments to enjoying the stuff that we want, but also serve as information that keeps a capitalistic society prosperous, and the citizens in a capitalistic society ever mobile economically and socially. Socialism can never work because it distorts prices so that the consumer does no know how much he should use or conserve, and the supplier how much of what he should produce.
4) Government is much less efficient in delivering services; there is graft/corruption, and favoritism
5) The great marketing principal holds that you can get rid of the middleman, but you can’t get rid of his function.
6) Deferred costs are costs nevertheless.
7) 60 % of medical care costs already come from government programs, and everything in medicine is regulated, so we already have socialized medicine in everything except in name. This is probably the main reason why health care costs are out of control, if we assume that these things are controlled.
8) about 2% of the GDP is for nursing home care and is calculated to be a medical cost. This element is not included in the reported medical care costs of countries to which the US medical care system are oft compared.
9) Comparing medical care results in the USA to those of Western Europe or of Japan seems to be non relevant. These countries are small, and have morally homogeneous populations. It’s best to compare it to the old USSR with a large diverse population spread out over many time zones. The average Russian male now lives to be age 58 and enjoys free health care.
10) The natural rate of medical care uses is probably around 3% of GDP in civilized countries.

Health vs medical care is a fundamental misunderstanding.
Health is something that most everyone enjoys from birth. It is the default position. One maintains one’s health, it is not given to you by someone else or government grant. There are a few things that you ought to do to retain your health, to wit, exercise, control BP and weight, eat a reasonable diet, avoid smoking and excess alcohol, etc. It is a personal responsibility, effort and the rewards of retaining your health redound only to your self.
You actually have to work very hard, and expend resources to wreck your health. The medieval Christian 7 deadly sins (think sloth, lust, gluttony, anger, envy, pride, and greed) explain most deviations from health; the injunction to avoid booze, bad women and cigarettes gets you a long way towards an early heaven.
Once health is ruined, it seldom returns to normal. The hospitals and doctor’s offices are full of folks who have ruined their own health; seeing a patient with the bad luck of having cancer, or alzheimers that are not the result of poor personal health management is almost unusual.

Medical care is a good deal more expensive, and comes with other costs. It probably does not much to extend life span, but it can make life more bearable and maybe healthier. Simple meds and self help exercises can help manage blood pressure, stop smoking, control appetite within limits. Hernia repairs, back operations, orthopedic procedures all make life less painful and more productive. Antibiotics occasionally clear up life threatening infections, and cancer chemo occasionally prolongs and tames an otherwise lethal disease. What medical care is very poor at is managing obesity and its many complications, or high blood pressure when the patient won’t take his medications, even if they are “free”, or alcoholism, or homosexual behavior without protection, or impulsiveness, or, come to think of it, the 7 deadly sins.

It is estimated that over 50% of medical care money is spent in the last 6 months of a person’s life, ie managing dying. It turns out that the incidence of dying is still one per person, so that is unlikely to change no matter who or what system is in vogue.

Historical costs/factors
There had been an attempt to limit physicians by licensing practitioners in the early 1800s. However, this was swept away in the populist Andrew Jackson presidency, and thereafter, physicians/medical schools proliferated. Medicine was full of medicine men in the late1800s competing for patients with low fees and personalized services. Every small town had their beloved doc who wasn’t very busy, who seemed to care for his patients, and who was really poorly trained and experienced. The doc was also poor. All that he could do was use asparin, opiates, deliver babies or do simple surgery, set bones, drain abscesses. He was a justifiably a fatalist. There was a proprietary medical school in every backwash. Grand Rapids had a medical school. Buffalo NY had 3, Geneva NY had one. All you had to have was the fees and two years or so to get your MD. There were 250 US medical schools around 1900. Philosophical orientation ranged from allopathic (like me, university medical school trained, certified etc.) to chiropracters, naturopaths, and especially the homeopaths; all pledged allegiance to “SCIENCE”.
The AMA was the largest of the numerous medical organizations, and were composed of allopaths who had gone to university, or who had European (mostly German) backgrounds that promised greater skill. This organization concerned itself mostly about the poor economic condition of practitioners, and understood that there was too much competition. They worked for over 50 years to restrict the number of physicians under colour of improving the quality. Accordingly, they lobbied state legislatures to license physicians. In 1913, theAMA deployed an insect scientist, Samuel Flexner, to produce a report that said that there were too many doctors, and that the only way to improve quality of physicians was to force them to be trained only in universities, and of course, to complete AMA approved internships before starting practice. The period just before WW! Was a good one for the AMA; Congress also passed the Harrison Act which was intended to give MDs the monopoly on prescribing Heroin.
Amazingly hundreds of medical schools voluntarily went out of business; the notable exceptions were the osteopaths and chiropracters. The excess numbers of physicians didn’t die out until after WW2, and after this there was a real shortage of physician. Practitioners were very hard working, died early, and were often very dedicated to their art. Giants walked upon the earth in those days. Health care costs during the late 1920; it was 4 % of GDP
Physicians were in serious financial trouble during the deprression, The percent of gdp that went to medical care went down toward 3%/ Physicians developed BCBS in the mid 1930s. This prepayment scheme guaranteed the doc at least some payment, and eventually became the monster that we see today.
Medications had been produced by pharmaceutical houses. Before 1938 these companies had submitted these medications to 2 testing labs; one was a subsidiary of the AMA, and the other Underwriter’s labs. They would test the drug submitted by pharmaceutical houses for efficacy and safety; usually finishing the study in 1-2 years, and then issue a report. The drug companies could use this report to market drugs to physicians and other users. These reports were never redacted. From the economic prospective, there were vast advantages because the testing house provided a second kind of insurance for the drug company since not only would the drug company, but also the testing/certifying organization could be sued for bad results. In 1938, there was some sort of event which the Agriculture department used to form what became the FDA. The FDA is basically a review organization which allowed drug companies to do and report their own tests of their own medications. The review/approval process takes 5-10 years, and a fair number of FDA approved drugs have had to be recalled; the FDA does not stand to be sued, only the Drug company.
For a series of causes, but no discernable reason, Employer provided health insurance became tax deductible during WW2. This was a subsidy for the rich, as they got more of a tax break because they had higher marginal breaks, and generally had more expensive insurance premiums.
Health care costs went to around 5% of GDP
The federal congress saw the shortage of physicians and stepped in in the 1950s for some medical research in the medical schools. They also encouraged hospital construction as a kind of pork barrel project.
The real money spigot was opened in the mid 60 when medical schools were given a large bonus for every medical school graduate that they produced. The number of US medical school entrants was 6500 in the early 1960, up to 6800 or so when I entered in 1964, and up to 15000 by 1980.The number approaches 20000 now with a population growth of about 50 Percent since 1960. Also about a third of physicians practicing in the USA are foreign medical graduates. Every physician could develop some kind of business, and generate costs to justify his keep.
1965 saw the institution of Medicare/caid. Medical care costs that were growing at 8% per year went up an average of 12 percent per year for the next 5 years, and have remained in a supercharged range since.
In 1973 or thereabouts, the federal government encouraged the institution of Certificate of need laws in the various states, trying to restrict cost increases by requiring that hospitals/doctors etc get permission before buying and using/billing for expensive technology. There were 14 scholarly and economic studies done in the 1980s of which 12 showed that CON increased costs substantially. A 13th one contradicted the other 12, but was disavowed by its authors some years later in the 14th published study. The average cost increase was 10 percent. Regina Herzingler, now professor of medical economics at Harvard Business School did the major one when she was at the FTC. We will hear more about Regina later.
Patients wanting everything done since the individual cost was nil, got more and newer medications, and diagnostic tools. As money in medicine increased, drug companies joined universities as centers of technologic advancement.
The vast increase in medical research led to cascade after cascade of new toys. There is a study done by the government showing that about 60% of increased medical care costs are due to new the “technologic imperative”
There were other regulations that made medical care costs explode; like mandating certain services, such as mammograms in Michigan in every insurance policy written in the state.
The baby doe rule mandated that all neonates be resuscitated.
TheEmergency rooms had to see and care for all patients, flooding these institutions with routine medical patients who did not have insurance.
You can make the argument that socializing medical care (free) will not increase costs as virtually everyone in the US is getting care one way or the other anyway. We will merely rationalize the costs..
The system that we have now has been called the survival of the sickest.

Moral issue; the uninsured. We hear repeatedly that 40 + million Americans are uninsured, but that number is misleading. 12 million are probably illegal aliens. A fair number are temporarily without insurance due to recent job change, or other change. I know of a fair number who are young and healthy, and who prefer to maybe buy a red sports car and forego what they see as unnecessary health insurance. I know that I never knew whether or what kind of health insurance I had when in my 20s. The self employed have to pay for medical insurance with after tax dollars, and they are justifiably miffed, and likelier to skimp.
I’m not sure why we consider medical insurance or “health” care to be such a godsend that it becomes a right. We have a rights (penumbras and emanations of the federal constitution) to travel or to initiate lawsuits, but no one offers to give me a free Chevy, or to indulge my litigiousness by paying my attorney. The countervailing force for these very reasonable governmental programs, is that we would expect UAW members and Attorneys to work for minimum wages in the interests of the “common good”, and that ain’t gonna happen.
We do have a right to maintain our health, but nowhere can I find the penumbras and emanations of a right to free medical care. It would seem that medical care does not extend life much, and doesn’t do an effective job of reversing the health destructive habits of most of the public so the arguments of public health are mute. How does the taxpayer get to pay for another’s self destructive behavior? The moral hazard argument could, I suppose, be extended to make the argument that we should not pay to help contain other’s offences against the 7 deadly sins, as it will encourage even more dysfunctional behavior.
Proponents of socialized medicine recognize the moral hazard, and one hears continuously campaigns to adopt a healthy life style and the like. But Alasz! these appeals fall upon stony ground. There is a movement to make Americans eat less and lose weight. Good luck.
There is the study by two physicians, Himmelstein and Warren asserting that 54% of bankruptcies are caused by unpaid medical bills. The problem is that it includes bankruptcy filings that include a medical bill. It turns out that if you owe 100,000 on your mortgage, 20k on your credit card, and 1500 medical bills, the medical bills are not causing your financial problems.

Moral issues; how doe we doe the payment thing? Taxpayer fundedinsurance from the beginning A to Z?
Co-pays for those able to pay these?
Mandated insurance for those able to pay, and tax subsidized premiums for the impoverished? Will one be able to get supplemental insurance, or pay for more care out of pocket?
I suppose that political considerations mandate that costs will be obscured so that the citizenry is kept in the dark about the true costs of the services that they are using. Payments that are covered (no deductibles) require an expensive review for a myriad of small bills. This is a major cost with insurance companies, and will get much worse when we have socialized medicine.

Moral issues/abortion/end to life/baby doe. What shall the taxpayer funded insurance plan cover? This is actually the major reason why Hilliary care failed in 1994. The plan was to pay for abortions. The Catholic Church and conservatives informed about 20-25 Democratic representatives from heavily catholic, mostly North East states that they would not be re-elected if they voted for the plan. The plan was abandoned within a week, after nearly 2 years of work.
The extent of services that could be offered could be infinite. At the margins, lurk services like elective plastic surgery and psychological services. Then the whole problem with nursing home services will have to be taken out of offerings since these are not reallymedical care, or even health care issues.
Now come harder decisions. The treating of hopelessly brain damaged infant sand old people have powerful lobbies.
About terminal patients, who will make the decisions and what bright line will we use to decide when to stop supporting the process of dying?
Will the government cut off funding for these medical treatments which are only possible with very expensive and often invasive/painful procedures with doubtful benefits?
We are in a position in which we must do whatever we can because the technology, legal/malpractice mileau, and medical cultures will allow no other options. The fundamental problem is that we developed these new technologies so rapidly (government inspired research.) that mankind did not develop the moral language to deal with the consequent human life without the human soul. Had the current state of medical technology developed over a hundred years, then the language used 50 years ago that “we’re doing everything that is possible for granny” would have faded and replaced some other expectations by patients, and the legal community. Patients have come to think that every complaint has some sort of medical solution. Especiallygalling to me is the expectation that medicine has solutions for the 7 deadly sins.
There are any number of moral communities whose religion/beliefs demand adherence to widely different expectations of the medical care system. Witness Catholics, who eschew abortion and birth control, want to have “ routine” care for hopeless cases, ie the kind of care where no bright line exists to separates a tiny chance of surviving as a badly damaged, probably totally disabled, possibly pained, and depressed human being from care that at best prolongs dying. Atheists and groups (ZPG, Hemlock Society) advertising in liberal magazines might advocate abortion, infanticide, and euthanasia, eugenics, etc.. It will be impossible to write laws that balance accommodating the high cost of Catholic care (Viaticare?) and the demand that atheists foot the bill.
Amish pay for their individual medical costs out of pocket. They deal with catastrophic costs with either hi deductible insurance, or by passing the hat around the families in their churches, easily collecting 100s of thousands of dollars to fund a transplant, or life saving operation. A member who is in good standing may well get more consideration, but I don’t really know that for sure. What is sure is that paying for small bills on the spot allows doctors and hospitals who cater to Amish to have lower costs, and hopefully lower bills.

Proposed solutions.
Consequences of a Policy of "Do No Harm"
Consumer driven health care.
John Goodman, promoted by Regina Helzinger of hbs. These are run as HSAs as far as I can tell; I’ve tried to understand this stuff, but to no avail.
This exercise has had two objectives: 1) to identify ways in which government policies create perverse incentives and problems that many turn to government to solve; and 2) to identify what policy changes would be needed to make government a neutral player in the health care system.
Under a policy of neutrality, government would no longer be a cause of the problems so many people complain about. And if government were removed as a source of problems, the resulting system would have some remarkably attractive features. The following is a brief summary.
A Form of Universal Coverage. Under the neutrality reforms envisioned here, government would promise every citizen a fixed sum of money. Those who choose private insurance would get a tax credit against premiums. For those who are uninsured, the sum would be used to fund a health care safety net in their locality. Further, since money follows people, there would always be a minimum amount of funding - regardless of how many people are uninsured.
A Level Playing Field for Public and Private Insurance. Low-income families would no longer be trapped in public systems where the quality of care is frequently suspect and there is often rationing of care, especially rationing by waiting. Instead, people would be able to apply funds spent on their behalf to enroll in an employer's plan or purchase health insurance directly.
A Level Playing Field for Individual and Group Insurance. No longer would tax policy be biased in favor of an employer-based system in which people lose their insurance whenever they leave or change jobs. Instead, tax law would grant the same subsidy to all forms of insurance - regardless of how it is purchased. Further, employers would be able to purchase individually owned, portable insurance for their employees in the same way they purchase group insurance today.
A Level Playing Field for Third-Party Insurance and Individual Self-Insurance. No longer would the tax law encourage the HMO form of insurance by subsidizing third-party insurance while penalizing self-insurance. Instead, all forms of insurance would compete against each other on a level playing field. The expected outcome: An evolving system under which people manage more of their own health care dollars - especially for those expenditures for which patients can exercise discretion and where it is appropriate for them to exercise discretion.
A Genuine Market for Risk. No longer would governments require insurers to charge prices for risk that are totally unrelated to an individual's real health costs. Instead, healthy people would be able to buy into the system at prices that reflect their lower expected costs. The insurance they buy would most likely be portable insurance, making possible a long-term relationship with their insurer and with their doctors. In case of a serious illness, people would be able to transfer to other health plans at market prices (paid mainly by their current insurer, not artificially low prices). As a result, insurers would actively complete for sick people, including the chronically ill, and providers would compete to deliver that care.
A Consumer Driven Health Plan (CDHP) is a broad term used to describe health insurance plans with a Health Savings Account (HSA) or Health Reimbursement Account (HRA) component. CDHP's were first introduced in the 1990's, but they have recently become one of the latest trends on the health insurance market. President Bush is an advocate of the CDHP, and encourages Americans to take advantage of the benefits such a health insurance plan offers.
Consumer Driven Health Plans: The Basics
There are two components to the CDHP: the high deductible health insurance plan and the HSA or HRA. It is important that the two components are paired together in order to insure maximum benefit to the consumer. An HSA is a tax free savings account in which the consumer can set aside money he/she may need for future medical care. The high deductible plan comes with lower monthly premium payments, and it is presumed that the consumer will put the money he/she saves with lower premiums into the HSA. The main concept behind the combination of the high deductible health plan and the HSA is that the consumer is in charge of how his/her health dollars are spent. It is a Consumer Driven Health Plan.
Many major health insurance companies offer CDHP's. Some of the companies that offer such products are: Lumenos, Kaiser Permanente, Humana-One, and State Farm Insurance. Corporations such as Target are increasingly offering CDHP's as part of their employee benefits packages.

A Libertarian plan would get government out of health care altogether. But more realistically I offer the following at the national level since that is what folks are talking about

Get rid of CON enabling federal laws, advertise their monopolistic results
If the IRS is still in business do MSAs (Medical savings accounts with high deductible insurance policies and a tax deductible contribution to an IRA like account out of which the individual can pay for routine medical costs; the premiums will be determined after each individual seeking insurance files his Advanced Directives for the insured.
The premiums charged would go down by the market rate if the physician and patient agree to arbitrate malpractice type claims, and there will be no punitive damages awards
Stop legislatures from demanding that all policies in the state cover certain stuff, like mammograms for all women.
Encourage outsourcing of procedures, ie globalize medicine.
No licensing, only the requirement that one’s claims for degrees and training be truthful
Get rid of the Organ transplant list, Organs can be purchased, and sold at market rates
Electronic medical records follow the patient along with his insurance
Get rid of the FDA, resurrect the function of Underwriter’s labs.
A portion of the savings portion of the HSAs will be sequestered for preventative care If not used, the government will take it back as a tax contribution, ie. use your preventative medical money or lose it.
Privatize the VAH, military medical care systems. These are wasteful.
Stop subsidizing research, medical schools, hospital buildings.
Public health should be restricted to finding and preventing external threats from the environment, not from guiding personal morality