President Obama is looking at making one of the most significant changes to the US by introducing a socialized health care system. The US is the only developed country in the world that doesn’t have a socialized health system, and so the US is in a unique position to adapt a new system based on other countries’ systems.

Unfortunately, politics and the media have gotten involved and as a result the American population is not being offered the simple facts, just hearing a lot of scare tactics and overly complicated views. By reviewing and comparing both systems on a basic level, this will help highlight how cost and access to health care drives the populations’ health care needs and as a result why the US needs to adopt socialized health care.

The US health care system is a privatized system where the user needs to have medical insurance to offset the cost of their treatment. This has the alleged benefit of having shorter wait times and easy accessibility to medical treatment, encourages good medical and service performance due to market competition, allows the individual to customize their insurance based on their needs, and reduced government spending on health.

However, its major drawbacks include the extremely high cost of the insurance and health care treatment, insurance doesn’t cover 100 percent of treatment cost, health care facilities charges are inflated to increase profits, treatment must occur in the insurers’ network of facilities (even in emergency situations), and the entire system is driven by profit not patient care. The current government run health care system only covers the select few who meet the strict criteria (“Socialized Medicine vs Private Health Care,” par. 15-20).

Unfortunately, there are millions who are caught in the gap between not qualifying for government assistance and the inability to afford private insurance. “Some 47 million (out of a population of over 300 million) are estimated to be without insurance. On top of that, an additional 25 million Americans are also deemed ‘underinsured’ -- their coverage is inadequate for their needs. When someone without insurance (or with inadequate coverage) falls ill, they are obliged to pay their medical costs out of their own pocket” (“Q&A: US healthcare reform,” par. 13-15). This results in cost determining an individual’s decision to seek medical treatment, not the need for the treatment itself.

There are 30 OECD (Organization for Economic and Co-operation and Development) countries and 29 of the 30 use a socialized health care system and incorporate aspects of privatized health care (“Comparing U.S. Healthcare Spending with Other OECD Countries,” par. 1). Under this system, every person in the population is covered for free hospital medical treatment which is provided by the government. This has the benefit of encouraging people seek to medical treatment regularly (often resulting in early diagnosis and treatment), no upfront cost, forms a major database so the patient’s files are easily accessible all over the country for medical professionals, and patient care drives the system not profit.

The drawbacks include overwhelming of medical facilities causing long wait times for non-urgent treatment, increased government spending and taxation, and government regulation can cause private practices to suffer from reduced income (“Socialized Medicine vs Private Health Care,” par. 7-14). To combat some of these issues, aspects of the privatized system are incorporated on a voluntary basis. Taking private health insurance, the individual now has the ability to choose their medical treatment without being forced to wait, and the government will also contribute to cover some of the cost. However, there is still a gap (after insurance and government has paid) which must be paid for by the individual (“What Medicare Offers,” par. 6). In saying that, the privately insured individual still has complete access to the socialized system and can be treated under it without any penalty or up-front cost.

This is a very simple and general overview, but has been done this way to give the basic facts of both systems. Even with these vast differences, both systems offer a high quality level of care. However, when it comes to health care, the population is mostly concerned with two major factors, which are cost and access to medical treatment. This is where the socialized combined with aspects of the privatized system is a more effective system, as opposed to the current US system.

First, the cost of health care in the US is outrageously high with the country spending $2.2 trillion in 2007 on health care, or $7,290 per capita which equates to 16 percent of GDP (gross domestic product). Compared to the spending, in 2007, on health care by socially similar OECD countries of Australia ($3,137 per capita and 8.7 percent of GDP), Canada ($3,895 per capita and 10.1 percent of GDP, and the United Kingdom ($2,992 per capita and 8.4 percent of GDP), the spending difference is extreme. The US spent almost double the other 29 OECD countries average of 8.9 percent of GDP, and two and a half times the OECD countries per capita average of $2,964 (“Comparing U.S. Healthcare Spending with Other OECD Countries,” par. 1).

Major opponents to the US health care change argue it will cost too much, yet currently the US spends at least 35 percent more on health care than any other OECD country. “Despite spending the most, the U.S. provides free health care for only the elderly, disabled and some of the poor people. In comparison, the same amount (currently paid by the US government on free health care) is enough to provide universal health care insurance by the government for all citizens in other OECD countries” (“Comparing U.S. Healthcare Spending with Other OECD Countries,” par. 1).

In addition to overall spending by the country, the cost of insurance and/or treatment is most felt by an individual. Even though the US has the lowest government expenditure in health care of all OECD countries, it’s the US individual that pays the highest share. In 2008 the average annual medical insurance premiums, via an employer, for a plan covering a family of four, was $12,680. To put this into perspective, the annual gross salary of a minimum wage, full time worker in 2008 was $13,624 (“Comparing U.S. Healthcare Spending with Other OECD Countries,” par. 9).

This insurance cost is just the premium alone and doesn’t factor in any out of pocket expenses incurred by using a medical service. Compared to the socialized system, even with higher taxes, there is no insurance premium (for those that choice not to purchase it) which dramatically reduces individual cost. Even for those opting for insurance, the overall cost (including premiums and taxes) is still less than the current US insurance premiums. In addition, the socialized system fully covers the population for their medical costs (only paying a smaller gap for privately insured non-urgent treatment).

Secondly, access to medical treatment should be determined by the needs of the patient and the availability of the service. Unfortunately, under the US system this isn’t the case. If you have insurance, then you can readily use medical services but there will be out of pocket expenses, which can be quite expensive. It must be noted that the patient must use the facilities in the network of the insurer otherwise the service will only be minimally covered by insurance, if at all. In some cases, facilities won’t treat patients because of an incompatible insurance (Chua, “Overview of the U.S. Health Care System,” par. 8-10). For people without insurance, the service is still readily available, but the excessively expensive cost forces the person into the dangerous choice of either not being treated or to self-treat without adequate materials or skills.

Under the socialized system if treatment is needed, then people are more apt to use the service (since cost isn’t a factor). However, this does create a backlog for non-urgent services (urgent cases will always be treated immediately without question) and can result in waiting periods of weeks, months or even years (Chua, “Waiting Lists in Canada: Reality or Hype?,” par. 10-15). To help alleviate this, the use of private insurance allows the people who can afford insurance to be seen in a private hospital and avoid the wait (“Frequently Asked Questions,” par. 6-9). This then reduces the waiting times and ensures the less fortunate can still receive medical treatment. Once again showing that socialized health care offers a more effective and accessible service for the population as a whole.

Here are some examples to apply these concepts of the two systems. In an urgent treatment situation (for example, a person required four weeks of intensive care), under the current US health system, a person with insurance will be treated immediately but will still owe a substantial bill due to the gap in insurance. A person without insurance or treated in an out of network facility will be treated immediately, but will owe an exorbitant amount and will most likely be forced into financial hardship. In fact, “half of all personal bankruptcies in the US are at least partially the result of medical expenses” (“Q&A: US healthcare reform,” par. 17), something not seen in socialized health care.

In the same situation under a socialized system, the person would receive immediate care and identical treatment, but would owe nothing.

In a non-urgent situation (for example, knee replacement surgery), under the US system, the insured person could have the operation done immediately and would pay the gap. The uninsured patient would most likely opt not to do the surgery, because it’s too expensive and would be left with a bad knee that will probably never be fixed.

Under the socialized system, the uninsured can have the surgery at no cost; however, they may be forced to wait, but it will get done eventually. The insured person can have the surgery immediately in a private hospital, but will have to pay a gap (which is partially subsidized by the government as well). These situations highlight the effectiveness of the socialized system incorporating aspects of the privatized system as it ensures that every person in the population never has to worry about a medical bill, while still receiving high quality care. Unfortunately the US system has the real potential of punishing the uninsured (and often even the insured) for using a medical service with a lifetime of financial burden.

Simply put socialized health care covers the entire population, offering high quality care in a cost effective manner. The system isn’t perfect on its own, so by incorporating the positive aspects of the privatized system; some of these flaws have been somewhat addressed. However, at the end of the day the socialized system ensures every single person is medically covered without any financial hardships.

It is clear that the current US health care system fails because profits are put ahead of patient needs. In doing so the US population is forced to pay exorbitant amounts for excessively overpriced health care, and even with all this excess spending, there are still millions of people who are not medically covered.

By reviewing the principles of both systems and applying individual thought to the simple facts, without being subdued by the political and media song and dance routine, it is clear why the US health care must be reformed. This change will not just benefit the US as a whole; it will also ensure that every person in the US has access to high quality, accessible and financially affordable health care.

References

“Socialized Medicine vs Private Health Care,” Free Choice Foundation, 26 July 2009.

“Q&A healthcare reform,” BBC News, 23 July 2009. BBC, 25 July 2009.

“What Medicare Offers.” Medicare Australia. 15 April 2009. Australian Government. 26 July 2009.

“Comparing U.S. Healthcare Spending with Other OECD Countries,” Seeking Alpha, 5 July 2009. 26 July 2009.

Chua, Kao-Ping. “Overview of the U.S. Health Care System.” ASMA (American Medical Student Association, 10 February 2006.

Chua, Kao-Ping. “Waiting Lists in Canada: Reality or Hype?” ASMA (American Medical Student Association, 2005-2006, 26 July 2009.