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Bernie Sanders’ Single-Payer Catastrophe

Vermont Senator and Democratic presidential candidate, Bernie Sanders, constantly chastises America’s healthcare system for being too expensive.  But rather than improve our healthcare through greater choice and competition, Senator Sanders calls for imposing a one-size-fits-all government-run system across the entire industry.

Sanders reiterated his support for universal (or Single-Payer) healthcare at a rally at the University of Wyoming, saying:

“Why [is it] that every other major country on earth, United Kingdom, France, Germany, Holland, Scandinavia, Canada, guarantees healthcare to all of their people as a right except the United States?  Together, we’re going to change that.”

Earlier this year, he unveiled his grand single-payer plan. He promises a brand new healthcare system that covers seemingly every service under the sun.  It would pay for inpatient care, outpatient care, primary and specialties, preventive and emergency services, oral, dental, hearing, mental health, prescriptions and medical equipment.

How much would patients pay?  On paper, every patient (and I mean everyone) could access this grab-bag of treatments completely free of charge! Under Sanders’ proposal, Medicare, Medicaid, Veterans Affairs, CHIP, and private insurance would all be abolished and replaced with a single open-ended federally-run healthcare plan.  There would be no deductibles, co-pays, or premiums to speak of. 

For taxpayers, Sanders’ plan is a far more costly endeavor.  In order to pay for this gargantuan government program, he raises payroll taxes by a combined 8.4 percent on workers and employers. He also raises a slew of new taxes on income, capital gains, dividends, and estates.  All told, his plan costs individuals and entrepreneurs $1.38 trillion in new taxes every year, or $13.8 trillion over a decade.

While this sounds like a huge tax increase, these are just the numbers his campaign released.  If the Senator’s plans were ever implemented, taxpayers will likely pay even more. It’s well known that if you lower the cost of something, people will use more of it. A landmark study by the Rand Corporation found that patients without any out-of-pocket expenses spend 32 percent more on healthcare than patients paying deductibles and copays.  By eliminating out-of-pocket expenses, Bernie’s plan would impose these profligate incentives across our entire healthcare system.

For this reason, numerous experts question the Senator’s math. According to Chris Conover at the Center for Health Policy Research at Duke University, Bernie’s healthcare plan would cost over $36 trillion and raise federal taxes by 71 percent.  Even Kenneth Thorpe, a healthcare expert from Emory University and one of the nation’s most outspoken supporters of government-run healthcare, estimates that Bernie Sanders is undercounting his plan’s costs by at least $1.1 trillion every year.

But these punitive taxes pale in comparison to the damage single-payer would do to patients. In order to control runaway healthcare spending, Bernie Sanders promises to:

“significantly reduces overhead, administrative costs and complexity…By moving to an integrated system, the government will finally have the ability to stand up to drug companies and negotiate fair prices for the American people collectively.”

But single-payer systems in other countries don’t save money by reducing overhead expenses. They do it by ruthlessly cutting payments to doctors, clinics, and hospitals. According to a report in Health Affairs, doctors in Canada, Great Britain, France and Germany earn less than half of what American doctors earn.  In Canada, surgeons make just 40 percent for performing hip replacements as surgeons in America.  This is how socialized medicine actually saves money; by fleecing your local doctor.

Ironically, these cost-control schemes actually reduce the care that patients receive.  Since these governments reimburse providers so poorly, they must ration patient care to remain viable.  A study by the Fraser Institute found that Canadian patients on average wait 18.2 weeks to receive essential medical care.  Wait times were especially long for patients in need of back surgery (42.2 weeks) and neurosurgery (31.2 weeks).  Does this sound like adequate healthcare access?

Because of these long wait times, patents in single-payer systems consistently have worse health outcomes than those in the United States.  According to a 2008 report in The Lancet medical journal, the odds of surviving breast, colon, and prostate cancer after being diagnosed is better in the United States than any other industrialized country with socialized medicine.  Yet these are the healthcare systems Bernie Sanders wants to emulate.

American healthcare is far from perfect.  But adopting single-payer healthcare as Senator Sanders envisions would squash the little market dynamism we have left and replace it with lengthy wait times, fewer treatments, and worse outcomes for patients.

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Thursday, 19 October 2017
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