Hidden Costs of Nationalized Health Insurance - Literature review Example

Nationalized health insurance brings ostensibly free health care to the masses but at a price! Most developed countries have implemented some form of a nationalized health insurance scheme aimed at lowering the cost of health care with equal access for all, but unfortunately they have not succeeded according to plan. Fleming (2006), presented ten and Goodman, Musgrave and Herrick (2004), provided twenty adverse effects of nationalized health insurance in Britain and Canada, illustrating the real price tags paid. This paper will limit discussion to only three major areas of concern: loss of health decision choices and lack of privacy, a decline in the quality of health care and the creation of new inequalities. Proponents of nationalized health insurance focus predominately on the issue of monetary savings. They claim that the cost of consumer products is reduced when health insurance is nationalized because savings made by employers who are no longer liable for their employees health insurance are passed on to consumers. In turn, this lowering of the cost of products ensures more local jobs for employees because companies are more able to compete in global trade. Supporters of nationalized health insurance also maintain that employees are more mobile because they are more confident and thus more able to change employment if they are no longer happy with one employer; they are also less hesitant in setting up their own business or company without the anxiety of losing their health insurance. In reality however, while these arguments may be acceptable in terms of monetary savings and mobility, other costs are heavier. Canada and Britain both have nationalized health insurance but with differences. Britain employs a ‘single-payer system’ and people are unable to avoid the system and use private insurers. The government covers all health care costs, with money coming from tax incomes. Patients are not required to pay for any services other than some small amounts towards optical and dental care and treatments bought on prescription. Most doctors and nurses are direct employees of the government and thus paid by the government (Tanner, 2008, p.31). Canada’s system is different to Britain’s in that responsibility is divided between ten provinces and two territories. In other words, the federal government and provinces cover all costs but medical staff are not direct employees of the government. Federal taxes pay for around sixteen percent of health care costs with the remainder covered by provincial taxes. Canadians also have the option of private insurance which is usually given by their employer (Tanner, 2008 p.24). Nationalized health insurance means government control of individual records and health decision choices; to increase accountability all individual records pertaining to health must be computerized for government access, as well as linked access by doctors, hospitals, pharmacies, private insurers and other health care authorities. This plethora of information accessible to so many gives obvious cause for concern; such information and lack of privacy is open to misuse and has the potential to be copied or electronically transmitted. All health records in one database also increases the odds for break-ins by computer hackers, which opens doors to a number of untoward illegal or at the very least unpleasant events; “over time, government officials will claim a compelling interest in many areas now considered private” (Fleming, 2006, Introduction, section politicalization and lost liberty). In terms of health decision choices, government bureaucracy stands between a patient and their doctor and patient autonomy is restrained; with nationalized health insurance doctors need to base their decisions on cost rather than care because of government rulings, which may have negative ramifications for patients. Example can be taken from Britain, wherein medical decisions are made by a board known as ‘NICE’ (National Institute for Clinical Excellence). The mandate of this board is to “monitor the ‘effectiveness’ of medical treatments and preventative measures” but in reality it focuses on reducing health care costs “by rationing patient care” (“Is Congress Importing Health Care Rationing from Britain?” n.d. p.1). Numerous case studies are available in the media, relaying occurrences of patients in Britain being denied certain healthcare or medication based on cost. NICE uses an appraisal system called ‘QALY’ (quality-adjusted life year) to determine the value of a particular treatment; in other words mathematical calculations are used to ascertain the worth of a patient’s life (“Is Congress Importing Health Care Rationing from Britain?” n.d). As illustration, The Daily Telegraph (as cited in “Is Congress Importing Health Care Rationing from Britain?” n.d.) reported that NICE denied 100,000 Alzheimer’s patients a particular treatment because it was deemed too expensive. Similarly, a 23 year old woman who was diagnosed with cervical cancer was denied a pap test because the National Health Insurance only pays for such tests for women over 25 years of age, in their endeavour to cut costs. As a result, when found, the cancer was too far advanced and is terminal (“Is Congress Importing Health Care Rationing from Britain?” n.d.). Taking the health insurance sector away from free enterprise reduces the overall quality of health care. When health treatment costs little or nothing the demand for treatment will increase and the burgeoning numbers of patients accumulate. Fleming (2006) reported that more than 800,000 patients are queuing for hospital care in Britain, while in Canada people usually have to wait seventeen weeks to see a specialist after having obtained a referral from their doctor. In Britain the “waiting time for routine, non-emergency surgery has increased to years” and it takes five months for women to have pap smears and up to eight months for mammograms (Wollstein, 1992, p.2). People who may not have sought medical help for minor ailments like the common cold, headaches or sunburn because of the cost of insurance and treatment will more readily elect to seek help if they believe that treatment is free and they believe they will “remain insulated from the direct costs of health care” (Fleming, 2006, Introduction, section financing crisis). The increase in demand also places a large burden on medical practitioners, other health care workers and services, which may result in deteriorating services and care. Britain has a serious shortage of doctors and nurses because the NHS (National Health System) did not foresee the increase in demand and after waiting hours, patients usually receive only five minutes with their doctor (Wollstein, 1992, p.2); a visit so short places concern as to the quality of care and judgment of treatment. Problems arose in 2004 when in order to save further costs, the government bargained with general doctors that resulted in GPs reducing work hours for lower pay; this in turn has led to fewer doctors working at night or on weekends (Tanner, 2008, p.23). According to Hammond (2002) (as cited in Fleming, 2006) it will take until 2024 before Britain can attain the same staffing levels as Europe, thus existing staff are ridiculously overburdened. Canada too is experiencing the same lack of doctors and they have to work in excess of fifty hours a week on a regular basis (CBC News, 2004). Fleming (2006) told us that this shortage has resulted in almost twenty percent of Canadians having trouble locating a doctor, together with a lack of other health professionals such as radiologists, psychiatrists and obstetricians. He further stated that almost two thirds of family doctors are refusing or limiting new patients. Canada only has about 2.1 doctors per 1000 people but even more dire is that the ratio has not increased since 1990 and the ratio of nurses to patients is in decline (Tanner, 2008, p.32). The lack of doctors and nurses in Canada is quickly reaching crisis point; in 2004, one hospital in Vancouver was forced to farm out almost a thousand patients because of a shortage of nurses and in 2006 another hospital had to cease all surgery for over a week because of a lack of nurses (Fleming, 2006). Stossel (2009) claimed that some towns in Canada hold lotteries for designating who gets a family doctor; due to crucial shortages over one and a half million people are without a family doctor. Another problem that occurs because of increase in demand is the shortage of updated medical equipment and the condition of health care facilities. Nationalized health insurance means that all funds for equipment and upgrading of facilities are controlled by government and in the ever increasing need for cost cutting, nationalized health means that tenders for equipment and health facility cleaning and catering contracts are given to the lowest bidder and not necessarily the most able, resulting in a decline in services. According to Stossel (2009) one particular hospital “tried to save money by not changing bed sheets. Instead of washing sheets, the staff was encouraged to just turn them over”. Many hospitals and other national health facilities in Britain are past their used-by-date and lack of funding means that these facilities are not being upgraded and equipment is outdated. Wollstein (1992) claimed that after thirty years of nationalized health general doctors had very few ‘medical instruments’ and were forced to send their patients to hospitals for routine care, and in Canada medical equipment is in short supply. Tanner (2008) purported that “clearly there is limited access to modern medical technology in Canada” (page 32). The lack of equipment in Britain has “reduced availability and eroded quality” and in Canada over fifty percent of equipment is outdated and only when it no longer functions, is it replaced (Fleming, 2006). In fact, according to Shaw (2002) some equipment in Canada is not safe and worse than in countries such as Brazil and Chile. In Canada, doctors are not able to work properly because of inadequate availability time of operating rooms, and the limitations placed on the number of patients they can operate on means that those deemed not crucial often have to wait years before receiving surgery. (Fleming, 2006) Nationalized health insurance proposes equality for all in health care services but in fact creates new inequalities. These inequalities take many forms: bias against rural patients and the poor, bias against the elderly, bias against overweight patients, and the likelihood that those with money or government contacts receive better health care than those who do not. Wollstein (1992) stated that people living in rural areas are less likely to receive medical treatment, particularly specialist medical treatment, than those in major cities. A patient living in Vancouver for instance is more likely to receive a referral to a specialist than a patient from a rural area such as East Kootenay; he also stated that patients living in urban areas of Brazil receive more medical visits, related services, dental visits and hospital stays, than rural patients. Fleming (2006) provided evidence of bias against rural patients and the poor in Canada. He referred to the findings of a study conducted by Alter, Naylor, Austin, Chan and Tu in 2003, wherein thirty percent more people living in Alberta were able to receive heart surgery than those living in Prince Edward Island. Another study undertaken by Pilote et al. in 2004, found that in Nova Scotia patients have to wait three weeks longer for heart surgery after a heart attack, than those living in Alberta. People living in the north of England are more liable to die of cancer then those living in the south of England; those living in the north are poorer and older and those in the south (Fleming, 2006). Health care for the elderly is inadequate in both Britain and Canada. In terms of ‘long-term care and home health services” (Fleming, 2006, section, exploration #8) government cuts in Canada have resulted in many elderly patients who do not have money or family support having to go without care until they reach crisis point and have to be admitted to hospital. In Britain, elderly patients may be denied treatment completely if the process is not deemed cost effective (Tanner, 2008, p25). British consultants, for example, refer to "bed blocking" when such patients take up badly needed space (Rodwin, 1989). Even worse, is the proposal by the NHS to refuse care to people they regard as not following healthy lifestyle regimes, such as those who smoke or are overweight. In fact, bias against people suffering from weight problems is extremely evident in Britain and some areas such as Staffordshire are limiting access to surgery for those deemed obese by ‘Body Mass Index measurement.’ (Fleming, 2006) The bias towards those who have money or contact within government receiving faster and/or better health care is also evident within nationalized health. Walter (2004) (as cited in Fleming, 2006), raised the issue of a considerable number of doctors in Canada allowing important, rich or personal friends and family to receive treatment faster then others. Similarly, there is evidence of prominent people in sport and politicians doing the same. In other words, those people with money or connections are easily able to jump the queues ahead of the poor and elderly. Such evidence of favoritism can also be found in Britain where Members of Parliament were granted admission to exclusive ‘primary care’ to which others in the public domain were not allowed (Fleming, 2006). Both the British and Canadian public are very conscious of the need of reform. Tanner (2008) affirmed that almost two-thirds of Britons think that this reform is ‘urgent’, while another quarter think it is ‘desirable’(page 25), while a Canadian survey found that almost sixty percent of Canadians think their system is in need of ‘fundamental’ reform and almost another twenty percent think it should be destroyed and reconstructed completely (page 33). Developed countries that have nationalized health insurance schemes are in a predicament with escalating costs and the inability to honor their fundamental goal of equal access to all. Where health insurance and care is deemed free, demand escalates and governments devise ways of controlling costs by rationing both overtly and implied. The cost is loss of patient autonomy and privacy, a decline in the quality of health care in terms of equipment, facilities and access to health care, and the creation of new inequalities such as bias towards the poor, elderly and other minor groups, as well as favoritism towards the more affluent or well-connected people. The quandaries of nationalized health insurance are inescapably due to the fact that they are run by the government instead of being market-driven. Reference list CBC News, Crunch looms for access to health care: Doctors Survey, October 27. http://www.cbc.ca/story/canada/national Fleming, K. C. (2006) High-priced pain: What to expect from a single-payer health care system. http://www.heritage.org/research/healthcare/bg1973.cfm. Accessed 7/22/09 Goodman, J.C., Musgrave, G.L., Herrick, D.M. (2004) Lives at risk: single-payer national health insurance around the world. Roumon and Littlefield Publishers. Graboyes, R. F. (2005) Lives at risk: single-payer national health insurance around the world. Business Economics. April. http://findarticles.com/p/articles/mi_m1094/is_2_40/ai_n13784522/ Is congress importing health care rationing from Britain? (n.d) CPR, Conservatives for Patient Rights. http://www.cato.org/pdf/HealthCareRationing_5-04-09.pdf Lemco, Jonothan, (1995) National Health Care: lessons for the USA and Canada. University of Michigan Press. Rodwin, V.G. (1989) Inequalities in private and public health systems: The United States, France, Canada and Great Britain, in Ethnicity and Health, ed. W. Van Home, Milwaukee: University of Wisconsin System American Ethnic Studies. http://www.nyu.edu/projects/rodwin/inequ.html Shaw, A. (2006) Diagnostic imaging across Canada: The emperors still have no clothes. Canadian Healthcare Technology, January/February. http://www.canhealth.com/jan02.html#anchor19080 Stossel, J. (2009) Better health care: With government, there’s no free lunch. ABC News, June 30. http://abcnews.go.com/2020/Stossel/story?id=7968656&page=1 Tanner, M. (2008) The grass is not always greener: a look at national health care systems around the world. Policy Analysis, No. 613, pages 1-48. March 18. www.cato.org/pub_display.php?pub_id=9272 Wollsten, J. B. (1992) National Health Insurance: a medical disaster. October, Vol.42:10 www.thefreemanonline.org/columns/national-health-insurance-a-medical-disaster Read More