Experts Warn Against Socialized Health Care

Published August 1, 2007

A panel convened in Minnesota by a financial consulting service on June 14 called universal health insurance coverage “an economic and moral imperative.” Policy experts nationwide responded by urging policymakers to consider other solutions for controlling health care costs.

Former U.S. Health and Human Services Secretary Tommy Thompson led the panel discussion sponsored by Deloitte & Touche USA LLP.

The Deloitte Center for Health Solutions, the firm’s policy research arm, has developed a $70 billion plan to pay for universal coverage nationwide, according to a June 15 article in the Minneapolis Star-Tribune. The plan would have the federal government pay $24 billion a year and consumers about $94 a month in premiums.

Empty Promises

But many analysts say “universal coverage” plans won’t do anything to lower the cost of health care. In fact, they say, these schemes tend to do the opposite–and strip individuals of choice in the process.

“Universal coverage is just another name for socialized medicine,” said Twila Brase, president of the Citizens’ Council on Health Care in Minneapolis. “That which the government mandates, the government is obligated to control. Universal coverage is government control of health care dollars and government control of medical decision-making.

“Universal coverage promises everything, but guarantees nothing.” Brase said. “If we mandate universal coverage, we say goodbye to the ethical and professional practice of medicine and hello to the restrictive realities of socialized medicine. This emperor has no clothes.”

Real Issue

Paul Keckley, director of the Deloitte Center for Health Solutions, told the conference that treating uninsured people who use emergency rooms for health care results in a “hidden tax” built into all health insurance premiums.

John Graham, director of health care studies at the San Francisco-based Pacific Research Institute, said emergency room overuse is the problem.

“The notion that uninsured patients crowding emergency rooms is the cause of our so-called health care crisis is not credible. The root cause of high costs and uneven quality in U.S. health care is over-insurance, not under-insurance,” Graham explained. “Calls for systemic reform through more government control will not improve things.

“Look at Medicare, arguably the most centrally controlled government health care system in the world,” Graham continued. “People in regions with high Medicare costs do not have better health outcomes than those in regions with low Medicare costs.”


Thompson noted U.S. employers currently spend $2 trillion annually on health care–a figure that may double by 2014 and constitute 21 percent of gross domestic product.

“Companies can’t compete on a level playing field [in a global economy] if that happens,” Thompson said.

Michael Cannon, director of health policy studies at the Washington, DC-based Cato Institute, said thinking universal coverage plans will make American companies more competitive “is economic nonsense.”

“Employers don’t need the government to save them from the rising cost of health benefits. Just as Dorothy always had the power to return to Kansas by clicking her heels, employers have always had the power to pare back their health benefits,” Cannon said.

Cannon continued, “All else being equal, firms that contain their labor costs this way will beat the firms that don’t. Those companies that support ‘universal coverage’ want to increase the labor costs of their competition, whether through higher taxes or health premiums. Universal coverage won’t make America more competitive–it will cripple America’s most competitive firms to protect its least competitive firms.

“And, of course, that’s the entire point,” Cannon continued. “Companies that support ‘universal coverage’ never bother to mention that covering all the uninsured would cause health spending to explode, because they don’t really care about overall health spending. All they care about is that their competitors spend as much as they do.”

Preventive Care

Another panelist, General Mills Vice President of Corporate Communications Tom Forsythe, said wellness programs have helped his company control costs for its 40,000 employees over the past five years.

But Devon Herrick, a health care reform expert at the National Center for Policy Analysis in Dallas, said wellness programs don’t necessarily lower costs.

“There is prevailing wisdom that universal coverage can somehow pay for itself by increasing access to preventive care and improving health. The reality is, although beneficial, preventive care generally increases rather than decreases expenditures,” Herrick said.

“If a health plan is really to improve health while decreasing costs, it has to give patients economic incentives to lead healthy lifestyles,” Herrick explained. “Consumer-driven health care gives patients a financial incentive to spend wisely and maintain health to prevent costly treatments that hit them where it hurts–in their wallets.

“None of the prominent [universal] health care proposals do anything to alleviate spending [because] none would have patients choose between health care and other uses for their money,” Herrick concluded. “Until patients control more of their own health care dollars, they will have no incentive to rein in spending.”

Karla Dial ([email protected]) is managing editor of Health Care News.

For more information …

“Universal coverage called an economic imperative,” by David Phelps, Minneapolis Star-Tribune, June 15, 2007,