Patients at the Mercy of Health Care Bureaucrats

Published January 1, 2005

Lives at Risk: Single-Payer National Health Insurance Around the World
by John C. Goodman, Gerald L. Musgrave, and Devon M. Herrick ($22.95 paperback, 261 pages; Rowman and Littlefield, July 2004; ISBN 0-7425-4151-7)

There is little disagreement among stakeholders in the U.S. health care system–patients, insurers, physicians, policy analysts, and the like–that America’s health care system must change to adjust to the twenty-first century. But what to do?


Some observers advocate a return to the fee-for-service health care arrangement that prevailed in the 1950s. Others want to move in the opposite direction, toward the government-run health care bureaucracies common in other developed countries.

Advocates of the latter approach, known as universal or single-payer health insurance, are a minority in the U.S. health policy debate–but they are vocal and well-funded. In Lives at Risk, John Goodman, Gerald Musgrave, and Devon Herrick urge that we disregard pleas for such a drastic change in our approach to health care until we carefully consider whether such a system–failing in every country where it currently exists–could possibly be effective and efficient for the U.S.

Goodman is founder and president of the Dallas, Texas-based National Center for Policy Analysis (NCPA); Musgrave and Herrick are NCPA senior fellows. In Lives at Risk, they examine in microscopic detail the many flaws in the structure of single-payer health insurance, and they provide evidence that single-payer social policy is not in the best interest of consumers.

They explain, for example, how universal health insurance systems encourage over-consumption by patients, and how such over-consumption always leads to financial crises and broken promises of universal access and quality care. “One of the cardinal beliefs of advocates of single-payer health insurance is that health care should be free at the point of consumption, regardless of willingness or ability to pay,” they write. Not surprisingly, such “free” medical care is over-utilized–to the point where demand exceeds the system’s ability to sustain supply.

Promise Clashes with Reality

Goodman and his coauthors reveal how the promise of “health care for all” under a single-payer system clashes with reality. “The promise of national health insurance,” they explain, “is that government will make health care available on the basis of need rather than the ability to pay.” But in reality, single-payer systems tend to overspend on primary care for the healthy, while denying more expensive specialist care to those with serious medical problems.

The evidence creates a sharp contrast between the U.S. health care system and single-payer systems abroad. Although single-payer advocates claim their approach delivers health care more efficiently, more equitably, and at lower cost than our system, those claims crack open under the weight of the data.

According to Lives at Risk, wherever national health care is the only option, rationing by waiting is the norm. Rationing decisions are made by local health care bureaucrats, who are responsible only for spending, not healing.

Lives at Risk should be required reading for academics and policymakers of all opinions on health policy reform–and also for the medical community, consumers, advocates of single-payer insurance, and journalists who report on the issue. Newt Gingrich, former speaker of the U.S. House of Representatives, suggests in an editorial review, “This book will be an eye-opener for anyone who thinks a government-run system is the solution for our healthcare problem.”

Information Age Requires New Approach

Dr. Robert Hamilton, a retired general and vascular surgeon living in Alton, Illinois, sees Lives at Risk from a physician’s point of view. “Although this book is a brilliant exposition of the grand-scale effects of single payer health care financing and the economics of health care delivery, the implications for individual physicians and their patients are enormous,” he noted

“Systemic inefficiencies, which interfere with timely, appropriate diagnosis and treatment of the individual patient, are dangerous and frustrating for physicians and patients alike in a system dominated by a government health care bureaucracy.”

Hamilton suggests, “The way out of our professional doldrums is not through greater control of our profession by outside forces, but by making the patient-physician relationship the driving force. This book will restore optimism to those physicians whose frustration with imposed systems has nearly led them to give up on their noble profession.”

Goodman, Musgrave, and Herrick do not just make a hard-boiled assessment of single-payer systems and then run for cover. They also turn their attention to the U.S. health care system. Instead of the usual worn-out generalities and obsolete assumptions, they point to specific problems and lay out specific ways to harness the intelligence of consumers and the power of the free market to improve health care in the U.S.

“The modern era has inherited two models of health insurance: the fee-for-service model and the HMO model. Neither is appropriate for the Information Age,” they write. “Both models assume that (1) the amount of sickness is limited and largely outside the control of the insured, (2) methods of treating illness are limited and well-defined, and (3) because of patient ignorance and asymmetry of information, treatment decisions will always be filtered by physicians, based on their own knowledge and experience or clinical practice guidelines.”

Regardless of whether the reader agrees with the authors’ conclusions, Lives at Risk helps us understand how different policy approaches might lead to two very different outcomes for the U.S. health care system: complete meltdown under single-payer health care, or transformation into a system driven by consumer demand instead of health care bureaucrats and political expediency.

Conrad F. Meier ([email protected]) is senior fellow in health policy at The Heartland Institute.