A case for socialized medicine

By Tobias Peter

Can you imagine a place where health care is twice as cheap as in the United States, but as good or even better? It may sound like a land of milk and honey - and of affordable dental care to repair any tooth decay caused by the honey.

Or it may sound like "socialized medicine," the epithet often leveled at President Obama's still controversial effort to make health insurance affordable and universal in America.

There are two things Americans should know about socialized medicine. First, the U.S. health-care system, which relies mainly on private insurance companies, is miles away from socialized medicine. Medicare and Medicaid fit the accusation better, but they are also widely accepted.

Second, socialized medicine is not the work of the devil. A lot of industrialized Western countries have it, and while some of these systems do a poor job, others work fantastically.

Britain's National Health Service, founded in 1948, is a prominent example of the socialist approach, primarily funded through general taxation. With 1.7 million people on staff, the NHS is also the fifth largest employer in the world, according to the BBC, just behind McDonald's. This huge bureaucracy appears to be one reason for its poor reputation internationally.

While British patients do not have to pay for treatment, they may face long waits for operations. Delays of eight weeks aren't unusual, and in one in 10 cases, patients can wait more than 18 weeks. It's hard to imagine Americans tolerating this.

Some of the NHS's shortcomings can be explained by the fact that the British don't put a lot of money into it. Their total health-care spending in 2010 was less than $3,000 per capita, according to the Organisation for Economic Co-operation and Development. The corresponding figure in the United States was more than $7,000.

Germany, meanwhile, spent about $3,500 per person. At the same time, it enjoys more doctors and hospital beds per patient, and it's never had the sort of insurance problems that Obama is trying to tackle. Moreover, Germans live an average of more than two years longer than Americans.

How does Germany do it? The key is a combination of socialism and competition. Yet the competition among German insurers is for patients, not profits. All Germans are required to have health insurance, but they can get it from any of more than 100 regulated nonprofit agencies, which are not allowed to decline coverage on the basis of preexisting conditions.

Every citizen who takes part in this system has to pay into a pool according to his or her income. Some might think it unfair that rich people have to pay more: They don't have to pay more when they buy a car, do they? But Germans can opt out of the system and buy private insurance if they can afford it. Still, a lot of them don't: They feel they are getting a fair deal for their money, and many also feel that while their neighbors don't deserve whatever car they want, they do deserve cancer treatment.

How much money each insurance agency gets depends on how many patients it covers. So if an agency wants to thrive, it has to maintain a good reputation among patients who can always switch to a competitor.

But can Germans choose their doctors? Yes, without restriction. Can they get the treatments they need? Yes, a 70-year-old can still get an artificial hip. The system works partly because the insurance agencies are designed to be strong patient advocates, and they can negotiate reasonable prices with doctors and drug makers.

At its best, socialized health care takes the idea of bringing your sick neighbor soup - an idea perfectly in keeping with the American spirit - and puts it into a working system. And it can solve many problems if done right. It might not make for a land of milk and honey, but it does allow everyone to see a dentist.