Economics of Health Care for All


By Charles R. Mathews, M.D.
18 Oct 2008

Congratulations to Paul Krugman, for being awarded his well deserved Nobel Prize in Economics. Krugman’ insights into the economics have included excellent analysis of this country’s health care system, its problems and prospects.

He states, “A history of failed attempts to introduce universal health insurance has left us with a system in which the government pays directly or indirectly for more than half of the nation’s health care, but the actual delivery both of insurance and of care is undertaken by a crazy quilt of private insurers, for-profit hospitals, and other players who add cost without adding value. A Canadian-style single-payer system, in which the government directly provides insurance, would almost surely be both cheaper and more effective than what we now have. And we could do even better if we learned from “integrated” systems, like the Veterans Administration, that directly provide some health care as well as medical insurance.”

Krugman believes that the compromise plans being proposed by the cautious reformers such as Hillary Clinton and Barack Obama will run into the same political problems, and that it would be politically smarter as well as economically superior to go for broke: to propose a straightforward single-payer system, and try to sell voters on the huge advantages such a system would bring. But this would mean taking on the drug and insurance companies rather than trying to co-opt them, and even progressive policy wonks, let alone Democratic politicians, still seem too timid to do that.

Such single payer bill is currently before Congress, HR 676, the United States Health Insurance Act, with 93 co-sponsors (not yet including Rep. Allen Boyd). Of special interest, a majority (59%) of American physicians now support government legislation to establish national health insurance. The American College of Physicians, the nation’s largest medical specialty group, has endorsed single payer health reform. “There is really only one choice for universal health care we can afford”, said Dr. Marcia Angell, former editor-in-chief of the New England Journal of Medicine. “There is simply no way to cover everyone in a pluralistic system and control costs.”

Especially now in these times of widespread severe economic stress, the country can not afford to continue the current chaotic non-system of health care for all Americans. Krugman again: “But things may have to get much worse before reality can break through the combination of powerful interest groups and free-market ideology.”

This writer is a Tallahassee physician, active in the Capital City Chapter of Physicians for a National Health Program,

Paul Krugman, Robin Wells, New York Review of Books, Vol. 53, No. 5, 23 Mar 2006
ACP Position Paper, Annals of Internal Medicine Jan 2008 Pg. 55-75.
Support for National Health among U.S. Physicians: 5 Years Later. Annals of Internal Medicine, Vol 148, No. 7, April 2008, Pg 566