(Bloomberg View) — Bernie Sanders probably knows that his plan to give all Americans free health care is never going to become law. Yet he’s doing the country a service: His proposal has re-ignited a national debate — the third since the 1990s — over why the U.S. can’t be like Europe, Canada and the rest of the industrialized world and adopt universal health care.
See also: How might ‘Berniecare’ work?
Sanders is no dummy. He calls his proposal “Medicare for All” because federal health insurance for the elderly is so popular that some of its beneficiaries don’t realize it’s a government program. Remember those picket signs that warned President Barack Obama to “keep government out of my Medicare?”
To Sanders, Europe’s example proves that it wouldn’t be such a leap to extend Medicare to everyone while getting rid of private insurance and employer-based coverage (and by extension, Obamacare). As my colleague, Leonid Bershidsky, wrote, Europe’s nationalized health systems run pretty well and haven’t broken their national budgets. Per-capita taxes aren’t inordinately higher in Europe than in the U.S. (the U.S.’s $14,202 is about the same as the U.K.’s but $3,000 less than what Germans pay).
And the Vermont senator relishes saying that “We spend more, yet end up with less.” He’s right: Europeans spend less on health care yet have better health outcomes, as measured by rates of infant mortality, life expectancy and obesity.
Single payer, not Medicare for all, is the more apt description of Sanders’s plan, which would give the federal government a much bigger role than it plays in controlling health care under Obama’s 2009 Patient Protection and Affordable Care Act (PPACA). Based on his website’s description, Sanders would massively expand Medicare’s current slate of benefits, for which every American man, woman and child (employed or unemployed) would qualify. He would also combine all insurers — public ones like Medicaid, veterans’ programs and the federal-state Child Health Insurance Program (CHIP) as well as private ones like Aetna (NYSE:AET) and UnitedHealth Group (NYSE:UNH) — into a single, federal payer.
It sounds appealing. But would it really be popular once Americans found out how it worked? There are strong reasons to doubt it.
First, let’s revisit the spending issue. The U.S. doesn’t just spend more than other advanced nations, it spends much, much more. The Organization for Economic Cooperation & Development (OECD) in a July 2015 report said the United States spent 16.4 percent of gross domestic product on health care in 2013, while the median of the 34 OECD countries was about half that, at 8.9 percent. The mixed public-private systems of the Netherlands, Germany and Switzerland spend 32 percent less than the United States while the United Kingdom, where health care is fully nationalized, spends 50 percent less.
European countries manage to keep their health spending down by reducing patient choices on diagnostic tests, new technologies, expensive drugs and costly procedures such as hip and knee replacements to what their governments define as “medically necessary.” Administrators and physician panels, not patients, decide what’s necessary. Another word for this is rationing.
Rationing would have to take place under the Sanders plan, too. He would have a “board of medical experts” decide which elective procedures, cosmetic surgeries or prescription drugs patients could get.
The United States spends about $3 trillion a year on health care, or about $10,000 a person. Sanders claims that, by getting rid of third-party claims processing and the need for insurers to make a profit, and by making the health system more efficient, he could cut $10 trillion over 10 years in costs.