Per person, the United States government spends more on healthcare than any other nation in the world. That sounds insane considering that the United States is also the only ‘advanced’ economy that does NOT provide universal healthcare to citizens. The consequences of failing to create a universal healthcare system for U.S. citizens is that the government is forced to spend twice as much taxpayer money on healthcare than other rich nations. Does that sound fair?
Universal healthcare is less expensive for everyone
Although the United States does not offer universal healthcare to citizens, the United States Government still pays a lot of money to cover the healthcare needs of many people. In 2019, taxpayers spent $3.8 trillion to cover the healthcare costs of Americans. That worked out to the Government paying $11,582 for every single American. Sounds great except every single American did not benefit from that huge payout.
Did you have any personal healthcare bills in 2019? Did the government cut you a check for $11,582 to cover those bills? No? Well, you and many other Americans got ripped off. You got ripped off because every other ‘rich nation’ paid less per person for healthcare, BUT every single one of their citizens was fully covered for their healthcare. WHY are Americans getting ripped off?
The United States devotes more of its national income to healthcare relative to other OECD countries. On average, healthcare spending across those countries has remained in line with overall economic growth in the past decade. Between 2010 and 2019, health spending across the OECD averaged about 8.7 percent of gross domestic product (GDP) annually. Healthcare spending in the United States, however, rose from 16.3 percent to 17.0 percent of GDP in in that same time period.Peter G Peterson Foundation
Think about this for a moment. Imagine that Country A has single payer universal health insurance for their citizens. It costs the government of Country A $100 per citizen. Every single citizen of Country A is fully covered for all healthcare needs, even if they have a pre-existing condition. They do not even know what a hospital bill looks like.
Now think about Country B. Country B is like the United States where people are responsible to hustle for their own health insurance coverage. Citizens of Country B must pay huge monthly premiums for their healthcare insurance and they STILL end up paying out of pocket if they get sick or have an accident. Often, citizens of Country B can’t even buy coverage for certain health conditions. Meanwhile, Country B ends up paying the equivalent of $200 in healthcare costs for every single one of their citizens. That is twice as much as what Country A pays.
Country A has 10 citizens and their government gets to cover the healthcare needs of every single citizen for $100 per capita. That works out to $1000 in annual healthcare costs.
Country B also has 10 citizens, but their government only covers the healthcare costs of 2 citizens. The other 8 citizens are on their own. This costs Country B $200 per capita. That works out to $2000 in annual healthcare costs.
Country B pays TWICE as much because investors are scooping the profits for themselves. In the United States, medical care is BIG BUSINESS that rewards investors with BIG PROFITS. Meanwhile, the tax payer has to subsidize those profits. It is like huge welfare payments to the rich who laugh all the way to the bank while telling poor people it is their own fault if they can’t pay their medical bills.
Why does it cost Country B TWICE as much to cover a fraction of the population that Country A does?
Hint: it is NOT because the citizens of Country A pay higher income tax. Both country A and Country B pay roughly the same in personal income tax. There is a far more sinister reason.
Universal healthcare reduces administration costs
Huge amounts of money is spent on administration costs. A universal healthcare system would eliminate a lot of these costs because Healthcare systems that rely on private health insurance are saddled with huge billing and insurance related costs. Anyone who has been to an American hospital understands that there is no end to the insurance paperwork that needs to be filled out, but very importantly, it costs a lot of money to cover the costs of filling out and tracking that paperwork.
In a 2003 article in The New England Journal of Medicine, researchers Steffie Woolhandler, Terry Campbell, and David Himmelstein concluded that overall administrative costs in 1999 amounted to 31 percent of total health care expenditures or $294 billion5—roughly $569 billion today when adjusted for medical care inflation.6 A more recent paper by Woolhandler and Himmelstein, which looked at 2017 spending levels, placed the total cost of administration at $1.1 trillion.7American Progress
Wow, that is a LOT of paperwork and a big waste of money when other nations are providing free healthcare to every single citizen for a FRACTION of what the United States pays. Imagine if these administration costs could be cut in half. It would save the government half a trillion per year in taxpayer money that could be transferred directly into improving healthcare access for all Americans.
Universal healthcare increases health outcomes
Did you know that the US child mortality rate ranks worst among 20 wealthy nations? How terrible! The United States is supposed to be the richest and most advanced country in the world. Why is the infant death rate so high? Why are American teenagers far more likely to die from injuries than they are in other nations? Could it be related to lack of access to medical care?
Growing up American appears to come with extra risk, but it doesn’t have to be this way. When countries offer universal healthcare to their citizens, infant mortality rates decrease. Parents never have to worry that they will not be able to afford to bring their child to a doctor. This is because it will cost them nothing out of pocket to see a doctor.
By the 1990s and into the 2000s, the US ranked lowest of all twenty nations in terms of child mortality rates. Compared to the OECD19 in the first decade of the 2000s, infants in the US had a 76 percent increased risk of death, and children ages 1–19 a 57 percent increased risk of death. If the US had achieved just the average childhood mortality rate of the OECD19 over the fifty-year study period, over 600,000 deaths could have been avoided—a rate of about 20,000 excess deaths per year by the turn of the century.Health Affairs
76% increased risk of death!? That is outrageous. Universal healthcare saves lives.
Country A is the big winner because not only are they getting healthcare for all citizens at a reasonable rate, but they can reinvest the savings in improving existing healthcare delivery. Since all citizens have access to free healthcare, stuff like infant mortality rates fall, people live longer, and those who experience chronic illness can live more productive lives.
It must make people angry to have to pay huge health insurance premiums while their tax dollars are wasted. Unfortunately, that anger is rarely directed to the poor healthcare policy that is responsible for wasting tax money. Other nations provide universal healthcare to their citizens because it makes good economic sense. Universal single-payer healthcare coverage is cheaper and more efficient than private for-profit systems. THAT is why they do it. Economists all over the world understand this, and that is why all the advanced economies provide universal healthcare to citizens–except for the United States. Don’t think for a moment that any government anywhere would invest in a public healthcare system unless there was a benefit for them.