Socialized Medicine

Yuri Maltsev is one of my favorite contributors at the Ludwig von Mises Institute. He lived in the Soviet Union and was one of the members of Gorbachev’s team that was looking into economic reform. Unlike many critics of the Soviet Union, Yuri lived there and thus has firsthand experience. Part of the The 30 Day Reading List that will Lead You to Becoming a Knowledgeable Libertarian includes Maltsev’s article that discusses socialized medicine:

In 1918, the Soviet Union became the first country to promise universal “cradle-to-grave” healthcare coverage, to be accomplished through the complete socialization of medicine. The “right to health” became a “constitutional right” of Soviet citizens.

The proclaimed advantages of this system were that it would “reduce costs” and eliminate the “waste” that stemmed from “unnecessary duplication and parallelism” — i.e., competition.

What happens when you remove competition from a market? The market stagnates. The Soviet Healthcare system was a wreck and far behind the technological and basica sanitary conditions of other industrialized nations:

The system had many decades to work, but widespread apathy and low quality of work paralyzed the healthcare system. In the depths of the socialist experiment, healthcare institutions in Russia were at least a hundred years behind the average US level. Moreover, the filth, odors, cats roaming the halls, drunken medical personnel, and absence of soap and cleaning supplies added to an overall impression of hopelessness and frustration that paralyzed the system. According to official Russian estimates, 78 percent of all AIDS victims in Russia contracted the virus through dirty needles or HIV-tainted blood in the state-run hospitals.

Irresponsibility, expressed by the popular Russian saying “They pretend they are paying us and we pretend we are working,” resulted in appalling quality of service, widespread corruption, and extensive loss of life.

Everything humans, and every other creature on the planet, does is done in self-interest. Collectivists do not like this idea and instead try to encourage people to perform acts of altruism instead of acts of self-interest. This is where the collectivist philosophy hits a wall since acts of altruism ultimate have to be based on self-interest.

Medical professionals weren’t hardly motivated to do their best since the pay they were receiving didn’t match the work they were supposed to perform. Instead of providing healthcare altruistically, the medical professionals fo the Soviet Union apathetically stood aside as people died… unless they were paid by the patients:

In order to receive minimal attention by doctors and nursing personnel, patients had to pay bribes. I even witnessed a case of a “nonpaying” patient who died trying to reach a lavatory at the end of the long corridor after brain surgery. Anesthesia was usually “not available” for abortions or minor ear, nose, throat, and skin surgeries. This was used as a means of extortion by unscrupulous medical bureaucrats.

Isn’t it strange how medical care could be found if one was willing to pay? There was another exception as well, if you were an employee of the state:

Not surprisingly, government bureaucrats and Communist Party officials, as early as 1921 (three years after Lenin’s socialization of medicine), realized that the egalitarian system of healthcare was good only for their personal interest as providers, managers, and rationers — but not as private users of the system.

So, as in all countries with socialized medicine, a two-tier system was created: one for the “gray masses” and the other, with a completely different level of service, for the bureaucrats and their intellectual servants. In the USSR, it was often the case that while workers and peasants were dying in the state hospitals, the medicine and equipment that could save their lives was sitting unused in the nomenklatura system.

Marx’s theory always fell apart around the whole “eventually the all powerful state will dissolve and the communist society will be left in the socialist society’s place.” Power corrupts and the more power that is available the more it corrupts. The problem with socialism is the fact that it relies on an all powerful state to control everything. Ideally the state educations people on the wonders of communism and brings in the next era of human society, in reality corrupt power hungry psychopaths seek the positions of power and use them to rule over the proletariat.

The Soviet Union was a classic example of this fact. There were two classes in the Soviet Union, not bourgeoisie and proletariat as Marx claimed, but the state and everybody else. If you were part of the state you received better food, medical care, transportation, alcohol, etc., while everybody else suffered long breadlines, deplorable healthcare, a horribly dilapidated transportation system, poor liquor, etc.

What did socialized medicine get the Soviet Union? Horrible infant fatality rates for starters:

At the end of the socialist experiment, the official infant-mortality rate in Russia was more than 2.5 times as high as in the United States and more than 5 times that of Japan. The rate of 24.5 deaths per 1,000 live births was questioned recently by several deputies to the Russian Parliament, who claim that it is 7 times higher than in the United States. This would make the Russian death rate 55 compared to the US rate of 8.1 per 1,000 live births.

OK, the Soviet Union falled to provide proper medical care. What about the medical paradises of other nations that have implemented socialized medical care? We all know that places like the United Kingdom (UK) have far better medical care than the United States because the healthcare industry in that country is socialized, right? Wrong:

In “civilized” England, for example, the waiting list for surgeries is nearly 800,000 out of a population of 55 million. State-of-the-art equipment is nonexistent in most British hospitals. In England, only 10 percent of the healthcare spending is derived from private sources.

Britain pioneered in developing kidney-dialysis technology, and yet the country has one of the lowest dialysis rates in the world. The Brookings Institution (hardly a supporter of free markets) found that every year 7,000 Britons in need of hip replacements, between 4,000 and 20,000 in need of coronary bypass surgery, and some 10,000 to 15,000 in need of cancer chemotherapy are denied medical attention in Britain.

Age discrimination is particularly apparent in all government-run or heavily regulated systems of healthcare. In Russia, patients over 60 are considered worthless parasites and those over 70 are often denied even elementary forms of healthcare.

In the United Kingdom, in the treatment of chronic kidney failure, those who are 55 years old are refused treatment at 35 percent of dialysis centers. Forty-five percent of 65-year-old patients at the centers are denied treatment, while patients 75 or older rarely receive any medical attention at these centers.

Socialized medical systems have a major issue, shortages of critical medical supplies and technologies. Shortages are unavoidable, it’s a harsh reality that manifests in the fact that there is only a limited amount of resources on the planet. By resources I mean not only the chemicals that are used in the production of medicine but also the labor. Research and development isn’t easy and people need a way to know what is needed and what isn’t needed by society. The government tries determining such things by toiling over statistics, gathered data, and future predictions. Markets accomplish this through the price mechanism. If the price of something goes up is indicates there is a greater demand than supply so companies, hoping to cash in on the profits, start producing more of that thing.

The state doesn’t work on the price mechanism, they don’t receive profits from selling goods and services, so when they see a shortage they merely started regulating who gets access. Suddenly society is divided into groups that receive priority on medical care. If you’re elderly you’ll find yourself without treatment, unless you go to another country that has some semblance of a free market in healthcare and buy your medical needs. Collectivists decry free market medicine because the “poor” have to go without, but the exact same problem occurs under socialized medicine with the exception of who is made to go without. Of course free markets are usually able to take care of the “poor” through mutual aid, which is an option that isn’t usually available in under socialized medicine because mutual aid societies get legislated out of existence due to their “inefficiency” and “parallelism” with state controlled healthcare.

What about the paradise of Canada? Turns out that it’s not as much of a paradise as people make it out to be:

In Canada, the population is divided into three age groups in terms of their access to healthcare: those below 45, those 45–65, and those over 65. Needless to say, the first group, which could be called the “active taxpayers,” enjoys priority treatment.

The state, like individuals, works off of self-interest. If you’re an active taxpayer you get preferential treatment, if you’re collecting welfare or otherwise costing the state money you get substandard treatment.

Socialized healthcare is yet another ploy by the collectivists to hand power over to the state. History has proven it to be a bad idea time and time again but they refuse to listen. In their eyes self-interest is evil and thus they must abolish self-interest. It never dawns on them that their act of abolishing self-interest is an act of self-interest in of itself. They don’t see that they are the thing they claim to be fighting. Because they can’t bring themselves to face such a reality they continue pushing the same ideas that have historically failed. Don’t fall for the ploy the socialized medicine is a good thing, it’s not.