Why Socialized Medicine Leads to the Prohibition of Private Medicine

An article in today’s (Feb. 20, 2006) New York Times makes clear that Canada’s much ballyhooed system of socialized medicine, in addition to being plagued by interminable waits for treatment, has prohibited competition from private medicine. But now, as the result of a ruling last June by Canada’s Supreme Court, limited forms of private medical care are apparently in process of being allowed to appear, at least in some provinces. In The Times’ article’s words: “The cracks are still small in Canada's vaunted public health insurance system, but several of its largest provinces are beginning to open the way for private health care eventually to take root around the country.” [See full Times article.]

The Canadian Supreme Court’s decision was the outcome of a lonely and courageous struggle conducted at great personal cost in time and money by a Canadian physician, Dr. Jacques Chaoulli. Dr. Chaoulli went to court with the case of a chemical salesman who had been forced to wait a year for a hip replacement and who at the same time was prohibited from paying for private surgery. As described in an earlier Times article, Dr. Chaoulli argued

that regulations that create long waiting times for surgery contradict the constitutional guarantees for individuals of “life, liberty and the security of the person,’' and that the prohibition against private medical insurance and care is for sick patients an “infringement of the protection against cruel and unusual treatment.''

To most Americans it may come as something of a shock simply to learn that all is not well with health care in Canada. That’s because Canada’s system has continuously been held up as the model for the United States to follow. Sometimes it seems that every ignoramus with a graduate-school diploma is ready to pontificate on how wonderful medical care is north of the border and that to solve our problems with medical care, all we need do is adopt that wonderful, single-payer Canadian system.

I could stop here, with the satisfaction of conveying knowledge that the system of socialized medical care in Canada is in fact so unwell that the door to its replacement with private medical care has been opened. But there is a deeper point I want to make, which will help to establish why socialized medicine is a profoundly evil and immoral system, that should never be implemented anywhere.

And this is the fact that the prohibition of private medical care that has existed in Canada is not some inexplicable accident but, on the contrary, follows logically from the very nature of socialized medicine. The connection is this:

Socialized medicine is advocated as the means of making medical care free or almost free, thereby enabling even the very poorest people to afford all of it that they need. Unfortunately, when medical care is made free, the quantity of it that people attempt to consume becomes virtually limitless. Office visits, diagnostic tests, procedures, hospitalizations, and surgeries all balloon. If nothing further were done, the cost would destroy the government’s budget. Something further is done, and that is that cost controls are imposed. The government simply draws the line on how much it is willing to spend. But so long as nothing limits the office visits, requests for diagnostic tests, etc., etc., waiting lines and waiting lists grow longer and longer.

Then the government seeks to limit the number of office visits, tests, procedures, etc., etc., by more narrowly limiting the circumstances in which they can occur. For example, a given diagnostic test may be allowed only when a precise set of symptoms is present and not otherwise. A hospitalization or surgery may be denied if the patient is over a certain age.

As part of the process of cost control, the government controls and sometimes reduces the compensation it allows to physicians and surgeons. For example, in the present fiscal year, in the United States, the fees paid to physicians by Medicare are scheduled to fall by four percent. (The New York Times, Feb. 4, 2006.)

Now all one need do to understand why socialized medicine leads to the prohibition of private medicine is simply to hold in mind the combination of deteriorating medical treatment and controlled physician incomes under socialized medicine and ask what would happen if an escape from this nightmare exists in the form of private medicine. Obviously, physicians who want to earn a higher income and to have the freedom to treat their patients in accordance with their own medical judgment will flee the socialized system for the private system and leave basically only the dregs of medicine for what will remain of the socialized system. That is what the government’s prohibition of private medical care is designed to prevent. This was confirmed in arguments before the Canadian Supreme Court. The Times article on the subject reported that

Various medical experts, government representatives and union leaders argued in court that privatization of insurance and services would bring an exodus of medical talent from public to private practices, and make waiting times even longer.

And there you have it. Socialized medicine destroys the quality of medical care and dare not allow the competition of private medical care. To prevent that competition, it must prohibit private medical care and establish a legal monopoly on medical care.

This article is copyright © 2006, by George Reisman. Permission is hereby granted to reproduce and distribute it electronically and in print, other than as part of a book and provided that mention of the author’s web site http://www.capitalism.net/ is included. (Email notification is requested.) All other rights reserved.

You Can Earn College Credit for Studying the Works of George Reisman and Ayn Rand! Click here for Details.