Why is America the Only Rich Country That Doesn’t Have Universal Health Care?
It is embarrassing, and sad, that the richest country in the world chooses not to provide health insurance for its citizens. This is true even though the U.S. spends two to three times as much on health care per capita as most industrialized countries. In 2015, the U.S. spent $9451 per person, Norway $6567, Germany $5267, Canada $4608, Japan $4150, the UK $4003, and Spain $3153.
But, Dr. John, don’t we have the best medical care in the world? Well, if you crash your motorcycle and need heroic rescue and surgery, perhaps. But by nearly all other measures of health care success (life expectancy, infant mortality, etc.) the U.S. ranks about 28th in the world. So how did we get into this position? The reasons are historical, demographic, political, and economic.
Germany started the idea of government-sponsored health care in 1883, with Great Britain also taking some steps in 1911. In the U.S. between 1912 and 1940, the high cost of medical care spurred some liberal administrations to act, and President Franklin Delano Roosevelt even promoted national health care as part of the Social Security Law of 1935, but those efforts failed.
The debate continued over the next decade. In 1943, as the costly war dragged on, FDR imposed a freeze on labor wages, so companies responded by offering health and pension benefits to attract and retain the best employees. The labor unions were content to negotiate with the big companies to enhance these benefits, so there was no motivation for labor to petition the government for health care insurance. In addition, some argued that we shouldn’t embrace an idea started by Germany, the enemy our country was fighting against. Others described universal health care as a Bolshevik, or socialist enterprise, promoted by our imminent enemy, the Soviet Union.
In 1945, President Harry S. Truman endorsed the creation of a federally based national health insurance program, but it was torpedoed by private insurance companies and a complicated post-war political climate. Meanwhile, the death, homelessness, and grief in post-war Western Europe caused those governments to create universal health care systems to encourage a better future for their devastated populations. Britain started the National Health Service in 1948.
Not so in the U.S. While Europe felt devastated, Americans felt triumphant. The war had rescued us from the Great Depression, we were richer than before, and were now the leaders of the free world. We didn’t need to offer our citizens free health care to improve their outlook.
By the 1950s, some reformers, in an attempt to gather support for federal funding of health care, suggested that it be limited to the elderly, as they were increasingly exposed to crushing health care costs. The elderly were also a significant risk for high costs to private health insurance companies.
Multiple efforts in the early 1960s were only partially successful, until President Lyndon Johnson succeeded in establishing Medicare for the elderly and Medicaid for the poor in July 1965. In 1972 Medicare was expanded to cover the disabled and those with end-stage renal failure.
Why have countries like Norway been so successful with this idea? Partly because they have a small, relatively homogenous population that shares similar, traditional values. In contrast, the U.S. is a very large country with a diverse population and a history of racial divisions. If people don’t feel a strong connection, they won’t agree to having taxes used to give away free benefits to “others.”
The profit motive of our capitalist society also has much to do with it. In the U.S., spending on health care is about 17.4% of GDP, double what Australia and Japan spend, and more than 5% above our nearest competitor. Lots of entities make money from this massive expenditure, including providers (doctors, nurses, etc.), hospitals, medical technology companies, drug companies, and insurance companies. Switching to a single payer system would cut the profits of these groups, which wouldn’t be readily accepted.
Contrary to popular belief, our health care system is already partially “socialized.” Perhaps the funniest statement I heard in the debate surrounding Obamacare was, “Don’t socialize my Medicare!” If we add up payments for Medicare, Medicaid, veterans’ health care, and the reduction in income and payroll taxes for employer contributions to health care benefits, our government covered about 38% of the $3.5 trillion spent on health care in fiscal 2018. And this doesn’t include health benefits for federal employees. As one writer recently put it, “The government’s role is mostly to subsidize the astronomical costs set by the for-profit market.”
According to David Himmelstein, Professor of Public Health at City University of New York, the “overarching explanation” for the lack of universal health care in the U.S. is that “there has never been a labor party in the U.S. that represents the working class.” Instead, Americans that aren’t affluent consider themselves “middle class.” Thus, a unified labor movement has never been committed to pressing the government for benefits they couldn’t otherwise get from business.
These factors are not likely to change soon. The stakeholders mentioned above will work to maintain the system rather than negotiate toward a more efficient approach. The two major political parties are heavily influenced by the medical-industrial complex: in 2016 alone, hospitals, nursing homes, and pharmaceutical companies contributed about $350 million to electoral campaigns. And anti-socialist rhetoric is still very prevalent in our political discourse.
Prior to Obamacare, 40 million Americans had no medical insurance. After Obamacare was instituted, 28 million still had no insurance. Obamacare is slowly being dismantled, so we are moving in reverse. What will we do to change the fact that millions of people in our country have inadequate or no health insurance, and face poor health and financial ruin as a result?
That’s a good question for a future blog post.
Note: the essay above represents some of my thinking about health care in America, but I borrowed data, quotes, ideas, and historical facts from the sources listed below.
1. The modern history of U.S. health care reform: a primer for practicing surgeons, residents, and associate fellows by Carlos M. Mery, MD, MPH, et al. July 2010 Bulletin of the American College of Surgeons.
2. Why Doesn’t the US Have Universal Health Care? by Alister Chapman, in Rest of the Iceberg.org, 11/14/17.
3. A history of why the US is the only rich country without universal health care by Annalisa Merelli, in qz.com, 7/18/17.