socialized medicine

socialized medicine

socialized medicine, publicly administered system of national health care. The term is used to describe programs that range from government operation of medical facilities to national health-insurance plans. In 1948, Great Britain passed the National Health Service Act that provided free physician and hospital services for all citizens. The system was later amended, now charging a small fee for the filling of prescriptions and the purchasing of eyeglasses and dentures; it is funded jointly by a health-insurance tax and by the national treasury. Doctors are salaried by the government and receive an additional allotment per patient and for the performance of special services. Sweden maintains a compulsory health-insurance plan that provides for income compensation, hospital treatment, most of the physician's fee, and part of the cost of medicines. Maternity benefits are provided for expectant women. A large percentage of Israel's medical care is provided by the Histadrut, the national labor union. A number of private welfare organizations also provide care, and the armed forces maintain a number of military hospitals whose services are widely used since many citizens of Israel are military veterans. Canada has a federally sponsored system of medical insurance with voluntary participation on the part of each province; the system is funded by taxes and contributions from the government. The United States is the only major Western country without some form of socialized medical care. However, it does sponsor Medicare, a federally administered program for those over 65, and Medicaid, a federally funded program of medical care for the poor that is administered by the individual states. Veterans have access to Veterans Health Administration facilities; care is free or partially subsidized, depending on whether injuries and disabilities are service connected.
Socialized medicine is a term used primarily in the United States to refer to certain kinds of publicly-funded health care. The term is used most frequently, and often pejoratively, in the U.S. political debate concerning health care. Definitions vary, and usage is inconsistent. The term can refer to any system of medical care that is publicly financed, government administered, or both.

Some say the literal meaning is confined to systems in which the government operates health care facilities and employs health care professionals. This narrower usage would apply to the British National Health Service hospital trusts and health systems that operate in other countries as diverse as Finland, Spain, Israel and Cuba. The United States' Veterans Health Administration, and the medical departments of the U.S. Army, Navy, and Air Force would also fall under this narrow definition. When used in this way, the narrow definition permits a clear distinction from single payer health insurance systems, in which the government finances health care but is not involved in care delivery.

Others apply the term more broadly to any publicly funded system. Canada's Medicare system, most of the UK's NHS general practitioner and dental services, which are all systems where health care is delivered by private business with partial or total government funding, fit this broader definition, as do the health care systems of most of Western Europe. In the United States, Medicare, Medicaid, and the U.S. military's TRICARE fall under this definition.

Most industrialized countries, and many developing countries, operate some form of publicly-funded health care with universal coverage as the goal. According to the Institute of Medicine and others, the United States is the only wealthy, industrialized nation that does not provide universal health care.

The term is often used in the U.S. to evoke negative sentiment toward public control of the health care system by associating it with socialism, which has negative connotations in American political culture . As such its usage is controversial. A 2008 poll indicates that Americans are sharply divided when asked about their views of the expression socialized medicine, with a large percentage of Democrats holding favorable views, while a large percentage of Republicans hold unfavorable views. Independents tend to somewhat favor it.



When the term "socialized medicine" first appeared in the United States in the early 1900s, it bore no negative connotations. Otto P. Geier, chairman of the Preventive Medicine Section of the American Medical Association (AMA), was quoted in The New York Times in 1917, praising socialized medicine as a way to "discover disease in its incipiency," help end "venereal diseases, alcoholism, tuberculosis," and "make a fundamental contribution to social welfare." However, by the 1930s, the term socialized medicine was routinely used negatively by conservative opponents of publicly operated health care. Publicly operated health care was first proposed by U.S. President Theodore Roosevelt. President Franklin D. Roosevelt later championed it, as did Harry S. Truman as part of his Fair Deal and many others, but it was ardently opposed by the AMA (which distributed posters to doctors with slogans such as "Socialized medicine ... will undermine the democratic form of government.

Current usage

Hostility to socialism remains a common basis of objection to universal health care by those generally opposed to expansion of government, social services and other redistributory policies. Milton Friedman argued in 2005 that the health care system in the US was already partly socialist, and that suggestions for improving the medical system by expanding the role of government would move health care to a completely socialist system. In 2006, Friedman even argued that the third-party payment system used for health care in the United States is "a communist system and it has a communist result". By "third party" Friedman was referring all forms of insurance, whether privately run and funded, or government schemes such as Medicare which have some tax funding.

According to others, the term is a scare tactic or may be used as a pejorative ("name-calling") so that the idea may be rejected without examining the evidence. This rhetorical usage has been pointed out in popular movies such Sicko, in which Michael Moore notes that Americans do not refer to their fire departments, police or public library services as socialized, and by popular media personalities such as Oprah Winfrey.

Some health care professionals prefer to avoid the term because of its pejorative nature, but if they do use it, they will use it according to the strict definition.

Opponents of state involvement in health care tend to use the looser definition.

The term is sometimes used in the U.S. to describe health care systems that have large amounts of public financing. As such, the term is often applied to other single-payer health insurance systems, such as national health insurance, where the government contracts with private medical practices to provide the service under rules and regulations for payment. Examples include Medicare systems in Canada, Australia and the US, Germany's health care system, and Britain's NHS general practitioner service.

The term is widely used by the American media and pressure groups. Some have even stretched use of the term to cover any regulation of health care, whether publicly financed or not. The term is often used to criticize socialized health care outside the U.S., but rarely to describe socialized health care programs in the U.S., such as the Veterans Administration clinics and hospitals, military health care, nor the single payer programs such as Medicaid and Medicare. The term is almost always used to evoke negative sentiment toward health care reform that would involve increasing government involvement in the U.S. health care system.

Medical staff, academics and most professionals in the field and international bodies such as the WHO tend to avoid use of the term. Outside the U.S., the terms most commonly used are universal health care or public health care. According to health economist Uwe Reinhardt, "strictly speaking, the term 'socialized medicine' should be reserved for health systems in which the government operates the production of health care and provides its financing". Still others say the term has no meaning at all.

Usage in 2008 U.S. Presidential election

The issue of health care in the 2008 U.S. presidential election has caused a resurgence in use of the term by Republicans. For example, in a July 2007 campaign speech, Republican presidential candidate Rudy Giuliani made a direct connection between socialized medicine and socialism. Giuliani also quoted statistics from his health care advisor, Canadian psychiatrist David Gratzer, to support his claim that he had a better chance of surviving prostate cancer in the U.S. than he would have had in England. According to cancer experts cited in fact check articles by the Annenberg Public Policy Center's, the St. Petersburg Times and its, The New York Times, The Washington Post, and The Times, Giuliani's statistics were "false" and very "misleading" and his conclusions were complete "nonsense".
In response, Canadian psychiatrist and Giuliani health care advisor David Gratzer said: "The mayor is right."
Krugman and others have compared statistical apples to oranges. My 44% figure, replicated by economist John Goodman and others, looks at a snapshot in time, based on decade-old OECD data; Krugman's 74% is a five-year relative survival rate from government sources today.
Annenberg's found no merit in Gratzer's response:
Marie Diener-West, professor of biostatistics at Johns Hopkins Bloomberg School of Public Health, said Gratzer's attempts to calculate cancer survival rates were “inappropriate” and “very misleading."
Peter Albertsen, professor and chief of urology at the University of Connecticut Health Center, called Gratzer's calculations a “very dangerous thing to do” and “complete nonsense.”
Nor did The Washington Post, which awarded Giuliani and Gratzer's response the same "Four Pinocchios" rating (reserved for "whoppers") it awarded Giuliani and Gratzer's original claim.


The first system of socialized medicine based on compulsory insurance with state subsidy was created by Otto von Bismarck after the Franco-Prussian War of 1870. Socialized health care was implemented by the Soviet Union in the 1920s. New Zealand was the first country with a mixed economy to provide the direct provision of health care by the state when, in 1939, it provided mental health services free of cost to the recipient following the passing of the Social Security Act of 1938. After World War II in the 1940s the United Kingdom established its National Health Service which was built from the outset as a comprehensive service. A socialized model was used in China in from the 1950s to the 1970s during the first two decades of communist rule. Cuba adopted socialized medicine in the 1960s under the leadership of Fidel Castro. Also in the 1960s, the United States initiated its Medicaid program to help poor mothers and their children.




Finland has a highly decentralized three level socialized system of health care and alongside these, a much smaller private health care system. Responsibility for health care is devolved to the municipalities (local government), Primary health care is obtained from district health centers employing general practitioners and nurses that provide most day-to-day medical services. The general practitioners are also gatekeepers to the more specialized services in the secondary and tertiary care sectors. Secondary care is provided by the municipalities through district hospitals where more specialist care is available. Finland also has a network of five university teaching hospitals which makes up the tertiary level. These contain the most advanced medical facilities in the country and they are where Finnish doctors learn their profession. These are funded by the municipalities, but national government meets the cost of medical training. These hospitals are located in the major cities of Helsinki, Turku, Tampere, Kuopio, and Oulu.

There is a high level of co-operation between the various sectors with almost all having access to computerised patient data based on open source software originally developed for the U.S. Veterans Health Administration and compliant with CDA subset of HL7 interoperability standards . Since the 1980s, the planning system for basic health care has been extended and now plans not just health care services but also care homes for the elderly and day care for children creating a fairly seamless cradle to grave system.

The separate private health care system is very small. Between 3 and 4 per cent of hospital in-patient care is provided by the private health care system and the remainder by the public or socialized system. Physiotherapy, dentistry and occupational health services are the main areas where the private sector is most used, although the municipalities by law also have to provide basic dental services. Employers are obliged by law to provide occupational health care services for their employees, as are educational establishments for their students as well as their staff. Only about 10 per cent of the income of private sector income comes from private insurance. Most is paid for out of pocket, but a significant share of the cost is reclaimable from the National Insurance system KELA. Spectacles, however, are not publicly subsidized.

A Patient’s Injury Law gives patients the right to compensation for unforeseeable injury that occurred as a result of treatment or diagnosis. Health care personnel need not be shown to be legally responsible for the injury thus avoiding the development of a litigious blame culture and the development of defensive medical practices. To receive compensation, it is sufficient that unforeseeable injury as defined by law occurred. A law on patients’ status and rights, the first such law in Europe, ensures a patient’s right to information, to informed consent to treatment, the right to see any relevant medical documents,and the right to autonomy. Legislation also lays down the time frame in which a person must be ensured access to necessary medical care and defines the small percentage of treatments that are to be considered as non-urgent. Doctors comply with care guidelines set by medical experts, but these are just guidelines and doctors are free to decide independently how to treat patients. The government does not dictate how doctors may treat their patients.

Finland's health care services are more highly socialized than the European average. The quality of service in Finnish health care is considered to be good and according to a survey published by the European Commission in 2000, Finland has one of the highest ratings of patient satisfacton with their hospital care system in the EU: 88% of Finnish respondents were satisfied compared with the EU average of 41.3%. Finnish health care expenditures are below the European average.

Overall, the municipalities (funded by taxation, local and national) meet about two thirds of all medical care costs and the remaining one third by the national insurance system (nationally funded), and private finance (either employer funded or met by patients themselves). There are caps on total medical expenses that are met out of pocket for drugs and hospital treatments. All necessary costs over these caps are paid for by the National Insurance system. Public spending on health care in 2006 was 13.6 billion euros, equivalent to 2,586 euros (US$ 4,031) per person annually. The increase over 2005 at 8.2 per cent was below the OECD average of 9 percent. Household budgets directly met 18.7 per cent of all health care costs.

Main sources: Finland report on Health Care Systems in Transition (WHO) and Health care in Finland (Ministry of Social Affairs and Health publication)


Israel has maintained a system of socialized health care since its establishment in 1948, although the National Health Insurance law was passed only on January 1, 1995. The state is responsible for providing health services to all residents of the country, who can register with one of the four health service funds. To be eligible, a citizen must pay a health insurance tax. Coverage includes medical diagnosis and treatment, preventive medicine, hospitalization (general, maternity, psychiatric and chronic), surgery and transplants, preventive dental care for children, first aid and transportation to a hospital or clinic, medical services at the workplace, treatment for drug abuse and alcoholism, medical equipment and appliances, obstetrics and fertility treatment, medication, treatment of chronic diseases and paramedical services such as physiotherapy and occupational therapy.

Soviet Union

In the Soviet Union, the preferred term was "socialist medicine"; the Russian language has no term to distinguish between "socialist" and "socialized" (other than "public", Rus: obshchestvenniy/общественный, sometimes "collectivized" or "nationalized", Rus: obobshchestvlenniy/обобществленный).Pre 1990s, soviet Russia had a totally socialist model of health care with a centralised, integrated, hierarchically organised with the government providing free health care to all citizens. All health personnel were state employees. Control of communicable diseases had priority over non-communicable ones. There was over provision of hospital beds, which contributed over time to an imbalance in the overall structure of the health care system. On the whole, the Soviet system tended to neglect primary care, and placed too much emphasis on specialist and hospital care. Despite weaknesses, the integrated model achieved considerable success in dealing with infectious diseases such as tuberculosis, typhoid fever and typhus. The effectiveness of the socialized model declined with underinvestment. Despite a doubling in the number of hospital beds and doctors per capita between 1950 and 1980, the quality of care began to decline by the early 1980s and medical care and health outcomes were below western standards. The lack of money that had been going into health was patently obvious. Many small district hospitals had no more than 4–5 m2 per bed, and some of the smallest hospitals had no radiology services, and inadequate heating or water. A 1989 survey found that 20% of Russian hospitals did not have piped hot water and 3% did not even have piped cold water. 17% lacked adequate sanitation facilities. Every seventh hospital and polyclinic needed basic reconstruction. Five years after the reforms described below per capital spending on health care was still a meagre US$158 per year (about 8 times less than the average European social models in Spain, the UK and Finland, and 26 times that of the U.S. which spent US$4,187 at that time).

The new Russia has switched to a mixed model of health care with private financing and provision running alongside state financing and provision. Article 41 of the 1993 constitution confirmed a citizen's right to healthcare and medical assistance free of charge. This is achieved through compulsory medical insurance (OMS) rather than just tax funding. This and the introduction of new free market providers was intended to promote both efficiency and patient choice. A purchaser-provider split was also expected to help facilitate the restructuring of care, as resources would migrate to where there was greatest demand, reduce the excess capacity in the hospital sector and stimulate the development of primary care. Finally, it was intended that insurance contributions would supplement budget revenues and thus help to maintain adequate levels of healthcare funding.

The OECD reported that unfortunately, none of this has worked out as planned and the reforms have in many respects made the system worse. The population’s health has deteriorated on virtually every measure. Though this is by no means all due to the changes in health care structures, the reforms have proven to be woefully indequate at meeting the needs of the nation. Private health care delivery has not managed to make much inroads and public provision of health care still predominates. The resulting system is overly complex and very inefficient. It has little in common with the model envisaged by the reformers. Although there are more than 300 private insurers and numerous public ones in the market, real competition for patients is rare leaving most patients with little or no effective choice of insurer, and in many places, no choice of health care provider either. The insurance companies have failed to develop as active, informed purchasers of health care services. Most are passive intermediaries, making money by simply channelling funds from regional OMS funds to healthcare providers.

Main source: OECD: Health care reforms in Russia

United Kingdom

See Healthcare in the United Kingdom for a description of the services from the user perspective.

The National Insurance Act 1911 granted all workers of 16 years or over free medical coverage as well as unemployemnt benefits. In 1948 the system was extended to the entire population and a new service, The National Health Service or NHS was established. Today it is the world's largest publicly funded health service. It was set up on July 5 1948 to "provide healthcare for all citizens, based on need, not the ability to pay." It is funded by the taxpayer and managed by a government department, the Department of Health, which sets overall policy on health issues. There are four separate health services for each of the three constituent nations (England, Scotland, and Wales) and one for Northern Ireland. In practice, they work closely together and provide a seamless service based on the same core principles.

"The NHS is committed to providing quality care that meets the needs of everyone, is free at the point of need, and is based on a patient's clinical need, not their ability to pay." (Source: NHS website)

The core of the service are the General Practitioners (GPs or family doctors) who are responsible for the care of patients registered with them. GPs are mostly private doctors that choose to contract with the NHS to provide services to patients paid for by the government and not the patient. They are paid a capitation fee and certain other payments according to work they do and their performance. Patients are free to register with any GP of their choice in their locality. GPs can prescribe medicines for collection at a local pharmacy. Patients in England of working age pay a fixed price (presently £7.10 or about US$14 - Northern Ireland and Scotland charge less and in Wales prescriptions are free) for each drug prescribed regardless of the amount of drug prescribed or the cost to the pharmacy. The pharmacy invoices the cost of the drugs (less the fixed price patient contribution) to the NHS. GPs can refer their patients to a hospital for more specialized services and for surgery. GP referrals are needed to see any hospital specialist. Most patients choose to be treated in NHS run hospitals. The quality is comparable to private hospitals and the services obtained (medicines, surgeons and other care workers, and even meals) are free of charge to the patient, whereas private hospitals bill for these. Ambulance services, mental health, and ancillary services such as physical and occupational therapy, in-home and in-clinic nursing, and certain care for the sick elderly in nursing homes are met from the NHS budget. The estimated cost of the English NHS in 2008 is £98.6 billion or about £162 per person per month. Funding for the NHS is met from tax and National Insurance contributions paid by all persons over the age of 18 and employers in the UK. There is no direct correlation between National Insurance payments and health care costs because UK National insurance is part of much wider plan for social insurance, funding health care, retirement pensions and other social security benefits such as Jobseeker’s Allowance, Incapacity Benefit, Bereavement Benefits, and Maternity Allowance. Unlike other benefits paid from National Insurance, health care entitlement is not dependent on a person's National Insurance contribution history but is instead dependent on a person's right to be permanently resident. Temporary residents such as tourists are only entitled to free emergency care.

There is popular support for the NHS in the UK. In opinion polls carried out regularly, IPSOS-MORI asks people which of the following two statements best reflects their thinking about the NHS. "The NHS is crucial to British society and we must do everything to maintain it" (chosen by 78%) and "The NHS was a great project but we cannot maintain it in its current form" (chosen by 20%) . None of the main political parties or even the fringe parties propose adopting a different health care system. The UK's centre-right Conservative party says its policies are aimed at "Protecting and improving our health service by putting patients back at the heart of the NHS, and trusting the professionals to ensure that they are able to use their skills to make the fullest possible contribution to patient care.. Even the ultra-right-wing British National Party supports socialized medicine and rails against free markets in health care.

A member of Margaret Thatcher's government, Nigel Lawson, described the NHS in his memoirs as "the closest thing the English have to a religion." The Thatcher administration made only minor changes to the system, and although many state industries were privatized, the state health sector was not one of them.

The Health Care Commission undertakes regular surveys of patients' opinions of the NHS. In its most recent survey (2006), experience of hospitals in England was rated by those who responded to the surveys as follows: “excellent” (41%), “very good (36%)”, “good”(15%), “fair” (6%) and “poor” (2%).

United States

The Veterans Health Administration, the military health care system, and the Indian Health Service are examples of socialized medicine in the stricter sense of government administered care, although for limited populations. Medicare and Medicaid are forms of publicly-funded health care which fits the looser definition of socialized medicine.

A poll released in February 2008, conducted by the Harvard School of Public Health and Harris Interactive, indicated that Americans are currently divided in their opinions of socialized medicine, and this split correlates strongly with their political party affiliation. Two-thirds of those polled said they understood the term "socialized medicine" very well or somewhat well. When offered descriptions of what such a system could mean, strong majorities believed that it means "the government makes sure everyone has health insurance" (79%) and "the government pays most of the cost of health care" (73%). One-third (32%) felt that socialized medicine is a system where "the government tells doctors what to do". The poll showed "striking differences" by party affiliation. Among Republicans polled, 70% said that socialized medicine would be worse than the current system. The same percentage of Democrats (70%) said that a socialized medical system would be better than the current system. Independents were more evenly split, with 43% saying socialized medicine would be better and 38% worse. According to Robert J. Blendon, Professor of Health Policy and Political Analysis at the Harvard School of Public Health, "The phrase ‘socialized medicine' really resonates as a pejorative with Republicans. However, that so many Democrats believe that socialized medicine would be an improvement is an indication of their dissatisfaction with our current system." According to Humphrey Taylor, chairman of The Harris Polls, "Only just over one third of adults think that socialized medicine would be worse than what we have now, and majorities associate the words with popular policies such as Medicare and a government guarantee that everyone has health insurance. Clearly socialized medicine is not the scary bogeyman it used to be."

Physicians' opinions on "socialized medicine" have evolved. A 2008 survey of doctors, published in Annals of Internal Medicine, shows that physicians support universal health care and national health insurance by almost 2 to 1.

Political controversies in the United States

Although the marginal scope of free or subsidized medicine provided is much discussed within the body politic in most countries with socialized health care systems, there is little or no evidence of strong public or other pressure for the removal of subsidies or the privatization of health care. This is in marked contrast with the situation in the United States where the health care delivery system and financial intermediaries (the insurance companies) are mostly in private hands.

Supporters of government involvement in health care argue that government involvement ensures access, quality, and addresses market failures specific to the health care markets. When the government covers the cost of health care, there is no need for individuals or their employers to pay for private insurance. Opponents point out that socialized medicine would require higher taxes. They also claim that it would reduce health care quality, and also claim that the absence of a market mechanism may slow innovation in treatment and research. Some opponents argue that socialized medicine would lead to rationing of care through waiting lists instead of the price mechanism. Supporters on the other hand argue that waiting lists do not deny care but just prioritize it to those who need it first.

Both sides have also looked to more philosophical arguments, debating whether people have a fundamental right to have health care provided to them by their government.

Cost of care

Consumers want unfettered access to medical services; they also prefer to pay through insurance or tax rather than out of pocket. These two needs create cost-efficiency challenges for healthcare. Some studies have found no consistent and systematic relationship between the type of financing of health care and cost containment; the efficiency of operation of the health care system itself appears to depend much more on how providers are paid and how the delivery of care is organized than on the method used to raise these funds.

Some supporters argue that government involvement in health care reduces costs because it eliminates profit margins and administrative overhead, and can make use of economies of scale in administration. Government-run health care may also make use of purchasing power to reduce costs, particularly for products benefitting from intellectual property rights (in economic terms, producers have a government-protected monopoly, and a large purchaser or monopsony may have more ability to reduce prices by bargaining). In certain circumstances, a volume purchaser may be able to guarantee sufficient volume to reduce overall prices while providing greater profitability to the seller, such as in so-called 'purchase commitment' programs.

Some opponents argue that government has weak incentives to reduce costs (Milton Friedman said that "nobody spends somebody else’s money as wisely or as frugally as he spends his own"). The United States, which has a partly free-market health care system, spends a higher portion of its GDP on health care than any other country in the world. Some claim that this is because of the inefficiency of free-market health care. Others argue that high labor costs, high use of specialists and advanced medical equipment, and some forms of government regulation, such as requiring insurers to cover certain procedures, explain the high rate of health care spending in the United States. There are risk factors specific to the US population, such as a relatively high prevalence of obesity, that also increase costs. Economist Arnold Kling argues that extra spending in the US is cost-effective if expected life span increases by only about half a year as a result of this spending. Kling attributes the "present cost crisis mainly to the practice of what he calls "premium medicine," which overuses expensive forms of technology that is of marginal or no proven benefit.

Paul Krugman and Robin Wells state that all of the evidence indicates that public insurance of the kind available in several European countries achieves equal or better results at much lower cost, a conclusion that also applies within the United States. In terms of actual administrative costs, Medicare spent less than 2 percent of its resources on administration, while private insurance companies spent more than 13 percent. The Cato Institute argues that the 2 percent Medicare cost figure ignores all costs shifted to doctors and hospitals, and that Medicare is not very efficient at all when those costs are incorporated. Some studies have found that the US wastes more on bureaucracy (compared to the Canadian level), and that this excess administrative cost would be sufficient to provide health care to the uninsured population in the US.

Supporters say that there is in fact less bureaucracy in socialized systems than in insurance- based reimbursement systems and that doctors rather than patients are probably the better judges of value-for-money and effectiveness in the special case of health care.


Some in the U.S. have argued that if government were to use its size to bargain down health care prices, this would undermine American leadership in medical innovation. It is argued that the high level of spending in the U.S. health care system and its tolerance of waste is actually beneficial because it underpins American leadership in medical innovation which is crucial not just for Americans, but for the entire world.

Others point out that the American health care system spends more on state-of-the-art treatment for people who have good insurance, and spending is reduced on those lacking it and question the costs and benefits of some medical innovations, noting, for example, that "rising spending on new medical technologies designed to address heart disease has not meant that more patients have survived."

Access and rationing

One of the goals of socialized medicine systems is ensuring universal access to health care. Opponents of socialized medicine say that access for low-income individuals can be achieved by means other than socialized medicine, for example, income-related subsidies can function without public provision of either insurance or medical services. Economist Milton Friedman said the role of the government in health care should be restricted to financing hard cases. Universal coverage can also be achieved by making purchase of insurance compulsory. For example, European countries with socialized medicine in the broader sense, such as Germany and Holland, operate in this way. A legal obligation to purchase health insurance is akin to a mandated health tax, and the use of public subsidies is a form of directed income redistribution via the tax system. Such systems give the consumer a free choice amongst competing insurers whilst achieving universality to a government directed minimum standard.

Compulsory health insurance or savings are not limited to so-called socialized medicine, however. Singapore's health care system, which is often referred to as a free-market or mixed system, makes use of a combination of compulsory participation and state price controls to achieve the same goals.

Opponents of socialized medicine say that socialized medicine rations healthcare by bureaucracy, denying care through waiting lists. Opponents of socialized medicine say that healthcare is rationed in non-socialized systems through individual choice. Supporters of socialized systems argue that rationing in a market-based system occurs through denial of services for those who can't pay for them, and through managed care initiatives.

Political interference and targeting

People working in the UK health service often claim that target-setting by politicians distorts clinical priorities and leads to unwarranted actions merely to meet a target. The veracity and significance of such claims is often hard to judge.

For example, some ambulance crews have complained that the turnaround time for ambulance crews at Accident and Emergency (A&E) departments in hospitals is sometimes too long. They are themselves targeted with a 15-minute turnaround time but occasionally find themselves at the hospital for an hour or more, which can then deplete the capacity of the ambulance service. Ambulance trade union officials suspected that another politically inspired target on A&E departments (for the A&E department to either treat and discharge a patient or admit the patient to the hospital within 4 hours) is to blame. The key allegation was that hospitals were deliberately leaving patients with ambulance crews to prevent the A&E target time from starting to run. The Department of Health vehemently denied the claim, because the A&E time begins when the ambulance arrives at the hospital and not after the handover. It defended the 4-hour target by pointing out that the percentage of people waiting 4 hours or more in A&E had dropped from just under 25 percent in 2004 to less that 2 percent in 2008. The original Observer article reported that in London, 14,700 ambulance turnarounds were longer than an hour and 332 were more than 2 hours. In the context of the total number of emergency ambulance attendances by the London Ambulance Service each year however,(approximately 865,000) these represent 1.6% and 0.03% of all incidents. At least one junior doctor has complained that the 4-hour A&E target is too high and leads to unwarranted actions which are not in the best interests of patients. Academics have also pointed out that the claims of success of the targeting are statistically flawed.


The benefits of socialized medicine (according to the narrow definition) include the following.

  • Avoids over-production that can occur in free market health care

In most free-market situations, the consumer of health care is entirely in the hands of a third party who has a direct personal interest in persuading the consumer to spend money on health care in his or her practice. The consumer is not able to make value judgements about the services judged to be necessary because he or she may not have sufficient expertise to do so. This, it is claimed, leads to a tendency to over produce. In socialized medicine, hospitals are not run for profit and doctors work directly for the community and are assured of their salary. They have no direct financial interest in whether the patient is treated or not, so there is no incentive to over provide. When insurance interests are involved this furthers the disconnect between consumption and utility and the ability to make value judgements. Others argue that the reason for over production is less cynically driven but that the end result is much the same.

  • No for-profit insurance companies are involved. This removes the incentive to deny or restrict care

A criticism leveled at insurance based systems, especially when insurance is done for profit, is that insurance companies make more money when they deny or restrict the care they to their policyholders. Socialized medicine is essentially insured by the community and so there is no profit motive present. If the socialized system under provides, the community applies political pressure to get additional provisions. In democracies, the normal political process achieves this.

  • The system is better geared to keep the nation healthy

It is usually cheaper and easier to deal with disease in the early stages than to deal with it once it has advanced too far. Britain's NHS, for example, rewards doctors through a Quality and Outcomes Framework to actively take steps that will improve the quality of health of the nation. Finland's nurses can grant discounted access to fitness facilities run by the municipalities (which also run the hospitals) for those patients for whom improved fitness will improve their health.

Supporters of socialized medicine would contend that there is a fundamental disconnect with the interests of patients in a free market with employer funded health insurance and private hospitals. For profit hospitals mostly make profits by treating the unhealthy. Investigating and treating illness is what generates profits. For profit insurance companies tend not to fund preventative care because this costs the company money but the savings are likely to be achieved by another insurer because of the tendency to switch insurers over time. Critics of socialized medicine would contend that the government has no reason to reduce the costs since it can always transfer them onto someone else by raising taxes.

  • Making health care affordable to all raises national productivity and the reduces the level of human misery
  • Centralized planning can maximize investment returns to reduce average costs when provider and payer are the same entity

For example, medical imaging technology, which has a high capital cost, is used most efficiently if there is a high throughput of patients. The average cost of an exam will be lower at higher throughput rates as high fixed capital costs are recouped across a high number of patients. A centrally planned health care system can guarantee a high throughput rate at a Magnetic Imaging Resolution (MRI) unit because it has an almost perfect knowledge of demand and supply conditions it can acquire new units and/or retire old units to meet anticipated demand in order to ensure a high rate of use.

For example the UK's NHS has increased MRI throughput rates over the past 10 years and are now handling about 4000 exams per unit per year, an increase of about 26% since 2001. There is evidence of oversupply in the US. For example, in the US, between the years 1985 and 2000 investors had installed MRI units at a much faster rate than the demand for scans such that average throughput rates actually fell, from 3,143 per year to an estimated 2,361 per year. Based on US data at 2001 prices, the average cost of a scan of unit running at 2,000 scans per year was 440 dollars per scan compared to 281 dollars per scan at a rate of 4,000 exams per year.

  • Countries where health care is provided mostly by government tend to spend less on health care overall than similar countries with a more mixed health care system.

This may be due to a number of factors such as regulations, marketing, underwriting, profits, which are not present or present to a lesser extent in government delivered care. There may also be other centralizing efficiencies such as bulk purchasing, IT, payroll, lower spend on defensive medicine and fewer potentially expensive litigations for malpractice. Spending on administration in Finland is 2.1% of all health care costs, and in the UK the figure is 3.3%. The US spends 7.3% of all expenditures on administration. Some socialized systems also take a balanced view of cost against benefit. For example, the UK's NHS generally places a value of about £30,000 (about 45,000€ or 60,000 US dollars) on the benefit of an additional year of life and therefore treatments which do not deliver a cost benefit higher than this threshold are simply not funded and patients must fund the treatment themselves if they wish to receive it. By contrast, in the U.S., doctors and the health care industry have little reason to keep costs in check, because insurers rarely deny coverage for new treatments on the basis of price and the Federal Drug Administration is prohibited by law from considering price when it approves a drug. Even some government programs in the U.S. such as Medicare Part D do not attempt to weigh up cost and benefit when deciding which drugs the government will help fund.

  • Socialized systems that provide universal health care give expression to a collectivist view that health care is a right for everyone and that there is also a moral duty on the well to care for the sick. Filmaker Michael Moore, promoting Sicko says it should be re-labelled as "Christianized medicine" because it is what Jesus would do.

Critics have countered that if it was relabelled as such then the US could not introduce it because it would then violate the rule of separation between Church and State.

  • Where there is a large common risk pool, such as where the state delivers health care to large national or regional populations (such as those in Britain, Spain and Finland for example) pre-existing conditions do not affect a person's access to medical services. The same is true of Canada's health care system.

In free market health care with multiple insurers, insurers employ actuaries and load premiums against insured persons with pre-existing conditions or limit the cost available. In practice this means that the healthiest and youngest people are offered low rates and are more likely to afford wide coverage. On the other hand, sicker, older people end to have to pay higher premiums, and may have their coverage restricted or denied, especially in areas related to pre-existing conditions.

  • In narrowly defined socialized systems, where the state delivers health care to the national population (such as those in Britain, Spain and Finland for example,) changing employer does not have health care consequences. The same is true of Canada's health care system.

People are free to change employer, move to a new location, without ever leaving the risk pool and in the knowledge that a pre-existing condition will not affect the ability to get treatment and will not affect their future medical expenses.

  • In National Health Care schemes, coverage is usually well understood by the population as a whole because there is one scheme. The coverage rules are often mentioned in the press and are therefore become known to many people.
  • Low cost to the patients which can lead to earlier detections.

In some countries with a socialized health service, the state assumes the major costs of medical treatment and medicines at the time of need. Patients may be required to pay a capped contribution before the state begins to assumes the remaining costs of their treatment. For example in Finland the cost of a hospital visit is €22 (€11 in a smaller clinic), and in the UK all hospital and GP services are free. There is evidence that the cost of even a basic consultation in the United States deters some people from seeking medical advice. This can have serious consequences if the condition is discovered late where early diagnosis could save later costs and discomfort in the long run or even save a life.

  • Socialized systems have long term patient relationships and can make investments on the back of this assumption.

This happens because there is a long term relationship with the patient and the preservation of records has long term benefits. Investment in IT is one often cited example where health care providers in socialized systems have access to electronic records of patients tests online and where computer systems can check for example incompatible drug combinations and that drugs are administered to the right patient. Some for profit systems find this investment hard to justify because the provider-patient relationship is not guaranteed to last long enough to justify the investment. Patients in the US are more likely to report that doctors are unable to trace the results of test than patients in other countries and inappropriate drug administration is much less likely to happen in VA hospitals and clinics than happens in private sector care.

  • Coverage is set in order to maximise the health benefit under the funding arrangements

The government sets the framework for determining how the health care system delivers treatments to patients. Health care professionals work within the framework to determine what treatments are offered and on what basis and to whom. Typically criteria are established to maximize the health benefit that is delivered within the allocated funding. For highly expensive interventions, measurements of quality adjusted life years QALY are sometimes taken to calculate the cost/benefit ratio of a particular interventions in particular circumstances to formulate simple rules of guidance for clinicians. Doctors make decisions about the care of individual patients within the guidance of these rules in much the same way as an insurance company applies rules evenly to health insurance policyholders.

Patients for whom certain treatments are determined to be not effective or cost effective in their circumstances may be denied public funding for those treatments but will usually be free to pay for them themselves from their own pocket.


Some criticisms of socialized medicine are

  • Higher Taxes:

A country which adopts a totally tax funded socialized form of health care will have to increase the average tax rate by an amount equivalent to the cost of providing health care and administering the system. Offsetting this in whole or in part will be savings equivalent to the entire revenues of the health insurance industry, which will cease to exist all together, and all other direct medical fees paid to medical providers such as non-insured treatment, co-payments and deductibles, and prescription drug costs.

In England, a survey for the British Medical Association of the general public showed overwhelming support for the tax funding of health care. Nine out of ten people agreed or strongly agreed with a statement that the NHS should be funded from taxation with care being free at the point of use.

Some countries use a payroll tax in whole or in part to fund health care which may be levied on both employers and employees. Other countries (e.g. Switzerland) use a compulsory national insurance funding model with a flatter rate contribution system less related to income. Contributions for such programs can be considered as a form of taxation even if the funds do not pass through government hands.

  • Waiting times: Critics often contend that socialized medicine is characterized by long waiting times for treatment.

For example, the National Health Service reports that the median admission wait time for elective inpatient treatment (non-urgent hospital treatment) in England at the end of August 2007, was just under 6 weeks, and 87.5 per cent of patients were admitted within 13 weeks. 0.04% of those waiting were waiting more than 26 weeks. The median wait time has reduced slowly over a 3 year period from about 10 weeks in 2004 to its present level of about 6 weeks. Similarly, the median wait time for a first GP referral to a specialist was just over 3 weeks. 92% of patients were seen within 13 weeks. According to some supporters of socialized medicine, more recent UK statistics on waiting can also be misleading and overstate true waiting times. This is because under the new 18 week maximum target, the clock starts ticking much sooner, when the patient has been referred to a specialist by the GP. It only stops when the medical procedure is completed or the patient has been fixed on some regime to cure or mitigate the problem. The waiting period thus includes all the times taken for the patient to attend the first appointment with the specialist, any tests called for by the specialist to determine precisely the root of the patient's problem and determining the best way to treat it. It may also include any intervening steps deemed necessary prior to treatment, such as recovery from some other illness or the losing of excessive weight. Some transient medical conditions are not at all easy to diagnose. Therefore the so-called wait time may contain certain absolutely necessary and unavoidable activities which most people would not regard as "wait time" at all.

Supporters of socialized medicine say there is also waiting in free market medicine because of normal scheduling or because the price mechanism can force some to wait. Those that cannot afford their treatment at the price level determined by the free market (or by a combination of the free market and state regulations that are common in most countries) because they cannot afford insurance premiums, are denied coverage by their insurer, or cannot afford to take out loans to cover their medical costs, or cannot obtain private charity, have to wait until they can afford their treatment. The numbers of people waiting in the free market is only known to hospitals and the insurance companies and is not recorded in governmental statistics. In socialized medicine, it is not the price mechanism but the relative need of the patient as determined by medical professionals that determines waiting times. In a socialized system, the numbers waiting are recorded in governmental statistics which informs the public debate about how much national funding should be provided for health care.

Surveys on waiting times for certain elective procedures suggest that whereas such respondents are intolerant of long waits, exceeding three to six months, they can be quite sanguine about short and moderate waits, depending on the severity of the symptoms.

Critics say the patient's "need" as defined by a doctor constitutes an arbitrary criterion for the distribution of health care .

  • Health care rationing

Critics of socialized medicine argue that medical resources are rationed in socialized systems so that some people are either denied care or have to wait for it.

Supporters would argue that rationing also happens in free market health care with the market price determining on the demand side who can afford health care and who cannot, and on the supply how much care is available.

In a democracy, the people through the democratic process are free to determine how much of their money as taxpayers should be spent on health and what services are covered and which are excluded. They also determine how much should be paid by users at the time of consumption and how much is paid as a form of insurance by way of tax. Both the allocation of overall funding to health and the allocation between areas and within an area to individual patients can become a topic of ending political debate. Within the medical profession, professional bodies may established bodies (such as NICE in the UK) which examine the cost effectiveness of treatments and set 'rational' guidelines as to how allocations should be made.

If a person is "rationed out" of the public health care service (perhaps because the treatment is not considered effective or cost effective enough to warrant intervention) they will be able seek alternative treatment in the private sector. If they cannot afford private care, they may have to go without.

  • Cancellations: Critics of socialized systems say that cancellations are a feature of the system.

As an incentive to reduce cancellations in UK NHS hospitals, regulations were introduced to force the NHS trust to perform a cancelled operation with the following 28 days or else give the patient the opportunity to have the surgery done at a private hospital of his own choice at the trust's own expense. As a result, the percentage of operations carried out on time has risen to almost 99%..

  • Bureaucracy: Critics in the United States often claim that "socialized" or public medicine would introduce additional government control over the provision of health care and increase costs.

However, administrative costs in US private sector health care are in fact higher than those in the public sector health care system . One often-cited study by Harvard Medical School and the Canadian Institute for Health Information put the total administrative costs at 31 percent of U.S. health care spending.

Supporters of the free market medicine would contend that these costs arise out of the substantial level of government regulation that exists in the United States's health care sector. According to a Cato Institute study, this regulation provides benefits in the amount of $170 billion but costs the public up to $340 billion.

  • Choice: Critics sometimes argue that choice is restricted in socialized systems because individuals are not allowed a public sector alternative or are required to pay twice when one is available--once to subsidize the socialized system and a second time for their private care.

In some countries with socialized medicine, such as the UK, patients are offered a choice of general practitioner, all of whom are self-employed or work in private partnerships employing all practice nurses, doctors and clerical staff. In addition, some hospital services are sub-contracted to the private sector, so that patients can choose from a range of providers International comparisons of quality of care and health outcomes generally rank the UK above the U.S.

The degree to which waiting in a socialized system affects choice varies from country to country. In the UK for example, a person is free at any time to seek treatment faster in the parallel free market medical system, but they will have to pay the full cost of their private treatment on top of their contribution to the national health care service. In Finland, it is possible to get some funding from the Social Insurance System for private sector delivered care. In Canada the right to jump the queue in this fashion has been discouraged in some provincial legislation and outlawed in others..

  • Capacity: Critics argue that central planning is inefficient and under investment leads to capacity shortages and that a lack of willingness to invest in expensive technology leads to shortages in areas such as MRI scanning. Some would argue that only the price mechanism in free market health care can allocate resources efficiently and that political pressure often leads to shortages in socialized systems.

Supporters might argue that analysis of the facts reveals that it rather depends on how the system is supported financially and managed. Soviet era Russia was clearly starved the health care system of basic facilities, and made this worse by making bad investment decisions. Freeing up markets and introducing insurance has not made things better or delivered extra choice. Cuba demonstrates that remarkably good outcomes are possible for very little investment, even if some facilities are rather basic.

Critics would respond that there's no guarantee that current day systems won't make "bad investment decisions" like the Soviet Union. Additionally, they would point to the fact that health outcomes under Cuba's socialized system have declined relative to those of the pre-revolutionary period.

  • A right to health care

Opponents of socialized medicine contend that no one has a right to health care. According to this view, the individual and not the government or doctors should get the choice to determine what amount of health care coverage, if any, is appropriate for his or her needs.

Supporters would argue that everybody has a right to health care and it is therefore logical for the government to set down minimum standards of care available to all and to determine how the cost burden should be shared.

  • Subsidies are incentives for unhealthy behavior

Critics argue that subsidizing health care costs creates incentives for individuals to engage in unhealthy behaviors (smoking, overeating, engaging in unsafe sex) because individuals do not have to bear the costs of their own actions. As such, individuals who do take care of themselves are, in effect, paying for the carelessness of others.

Supporters would argue that the issue of health care costs is not a significant behavioral driver. If it were, then Europeans would be expected to be more overweight and have a worse HIV rate than Americans. But this is simply not the case.

See also

Publicly-funded health care

Notes and references

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