Single-payer activists tell us that Medicare-for-All would be nothing like socialized medicine because health care providers would not be directly owned and operated by our masters in D.C.  In the real world, however, the golden rule (He who has the gold, rules.) applies to health care just as it does to everything else.

If government bureaucrats control who gets paid and how much, they may as well employ the doctors and own the hospitals. Anyone doubting this should read Jerry Cromwell’s post at Health Affairs, in which he describes how Medicare’s clumsy cost control strategies have destabilized acute care hospitals:

Stability reigned until Medicare’s per case bundled payment arrived, reinforced by aggressive government denials of inpatient coverage for simpler procedures (e.g., laser eye surgery). Stays became shorter, and less complex surgery migrated to ambulatory settings …


Acute inpatient surgery became far more complex and much more costly, on average. It also involved a higher proportion of uninsured patients as ASCs siphoned off better-paying patients … the industry was hemorrhaging inpatient cases that left many fixed costs of operating a full service facility uncovered.

All of this disruption might have been worth it if the goal of saving money had been reached. But health care inflation continues apace, Medicare is in serious financial trouble, and the patients are coughing up more out-of-pocket money than ever before. Moreover, it has created a whole new problem—-physician-owned ASCs and specialty hospitals:

ASC and specialty hospital physician-owners refer uninsured and Medicaid patients to acute hospitals more often … ASCs and specialty hospitals reap the benefits of physicians referring more complex, costly patients to acute general hospitals while focusing on less complex, more profitable patients …

This has, of course, done considerable damage to acute care hospitals. And the vicious cycle of meddling continues as various interested parties request (you guessed it) more government intervention. Cromwell himself, apparently missing the larger significance of his own analysis, thinks the solution is government-imposed “universal coverage.”

The real solution is, however, less rather than more government. There’s a lesson here for anyone capable of thinking outside of the ideological box: When government controls the purse strings, it can and will control the health care delivery system. Thus, there would be no practical difference between Medicare-for-All and socialized medicine.

Comments 1

  1. Marc Brown wrote:

    What he writes is:

    ‘A far more efficient and equitable solution would be universal health insurance coverage for Americans, thereby minimizing any financial bias in physician referral incentives.’

    All you’re advocating is more chaos with stitch ups between insurers and hospitals.

    Posted 31 Mar 2008 at 9:42 am

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