America’s preeminent conservative think tank; The Heritage Foundation, has just inadvertently made a very good case for Single Payer Healthcare. Its data shows that countries with single-payer health insurance have more economic freedom than those that lack it.
The five top-scoring nations in the Foundation’s Index of Economic Freedom; Hong Kong, Singapore, New Zealand, Switzerland and Australia, all have some form of single-payer health insurance. What’s more interesting is that countries with strong single payer systems are more likely to place higher on the Index than those that lack it.
Canada, Chile, Ireland, Taiwan and the United Kingdom all scored better on the list than the United States. The UK, home of the National Health was ranked the 12th freest in the world for the second time in a row. The United States was ranked 17th behind such countries as the former Soviet Republic of Georgia.
America’s Economy is Less Free than Ever Before
The US’s ranking actually fell by .3% while those of Canada and the former Soviet Republic of Estonia; both of which have single-payer, rose. The USA actually had its lowest economic freedom score ever, because of growing public debt, high budget deficits, and the anemic recovery from the recession.
“The anemic economic recovery since the great recession has been characterized by a lack of labor market dynamism and depressed levels of investment,” a Foundation writer wrote of America’s current situation. Interestingly enough lack of single-payer might be contributing to America’s decline in economic freedom.
One reason why America’s labor market lacks dynamism is that many workers are afraid to change jobs for fear of losing health insurance. Many employers are reluctant to hire because of the cost of health insurance.
The high cost for drugs and medical services under Medicare is one of the causes of the growing public debt and high budget deficits. Unlike Britain’s National Health, the Centers for Medicare and Medicaid lack the ability to set prices for drugs and medical services, which contributes to the deficit.
The Interesting Relationship between Single-Payer Healthcare and Economic Freedom
The idea that single-payer healthcare might enhance economic freedoms is a counterintuitive one. Conventional wisdom teaches that increasing the size and power of government should decrease economic freedom.
Yet the Index of Economic Freedom seems to show otherwise. Why does handing part of the economy namely healthcare over to government seem to lead to more economic freedom? Obviously more study is needed but here are five possible reasons for this paradox:
- Single-payer increases government’s ability to control healthcare costs which cuts spending, limits budget deficits and lowers the need for additional taxes. For example the costs of some prescription drugs are much lower in Canada than the United States. Canada scored 52.3% for government spending and 80.3% for fiscal health in the Index. The US scored9% for government spending and 53.3% for fiscal health.
- Limiting private involvement in healthcare and insurance decreases the need for regulation. That increases regulatory efficiency, and the need for companies to comply with expensive regulations. There are fewer companies to regulate, which reduces the need for red tape and bureaucrats.
- Getting private industry out of healthcare might reduce the potential for corruption. For example private health-insurance companies in the United States have a strong incentive to participate in the political process via lobbying and campaign donations. Get rid of private health insurance and the need for that disappears.
- Effective single-payer might increase citizens’ trust and faith in government institutions. It gives people evidence that government is on their side and doing something for them. Bonds between citizens and country are increased; which can promote political involvement, patriotism and faith in the economy. Many Britons take almost as much pride in the National Health as they do in the Monarchy for example.
- Single-Payer might encourage entrepreneurship and increased economic activity. With single payer available people might be more likely to take risks such as starting a business, moving in search of new opportunities, quitting their jobs, freelancing, going back to school or taking a risk on a better job.
The Foundation’s findings indicate that Americans should take a hard look at Obamacare and considering replacing it with a true single-payer system. Hopefully, the politicians wrangling over the replacement of Obamacare will take a look at the Index of Economic Freedom. Its’ findings are a real eye opener that will challenge a lot of preconceived beliefs and deeply held notions.