Why Free Health Care Will Lead to More Deaths

By
Amir Abdelbaky
on
May 8, 2021
Category:
Economic Policy

Many proponents of a free healthcare system argue that it would save a plethora of lives and that our current American healthcare system kills thousands. More specifically, they cite a common 2020 Lancet study showing that Medicare for All or a single-payer system will save 68,000 lives. This is the first figure that shows up when you Google: “How many lives will free healthcare save?” Not only is this Lancet study methodologically flawed, but a Medicare for All or free healthcare system would inevitably lead to significantly more deaths than our current system, contrary to popular belief. Before substantiating this, it is important to define what Medicare for All is: a system in which the costs of healthcare for all residents are covered by a single government insurance company—Medicare—so that there is no price a patient has to pay for a health service or product at the point of exchange. In addition to this system, some go beyond this and propose that the government should not only take control of health insurance, but it should also control all health services and products so that individuals do not have to pay for healthcare at the point of service at all. Although appealing on paper, both of these systems will ultimately result in more deaths. It is also worth noting that semantically, it is not technically free healthcare, but taxpayer-funded healthcare. However, this paper will still refer to such a system as “free healthcare” because the health services and products are still free at the point of exchange.


The Flaws in the Lancet Study

Page six of the Lancet study states: “Given that uninsured people experience a 40% elevation in age-specific mortality risk (Source 62), we calculated the expected number of deaths in each age cohort if all Americans became insured. We estimated that on an annual basis, universal coverage would save 68531 lives in the USA.” Essentially, the method in which the Lancet study got to the 68,000 lives saved figure was solely based on “Source 62.” Now, when you scroll to the reference section of the Lancet study, source 62 takes you to this 2009 study written by Andrew P. Wilper. Wilper’s paper that the Lancet study utilizes is also methodologically flawed. The 2009 study noted the insurance status of a group of people in 1993 and followed up in 2001, checking whether they were dead or alive. They found that the group who had been uninsured in 1993 had a higher mortality rate than those who were insured, and from that, they calculated a 40% increased risk for death due to lack of insurance. However, there is one major problem that the authors themselves admitted in the study: “We were unable to measure the effect of gaining or losing coverage after the interview.” In other words, the authors had no idea how many people uninsured in 1993 acquired health insurance later on. For example, if someone was uninsured in 1993, got insurance in 1996, and then died in 1999 from a hospital death, the authors of the study would have attributed this death due to lack of health insurance, even though they had health insurance at the time of death. In fact, among adults who were uninsured in 1993, 74.5% became insured in later years. Therefore, because the Lancet study failed to take this factor into account, the claim that free healthcare would save 68,000 lives is untrue. Another paper by Richard Kronick published in the same year as the 2009 study written by Andrew P. Wilper found that lacking health insurance was not independently associated with an increased risk of mortality. Hence, the amount of deaths due to lack of health insurance in America is likely overstated and minimal. It is also impossible for an individual to be denied urgent healthcare even if they can’t afford it, due to the Emergency Medical Treatment and Labor Act. The number of deaths due to the American healthcare system is likely minimal; furthermore, the implementation of a free healthcare system will indeed result in a significant increase in the number of deaths.


Wait Times 

One of the confounding reasons as to why a free healthcare system would lead to more deaths is due to the increased wait times brought by such a system. Under Medicare for All, for example — where private insurance is either rare or non-existent — medical professionals will earn significantly less because, for many health services, Medicare reimburses physicians at a rate that is 50% less than private insurance on average. Doctors will be forced to take a 40% pay cut on all their former private insurance patients under Medicare for All. Due to this, there will be a major decrease in doctors entering the field because there are fewer incentives and resources to pursue this field. A recent 2020 report predicts that the physician workforce would decrease by over 44,000 doctors by 2050 under a Medicare for All system. This best explains why studies show that in other countries that provide free healthcare like Canada, there are 35% fewer physicians per capita than in the U.S. At the same time, you will see a major increase in the demand for medical services because they are now free. A decrease in the supply of doctors and an increase in the demand of patients will lead to increased waiting times to receive medical services. To empirically demonstrate the increased wait times brought by a free healthcare system, we can examine Canada and the UK, which both run on single-payer systems similar to Medicare for All. 2017 reports show 50% of patients in Canada waited 2 or more hours for care in emergency rooms compared to only 25% in the US. These figures were similar in the UK as well, as 31% of British doctors report that patients often experience long wait times to receive treatment after diagnosis compared to only 9% of American doctors.

Deaths Caused by Increased Wait Times

The extended wait times brought by a free healthcare system is a problem that increases the chances of preventable death an individual faces. A 2017 study confirms that a “wait time longer than 24 hours was associated with a significantly higher risk of 30-day mortality.” To quantify this amount to the number of wait time-related deaths a free healthcare system would result in, we can again examine Canada and the UK. A 2014 analysis states that up to 25,000-63,000 Canadian women may have died as a result of increased wait times over the past 16 years. Adjusting for the difference in populations (the U.S. has about nine times as many people), that middle value inflates to an estimated 400,000 additional deaths among women if the U.S. were to implement a free healthcare system. In the UK, 5,500 people have lost their lives since 2016 as a direct result of waiting anywhere between six hours and 11 hours in medical facilities. This means that 1 in every 83 people who have to wait that long to be admitted will die as a direct result of the delay. The risk of death goes up to 1 in 31 for those kept on a trolley for nine hours and rises to 1 in 30 for patients whose admission was delayed for 11 hours. The study concluded that the deaths are entirely and solely caused by the length of wait times and not by the patient’s condition. 


Quality

Not only will Medicare for All increase deaths through extended wait times, but it will result in more deaths due to the reduction in healthcare quality. Under a free healthcare system, there is no market price for an operation or a course of drug therapy, so health managers are required to undertake rationing and allocation decisions based on accounting prices or their judgment of where resources are most needed. When there are no prices for medical resources, it is impossible to know if any particular health product or service is profitable or more valuable since there is no common denominator to add up all the different health resources that go into production or service. Like all goods, healthcare resources by their very nature are substitutable for one another. For example, for some cancers, chemotherapy, radiation therapy, and surgery may be substituted or complemented with one another. The health manager then has to discover the natural substitutability of millions of healthcare services following the exchange relations that, in a free healthcare market economy, take place automatically, permanently, and instantaneously. Managers then have no way of knowing the accuracy of their accounting prices or their judgments and therefore cannot undertake the heuristic learning that is available to market participants who can observe the profits and losses resulting from their actions. In addition, Medicare severely undercompensates for health services, as hospitals lose 13 cents for every dollar spent caring for government health beneficiaries. If any insurance company compensated hospitals like that, it would quickly go bankrupt. Under a system in which hospitals are forced to accept predominantly Medicare patients, a hospital's profit and loss signals would be heavily skewed in a way in which hospitals would be utterly clueless in determining which medical resources are the most valuable, which ones they should produce more or less of, and most importantly, how to substitute and produce these resources. Hospitals would also be less able to afford newer, more advanced medical resources due to a lack of adequate revenue. Henceforth, this will ultimately lead to a significant increase in patients receiving subpar care if a free healthcare — a system without market prices — were to be implemented. A paper by Christine S. Spencer confirms that privately insured patients performed better than Medicare patients for 12 out of 15 quality measures examined. The study concluded that “Medicare patients appeared particularly vulnerable to receiving inferior care.” Now imagine if Medicare was the only method of acquiring health insurance. The quality of healthcare would drop for the vast majority of the population, which we have seen in both the UK and Canada. For example, fewer than one-third of British patients who suffer a heart attack have access to beta-blockers used by 75% of patients in the U.S., even though the use of these beta-blockers reduces the risk of sudden death from a subsequent heart attack by 20%. In fact, in Canadian hospitals, 63% of all general X-ray equipment is severely outdated, and half of all diagnostic imaging units require replacement. The U.S. also has the highest cancer survival rates in the world due to American patients receiving the best and most advanced treatment, while in the UK, a report found that 15,000 cancer patients failed to receive or even get access to the best treatment. Only 59% of new cancer drugs are available in Canada, whereas 96% of them were accessible to American patients. More generally, for some medical services, American patients are 6.6 times more likely than UK patients to receive advanced technology during the procedure.

Deaths caused by Subpar Quality

A free healthcare system will ultimately lead to worse quality care, which inevitably affects mortality. A 2013 study found that after adjusting for the distribution of ages, sexes, and numbers of comorbidities, Medicare patients had on average 8.52 more deaths per 1,000 than patients with private insurance did at the same hospital. If Medicare was the only method for patients to acquire health insurance, the mortality rate of hospitals would get drastically worse. As previously mentioned, American healthcare is superior to Canadian and UK healthcare in terms of treating cancer because a free healthcare system yields less advanced medical resources to treat cancer. A WHO study found 25,000 people die unnecessarily in Britain each year because they are denied the highest-quality cancer care. 2017 research finds that if we implemented a UK-style healthcare system with their cancer survival rates, there would be about 72,000 additional cancer-related deaths; if we were to implement the Canadian healthcare system, there would be 21,000 additional deaths. In Canadian hospitals, the death rate in hospitals for patients suffering a heart attack is 22% higher and almost three times as high for those suffering a stroke than in the U.S.


Conclusion

Contrary to popular belief, providing free healthcare through a Medicare for All system or a nationalized free healthcare system will lead to a significant increase in the rate of medical-related deaths through extended wait times and reductions in healthcare quality. A common objection to this line of argumentation is that it did not take preventative care into account. Essentially, this objection states that due to the implementation of free healthcare, individuals would be more willing to obtain a physician checkup, medical screenings, and so on, which ultimately improves health outcomes. However, research from Devon M. Herrick confirms that patients in free health care systems like Canada and the UK do not get more preventive care than Americans do. To conclude, in many situations, individuals who oppose free healthcare are labeled as disregarding human life, greedy, or even proponents of death. It is, in fact, the exact opposite: free healthcare would inevitably result in more individuals needlessly dying.


Sources

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