Government-Run Health Care and Market Incentives: Debunking the Myth

Introduction

The question of whether a single-payer government-run health care system would eliminate the market incentives to develop new and better health care products and services is a common concern. However, this argument is often based on misconceptions. Let’s delve into the facts, debunk the myth, and discuss the role of government labs, corporate care, and health insurance in advancing health care.

Myth: A Government-Run Health Care System Eliminates Market Incentives

The misconception often arises from a fundamental misunderstandings of the role of health insurance and the distinction between health care and health services. The real issue is not the provision of health care itself, but the affordability and accessibility of health insurance.

For instance, the development of the first two COVID-19 vaccines can trace its roots back to countries with long-standing universal health care systems. Germany and the United Kingdom, long leaders in health care innovation, have shown that government-run systems can foster significant advancements in health care. These countries have been at the forefront of medical innovation for decades, and their health care systems have provided the necessary infrastructure and funding for such breakthroughs.

Reality: Government Laboratories and Contracted Private Firms

Government laboratories and research institutions around the world have consistently produced numerous breakthrough products and procedures. This is often achieved through partnerships with private companies that have promising ideas. For example, Pfizer, whose roots in Germany date back over a century, and AstraZeneca, developed in collaboration with Oxford University in the UK, have both been leaders in medical innovation. Government contracts play a crucial role in funding and supporting these private firms, ensuring that critical health care products and procedures are developed and brought to market.

Key Point: The Issue is HEALTH INSURANCE, NOT CARE

The true challenge is not in the development of health care products but in accessing and affording them. In the United States, the expensive and for-profit health insurance system mirrors the expensive and for-profit health care system, creating a complex and often prohibitive barrier to care. This dual system is maintained by powerful lobbies that bribe government officials to keep both systems in place, ultimately harming the average working-class Americans who bear the brunt of these costs.

The Example of the British National Health Service

While the British National Health Service (NHS) may be widely considered one of the best systems globally, it is unrealistic to expect such a model to be adopted in the United States. The NHS provides universal coverage, free at the point of use, and is funded through general taxation. However, the U.S. heavily relies on a profit-driven health insurance and care system, which significantly increases costs and limits access.

Advancing Health Care Despite Challenges

Health care providers and researchers are not held back by a lack of profit motivations. They continue to innovate, driven by the potential for financial gain and the desire to improve patient care. In fact, corporations often make substantial profits on the products they develop and sell to the medical industry. Whether it is through developing new treatments or controlling the distribution of health care supplies, the market incentivizes continued innovation and improvement.

For example, the high cost of insulin in the U.S. is often criticized, but insulin remains a critical and necessary medication for people with diabetes. Profits are made by pharmaceutical companies to recoup investments in research and development, but this does not negate the fact that new treatments and technologies continue to be developed.

In conclusion, a single-payer or government-run health care system does not eliminate market incentives to create new and better health care products and services. The focus should be on making care accessible and affordable, not on whether a profit motive exists. Understanding the distinction between care and insurance helps clarify the debate and highlights the need for systemic changes to improve health care outcomes for everyone.