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Editorial: Coronavirus Shows Drawbacks of Statist Healthcare Systems

Data aggregated by RealClearPolitics indicates that the United States has 133,146 cases of the Wuhan coronavirus. We lead the world handily in infections, but surprisingly, we place sixth for deaths: 2,363 Americans have died from the virus, a death rate of 1.77%.

Out of the "top" thirty countries on RealClearPolitics' list, only six countries purport to have a lower death rate than the United States: Germany, South Korea (which leads the world in testing), Turkey, Austria, Ireland and Malaysia.

The other 23 countries on the list have higher death rates despite a much lower number of infections. Italy clocks in at 11.03%, Spain at 8.38%, France at 6.49%, the United Kingdom at 6.29%, the Netherlands at 7.10%, Belgium at 3.98%, Switzerland at 2.02%, Sweden at 2.97%, and Denmark at 3.01%.

Why Socialized Health Care Is Unjust
Waiting room (The Federalist)

I am deliberate in listing these countries: They are all developed, democratic Western nations with per-capita GDPs in the same neighborhood as the United States. Better yet, many of these nations have economic-equalization schemes -- implemented via social-welfare programs -- that have reduced some of the economic inequality commonplace in the United States. In theory, this would increase the poor's access to healthcare.

The factor prohibiting these nations from achieving the outcomes of the United States is their common model -- government-dominated socialized healthcare. One might suggest that Germany and Austria (whose death rates lag the U.S. pretty significantly) also have socialized systems, but there is an important caveat: Their healthcare systems are supported by government investment but they are not smothered by central planners.

Admittedly, I am not an expert on the healthcare arrangements in those nations, but identifies some key characteristics of each of their systems.

Austria has 28 separate healthcare funds, and the funds -- not the government -- contract medical services. Furthermore, Austria employs a federalist model: Vienna delegates hospitals' "administrative and financial business" to the nine states that make up Austria.

Germany is even more capitalist in their outlook. notes, "The German public healthcare system is highly decentralized, with 16 municipalities (called Länder) sharing responsibility with the government for hospital planning, building and the upkeep of technical facilities." Additionally, Germany maintains a profit incentive: "Throughout Germany, there are public hospitals, private non-profit hospitals and private for-profit hospitals. Of these, there are two categories: general hospitals and psychiatric hospitals."

Other nations in Europe (namely, Italy, Spain, France, and the U.K.) have a decidedly socialist outlook. In the U.K.'s case, Joseph C. Sternberg of the Wall Street Journal notes that the National Health Service

already falls to pieces every year with the normal ebb and flow of cold-weather ailments. Each winter crisis becomes a bit more acute, and this year was no exception. As of December, only 80% of emergency-room patients were treated within four hours of arrival, down from 84% in the depths of the previous two winters.

Socialist healthcare schemes lead to the underfunding of acute and rehabilitative care services. Sternberg observes, "Italy devoted around $913 per capita to inpatient acute and rehabilitative care, compared with $1,338 in France, $1,506 in Germany, and $1,732 in the U.S."

Sternberg adds,

Government accounted for 79% of total health-care spending in the U.K. in 2017, according to Eurostat, and 74% in Italy. Germany and France both rely on compulsory insurance schemes with varying degrees of subsidy and government meddling, but outright government expenditure amounts to only 6% of total health spending in Germany and 5% in France. Covid-19 in this sense is a test of how much one trusts central health planners to make wise long-term decisions that boost resilience in the face of unusual dangers.

When healthcare is dominated by the state and medical systems have limited revenues, it is only natural that they will be starved of resources. Just the same, when medical decisions are left to central planners instead of extensively-trained physicians and local officials, the outcomes cannot possibly compare. These theses have been thoroughly demonstrated by the coronavirus pandemic.