Single-Payer Healthcare
In Part 1 of this series, I gave some brief examples of democratic socialism in practice in Italy over the course of more than three decades. To really get a sense of the effects of it, and how it is all but unavoidable whenever implemented, I believe it is important to cover as many topics of interest with stories of first-hand experiences, and clear cause and effect showing how these noble ideas have played out over the years.
In this article, I will focus on one of the hottest topics and arguments in favor of democratic socialism: health care for all, provided by the government, as a right.
I will detail what a system like this has looked like for decades in Italy with personal first-hand experiences I was a witness to. But simply talking about the horrors I have experienced is not the driving point of this article. Rather, as you get toward the end, I will detail how Italy finally began to introduce private, market-driven, and transparent healthcare options that drastically increased the quality of care, patient rights, and better outcomes in recent years.
A free market in healthcare has actually forced an absurdly corrupt government system into competition.
Everyone Deserves Healthcare
Before I discuss my own experience with single-payer healthcare in Italy, I would like to get a few personal beliefs out of the way first. I am in no way a proponent of the idea of letting the poor die in the streets without getting adequate medical care. I am also not a proponent for medical care in the United States as it stands now, or has it has been in my lifetime. I believe we have some huge problems that absolutely need to be addressed so that a person who cannot afford heart surgery is not left to die. I believe that the idea that a diabetic cannot afford their insulin means something is broken, or that many common and life-saving prescription medications are priced in the thousands per dose is absurd. Heck, I have asthma, and my medication is more than $1,000 per month with insurance in the United States, while I only pay $40 in Italy for the same brand, same medication.
This is all, quite simply, bad. And it should be addressed and rectified in some way. I understand why so many are proponents for single-payer healthcare because of this, but my experience is that the price you pay for it is not worth it. There are surely other answers to explore without putting a gigantic government bureaucracy—that tends to destroy everything it takes control of—in charge of it.
Ok, so now you know I am not a hater that wants to kill poor children, ok? Let’s move on.
The Italian Healthcare System
Italy offers universal healthcare to its citizens. Over the years, I have looked at a number of studies that rank the best healthcare systems in the world, and Italy is very often near the top of the list, and usually considered better than Canada and the United States. One would assume that they got it right. Maybe this is true if you are simply looking at numbers and intentions, but in real-world practice, my experience has been vastly different. So much so that everyone in my inner circle has clear instructions that if anything serious ever happens to me, they are to get me on the first plane to any U.S. hospital.
To be clear, it is advertised as a healthcare system that is free and available to all. One in which the poorest of the citizens get the same healthcare as the richest. Decades ago, this was partially true, in that everyone got the same level of terrible healthcare, but that it was free is only an illusion to those looking in from the outside.
In all fairness, you will find many people who defend the system. This is largely because their system is nationalized but actually runs on the regional level. Smaller and less populace regions tend to have significantly better healthcare. That is, they have a smaller population to take care of, and a much larger per capita budget, and less bureaucracy in the middle.
Still, over the years, I have encountered significantly more people in Europe who have said we need to fix the private system in the U.S., and not follow their example. They make it clear that when the government runs it entirely, it cannot be anything but a failure.
As you read this article, it is important to note that much of what I describe has improved quite a bit in recent years, but what I believe has fueled the fire for these improvements has been the introduction of a great deal of private, market-driven, and transparent healthcare options that have developed as a result of an abject failure of the single-payer healthcare system.
My Introduction to Single-Payer Healthcare
My first experience with the system was in 1984 when I visited a friend’s wife in what was considered to be the best hospital in Milan. She was what most would consider extremely wealthy, so she could certainly afford the best of the best. Furthermore, Milan was the most advanced city in the country—the cosmopolitan capital where virtually everything was the best of the best. But at the time, all that was available was the government-run system. While it may seem wonderful that even the poorest got the same care as the richest, if that care was absurdly bad, was anyone really cared for?
My impression was quite simply something that felt like a 3rd world experience. There were no elevators in the hospital, no climate control, and she was in a room with five other women that consisted of five old and sagging beds, and five old wooden chairs. In each of those chairs was a family member tending to the patient’s needs. There were no monitoring machines, and I could see no nursing staff or doctors in the hallways. Beyond that, the hospital was absolutely filthy, filled with clouds of cigarette smoke, and a gut-wrenching smell.
Had this been a restaurant, I would have expected the health department to close them down without a second thought… and this was the “good” hospital. By every standard, I felt as though I was walking through the hallways of a hospital I would have expected to see in a depressed 3rd world country decades earlier.
Sadly, over the years I came to learn that this was actually considered to be a fantastic place in comparison to most alternatives. Every other hospital I ever walked into in the 80s and 90s was not only unfit as a hospital, based on my experience in the U.S., but would surely fail nearly every building and sanitation code on the books.
But it doesn’t all come down to the building, of course. What about quality of care?
Consider this: Italians have traditionally had a concept called “doing the night.” What this means is that if I were to be hospitalized, my friends and family would gather to make a schedule that assured there was someone at the hospital to advocate for my needs 24 hours per day. These people would be charged with making sure I had clothing and bedding (basic necessities are not provided by the hospitals), and they all needed to have a fair amount of cash on hand at all times. Should I need a nurse to tend to me, the person doing the night at any given moment had the duty to search the entire hospital for a nurse, and be ready to fork over a “tip” to get them to come to my room. Should I need to see a doctor, that was an entirely more challenging proposition. This was an effect of a government monopoly of healthcare.
In 1999, when my mother-in-law was in the final days of her battle with cancer, my wife immediately flew from Los Angeles to Rome. Upon arriving at the airport, she was greeted by her brother. His first words were to ask her if she had enough cash on hand to tip the staff at the hospital in order to assure their mother would get some level of medical comfort at the end of her life. But hey, healthcare is free, right?
One dear friend told the story of a nurse rifling through her purse while she was hospitalized. When confronted, the nurse looked at her with contempt and said, “Do you realize how little I get paid?” Let that sink in, because what I write in this article is not a laundry list of grievances. I could write a book full of similar stories. This was absolutely typical. It was expected and even accepted.
It isn’t just hospitalizations. Even regular medical visits are often a nightmare. My doctor is a state-assigned doctor, and if I want a specific doctor as my primary care physician, I likely need to wait for someone to die in hopes that I can get reassigned. Should I need to see the doctor, there are no appointments, but simply days the doctor is in the office. I show up and hope to be seen, period. I may show up at 8:00AM, and hopefully, I will be seen that day. If not, come back on the next day the doctor is seeing patients and try again. I say “the next day the doctor is seeing patients” because a doctor is mandated by law to only have a limited number of patients, and their pay is set by the government. In order to make a living, many need additional employment. As such, your doctor is likely to also have a private practice for “specializations.” All paid in cash, under the table, of course.
Much like the hospitals, their offices often look like something of a 3rd world country. Should the doctor see me and decide I need a CAT scan or MRI, I can expect to hopefully be given access sometime within the year, regardless of how urgent the need is. Of course, for $500 under the table, I can get an appointment on the same MRI machine by tomorrow, and if I want to be seen in a reasonable amount of time, I can usually just make an appointment at the doctor’s other office. Naturally, this is not covered by the state healthcare system, and of course, this is cash-only with no paper trail. In other words, even in the single-payer system, decent care is reserved for those that can afford to pay a premium under the table, or the politically-connected.
If I need surgery, I can expect similar wait times. Dear friends of mine in Rome had a son with serious heart issues. Their 10-year-old boy was instructed to exert absolutely no physical activity for the year and a half he would have to wait for surgery. Think about that. You have a son with heart problems that can be taken care of with a simple surgery. You are told the wait will be a year and a half. This is so normal there, that his parents were happy that their son was at least approved for the surgery.
The cancer that killed my mother-in-law was not something that happened after a long-fought battle. It could have been a battle, but the CAT scans done on her that would have caught it a year earlier were, quite simply, lost. Naturally, the family had no recourse, because they could not use the government court system to make a claim against government-run healthcare.
In fact, since healthcare is government-run, there was no concept of patient rights. It was not uncommon at all to be diagnosed with a terminal disease and have the medical professionals decide that it is best for you not to know. I cannot count the number of people I saw die without ever being told their diagnosis. Imagine being diagnosed with a terminal disease, and not being given the chance to prepare for your end of life. Imagine not being told, and being robbed of the chance to seek second opinions or alternative treatment options.
And we call single-payer healthcare the “moral” choice.
But it is Free!
Not so fast. Nothing is free. Italy doesn’t roll the healthcare cost into your income taxes. It is a line item on your paycheck, much like social security in the U.S. I remember looking at this line item on my father-in-law’s paycheck, and the amount deducted for his middle-class family was roughly the same as what we were paying for our family health insurance in the United States. Yet while this guarantees healthcare for all, it does not actually guarantee the healthcare system will care for you as you might expect when you are in need. While my in-laws paid heavily into that system all their lives, it failed them in the end.
But Everybody is Covered!
This is technically true. Everybody is covered by a system that doesn’t cover in a way you may expect. Thousands die waiting for that necessary surgery, the better hospitals are less well-equipped and well-staffed than, say, L.A. County General, where all of my life the uninsured would get cared for at least to some extent. When you call the Italian equivalent of 911, you absolutely cannot do so with any expectations unless you happen to live in the right area.
To draw a comparison, in 2003 I had a ruptured disc in my back. It was bad enough that I was unable to sit or stand without excruciating pain. I was in L.A. at the time. The day it happened, I had an MRI. The following day I was diagnosed and referred to a spinal surgeon. A day later I was given the option for surgery the same week. By my own choice, I chose not to have the surgery right away, but once I did, within two days I was in an operating room having a micro endoscopic discectomy, and that afternoon I was home recovering.
Had I been in the Italian system, I would have had roughly a one-year wait time for the MRI, so I would have certainly gone for the under-the-table, cash-only MRI. I would have then been referred to a spinal surgeon. The wait time for such an appointment at the time would have been months because it is kind of tough to do spinal surgery under the table. Once seeing the surgeon, I would have been scheduled for surgery. Additionally, there would have been no option for micro endoscopy, because such advanced techniques were not available under the bankrupt state healthcare system yet, and my wait time to get that surgery would have been at least a year… on the floor… on my back… in agony.
But hey, this is the “moral” answer that is ranked as one of the best healthcare systems in the world!
Malpractice
While I am not a fan of how litigious the United States is, there is a line somewhere to be drawn. My mother-in-law’s cancer would have been treatable had they not lost her files. But it wasn’t as though they were lost and had to simply be re-done as soon as the loss was finally accepted as having been lost. Over the course of that year, every time hey family would ask about the results, they would get vague answers, simply citing that everything was fine. It wasn’t until it was too late, and her cancer was too advanced, that someone admitted that they had lost the earlier tests. She was never even told she had cancer, and when she died there was no pathway to find out who dropped the ball, and how. After all, since the medical professionals were ultimately employees of the government, there was absolutely no accountability in the system. But everyone is covered, right?
He’s a Great Surgeon! He Practices in America!
Have you ever noticed how many doctors in the United States are immigrants? If so, have you ever wondered why? One of the things I have noticed over the years in Italy is how people speak of the qualifications of the medical professionals they trust the most. One of the most common comments you will hear about a great doctor is that they practice in America. Seriously, I have heard this dozens and dozens of times. “Oh, Giorgio is the best orthopedic surgeon in town. He even practices in New York.”
There are many fine doctors in Italy and all over the world. But this proves to be something that should speak volumes. The best of the best, when they get a chance, will often set up a practice in the United States. After all, their pay in Italy is fairly low, so practicing in the U.S. gives them the chance to better their own economic situation. But only if they are good enough. Many of those travel back and forth, because they do have a sense of patriotism that drives them to also help their own people. But also practicing in the U.S. gives them both an economic boost, and access to surrounding themselves with the best of the best in their field. It makes them better at what they do, and they can take that home with them.
Nationalizing the system gives these doctors few resources and pathways to become even better within their own system. It stifles the advancement of medicine.
Things Are Getting Better
In the 2000s, reforms happened in much of the country, such that much of what I described is no longer the standard, at least not everywhere. That is, many of the hospitals are cleaner now, and a new generation of nurses have come through universities that truly care, and are not expecting tips. The concept of patient rights has finally seen the light of day. But those wait times and rationing are still in regular practice, at least for now. Additionally, the ratio of doctors and nurses to the population is still significantly lower than what an American would expect. The ratio of ICU beds is about 1/3 of that in the United States, and the nurse to patient ratio is significantly higher in Italy, which directly affects the level of care one can expect. These numbers are absolutely improving, but this also corresponds with a move toward more care offered through the private sector in recent years.
Privatizing Healthcare in Italy
Anything run by a government will ultimately become so bloated and inefficient, that it will collapse under its own weight, and I have watched this before my eyes in Italy. That “amazing” healthcare system I have described so far is bankrupt. They cannot raise taxes enough to fix it effectively. As a result, in order to prop it up as best they could, the government has been forced to allow for more private health clinics in the 21st century. They have been edging away from democratic socialism in this respect. This has helped the healthcare system in that many of the government hospitals and medical offices have been sold off to private companies.
These companies have modernized the buildings that are much more like a typical U.S. healthcare office or hospital, and have entered into a competitive environment.
The result is that if I am not feeling well, I now have two options. I can go for the government system that I am still paying for, and deal with all of the worries, waiting, and hassle. Or I can go to one of the private clinics, walk inside, see a menu with a price list, and get immediate and professional care. Thanks to the competition of this private market, I can get that MRI for a couple of hundred dollars now. I can see a doctor without waiting all day on a hope and a prayer if I am willing to fork over the $50 for a visit.
This has also created a market for a new concept called health insurance. In a nutshell, many are now paying for private medical care, while still paying for the failing nationalized system.
As a result of the reforms through increased privatization, the people have started to demand greater accountability. Citizens now have a concept of patient’s rights, and the inability to cover up malpractice and ration healthcare has produced a heavier weight on the state-run system, making private insurance and private clinics that much more popular. In doing so, they have also become more competitive, creating lower costs, better care, and better outcomes. The government simply cannot compete with any of this, but they are forced to reform as a result. The slow drive away from democratic socialism is the force behind it.
To throw in yet another comparison, a few years ago, my son needed to be tested for H. Pylori. With our insurance in the U.S., our out of pocket cost for the test was to be $800. The antibiotics would have been $1,200, and this was after the ACA was implemented. This is a perfect example of the failure of our own system. In Italy’s nationalized system, it would have all been close to free, but the process would have been a matter of endless days of waiting for doctor visits, scheduling tests months in advance, and simply a tremendous amount of aggravation. We chose the private option in Italy. Our son was seen at a private clinic and tested for a grand total of $50. The test came back positive, and his prescription for the necessary antibiotics came to a total of $60 since we got it “out of the system.”
The private system in the U.S. is absolutely broken. The public system in Italy is absolutely broken, but the private system that developed as a result of Italy stepping back from democratic socialism is working like a charm. So we have to ask ourselves which road we really want to travel!
In a nutshell, while the United States is busy trying to go toward a nationalized system, Italy is working away from it, or at least into a hybrid system. The future that seems inevitable is that private care is becoming more and more the norm, while the medical tax is looking more and more like something similar to catastrophic coverage for the uninsured. Perhaps we can learn something from this.
Democratic socialism failed Italy’s healthcare system. Private markets are saving it.
What We Can Learn
While I have outlined some examples of the problems, it is not all without good. There have been aspects of the Italian healthcare system that I believe we can learn from. One such thing is the role of the pharmacy, as well as the doctor-pharmacist relationship. An Italian pharmacist is held to extremely high standards, and is considered very much like a nurse practitioner in the United States. If you are ill, you can walk into your pharmacy and consult your pharmacist. They, in turn, can provide some treatment options, or in many cases directly consult your doctor and prescribe medication for you. A pharmacy is much like an urgent care clinic in a sense, except the consultation is free of charge.
We can also see that as they have privatized more and more, they have created a competitive environment in which price, quality of care, and outcomes are all taken into consideration. The pricing in the private clinics is completely transparent, so they are placed in a position to compete for your business. The insurance companies that have evolved are more similar in operation to how car insurance works for us. They are not monstrous HMOs and PPOs. Pricing and payouts are entirely transparent.
Prescription medication is affordable, even if you are not paying through insurance or the government system. This is the result of price transparency and bargaining.
Italy’s Healthcare System and COVID-19
In all fairness, I also must recognize some of the pros with respect to dealing with a major pandemic. As a government-run system, they were well-positioned to evaluate data in near real-time nation-wide without a profit motive. Italy mobilized to have every hospital in the country to report data daily to the provincial health department, who in turn reported to the regional departments, who in turn reported to the national system. They tracked everything at a granular level, such that every day you could know exactly how many new cases there were, new deaths, new positive or negative tests, how many people were hospitalized at any given time, how many of them were in ICU, how many had been moved out of ICU, how many were quarantined at home, and how many had been pronounced recovered after two consecutive negative tests. The centralized system did allow all of this to come together quickly.
However, the system still failed, as the hard-hit areas became overwhelmed. Italy’s nurse to patient ratio is very low, and their ICU bed to standard bed ratio is extremely low. Because of this, they were unable to care for people in the harder hit areas. To add to this, some of the hard hit regions had recently implemented a “point of care” system, that caused a person with a broken leg to be in a bed right next to someone with COVID. This caused some of the hospitals in the north to become the main super spreader centers very quickly. And as these hospitals became increasingly overwhelmed, they were forced into a reality of having to ration care, making impossible decisions on which people have the best-guess chance of a positive outcome. In many cases, the elderly drew the short straw, simply for being elderly.
Even the vaccination rollout has been a nightmare. As part of the European Union, Italy has received a very low quantity of vaccines. The pharmaceutical industry in the United States, with all of its faults, has also put much of the world in a secondary position for vaccine rollout. If we nationalize, we lose that advantage. But even for that which is available in Italy, the government rollout is not without its bureaucratic nightmares.
Another dear friend of mine is a cancer patient. He lives in the province of Viterbo, but his treatment is administered in Rome. With the division of health departments, his care is in Health Department #3, while his residence is in Health Department #1. He is not eligible for the vaccine in #1 because he is not getting his treatment there. He is not eligible in #3 because he doesn’t live there. It took weeks of paperwork, phone calls, and pulling of bureaucratic strings to finally get him vaccinated.
A Look at Germany
Many proponents of single-payer healthcare point to Europe as an example and they often cite Germany as a glowing success we should look at. The problem with this is that while Germany does have a functional system, it is not a single-payer system. There is a legal insurance mandate for anyone that makes less than roughly $75,000 per year, but it is a requirement to obtain insurance, which is paid in part by an employee and in part by the employer. There are hundreds of insurance companies that participate in the public consortium. All are allowed to also participate in a private system, for which there are many benefits of efficiency. For those making above $75,000, they are not required to pay into the system but may elect to only have private insurance. It gets pretty complicated, but this is by no means a single-payer system. It is a regulated private system.
Fixing the System in the United States
I am certainly no expert on the dynamics of healthcare, but it is clear to me that an attempt to fix a broken system with another broken system isn’t a viable solution. Perhaps the better answer is to understand the breakdowns in our own system and seek a free-market solution that also guarantees nobody will be left to die uninsured. Realistically, the private system in the United States is not a free-market system. It is private, but there are many barriers in place that make the health insurance system more of a corporate-government cabal with almost no price transparency. Italy and Germany’s lessons may give us some ideas on how we may fix our own broken system without giving up all of our control to a state monopoly.
- What if we empowered a true free-market system, in which I could go online and shop for the surgery I need while browsing reviews and ratings of the various providers?
- What if there were no barriers to health insurance companies operating across state lines?
- What if there were no monopolies of benefit management companies price-fixing with pharmaceutical companies?
- What if we had actual common sense tort reform to drive down the cost of malpractice insurance?
- What if health insurance was treated more like car insurance?
- What if my local pharmacist was also more of a primary care resource for minor issues?
- What if the government’s primary roles in healthcare were focused on enforcing quality of care in a free-market system, focusing on patent reform and lockstep pricing in the pharmaceutical industry, and a simplified approval system for generics? All to allow the market to work efficiently by increasing competition.
We could create a highly competitive landscape in which a combination of quality, price, and efficiency are the drivers of the care we receive. We very well may find that we can drive the cost of healthcare down to something significantly lower than we would be paying for a government bureaucracy to control it, while also experiencing better quality and better outcomes.
All the while, we could find better ways to assure that the poor are never denied care, and we most certainly don’t need to go down the democratic socialism rabbit hole to do it.
But single-payer healthcare is the moral choice, right?
In my next article for this series, I will be diving into central planning, with first-hand examples describing how destructive it has been on small mom-and-pop businesses, and how it has kept new markets from emerging. I will start at home, with the vineyard that is no longer in my own back yard.
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