Single Payer Healthcare - Effect on Medical Industry

[XenaLives]

Healthcare and the myth of American Exceptionalism:

An interesting paper presented over 30 years ago.

Torrance, G. W. (1984). "Health Status Measurement for Economic Appraisal." Paper presented at the Aberdeen meeting on Health Economics.

AMERICAN EXCEPTIONALISM: IMAGES AND REALITIES
Tocqueville observed that the "great advantage" of the American lay in that he did not have to "endure a democratic revolution".(4) That insight into American life is one of the earlier and more well known attempts to explain why the United States is different from Europe. Why, in the United States, did there not develop either a mass socialist movement, or the kinds of social democracies that still prevail in Western Europe or Canada?(5)
In comparison to Canada and Western Europe, the United States is commonly regarded as a "welfare laggard" (Wilensky 1975); or, at best, as a "reluctant welfare state" (Bendick 1985). In this respect, the case for American exceptionalism is most often based on two contentions. First, the United States was no pathbreaker in the adoption of major social programs. Social security, workmen's compensation, unemployment insurance and public housing were generally adopted later in the United States than in Western Europe and Canada. Second, the scale of public expenditure on social programs in the United States was generally smaller than in Western Europe and Canada.
Both of these contentions hold in the health sector. Indeed, two distinguishing characteristics of the American health system are the absence of a compulsory and universal national health insurance (NHI) program and the relatively low level of public expenditure on health care. Although the component elements of an NHI system already exist in the United States (Medicare for the elderly and handicapped and Medicaid for the very poor), these programs were adopted later than in Western Europe and Canada. What is more, long before these programs were adopted, the United States opted in the 1930s for a system of private health insurance. Although this was not the outcome of explicit health policy decisions, a number of federal policies outside of the health sector, e.g., the exemption of fringe benefits from wage controls during World War Il and their largely tax-exempt status since then, provided indirect subsidies to the private health insurance industry (Starr 1982). As a result, beginning in the 1930s this industry grew and remains an important source of health care financing.
In summary, there is some evidence for American exceptionalism in the health sector. But there are also important ways in which the health sector in the United States resembles that of Western Europe and Canada. Let us examine this issue from the vantage point of three characteristics that typically distinguish the United States from Western Europe and Canada: (1) American values and popular opinion; (2) the structure of health care financing and organization; and (3) policy responses to health sector problems.

Link to full paper -
https://www.nyu.edu/projects/rodwin/american.html