Sweden is often looked upon by liberals and statists as a shining beacon of what all countries should aspire towards – a government run utopia, where everything is taken care of: a true nanny state. Naturally, this is all made possible due to the absurd tax rate – tied for the highest in Europe right around 45%. I wrote recently about Sweden’s problems with unemployment due to its policy of imposing a high minimum wage that has driven the young, unskilled and foreign into a state of employment coma, and recent news has further damned its failed state healthcare. Up to 10% of Swedes have recently opted to pay for healthcare in order to skip the very lengthy wait times to see a doctor, specialist, etc.
Swedish Newspaper The Local has the breakdown:
More than half a million Swedes now have private health insurance, showed a new review from industry organization Swedish Insurance (Svensk Försäkring). In eight out of ten cases, the person’s employer had offered them the private insurance deal.
“It’s quicker to get a colleague back to work if you have an operation in two weeks’ time rather than having to wait for a year,” privately insured Anna Norlander told Sveriges Radio on Friday. “It’s terrible that I, as a young person, don’t feel I can trust the health care system to take care of me.”
Of course you can’t – with government run healthcare you remove the market, which is the great equalizer in the equation. The industry can’t help but be swamped via the influx of individuals who now have access to care and without monetary incentive can abuse the system either intentionally or unintentionally through demands for care on imagined or inconsequential health issues.
Government can invest all of the cash it wants into this (recently Sweden invested €5 Billion to try to cut wait times down, an effort that didn’t provide much, if any, relief – see Gammon’s Law about this), there is still a sea of government waste, ineptitude and corruption to swim before any progress can be made and even then the system is inherently flawed (good Mises article from Thomas Di Lorenzo here).
Milton Friedman studied this phenomenon, looking at government’s takeover of hospitals over a 24 year span.
Friedman’s key conclusion was that, as with all governmental bureaucratic systems, government-owned or -controlled healthcare created a situation whereby increased “inputs,” such as expenditures on equipment, infrastructure, and the salaries of medical professionals, actually led to decreased “outputs” in terms of the quantity of medical care. For example, while medical expenditures rose by 224 percent from 1965–1989, the number of hospital beds per 1,000 population fell by 44 percent and the number of beds occupied declined by 15 percent. Also during this time of almost complete governmental domination of the hospital industry (1944–1989), costs per patient-day rose almost 24-fold after inflation is taken into account.
The more money that has been spent on government-run healthcare, the less healthcare we have gotten. This kind of result is generally true of all government bureaucracies because of the absence of any market feedback mechanism. Since there are no profits in an accounting sense, by definition, in government, there is no mechanism for rewarding good performance and penalizing bad performance. In fact, in all government enterprises, exactly the opposite is true: bad performance (failure to achieve ostensible goals, or satisfy “customers”) is typically rewarded with larger budgets. Failure to educate children leads to more money for government schools. Failure to reduce poverty leads to larger budgets for welfare state bureaucracies. This is guaranteed to happen with healthcare socialism as well.
When this Swedish galleon of socialized ideology runs aground on the rocks of reality, which it has been doing for some time now, one has to hope that politicians and the public will look and learn what to avoid in our own future. Obamacare is already destroying the lives of virtually every citizen it touches, and it isn’t even close to a single payer system (yet).
The State should stay out of healthcare. How much evidence is needed to prove this point?