As Paul Krugman first pointed out (see ), the quotation from Ronald
Reagan that Sarah Palin used at the end of the Vice Presidential debate
was taken from a recording that Reagan made in the 1950s in opposition
to the enactment of Medicare (aka, "socialized medicine"). I doubt the
quotation was selected at random, or its relationship to the earlier
health care debate was coincidental, because fear of the government has
been a persistent theme of those opposed to government-paid health care.

This
anti-government theme was explicit in Palin's criticism of Obama's plans
for health care, which she described as a "universal government run
program," adding that, "unless you're pleased with the way the federal
government has been running anything lately, I don't think that it's
going to be real pleasing for Americans to consider health care being
taken over by the feds."

Of course, "lately" the government has
been run by Republicans, but let's ignore that unintentional admission
of Republican ineptitude because "government = incompetent" is still a
truism for many people. Except that we now have experience with
government-run health care in the United States. It's called Medicare,
and people like it. Independent surveys show that people are generally
more satisfied with Medicare than with private health insurance. (See,
for example, "Medicare v. Private Insurance: Rhetoric and Reality" at
http://content.healthaffairs.org/cgi/content/full/hlthaff.w2.311v1/DC1)

Knee-jerk
opposition to all things governmental overlooks the advantages of a
government-run, bureaucratic system, one of which is that the
elimination of the profit motive actually makes Medicare more
efficient, and more consumer-friendly, than private insurance.

A
private insurance company makes a profit by charging premiums in excess
of the covered medical costs of its policyholders. One way for an
insurer to increase profits would be to raise premium prices, but
consumers can easily shop among insurance companies by comparing
premium costs, so market pressures will keep premiums competitive. The
other way to increase profits is by reducing the medical benefits paid.
This can be done by screening out applicants who might incur higher
than average medical costs (e.g., those with "pre-existing"
conditions) and by scrupulously denying claims for any benefits not
absolutely required by the terms of the policy. And both screening
applicants and screening claims requires more administrative oversight.
(For that reason, a good way to shop among competing insurance
companies is to look at both the costs of the premiums they charge and
the percentage of the premiums paid in administrative costs compared to
benefits paid. You're more likely to get value for your money from a
company that pays a larger percentage of premiums back to its customers
in the form of benefits.)

A government-run, bureaucratic
system, by comparison, has no profit motive. There is therefore no
incentive to screen applicants or claims more than is necessary to
comply with the terms of the program. As a result, Medicare is much
more efficient that private insurance companies. According to Paul
Krugman (once again) in today's (10/6) column, for private insurance
companies selling individual health plans, 29 percent of their total
costs are administrative costs, and not medical benefits, while
Medicare spends only 3 percent of its money on administration.

That's right, it is private industry that has bloated, inefficient bureaucracies, and not the government.

The
other advantage to a government bureaucracy over a private bureaucracy
is that the government bureaucrat doesn't really care whether he (or
she) grants or denies your claim for benefits. It's not his money, so
what does he care?

The private bureaucrat does care, because the
profitability of his employer is at stake. In fact, investigation often
find that private insurance companies provide implicit incentives for
their employees to deny claims for benefits and disincentives to
allowing claims. By contrast, government workers are often rated by
the volume of claims processed without regard to whether the claim is
allowed or denied. So a government bureaucrat may have an incentive to
pay a large number of claims quickly, while a private bureaucrat has an
incentive to pay fewer claims slowly.

Bottom line: We mustn't
let soundbite appeals to knee-jerk ideologies obscure the reality that
"socialized medicine" works in other countries and it works here too.