13 Profound Socialized Medicine Pros and Cons

Socialized medicine is the provision of hospital care, medical care, and supportive care for everyone within a society. Instead of requiring individuals and households to pay for their own care, payment is provided for required services through the use of public funds.

The term “socialized medicine” is almost exclusively used in the United States. A more accurate term for this type of care would be “universal health care.”

The primary benefit of socialized medicine is that it guarantees every individual can access medical services if they are required without a threat to their personal finances. In the U.S., if someone loses their job, they often lose their health insurance. There is always an option to purchase coverage, including on the Affordable Care Act networks, but at an added cost. True universal coverall would eliminate this issue altogether.

The primary disadvantage of socialized medicine is the cost. Gerald Friedman, an economist at the University of Massachusetts-Amherst, estimates that the price of establishing universal coverage in the United States would be $1.38 trillion per year over the first 10 years. Higher cost estimates from the Committee for a Responsible Federal Budget reach $2.8 trillion per year in the first decade of coverage.

Here are some additional socialized medicine pros and cons to think about.

List of the Pros of Socialized Medicine

1. It creates options for bulk buying.
The United States spends more on healthcare as a percentage of GDP than any other developed nation. It is also the only major developed nation of its size that does not offer a complete universal system. Because of the size of universal systems, bulk purchasing is possible because of the system’s structure. That lowers costs, improves pricing and rates through negotiation, and reduces administrative costs. Universal care would likely lower care costs over time.

2. It would provide more care to people from all walks of life.
There are laws in the U.S. which require emergency rooms to treat people, whether they can pay for the services or not. Many people use these services for simple care needs because they have no other option due to their finances. A universal system brings more people into care centers, reserving emergency services for real emergencies, while being funded by likely changes to the structure of taxation.

3. It would allow insurance to move with each person.
Under the current system of healthcare in the United States, moving from job to job requires insurance coverages to change. That can mean going to new doctors, even if you haven’t moved to a new town. Even with electronic records and improved communication between facilities, patients must establish new relationships with their doctors in a cycle that never seems to stop. Socialized medicine would cause that cycle to stop because you could take your insurance with you everywhere.

4. It could improve public health.
Since every person in a society has equal access to care under a universal system, there are improvements to the general public health that occur. That creates a society that is healthier, which means there can be increases in productivity. Although individuals would still need to seek out care and take care of themselves, universal care could reduce illness rates within the general population.

5. It would improve household finances.
In 2007, 3 out of every 5 bankruptcies filed in the United states were due to medical expenses. Many of those who were forced to file for bankruptcy did so even though they had healthcare insurance at the time. Although there would be increased costs that would likely impact household paychecks, the threat of bankruptcy or the high care costs with a severe illness or disease would go away. The average household would see financial gains, not losses, over time because of this structure.

6. It could encourage personal innovation.
Although innovation within the medical industry may be reduced with a single-payer system, other fields would flourish. Many people seek out employment because of the health insurance benefits they can receive. If that worry was eliminated, entrepreneurship could be encouraged. With socialized medicine, the rates of self-employment in the U.S. would likely double. At the same time, employers would likely see a reduction in costs because they’re not subsidizing private insurance.

List of the Cons of Socialized Medicine

1. It reduces competition within the industry.
Two of the fastest growing industries over the last generation have been biotechnology and pharmaceuticals. Thanks to competition and a free market system, there is the potential to make huge profits by finding new ways to care for people in an affordable manner. A universal system of care, funded through a single-payer system, would likely reduce innovation. The single-payer (the government) would insist on sharing any breakthrough that occurred, which would reduce the potential profitability of any new idea.

2. It can increase wait times to see specialists.
In Canada, a 2017 report in the Huffington Post showed that residents of New Brunswick are waiting an average of 41.7 weeks to see a specialist with their system of universal care. Nationwide in Canada, the median time of waiting, from diagnosis to treatment by a specialist, is 21.2 weeks. In 2016, the median wait time was 20 weeks. In 1993, the wait time was 9.3 weeks. Over the same time, in the United States, wait times increased by 30%, but are still at just 24 days.

3. It can still require private insurance.
Although socialized medicine is intended to provide universal care, countries that have implemented this type of care do not always cover every procedure. Many need to carry private insurance still, in case they need immediate treatment, which means they’re essentially paying for two systems of healthcare instead of just one.

4. It puts the government in charge of healthcare.
In the United States, the systems of universal care that do exist for qualifying individuals, Medicaid and Medicare, are on the verge of bankruptcy. Regulations would need to be put into place to prevent the care budget from being appropriated to other budgets to have it maintain its health in the U.S. if this form of care would have a chance to succeed. If something should happen to the government, the options for care would go away as well.

5. It could lead to care rationing.
Some nations that offer universal care have resorted to the rationing of medical services. This is done because some people abuse the system, seeking care for a condition that doesn’t require a visit to a medical provider to treat. Service restrictions and controlled distribution may make it difficult for people to receive the care that they actually need.

These socialized medicine pros and cons show that there is a lot of potential in the idea of universal care. They also show that there can be tremendous challenges that must be addressed for it to be a successful endeavor.

Blog Post Author Credentials
Louise Gaille is the author of this post. She received her B.A. in Economics from the University of Washington. In addition to being a seasoned writer, Louise has almost a decade of experience in Banking and Finance. If you have any suggestions on how to make this post better, then go here to contact our team.