Stock Market News

Would a Single-Payer Health Care System Save Money?

Robert Frank wrote an op-ed in the New York Times last week called “Why Single-Payer Health Care Saves Money.” He points out that ObamaCare “is an inefficient system” and should be replaced with a single-payer system that will sharply reduce administrative costs, and government agencies can negotiate much better terms with service providers like UnitedHealth Group.

But what Frank ignores is the incredible cost of a single-payer system that allows everyone to get a valuable commodity called “medical care” at no marginal cost — in essence, for free. The taxpayer foots the bill. This is the system in place in England, Canada and most of Europe, often resulting in shortages (long waiting times for surgery, MRIs, etc.) and lack of access to the latest biotechnological breakthroughs that American firms provide.

Professor Frank should know better. He is an economics professor at Cornell and apparently doesn’t understand the accountability or “user pay” principle. When third parties, whether it is the government or insurance companies, pay the entire amount of a medical bill, there is a strong incentive to overuse such valuable services or products. That’s why shortages arise and fraud occurs.

The best solution to the health care debate is the “welfare” principle of economics: You help those who need help but you don’t help those who don’t need help. Most medical services should be decided and paid for by individuals and companies through Health Savings Accounts and insurance products that cover catastrophic illnesses. For those who can’t afford basic medical assistance, a combination of private charities and state-level assistance should be devised. But these welfare services should be means tested, not universal.

Exclusive Milton Friedman’s Blind Spot

Mark Skousen

Mark Skousen, Ph. D., is a professional economist, investment expert, university professor, and author of more than 25 books. He earned his Ph. D. in monetary economics at George Washington University in 1977. He has taught economics and finance at Columbia Business School, Columbia University, Grantham University, Barnard College, Mercy College, Rollins College, and is a Presidential Fellow at Chapman University. He also has been a consultant to IBM, Hutchinson Technology, and other Fortune 500 companies. Since 1980, Skousen has been editor in chief of Forecasts & Strategies, a popular award-winning investment newsletter. He also is editor of four trading services, Skousen TNT Trader, Skousen Five Star Trader, Skousen Low-Priced Stock Trader, and Skousen Fast Money Alert. He is a former analyst for the Central Intelligence Agency, a columnist to Forbes magazine (1997-2001), and past president of the Foundation for Economic Education (FEE) in New York. He has written articles for The Wall Street Journal, Liberty, Reason, Human Events, the Daily Caller, Christian Science Monitor, and The Journal of Economic Perspectives. He has appeared on ABC News, CNBC Power Lunch, CNN, Fox News, and C-SPAN Book TV. In 2008-09, he was a regular contributor to Larry Kudlow & Co. on CNBC. His economic bestsellers include “Economics on Trial” (Irwin, 1991), “Puzzles and Paradoxes on Economics” (Edward Elgar, 1997), “The Making of Modern Economics” (M. E. Sharpe, 2001, 2009), “The Big Three in Economics” (M. E. Sharpe, 2007), “EconoPower” (Wiley, 2008), and “Economic Logic” (2000, 2010). In 2009, “The Making of Modern Economics” won the Choice Book Award for Outstanding Academic Title. His financial bestsellers include “The Complete Guide to Financial Privacy” (Simon & Schuster, 1983), “High Finance on a Low Budget” (Bantam, 1981), co-authored with his wife Jo Ann, “Scrooge Investing” (Little Brown, 1995; McGraw Hill, 1999), and “Investing in One Lesson” (Regnery, 2007). In honor of his work in economics, finance, and management, Grantham University renamed its business school “The Mark Skousen School of Business.” Dr. Skousen has lived in eight nations, and has traveled and lectured throughout the United States and 70 countries. He grew up in Portland, Ore. He and his wife, Jo Ann, and five children have lived in Washington, D.C.; Nassau, the Bahamas; London, England; Orlando, Fla.; and New York. For more information about Mark’s services, go to http://www.markskousen.com/