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Reason Foundation

American Health Care vs. Britain's National Health Service

Samuel Staley
August 28, 2009, 10:06am

Economist Lawrence B. Lindsey has a very useful article in England's Sunday Times comparing American and British approaches to providing health care. The analysis is usefully objective, and he notes that one reason the British National Health Service (NHS) spends less than the Americans on health care is because health-care services have always been much more scarce and limited in Britain. In the U.S., health care has always been provided a much higher levels, dictate by policy and income.

Generally, we can choose to provide health care by rationing based on regulation, queuing or price. The erroneous assumption is that American's ration based on price. In fact, we don't.

There is another choice: spending. Or, uncontrained access. The U.S. has generally avoided rationing altogether by simply spending more--lots more and mandating coverage through public policy and broadening coverage through very generous (largely employer provided) insurance plans. Medicare and Medicaid, he notes, are entitlements--spending is not capped by Congress or legislatures. Rather we fund the level of service used. As with any "free" good, more is consumed than if it were left to markets (and prices).

Moreover, just because someone doesn't have insurance coverage in the U.S. doesn't mean they don't have access to health care (a severe problem in Britain before the NHS). All 50 states require emergency services be provided to patients that walk in the door.

Not surprisingly, Americans spend so much (about $8,000 per year compared to $3,500 in the U.K.) because we use more health care services, not because of waste.

Lindsey makes good points, showing the good, the bad, and the ugly of both systems.

Samuel Staley is Research Fellow

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