Thoughts on healthcare and Dutch socialism, 03 May 2009


I bumped into a New York Times article about comparisons between the Dutch and American healthcare systems [1] on a friend’s Facebook page, and it brought a few thoughts to mind.

First and foremost, I have never argued that we cannot have a nationalized universal health care system; I have merely stated that a) it would be expensive; [2] b) it would likely be more inefficient than we would like, given the Federal government’s track record in such matters; [3] and c) it would probably not offer too many advantages over our current situation, apart from the out-of-pocket cost (more on that in a moment, however).

Regarding the first point, many Americans already pay the equivalent of a healthcare tax in the form of withholdings from their paychecks that fund employer-provided group healthcare coverage. It is open to debate as to whether or not the tax to fund a nationalized healthcare system would be more or less expensive than the withholdings said individuals already pay. I suspect that the former will be true, given that there is a sizeable portion of the population that is not currently covered by any form of health insurance – roughly 42 million individuals, or approximately 18% of the population. [4] On the other hand, it is also likely that these individuals do affect the costs of our current health care structure, given than insurance companites typically distribute the costs incurred by the uninsured among the payments made by the insured. [5] Additionally, some of these costs are also probably covered by Medicaid and Medicare, so we are already paying for these individuals through our FICA withholdings. As usual, the President has not provided any hard data regarding his health care proposals, so until he does so, these questions will remain unanswered.

Given the manner in which our health care systems currently procure payment for the uninsured, it is also curious to note that our system is already closer to being a “spread the wealth” system than a purely capitalist one. It is also pertinent to note that while nationalized systems such as the Dutch system are considered “fair,” it is also unfair, depending on one’s perspective. Consider, for example, the additional costs incurred by individuals who voluntarily engage in activities that are known to lead to detrimental future medical conditions. Smoking and drinking, for example, have both been extensively studied, and the detrimental results of these activities are very well known. And yet, individuals who engage in these activities generally do not pay more for their health insurance than those who do not. Is this a “fair” setup? Personally, I know with relative certainty that since I am a smoker, I will likely suffer from specific complications later in life, and that these complications could be expensive. Would it not be fair for me to pay more for health insurance than for an individual who does not smoke, particuarly because I am not an uninformed party; I know exactly what can result from this activity, and yet, I continue to partake. [6] Would it not be fair for individuals who act in such a manner to contribute more for their health care than those who do not?

It is also interesting to note that many of the amenities offered by the Dutch government effectively amount to tax refunds in the form of specifically targeted rations, such as the payments for school supplies, daycare, vacations, etc. What strikes me as strange (from my throughly American perspective) is that government funding is not necessary to support such activities. This basically amounts to giving money to the government for the general good (taxes), having the latter then dole out a ration for each funded activity (the refund), and then having the individuals spend the ration; would it not be more efficient to simply cut out the middleman (the government), and let the individuals spend the money themselves, instead of giving it to the government, getting it back, and then spending it? Granted, without the government sticking its fingers into these matters, there are no guarantees that individuals will spend appropriately for them, but our results up until now generally indicate to me that we are not doing so bad thus far. Perhaps, this is not so bad when compared to the more authoritarian methods employed by regimes such as the USSR or China, but it is also fair to question whether or not the steps taken by the Dutch thus far are the final extent of their socializing efforts, or if they are merely a first step down that long, dark road. I suppose we will simply have to wait and see.

Additionally, the author (and some of his Dutch interviewees) indicate that the general acceptance of these socialist incentives are primarily the result of a uniformity of perspective among the populace, specifically that they generally prefer having their government provide these services than having to procure them for themselves on their own individual initiative. Given that we have a long history of, for lack of a better description, rugged individualism, I suspect that attitudes along the lines of the Dutch may not take hold here quite so easily – if at all. While there are certainly individuals who do agree with such perspectives, there are also many who do not (myself included). If universal conformity is necessary for such socialized systems to work, I suspect that they will be difficult (if not impossible) to implement. After all, societal attitudes are notoriously difficult to change in a short period of time, without the use of mass indoctrination, of course. Given that the fundamental principle of our system of government is faith in the power of the people themselves, should we be so willing to accept expansions of our government that diametrically opposed to that principle? Perhaps we, as individuals, should explore non-governmental options, rather than sitting idly by while our government (and it is still our government, if the President and his sycophants are sincere in their proclamations) expands its meddling further into our private and personal affairs.


[1]: New York Times article, 29 April 2009. Note: You may have sign up for a free account with the NYT for access; I suggest setting up a ghost email account through one of the free webmail services, if you want to do this. I have four email addresses, two of which are “ghosts,” i.e. their primary purpose is as giveaways for websites like this; that way, if they end up funneling junk mail my way, I don’t have to worry about these sites getting their claws on my personal email addresses. And, if you think this is excessive, that figure is down from an all-time high of seven (to be fair, at the time one of them was my university email account).

[2]: I’ve previously noted the following statistics available from the Federation of International Trade Associations (FITA), but they bear repeating. Both American and Dutch tax rates are progressive for different income levels: from 10% to 33% (though the lowest income brackets are effectively untaxed), and from 34% to 52%, respectively. The NYT article correctly notes that American tax rates do not always include state tax rates, FICA taxes, etc., though anecdotally from my own experience, these latter add roughly 10% to the Federal income taxes. The NYT article, however, quotes only the highest income brackets, so I do not know if these rates are different.

[3]: I know it is somewhat like beating a dead horse, but I refer you to the Federal government’s track record for Medicare and Medicaid – not exactly stellar examples of efficiency in action.

[4]: Statistics available from the National Coalition on Health Care, 2009 report available here.

[5]: Note that I may not be particuarly well-informed in this regard; my understanding is based on the various explanations provided to the companies I’ve worked with. I was not paying close attention during the meetings, so if anyone knows of evidence to the contrary, by all means, correct me.

[6]: Two things: 1) I would not be concerned about paying more for health insurance, given that I voluntarily engage in an activity that has known adverse consequences, and 2) I smoke because I want to, not because I was misinformed about the consequences, or other such nonsense. Even though it is an addiction (though I am not willing to concede that in my case), this does not constitute a mitigating factore, in my opinion, since the addictive potential of this activity is also well documented, and would be well known to any individual before they start.


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