Policy Documents

Five Myths of Socialized Medicine

John Goodman –
January 1, 2005

In this essay in CATO's Letter, John Goodman writes that in the United States there are about 14 million people—more than a third of the uninsured—who are, in principle, eligible to get free medical care by joining either the Medicaid program or the State Children’s Health Insurance Program. And yet they don’t bother to enroll.

To understand why they don’t, you might go to the emergency room of Parkland Hospital in my hometown of Dallas. The uninsured and Medicaid patients come there to get their medical care. They all see the same doctors. They get the same treatment. If they’re admitted to the hospital, they stay in the same beds. From the patient’s point of view, there is no real reason to join Medicaid, because they get the same care whether or not they are formally insured.

The doctors and nurses get paid the same regardless of who is enrolled in what plan. The only people who really care whether or not someone is enrolled in Medicaid are the hospital administrators, because that determines how they get their money. So they actually have paid employees who go through the emergency room and try to get people to sign up for Medicaid.

The author also details why hospitals act the way they do--it is all related to self-interest.  Acute patients cost money, chronic patients do not as much.