Healthcare for Freedom Lovers

Socialized healthcare in the Heritage Foundation's Index of Economic Freedom Top 10.

Amidst the abundant rhetoric surrounding the passage of the Affordable Care Act, one message seems to be incredibly popular among those on the right, socialized healthcare is unsustainable socialism. Indeed this idea is not new. Ronald Reagan once claimed socialized medicine was a "short step to all the rest of socialism." The bottom line is simple: If America wants to continue being a free nation, it must reject the idea of socialized healthcare.

Yet today, nearly all wealthy nations provide some form of socialized healthcare. Are all these countries on their way to socialism? Are they even close? To answer this question, I decided to take a look at the top countries on the conservative Heritage Foundation's 2012 Index of Economic Freedom. The United States currently ranks number 10. It has fluctuated since the creation of the index in 1995, once achieving a rank as high as 4. At least some of this fall has been attributed to the ACA:

"A 2010 health care bill that greatly expanded the central government’s reach has been under challenge in the courts"

Naturally, since the United States was dinged for government involvement in healthcare (its socialized healthcare program), I was curious just how the 9 countries above fared on the issue of government involvement in the healthcare system. 

Indeed every country listed in the top 10 contains some form of socialized medicine (except for the United States, until recently). However, their methods of implementation are different. Singapore has compulsory savings and price controls resulting in a largely private system. Canada has a hybrid system of public and private insurance and hospitals. New Zealand is almost completely public. One of the best ways to gauge government involvement in healthcare is to find out just how much of the total healthcare spending in a given country comes from the government: 

1. Hong Kong:¹ The overwhelming majority of Hospitals in Hong Kong are public, managed by the Hospital Authority. In 2007, the government accounted for 49.9% of all healthcare spending.
2. Singapore: In 2010, the government accounted for 36.3% of all healthcare spending. Since 1995, this number has been as low as 29.8 in 2007 and as high as 54.1 in 1998.
3. Australia: In 2010, the government accounted for 68% of all healthcare spending. This number has stayed fairly constant, never dipping below 65% GDP since 1995.
4. New Zealand: In 2010 the government accounted for 83.2% of all healthcare spending.This number has stayed fairly constant, never dipping below 77% GDP since 1995.
5. Switzerland: In 2010 the government accounted for 59% of all healthcare spending. This number has stayed fairly constant, never dipping below 53% GDP since 1995.
6. Canada: In 2010 the government accounted for 70.5% of all healthcare spending. This number has stayed fairly constant, never dipping below 69% GDP since 1995.
7. Chile: In 2010 the government accounted for 48.2% of all healthcare spending. Since 1995, this number has been as low as 36.6 in 1996. 2010 is the highest year since then.
8. Mauritius: In 2010 the government accounted for 41.7% of all healthcare spending. Since 1995, this number has been as low as 33.9 in 2007 and as high as 54.7 in 1995, 1998, and 2004.
9. Ireland: In 2010 the government accounted for 69.2% of all healthcare spending. That year was the lowest on record. Between the years of 1995 and 2009, this number has been as low as 71.5% in 1996 and as high as 77.4 in 2004.
10. United States: In 2010 the government accounted for 53.1% of all healthcare spending. That year was the highest on record. Between the years of 1995 and 2010, this number has been as low as 43.1% in 1999 and as high as 47.7% in 2004. In addition, separate estimates predict a 3.8 percentage point increase² by 2015 as a result of the ACA and future Medicare beneficiaries.  

¹ I could not find the standard WHO format statistics on healthcare spending for Hong Kong. I instead used an available WHO profile with data from 2007. 

² Remember that all these numbers are statistics and are thus subject to a margin of error. As a result, some estimates are going to be slightly different from others. The 3.8 percentage point number comes from a study with slightly different estimates for government healthcare contributions.

And which of these countries appeared to have been dinged by Heritage Foundation for having too much government involvement in healthcare? Other than the US, just two: Singapore and Canada. Nothing on Australia, New Zealand, Switzerland, or Ireland, four countries where the government contributed significantly more to healthcare than the US. Nothing on Hong Kong or Chile either, two countries that contributed approximately the same amount as the US to healthcare. In fact, the country with the lowest government contribution to healthcare was one of the few dinged for it.

Of the 9 countries that ranked above the United States, only two countries' governments contributed significantly less to healthcare than the US. And of the countries that contributed as much or more, only one was dinged for that fact. So it sounds like the government's role in healthcare is much less a factor for measuring freedom than many conservatives like to imagine. In general, this index is very subjective in nature (is the recent excess in government spending really a sign of a lack of freedom, or the automatic reaction to the recession that was a product of pre-existing programs), so there is only so much that one can conclude from this analysis. However, there is one thing that can be concluded: Socialized healthcare does not keep these countries from being free, even in the eyes of conservatives. So why can't they say the same for the United States?

UPDATE 1/12/2013: Think Progress expands on this a bit.