I was chatting with a couple of women in London today and as usual I directed the conversation to national health insurance. And as also usual, they love their system. What do you pay for an office visit? I asked. Nothing was the enthusiastic reply, they pay nothing for their health care. But if you want a certain doctor, you can pay yourself they said.
Let’s assume your knee hurts and you go to the doctor and he orders an MRI, when would you be able to get the MRI? I asked. They both replied, in about two months. But they love their system.
Here’s the thing though. When I asked what the payroll tax was they didn’t know. One said I think about 4-5%, but who cares, they love their free health care.
In fact, the payroll tax for national insurance (which includes what we in the US call Social Security) is on average 12% for the worker plus 13.8% for the employer for the typical worker. Workers earning more than about $62,000 a year pay an additional 2% payroll tax. In other words, the total payroll tax on earnings of $62,000 is about $15,996 per year. There is no taxable wage cap. Our cab driver in London who is considered self-employed pays 33% of his earnings for his health care and future pension, but he described his health care as free.
Add to that a Value Added Tax (sales tax) on virtually everything you routinely buy and “free” seems not so appropriate.
Of course there are income taxes as well. Over $16,066 income per year you pay 20% up to $62,000 and from there up to $219,000 you pay 40% and higher rates beyond.
There is no doubt that the British NHS spends less as a percentage of GDP than the US and by some measures they are ranked higher, but the system is not without criticism like waiting times, even hospital deaths and their costs keep going up.
There is a claim that the system is more efficient and that’s true in some ways like communication between doctor and patient and coordination of patient information.
However, the claim of less administration as the key to lower costs is questionable. That’s a red herring that single-payer proponents are trying to sell in the US.
The NHS in England employs 1.2 million people for a population of 54 million. However, of the 1.2 million employees only 635,812, are health professionals from doctors and nurses, to home visitors and emergency response personnel. That means that half the entire workforce is doing administration of some type.
Do the people in Great Britain like their health care system? Yes they do. Is their lower cost a result of lower administrative expenses? No, their lower costs reflect a different set of priorities in providing health care; a different perspective and acceptance by citizens.
The British system is far from free and far more limiting than Americans have come to expect when receiving health care. Health care decisions are made by numerous government agencies and committee type organizations.
If you support a single-payer, government-run system, just be sure you understand what that truly means.