Late-Victorian economic doctrine answered the need for an intellectual response to the workers’ challenge, to trade unions, to socialism, to the land reform movement, and to Social Democracy. Liberal economists upheld the existing property order and its inequalities. In Western Europe, North America and Australasia, Social Democracy eventually prevailed over fascism and communism, established welfare states, safeguarded the structures of capitalism, and dominated policy during the first three post-war decades. It sustained economic growth and distributed it more equally. To do this, it had to challenge the assumptions of neoclassical economics, and sometimes to reject them. (Offer, Avner; Söderberg, Gabriel. The Nobel Factor (p. 6). Princeton University Press. Kindle Edition. https://a.co/foDEAma)—Offer, Avner; Söderberg, Gabriel. The Nobel Factor (pp. 6-7). Princeton University Press. Kindle Edition. https://a.co/cobZtMt
In contrast to the competitive free-for-all of orthodox economics, Social Democratic parties in post-war Europe (and in the English-speaking countries) defined a cluster of collective aspirations:
• Collective insurance against life-cycle periods of dependency, regulated and administered by government and paid for through progressive taxation.
• Good-quality affordable housing, by means of rent control, new construction, mortgage subsidies, and public or collective ownership.
• Secondary and higher education, land use planning, scientific research, culture, sports, roads and railways.
• A mixed economy with extensive public services, some nationalized firms, but leaving private ownership to manage production and distribution.
• A special concern for disadvantaged groups.13
The United States also went along with a good deal of this programme, and if it failed to provide universal healthcare entitlement, it did provide one for the old and the indigent.
Japan: Bismark on Rice
DURING A DEBATE AMONG THE PRESIDENTIAL CANDIDATES in the spring of 2008, former New York mayor Rudy Giuliani offered a picture of health care in foreign countries: “These countries that say they provide universal coverage—they pay a price for it, you know,” Giuliani explained. “They do it by rationing care, by long waiting lines, and by limiting, or I should say by eliminating, a patient’s choice.” Judging from that, it seems safe to say that Rudy Giuliani has never visited Dr. Nakamichi Noriaki at the Orthopedic Surgery Department of Keio Daigaku Hospital in Tokyo. (Reid, T. R.. The Healing of America (p. 82). Penguin Publishing Group. Kindle Edition.)
In a society that is acutely conscious of hierarchy and rank, Dr. Nakamichi is generally recognized as one of the top orthopedic surgeons in all Japan; his clinic at Keio is perhaps the most respected place in the country for the repair of stiff, aching shoulders like mine. I was first told about him one Thursday morning in Tokyo when I was complaining, as usual, about my shoulder. I called his office to schedule an appointment—and was told to come in that same afternoon. After the familiar poking, patting, massage, and manipulation, Dr. Nakamichi suggested an assortment of different treatments that might work for me; in fact, it was the widest variety of care any doctor had proposed. The treatment available in Japan ranges from acupuncture to injections to manipulation to the total shoulder arthroplasty that my doctor back home had recommended. All the options, he told me, are covered by Japanese health insurance. When I asked how long I would have to wait if I chose the full-scale shoulder-replacement surgery, the doctor checked his computer. “Tomorrow would be a little difficult,” he said. “But next week would probably work.” (Reid, T. R.. The Healing of America (pp. 82-83). Penguin Publishing Group. Kindle Edition.)
In other words: no waiting, no gatekeeper, no rationing, and a broad array of patient choice. Prices are low; as we’ll see, the Japanese system has a rigid cost-control mechanism that favors the patient, at the expense of doctors and hospitals. My out-of-pocket cost for an office visit with the prestigious Dr. Nakamichi in his prestigious clinic came to ¥2,060, or $19 (the doctor charged $64, and insurance pays 70 percent of the bill in Japan). (Reid, T. R.. The Healing of America (p. 83). Penguin Publishing Group. Kindle Edition.)
(….) It’s worth noting that this happens in a largely private-sector system; Japan relies on private doctors and hospitals, with the bills paid by insurance plans. In fact, Japanese doctors are the most capitalist, and most competitive, that I’ve seen anywhere in the world. (Reid, T. R.. The Healing of America (p. 83). Penguin Publishing Group. Kindle Edition.)
(….) Since medical care is so readily available, so easy to get, and so cheap, you might think that the Japanese use an awful lot of medical care. And you’d be right. The Japanese are the world’s most prodigious consumers of health care.1 The average Japanese visits a doctor about 14.5 times per year—three times as often as the U.S. average, and twice as often as any nation in Europe. If you can’t get to the doctor, no problem: Nearly all general practitioners in Japan make house calls, either daily or weekly. (Reid, T. R.. The Healing of America (p. 84). Penguin Publishing Group. Kindle Edition.)
(….) “Japan’s macro health indices, such as healthy life expectancy and infant mortality, are the best, or among the best, in the world,” says Professor Ikegami Naoki, the country’s best-known health care economist. “Now, that’s not all the result of health care. Japan has lower rates of violent crime than most countries, less illicit drug use, fewer traffic accidents, lower rates of HIV infection, less obesity. In terms of keeping people alive and healthy, those factors obviously help. But you also have to give some credit to the health care system for providing universal coverage and egalitarian access without long waiting lists, and we need to credit the doctors and the medical schools for providing a high quality of treatment.” (Reid, T. R.. The Healing of America (p. 85). Penguin Publishing Group. Kindle Edition.)
The Japanese system, in short, provides care to every resident of Japan, for minimal fees, with no waiting lists—and excellent results. This is a good deal for the people of Japan, and they take advantage of it, flocking to clinics and hospitals. To an American, it seems natural that this formula—heavy demand by an aging population, with almost no rationing of care—would add up to a huge national medical bill. But when it comes to costs, Japan has turned the predictable formula upside down. Despite universal coverage and prodigious consumption, Japan spends a lot less for health care than most of the developed nations; with costs running at about 8 percent of GDP, it spends about half as much as the United States. (Reid, T. R.. The Healing of America (p. 85). Penguin Publishing Group. Kindle Edition.)
(….) As we’ll see shortly, not everybody in Japan is happy with the system and its strict cost controls, because the system squeezes cost by sharply limiting the income of medical providers—doctors, nurses, hospitals, labs, drug makers. But if your goal is to provide quality care for everybody at a reasonable cost (which is not a bad goal for any health system), then the Japanese model could be a good one to follow. (Reid, T. R.. The Healing of America (p. 86). Penguin Publishing Group. Kindle Edition.)