The path toward socialized medicine by New Zealand is quite different from the one the United States is taking. This is due in a great part to the very different traditions in the founding of the two nations. New Zealand is a part of the British Commonwealth and the long tradition of power, rights and benefits flowing from the government to the people is fundamental to that system. So, it was entirely natural for New Zealand to establish socialized systems for institutions such as health care, transportation and utilities.
The concept of rights and privileges flowing down from the government to the people is natural to someone who comes from a monarchy. Kiwis expect government to provide for them. Americans come from a very different idealogical foundation. It was the Americans who gathered the states together to create their own central government. It was the Americans who stated so eloquently in their founding documents that rights were inherent in humanity and government got power and authority from the people, not the other way around.
Nonetheless, the United States is embarking on the same path New Zealand has taken. It behooves us to examine the record of countries that have a long experience in government-backed health care. There are numerous arguments for lower costs and better health by centralizing health delivery systems. The question is, "Does it really work that way?" Given the Kiwis 37 year history, we can see how their system works after almost two generations.
From the standpoint of the locals I interviewed, the standard of care available to citizens is world class. The largest teaching hospital in the Southern Hemisphere is in Dunedin, NZ. As promised, people pay little for care. From a statistical standpoint the care New Zealanders get is nearly identical to what US citizens get. The number of doctors, nurses, hospital beds and so on per capita is very similar.
The real difference is in procedures performed. Knee replacements and heart surgeries are performed at a small fraction of the rate in the US. Indeed, from a world standpoint, the US is far ahead of the rest of the planet in the delivery of these services while spending in the US per capita is much the same. Generally, these procedures are more likely to be performed on aging people. From my interviews I learned that joint replacements are very difficult to get for aging Kiwis and just impossible for the elderly. In New Zealand, the wealthy can purchase private coverage and get the procedures they need. 22% of the population has private coverage. For the rest, these procedures just are not going to happen. We met a 55 year old bus driver whose mother has been waiting for knee replacement since she was 70; she is now 85 and no longer expects she will have the surgery.
The people of New Zealand approached their health care design with a lot of thought and planning. They distributed the administration to 21 district agencies since they do not have anything like our states or county governments. Local policy is made at the local level. Doctors and other providers are self-employed and compete for business within the districts. Nonetheless, costs have risen beyond the level of reason and services are rationed. The promise of universal health care has not been fulfilled. The people are now discouraged and believe their problems cannot be solved.
In our next post we will speculate on why this happened.
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