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Ineffectiveness of Universal Health Care


In this paper, I seek to prove that the Universal healthy care plan is ineffective and ill-advised at its best. The plan has elicited a spate of heated debate since it was proposed by President Obama. Right from its introduction, it was received with mixed reactions from various sides causing a deep split between its opponents and proponents. To add a twist into the ensuing debate, Obama has fallen short of admitting that the plan is indeed unlikely to attain universal coverage (Daou, 2007). With an estimated $650 billion budget, the medical care plan will most likely double bearing in mind that its planned funding strategy using carbon emission warrants hit a snag according to Kudlow (2009). Health care expenditure in the United States currently accounts for 15% of its GDP which easily passes out as the highest spending in any of the most industrial countries (Odje, 2009). Some of the likely consequences include the following:

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Poor quality services and Long queues

Medical doctors have voiced their concern that it will probably lead to the provision of inferior health care due to the expected influx of Patients who will troop into medical facilities across the country to seek treatment. The resultant effect will be tripling of the physician’s patient lists forcing them to ration the health care (Anonymous, 2009). Looking keenly at the bill, it is full of rules that will definitely result in rationing of health care and longer waiting lines in medical facilities.

The plan seems to emphasize much on quantity rather than the quality of the medical care thus diluting the whole essence of health care reform. Poor quality health care will not come as a relief to patients millions of uninsured Americans but will spell doom to the taxpayers who will foot the gigantic health care expenditure. Still worse is the fact that since many congressmen have vested interest in the pharmaceutical industries and other related industries, the situation might lead to intense lobbying resulting in the enactment of a mediocre health care plan. The plan will thus be inconsequential to the welfare of US citizens.

The decline in global competitiveness of American goods and services

Increased taxation will likely impair the global competitiveness of the US businesses if tax hikes are to be implemented to fund the plan as Odje (2009) observes. The employees are also airing concerns that universal health is likely to result in increased health insurance premiums which will lead to a further economic strain. Furthermore, the plan is likely to impact negatively on the pharmaceutical companies which will be pressured to lower their drug prices. In addition, the pressure is likely to hinder the research and development of newer and more affordable drugs. The precipitation of the available incentives is also likely to influence drug manufacturing firms to relocate to other countries with better-operating environments to exploit economies of scale in production. This in turn will hit employees hard in terms of loss of employment opportunities.

Research conducted by John Hopkins University revealed that the U.S. medical expenditure is 44% higher than that of Switzerland which is considered to have the second-highest expenditure. It is also 134% higher than the median expenditure of the OECD countries (Teslik, 2009). This poses a threat of making American businesses outsource jobs abroad or shifting their base entirely.

Increased bureaucracy in medical care

By involving the government in health care, government-run agencies will lead to increased red tape. This will likely result in inefficiency in the provision of services much to the disadvantage of taxpayers. Government-run agencies are characterized by corrupt practices and laxity in the provision of services as compared to the private sector. Hence delivery of these services by the government will only lead to the dilution of the quality of medical services. Government bureaucracies are vulnerable to mismanagement as a result of political interference which derails the achievement of the intended objectives leading to immense wastage and sometimes misallocation of resources. This could be very harmful to any economy.

Conflict with American ideology

The American society and the associated economic culture are deeply entrenched in the roots of capitalism. The universal health care plan is a socialist concept that goes against the very principles of capitalism Odje (2009). This lays the foundation of its failure as the use of the taxpayers’ money to fund the medical care of non-contributors has no place in the spirit of capitalism. The healthy population for example will be forced to pay for services they do not use (Easey, 2009). To any US citizen, the idea is alien and incomprehensible. It fails to capture the needs and aspirations of the Americans who are already facing a myriad of problems. A borrowed ideology won’t address the problems of the citizens as each problem is unique to a particular locality and cultural setting. Americans require a medical plan they can identify with so as to facilitate ownership of the program. This increases its risk of flopping due to a lack of acceptance by the public.

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High cost of implementation

The health care budget is projected to cost $1 trillion over the next decade which will be borne by American taxpayers as Allen (2009) observes. The current annual budget is about $327 billion and is often characterized by huge deficits. This leads us to question whether American taxpayers are adequately prepared to shoulder the burden of an additional $750 billion in their budgetary spending. This presents the taxpayers with a founded reason to be wary of this overambitious affair amidst escalating federal budget (Williamson & Pulizzi, 2009). The enormous spending expected will place a heavy burden on the United States citizens who are already grappling with the effects of the current recession which hit them badly. In my opinion, the cost of implementation of the program is likely to overshadow the expected gains from the universal health plan and is thus unfeasible.

Impact on the insurance industry

By taking over the provision of insurance services, the government will lead to alienation of the insurance industry from their traditional role, a move that is likely to deny its business leading to the closure of some companies. This is likely then to be catastrophic to hundred of thousands of workers employed in the insurance industry. Many are likely to experience pay cuts while others will be axed if the performance of the company dwindles. This will in the long run render the universal health care plan ineffective in addressing the economic issues affecting Americans. It will thus amount to the shifting of citizens’ problems from lack of medical insurance to unemployment.

Deterrent to innovation

The high profitability in the pharmaceutical and biotechnology industries in the US acts as an incentive for innovations. Implementation of universal health care will act as a hindrance to innovativeness due to the requirement by the government to share in the discoveries, a factor that will depress their profitability. In addition, government interference will inhibit competition in the market further discouraging research into new medical products and technologies (Weakonomist, 2009). Such firms might result in cuts in their output or complete relocation to other countries.

Market imperfection

Involvement of the government in the service industry leads to distortion of the market. The resulting consequence is often manifested in the provision of poor quality services and a string of loss-making in the market. The influence of government leads to poor allocation of health care services and inadequate supply due to lack of motivation resulting from lack of competition in the provision of services. The market operates best when left alone to be determined by the forces of demand and supply. By influencing the delivery of services through regulation of the pricing regime, it creates disincentives to produce, innovate, and supply efficiently which could result in the delivery of inferior services. The result is a decline in the provision of health care for everyone including those capable of paying for it (Thomson, n.d.).


Considering the high cost of implementation and the related cost to the taxpayers, the medical care plan will not be of any good to the majority of American citizens. The universal health care plan is largely adventurous and will only result in the suffering of Americans. The burden of servicing the bloated budget will be out of reach to American taxpayers who are still struggling to recover from the effects of the credit crunch and thus the bill ought to be trashed. A domestically generated social care policy that takes into consideration the various aspects of the Americans lifestyles and economic conditions ought to be introduced instead.

Reference List

Allen, C. (2009). The painful side effects of Obama’s healthcare reform, Los Angeles Times. Web.

Anonymous (2009). Doctors Wage War against Obama’s Health Care Overhaul, Web.

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Daou, P. (2007). The fundamental weakness of Sen. Obama’s health care Plan, The Huffington Post. Web.

Easey, C. (2009). Pros & Cons of Universal Health Insurance, eHow. Web.

Kudlow, L. (2009). Obama’s ‘Public’ Health Plan Will Bankrupt the Nation. National review, Web.

Odje, O. (2009). Ofuoma Odje on Barack Obama’s Healthcare Plan. Scribd, Web.

Teslik, H. L. (2009). Healthcare Costs and U.S. Competitiveness. Council on Foreign Relations, Web.

Thomson, R. (n.d.). Universal Healthcare: The Pros and Cons. ABC Article Directory, Web.

Weakonomist, (2009). The Pros and Cons of Universal Health Care in the United States. Weakonomi¢s, Web.

Williamson, E. & Pulizzi, H.J. (2009). Obama Seeks More Payouts. Dow Jones & Company, Inc., Web.

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