Currently, I am reading a great book Blood, Iron, and Gold: How the Railroads Transformed the World by Christian Wolmar. So what can railroad policies in Europe tell us about health care policies today?
Take a look at these excerpts:
“Just as in similar periods of railway mania elsewhere, the speculators soon piled in, promoting lines that had no economic rationale but nevertheless attracted state subsidy…”
“The difficult relationship between the state and the railways in France was therefore mirrored in Italy… In the forty years after [italian] unification, there would be a railway crisis every decade in Italy, and all of them had their rots in the fundamental lack of viability of the rail network. Invariably, each of these crises was followed by legislation to try to sort out the mess, and ultimately the result was the full nationalization of the system in 1905.”
In other words, the state interfered and saw Railways as a right for their country. In doing so, the people believed that it was their right to have rail run to their little town. It did not matter to them whether it was economical or not because the cost was being spread out to the rest of the country, while the benefit was only coming to the small town.
Put this in today’s health care debate and you can see clear similarities.
Like railways, the state has basically declared that every person has a right to be covered under health care causing social programs like Medicare and Medicaid to exist. The public went into the doctors offices with their co-pays and government health care and demanded more and more tests (like the rail running to each town). They did not see an increase in the costs right-away, it would come later in premiums (the railroad example, it came later in taxes).
And like what happened in Italy, the United States continues to have health care “crises” every decade. Now the government is to the point that Italy was at in 1905, where they believe nationalization is the only option.
But what they missed was the initial policy of state subsidies which caused the uneconomical spending in the first place.
