Lessons from Soviet medicine.
Subject: Health insurance (Analysis)
Health insurance (Usage)
Author: Maltsev, Yuri N.
Pub Date: 06/22/2011
Publication: Name: Journal of American Physicians and Surgeons Publisher: Association of American Physicians and Surgeons, Inc. Audience: Academic Format: Magazine/Journal Subject: Health care industry Copyright: COPYRIGHT 2011 Association of American Physicians and Surgeons, Inc. ISSN: 1543-4826
Issue: Date: Summer, 2011 Source Volume: 16 Source Issue: 2
Product: Product Code: 6322000 Medical Care Insurance; 6320000 Accident & Health Insurance NAICS Code: 524114 Direct Health and Medical Insurance Carriers; 5241 Insurance Carriers SIC Code: 6321 Accident and health insurance
Geographic: Geographic Scope: Russia Geographic Code: 4EXRU Russia
Accession Number: 267810797
Full Text: After the socialist revolution in Russia, in 1917, the Union of Soviet Socialist Republics was formed. The economy was forcibly socialized, including medicine and related industries. The state controlled everything, saying its control was for the benefit of all, and there would be universal health coverage, with a "constitutional right to health" for all Soviet citizens.

The elite Communist Party officials trumpeted that everyone would have health services, and the system would eliminate "waste" stemming from what Lenin called "unnecessary duplication and parallelism"; i.e. market competition. As with our present government, Communist Party officials and their intellectual servants found it expedient to exempt themselves from the egalitarian medical system they created and controlled, and to leave it for the gray masses, while they provided themselves with an elite medical system to go along with their elite social positions. While ordinary Soviet citizens, "workers and peasants" in their masters' eyes, died in state-run hospitals, equipment and medicine that could have saved their lives was in the elite facilities, out of ordinary citizens' reach.

Socialist irresponsibility ignored the fact that nobody puts forth effort without reward. The result is expressed by the Russian saying of that time: "They pretend they are paying us, and we pretend we are working." Apathy resulting from lack of any incentive to excel paralyzed the socialist economy, including medicine, and resulted in appallingly poor quality of medical care and other services, widespread corruption, and extensive loss of life.

The hatred and envy perpetuated by Marxist ideas, imagining that those better off than others had caused the misery of the poor, meant that physicians supposedly owed their education to the beneficence of the state, and so should receive wages as did a friend of mine, who received one-third of the wages of a bus driver under the Soviet system, when he was considered an expendable public slave, but who is now a prosperous and famous neurosurgeon in today's Russia.

The system had many decades to work in more than 30 socialist countries, from Russia to Vietnam and Cuba to Angola, where treatment of people as expendable public slaves by their socialist masters, as well as widespread apathy and low quality of work provided by public slaves--including those assigned to the medical industry--paralyzed socialist economies.

Deadly Agenda Covered up in West

Most Western historians believe that Stalin's terror took place against political opponents. But the great purges were really an assault on the ordinary people. More than half of all executions took place in rural areas. The liquidation of independent farmers sent 10 million (including three million children) to Siberia, where most of them died. In the Ukraine alone Stalin starved to death more than seven million peasants. By the spring of 1933 an estimated 25,000 persons died every day in the Ukraine, one-third of them children. Bloodthirsty socialist leaders ended up deporting sick and crippled people, single mothers, and their children, who were no threat to the government. Authorities had a different agenda, including clearing out people they might have to heal and feed. The number of people murdered by their socialist leaders last century amounts to 262,000,000, according to famous American demographer Rudy Rummel. (1) Socialism became the most deadly disease of our time.

Why is this not common knowledge? One reason is publicly funded broadcasting: National Public Radio (NPR) and the Public Broadcasting System (PBS). From its programming, it appears that NPR's past and present heroes include Stalin, Mao, Allende, Castro, Chavez, Arafat, Hezbollah, Archbishop Tutu, Vladimir Putin, and the Muslim Brotherhood. NPR and PBS poison the air with blatant anti-free-market propaganda and praise for public slavery here and abroad. Slavery certainly "reduced costs" of labor, "eliminated the waste" of bargaining for wages, and avoided "unnecessary duplication and parallelism." Despite promises from many prominent Republicans, from President Ronald Reagan to Speaker John Boehner (R-Ohio), taxpayers are still forced to fund these entities, in defiance of the U.S. Constitution. Ironically, most listeners to NPR and viewers of PBS are upper-income, white intellectuals and professionals. Why should everyone else fund the radio and television preferences of the intellectual elite of this country, who enjoy the highest incomes in the world as entertainers, trial lawyers, university professors, public union officials, politicians, bureaucrats, and privileged others?

Personal Experience in the Soviet System

On paper, the Soviet system might look good. The Soviet government employed plan indicators, similar to the current "No Child Left Behind Act" in the United States, to measure hospital performance, with reduced mortality rate seen as the most desired and easily measured improvement. To meet the plan targets and improve statistics on the numbers of people dying within the system, patients were routinely shoved out the door before taking their last breath.

In reality, more often than not patients had to pay bribes in order to receive attention from doctors and nursing personnel. Anesthesia was usually "not available" for abortions and minor surgeries unless a patient could pay a bribe.

I was born and raised in a family of several generations of medical professionals. My parents and my sister were appalled by their brief experiences as medical practitioners, and moved to medical research and became very successful in their fields. My father Nikolai became a famous biophysicist, my mother Olga, a biochemist, and my sister Natalia, a geneticist. They realized, however, that no amount of research could cure the systemic flaws of Soviet society and economy in general, and of the medical system in particular. At home I've heard horrifying stories of a nurse who would not sterilize reusable needles and syringes (disposable ones became available in today's Russia only after the fall of the "Evil Empire") before using them again on other patients, and the story of a devoted socialist, who refused to pay a bribe, and who died trying to reach a lavatory after brain surgery.

In another case I witnessed how my best friend's brother Vladimir, a famous aircraft engineer, was robbed and severely beaten in Moscow. He was found lying in the street by a police officer and brought to a trauma hospital, where he was diagnosed with a hinge fracture (a basilar skull fracture, which divides the skull into anterior and posterior segments). (2) His physicians assured me that they would do everything to aid his recovery, adding that they would expect to be compensated, noting that his type of injury had a high mortality rate, and that if, God forbid, anything should happen to him, nobody would inquire into a death from something with such a high mortality rate. In the face of a thinly veiled death threat, his family paid a hefty bribe.

I cannot forget my neighbor's daughter, a bright and funny 14-year-old girl, who died of acute nephritis after a misdiagnosis of neuropathic pain. This mistake could have been easily avoided by an X-ray examination. The hospital, however, ran out of X-ray film, and this child died because of it. The girl's parents, like all other Soviet citizens, had absolutely no legal remedy, and her grandparents died of grief shortly thereafter. The doctor received no official reprimand--it was not his fault that there was "no film." The necessary X-ray film obviously was sitting and expiring in abundance at the Party hospitals.

In the years 1987 to 1989, as a People's Deputy in the Moscow region, I received many complaints about criminal negligence, bribes taken by medical apparatchiks, and drunken ambulance crews. I've read police reports about patients being robbed by ambulance crews and emergency room personnel. Many facilities (especially in rural areas) were filthy, rat and roach infested, without soap and cleaning supplies, all adding to the sense of hopelessness. According to classified data that I came across working for the government in Moscow, 78 percent of all AIDS victims in Russia contracted the disease through dirty needles or tainted blood in the state-run hospitals.

Misleading Statistics: Infant Mortality, Maternal Care, and Lifespan

Uterine damage commonly affects Russian women because of an average 7.3 abortions per woman of childbearing age. Abortion is cost-effective for the socialized medical system, as it eliminates the need to provide medical care to babies and children. It also reflects a lack of faith in the future for women to abort their babies. When babies are born, the infant mortality rate is very high, in some regions as high as rates in Angola and Somalia. The United States is said to have a high infant mortality rate, but in the United States, all births, of any gestational age, with any pulsation of the cord, or any spontaneous respiration or movement, are counted as live births, whereas many socialist nations do not count babies as live births until they are days, or even months old.

Even today, according to the Russian State Statistics Committee, the average lifespan for Russian men is less than 59 years, and for women, 72 years, (3) whereas in the U.S., the corresponding figures are 73 years for men and 79 years for women. (4) In general, the socialist experiment in the U.S.S.R., China, North Korea, Cuba, and other hard-core socialist states caused massive suffering and death, through neglect of sanitation and medical care. After 74 years of socialism, 57 percent of hospitals in Russia had no running hot water, and 36 percent had no water or sewage facilities.

There is also overwhelming evidence5 that Gulag prisoners were used as human guinea pigs by the "medical researchers" of the KGB. All of this "research" would end in the murder of experimental subjects, as authorities would not risk leaving behind witnesses of their crimes.

Socialist Medicine Has Caused Regression in Quality of Medical Care Even in Advanced Western Nations

Decline in the quality of medical care quality has occurred even in far-advanced Western societies. It is a direct result of government monopoly, and it will happen in any country in which socialized medicine is implemented. For example, in England, 800,000 wait on a list for surgery, of a total population of 55 million. British hospitals do not have state-of-the-art equipment. Only 10 percent of medical spending is private. Despite having pioneered development of kidney dialysis, Britain has one of the lowest dialysis rates in the world. Swedish patients routinely complain about waiting lists--the government has recently introduced a six-month waiting guarantee.6The Swedes recently began moving more toward privatization of medical services. (7)

Propaganda in the U.S.

In the U.S., socialist apologists pushing government-run medical care use NPR and PBS to indoctrinate Americans into believing their medical care is not the best in the world, using our own tax dollars to do it, calling government radio and TV a "public good." The socialist message is also promulgated without tax subsidy by ABC, NBC, MSNBC, CBS, CNN, and most local Fox stations. These American socialists retrace the steps used by Soviets to propagandize Russians. Michael Moore is a prime example, unfavorably and erroneously comparing our medical care of older patients, with complex and serious diseases, to French care of young women with uncomplicated pregnancies. Had he done the reverse--compared medical care of young pregnant women in the U.S. with medical care of older patients with complex, serious diseases in France, the UK, and Canada, his movie Sicko would have made medical care in the U.S. look ideal, while medical care in France, the UK and Canada looked backward and inhumane.

Age Discrimination in Socialized Medicine

Age discrimination is very apparent in all government-run or heavily regulated medical systems. In the United States, it has not yet taken hold because the elderly vote in large numbers. But in Russia, patients older than 60 were considered worthless parasites, and those older than 70 were often denied even routine care unless they were members of the elite class. Many examples of this type of treatment, in which some are more equal and deserving than others, occur in nations with socialized medical care.

Now we in the United States are being insidiously prepared for age discrimination in medical treatment of the elderly, who already cost so much money. Dr. Ezekiel Emanuel is director of the Clinical Bioethics Department at the National Institutes of Health, and he is a contributing architect of Obama's healthcare plan. He is also the brother of Rahm Emanuel, Obama's former chief of staff and now mayor of Chicago. Foster Friess reports that Dr. Emanuel has written that health services should not be guaranteed to individuals who are irreversibly prevented from being or becoming "participating" citizens. An obvious example is denial of medical care to people with dementia. (8,9)

An equally troubling article, co-authored by Dr. Emanuel, appeared in The Lancet in January 2009. Persed et al. write that unlike forcible state allocation of medical care by by sex or race, allocation by age is not invidious discrimination because every person lives through different life stages rather than being a single age. Even if 25-year-olds receive priority over 65-year-olds, everyone who is 65 now was once 25. Treating 65-year-olds differently because of stereotypes or falsehoods would be ageist, but treating them differently because they have already had more life years is not, according to the article. (10) With respect to rationing by age, the figure they present on page 6 of their article tells the whole story. The title of the figure is "Age-based priority for receiving scarce medical interventions under the Complete Lives System." This is a wordy euphemism for denying care to the elderly.

You will note that the curve drops off rather precipitously past the age of 55, meaning that the probability of receiving a medical intervention past age 55 is not very high under the "Complete Lives System." Persed et al. also talk about "social justice" in their article, and advocate that a person's "social usefulness" to society (as determined by an elite government bureaucrat) should be a factor in deciding who gets and who does not get medical treatment under their "Complete Lives System" of rationing care.

Obviously, the lessons from history tell us a lot about what happens to those who are deemed not "socially useful" to society. The Nazis referred to them as "worthless bread eaters." Stalin called them "social parasites" as he systematically starved to death millions of peasants, intellectuals, and randomly chosen others.

Real savings in a socialized medical system can be realized only by denying care and denigrating physicians. In a free-market system, people would be free to choose what would be best for their individual situation. Insurance companies, instead of being told by bureaucrats exactly what must be in their policies, would be free to tailor policies to what people want.

Physicians with the Stockholm Syndrome

Some American physicians who support the call for socialized medicine are like cattle lured by hay, rushing to a slaughterhouse. They do not understand the economics of medical care in the United States, nor do they understand the general economic nature of socialism, including government regulations, which exact a high cost for no benefit--regulations that also stifle competition that would lower costs. Those physicians also do not understand that their patients will be like livestock on a government ranch, and they themselves will be pawns of the government, mere ranch hands.

More government intrusion and over-regulation of medicine will not fix the problem, but aggravate it. Meanwhile, such socialist physicians fail to recognize that the reason they enjoy some of the highest incomes among physicians in the world is because they are not subject to a government-run system with its price controls and restrictions on earned income (such as "clawbacks" in Canada).

Government-imposed regulations such as "certificates of need," licensing, and other restrictions on the availability of medical services prevent competition, and therefore result in higher prices and fewer services.

ObamaCare: a Replay of the Socialist Nightmare

"ObamaCare" would create more massive government bureaucracies, which would produce nothing of value, but would further strangle American medicine. It would force costly, job-destroying mandates on employers to provide coverage of the type the government dictates people must have, resulting in non-price rationing, that is, rationing based on political considerations, corruption, and discrimination. There would be shortages, waiting lists, and poor medical care dispensed by slaves of the system, just like the system from which I fled.

Americans Want Reform, Not Socialism

Eminent economist Hans-Hermann Hoppe wrote in 1993: "It's time to get serious about health care reform. Tax credits, vouchers, and privatization will go a long way toward de-centralizing the system and removing unnecessary burdens from business." His proposal, "A Four-Step Health-Care Solution," makes a lot of sense in creating a free and efficient market in health care. These steps include:

"1. Eliminate all licensing requirements for medical schools, hospitals, pharmacies, and medical doctors and other health care personnel. Their supply would almost instantly increase, prices would fall, and a greater variety of health care services would appear on the market.

"Competing voluntary accreditation agencies would take the place of compulsory government licensing--if health care providers believe that such accreditation would enhance their own reputation, and that their consumers care about reputation, and are willing to pay for it.

"Because consumers would no longer be duped into believing that there is such a thing as a 'national standard' of health care, they will educate themselves and make more discriminating health care choices, just as they do for other things.

"2. Eliminate all government restrictions on the production and sale of pharmaceutical products and medical devices. This means no more Food and Drug Administration, which presently hinders innovation and increases costs.

"Costs and prices would fall, and a wider variety of better products would reach the market sooner. The market would force consumers to act in accordance with their own--rather than the government's--risk assessment. And competing drug and device manufacturers and sellers, to safeguard against product liability suits as much as to attract customers, would provide increasingly better product descriptions and guarantees.

"3. Deregulate the health insurance industry. Private enterprise can offer insurance against events over whose outcome the insured possesses no control. One cannot insure oneself against suicide or bankruptcy, for example, because it is in one's own hands to bring these events about.

"Because a person's health, or lack of it, lies increasingly within his own control, many, if not most, health risks, are actually uninsurable. 'Insurance' against risks whose likelihood an individual can systematically influence falls within that person's own responsibility.

"All insurance, moreover, involves the pooling of individual risks. It implies that insurers pay more to some and less to others. But no one knows in advance, and with certainty, which the 'winners' and 'losers' will be. 'Winners' and 'losers' are distributed randomly, and the resulting income redistribution is unsystematic. If 'winners' or 'losers' could be systematically predicted, 'losers' would not want to pool their risk with 'winners,' but with other 'losers,' because this would lower their insurance costs. I would not want to pool my personal accident risks with those of professional football players, for instance, but exclusively with those of people in circumstances similar to my own, at lower costs.

"Because of legal restrictions on the health insurers' right of refusal--to exclude any individual risk as uninsurable--the present health-insurance system is only partly concerned with insurance. The industry cannot discriminate freely among different groups' risks.

"As a result, health insurers cover a multitude of uninsurable risks, alongside, and pooled with, genuine insurance risks. They do not discriminate among various groups of people which pose significantly different insurance risks. The industry thus runs a system of income redistribution--benefiting irresponsible actors and high-risk groups at the expense of responsible individuals and low risk groups. Accordingly the industry's prices are high and ballooning.

"To deregulate the industry means to restore it to unrestricted freedom of contract: to allow a health insurer to offer any contract whatsoever, to include or exclude any risk, and to discriminate among any groups of individuals. Uninsurable risks would lose coverage, the variety of insurance policies for the remaining coverage would increase, and price differentials would reflect genuine insurance risks. On average, prices would drastically fall. And the reform would restore individual responsibility in health care.

"4. Eliminate all subsidies to the sick or unhealthy. Subsidies create more of whatever is being subsidized. Subsidies for the ill and diseased breed illness and disease, and promote carelessness, indigence, and dependency. If we eliminate them, we would strengthen the will to live healthy lives and to work for a living. In the first instance, that means abolishing Medicare and Medicaid." (11)

Socialized medical systems have not served to increase general health or living standards anywhere. In fact, both analytical reasoning and empirical evidence point to the opposite conclusion. But the dismal failure of socialized medicine to raise people's health and longevity has unfortunately not affected its appeal for certain politicians, administrators, and their intellectual servants in search of absolute power and total control. Advocates of socialized healthcare insist that it is "too important" to leave to the whims of the market. Don Boudreaux, in the great tradition of French economist/philosopher Frederic Bastiat, wrote a wonderfully entertaining essay, "The Grocery School." He insists that groceries are pretty important as well, and discusses possible outcomes for socialization of food supplies. (12)

Most countries enslaved by the Soviet empire moved out of a fully socialized system through privatization and insuring competition in the medical system. Others, including many European social democracies, intend to privatize their medical systems in the long run and decentralize control of medicine. Private ownership of hospitals and other units is seen as a critical determining factor of the new, more efficient, and humane system.

Member of the Russian Duma (parliament), Oleg Kulikov, summarized this trend toward privatization in the following way: "It is fascinating: we are returning to capitalism in health care by increasing the share of private payments and health care provision, while Obama suggested a system which we rightly can define as communist or socialist. They

are assuming positions that we've abandoned." (13)

A hero of Canadian medicine, Dr. Jacques Chaoulli, sued the Quebec government, arguing that the Canadian implementation of publicly funded healthcare is not effective at delivering an adequate level of care. The Canadian Supreme Court decision on the case resulted in a change in the Quebec government's policy on wait times, and opened the case for privatization of care. "Challenging a powerful state monopoly of medical services is not easy, but as I had reached the point where I could no longer tolerate seeing my patients suffer and die while on waiting lists, I had to do something," Dr. Chaoulli wrote in this journal. (14)

According to the European Journal of Public Health, "Ideas about privatizing health care in Western Europe were triggered by the crisis of the welfare state, a desire for more efficiency, and exemplification of private businesses as role models for optimization of service delivery. Historically, the negative experiences, which opened the door to privatization, were rigidity of public institutions and their inability to change or adapt to different stimuli from their environment, including the population's and patients' expectations." (15)

Privatization, as opposed to socialization, is the answer to our problems in the financing and delivery of medical services. "It has proven it is worth the effort, as it eliminates waste, saves resources, reduces government budget deficits and debt, and creates a better healthcare system for those who need it most." (16)

Doug French of the Ludwig Von Mises Institute wrote, "Medical socialism is but one variety of a larger problem. But it is one that is particularly devastating to people, because it affects their capacity for staying healthy and alive." (17) The last line of defense of our liberty today is the fight against this outrageous attempt to turn us into pawns of government healthcare socialism.


(1) Rummel RJ. 20th century democide. In: Freedom, Democracy, Peace; Power, Democide, and War. Available at: www.hawaii.edu/powerkills/20th.htm. Accessed May 4, 2011.

(2) WikiAnswers. Hinge fracture of skull is seen in accidents involving? Answers.com. Available at: http://wiki.answers.com/Q/Hinge_fracture_ of_skull_is_seen_in_accidents_involving. Accessed May 4, 2011.

(3) Titova I. Russian life expectancy on downward trend. St. Petersburg Times, Jan 17, 2003. Available at: www.cdi.org/russia/johnson/7023-14.cfm. Accessed May 4, 2011.

(4) Shrestha LB. Life Expectancy in the United States. CRS Report for Congress. Order Code RL32792. Washington, D.C.: Congressional Research Service; updated Aug 16, 2006. Available at: http://aging.senate.gov/crs/aging1.pdf. Accessed May 4, 2011.

(5) Snore E. The Soviet Story [DVD]. Latvia; 2008. Available at: www. sovietstory.com. Accessed May 4, 2011.

(6) Triggle N. How the NHS could learn from Sweden [news release]. BBC; Nov 28, 2005. Available at: http://news.bbc.co.uk/2/hi/health/4460098.stm. Accessed May 4, 2011.

(7) Glenngard AH, Hjalte F, Svensson M, Anell A, Bankauskaite V. Health Systems in Transition: Sweden. Copenhagen, Denmark: WHO Regional Office for Europe, on behalf of the European Observatory on Health Systems and Policies; 2005:103. Available at: www.euro.who.int/_data/assets/pdf_file/0010/ 96409/E88669.pdf. Accessed May 4, 2011.

(8) Can you believe denying health care to people with dementia is being considered? Foster Friess; July 14, 2009. Available at: www.fosterfriess.com/ transforming+america/healthcare/articles/20512/. Accessed May 4, 2011.

(9) Emanuel EJ. Where civic republicanism and deliberative democracy meet. Hastings Center Report 1996;26(6):12-14. Available at: www.ncpa.org/pdfs/ Where_Civic_Republicanism_and_Deliberative_Democracy_Meet.pdf. Accessed May 4, 2011.

(10) Persad G, Wertheimer A, Emanuel EJ. Principles for allocation of scarce medical interventions. Lancet 2009;373:423-431.

(11) Hoppe H-H. A four-step health-care soution. Mises Daily, Aug 14, 2009. Available at: http://mises.org/daily/3643. Accessed May 4, 2011.

(12) Boudreaux D. Grocery school. Cafe Hayek, Apr 24, 2001. Available at: http://cafehayek.com/2011/04/grocery-school.html.Accessed May 4, 2011.

(13) KulikovO. [Obama's system of mandatory health insurance is a copy of Soviet public health system. Our government's proposed reform is capitalist]. Proceedings, Russian State Duma; 2010.

(14) Chaoulli J. The long road to freedom in Canadian medicine. J Am Phys Surg 2005;10:91 -92.

(15) Albrecht T. Privatization processes in health care in Europe--a move in the right direction, a "trendy" option, or a step back? Eur J Pub Health 2009;19:448-450.

(16) Wootton I. Privatisation in the healthcare industry. AEMH Conference, Brussels, May 7, 2009. Available at: www.aemh.org/pdf/PrivatisationinHealth careIndustry_AEMH7.pdf. Accessed May 4, 2011.

(17) French D. Healthcare intervention: the bigger picture. Mises Daily, Mar 24, 2010. Available at: http://mises.org/daily/4213. Accessed May 4, 2011.

Yuri Maltsev, Ph.D., is professor of economics at Carthage College in Wisconsin. Before defecting to the U.S. in 1989, he was a member of a senior Soviet economics team that worked on President Gorbachev's reforms package under "perestroika." Contact: yuri@carthage.edu.
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