Health care in the US (debate with E), part 2

A continuation of the health-care debate I've been having with my friend, E:

E: ...with regard to health care costs and your allegation that their cause is "massive" government "interference" with the providers of it:

It is hard to believe that these Godless Communist countries with "socialized" health care have LESS regulation than we do.  Since their governments control large sectors (or all) of their respective delivery systems, it would be fair to say that the systems in these countries are much, much more regulated by their governments than ours is.  Yet they spend far less per-capita than we do, despite all this "massive" government "interference".  This observation includes first-world countries with first-world health services.

Link to table

Despite our relative lack of health-care regulation, we still spend far more than the nearest country or any of the "socialized" medical-care countries.

At the very least this fact seems to destroy the "health care is expensive here because of massive government interference" argument.

JCB: The countries with completely socialized health care hold costs down by means of strict rationing. That's why I much prefer our current system to alternatives such as the Canadian system. Of course, our system is probably completely unsustainable in its current form. We're either going to have to radically deregulate and desocialize our system or transition to a completely socialized/rationed system. The former option would be far superior in every way. Unfortunately, the latter is much more likely to happen.

E: And we hold down costs by means of strict rationing too. But our rationing is based simply on how poor you are. Which of course works in our favor as well as in the favors of people yet higher up the wealth ladder. "Poor, too bad, you can't afford health care, too too bad for you loser. You should have had good genetics and good (i.e. wealthy) parents and grown up somewhere that encouraged the good sense that I have."  "Unlucky you. No MRI. Die." Rationing. Brutal, class-wide rationing.

JCB: People not buying what they can't afford is not what is normally referred to as rationing. But, no matter. Whatever we choose to call it, it's obviously a serious problem. The key point, however, is that it's not a problem that can be blamed on the free market, since--as Goldhill shows--our health-care market is highly distorted by government interference.

E: I much prefer the Canadian system to alternatives such as our system. We are going to have to radically regulate and socialize our system, in the sense of providing a safe and deep "safety blanket" (by that I mean, making modern technologies and treatments just as available to the poor as to the rich). You know, the sort of thing we do with roads and schools and above all, the military. This option is far superior in every way, unfortunately with powerful status quo seeking to maintain profits, that's unlikely to happen, as we're currently seeing.

JCB: Transitioning to a purely socialist system may actually be preferable to keeping our existing system, since it'd at least allow us to control spending. Our existing health-care system is almost certainly economically unsustainable. Unfortunately, the quality of medical care available under a socialist system would of necessity be far inferior to what could be achieved were we to adopt a free-market approach. Why? Because excellent health care requires a high degree of innovation and hard work by highly-skilled, dedicated workers. A free market is the only known economic system capable of providing the kinds of incentives required to consistently motivate people to achieve high levels of excellence in their work. Socialist government bureaucracies, conversely, are not generally renowned for their ability to inspire excellence.

You mentioned roads and the military. I'd be in favor of as much privatization of roads as is practical. The cleanest, best-maintained freeways I've ever driven on were privately-owned toll roads, such as those found in Orange County, CA. Many government-operated roads are notorious for being poorly maintained, with lots of trash, potholes, graffiti, etc. As for the military, that of necessity has to be controlled by the government. At least I don't see a practical way to avoid that. However, a system of private contractors operating in a competitive, free-market environment is the most efficient means of producing the highest-quality military equipment.

I just noticed that you also mentioned the issue of socialized schools. The record of government-run schools is spotty, at best. The dysfunctional nature of many of our public schools provides further evidence of the inherent inability of socialized systems to consistently provide high-quality services. I believe that a more free-market approach to schools would vastly improve the quality of education available in this country.