Is single-payer (government pays providers) the right US-healthcare solution for physicians and hospitals as many advocates believe it to be? Maybe, maybe not. It turns out that there are a number of single-payer healthcare concepts out there, some with an interesting combination of options in the solution.
“The Left believes single-payer gives Western Europe and Canada universal coverage, better care, and lower costs — and that such a payment system would rid American health care of its ills. The Right imagines such a shift would end free-market medicine and America’s role as the world’s engine of medical innovation (plus bankrupt the country).” — from an article on “Single-payer health care — dream, nightmare or status quo?” in NewsDay
The single-payer healthcare debate continues. Politically, the argument is framed as either free-market plans or as government single-payers. There are advocate groups on both sides of the debate, and the Physicians for a National Health Program (PNHP) has done a good job of explaining the single-payer concept: “Single-payer national health insurance, also known as ‘Medicare for all,’ is a system in which a single public or quasi-public agency organizes health care financing, but the delivery of care remains largely in private hands. Under a single-payer system, all residents of the U.S. would be covered for all medically necessary services, including doctor, hospital, preventive, long-term care, mental health, reproductive health care, dental, vision, prescription drug and medical supply costs.”
How many physicians back the single-payer healthcare concept? In April of this year, Healthcare Finance reported on a survey showing about half claim to support it. The survey uncovered some compelling reasons for the proponents: “Many cited efficiency as one of the main reasons for their stance, saying it’s often a hassle to work with a number of different insurance companies, each with its own billing practices. While they acknowledged that they may take a financial hit under a single-payer system, they also said there were hidden costs to consider in the current system. Many doctors want to avoid making collections a part of their business models.”
But Robert Brook, a former senior research fellow in health economics, gives counterpoints in a Heritage Foundation article, including that a single-payer solution would:
- Result in substantially lower payments to physicians and other health care providers compared to a multiple-payer system
- Reduce the quality of care by limiting the ability of physicians to invest in advanced medical equipment that takes advantage of new technology
- Limit access to care even more substantially in the long term, as the prospect of lower lifetime earnings reduces the incentive for talented people to choose careers in health care
Daniel Summers. a physician writing in the New Republic, sums up the opposing viewpoint like this: “What is not disputed to any great degree is that Sanders would reduce payments to doctors and hospitals. His ‘Medicare for all’ plan would result in a substantial reduction in revenue compared to what most private insurance plans currently pay. As a pediatrician in private practice, I have grave concerns that implementing a rapid transition to a single-payer system would be far more disruptive to many Americans’ health care than Sanders cares to discuss.”
What About Europe’s Single Payer Healthcare Systems?
Then there are European systems, some of which are based on the single-payer model. What is lesser known, is that there are models in Europe that combine public and private insurers in a way that is perhaps a better balance than we have achieved in the US so far. In a recent Economist article, it was explained like this: “European countries that do not have single-payer health insurance include Switzerland, the Netherlands and an obscure republic called Germany. These countries achieve universal coverage through a mix of private, for-profit and not-for-profit insurers. This private-public combination may sound like the sort of ideological breakthrough that could serve as a compromise between Democrats and Republicans. But it isn’t new. Germany has been using some variety of this model ever since it invented public health insurance, 134 years ago, during the administration of Otto von Bismarck.”
According to a Wikipedia article, “Germany has a universal multi-payer health care system paid for by a combination of statutory health insurance (Gesetzliche Krankenversicherung) officially called ‘sickness funds’ (Krankenkassen) and private health insurance (Private Krankenversicherung), colloquially also called ‘(private) sickness funds’. According to the World Health Organization, Germany’s health care system was 77% government-funded and 23% privately funded as of 2004.”
The library at PubMed Central, includes a study comparing healthcare in the US, Canada and Germany, that found, “The data suggests that the Canadian and German systems appear to be more effective than the U.S. system in several respects. Costs are lower, more services are provided, financial barriers do not exist, and health status as measured by mortality rates is superior. Canadians and Germans have longer life expectancies and lower infant mortality rates than do U.S. residents. However, the comparisons do not tell the whole story, nor do they necessarily imply that the United States should adopt the Canadian or German approach. Some have argued that a system that is manageable for a population of 30 or 80 million people cannot easily be adapted to a more pluralistic, heterogeneous country with a population of nearly 280 million.”
The study further explains that in Germany, “individual health insurance premiums for workers are calculated on the basis of income and not age or the number of dependents. Premiums are collected through a payroll tax deduction; the average contribution was 13.4% of workers gross salary in 1993.” So, if you earned $80,000 per year, your share would be around $10,700 per year. This is quite high, even in comparison to what is paid in the US under Obamacare.
How much would a single payer healthcare plan cost taxpayers in total? Politifact ran the numbers, specifically for the Bernie Sanders version and found that estimates vary: “Kenneth Thorpe, a professor of health policy and management at Emory University, put the cost at $2.4 trillion a year. A team from the Urban Institute put the number at $2.5 trillion a year. The Committee for a Responsible Federal Budget projected $2.8 trillion a year.” Bernie had claimed his plan would cost only $1.38 trillion per year.
In the end, it looks like we have a choice between three models, as outlined in the Economist article. The editors explain, “…what is interesting about European schemes for universal health insurance is precisely their variety. The systems fall into three paradigms. In the first, the government takes over both health insurance and the provision of care, employing doctors and running hospitals. In the second, the government provides universal health insurance but leaves much of the provision of care to the private sector. (This is the ‘single-payer’ model to which Mr. McConnell refers.) In the third, the government leaves both insurance and care to the private sector, but uses regulation, government subsidies and an individual mandate to guarantee that everyone is covered.”