I have seen the terms "universal healthcare" and "single-payer healthcare" bandied about with respect to the much anticipated healthcare reform everyone is hoping to be high on the incoming administration's agenda. I am sure a certain number of Kossacks find this terminology confusing and unfamiliar to the point of discomfort, perhaps even averting their eyes from what might otherwise be interesting stuff.
At least some people are no doubt asking themselves "what the hell is single-payer????"
Let's find out, shall we?
First off, single-payer is a truly "universal" healthcare system. Some systems, such as ones that use "mandates", that is, compulsory buying of private health insurance (if you don't qualify for public assistance), are an attempt to force "universal" coverage, usually on a reluctant populace. These are also referred to as "universal health care" without proper clarification.
When you hear the term "universal health care", try to seek some clarity about whether it is "mandated" or "single-payer".
More on mandates in a moment.
Single-payer is a method of providing financing for healthcare, that is, a way to fund the access to the providers of healthcare. It says nothing about the providers, who may be public or private as they choose. The only difference to them is that billing is immensely simplified, as they needn't chase down payment from an overwhelming number of deadbeat insurance companies and patients.
In single-payer systems all healthcare is pre-paid. There are no co-pays, no deductibles, and no premiums.
- but -
Where does the money come from? Unlike most of the "plans" we are now seeing, which are a bit muddy (perhaps understandably) in this respect, single-payer systems are fairly straight-forward. There are a multitude of ways of implementing it, and this is where single-payer plans diverge from one to the other, but in essence the money comes from those who are most able to pay for it (yes, it's socialism, folks). I will use the model of SB840, considered the gold standard of single-payer healthcare financing bills (and its companion bill SB1014) as an example of one way of funding the single-payer kitty.
In this implementation, employers and income earners (employees, self-employed, day-traders and other gamblers, whoever makes an income) are taxed (I prefer the term "public investment"). The tax levied is not onerous, especially if compared to the current level of private insurance premiums. For an example of a real life implementation of single-payer, please see this diary entry. The bottom line is that, if we were to implement a single-payer healthcare financing plan, overall we will be paying much less than we are now (1/2 to 2/3 as much) for more comprehensive coverage for everybody.
OK, I realize I kind of jumped to an unsupported conclusion with that last sentence. You're probably saying, how? Briefly:
- The single-payer, being a monopsony (a fancy way of saying "single-buyer"), exerts tremendous buying leverage over it's clients (doctors, drug companies, and makers of durable medical equipment). This results in significant savings without undue harm to the providers.
- The billing cycle is simplified. You may hear that single-payer administration costs are 1/4 of those of systems with private insurers, an enormous savings by itself, but that doesn't even take into account what happens at the providers' end, which can account for another significant amount of savings.
- Simplified billing with a single billing agency also enables system-wide computerized billing, which in turn facilitates the reduction of fraud.
- There is essentially no policing required. Mandates (see below) require some sort of punitive measures, both for employers and individuals, typically. Some might object to the inclusion of undocumented individuals in the system, but they pay taxes also (ask your preparer, if you don't believe me), and are typically a healthier segment of our society.
- An often overlooked savings is related to malpractice insurance. Currently, the bulk of malpractice awards are, surprisingly, not punitive, but to ensure the health care needs of the victim. In single-payer systems this is no longer part of the equation, and malpractice premiums will drop to a fraction of their current size.
- No one will ever become bankrupt due to medical costs. The generational costs of bankruptcy are enormous.
- Improper use of emergency medical intervention is greatly reduced as everyone has access to appropriate healthcare providers.
- There are many others.
Now back to "mandates". There have been many diary entries addressing this subject. All the ones I have seen are dismissive, with reason. Often you will hear that single-payer systems are essentially mandates. This is true, in a sense, since you probably are mandated to pay income taxes (though many don't). A big distinction, however, is that you are not penalized for not participating in the system - penalties are the only way to enforce mandates. Under a truly mandated system, even those who don't pay taxes will have to prove they are compliant, which begets a very costly enforcement effort.
You are enrolled in a single-payer system automatically - if you have a pulse. Also, mandates only require you to buy some sort of private insurance, inevitably a vastly inferior product to what you get in the single-payer system, which is comprehensive and definitely beyond anything you can possibly buy through private insurance for the same amount of money. Having private insurance is no guarantee against medical bankruptcy. 75% of medical bankruptcies are of people who had insurance.
One final note. 60% of our healthcare costs are currently financed through taxation. It is only the remaining 40% that is vexing us. Single-payer financing has been shown over and over to be the most fiscally sound way of financing healthcare, both by analysis and in the real world. Market systems simply cannot work in any way that is fair or efficient or comprehensive for financing our access to healthcare.