Jamie Chang

I've been thinking about single-payer. At school, this is the system that most of my professors really care about and would like to see implemented. I understand single-payer as a health care system where there is, literally, a single payer. In this universal health care system, the government is the payer, and they get the money to pay for the health care through taxes. The point in having just one payer is that it eliminates the wastefulness and poor care that is the result of a profit-driven health care system. There is less waste because there is more regulation, and the cost of services are drugs are curbed because the single payer can negotiate reasonable rates without competition.

I found this little clip that describes single payer, in pretty simple terms from the American Journal of Public Health January 2003, Vol 93, No.1. In blue, I wrote my own thoughts on the points, either supporting them, or wondering how the hell this would be implemented as actual policy. A lot of what I wrote is based on a series of articles by Thomas Bodenheimer, a UCSF doctor who published "High and Rising Health Care Costs" in Annals of Internal Medicine a few years back.

I really like single-payer, and I respect and support it. But I have a lot to learn and often struggle with how this would fit within the American context. I really want something like this to work, and I believe it's really important. Anyway, here goes - I hope it's interesting.

Universal, Comprehensive Coverage
Only such coverage ensures access, avoids a two-class system, and minimizes expense
How does providing care for everybody cut costs? The answer is two-fold: first is recognizing that the need for health care is an inevitability for all of us. Sooner or later, we're all going to get hurt, get sick, have babies, die. All of these things cost money. We will ALL be a burden on our health care system, where or not we're insured.
The thing is that, when people are insured, their health care services cost less. One of the major reasons for this is that health insurance means access to preventitive care. When people have access to preventitive health care services, they're less likely to have a NEED for far more expensive measures of care, like the ER. In other words, people are better able to take care of themselves before things get totally ape. Example: a few years ago, I found a lump on one of my lymph nodes. I went to my primary care physician, who said it was likely to be just a cyst. This probably cost a total of $200 or so for this 20 minute visit. If I didn't have health insurance, I wouldn't have gone for this 'preventitive' checkup. If this were something worse than a cyst, I would have likely never known until it actually hurt or started growing, at which point, the costs for treatment would likely have been thousands of dollars. For people without health insurance, the latter scenario is a lifestyle. Not only is this reality disproportionately hazardous to the poor, minority, and immigrant groups, but one that costs them, and our system, billions of dollars a year and thousands of lives. Universal health care is a NECESSITY - it is less expensive, it improves lives, and it makes health care a right, not a privilege.

No out-of-pocket payments
Co-payments and deductibles are barriers to access, administratively unwieldy, and unnecessary for cost containment
Co-payments prevent people from getting proper care. Has anybody wondered what the point of a co-payment actually is? The actual reason why co-payments exist is based on the economic theory of moral-hazard. The theory suggests that if a person has to pay, they are less likely to do something. So co-payments are implemented soley to provide a barrier to seeking health care! This is astonishing to me. The insurance company benefits not only from the co-payment itself, but how the cost of the co-payment make it less likely for a person to be able to access care.
Sometimes co-payments are low, but other times, they can be very costly and an extreme burden for the sick, the poor, and the elderly. Anybody with an HMO plan knows that co-payments change all the time. This may not effect a healthy 26 year old that goes to the doctor once a year and takes no medication. But picture a 70 year old grannie that takes seven or eight meds a day, and pays hundreds of dollars in co-payments each month and lives on a fixed income. Or a self-employed family who already pays tons of money on their own health insurance and has to pay a co-pay or deductible for care on top of that. Not only are these scenarios costly, but they also make things very confusing for people, both disincentives for adequate health care.

A single insurance plan in each region, administered by a public or quasi-public agency
A fragmentary payment system that entrusts private firms with administration ensures the waste of billions of dollars on useless paper pushing and profits. Private insurance duplicating public coverage fosters two-class care and drives up costs; such duplication should be prohibited
The purpose of having a single insurer is related to economic theory and market power. Market power is a complicated idea, but to make it simple, one can look at it as the ability to raise the price of something without losing customers. If a bar is selling beer for $4/pint and decides to raise the price of the beer to $6, it may lose customers. But if there was no competition, or the beer is JUST THAT GOOD, the bar may be able to raise the price without losing customers. In the latter scenario, the bar has market power.
The American health insurance industry is based on Blue Cross and Blue Shield, industries with relatively uncontested power that were started and controlled by hospitals and doctors. So basically, the mechanism by which hospitals and physicians were getting paid was developed by hospitals and physicians. Recipe for disaster. It is through this model that health care providers were able to gain market power, and continually increase their price without necessarily losing customers. To make matters worse, these same groups were very influential in writing the legislation for Medicare/Medicaid, so even public systems suffer from the same market power of providers.
If the payer (insurance) has the market power, economic theory suggests that the costs for services would increase much slower. If there is only one payer, as in the Medicare model (and suggested in the single-payer model), the payer has the market power, and thus curbs provider market power, eliminating their ability to demand unjustifiably high reimbursements. A single payer also has more leverage to negotiate reasonable prices from the private sector, for things like pharmaceuticals.
Regarding the public v. private insurance systems, I need to think about this one more. These days, my impression has been that public and private organizations ultimately behave in similar ways, but two important differences are in regulation and accountability. Private insurance is difficult to regulate on large scales and is clearly accountable to profits, which has really effed up our system and limited our ability to deliver the best care, as opposed to the most profit-yielding care. Ideally, a public single-payer is far more liable to public accountability and structured to seek responsible cost-management to optimize health care delivery, not profits.

Global operating budgets for hospitals, nursing homes, allowed group and staff model HMOs and other providers with separate allocation of capital funds
Billing on a per-patient basis creates unnecessary administrative complexity and expense. A budget separate from operating expenses will be allowed for capital improvements
I’m just starting to learn about global budgets. As I understand it, a global budget is basically when the budget is set in advance for a specific time frame. For example, a hospital may know in January that their global budget for a fiscal year is $10 million. It is then the hospitals responsibility to stay within this budget. A global budget only really works in a single-payer system, and it keeps the cost of health care down in two main ways: first, it reduces the time and money wasted on billing a zillion different insurance companies (this can be up to 12% of health care expenditures - administrative costs). Second, it reduces the ability for the provider to provide wasteful or exorbitant care.
This model is criticized for a number of reasons. The first reason is that it’s difficult to create an ideal and appropriate global budget for each hospital and this process can be influenced by special interests. Second, people get scared that the idea of a budget may reduce the quality of care available to them. Third, there is less room within a global budget environment for the development of new technologies. These are all totally legit criticisms, but countries that actually use the global budget system not only control costs way better than the United States, but also have way better health outcomes, including the UK and Canada.

Free Choice of Providers
Patients should be free to seek care from any licensed health care provider, without financial incentives or penalties
The motivations for this point are pretty self evident.

Public Accountability, Not Corporate Dictates
The public has an absolute right to democratically set overall health policies and priorities, but medical decisions must be made by patients and providers rather than dictated from afar. Market mechanisms principally empower employers and insurance bureaucrats pursuing narrow financial interests
I think the subtext does a good job of describing this point. This point is specifically written in to curb the fears people have that a completely government run health care system will result in a bureaucratic sterility, that health care will be dictated by rules and suits, instead of individuals, families, doctors. The fact is that this situation that we fear already exists today for too many people. That procedure you need may or may not be covered by your insurance, depending on whether the for-profit insurance company thinks it’s worth their money. This is a situation that we need to make a priority to avoid, and that is why this point is necessary to consider in the development of any single payer system. I’m not sure how this point would actually play out in daily interactions, but it is critical to take notice of its importance.

Protection of the rights of health care and insurance workers
A single-payer national health program would eliminate the jobs of hundreds of thousands of people who currently perform billing, advertising, eligibility determination, and other superfluous tasks. These workers must be guaranteed retraining and placement in meaningful jobs.
If we need to cut the cost of health care, we inevitably need to cut jobs. There is a legitimate fear that the loss of this many jobs may curb costs, but at the cost of an economic depression due to unemployment. I’m not sure how politicians intend to address this concern, although it seems to be at the tip of everyone’s tongues. I’ll look into this more and update this blog post.