Posted on April 22, 2009

Single-payer health care plan isn't socialism


Saul Friedman
Gray Matters
April 17, 2009

I was surprised during a recent conference for care- givers when several professionals, who should have known better, asked me if a “single-payer” health insurance system is “socialized medicine.”

The quick answer: No.

But the question suggests the specter of socialism that haunts efforts to bail out American financial institutions may be used to cast doubt on one of the possible solutions to the health care crisis: Medicare for All.

Webster’s online dictionary defines socialism as “any of various economic and political theories advocating collective or governmental ownership and administration of the means of production and distribution of goods.”

Britain’s socialized health care system is government-run. Doctors, nurses and other personnel work for the country’s National Health Service, which also owns the hospitals and other facilities. Other nations have similar systems, but no one has seriously proposed such a system here.

Newsweek suggested Medicare and its expansion (Part D) to cover prescription drugs smacked of socialism. But it’s nothing of the sort. Medicare itself, while publicly financed, uses private contractors to administer the benefits, and the doctors, labs and other facilities are private businesses. Part D uses private insurance companies and drug manufacturers.

In the United States, there are a few pockets of socialism, such as the Department of Veterans Affairs health system, in which doctors and others are employed by the VA, which owns its hospitals.

Physicians for a National Health Plan, a nonprofit research and education organization that supports the single-payer system, states on its Web site: “Single-payer is a term used to describe a type of financing system. It refers to one entity acting as administrator, or ‘payer.’ In the case of health care . . . a government-run organization - would collect all health care fees, and pay out all health care costs.” The group believes the program could be financed by a 7 percent employer payroll tax, relieving companies from having to pay for employee health insurance, plus a 2 percent tax for employees, and other taxes. More than 90 percent of Americans would pay less for health care.

The U.S. system now consists of thousands of health insurance organizations, HMOs, PPOs, their billing agencies and paper pushers who administer and pay the health care bills (after expenses and profits) for those who buy or have health coverage. That’s why the U.S. spends more on health care per capita than any other nation, and administrative costs are more than 15 percent of each dollar spent on care.

In contrast, Medicare is America’s single-payer system for more than 40 million older or disabled Americans, providing hospital and outpatient care, with administrative costs of about 2 percent.

Advocates of a single-payer system seek “Medicare for All” as the simplest, most straightforward and least costly solution to providing health care to the 47 million uninsured while relieving American business of the burdens of paying for employee health insurance.

The most prominent single-payer proposal, H.R. 676, called the “U.S. National Health Care Act,” is subtitled the “Expanded and Improved Medicare for All Act.”(View it online at As proposed by Rep. John Conyers (D-Mich.), it would provide comprehensive medical benefits under a single-payer, probably an agency like the current Center for Medicare and Medicaid Services, which administers Medicare.

But while the benefits would be publicly financed, the health care providers would, for the most part, be private. Indeed, profit-making medical practices, laboratories, hospitals and other institutions would continue. They would simply bill the single-payer agency, as they do now with Medicare.

The Congressional Research Service says Conyers’ bill, which has dozens of co-sponsors, would cover and provide free “all medically necessary care, such as primary care and prevention, prescription drugs, emergency care and mental health services.”

It also would eliminate the need, the spending and the administrative costs for myriad federal and state health programs such as Medicaid and the State Children’s Health Insurance Program. The act also “provides for the eventual integration of the health programs” of the VA and Indian Health Services. And it could replace Medicaid to cover long-term nursing care. The act is opposed by the insurance lobby as well as most free-market Republicans, because it would be government-run and prohibit insurance companies from selling health insurance that duplicates the law’s benefits.

It is supported by most labor unions and thousands of health professionals, including Dr. Quentin Young, the Rev. Martin Luther King’s physician when he lived in Chicago and Obama’s longtime friend. But Young, an organizer of the physicians group, is disappointed that Obama, once an advocate of single-payer, has changed his position and had not even invited Young to the White House meeting on health care.

We’ll talk soon about Obama’s alternative to single payer.,0,721971.column