Simple, Fair, and Affordable
Pro: Single-Payer Health Care
John A. Day, Jr., M.D.
American Journal of Respiratory and Critical Care Medicine
Volume 180 pp. 920-922, (2009)
With the election of Barack Obama as our 44th President and the installation of a new United States Congress has come renewed attention to health care reform. Appropriately, there is a sense of urgency regarding the 47 million Americans without health insurance and the millions more underinsured, and to make matters worse, it is inevitable that both numbers will increase due to rising unemployment. In response to this crisis, most health care reform proposals attempt to guarantee at least some health coverage for all Americans. Yet nearly all proposals achieve this aim in large part through the current private insurance system. It is well worth asking: exactly what value does the insurance industry bring to health care in this country? And if it contributes little of consequence, is there another way?
Using the private insurance industry to achieve universal coverage would require that all financially able U.S. residents or their employers purchase health insurance. Americans unable to afford health insurance, the poorest and potentially the sickest among us, would be covered by the government—most likely by incorporating them into a public insurance system, although a government subsidy (in all or in part) could be used instead to purchase private insurance coverage. If, as seems likely, a current or future public insurance program is used for this purpose, then this construct amounts to a massive preemptive bailout of health insurers. These private entities would profit by adding relatively healthy young people to their rolls, while potentially bankrupting the public systems that are charged with paying for the care of these unprofitable patients.
Health insurance as a commodity is particularly unsuited to the so-called “wisdom of the market.” Private insurers are dutybound to maximize profits for their shareholders, and profits are best achieved by minimizing risk through cherry-picking the healthiest enrollees and denying payment for services whenever possible (1). These goals are clearly not in the best interest of individuals seeking reliable health insurance coverage, enrollees who require ongoing or complicated care, or the taxpayers subsidizing care for those denied coverage.
Furthermore, health care reimbursement funneled through a private insurance industry does not necessarily lead to improved health. Thirty-one percent of United States health spending goes toward bureaucracy (2). Such remarkable inefficiency is directly attributable to the overhead and profit of the health insurance industry (3) and wasted clerical time, as providers must deal with a multitude of different insurers and health plans.
In contrast, Canada only spends about 17% on total system administration (2). Nor does having private insurance necessarily mean access to affordable, quality health care. Large premium hikes have made it increasingly difficult for businesses to offer, and individuals to buy, comprehensive insurance. Instead, a profusion of high-deductible, high co-pay plans, along with plans offering extremely limited coverage, have put even insured patients at risk. This issue was nicely demonstrated in a 2005 study, which showed that three-quarters of the 750,000 American families entering into bankruptcy proceedings each year due to illness or medical bills actually had health insurance coverage at the time (4).
In the opinion of many, ending our reliance on the private insurance industry and adopting a single-payer health care system in the United States has long been the clear solution to these problems. Why is a single-payer health care system the best and only realistic solution to the crisis of the uninsured and underinsured?
The answer is simplicity, inclusiveness (everyone is in, no one is left out), breadth of service, equality, preservation of the current private delivery system, and, perhaps most of all, affordability. Multiple state and federal studies show that by eliminating the overhead associated with private insurance and negotiating prices with drug companies, it is possible to offer lifetime coverage to everyone in the country for an amount similar to that which we currently pay for coverage of only part of our population (5). Health insurance would be uncoupled from employment, so that individuals who lost or changed jobs would keep the same coverage, regardless of age, preexisting conditions, or state of residence. No one would be without health insurance, accomplishing in the simplest way possible the overall goal of health reform—improving access to health care for all Americans.
Funding for a single-payer health care system would come from a combination of payroll tax for employers (about 7% of payroll, or less than the amount typically paid for employee health care coverage) and an increase in the federal tax on income (an increment of about 2%, or less than most people currently pay for out-of-pocket health care expenses). Patients would be free to choose any physician or hospital in the country, as opposed to the current system, in which patient choice is frequently limited to providers within the various health plan networks. Because, under the current system, most employers offer only one or two health plans, it is frequently the case that employers, not patients, in effect determine our choice of doctors, hospitals, and other health care providers. Providers of patient care would see significant reductions in paperwork, having to interact with only one health plan instead of the seemingly endless number of plans and subplans with which we now deal. A single-payer system would also facilitate comprehensive health planning, which could include regional disease management programs, strategies aimed at solving physician shortage issues, collective adoption of a unified electronic medical record, and a cohesive approach to the distribution of innovative health care technologies (6).
Given the social, clinical, and economic benefits of single-payer health care, the only barrier would seem to be that of political feasibility. Indeed, adoption of a single-payer health care system will be challenging in today’s economic climate and in a country seemingly dedicated to a free-market ideology. Yet many current social programs faced similar political obstacles at the time of adoption, including Social Security and Medicare.
Ironically, today it is the disbanding of these programs that would be considered not politically feasible. Although some major stakeholders (mainly the insurance and pharmaceutical industries) may be unalterably opposed to single-payer health care, the most important and relevant stakeholders are the American people and their health care providers. It is becoming evident that these factions increasingly support a single-payer system: 65% of the United States population and 59% of American physicians voiced this opinion in recent polls (7, 8). Finally, while there are major cost concerns regarding the proposed increased role for the private insurance industry in covering just some of the uninsured, a single payer system would cover all comprehensively (something no other proposed system can claim) at a cost no higher than we are currently spending, and potentially significantly less, if the experience of other industrialized nations is any guide. The time for true universal health coverage is now, and the best path to universal coverage is through single-payer health insurance.
John A. Day, Jr., M.D.
Day Kimball Hospital
University of Massachusetts Medical School
Conflict of Interest Statement: The author does not have a financial relationship with a commercial entity that has an interest in the subject of this manuscript.
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6. Ginsburg JA, Doherty RB, Ralston JF Jr, Senkeeto N. Achieving a high-performance health care system with universal access: what the United States can learn from other countries. Ann Intern Med 2008; 148:55-75.
7. The Associated Press/Yahoo Poll. WAVE2 conducted by knowledge networks. [Accessed May 14, 2009] Available from: http://news.yahoo.com/page/election-2008-political-pulse-voter-worries
8. Carroll AE, Ackermann RT. Support for national health insurance among U.S. physicians: 5 years later. Ann Intern Med 2008;148:566.
Am J Respir Crit Care Med Vol 180. pp 920—922, 2009
Internet address: www.atsjournals.org