Home > Would single payer health insurance be good for America?
View this page in Spanish

Would single payer health insurance be good for America?

Don R. McCanne, M.D.

YES: Single payer insurance would provide better and more affordable care for everyone.

Single payer national health insurance would resolve virtually all of the major problems facing America’s health care system today.

Single payer insurance is commonly defined as a single government fund within each state which pays hospitals, physicians and other health care providers, replacing the current multi-payer system of private insurance companies and health plans. It would provide coverage for the 44 million who are uninsured. It would eliminate the financial threat and impaired access to care for the tens of millions who do have coverage but are unable to afford the out-of-pocket expenses because of deficiencies in their insurance plans. It would return to the patient free choice of physicians and hospitals, not just choice of restrictive health care plans. It would relieve businesses of administrative hassles and expenses of maintaining a health benefits program. It would remove from the health care equation the middleman - the insurance/managed care industry - that has wreaked havoc on the traditional patient-physician relationship, while diverting outrageous amounts of patient-care dollars to their own coffers. It would control health care inflation through constructive mechanisms of cost containment that improve allocation of our health care resources, rather than controlling costs through an impersonal business ethic that strips patients of care to improve the bottom line.

In sum, single payer national health insurance would provide access to high quality care for everyone at an affordable price. Since this would be beneficial for individuals, businesses, and even the government, why don’t we have a national single payer plan? The reason: The political will has not developed because of lingering concerns over the alleged defects of such a proposal. These supposed defects have been publicized widely by those interests that for ideological, financial, or other self-serving reasons are opposed to it. Since the benefits are unimpeachable, we should look the claims of the plan’s critics.

The first misgiving usually expressed is that we cannot afford to pay for comprehensive care for everyone. Every other industrialized nation provides comprehensive care to everyone at a much lower cost than our system that leaves so many out. Other nations spend 6 to 10 percent of their Gross Domestic Product, or GDP, whereas we, the wealthiest nation on earth, spend 14 percent of our GDP. We already have enough funds dedicated to health care to provide the highest quality of care for everyone. Studies conducted by the Congressional Budget Office, the General Accounting Office, the Lewin Group and Boston University School of Public Health have shown that, under a single payer system, comprehensive care can be provided for everyone without spending any more funds than now are spent.

There has been considerable publicity about the queue, or delays in receiving elective services that are characteristic of other nations, especially the United Kingdom and Canada. At 6 percent and 9 percent of their GDPs, respectively, they are spending much less than us and need only to increase their budgets to escape prolonged queues. Not only do we have more than sufficient funds, we also are a nation that is infamous for our excess capacity in health care. Typical of these excesses is the fact that there are more MRI scanners in Orange County, California, than in all of Canada. With our generous funding and the tremendous capacity of our health care delivery system, the queue will not be a significant limiting factor in the United States.

“Americans do not want socialized medicine,” is a phrase that is frequently used glibly to dismiss the single payer concept. Socialized medicine is a system in which the government owns the facilities, and the providers of care are government employees. In sharp contrast, a single payer system uses the existing private and public sector health care delivery system, preserving private ownership and employment. The unique feature of a single payer system is that all health care risks are placed in a universal risk pool, covering everyone. The pool is funded in a fair and equitable manner such that everyone pays their fair share, unlike our current defective system in which some pay far too much, and others are not paying their share. The funds are allocated through a publicly administered program resulting in optimum use of our health care dollars. A single payer system has no more in common with socialized medicine than does our Medicare program.

Many contend that government bureaucracies are very wasteful compared with the efficiencies of the private marketplace. In the health care arena, that just has not been true. Our Medicare program, a publicly administered program, operates on an administrative cost of less than 2 percent. The managed care intermediaries consume 9 to 30 percent of health care dollars. The difference is due to large corporate administrations, tremendous duplication of administrative efforts between companies and other intermediaries, and marketing expenses that would be superfluous in a public program. A single payer system has as its mission optimizing resources for better patient care. Funds are not wasted on corporate administrative excesses.

It is argued that a single payer system, by being universal, would lower the standard of care to a level of mediocrity for everyone, preventing the affluent from exercising his or her option to obtain the highest level of care. However, our current system is characterized by essentially two alternatives: either no insurance with severely impaired access to even a mediocre level of care, or being insured by a managed care industry that has slashed and burned until mediocrity has become the standard. Only the relatively affluent now have access to unlimited care. With the generous level of funds that we already have dedicated to health care, with a more efficient administration, and with an exclusive mission of optimum patient care, a single payer system would raise the level of care well above the mediocrity that we now have. A single payer system does not preclude the affluent from paying, outside the system, for a penthouse suite in the hospital, or for cosmetic surgery, or for any other services that should not be part of a publicly funded program anyway.

Other than the assurance that everyone would have coverage for health care, there is even a greater good that single payer would bring to our nation. Making available to everyone preventive and public health services would significantly improve the level of health of our entire nation. Reduction of communicable diseases and reducing the higher costs of untreated chronic disease helps all of us. Healthy individuals make for a healthier work force, with less lost time at work, greater productivity, and a more positive work environment.

What are the current prospects for reform? Most proposals call for incremental and pluralistic measures. Unfortunately, such approaches cannot meet the goals of universal, comprehensive, affordable health care. As an example, it was recognized that Medicaid was grossly inadequate in meeting the needs of insurance coverage of low-income children. Congress passed the Children’s Health Insurance Program to expand the number of children covered. Yet, since enactment, the number of uninsured children actually has increased. Even if every eligible child could be enrolled, an impossible administrative task, in California alone, 600,000 children would still be left without coverage. Incrementalism will never provide universal coverage.

Pluralistic approaches are popular with the organizations that advocate for them. For instance, the American Medical Association supports medical savings accounts, a scheme that will provide pools of funds for physicians to dip into without any restrictions on fees or controls on delivery of ineffective services. Although healthy individuals would find medical savings accounts to be attractive, those individuals would be exposed to financial risk should they develop a major medical problem, since the catastrophic plan that backs up the savings accounts would not cover the significant out-of-pocket expenses that would mount up after the savings funds are depleted. Another example is the governmental insurance premium subsidy proposed by the Health Insurance Association of America. This subsidy would divert more taxpayer dollars to an industry that is already wasting enough of our health care resources.

Perhaps one of the more inhumane proposals is to offer uninsured patients discounts for cash payments and pass that off as health care reform. Such a scheme is merely a means of assuring physicians modest income from indigent patients, while dodging governmental and insurance company oversight. This simplistic plan not only exposes the uninsured to financial disaster should a major medical event occur, but it also significantly impairs access to even the most modest care simply because of lack of affordability. While the various pluralistic approaches would meet the needs of special interests, they can never provide adequate coverage and access for the most vulnerable members of our society.

We should modernize the traditional insurance functions of risk pooling, administration and marketing, and information management. The insurance industry has been evading its most important function, risk pooling, by devising methods of passing risk on to providers and patients. We need to place everyone in the risk pool and then assure that the funding is fair by the adoption of a single payer model. Many billions of dollars could be returned to patient care each year by eliminating the expenses of plan marketing, and by modernizing administration through the creation of an efficient public system.

Information management has been limited primarily to claims processing. Modernization of this potential tool can provide tremendous rewards in improving our health care system. Encrypted electronic medical records would enable 24-hour availability and portability of essential patient information. Use of a common record would reduce medical error by preventing conflicts and duplications in management. Improved collection of outcome data would provide a rational basis for increasing efficiency through better allocation of our resources. With the efficiencies and power of information technology, we finally have the potential to deliver on the previously elusive promise of higher quality health care at a lower cost through an electronically integrated health care system.

Would Americans accept a publicly administered health insurance program? For over three decades, they have shown strong support for a national health insurance program for our seniors, Medicare. Americans across the political spectrum emphatically reject suggestions that Medicare should be abolished, although they do support needed reform. If we had a comprehensive, affordable health insurance program that covered everyone, Americans would finally be able to say, quite honestly and with justifiable pride, “We have the finest health care system on earth.”

Robert LeBow, M.D., Immediate Past President of Physicians for a National Health Program contributed to this article.

Don R. McCanne, M.D. is a family physician and health care reform activist from San Juan Capistrano, California. He is a board member of both Physicians for a National Health Program and California Physicians Alliance.