In 2017, States can Adopt Single-Payer Healthcare. Let’s Do It!
I entered the health care debate in response to a statement in the United States press in summer 2009 which claimed the National Health Service in Great Britain would have killed me off, were I a British citizen. I felt compelled to make a statement to explain the error. I am British, I live in Cambridge, England, and the National Health Service has taken great care of me for over 40 years. I have received excellent medical attention in Britain, and I felt it was important to set the record straight. I believe in universal health care.
– Stephen Hawking ( NY Times, May 9, 2011)
Many people in the United States with chronic illnesses have rejoiced over the changes brought on by the Affordable Care Act (ACA). More of us can afford health insurance. We are no longer denied coverage because of a pre-existing condition. There are no more annual or life-time caps on insurance payments. And there is now a limit on our out-of-pocket fees.
While the ACA has made important strides, serious healthcare problems remain. Insurance companies still limit which doctors and hospitals we can go to and whittle down the list of prescription medications they will cover. We spend hours dealing with billing “errors” and appeals for treatment coverage. Many of us are still paying tens of thousands of dollars each year for our families’ health care, between premiums, deductibles, co-insurance, and prescription fees. All these barriers to quality, affordable healthcare lead to a poorer and sicker population.
Isn’t there a better way? Certainly, no healthcare system is perfect, and there always seems to be some grumbling about it in every country. Yet, when comparing healthcare across the globe, countries with single-payer systems tend to have more success than those that don’t. Single-payer healthcare results in better health outcomes, is less expense, and has higher rates of satisfaction. (The Commonwealth Fund).
What is a Single-Payer Healthcare System?
“Single payer” describes a type of financing, in which one organization is responsible for managing and distributing money for a service. In single-payer healthcare, a government agency collects taxes and pays it out directly to doctors and medical facilities. There is no insurance middleman. Seventeen countries have a variation of single-payer healthcare: Norway, Japan, the United Kingdom, Kuwait, Sweden, Bahrain, Brunei, Canada, the United Arab Emirates, Finland, Slovenia, Italy, Portugal, Cyprus, Spain, and Iceland (truecostblog.com).
Instead of single-payer, we have a multiple-payer system in the United States, with many private insurance companies and several government agencies collecting money and managing healthcare. The Affordable Care Act did not get rid of the multi-payer model. It just made it possible for more people to join in.
Other Healthcare Models around the World
Single-payer systems are often set up to provide “universal” coverage, meaning that every resident has access to healthcare. There are a few other universal healthcare models, including two-tier and insurance mandates. Thirty-three countries worldwide provide some type of “universal” healthcare.
Two-Tier – The government provides public health coverage, and individuals can buy supplemental private health insurance. Countries with this system include: New Zealand, The Netherlands, Denmark, France, Australia, Ireland, Hong Kong, Singapore, and Israel (truecostblog.com).
Insurance Mandates – Citizens are mandated to purchase insurance from private, public or non-profit providers. Some countries have restricted choices and others have many choices for purchasing healthcare coverage. Where universal coverage exists, governments tend to impose strict regulations, giving them similar cost-control as single-payer models. Countries with insurance mandates include Germany, Belgium, Greece, Austria, Luxembourg, South Korea, and Switzerland (truecostblog.com).
Out-of-pocket – Many people living in countries without a universal healthcare system must pay for their medical care out-of-pocket–if they can afford it–or rely on charity clinics. There are too many countries to name them all. Some examples include Haiti, Turkmenistan, Bangladesh, and most African countries.
Healthcare in the United States – A Mixed Bag
The United States has a very confusing healthcare system. Among all the countries in the world, we are unique in relying on several different healthcare programs, which are selectively available to people based on age, income, and military status (NIH).
Our veterans and elderly are covered by two different single-payer institutions. Veterans are treated through government-owned hospitals managed by the Veterans’ Health Administration. Citizens over age 65 are covered by Medicare, with the government paying private doctors and hospitals. Both programs are paid for through taxes collected from the general population.
For our low-income citizens who qualify, we have Medicaid, administered jointly by the federal and state governments. Medicaid is a multi-payer program. Private insurance companies receive government payments to cover the healthcare plans of people in the program. The companies then pay doctors and medical facilities for their services.
The Affordable Care Act introduced insurance mandates. So those not covered by the VA, Medicare, or Medicaid must purchase private health insurance or pay a fine. Private insurance is either provided through the workplace, or purchased individually. People buying insurance through the new health exchanges can receive a government subsidy, if they qualify. People who do not have health coverage of any kind must pay out-of-pocket, and are responsible for their own medical bills.
The Affordable Care Act of 2010 can be credited for making healthcare more accessible and affordable to many. But the law has not gone far enough. Healthcare in the U.S. is still a big mess, with high prices and unequal, discriminatory treatment dependent on people’s income, age, employment, immigration status, and region where they live.
The Benefits of a Single-payer System for People with Chronic Illnesses (and Healthy People Too)
There are ample reasons for the United States to move toward a universal, single-payer system. The model is successful and popular resulting in both lower costs and healthier people.
But would Americans accept single-payer healthcare? It appears many already do. In the United States, 8 out of 10 seniors are happy with Medicare, which is a single-payer program, according to a 2013 poll (KHN); and 90 percent of veterans using the VHA system—also single-payer—are happy, according to an independent 2013 study.
The rest of Americans—those relying on the private multi-payer, insurance system, or who have no insurance at all—are less satisfied. According to a 2014 Gallup poll, only 66-70 percent of people with private health insurance and 36 percent of people without health insurance, were satisfied with the healthcare system.
When healthcare reform was being debated in 2009, physicians were surveyed about their preferances. Physicians were overwhelmingly unimpressed by the employment-based healthcare system, with only 9 percent of doctors surveyed preferring it (Journal of General Internal Medicine). Of physicians surveyed, 42 percent said they would prefer a government-run, single-payer health program and 89 percent believed the United States should adopt some form of universal healthcare.
Here’s what the single-payer healthcare model offers:
1. Access to more doctors and medical facilities
With only one health program, everyone has access to all or nearly all doctors and hospitals in a country or region. Greater choice of medical providers can lead to better health outcomes for people with chronic conditions. This is particularly true for people with rare or complicated illnesses, who need access to specialists experienced in treating their illnesses.
This is arguably better for people with chronic illnesses than what exists in the U.S.—where each private insurance company works with a limited group of doctors, hospitals, and labs. If you want to see a doctor that is not in your insurance network, you may get partial reimbursement, or have to cover the entire cost yourself.
2. Less billing and less paperwork for doctors and hospitals
In a single-payer system, doctors and medical facilities are paid directly by one agency. While there is still billing and paperwork, there is only one set of rules and procedures, making tasks simpler and less costly.
In the American multi-payer system, doctors, hospitals, and labs bill their services to different private insurance companies, Medicaid, and Medicare. Each has its unique billing requirements and distinct procedures for approving medical treatments. The process is so confusing, that medical offices often need a full-time staff to handle the billing and administrative tasks.
According to a 2011 study conducted by Health Affairs, doctor’s offices in the United States spent an average of 77.1 hours/week interacting with health insurance companies—billing, seeking pre-approvals for medications and procedures, providing quality data, and sifting through drug formularies. In Canada, where medical costs are covered by single-payer government agencies, doctors’ offices spent only 20.6 hours on similar tasks.
Based on a Health Affairs 2011 physician survey, researchers estimated that doctor’s offices in the US spent about $31 billion each year on administrative costs associated with private health insurance. Another study conducted in 2011 by the Commonwealth Fund, found that hospitals in the US spent 25 percent of their budgets—$200 billion total—on administrative costs, which is double the percent spent in the single-payer systems of Canada and Scotland.
3. More bang for your buck
Healthcare costs are lower in single-payer systems, because there are fewer overhead expenses, and because the fees for medical treatment and pharmaceuticals are negotiated and regulated by the government.
Healthcare costs in the United States are among the highest in the world, while at the same time, delivering some of the worst health outcomes and patient satisfaction among developed countries. In 2012, healthcare in the United States cost $8,895 per person, compared with $5,741 in Canada, and $3,512 in the United Kingdom (The World Bank).
Yet, the higher costs have not translated into better health. In 2012, the life expectancy in the United States was 79 years, in Canada it was 81, and in the UK it was 82. The United States ranks last in life expectancy among 34 developed countries in the world (OECD), despite the massive amounts we pay for our healthcare.
4. More affordable pharmaceutical coverage
Single-payer creates a “monopsony” in the pharmaceutical market, where there are several sellers (pharmaceutical companies) and only one buyer (the government). Prices of medicines are lower in single-payer systems because governments have greater leverage negotiating prices with pharmaceutical companies. (European Parliament study, 2011).
The United Kingdom’s National Health Service prescription benefits provides an example of what is possible when the government negotiates and regulates the price of drugs. Patients in the UK have access to a wide variety of medications, including the newer, expensive biologics used to treat immune disorders. All medications cost patients £8.05, or patients can choose a flat fee of £104 to cover all their medications for the year. Medications are also free for many groups, including children, senior citizens, people who are unemployed, and war veterans.
Americans, on the other hand, pay high prices for drugs because we don’t have a monopsony and because the US government does little to regulate pharmaceutical prices. Americans fill more than 4 million prescriptions a year, and spend upwards of $300 billion paying for them (Huffington Post, 2012). In the US, 20 percent of people with 2 or more chronic illnesses pay over $1,000 a year for their prescription medications. In countries offering drug benefits with low copays, including Germany, the Netherlands, New Zealand and the U.K, this number drops to fewer than 7 percent. In the U.K, it’s less than 2 percent (The Commonweath Fund, 2010).
A study comparing prices of 150 common medications in European Union countries and the United States found that the prices in the U.S. were more than twice that of E.U. countries (The Commonweath Fund, 2010). Because medications are so expensive in the U.S, private insurance companies often drop medications from their lists, or raise copayments for the drugs.
6. Stable healthcare coverage you can’t lose
In a single-payer system, changing or losing a job does not affect health coverage, the doctors you can see, or your access to medications.
But in the United States, people often have to change medical insurance with a new job—or they may find themselves with no medical coverage at all. Each private health insurance company has its own physician network, and its own list of covered medications. People with chronic illnesses are particularly reluctant to change jobs, because they do not want to lose their health insurance benefits, their doctors or their medications.
The healthcare exchanges brought on by the ACA are providing more security and stability for people changing jobs, but many people still rely on employer-provided healthcare.
7. Medical treatment is not attached to ability to pay
Single-payer programs are funded through the collection of taxes. When healthcare is covered through progressive taxes, it ensures everyone gets healthcare, and people contribute bases on their ability to pay. The wealthier will pay higher taxes than those with more modest incomes, but everyone is entitled to the same healthcare.
Before the ACA exchanges began last year, health insurance premiums were not based on ability to pay and there were no discounts for people with modest incomes. The health insurance exchanges have made the costs somewhat more affordable, by providing subsidies based on people’s incomes. But most people still face high deductibles and co-insurance with their private coverage, and they are still responsible for any out-of-pocket costs up to about $13,200 for a family of 4—based on 2015 prices.
8. High quality care…for everyone
There is a benefit to providing equal access to healthcare across all social, economic, and age groups. When everyone in the country relies on the same healthcare program, visiting the same doctors and hospitals, then there is pressure to maintain a high quality of service for everyone. The wealthy and powerful will use their influence to make sure the national healthcare program is well-funded and functions at a high standard.
Challenges facing Single-Payer Programs
Yes, countries with single-payer healthcare experience some problems—not everything is rosy. But, it is important to distinguish myths from facts, as so much criticism is not based in reality. People are not dying while waiting on long lines for medical care. The government does not get to decide who lives or dies. Single-payer does not create more bureaucracy. There is no compromise in quality of care. Choice of doctors and treatment is not more restricted. Single-payer programs are not more expensive.
Some of these problems are actually true in our current, multi-payer system in the United States, where people do die waiting for care, there is excessive bureaucracy, and unequal access to medical treatment—but not true in the single-payer model.
Here are a few of the real challenges some single-payer healthcare programs are facing…
1. Financial problems
In recent years, we have heard much about financial problems in single-payer programs. The United Kingdom has gone from having surpluses in the NHS to facing about 1 billion pound deficit (The Guardian, 2014). Canada has also faces rising healthcare costs that are putting a squeeze on their government-funded health program. Our own Medicare and Veteran’s Administration programs are facing financial challenges as well.
Rising costs are a challenge common to healthcare in general and not specific to single-payer programs. In the United States, Americans have seen their private medical insurance rates rise, and co-insurance payments of 30-50 percent have become the norm.
Healthcare is expensive, and no country has figured out a perfect model. But medical care is a service we need, and single-payer offers the most efficient, sustainable, and equitable way to pay for it.
2. Potentially longer wait times for elective medical procedures (but not for medical visits and urgent care)
Europeans and Canadians tend to have longer wait times than Americans for non-urgent, elective surgery, like knee and hip replacements. In Canada and the UK, for example, people may wait anywhere from a few weeks to 6 months for a hip or knee replacement (NYT, 2014). The longer wait times for elective surgery may be due to more people having access to these treatments in a universal program. But in the sense that there is “rationing” of care, it is based on need. Those with more urgent medical problems jump the line and go first, while those who can, may wait a few months for their procedures. There is rationing in the United States also—it is based on people’s ability to pay and not on medical needs.
For most medical needs, patients in countries with universal healthcare actually experience more timely access to medical care than Americans, not less. A survey of people in 11 developed countries (including countries in Europe, the U.S. and Canada), about their healthcare experiences showed that Americans have among the longest wait times for doctors’ visits when they are sick. Only Canada ranked worse than the United States in the 11-country survey commonwealth Fund Survey, 2013.
The United States has fewer physicians per capita than other industrial countries. According to the OECD, the U.S. had 2.4 practicing physicians per 1,000 people in 2010. The average OECD country had 3.1. The U.S. also lacks in the number of hospital beds, with 2.6 beds per 1,000 people, compared with an average of 3.4 beds in all OECD countries (pbs.org)
3. Trivial, and not so trivial single-payer complaints – Anecdotes from the British NHS
On a recent trip to England, I turned on the local TV news. The BBC was running a story about the cost of parking at hospitals for patients and visitors. People complained that having to spend a few pounds for parking was unnecessary and stressful. It was argued that the stress of having to pay for parking was detrimental to the health of patients and family members who were already coping with difficult health situations. In response to the complaints, the NHS has made parking at hospitals free or greatly reduced for certain groups of patients and visitors (The Guardian, 2014).
The difference between complaints from Americans and British citizens about their hospital bills is quite stark. British citizens expect more from their healthcare services than Americans do. Amazingly, Americans stoically put up with huge hospital fees. Even with the reforms put in place by the Affordable Care Act, a family can face thousands of dollars in co-insurance and deductibles for their hospital care, and can be stuck with up to $13,200 each year in out-of-pocket medical fees (in 2015). That is in addition to the thousands of dollars they pay in premiums for a health insurance policy. The fact that British citizens have the luxury to worry about small parking fees is credit to their generous, high quality, and affordable healthcare system.
But it is unfair to label all complaints by British citizens as trivial. The British have faced some serious issues, including decisions the NHS makes on treatments available to its citizens.
In the UK, for instance, the NHS does not have universal testing of pregnant women for strep B bacterial infections, even though the test and treatment cost very little. In rare instances, strep B infections during childbirth can be fatal to infants. In the United States, the strep B test is carried out universally among pregnant women, and antibiotics are administered routinely during childbirth to women carrying the bacteria. However, the NHS has determined that testing and treating large numbers of pregnant women with antibiotics is not justified when the risk to infants is rare. But, for families who have faced strep B complications with their babies, the NHS decision stings.
The controversy over treatment decisions is not unique to single-payer programs, though. It is reminiscent of the arguments Americans constantly have with their private insurance companies over which medications, tests, and treatments are covered. American insurance companies decide which treatments are effective and cost-efficient, often denying life-saving treatments to their members.
Adopting a Universal, Single-Payer System in the United States
Single-payer models only arose in the 20th century, so they are a fairly new idea. Most started during or after WWII. Single-payer health programs are not perfect, and countries continue to tweak their programs to make them better.
Single-payer healthcare has proven more successful than any other system, and would be an incredible improvement to the healthcare system in the United States. It allows for the most equitable, cost-effective and high-quality medical care available in the world.
A transition to a universal, single-payer system would be difficult in the United States, but it is possible. The most difficult challenge is political. Americans have been told many lies about the nature of healthcare programs in the United States and around the world, and there is an irrational distaste for anything that can be labeled as “socialism.” It will be an incredible challenge to adopt a healthcare program that goes against the interests of the powerful health insurance and pharmaceutical industries. And, transitioning from a multi- to a single-payer system would result in a loss of jobs in the health insurance and administration sectors.
Starting in 2017, the Affordable Care Act allows states to adopt single-payer healthcare on their own. Several state legislatures have already proposed referendums and bills for single payer healthcare, but all have failed so far. California, Hawaii, Illinois, Massachusetts, Minnesota, Montana, Oregon, Pennsylvania, and Vermont are among them. The state of Vermont came the closest with the legislature passing a single payer healthcare proposal in 2011. But in 2014, the state cancelled its plan, citing costs and taxes as an impediment.
With public support, states will begin to adopt single payer systems. Let’s support our states and give them the space they need to act boldly.