A column by Joe Flower in Hospitals and Health Networks Online laying out “eight solid, conservative, good-for-business reasons” for single-payer healthcare.
1. Transaction costs. 25-30% of healthcare dollars are spent paying keyboarders to parse out who owes what; meanwhile insurers randomly and routinely deny payments for legitimate covered services.
2. Employer funding. Why should employers pay for health care? There is no compelling, rational connection between employers and health care justifying putting the burden on employers.
3. The basic idea of insurance. The idea of insurance is to manage risk. The larger your pool, the more manageable the risk. With our current system, insurers can cherry-pick the healthiest and wealthiest, taking their premiums, leaving hospitals (and government) to pick up the tab for the sickest and poorest without much in the way of compensating premiums.
4. Value. “Costs and charges vary widely and
nonsensically, with no demonstrable connection to mortality rates or
other outcome measures. A single-payer system would at least be a
system, and might be able to get a handle on the wastelands of
profligacy hidden in those statistical variations.”
5. Risk cost of receivables. I don’t know what that phrase means, but the explanation makes sense. Trying to recover debts through liens, bankruptcy, and collection agencies is cruel, but more than that, it’s inefficient. Providing for everyone upfront is more cost effective.
6. Service quality. Service quality under our current system stinks. People think that “single payer” will lead to Soviet-style bureaucracy with obscure and arbitrary rules. Guess what? That’s what we have now. Mr. Flower suggests that single payer will lead to greater transparency, real competition, and better service quality.
7. Efficiency. Under the current system, we have people using emergency rooms to treat colds.
8. Patriotism. It’s hard to love a country that makes people choose between food, rent, and fuel oil versus cancer treatement, for example.
Sold!
I have gone from feeling that public health care was a good idea, but unmanageable (10 years ago) to lately feeling more like it is the only way. I am even more convinced.
Mr. Flower seems to me to be mixing two issues:(1) should employers carry health care costs; and (2) should there be a single payer system. Both these topics would be well worth careful consideration, particularly in Indiana where Delphi and General Motors have long been major employers and on which, directly or indirectly, a substantial number of retirees in this state depend.
In part because federal law made it attractive, and it was a cheap way to buy labor peace, employers undertook paying health insurance for employees (fully deductable to the company, with the value not included in employee income for tax purposes). In the 1950’s, with the auto industry growing and the costs a long way off, it was the easy path to take (sort of like the toll road, the loss of income is a long way off). The UAW fully bought into this idea, and its leadership fully understood it, but expected that the American auto industry would never be seriously challenged by imports. But the employer funded health insurance system operates as a time bomb for every industry in this country as it matures (that is when employment growth stops or reverses and the “Ponsi” aspect of paying for the first in from the work of the last in begans to dry up). The eventual escape route is bankruptcy reorganization. I think the economics of this sort of federal sponsored, private sector, half socialized medicine is breaking down and the final break down will hit the midwest particularly hard. I call it half socialized because that is, what in effect, has happened. The demand side, at least for the employed, has operated as though health care was a free good.
I am not sure of an answer in this area, but I would start with a careful study of the German system (which the Clintons claimed their proposal in the early 1990’s was based on, a conclusion I disagreed with). I am wary of the Canadian model because, in large part, I think the Canadian model relies on the U.S. as a fall back when they get into trouble.