This column discusses another controversial national health care question: Whether a single-payer health care system makes sense.
A single-payer system involves the government controlling and financing the delivery of health-care services. Health-care services are centrally planned by the government and are typically funded through taxes.
Michael Moore, quoted in a recent Washington Post article, stated that Obamacare is awful because it “is a pro-insurance-industry plan implemented by a president who knew in his heart that a single-payer, Medicare-for-all model was the true way to go.”
In a single-payer system, the price for health-care delivery is set by the government. These price controls effectively ration medical care by allocating resources based on government mandate.
Consequently, resources are frequently misallocated. The services provided do not keep pace with changes to health-care delivery in an extremely dynamic environment.
The Veterans Administration is an example of a single-payer system that has failed to keep pace with the times.
My neighbor, whose politics are to the left of center, visited France a few years ago when France was considered to have the highest quality health care in Europe. He maintains that, based on France’s experience, we should move to a single-payer system.
In recent years, however, France’s single-payer system has had difficulty dealing with demographic changes and new methods of service delivery. It is now considered the 11th best European health-care system in terms of quality.
Britain, another nation with a single-payer system, has among the lowest- cost health care in Europe, but its health-care infrastructure is showing its age and is experiencing difficulties adapting to changes in the delivery of health-care services.
Quoted in the Jan. 20, 2015, edition of the London Daily Mail, the medical director of England’s National Health Service, Professor Sir Bruce Keogh said, “If the NHS continues to function as it does now, it’s going to really struggle to cope because the model of delivery and service that we have at the moment is not fit for the future.”
Populations are aging while technology is changing the way health-care services are delivered, both from a quality and an efficiency perspective. Do we really want to be constrained by a government bureaucracy lacking the agility needed to keep pace with coming changes?
Physicians for a National Health Program, a physicians’ activist group seeking to implement a single-payer system, agrees with Michael Moore that insurance companies are raping the American health-care consumer.
They maintain that the profits of insurance companies can be eliminated in a single-payer system, resulting in savings that are passed on to consumers.
Michael Moore decries the fact that we pay insurance companies more than $100 million annually, ignoring the fact that insurance companies have relatively low profit margins of about 2.2 percent.
The real profits go to pharmaceuticals and medical equipment manufacturers who earn profit margins of 19 percent and 16 percent, respectively.
According to the website medicfootprints.org, American doctors earn 35 percent more than their European counterparts in countries with single-payer systems. That is why I am surprised that so many doctors seem to favor a single-payer system.
Several European countries, most recently Sweden, are beginning to allow privatization to creep into their systems. Sweden’s single-payer system is like a gigantic HMO providing low-cost services through a restricted network of providers.
Many non-essential services are delayed until they are funded. Swedes who purchase a private policy get a PPO-type arrangement which moves them to the head of the line in a larger provider network.
The private policies allow an element of free market resulting in a reallocation of resources to keep pace with changes in demand and new service delivery platforms.
Rebutting Michael Moore’s arguments about the rapacious nature of insurance companies requires an understanding of how Obamacare-like systems have worked in other countries. In those countries, the needs of all stakeholders are balanced. Insurance companies compete in a single risk pool across the entire population.
Furthermore, insurance companies collectively negotiate with providers to obtain more cost-effective pricing. Providers then are forced to increase efficiency to maintain profit margins.
Lower costs need to be passed on to the consumer so that the profits are not merely shifted from providers to insurance companies. The government’s role is to see that the consumer is protected, just like our government regulates utilities.
Other countries have demonstrated that properly structured health-care delivery systems afford a better alternative than do single-payer systems.
Jim de Bree is a retired CPA who lives in Valencia. This is the third in a series of columns by the author on health care.