A reader called to ask if I could explain “Single Payer”, so here goes!
In its simplest form, single payer refers to the financing of health care. Typically this means that there is only one party that pays for all health care expenses and it is usually a government entity. All of the expenses are financed or paid by this single entity. A government’s ability to tax the members to collect funds to pay for expenses allows unrestricted funding. In other words, the participant contributions are not voluntary.
The delivery system refers to doctors, hospitals, and pharmacies etc. who deliver care to the patient. They are paid by the financing system. The quality of the delivery system or actual health care, may or may not be related to the financing.
If the system also has a private funding component, then it is a hybrid system.
We often think of Canada as a “single payer” system. Most Canadians who live in a specific region have the same base benefit plan and it is funded by taxes. It is subject to a sliding scale based on income. Using private insurance for public services is illegal in several provinces. In 2015, private insurance accounted for only about 12% of the nation’s health care spending. But since there is some private funding, it is technically a hybrid system.
Critics say that the Canadian system, called Medicare, is fine for primary care, but is left wanting when it comes to specialty care and elective surgeries. The government actually publishes the wait times for services. A quick look at knee replacements shows 7172 cases waiting, 50% of the cases completed in 29 weeks and 90% in 59 weeks.
In the US, we have multiple financing systems. The closest to the Canadian system is our Medicare program. Taxes are collected from individuals and businesses to finance the basic benefits. There is also a private component wherein individuals pay for a portion of the Part D Rx plan and may purchase supplemental coverage to fill in the gaps.
The VA is a full single payer system. All of the benefits are funded by taxes. For the most part, all the providers are government employees..
President Trump recently commented that Australia has” superior health care”. Aussies have had a “Medicare for all” program since 1984. It is funded by a 1.5% income tax, but also allows for private insurance to be purchased. There is a penalty for opting out of the government plan.
Aussies can choose to be treated at a public hospital for free or private hospital and pay 25% of the bill.. Australia is protective of its system. When my brother moved there, he had to prove to the government that his epileptic daughter would not be a burden to the state before he was allowed to emigrate.
One argument in favor of a single payer system, if only for the basic benefits, is simplicity. With this approach, if you are knocked over by a car door opening in my office parking lot, you simply go to the doctor and pay your copay. No need to look at your employer’s health plan, my office liability coverage, the driver’s auto coverage or your workers compensation policy if you were here on a work related errand. You don’t have to worry about the provider being in your network.
There were many accusations that the Affordable Care Act (ACA, also known as Obamacare) was an attempt at single payer. Nothing could be further from the truth. It was designed to be a hybrid system that provided a safety net for the poor (under 400% of Federal Poverty Level) as well as strive for Universal Coverage.
Universal Coverage means just that: everyone has coverage. This approach is based on a value set that believes basic health care is a right for all. That was the goal of the ACA. But its design was set firmly in the commercial insurance market.
In contrast it appears that California SB562 if passed, would create a single payer system in California. My understanding of this bill tells me to vote “no”. In my opinion, to attempt to overhaul the system for just one state, especially as proposed in SB 562 is financial suicide. . According to Michael Lujan of Limelight Health and former Blue Shield executive, “The last time a fully-defined single-payer bill was scored in California, it showed that even after the massive payroll tax increases proposed, the funding for the law was still $40 billion short, which effectively ended debate on that bill. CA Gov. Jerry Brown expressed skepticism in the state’s ability to fund the current plan.”
Again I must state, controlling health insurance premiums can only be done by reducing health care costs- a topic we will continue to discuss in this column.