If the Question Relates to Efficient and Equitable Health Policy Reform, Single Payer is Not the Answer

Advocates for a single payer health insurance plan, such as the Physicians for a National Health Program, have been making their case for decades. In the United States, one version has been characterized as “Medicare for All.” In recent months, respected authorities such as New York Times columnists Thomas Friedman and Nicholas Kristof, as well as Nobel economist Angus Deaton, have joined the group of advocates. Friedman devotes only one paragraph of his most recent 453 page book (Thank You for Being Late) to his argument, which consists of stating that it works for Canada, Australia, and Sweden. In one sentence in his July 27, 2017 New York Times op-ed contribution, Kristof opines that our inability to have universal coverage means that “we urgently need a single-payer universal health care system along the lines of Medicare for all.” In a March 6th speech to the National Association of Business Economists, Angus Deaton argues that “he favors a single-payer health system only because our current part-private and part-public system is exquisitely designed to give opportunities for rent-seeking.” Rent seekers do not add value; they use a variety of means to transfer income to themselves without increasing income in the aggregate and, much of time, such behavior actually leads to reduced income whether it be at the community, state, or national levels.
In this posting, I seek to address the concerns that underlay the above statements regarding our national health policy rather than analyze single payer per se. Clearly, many people are frustrated with the inability of the United States to design and implement a coherent and cost-effective set of policies and programs that meet what some call the “triple aim”: improving the health care experience, improving the health of the population, and reducing the cost of health care. In a previous posting , I argued that a shared value bi-partisan solution with the following principles exists:
1. People should have reasonable access to both affordable insurance and medical care.
2. Insurance policies cannot exclude enrollees due to any pre-existing conditions.
3. Medical care expenditure growth must be brought closer to the growth rate in the economy (the $ value of the gross domestic product.)
4. A competitive non-group health insurance market should be made viable.
5. People should be able to choose a health plan that matches their preferences and budget given “appropriate” public funding support.
Advocates of single payer insurance do not value the fourth and fifth points; however, a broad political consensus necessary for a sustainable solution in the United States believes that competition and choice are important principles. In a February 27, 2017 Viewpoint in JAMA, Regina Herzlinger and her co-authors argue that many countries including Germany, Singapore, and Switzerland have achieved universal coverage as well as improved population health and patient satisfaction without implementing a single insurance plan for all approach. Two ingredients are essential for health plans to best serve diverse populations: 1) a competitive, community-rated, non-group insurance market with one set of rules including no opportunity for competitors to select the people and health risks they want and 2) mandatory purchase with default enrollment and payment for those who do not actively select and pay for a plan. Of course, appropriate subsidies would be provided to those deemed not to have the ability to pay the designated premiums and co-pays.
In a May 11, 2017 posting on the Health Affairs blog, Billy Wynne, former health policy counsel to the U.S. Senate Finance Committee, proposed a “Medicare for All” approach that might also meet the above stated principles. His proposal is based on the Medicare Advantage program, which presently enrolls roughly one-third of all Medicare recipients, in which insurance companies compete for enrollees. Funding for Medicare Parts A and B forms the base payment for each enrollee with additional payment by the enrollee required to secure those plans with the most comprehensive benefits.
In short, there exist a variety of ways to meet the shared values objectives identified above. Polar solutions including those posited in the American Health Care Act (passed by the House of Representative in April 2017) and its variants proposed by Senate Republicans as well as single payer plans along the lines of traditional Medicare do not; thus, they do not offer a sustainable solution to our complex health care needs.

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