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Single-payer health care
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Single-payer health care is a term used in the United States to describe the payment of doctors, hospitals, and other health care providers from a single fund. It is often mentioned as one way to deliver universal health care. The administrator of the fund is usually the government. Australia's Medicare and Canada's Medicare system are examples of single-payer universal health care.
According to the National Library of Medicine's Medical Subject Headings (MeSH) thesaurus, a single-payer system is:
An approach to health care financing with only one source of money for paying health care providers.
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Encyclopedia
Single-payer health care is a term used in the United States to describe the payment of doctors, hospitals, and other health care providers from a single fund. It is often mentioned as one way to deliver universal health care. The administrator of the fund is usually the government. Australia's Medicare and Canada's Medicare system are examples of single-payer universal health care.
According to the National Library of Medicine's Medical Subject Headings (MeSH) thesaurus, a single-payer system is:
An approach to health care financing with only one source of money for paying health care providers. The scope may be national (the Canadian System), state-wide, or community-based. The payer may be a governmental unit or other entity such as an insurance company. The proposed advantages include administrative simplicity for patients and providers, and resulting significant savings in overhead costs.
Single-payer health care pays health professionals that are either in the private or public sector. It is also used to pay both privately and publicly owned health care facilities.
Single-payer is one alternative proposed for health care reform in the United States, and as such, has been the subject of active political debate for decades.
Method of implementation
In some countries, medical practitioners in private practice may receive a fixed fee for service according to a fixed tariff negotiated between the government and the medical profession. Some countries allow doctors to charge more than this (with the patient paying the extra or charging it to a top-up insurance). Some governments make their payment conditional on it being the only charge that the doctor can raise. Some governments may simply re-imburse the doctor's full bill, though this is rare because of the potential for fraudulent overcharging.
There are similar variations in hospital practice. In some countries, hospitals are publicly owned and therefore run to fixed budgets set by government. In others, a fee for service may apply. Many countries allow private and public hospitals to operate side by side and compete with each other. Often (e.g. in Australia or Finland), the cost of using of private medical facilities is often not fully compensated by government, but is heavily subsidized nevertheless.
In Taiwan, every eligible resident has an electronic medical card which gives the doctor, whether in hospital or at a clinic, access to electronic medical records and is also needed for the doctor to reclaim from the government, the cost of services delivered to the patient. This gives the patient control over access to his medical records and limits the potential for fraudulent over-claiming.
Intent
Those advocating the introduction of single payer health care in the United States do so on several grounds most of which address problems that are seen to be inherent in the current system where there are multiple insurers.
- Lower administrative costs
Proponents of health care reform argue that moving to a single-payer system would reallocate the money currently wasted on the administrative overhead required to run the hundreds of insurance companies in the U.S. An often-cited study by Harvard Medical School and the Canadian Institute for Health Information determined that some 30 percent of U.S. health care dollars, or more than $1,000 per person per year, went to health care administrative costs. Insurance companies dispute this figure, citing an industry average of 15 percent within their industry for administrative expenses and profits. However, health care providers must also absorb the cost of staff time for dealing with the insurance companies, which adds to the cost of the insurance-based system. Some countries such as Taiwan have introduced Single Payer system in which the entire cost rebate system absorbs less than 2 per cent of health care costs.
- Avoid problems of moral hazard
Moral hazard arises when an individual or institution does not bear the full consequences of its actions, and therefore has a tendency to act less carefully than it otherwise would, leaving another party to bear some responsibility for the consequences of those actions. In the medical sphere, medical practitioners are sometimes accused of using the insured person's medical insurance to insure themselves against medical malpractice by doing more tests than are strictly necessary. This increases the overall cost of health insurance. Some insured people may ask an insurance provider to pay for the cost of medical treatment that they would not have chosen to pay for themselves. Some medical providers, keen to recoup their investment on medical technologies such as medical scanners, may recoup their investment by recommending scans which may not be strictly necessary. Forms of cost sharing such as co-insurance, co-payments, and deductibles are intended to reduce the risk of moral hazard by increasing the out-of-pocket spending of consumers thus giving the insured person a financial incentive to avoid making a claim. But they also effectively reduce the value of the insurance policy to the insured. Physician and health economist Edith Rasell has reviewed the literature on cost sharing and found that it reduces necessary care, discourages use of preventative services and has a negative effect on health outcomes, especially among the sick and poor. She concluded that overutilization is insignificant as a cost driver: far more important are huge levels of administrative waste, inefficient delivery of services and the United States’ comparatively high level of costly, high tech procedures .
Others would point out that consuming health care is also not really akin to other types of consumer behaviour because it has a negative utility of consumption. A person who consumes more health care is not fundamentally better off than a person who consumes less. An examination of health care consumption in Winnipeg, Canada, where there is a single payer health care system did not find that escalating health care costs there were exacerbated by patients facing no costs when they visit doctors or use hospital services. It found that those incurring high health care costs are sick by every measure used. These high-cost users were drawn from every neighbourhood and every socioeconomic group, and their health care expenditures were driven by hospital costs
- Avoid problems associated with medical underwriting - premium loading, caps and exclusions
When there are multiple insurers competing for business, medical underwriting protects insurers from adverse selection. Medical underwriters scrutinize applications for health care and apply differential conditions to policies according to the risk associated with the individual. Competing private health insurers naturally seek to attract young and healthy patients whilst simultaneously seeking to avoid or price out the sick and elderly. These processes go against the general principle of health insurance which is that the healthy pay for the health care needs of the sick and that persons pay into insurance when they are young so that they can be assured of receiving health care when they are old. Some call this process "cherry picking" A single payer insurer would not be faced with the competititve pressures to engage in medical underwriting practices which negate the benefit of insurance. With single-payer, the entire population would insure itself, ensuring that the costs of meeting the medical insurance of the sick was paid for by the healthy and that the young would be compelled to contribute to an insurance scheme at a rate that ensures that the care they may need when they become old will be available to them.
- Introduce Universal health care
Nearly 45 million Americans, about 15 percent of the population, lacked health insurance in 2005. The lack of universal coverage contributes to another flaw in the current U.S. health care system: on most dimensions of performance, it underperforms relative to other industrialized countries. In a 2007 comparison by the Commonwealth Fund of health care in the U.S. with that of Germany, Britain, Australia, New Zealand, and Canada, the U.S. ranked last on measures of quality, access, efficiency, equity, and outcomes.
- Avoid medical bankruptices
A recent Harvard University study found that medical bills are a leading cause of bankruptcy in the United States. The study found that many declaring bankruptcy were part of the middle class and were employed before they became ill, but had lost their health insurance by the time they declared bankruptcy. In the U.S., people leaving a job can continue with their former employer's health insurance plan under the COBRA but usually at a rate that is double what the employee paid while employed, and only for a limited time. When an employer-insured person loses a job due to illness and does not have sufficient resources to continue to pay for COBRA health insurance, they also lose their health insurance coverage. A single payer system, it is argued, would avoid medical bankruptcy, which is almost unknown in other advanced western industrial countries.
- Encourage preventative medicine
People often discover that although their doctors recommend screening and other forms of prevention, they find that their insurance company does not reimburse the cost of the procedure. Some have argued that it is not in the interests of the insurer to go looking for problems that could result in a medical claim which, if delayed until the problem becomes serious, would most likely fall upon a different insurer. A single insurer however would be incentivized to discover problems earlier because they will be cheaper to deal with in the long run if the cost of screening is cost effective.
Proponents and support
Physicians for a National Health Program the American Medical Student Association and the California Nurses Association are among those that have called for the introduction of a single payer health care program. In Congress, Rep. John Conyers, Jr. (D-MI) has repeatedly introduced The United States National Health Insurance Act (HR 676). As of August 2008, HR 676 had 91 co-sponsors.
The issue has often been debated, most recently in the 2008 presidential elections, and there are signs that the American public has warmed to the idea. A CBS News/New York Times poll published in February 2009 reported that 59% say the government should provide national health insurance (up from 40% thirty years earlier)
Types and variations
The United States, Canada and Australia have single-payer health insurance programs named Medicare; however, Australia's and Canada's programs provide universal health care, while U.S. Medicare is only for senior citizens and some of the disabled. Government is increasingly involved in U.S. health care spending, paying about 45 percent of the $2.2 trillion the nation spent on medical care in 2004.
According to Princeton University health economist Uwe E. Reinhardt, Medicare, Medicaid, and SCHIP represent "forms of 'social insurance' coupled with a largely private health-care delivery system" rather than forms of "socialized medicine." In contrast, he describes the Veterans Administration healthcare system as a pure form of socialized medicine because it is "owned, operated and financed by government."
The Veterans Administration is a single-payer system and provides excellent quality, said Reinhardt. In a peer-reviewed paper published in the Annals of Internal Medicine, researchers of the RAND Corp. reported that the quality of care received by Veterans Administration patients scored significantly higher overall than did comparable metrics for patients in the rest of the U.S. health system.
Some writers describe publicly administered health care systems as "single-payer plans." Some writers have described any system of health care which intends to cover the entire population, such as voucher plans, as "single-payer plans," although this is an uncommon usage.
Canada
Canada's system is an example of single-payer health care. The national government provides part of the funding, provincial governments manage the hospitals (and provide the brunt of the funding), and doctors in private practice contract with the government for fee-for-service payments. Many Canadian citizens have supplemental health insurance, which covers expenses not covered by Canadian Medicare. Fees for doctors, hospitals and other providers are set by negotiations among doctors' associations, provincial or regional governments, and the national government. Global budgets eliminate the cost of billing individually for huge numbers of products and services.
The provision of health care in Canada is done mostly via private practitioners, although most hospitals are public. Patients may go to any doctor or hospital in the country.
United States
Physicians for a National Health Program (PNHP) supports a single-payer system which would be an expanded and improved version of U.S. Medicare, and would cover every American for all necessary medical care. In 2007, The American College of Physicians, the second largest group of physicians in the USA, called for legally mandated coverage of all Americans and urged lawmakers to consider a single payer system as one option for achieving that goal. The American Medical Student Association also supports single-payer.
In Congress, Rep. John Conyers, Jr. (D-MI) has introduced the United States National Health Insurance Act (HR 676).
Converting to a single-payer system is seen by proponents as a solution to the flaws in the current U.S. system. The U.S. health care system is the most expensive in the world on both a per-capita basis and as a percentage of GDP. Despite this expenditure, the current U.S. system fails to provide universal coverage. More than 45 million Americans, about 15 percent of the population, lacked health insurance in 2007. The lack of universal coverage contributes to another flaw in the current U.S. health care system: on most dimensions of performance, it under performs relative to other industrialized countries. In a 2007 comparison by the Commonwealth Fund of health care in the U.S. with that of Germany, Britain, Australia, New Zealand, and Canada, the U.S. ranked last on measures of quality, access, efficiency, equity, and outcomes.
The U.S. ranks 42nd in the world for low infant mortality 46th in life expectancy, between Cyprus and Denmark, and 37th in health system performance, between Costa Rica and Slovenia.
The U.S. system is often compared with that of its northern neighbor, Canada (see Canadian and American health care systems compared). Canada's system is largely publicly funded. In 2005, Americans spent an estimated US$6,401 per capita on health care, while Canadians spent US$3,326. This amounted to 15.3% of U.S GDP in that year, while Canada spent 9.8% of GDP on health care.
A 2007 review of all studies comparing health outcomes in Canada and the U.S. found that "health outcomes may be superior in patients cared for in Canada versus the United States, but differences are not consistent."
Advocates say that a U.S. single-payer health care system would provide universal coverage, give patients free choice of providers and hospitals, and guarantee comprehensive coverage and equal access for all medically necessary procedures, without increasing overall spending. Shifting to a single-payer system would eliminate oversight by managed care reviewers, restoring the traditional doctor-patient relationship.
State proposals
California's Legislature has twice passed a state-level single payer bill, SB-840, "The California Universal Healthcare Act" (authored by Sheila Kuehl), in 2006 and again in 2008. Both times, Governor Arnold Schwarzenegger vetoed the bill. State Senator Mark Leno plans to introduce The California Universal Healthcare Act again, in 2009. In April 2008, the Illinois House of Representatives' Health Availability Access Committee passed the single-payer bill HB 311, "The Health Care for All Illinois Act," favorably out of committee by an 8-4 vote.
Several single-payer referendums have been proposed at the state level, but so far all have failed to pass: California in 1994, Massachusetts in 2000, and Oregon in 2002.
Opponents and criticisms
Several criticisms have been leveled against the idea of changing the U.S. health care system to a single-payer system. Some proponents argue that perhaps the largest obstacle is a lack of political will. While polling data indicate that U.S. citizens are concerned about health care costs and think the system needs reform (see Polls, below) most are generally satisfied with the quality of their own health care. According to a Joint Canada/United States Survey of Health in 2003, 86.9% of Americans reported being "satisfied" or "very satisfied" with their health care services, compared to 83.2% of Canadians. In the same study, 93.6% of Americans reported being "satisfed" or "very satisfied" with their physician services, compared to 91.5% of Canadians.
Some medical researchers say that patient satisfaction surveys are a poor way to evaluate medical care. Researchers at the RAND Corporation and the Department of Veterans Affairs asked 236 elderly patients at 2 managed care plans to rate their care, then examined care in medical records, as reported in Annals of Internal Medicine. There was no correlation. "Patient ratings of health care are easy to obtain and report, but do not accurately measure the technical quality of medical care," said John T. Chang, UCLA, lead author. It should also be pointed out that according to the above Joint Canada/United States Survey of Health in 2003 (a telephone survey of households, using randomly dialed land lines), "approximately 11% of Americans do not have health insurance." However, the US Census Bureau reported a far larger number of Americans, 15.7%, as not having health insurance during the same time period.
For this reason, some U.S. reformers argue for other, more incremental changes to achieve universal health care, such as tax credits or vouchers. However, supporters of a single-payer system, such as Marcia Angell, M.D., former editor of the New England Journal of Medicine, assert that incremental changes in a free-market system are "doomed to fail."
Leif Wellington Haase argues that converting to a single-payer system could be a radical change and might create administrative chaos.
An opinion piece in The Wall Street Journal by two conservative Republicans argues that government sponsored health care will legitimatize support for government services generally, and make an activist government acceptable. "Once a large number of citizens get their health care from the state, it dramatically alters their attachment to government. Every time a tax cut is proposed, the guardians of the new medical-welfare state will argue that tax cuts would come at the expense of health care -- an argument that would resonate with middle-class families entirely dependent on the government for access to doctors and hospitals."
See also
External links
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- . A nonprofit advocacy group for single-payer healthcare.
- Republicans who support single-payer healthcare.
- on Sept. 8, 2008 in Sacramento, California.
- . Hidden costs, value lost: uninsurance in America. Washington, DC: National Academies Press, 2003. Frequently-cited source.
- Corporate-funded free-market think tank opposed to single payer health insurance.
- . Advocates for single-payer system. Extensive source material from peer-reviewed journals.
- Advocates for single-payer system.
- from Frontline, PBS.
- . An independent/unaffiliated central clearing house of information (groups, legislation, etc.), for single-payer.
- , The Henry J. Kaiser Family Foundation.
- by Phillip Boffey. Editorial on U.S. "socialized medicine" in the military, the Veterans Health Administration, and Medicare, The New York Times, September 28, 2007.
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