Plan B Forum

The elephant in the room:

The single-payer debate we should be having
by Matthew Yglesias | January 15, 2016

Bernie Sanders's argument in favor of single-payer health care is pretty simple.

"The United States is the only major nation in the industrialized world that does not guarantee health care as a right to its people," Sanders said at a 2015 rally of the National Nurses Union, one of the leading advocacy groups in favor of moving to a Medicare-for-all approach. "Meanwhile, we spend far more per capita on health care with worse results than other countries. It is time that we bring about a fundamental transformation of the American health care system."

Hillary Clinton's campaign has sought to counter the appeal of this proposition with a questionable line of attack, arguing that the election of a Democratic president on a Medicare-for-all platform would somehow help Republicans unwind the existing Affordable Care Act and other aspects of insurance provision.

Alternately, she has (accurately) noted that a universal Medicare system would require higher taxes — only to be met with the counter that a universal Medicare system would involve less overall spending.

On this, too, Sanders is right. Medicare manages to finance patients' health care at dramatically lower per-person rates — just as foreign countries do — so if Medicare covered everyone, total spending would decline even as some of it was shifted to the tax side of the ledger.

The real issue is something else entirely. Single-payer systems save money by squeezing health care providers — doctors, hospitals, and ultimately everyone who works for them — which would be very difficult to accomplish ex post facto. If the political consensus did exist for enacting large, across-the-board cuts in doctors' fees and hospital charges, then there would be no need to shift to a single-payer system in order to accomplish the cuts. In the absence of such a consensus, the switch to single-payer actually wouldn't save money, and the costs would become exorbitant.

This doesn't mean single-payer advocates are wrong that such a system would be a good idea. But it does mean that their current rhetoric totally evades a central issue — should the federal government massively slash payments to health care providers, and how on earth do they plan on winning the political fight to make that happen?

Medicare works because it pays providers less

Single-payer skeptics tend to be simply incredulous that government-run systems, both in the United States and abroad, are more cost-effective. Isn't the government a legendary cesspool of waste and inefficiency? Why would a government-run system be more efficient?

Well, here's the answer: Foreign single-payer systems pay doctors less. They also pay pharmaceutical companies less. They pay less for medical devices, too.

It turns out that Medicare uses this trick, too, offering doctors only about 80 percent of what private insurance plans pay them.

The downside to Medicare paying just $426 on average for a colonoscopy when private plans offer $639 is that as a result, some doctors refuse to see Medicare patients. This is particularly something you see in large, dense, rich cities like New York or Boston where medical practices that can manage to get themselves written up on magazine "Best Doctors" lists can afford to be choosy about their patients.

But to the average health care provider, the Medicare patient market is just too big to ditch. Doctors — and hospitals and everyone else — take what they get and are glad for it.

A single-payer structure is neither necessary nor sufficient

The thing about saving money by having a single health care payer squeeze providers on reimbursement rates is that adopting a single-payer structure is neither necessary nor sufficient to achieve the gains. In other words, if the American political system wanted to cut doctors' payments, we could do that without moving to a single-payer system. Conversely, adopting a single-payer system does not on its own lead to low reimbursement rates — that's a separate decision that the political system would have to make.

The term for regulating the fees charged by doctors, hospitals, and others in a multi-payer setting is called all-payer rate setting, and it's a pretty good idea.

The problem, politically speaking, is that doctors and hospital administrators like money. When politicians try to take away their money, they complain and they lobby. And it turns out that most people have more confidence in doctors than they do in members of Congress, so not only does the lobbying cash count but the complaining is extremely effective.

On sufficiency, consider the case of prescription drugs. Medicare pays lower prices on virtually everything it buys than do private insurance plans. The big exception is prescription drugs, where Medicare is required by law to pay the open market rate. Lots of liberals (including Bernie Sanders) don't like this and have proposed changing it. But they haven't won the fight. And the case of Medicare's prescription drug program should be a cautionary tale to anyone who thinks adopting a single-payer model somehow automatically leads to cost savings.

The truth is that there are two entirely separate questions: Who pays health insurance claims, and what prices does the government set? It's true that shifting from a multi-payer to a single-payer system streamlines some elements of payment administration, but the overwhelming preponderance of the cost savings in a Medicare-for-all plan comes from the lower reimbursement rates.

To get single-payer, liberals have to be more honest with themselves

In policy terms, the Sanders-Clinton dust-up over Medicare for all is pretty clearly meaningless. Whether Sanders or Clinton sits in the White House, Congress isn't going to enact a Medicare-for-all bill. And whether Sanders or Clinton or Ted Cruz or Donald Trump or whoever else sits in the White House, liberals aren't going to stop fighting for one.

But if they ever want to get such a bill passed, liberals are going to have to start being more honest with themselves about what their vision entails — a sharp 20 percent cut in doctors' pay rates, alongside comparable cuts for other kinds of health care providers.

This is not an unreasonable thing to fight for. American doctors are paid much more than foreign doctors, and the foreign ones seem to treat illness just fine. But it's a tough, down-and-dirty fight with some very powerful and very well-respected interest groups.

That's why cautious, pragmatism-oriented politicians like Clinton don't want to embrace it. An oddball senator or House member here and there is no big deal, but a major party presidential nominee running on a single-payer platform would run into a buzzsaw of opposition from the American Medical Association and other health care providers.

Right now, Sanders and other single-payer proponents' main strategy for dealing with this problem is to talk around it. Medicare is extremely popular, so "Medicare for all" is a popular slogan, and that's what they talk about. But you can't get major policy change enacted on this basis. At some point, to get the savings of their dreams liberals are going to need to win a straightforward argument over the merits of cutting doctors' pay.

But in my experience, relatively few rank-and-file single-payer proponents are even aware that stingy reimbursements is how single-payer controls costs — in part because essentially none of the movement's leaders ever say it publicly.

That article does a good job of describing the trade-offs with single payer and the key political dynamics. I would just add that the reason Medicare and Medicaid can get away with low reimbursement rates now is their cost shifting -- most providers offset the low payments with much higher private plan payments.

Single-payer: an honest debate?

If we're going to have an "honest debate" about "single-payer" then perhaps we should start with being "honest" about the meaning of the euphemism, "single-payer"...(or the even more disingenuous, "Medicare for all"...)

It stands for "socialized medicine"....

But since the phrase "socialized medicine" is very unpopular with most folks in this country, we get the phrase, "single-payer" (though we all know that the "single payer" is the federal government; ie, the "American taxpayer"...)

All of that having been said...

There was a case to be made for socialized medicine; but its proponents failed to make it...

In 2008, in the depths of the recession, socialized medicine (or if you prefer the euphemism "single payer") could have been sold as a pro-business stimulus...

Take the cost of providing health insurance out of the equation for private businesses large, medium, and small... free up that capitol for growth investment...what a huge stimulus to the economy that would have been...

Hell, if they'd taken that approach, even the US Chamber Of Commerce might have supported it...

But the only public person (that I'm aware of) who actually "got" that argument was Bill Maher...

And he presented it as "Republicans should make this argument"...

But why should Republicans have made that argument? Republicans oppose socialized medicine...

The proponents of "single-payer" should have made that argument, and they should have made it vigorously...

But they didn't, because frankly, they don't care much for private business; anything that would benefit private enterprise they find morally odious and repellent....

They couldn't "lower" themselves to make that fairly persuasive practical argument; they preferred instead to take the unpersuasive "high ground" role of moral scolds...

Which made them feel good about themselves, but didn't actually accomplish anything....

Long Run wrote:That article does a good job of describing the trade-offs with single payer and the key political dynamics. I would just add that the reason Medicare and Medicaid can get away with low reimbursement rates now is their cost shifting -- most providers offset the low payments with much higher private plan payments.

And if it were illegal to charge more than the single payer rate, then such cost shifting would not occur, health care providers would be forced to suck it up, and health care would be much cheaper overall.

I know that what I am saying means the government going to war with doctors, probably including doctors going on strike, etc. It has happened many times before, in many jurisdictions where single payer has been enacted, and the government always wins in the end.

Meanwhile, we spend far more per capita on health care with worse results than other countries.

I don't doubt the first part about spending more. I have doubts that US health care produces "worse results", as claimed. Is there some hard information about that?

If "worse results" means "a lot of people don't have health care insurance" then that's obviously true. A socialized system covers everybody - a private system covers only those who can pay for it.

If "worse results" means that medical care is less effective - worse treatment; poor hygiene standards and so on - then I think there should be some explanation with yer ackchewal statistics, innit?

I am at heart very Libertarian EXCEPT on the single payer issue where I am completely a socialist.

The waste and cheating I see daily lends me to believe we could easily provide universal health care.

What makes you think that universal health care produces:

Less waste and cheating?

Better health outcomes?

Better management?

I clearly didn't say it wouldn't. Want to reread what I did say?

TPFKA@W wrote:I clearly didn't say it wouldn't. Want to reread what I did say?

I know you didn't say it wouldn't.... does that double negative mean you did say it would?

Aww, your first lover's quarrel...

How cute...

single payer eliminates the bloodsucking health insurers.

I m with @W, except that I am a small I independent, not libertarian.

...and an honest debate? not bloody likely with Hillary on the stage.

I think TPK@W , has a better perspective than you, meade, seeing as how she does healthcare for a living.

how do the other nurses and doctors feel, @W?

Having worked in health care since 1982, I can honestly say single payer is the way to go. All civilised countries have it.

...and Australia. Can't forget that.

Lord Jim wrote:If we're going to have an "honest debate" about "single-payer" then perhaps we should start with being "honest" about the meaning of the euphemism, "single-payer"...(or the even more disingenuous, "Medicare for all"...)

It stands for "socialized medicine"....

No...if anything is being "socialized" it would be insurance, not medicine. Socialized medicine would be what exists in the UK as the NHS. And if "Medicare for all" is disingenuous, does that mean you think the term "Medicare" is disingenuous? (Yeah, I know you, personally, would prefer to use the term "Evil Communist Medical Slavery", but...) And while we're at it, I think you're also a little unclear about what the word "euphemism" actually means.

Throwing in an emotionally loaded and poorly defined term like "socialist" to describe what almost every other nation calls simply "health care" adds nothing to the discussion or to anyone's understanding of what's being discussed. At least most Americans (sorry, Meade--USAsians) have a much better idea of what "Medicare" means than of what "socialism" means.

Anyway, the point of the article wasn't to discuss the terminology but rather to bring up the trade-offs involved, regardless of what you call it. I would have thought that you and other conservatives would appreciate the fact that somebody (let alone a "liberal" website like vox.com) was pointing out that "A single-payer structure is neither necessary nor sufficient" to bring down the cost of health care. Do you agree with that statement, or not? Isn't that worth discussing, especially since so many (especially, but not exclusively, on the left) seem to think that "single-payer" (or whatever you want to call it) would be a panacea?

(Yeah, I know you, personally, would prefer to use the term "Evil Communist Medical Slavery")

Yet another example of the "Trumpization" of political discourse...

yeah, like they didn t demonize you before trump came along.....

It was a joke for heaven's sake...

Here, have some smilies:






ETA: you mean that's NOT your preferred term for Medicare???

Econoline wrote:It was a joke for heaven's sake...

Here, have some smilies:




ETA: you mean that's NOT your preferred term for Medicare???

Ahh, now after I have re-read it, I get it now...

clearly your entire post was intended as a joke...

And while we're at it, I think you're also a little unclear about what the word "euphemism" actually means.

No, not at all:

eu·phe·mism

ˈyo͞ofəˌmizəm/
noun
noun: euphemism; plural noun: euphemisms

a mild or indirect word or expression substituted for one considered to be too harsh or blunt when referring to something unpleasant or embarrassing.

I used the word exactly as I intended to, with precisely that meaning in mind...

To reply to your earlier post, Jim...here's another really good analysis (again from vox.com, but not from one of their regular staff writers; in fact the author, Harold Pollack, based this article on a longer, more scholarly paper he had earlier published in The Journal of Health Politics, Policy, and Law) of why a "single payer"* system was never seriously considered in 2010 and may still not be ready for prime time--at least not without a great deal of political and economic tweaking.

Here's why creating single-payer health care in America is so hard
To become politically feasible, an American single-payer system would
necessarily replicate our current system’s most glaring defects.

I won't quote the whole thing like I did the article in the OP, but here are a couple of representative quotes:

It’s telling that no fully articulated single-payer bill was ever drafted as an alternative to the ACA. Such a bill would have been no less complicated, and would probably have been more encyclopedic than the ACA was. A huge reform that creates millions of winners creates millions of losers, too.

As with ACA, the biggest winners would be relatively disorganized low-income people in greatest need of help. The potential losers would include some of the most powerful and organized constituencies in America: workers who now receive generous tax expenditures for good private coverage, and affluent people who would face large tax increases to finance a single-payer system. At least some of these constituencies would need to be accommodated in messy political bargaining to get single-payer enacted. And states would have a role to play, too, potentially replicating the messy patchwork we got with ACA reforms.

Single-payer would require a serious rewrite of state and federal relations in Medicaid and in many other matters. It would radically revise the Employee Retirement Income Security Act (ERISA), which strongly influences the benefit practices of large employers. Single-payer would require intricate negotiation to navigate the transition from employer-based coverage. The House and Senate would be in charge of this tension, and at risk of the negotiations among key legislators and committees who hold sway.

Some progressives hope that single-payer could provide an attractive replacement for the grubby, path-dependent logrolling that now dominate our $3 trillion health care political economy. No viable single-payer program will replace these grubby politics. That’s logically impossible, because such a program must be produced through that very same process.

Yes, I still support "single payer"*--and I think there's a conservative, pro-business case to be made for it, too--but I also think that glossing over the political and economic problems would be intellectually dishonest and politically counterproductive.


* See, as a compromise--just for you, Jim --I put it in quotation marks. But I still maintain that "socialized medicine" is a much less accurate, much less well defined, much less universally understood, and much more ambiguous term.

I spent three days in a local hospital last August. I have read the $158,000 itemized bill and I've seen the multiple charges of $34 each for a prescription pill that I pay 60¢ each for. That made the $1.34 each for the ibuprofen seem reasonable. Something needs to be done, but I'm not sure what it is.

Socialized medicine has been discussed for at least 50 years. I can remember my first employer, a pharmacist, talking about it when I was in high school. He was scared that it was right around the corner, and would ruin his business.

I will be eligible for medicare this year. I'll let you know how I like it.