Editorial: Single-payer health care dreams collide with reality

Published on Tuesday, 22 August 2017 11:40 - Written by

There’s a cautionary tale in the most recent Atlantic Monthly. Penned by Olga Khazan, a progressive-leaning but very fair writer, the piece asks, “Are you sure you want single-payer?”

The answer is far more complicated than progressives hope, she writes.

“French women supposedly don’t get fat, and in the minds of many Americans, they also don’t get stuck with très gros medical bills,” Khazan writes. “There’s long been a dream among some American progressives to truly live as the Europeans do and have single-payer health care. Republicans’ failure - so far - to repeal and replace Obamacare has breathed new life into the single-payer dream. In June, the majority of Americans told Pew that the government has the responsibility to ensure health coverage for everyone, and 33 percent say this should take the form of a single government program.”

Even if support for single-payer was stronger (and it will be, if Republicans continue to fail in their efforts to provide a workable alternative), the reality is very different.

“It’s true that the current American health-care system suffers from serious problems,” Khazan writes. “It’s too expensive, millions are still uninsured, and even insured people sometimes can’t afford to go to the doctor. Single payer might be one way to fix that. But it could also bring with it some downsides - especially in the early years - that Americans who support the idea might not be fully aware of. And they are potentially big downsides.”

The biggest downside is that under a “Medicare for all” system, reimbursement rates for physicians and hospitals would necessarily be cut.

“Now, call a hospital administrator and tell him that his reimbursement for all the employer-based insurance he gets now is going to be cut by 50 percent, and ask him what’s going to happen,” on industry analyst told Khazan. “I think you can imagine - he’d go broke.”

She predicts, “Hospitals would shut down, and waits for major procedures would extend from a few weeks to several months.”

That brings up rationing - which even the supporters of single-payer acknowledge will be a necessity.

“Longer waits might not, from an economist’s perspective, be the worst thing, either,” Khazan writes. “That would be a way of rationing care, and we’re going to desperately need some sort of rationing. Otherwise ‘Medicare for all’ would be very expensive and would probably necessitate a large tax increase.”

And a final problem Khazan sees with transitioning from the current system to single-payer - most people like the insurance they have. The public policy debates center on the uninsured, but most people currently are covered.

“It’s true that single payer would help extend coverage to those who are currently uninsured,” Khazan writes. “But policy makers could already do that by simply expanding Medicaid or providing larger subsidies to low-income Americans. Under single payer, employers would stop covering part of their employees’ insurance premiums, as they do now, and people would likely see their taxes rise.”

Democratic Senators Bernie Sanders and Elizabeth Warren both say they’ll introduce bills for single-payer insurance. Let’s hope they read Khazan’s honest analysis of the issue.