Single-Payer Health Care
If elected president, Senator Bernie Sanders proposes to implement a single-payer universal health care system for America. What would that look like? How would we pay for it?
Senator Sanders proposes to pay for universal health care by taxing the ‘middle class’ an additional 2.2%. By Senator Sander’s accounting, this tax would be cheaper than insurance premiums that those with insurance are now paying. Of course, it would be more expensive for those who currently do not have or who do not want insurance. The plan would also generate some of its 14 trillion dollar price tag by imposing a 6.2% payroll tax on businesses. This would probably eliminate a bunch of bottom-tier small businesses that are barely profitable, and it may drive more large corporations overseas (America already has the highest corporate tax rates in the world). The proposed plan would collect significantly higher income taxes from the wealthy, starting with those making over $250,000 / year. The rich would also underwrite the care by paying additional estate taxes and having their income from investments taxed the same as earnings from wages and salaries. The uber-rich ($10M +) would pay a whopping 52% tax on their income.
Overview
The expanded Medicare program would provide Americans universal access to health care. Upon implementation, all physicians would become government employees since their remuneration would be derived from the new Single Payer. Presumably insurance companies would find another line of business (loan sharking?). A 2012 study conducted by Fortune found that about four hundred and sixty thousand Americans worked for insurance companies—many of these out-of-work bureaucrats could probably go work for the new incomprehensibly large and complex bureaucracy that would administer American health care. One of its primary tasks would be to employ actuarial processes to determine who gets how much and what kind of healthcare. This rationing process would presumable determine care allocation by calculating cost vs. benefit to society instead of our current process which rations care according to ability to pay. Regardless of the mechanism, rationing will always be necessary because demand is infinite and supply is limited. The universal plan would theoretically provide equal access to everyone, regardless of socioeconomic status.
The Good
Senator Sanders’ system would eliminate most of the social biases in our current health care system. Physicians would be much more likely to give all patients the same level of care because they wouldn’t be concerned about a patient’s ability to pay. American citizens would not be held hostage to runaway health care costs that just keep increasing.
Preventive care will almost certainly improve because people won’t consider cost as a reason to procrastinate visits to the doctor. Better preventive care would certainly decrease the downstream costs associated with chronically untreated conditions and attendant comorbidities caused by people’s reticence to spend money—maybe a lot of money—on non-urgent health issues.
Universal health care underwritten by tax dollars would enhance quality of life for the chronically poor. Those living below the poverty line (and even those living in the lower-middle echelons of the income spectrum) often times have no option but to simply do without health care in today’s market. Universal coverage would provide them with services that are now only available only to those who have insurance or who can afford them.
Critically, a single medical disaster wouldn’t spell financial ruin and bankruptcy for the average American. Universal coverage would serve as a basic safety net for all. Today, even those with insurance can face astronomical bills if faced with a serious medical problem.
The Scary
The government is able to make Medicare work today because it pays physicians substantially lower reimbursement for services rendered (about 30% lower). The new plan as revealed by Senator Sanders does not specifically address physician reimbursement, but most pundits agree that physicians would likely take it on the chin. According to a 2007 Congressional report, the adjusted wages (purchase power parity) of U.S. physicians soars above their international peers. (http://digitalcommons.ilr.cornell.edu/cgi/viewcontent.cgi?article=1316&context=key_workplace). Would cutting income by a third affect the number and quality of doctors in America? Would the best and the brightest still be incented to pay the formidable price of becoming a doctor for a less lucrative career as an employee in health care?
Demand would certainly go up if everyone is guaranteed full access to all the care they need, but supply would not; indeed, considering the above, it may even go down. Wait times (which even now can be lengthy for some procedures) would probably become problematic.
Any attempt to nationalize / socialize institutions that have traditionally operated in a free market environment (which is not to suggest that today’s medical market is all that free to start with), must be forged with a studied abandonment of the traditional valuations that govern the marketplace because superiority warps the implied egalitarianism of socialized services. For example, a physician’s care outcomes, that critical differentiator between the physician and his / her peers, could no longer be part of the equation that determines choice of doctor. Indeed, since patients have no immediate financial stake in health care transactions, why would they choose to visit any but the very best doctor in every circumstance? After all, every citizen would pay proportionately the same tax for health care, so each should be eligible for the same access and quality. If Doctor A’s outcomes are empirically superior to Doctor B’s, who would opt for Doctor B? Or would doctors be assigned to districts and citizens only have permission to visit their assigned work cell’s physician?
Would physicians still be willing to invest in advanced medical equipment if their reimbursement does not cover capital costs? Will the lack of sophisticated gear decrease quality of care? Or would the government purchase authorized equipment and supplies?
Speaking of equipment and supplies, what of existing privately-owned billions of dollars’ worth of equipment? Does the government levee another tax and purchase it? Or simply nationalize it?
Given the notorious inefficiencies and bureaucratic bungling of today’s Medicare program, is the government positioned to administer a much bigger and more complex program in a cost effective and patient-friendly manner? Would it be operated in a physician-friendly manner? Would a monopolistic single-payer system incent innovation and improvement? Would it encourage excellence? Who would look out for the physicians?
For the entrepreneurial, would employee physicians feel the same level of commitment to an endeavor in which they have no ownership? Would there be a shift in attitudes towards patients when they close the doors to their private practice and go to work for a corporation? What sense of personal responsibility would they feel if that corporation were the biggest in America?
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