What is single payer?
Single-payer national health insurance is a system in which a single public or quasi-public agency organizes health financing, but delivery of care remains largely private. Under a single-payer system, all Americans would be covered for all medically necessary services, including: doctor, hospital, preventive, long-term care, mental health, reproductive health care, dental, vision, prescription drug and medical supply costs. Patients would regain free choice of doctor and hospital, and doctors would regain autonomy over patient care.
Is national health insurance ‘socialized medicine’?
No. Socialized medicine is a system in which doctors and hospitals work for and draw salaries from the government. Doctors in the Veterans Administration and the Armed Services are paid this way. The health systems in Great Britain and Spain are other examples. But in most European countries, Canada, Australia and Japan they have socialized health insurance, not socialized medicine. The government pays for care that is delivered in the private (mostly not-for-profit) sector. This is similar to how Medicare works in this country. Doctors are in private practice and are paid on a fee-for-service basis from government funds. The government does not own or manage medical practices or hospitals.
The term socialized medicine is often used to conjure up images of government bureaucratic interference in medical care. That does not describe what happens in countries with national health insurance where doctors and patients often have more clinical freedom than in the U.S., where bureaucrats attempt to direct care.
Won’t single payer bankrupt the U.S.?
No, single payer will actually save money by slashing wasteful bureaucracy and adopting proven-effective cost controls like fee schedules, global budgets for hospitals, and negotiating drug prices with pharmaceutical companies. The savings – over $500 billion per year on overhead alone – are more than enough to cover all the uninsured. It turns out that it is much more expensive to keep patients away from health care in our current fragmented, market-based system than to provide care to all under an administratively simple single payer system.
Administrative overhead (also known as “transaction costs”) consumes one-third of current health spending in the U.S., a much higher share than in Canada or other nations. A recent paper on hospital administrative costs found that they consume 25 percent of the budgets of U.S. hospitals, compared to 12 percent in Canada and Scotland. Reducing hospital administrative costs to Canadian levels would save $150 billion a year alone.
Over the long-term, controlling the rise in health inflation saves even more money. Without reform, the U.S. is headed towards spending 20 percent of our GDP on health care within a decade (twice as much as other nations with universal coverage), even as we leave 27 million people uninsured and tens of millions more underinsured.