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Why does America not have single-payer healthcare? Because single payer plans like the UK’s NHS and Canada’s national healthcare system are running into the same exploding financial problems that the United States is having due to the tremendous costs of new technologies and new expensive drugs. Those systems are not handling the growth in expenses well either.
But they react differently. Instead of rapidly building new facilities and installing new high tech machines as occurs in every city in the United States, the UK and Canada slow things down with budget creep. They can’t commit political suicide with huge tax increases that would hurt their economies so they incrementally pass increases. That significantly delays but doesn’t prevent new technologies coming into play. Most cities in the US have more MRI and PET scanners than entire Canadian provinces.
It’s a form of government rationing because budget restrictions create a shortage for everyone in the system, resulting in waiting lists that some patients never get off. Their citizens mostly accept that for non-emergencies because fortunately, as in the US, most people don’t require sophisticated or advanced medical care. When they cannot accept it, they leave the system and fund their own private healthcare.
Before Obamacare, more than 85% of Americans expressed approval of their healthcare. That number has fallen somewhat but still represents a sizable majority.
Most Americans don’t want what a federally run program would entail. They don’t want their options reduced. They don’t want to be put on waiting lists. They don’t want to lose their choice of physicians and hospitals. They don’t want bureaucratic layer upon layer getting in the way of their healthcare. In short, they don’t want what Medicaid patients currently get. They also don’t want what we’ve been hearing that a significant number of American’s veterans get.
Many Democrats say they want Medicare for all. Medicare simply doesn’t pay the bills of hospitals and doctors. Medicare exists at it’s current high level of care because a significant part of the care is cost shifted from the 170 million Americans who have employer based health insurance.
I’ve used Nobel Prize winning liberal economist Paul Krugman’s response to Bernie Sanders’ Medicare-for-All plan time and time again. Krugman was a big supporter of Obamacare and also of Hillary Clinton’s candidacy. So here goes again:
My column and Bernie Sanders’ plan crossed in the mail. But the Sanders plan in a way reinforces my point that calls for single-payer in America at this point are basically a distraction. Again, I say this as someone who favors single-payer — but it’s just not going to happen anytime soon.
Put it this way: for all the talk about being honest and upfront, even Sanders ended up delivering mostly smoke and mirrors — or as Ezra Klein says, puppies and rainbows. Despite imposing large middle-class taxes, his “gesture toward a future plan”, as Ezra puts it, relies on the assumption of huge cost savings. If you like, it involves a huge magic asterisk.
Now, it’s true that single-payer systems in other advanced countries are much cheaper than our health care system. And some of that could be replicated via lower administrative costs and the generally lower prices Medicare pays. But to get costs down to, say, Canadian levels, we’d need to do what they do: say no to patients, telling them that they can’t always have the treatment they want.
Saying no has two cost-saving effects: it saves money directly, and it also greatly enhances the government’s bargaining power, because it can say, for example, to drug producers that if they charge too much they won’t be in the formulary.
But it’s not something most Americans want to hear about; foreign single-payer systems are actually more like Medicaid than they are like Medicare.
And Sanders isn’t coming clean on that — he’s promising Medicaid-like costs while also promising no rationing. The reason, of course, is that being realistic either about the costs or about what the system would really be like would make it a political loser. But that’s the point: single-payer just isn’t a political possibility starting from here. It’s just a distraction from the real issues.
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Why Single Payer Healthcare Won’t Work