Is Single-Payer the Magic Bullet?

I wrote an article for the latest issue of the Journal of the Student National Medical Association (Spring 2007, Vol 13, No. 4) entitled, "Is Single-Payer the Magic Bullet?" There is a misprint on pg. 28 of the issue and I would like to correct it.

The 1st sentence of the 2nd paragraph in the Opinion section reads, "Eliminating premiums and co-payments will end health disparities." The original sentence actually read, " I do not believe that eliminating premiums and health disparities." This is the opinion I was trying to convey and is congruent with the statements I make in the same paragraph as well as those in the proceeding paragraph.

If you would like to read the original article, please see below:

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When my policy professor claimed that just about every physician who reads the “Proposal of the Physicians’ Working Group for Single-Payer National Health Insurance” endorses it as the solution to the universal healthcare debate, I had to investigate. Several Harvard professors, in collaboration with Physicians for a National Health Program (www.pnhp.org), published the 2003 JAMA article as a proposal for national healthcare reform that would solve many of our country’s healthcare issues and most importantly, extend coverage the 46 million uninsured Americans. In this article, I will attempt to summarize the proposal and add my thoughts.

Summary:

The U.S. has the most sophisticated hospitals, best trained physicians and spends more than twice per capita on healthcare than any other industrialized nation, yet we lag behind on such measures as life expectancy and infant mortality. The current system requires hospitals and physicians to spend large amounts of money and time performing administrative tasks and creates incentives to deny coverage to the uninsured, underinsured and the sickest patients. The proposed national health insurance (NHI) is based on four principles:

1. It is our responsibility as a society to provide access to comprehensive health care for every citizen.
2. Patients should have the right to choose and change their physician at any time.
3. Making a financial profit should never be factored into the care provided to a patient.
4. Health policy and budgetary decisions should be made by the people, not corporate and government bureaucrats.

The NHI plan would cover every American for all “medically necessary” services, including medical, dental and long-term care, as well as providing prescription drugs and supplies. The plan would eliminate private insurance as we know it, and create a centralized “single-payer” to provide reimbursement to hospitals and physicians, similar to the structure of Medicare. The writers believe that eliminating “financial barriers” such as co-payments and deductibles can “end disparities based on race, ethnicity, social class and geographic region.”

Once all hospitals have been transitioned to not-for-profit status, the NHI would pay each facility an annual lump sum to cover operating expenses. If a service is covered by the NHI plan, hospitals would no longer be able to bill for it. The NHI plan hopes to significantly reduce the administrative overhead associated with billing practices and shift those resources to improving clinical care.

Private-practice physicians and other healthcare providers would be able to choose between fee-for-service- or salary-based pay. Patients would only receive medical bills for services not covered by the NHI, such as LASIK. The authors of this plan believe these payment schemes will “eliminate profiteering” and separate capital spending from operating costs.

The NHI would pay for all “medically necessary prescription drugs and medical supplies based on a national formulary.” With the NHI being the only payer to drug companies, it will harness the ability to negotiate drug prices and potentially reduce the exorbitant fees these companies charge directly to consumers.

Opinion:

A single-payer system is the single best way to reduce the cost of health care in this country. The multiplicity of insurance providers and managed care creates an administrative nightmare that requires physicians and hospitals to devote huge resources to ensure that they will be properly reimbursed. Physicians in private practice are often dependent on business managers to handle the copious amounts of paperwork and relationships with insurance companies. The proposal sites that private health insurers and HMOs consume 12% of insurance premiums in the form of overhead. The NHI plan hopes to reduce this number to ~3% or the percentage seen in the Canadian system.

I do not believe that eliminating premiums and co-payments will end health disparities. While co-pays deter consumers, especially the poor, from seeking medical attention, these point-of-service fees were put in place to help prevent unnecessary care. If individuals can receive medical attention without having to pay out-of-pocket, they will have incentive to see providers much more frequently and likely for unnecessary reasons. I believe this will actually increase the demand for hospital and clinic care (the “service” part of fee-for-service) resulting in an increase in overall costs.

Ending health disparities, especially for the poor, must occur in a systemic fashion. In most urban settings, the poor often receive their primary care in the emergency room setting. In rural settings, the poor may receive no medical care at all. Because Medicaid reimbursement is significantly below that of Medicare and private insurance, less and less doctors are seeing Medicaid patients. The NHI proposal is on the right track by reimbursing providers for each patient equally, but eliminating co-pays and premiums is not the answer. A voucher system for the poor is one possible solution, but individuals must retain some sense of financial responsibility and personal ownership of their health.

If the NHI plan was put in place today, the authors believe that universal health coverage could be achieved at the cost of our current healthcare expenditure – 16% of GDP or roughly $2 trillion. This appears to be a very conservative estimate considering there are roughly 46 million uninsured individuals in our country and many more who are underinsured. Extending this insurance to also cover long-term care and prescription drugs makes this figure seem even less likely.

Despite any shortcomings, a National Health Insurance plan is the only moral and socially responsible option for future healthcare reform in the U.S. The Bush administration’s move towards high-deductible consumer directed health plans and health savings accounts may give more working individuals the opportunity to purchase health insurance, but it does little if anything for the poor and underinsured in our country. We, as students and practitioners, must begin to understand the complexity of our healthcare system and challenge each other to think of ways to make it better. The proposal for NHI is the first step in this direction, but critical questions must be answered before drastic health policy reform is to occur. And with an election around the corner, now is the time to be asking these questions.

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