Virtually everyone in the U.S. agrees that our healthcare system is broken, but people disagree about how to fix it. So many different ideas and solutions have been put forward that ordinary citizens find it hard to know whom to believe. The problem is compounded by the one-sided nature of the arguments: few are willing to admit that their proposed solution will bring problems along with benefits, and even fewer are able to say what they would do to mitigate the negative effects of their plan.
As someone who has managed corporate employee benefit programs, I am convinced that single-payer healthcare is the most efficient and cost-effective system for delivering healthcare to all Americans. But it is not a panacea; it, too, will create both winners and losers. The benefits will substantially outweigh the costs, but proponents of single-payer healthcare do their cause no favor when they fail to admit and address those costs. The same is true for other types of proposals.
In the interest of advancing the public discussion, I offer here my own list of some of the benefits and costs that we can expect if a single-payer healthcare system were to be adopted in the United States.
Benefits
1. Cost savings. Several nonpartisan studies (and even one funded by the Koch brothers!) have shown that single-payer healthcare systems cost less than systems that rely on insurance companies. Costs for administering Medicare, a type of single-payer system, average 3 percent to 4 percent of total system expenses, while for insurance companies the figure is 12 percent to 18 percent. Substantial savings would also arise from negotiating lower drug prices (currently prohibited by law) and eliminating the need for medical providers to have huge staffs for processing claims. Savings could amount to several trillion dollars over a decade or so.
2. Predictability. Businesses would benefit from the stabilizing effects of such a system since they would no longer face massive premium increases if one of their employees incurred hefty healthcare expenses. Healthcare costs would be averaged across the entire country, reducing the need for sudden rate increases, and tax rates per employee would be the same for all employers. Employees would no longer receive surprise medical bills or face high charges that they could not afford to pay; medical bankruptcies would become a thing of the past.
3. Consumer satisfaction. A single-payer system would save enough money to eliminate all copays and deductibles — people could get the care they need without worrying about whether they can afford to pay for it. Networks would also be eliminated—people could go to any doctor or hospital that had openings. Claims would be processed with the consumer in mind rather than corporate profits. And since health coverage would no longer be tied to a particular employer, people could change jobs without having to worry about losing their benefits.
4. Better health. With everyone able to get the healthcare they need, people would be healthier and thus happier. The quality of care that people receive would no longer be based on their ability to pay. Fewer people would be debilitated by illnesses and injuries, and employers would lose less time and money due to employee sick days. A healthier population would need fewer expensive medical procedures to treat preventable health problems, thus reducing medical costs in the long run.
Costs
1. Lost jobs. Most single-payer proposals would ban private insurance companies from selling policies for services covered under the national plan. Companies would be forced to lay off workers and/or find other lines of business. Claims processors might find work within the national system, but many upper managers and salespeople would have to look for other jobs. The impact could be mitigated by offering funds for retraining as in other instances where workers have been hurt by changes in government policy, or a niche could be carved out for private companies to compete with the national plan as they do with Medicare Advantage programs. But some job losses are inevitable.
2. Higher costs for some. Small businesses that do not currently offer health insurance to their workers would no longer have that option; every company will pay payroll taxes to cover a portion of the medical cost for their employees. The same is true for people who have insurance through a spouse’s employer; everyone who works will have to pay healthcare taxes. Workers whose employers pay most or all of their insurance cost and high-income workers will also pay more as we move from a system where everyone in a company pays the same monthly premium to an income-based payment system. Supporters insist that the vast majority of people will pay less than under the current system, but not everyone will benefit.
3. Lower incomes for medical professionals. The managers of a single-payer system would have substantial clout in negotiating or even dictating the payments received by physicians, hospitals, drug manufacturers, and others in the healthcare field. This would reduce the cost of medical services, but it would also reduce the incomes of medical professionals, making the field less attractive to students. Some fear that this could lead to shortages of workers at the same time that the demand for medical services is increasing due to more people having insurance coverage. Financial incentives could be offered if this were to happen, but they might not come in time to prevent short-term shortages.
4. Reductions in benefits. Depending on which services are covered by the plan, people who have so-called “Cadillac plans” might find that their benefits are reduced under a single-payer system. Most of those affected would be high-paid executives, but some union employees might face reductions as well. The impact could be mitigated if people were allowed to buy private insurance to cover expenses not included under the national plan, but this would be easier for executives than for union workers.
On the whole, it seems that far more people would benefit from a single-payer healthcare system than would be hurt by it. But there will be losers under such a system, and those of us who care about our fellow Americans should insist that provision be made for these people in any single-payer plan that comes before Congress.
(Chris Stanley, a professor of theology at St. Bonaventure University, lives in Allegany, N.Y.)
