What is single-payer healthcare?

DEAR DOCTOR K:

I’ve heard the term “single-payer health care” a lot in recent years. What does it mean?

DEAR READER:

Single-payer health care is a term used to describe a single, unified health care insurance system. It means that all of your medical and health care expenses are covered by one organization — the government.

But a single-payer system does not mean that the health care professionals (like doctors) and institutions (like hospitals) are owned and run by the organization that pays for care. Most single-payer systems proposed for the U.S. anticipate that the health care professionals and institutions would remain in the private sector. It’s like Medicare for seniors: Seniors get their care from private doctors and hospitals, but the single payer (the federal government) pays most of the bills, with patients paying a fraction.

In contrast, the existing health care system in the United States is a multi-payer system. There are several insurance programs funded by the government, such as Medicare and Medicaid. There are many private health insurance companies. Many people have their health expenses covered by more than one insurance company, often a combination of a government program supplemented by a private insurance program.

And, of course, 30 million people have absolutely no health insurance, government or private. That’s true even though the Affordable Care Act (ACA) — informally called Obamacare — has provided insurance to more than 20 million previously uninsured people. But it was never designed to cover everyone, and it hasn’t.

In a single-payer health care system, a single public or semi-public agency finances health care. In most models of a single-payer system, everyone is covered. This generally includes expenses for doctors, hospitals, long-term care, prescription drugs, dentists and vision care.

Some people think the U.S. would be better off under a single-payer system. Why? For one thing, we spend a lot of money administering our complex health care system. Between 20 to 30 percent of every health care dollar goes toward administration. So that money is not available to pay the doctors and hospitals, or to pay for diagnostic tests or medicines.

In countries with single-payer systems, the administrative expenses are much lower. In other words, more of their health care dollar actually pays for what it’s supposed to: health care.

Opponents of a single-payer system are concerned about two things. First, they are worried that the total costs of health care might rise. That’s because, they argue, the current multi-payer system encourages competition, and competition drives down costs.

Second, they worry that the quality of health care might suffer, because competition also drives improved quality of care. Whether these concerns are valid is the subject of heated debate among health experts.

For us as individuals, would a single-payer system cost us more or less? It surely would require higher taxes, since the government needs the revenue to pay our health expenses. But today most of us get health insurance through our employers, and those expenses would be reduced. Several single-payer proposals calculate that taxpayers would actually save money. That could be true, but the devil is in the details.