By Gerald Friedman
The recent introduction of the Medicare-for-All bill has caused a spree of reaction pieces accusing supporters of thinking of single-payer healthcare systems as some sort of “magic pill.” These pieces have nitpicked aspects of systems in Canada, Europe, and beyond and then declared the idea of single-payer to be a complete failure. While some of these critiques have made good points about issues in existing systems, they completely miss the point of the argument.
At the end of the day, we are spending significantly more on health care than any other country in the world, have coverage that is far from universal, and are not producing better health results.
To make things worse, we are falling further behind.
In 1971, the US was spending twice as much per person and on health care and had a life expectancy that was eight months shorter than the average of 5 other affluent countries: Canada, France, Germany, Sweden, and the United Kingdom. Since then, we have lost ground, and are now spending over four times as much per person with a life expectancy that is 31 months shorter than the five country average. It is time to take significant steps to address this problem.
Defenders of our current system will tell you that we are the chief innovators in healthcare and have the highest quality doctors in the world. They will use this to say that our relative lack of government regulation or involvement in the healthcare sector is the reason we have developed so many life-saving treatments.
It is true that American innovation has developed cutting-edge treatment options, especially in the oncology field. However, huge portions of that research is already publicly funded!
The National Institute of Health invests $32.3 billion every year in medical research projects. They send that money to over 2,500 universities, medical schools, and other research facilities, many of which receive public funding for their operations, while also funding 6,000 researchers within their own laboratory.
The cruel irony is, after the taxpayers pay for all this innovation and research, many of them are blocked from being able to access these treatments when they need them due to cost.
Another tactic that many single-payer critics have used is pointing out that there are lots of systems around the world that accomplish low-cost, universal coverage without implementing a full single-payer system. It is true that in countries like Germany and Switzerland have used a blend of private insurance providers under heavy regulation and government subsidies to create a healthcare system with universal coverage at much lower costs than the U.S.
While these models may be interesting, they would not address the ridiculous administrative cost and burden that private health insurance companies have created in the US. While private insurance companies are spending over 17% of their operating revenue on administration, Medicare is only spending about 2 percent. In single-payer systems like Canada, physicians spend a fourth of what doctors spend in the US to interact with insurers. While there may be other ways to achieve universal coverage, single-payer is the best model for controlling our costs.
When it comes to the debate about how to design our healthcare system, many people are missing the point. We can build the best hospitals and medical devices, train the best doctors and researchers, develop the most powerful drugs and treatment options, but none of that matters if no one can afford access.
Our healthcare system is continuing to fall behind countries that don’t rely on employers, and do rely on the government, to provide insurance to their citizens. That’s why we need single-payer.
Dr. Gerald Friedman is a Professor of Economics & Undergraduate Program Director at the University of Massachusetts Amherst. A graduate of Columbia and Harvard, he has drafted funding plans for both statewide and federal single-payer systems, and is an advisor to the Business Initiative for Health Policy.