No, the Rest of the World Doesn’t Use ‘Single Payer’ by Eli Lehrer
There’s plenty of reason for free marketers to be skeptical of proposals, like the ones emanating from Democratic presidential candidate Bernie Sanders and hinted at by Republican Donald Trump, that would create a single-payer healthcare coverage system in the United States.
But, if only because these proposals have resonance with the public, they’re certainly worth debating. A rational debate depends on getting the facts straight and there’s one fact that both left and right often get wrong: “single payer” healthcare of the sort Bernie Sanders proposes isn’t universal in the developed world and the US system isn’t particularly free-market by the standards of peer nations.
Although definitions vary slightly, a single payer healthcare system is one where a single entity — a government-run insurance plan — pays all bills for a variety of medical care, and private payment for these same services is more-or-less banned.
Among the G-7 countries, only one nation, Canada, actually maintains such a system. One other, Italy, has a pretty similar system but allows much more private payment, and, because of the low standards of public hospitals, nearly everyone who can afford private insurance carries it.
Japan maintains a government-run healthcare plan, but it has so many gaps that most families find a need to carry private insurance to cover things like cancer-treatment related costs the public system excludes.
Germany, like the United States, has an employer-state hybrid system with heavy regulation of insurance companies.
France has a “dominant payer” system, where one quasi-governmental entity (CNAMTS) pays many bills, but about 90 percent of the population maintains private coverage as well, and most people pay something out of pocket each year.
The United Kingdom, finally, directly administers almost all medical personnel and facilities through a single governmental entity in each of the home countries. This is a “single provider” system.
Except in the United Kingdom, furthermore, there are significant numbers of people in all of these countries who report problems paying for needed medical care. This percentage is higher in the United States and Germany, intermediate in France, and lower in Canada. The UK only achieves its apparently enviable results because of long waiting lists for many procedures and health care rationing systems that are pretty close to the fictional “death panels” some conservatives claimed were part of Obamacare.
The American system as it exists isn’t unusually free market either. The German, French, and Japanese systems — where consumers much more frequently shop around for insurance plans they like rather than having the government or an employer chose — offer more consumer choices than most Americans enjoy. Even though taxpayers pick up a very large portion of the bills, the French practice of publically providing the prices of medical procedures makes that system feel a lot more like a free market than anything most Americans see day-to-day.
There are lots of valid criticisms of the United States’ healthcare system. The difficulty the poor or uninsured sometimes have in getting needed medical care is one of them. Some problems of the US health care system stem from lifestyle and cultural factors that organization and payment mechanisms can’t impact. But the lack of a single-payer system in the United States isn’t unusual in the slightest nor is the system we have particularly free-market.
Any debate should start by acknowledging both of those facts.
Eli Lehrer is president and co-founder of the R Street Institute, a free-market think tank.
Great article, Eli. I commend you for providing a balanced, objective, non-ideologically driven article dispelling many of the myths about the system we had, the system we now have, and the “universality” of the single-payer model. Our healthcare system has long been problematic and in desperate need of reform. But, predictably Obamacare didn’t provide solutions, and in fact, perpetuated and exacerbated pre-existing problems. Likewise, Mr. Bernie’s vision of “single-payer” salvation is a delusional fool’s paradise. To make healthcare more affordable and attainable, we need to embrace genuine free-market reforms.
Let’s start with the obvious. Repeal and replace Obamacare with a system that allows the individual to choose and control their own health care — get the government and employers out of it by allowing and encouraging individuals to carry their own insurance. Further, health savings accounts (HSAs), tax deductibility of premiums and co-pays (and/or tax credits), cross-state purchasing, reinsurance/risk transfer mechanisms, pooling mechanisms, etc., etc.
I would love to see a follow-up to this article with your vision of the ideal free market system.