A New Government Report Shows Why Single Payer Would Be Really, Really Hard

In most ways, yesterday’s Congressional Budget Office (CBO) report on single-payer health care looks scrupulously neutral. It takes no position on the merits of single payer, which is often popularly referred to as Medicare for All. It does not estimate the costs or budgetary effects of the single payer plans proposed by liberal lawmakers like Sen. Bernie Sanders (I–Vt.) and Rep. Pramila Jayapal (D–Wash.).  

Instead, the CBO report acts as an introduction to the many questions that would need to be resolved in order for such a system to be put in place. It highlights the obstacles standing between where we are now and a single-payer system, and the potential consequences—to both individual patients and taxpayers writ large—of the various tradeoffs required to get there.  

By simply raising these questions, the CBO report serves as a sober and practical guide to single-payer skepticism.

The report portrays any potential move to single-payer health care—in which the federal government would run a national health plan that acts as the primary financier of most health care services in the country—as a huge and difficult undertaking. “The transition toward a single-payer system could be complicated, challenging, and potentially disruptive,” it says, before laying out several of the major decisions that would have to be made, such as the speed at which individuals would be expected to move to the new government-run plan (a recent plan backed by Democrats in the House called for a two-year transition), and what to do about job losses in the health insurance industry.

The transition process, however, is not the primary focus of the report, most of which is devoted to laying out the various policy considerations and specific choices that would be involved in designing a single-payer system. These questions can seem wonky and bureaucratic. But what the report drives home is that the dry, wonky stuff would have significant effects on the quality, value, and availability of care that patients could expect to receive. 

For example, what would happen when the expansion of health coverage inevitably increased the demand for health care? More people with insurance would invariably mean more people trying to access medical services, posing a challenge to the system. “Whether the supply of providers would be adequate to meet the greater demand would depend on various components of the system, such as provider payment rates,” the report says. “If the number of providers was not sufficient to meet demand, patients might face increased wait times and reduced access to care.”

Single payer plans like the one proposed by Bernie Sanders typically assume that the new system would pay something like today’s Medicare rates, which are often quite a bit lower than those paid by private coverage. So the delivery infrastructure, from hospitals to doctors offices to emergency rooms, would face a dual shock—lower rates to providers on the one hand, greater demand on the other—that would likely result in longer waits for care. That’s hardly surprising, given that long wait times are a frequent complaint in countries like Canada, which has single-payer, and Britain, which runs a fully socialized health care system.

Moving to a single-payer system would also risk depriving patients of choice and individual customization. Compared with today’s arrangement, “the benefits provided by the public plan might not address the needs of some people,” and a “public plan might not be as quick to meet patients’ needs, such as covering new treatments.”

Questions about what is covered, and how much the government pays for particular products and services, would, in a government-run, taxpayer-financed system, inevitably become political, which is to say politicized, decisions: “A single-payer system would also need a way to decide which new treatments and technologies it would cover.”   

These decisions would necessarily become political decisions in part because they would have implications for the program’s overall cost. Covering more services would be more expensive; covering fewer would place limits on the types of care people receive.

Policymakers might respond by, say, requiring no cost sharing for some types of treatments deemed better values, while requiring patients to contribute out of pocket for others. But that, in itself, is a judgment call, and would have consequences of its own, pushing people into one type of care that bureaucrats and politicians view as preferable. Or, as CBO puts it, “because some judgment would be required to determine the value of services, some of those determinations would be imperfect, and the use of value-based insurance design would increase the administrative complexity and costs of the single-payer system.” No doubt the lobbying surrounding these judgments would be intense, as health providers jockeyed for bureaucratic favoritism. 

Cost, of course, would be a major point of contention for any single payer system, and the Medicare for All plans have so far largely avoided the question, issuing lists of “pay-fors” without specifying exactly how (or if) the enormous price tag would be offset. Multiple estimates have put the additional cost to the government at around $32 trillion, which would require more than doubling federal corporate and individual taxes to pay for. Single-payer advocates tend to argue that this actually represents a savings, since although government spending would increase, total national spending on health care would be somewhat lower.

But CBO’s report casts doubt on whether those savings would actually occur. “Total national health care spending under a single-payer system might be higher or lower than under the current system,” it says, “depending on the key features of the new system, such as the services covered, the provider payment rates, and patient cost-sharing requirements.” Some of the ideas favored by single-payer supporters, like negotiating for prescription drugs, might not pay off, because in a nationwide system, it would be difficult for policymakers to refuse to cover certain drugs. “It is uncertain whether the single-payer plan could use the threat of excluding certain drugs from the formulary as a negotiating strategy,” the report says. “It is also unclear whether a single-payer system could withstand the political pressure that might result from excluding some drugs. By contrast, private insurers can threaten to exclude drugs from their formularies and can follow through on that threat.” Without competition from private plans, drugmakers might have the upper hand in negotiations.

Other countries with single-payer systems allow for private health insurance that works alongside or on top of the government-run plan. Yet the high-profile plans from lawmakers like Sanders and Jayapal would virtually wipe out private health insurance in the space of just a few years.

The CBO report offers an overview of numerous other, often technical questions, from who owns hospitals to what sort of payment scheme—global budgets? Fee for service? Capitated payments?—would be used to pay providers. It lays out, in some detail, what international single-payer systems cover, and what they don’t, highlighting the various trade-offs they entail, few if any of which are part of Bernie Sanders’ Medicare for All plan. Certainly, these trade-offs are not part of the way he advertises it.

What the CBO report shows, in other words, is that designing and implementing a single-payer health care system would be enormously difficult as both a pragmatic and political matter. It’s a warning, in a way, about the scale, scope, and likely consequences of the challenge.

If anything, the report, which at just 34 pages is more of an overview than a deep dive, probably understates the challenge. But it asks many of the right questions, and in doing so, makes clear that there are no easy answers.

from Latest – Reason.com http://bit.ly/2vAasV6
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