Arguments Against a Single Payer Health Care System

For my first ever post on Fairly Conservative, I’d like to share my response to an intellectually honest friend of mine who is on the left.  Essentially, he wanted to know why I do not support a single payer health care system, especially since the government could have significantly lower administration costs than private insurers do.

I surely could have talked the struggles of other nations who have gone to a single payer system (long waiting times in Canada, severe rationing in Britian, etc.) but actually decided to go a different route.  Read on….

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1) I would fear that in a government run health system, the quality of medicine would decrease. Many of the best and brightest become doctors in part because of the large earning potential. In a single payer system, the government has a large amount of negotiating/purchasing power. This is another way of saying that when there is only 1 payer, doctors, hospitals, etc. have nowhere else to go and have to take whatever the government will pay. So as lawyers and others make more and more, doctors will only be able to be paid whatever the government can spare (and given our current financial mess, odds are that won’t be very much). So a single payer system will lead to both shortages and inferior quality of physicians in the long run.

2) Quality of care will suffer in the long run for another reason…. if the government is the only payer, there is substantially less potential payoff for health care innovations. I am not a huge fan of drug companies, but I do acknowledge that for all the bad, the pharmaceutical industry has done a tremendous amount of good in the sheer number of lives saved and lives improved… our present health care system is very effective at stimulating the vast majority of medical innovations across the globe.  Don’t we want the drug companies know that the research required for, say, a blockbuster cancer drug will be handsomely rewarded?

3) Quite simply, insurance companies are much better than the government at keeping the promises they make. I realize that insurers are not very popular these days, but this is not a very controversial statement. If the former starts to run short of money on hand to pay claims, their reputation is at stake. But the Federal Government IS running short…. we already have close to 60 TRILLION DOLLARS in UNFUNDED Medicare/Medicaid liabilities. You can say that government payers have better administrative expense ratios. That’s wonderful, but the fact is they don’t have the money to pay for the future claims they have promised.  Consider the unprecedented magnitude of this shortfall (which is an even bigger problem than our national debt, yet receives surprisingly little attention), it seems entirely reasonable to conclude that government run health care in the US is the single most poorly managed endeavor in the history of the mankind (if  you know of another program, even adjusting for inflation, that has ever had such a gigantic financial shortfall, please let me know what it might be).  Therefore on what basis is it rational for us to hand the entire health care system over to the same people who have already run the parts they currently control into fiscal ruin?

One other consideration… this I am by no means an expert in, but from what I have heard, we are pretty close to some amazing medical breakthroughs that could actually help to decrease the cost of health care. People always talk about technology as a driver of increased health care costs and that is very true…. but in most cases, once the technology gets good, it can go the other way (just like the first computers were very expensive and now anyone can get a pretty good laptop for $500). We are close to robotic arms that can perform surgeries…. imagine that rather than having surgeons who perform 2 surgeries per day, we had devices that could perform 40 per day at a fraction of the cost. That is the sort of thing that can bend the cost curve downward…. but the more we regulate the health care industry, the more we stifle the development of the sorts of medical breakthroughs that may be the only thing that really can slow down or reverse the accelerating health care cost trends.

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Please let me know what you think of the arguments I present as well as what others you would add in the comments below…. or if you want to try to make the case FOR a single payer system, then… well… doesn’t Moveon.com have a blog or something you could go to??? (just kidding, you are still welcome to share your thoughts)

Comments

  1. Randy in Richmond says:

    Ryan
    Your reasoning is practical and generally looks to the care provided. Those who will differ with you will point out the social aspects of health care. They will talk about all those not presently covered, the mean, money hungry insurance companies and the pre-existing conditions issue.

    I tend to be a little more practical in the way I oppose single payer healthcare. First it should be renamed to socialized medicine, which it is. Secondly, when one looks at the history of government run programs or intities, especially the larger ones, they are almost always a failure both operationally and fiscally. Our Post Office just announced it lost $8.5 billion in the past fiscal year as one example. Most people are unaware that over a million employees have been exempted from Obamacare–yes, you can request an exemption. I expect this trend to continue exponentially.
    http://www.hhs.gov/ociio/regulations/approved_applications_for_waiver.html

    http://voices.washingtonpost.com/federal-eye/2010/11/postal_service_posts_85_billio.html

    In other words I agree with you and we have only scratched the surface as to
    why this is a very bad idea, especially long term.

  2. US insureds pay for drug development that benefits the rest of the world. Drugs cost many times more here than elsewhere since there’s no “negotiating” prices like there are in other countries with other systems. I’m kind of tired of paying the freight for drug development that benefits the entire world.

    I also do not believe that technology such as robotic surgery will result in increased yields, like in a manufacturing plant. The procedures still require a surgeon to drive the equipment and an entire array of operating room staff standing by. A quality result can only happen when a surgeon is closely monitoring the procedure. They cannot do this more than X times a day. Nor would it be in their best interest to do so financially–why do 10 procedures for $ 1,000 when they can do one for $ 10,000 and not be exposed to the potential malpractice risk of rushing through a procedure, not to mention the preop and followup one on one patient contact required as part of the total care.

  3. Have you actually heard from any experts that support what we have right now? I actually am interested in contacting them for a debate. I have a room full of doctors that all support single-payer system. We see that probably the best system right now is the VA system which is socialized medicine, but it works! If doctors think it would work, we know it would save money. Why have 1500 different insurance companies?! Why pay for 1500 secretaries, 1500 cleaning people, 1500 file cabinets, 1500 office leases…. that is waste.

    Honestly though, I am trying to find a good speaker on the RIGHT who can debate someone from
    http://www.pnhp.org/

    Email me if you know of anyone.
    Thanks, David

  4. Your $60 trillion of unfunded Medicare/Medicaid liabilities number is misleading:
    http://www.politifact.com/virginia/statements/2011/may/23/frank-wolf/rep-frank-wolf-says-us-has-over-62-trillion-unfund

    Otherwise, your arguments are interesting and I think your worries are warranted. My response to you is that I think the consequences you describe can be avoided or diminished by carefully structuring any new single payer system to maintain some of the incentives from our current system. I don’t expect single payer to be paradise, and there may indeed be a decrease in healthcare innovation, but we have to weigh that possibility against the certainty of tens of millions of uninsured Americans. I think it’s our duty first to provide everyone with healthcare, and second to make that care the best it can possibly be. I think you basically flip those objectives around: you want to maximize quality first, and maximizing access comes second. That’s perfectly reasonable, too.

    All that said, I would support compromise positions, including an individual mandate with a public option. Are there any compromise positions you support?

  5. When is comes to health care, more is NOT better. Over and over research has shown this. Look at the research. Also, look at the models of systems like the Mayo Clinic who have the highest quality and lowest costs in the country vs. places like Miami and McAllen, TX, who have the highest costs and more procedures/tests and worse outcomes. So exponentially more surgeries per day? Not necessarily a good thing. Dr’s and hospitals that do more procedures (usually to make more $ because they are fee-for-service) have worse outcomes. It’s just a fact. And by the way, if you are in medicine for the money, then you are in the wrong field, plain and simple. I understand we all have to make a living, but if one of the core values of your practice is earning potential, then you are wrong. I certainly wouldn’t want you as my doctor. Again, see the Mayo Clinic whose core value is patient-centered. Their Doctors are paid salary.