Posted on August 5, 2019

The problem from hell facing anyone who wants single-payer health care

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Earlier this week, Senator and presidential candidate Kamala Harris (D-CA) released an outline for her version of “Medicare For All.” The plan would give everyone the immediate right to buy into Medicare as an alternative to private insurance, then would gradually transition everyone into an “expanded Medicare system” over the course of ten years.

Though Harris says that she would guarantee “universal coverage,” her end goal is not technically a single-payer system because individual health consumers could still choose private Medicare plans similar to today’s Medicare Advantage plans. But the Harris plan is still likely to significantly expand the number of Americans with public insurance.

Not long after Harris released her proposal, the Daily Beast published an array of quotes from rival campaign operatives and from former Obama administration officials, who took issue with her ten year roll out. As Sen. Bernie Sanders (I-VT) campaign manager Faiz Shakir put it, “if President Obama had passed a health-care bill that called for a 10-year horizon, he would have left it to Donald Trump to execute.” (Shakir is a former editor of ThinkProgress.)

He has a point. One of Obamacare’s biggest vulnerabilities is that it became law in 2010, but didn’t take full effect until 2014. That gave Republicans nearly four years, a presidential election cycle, and a full round of Supreme Court litigation to attack the law before most people saw any benefits from it.

The likelihood that Democrats could ward off GOP sabotage for more than twice as much time is, well, not great.

But there’s another side to this argument as well. Single-payer (or the close approximation proposed by Harris) has tremendous advantages over our current system. But it also cannot responsibly be implemented overnight. A too-fast transition could shut down hospitals throughout the country, and especially in rural regions, while simultaneously costing so much in the short term that it would be hard to sustain the political coalition for such a law.

America can get to single-payer, but it would require a sustained commitment over the course of several years to get there. And that can only happen if the Republican Party is kept at bay for a fairly long time.

Why single-payer is better

To understand why implementing single-payer is so difficult, it’s important to first understand why it would be such an improvement over our current system. Often, single-payer advocates present their case in moral terms — “87 million Americans are uninsured or underinsured, but the health care industry made $100 billion in profits last year,” as Sanders noted at Tuesday night’s debate. In this political conversation, single-payer is often presented as the way to ensure that everyone is covered.

It is possible, however, to achieve universal health coverage without a single-payer system, or even without government-run health plans at all. The Swiss, for example, have a universal program that closely resembles the original structure of Obamacare’s exchanges. Swiss private insurers must offer coverage to all citizens, all citizens must buy coverage, and people who cannot afford it receive subsidies.

Yet the Swiss also have the second-most expensive health care system in the world, second only to the United States. The problem with a private insurer based model isn’t that it necessarily leaves people uninsured or underinsured. It’s that the private model does little to control health costs — and these high costs often lead to many people being unable to obtain care.

In the American system, health providers typically charge very high sticker prices for care. These jacked up prices, however, are normally just an opening bid in a bargaining process between insurers and providers.

Large insurers — that is, insurers which represent a large number of a particular provider’s patients — have a good deal of bargaining power in these negotiations. If the provider won’t agree to lower prices, the insurer can walk away with a huge chunk of the provider’s customers. Smaller insurers, meanwhile, often pay exorbitant prices for the exact same care.

Given this dynamic, the ideal solution for everyone but the providers is a single health plan that represents everyone — and thus has tremendous power to bargain down health prices. Yet such a plan could not be private unless it was so highly regulated that it basically functioned as if it were a government agency. If a private insurance company were given an unregulated monopoly, they would use their monopoly to charge high premiums and to deny necessary health care.

So that’s why a government-run, single-payer system is better than a private insurance model. And, lest there be any doubt, this is not just a bunch of theory. The United States spends more than twice per patient what Canada spends with its single-payer system. And yet we have worse health outcomes. Canadian life expectancy is more than three years longer than that in the United States.

But it’s not better for everyone

There is, however, one big loser in a single-payer system — the health providers themselves. Because the primary advantage of single-payer is that it drives down the cost of care, the institutions providing that care are likely to make much less money in a single-payer system.

American Hospitals and other major health providers structured their business models around the assumption that they can charge much higher rates than similar providers in our peer nations. As Princeton’s Paul Starr, a groundbreaking scholar of the American health care system, warns, the health sector’s “investments in medical technology, the physical infrastructure of hospitals and other facilities, the patterns of medical training and specialization, and the size and structure of the health-care labor force” are all shaped by the assumption that high prices will continue.

Strip away those inflated prices overnight, and the immediate result will be retired doctors, laid off nurses, and closed down hospitals. In some parts of the country, patients may struggle to find treatment. Health outcomes would worsen, and they would do so very quickly. And Republicans would point to this catastrophe as proof that single-payer is a failed experiment.

Even setting aside the human costs of such a crisis, it could wind up driving the final nail in single-payer’s coffin. Worse, it could give Republicans all the ammunition they need to dismantle much of America’s existing health care safety net and deny health care to tens of millions of Americans.

What can be done?

So single-payer advocates are caught between the Scylla of implementing their policy dangerously fast, and the Charybdis of giving Republicans a long runway to sabotage that policy. There are ways to mitigate the starkness of this choice. But none of them are ideal.

One option is simply to run huge deficits for a little while. Congress could enact a single-payer plan that pays providers at their current rates for year one, and then gradually reduces those payments over time. Done slowly enough, such a plan could give those providers enough time to adapt their business models to avoid disruptions.

The short-term cost of such a solution, however, would be quite high. A 2016 analysis of Sanders’ single-payer proposal found that the “average annual cost of the plan would be approximately $2.5 trillion per year.” That’s an astonishing number, when you consider that the federal government’s total spending in 2016 was just $3.9 trillion.

In fairness, Sanders’ proposal is unusually generous, so it would be possible to lower these costs by reducing benefits or dropping expensive services like long-term care. And the cost of the plan would decline as prices fell. But ask yourself whether the electorate would tolerate multi-trillion dollar deficits for years until costs stabilized and the plan was sufficiently entrenched to resist GOP sabotage.

A second solution is to pay for the new plan with high taxes right out the gate. That would avoid big deficits, but it would create an even more serious political problem — many Americans would wind up taking on big tax burdens until costs went down.

A third solution is more or less what Harris proposes — pass a bill that implements some elements of single-payer right away, and then gradually implements more over time. The disadvantage of this proposal is exactly the concern that Shakir raised with it. If Republicans gain power they will prevent any new elements from being implemented. But many of the parts that actually do get implemented are likely to stick around.

Republicans have long feared the fact that new social welfare programs tend to resist efforts to repeal them once they gain a constituency that relies on those programs. As GOP-operative-turned-Never-Trumper Bill Kristol warned in a seminal 1993 memo, “any Republican urge to negotiate a ‘least bad’ compromise with the Democrats” over President Clinton’s health care proposals must be resisted because “passage of the Clinton health care plan, in any form, would guarantee and likely make permanent an unprecedented federal intrusion into and disruption of the American economy.”

America is unlikely, in other words, to reach the end of Harris’ ten-year runway. But our health care system could still be significantly improved by the reforms enacted along the way. And if Democrats did manage to hold onto the White House for the full decade, they could veto any Republican legislation that tried to tear up this runway.

So the reality is that, so long as Republicans remain committed to sabotaging Democratic health proposals, there are few good ways to get to single-payer. And there are many ways to get there that risk destroying political support for the entire project. Transforming the American health care system requires a sustained commitment over several years. But the American system of government gives a determined opposition many opportunities to undermine such a long-term project.

But that also does not necessarily mean that the project is doomed. It can potentially be done in steps. They will just be slow steps, implemented over a long time, and punctuated by periods of Republican rule that could take the project several steps backwards.


Read more: thinkprogress.org

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