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12 questions about single-payer health care

What is single-payer health care?

A single-payer health care system is one where the government operates a tax-funded health insurance plan for all residents.

In a way, the name "single payer" pretty much says it all: Just one, single entity pays doctors’ and hospitals’ bills. That one party is, in all international examples available today, the government.

This is very different than the current American health care system, where thousands of different parties — some private, some public and some individuals — all chip in a bit.

The term "single payer" describes a method of paying for health care. What it does not say anything about is ownership of the rest of the health-care system. It’s possible, for example, for a single-payer system to contract with doctors who are employed by private companies. Single payer is typically a policy approach used to achieve universal insurance coverage for all residents — but it’s not the only way to get there.

What medical services do single-payer systems cover?

It varies a bit by country, but there’s one thing that’s true everywhere: no single-payer system covers everything. They do tend to foot the entire bill for a core set of benefits, nearly always including medically necessary surgeries, annual physicals, and preventive screenings. But they also leave some pretty regular medical services out, too.

Single-payer systems have to make difficult decisions about what benefits they can — and can’t — afford to guarantee to all residents. Canada’s single-payer system, for example, does not include coverage for dental care, vision care and many prescription drugs. Two-thirds of Canadians purchase a separate, private policy to cover those costs. England’s National Health Service charges a $12 co-payment for drugs prescribed outside of a hospital setting. So in practice, single-payer health care systems end up mostly government-financed but with individuals chipping in, too.

Which countries have single-payer health care systems?

Researchers typically cite Canada as one of the most straightforward examples of single-payer health care. There, each province provides a public health insurance plan to all residents. Many Canadian provinces also have laws that actively discourage — or straight-out prohibit — private insurance plans from covering any of the benefits included in the government program.

The United Kingdom’s National Health Service also fits the definition of single-payer, with the country using general tax revenue to pay for all residents’ health care. But the United Kingdom is different from Canada in one big way: it also owns and operates most of the health care providers. Canada, by contrast, contracts with private providers. Taiwan's health care system works similarly.

New Zealand, Norway, Denmark and Sweden also have national health services similar to the United Kingdom, where the country owns the providers — and is responsible for paying them.

Are universal coverage and single-payer health care the same thing?

No. Universal coverage refers to a system where all residents have health coverage. Setting up a single-payer plan, where the federal government pays for all residents’ health care, is one path to get to universal coverage — but not the only one.

Some universal-coverage countries have lots of different payers. Japan and Germany, for example, require citizens to enroll in one of dozens of competing health insurance plans (Japan has 3,500 insurance plans; Germany has a more modest 300). These are typically called "multi-payer" health care systems.

There are lots of similarities between single-payer and multi-payer countries like Germany and Japan. All of them, for example, have the government set medical prices at a standard rate. But they're still different paths to getting a country's population insured.

Is Medicare a single-payer system?

If you want to get health economists into a furious debate, you should ask them this question. Some argue that Medicare, the federal program that covers all Americans over 65, counts as a single-payer system within the United States. Like single-payer systems, it's a tax-funded health plan run by the government. Medicare has some of the attributes typically associated with single-payer: lower administrative costs and high rates of coverage among seniors.

The Veteran’s Administration and Medicaid are two other, federally-run insurance plans that often get described as single payer in miniature.

Other health economists, however, hate this analogy. They argue that Medicare doesn’t count as single-payer because it’s restricted to a specific set of Americans, and not offered to all citizens. It’s one of many insurers that pay for health care in the United States, not the only one in town. That stops it from negotiating (or just setting) prices as low as those found in "real" single-payer systems. It does, however, negotiate prices lower than private health insurers.

To put it another way: If everyone in the United States were over 65, Medicare would be our single-payer system. But since there are lots of under-65-year-olds here it's not a true single-payer system.

Do single-payer systems cost less?

Compared to the US, single-payer systems tend to be considerably cheaper. But then, compared to the US, pretty much every health-care system looks affordable.


Single-payer systems tend to have lower administrative costs than those with many private insurance companies, where doctors and hospitals devote lots of time to figuring out who is supposed to pay them what amount. One 2011 study in the journal Health Affairs estimated that American doctors spend four times as much money interacting with healthcare payers than their Canadian counterparts.

Single-payer systems also have an advantage when it comes to bargaining down prices. Because doctors and pharmaceutical companies basically have no choice but to accept the terms laid out by the government, single-payer systems often feature much, much lower prices than systems. The United States, for instance, pays much more for most health-care services than single-payer systems do. It’s worth noting that many multi-payer systems, like Germany, achieve similar savings to single-payer systems by having the government set health care prices.

Do single-payer systems have long wait times?


While Canada is a single-payer system and has especially long wait times, most research doesn’t suggest any particular relationship between the financing model and how tough it is to see a doctor.

Here’s one graph from the Commonwealth Fund that looks at what percent of adults can get a same-day doctor's appointment when they’re sick (the single-payer systems below are Canada and the United Kingdom; all the rest, except for the United States, also have universal coverage.


Canada, a single-payer system, tends to have the longest wait times in this and other studies; the issue has become an increasing concern for legislators there. But the Commonwealth Fund data suggests that that long wait times are not systemic to single-payer systems. For example, in the United Kingdom, a single-payer country, it's easier to get a same-day appointment than in the United States. And multi-payer systems like Germany often have much lower wait times than the United States.

I'm in a Canadian waiting room right now. What have you got for me?

Two options: if you’re really interested in digging into your health care system, you can download a copy of T.R. Reid’s recent book, The Healing of America, which offers one of the most accessible tours through international health financing systems.

If you’re looking for something lighter, may we suggest a musical break from Canadian super-star Robin Sparkles.

What's the case against single-payer health care?

There’s no one, unified case against publicly financed health care systems, but there are a few arguments that turn up frequently. One is that single-payer health care could stifle innovation by regulating lower rates for health care providers — and leaving them less space to experiment with new treatments.

The United States has long been a leader in biomedical research, and some attribute that to the fact that we spend a lot of money on health care. We pay more for nearly all medical treatments than publicly financed systems do. According this theory, the extra money allows pharmaceutical companies, device manufacturers, and other developers to experiment with new, potentially groundbreaking experiments. In that view, the United States' higher healthcare costs are subsidizing medical innovations that then proliferate across the globe.

Others argue that single-payer health care gives the government too much control over the health care system, leaving patients little — if any — option to buy from a competitor that might offer different benefits or higher quality. This has been an issue in Canada especially, where many provinces have disallowed private plans that cover medical services in the federal program. The Canadian Supreme Court struck down this type of law in Quebec, citing long wait times in the public system as a reason why private plans ought to be able to compete with the government.

Does single-payer health care lead to rationing?

Every country — single-payer or not — has a limited number of dollars it devotes to health care. Those dollars get divided up in a way that, in all international examples available, doesn’t cover all the medical services that everybody wants.

In single-payer systems, the government sets parameters for what services it will and won’t cover. Countries often do this by looking at which treatments are "cost-effective"–health-care-speak for which medical interventions deliver good results at a lower price. Some treatments get left out, which can spark fierce debates. In Britain, for example, an agency called the National Institute for Health Care Excellence is in charge of evaluating what treatments it will pay for — and in which situations. Britain will limit certain treatments to certain types of patients, based on where research shows them to be most effective, which can often touch off fierce debates.

Supporters of single-payer systems tend to point out that the United States employs a different kind of rationing: people who can’t afford health insurance often don’t get it. That means these people never get access to health-care treatments regardless of whether it might help. These people are effectively waiting forever, and that won’t show up on surveys about wait times.

Do people who use single-payer like it?

Single-payer countries tend to get more favorable ratings than the American health-care system. Here’s a graph from the Commonwealth Fund’s International Health Policy Study, which shows the percent of each country’s residents who think the health system "works well" with "minor changes needed."

Canada, Sweden, and the United Kingdom all have higher satisfaction rates with their health-care systems than the United States, with many more people who think the system works well. And while 27 percent of Americans say that the country’s health-care system "needs to be completely rebuilt," only 10 percent of Canadians and 3 percent of Britons say the same about their system.

Will the United States ever have a single-payer system, or is that a crazy liberal pipe dream?

More of the latter: a single-payer system does not look likely in the United States anytime soon. During the battle over Obamacare, even the public option — a single health plan run by the federal government that would face private competitors — proved politically untenable in Congress.

Seeing the unfavorable political landscape, some states have explored the option of building their own single-payer systems on their own. Over the past three years, Vermont came closer than any other state in building a publicly financed, universal health care system. Officials there spent three years mapping out the system, which they planned to launch in 2017. But the effort fell apart in late 2014, when the state government realized it would take a massive tax increase to get Vermont's single-payer system off the ground. You can read more about what happened here.



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