Single-Payer Health Care By Any Other Name Is Still A Monopoly

Commentary by Pete du Pont

Over the past decade, self-appointed health care advocates have talked a lot about health care reform in America, ranging from issues such as a patients' bill of rights to reign in HMOs to the plight of the uninsured. Pundits often refer to these issues collectively as incremental health care reform, which is spin for the left's current strategy to push towards a system of national health insurance (e.g. socialized medicine) one step at a time.

Americans soundly rejected the idea of "socialized medicine" back in 1993, when the Clinton administration proposed a wholesale change of the health care industry. Licking their wounds from that defeat, proponents of national health insurance have recently seized upon a less threatening term - a "single-payer system."

In theory, a single-payer system would reduce the number of different organizations with which physicians and hospitals must file claims. From a paperwork sense, this sounds attractive. Many public health advocates assume the administrative savings would be sufficient to fund coverage for the uninsured. Likewise, consumer groups would like to pocket any savings in the form of lower premiums. Yet however logical these arguments sound, the truth is there will be no "savings" to fight over.

Health economists see inherent problems - similar to those experienced in Europe and Canada - in all single-payer systems. First and foremost, because it is paid for through taxation, consumers are insulated from the direct cost of health care. Consequently, they are not price sensitive and tend to consume more than they otherwise would. Thus, single-payer systems must employ one of several tactics to artificially reduce consumption. Options range from the outright rationing of care, to shortchanging capital investment in facilities and modern equipment, to reducing the number of physicians available to treat patients.

Britain and Canada, for example, have fewer physicians per capita than the U.S. To adopt a single-payer system with resource allocation similar to Canada, the U.S. would have to fire around 171,000 physicians. Those doctors who remained would have to see, on average, 921 additional patients per year to match the average number of patients seen by Canadian physicians. As a result, the length of time patients spend with their physician during an office visit would likely be shorter.

Because of these factors, virtually all countries with a single-payer system of national health insurance experience chronic equipment shortages and long waiting lines for treatment (not to mention higher taxes). Waiting lists exist simply because there aren't enough specialists, treatment beds and operating facilities to accommodate patients needing care. Thus, care is given to those patients most likely to benefit - at the least cost. For instance, in England, the shortest waiting lists are often for non-critical procedures, while life-threatening ones require longer waiting times.

Further, long waits are frequently required for routine services Americans take for granted. In 1999, for example, the median wait for a CT scan and an MRI across Canada (both critical for diagnoses) was five weeks and 12 weeks, respectively.

Finally, a single-payer system would be a bilateral monopoly. Just as a monopoly can charge what it wishes for the services it offers, a single-payer system can reduce funding available for particular services or refuse to cover services deemed too expensive. Because a single-payer does not have to compete for your business, consumers will likely get less value for their money. And consumers needing costly non-covered treatments (or costly medications not included in a drug formulary) would have to pay out-of-pocket.

Under our current system, if a health insurance company raised prices and reduced benefits, consumers would switch in droves. But, when there is only one game in town, consumers would have to accept whatever costs and benefits were offered. Without the incentives created by competition, a single-payer system would likely exemplify the innovation, compassion and efficiency of the Internal Revenue Service in no time.