NCPA - National Center for Policy Analysis

Less Costs More With Single-Payer Health Care

January 15, 2003

Single-payer health-care systems promise universal coverage, says Linda Gorman of the Independence Institute, but they do not guarantee access to treatment. For instance, in 1997, an estimated 20 percent to 30 percent of all patients on Canadian waiting lists were expected to die before getting care.

Because the government funds health care, access is limited by budget constraints. And since only 4 percent of adults are likely to need treatment in any year, politicians are likely to spend less on health care than individuals would themselves. Thus Americans spend about twice as much on health care as people in other countries.

The poor performance of single-payer systems can be seen in higher mortality rates for treatable diseases, compared to the United States. Take cancer, for instance:

  • For breast cancer in the United States, the cancer-mortality ratio, or death rate divided by the incidence of disease, is 25 percent.
  • In Canada and Australia, it is 28 percent; in Germany, 31 percent; in France, 35 percent; and in New Zealand and the United Kingdom, 46 percent.
  • For prostate cancer, the U.S. mortality ratio is 19 percent; in Canada, 25 percent; in New Zealand, 30 percent; in Australia, 35 percent; in Germany, 44 percent; in France, 49 percent; and in the United Kingdom it is 57 percent.

Single-payer systems are also extraordinarily costly to run because they do not reward those who reduce costs by increasing their profits. With all costs included, the overhead of the Canadian system is about 45 percent of claims -- compared to 7.6 percent of claims for private insurers in the United States -- according to Patricia Danzon of the Wharton School of Business.

Source: Linda Gorman (Independence Institute), "Road to medical hell," Perspective, Denver Post, January 12, 2003.

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