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December 08, 2002

Gore: Single-Payer Cheaper

Gore says he will be rolling out a full proposal for single-payer health care in coming weeks.

But he's already emphasizing the secret of government-run health care that makes conservatives squirm.

It's cheaper and more efficient than a private health insurance market.

As Gore argued on ABC's "This Week", a single-payer national health care plan where one entity, for example a government agency, collect all premiums and pay all bills can offer more choices and deliver more health care for less cost.

While Gore said he would seek new taxes to pay for the system if necessary, single payer is likely to result in lower taxes because it would make the system more efficient.

"I think it would mean less expense overall because of all the money that's wasted now," Gore said, saying about one-third of the $1 trillion spent on health care went to unnecessary paperwork and bureaucracy.

"I think that the amount that we're spending now is more than enough to cover an improved health-care system that would have better benefits for more people at lower costs. I don't think that new revenues necessarily are required," he said.

Conservatives will scoff, but as I noted in this post a couple of weeks ago, the facts are irrefutable. Government-run health care systems, from France to Sweden, all deliver better health care with lower costs.

France has one of the most comprehensive health care systems in the world with better life expectancy, no waiting lists for treatment, and house calls, yet spends only 10% of GDP on health care. The US spends over 13% of GDP on health care and still leaves much of the population without health coverage.

So when Gore says one-third of our health care dollars are wasted on insurance bureaucracy, comparing France's results to ours backs up his numbers.

BTW Just for the technically-minded, a shift from employers paying private insurers to paying a government agency for health care will be counted by conservatives as a "tax increase", but if they get more health care for less cost, who cares? Workers are "taxed" from their income as much for health care by private insurers as from government systems in other countries, a basic point that an anal fixation on "tax rates" just misses. As a Populist column of mine on Sweden emphasized, what voters should care about is what system delivers the most discretionary income after all the basic expenses of life are paid for, whether out of pocket or indirectly through taxes.

And single payer wins out hands down as the "low tax" option.

Posted by Nathan at December 8, 2002 03:35 PM

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Of course, bureaucracy is hardly the only source of waste in the U.S. health insurance system. What about all those touchy-feely TV ads for hospitals, prescription drugs, HMOs, etc.? I've never quite understood the reason for the latter, since most people are in thrall to the quasi-feudal employer-funded (correction, semi-funded) system and are scarcely able to choose an HMO they way they might choose, say, a car.

Side questions: does the money spent on such advertising count as "health-care spending"? And what, if any, would be the downside to diverting some of these funds to actual patient care?

Posted by: vaara at December 10, 2002 04:40 AM

On the face of this I would agree, in that economies of scale and scope, and uniformity of process, might drive down administrative costs. Then I realize that this is the government we are dealing with - necessary, but not really driven to be efficient. I would place procurement departments at GE or Coke up against the Department of Defense, and I can guarantee you the private firms would be far more streamlined. Also, industries that benefit from scale tend to grow, as weaker competitors are forced out - look at our automotive or financial services segments. If the health care industry could benefit from scale, but is not conglomerating, it is likely PREVENTED from doing it, by none other than regulations from state and federal governments. Finally, lets look at the best example of a government health-care system in the US: Medicare. We have 50 or so unique state-run Medicare programs, and I don't see any rush by government to streamline that organization.

Comparing life expectancy France and other socialized-medicine countries to the US is rather simplisitic (I notice that good old single-payer Cuba doesn't make the comparison list, btw..). There could be other causal factors that give them a lower health cost structure - a homogenous population with little immigration, for example. Second, the figures on % of GDP lack one thing that can help to validate them - a source. Without that, its not clear we are comparing apples to apples. Does France's figure include discretionary health procedures? Since they would not be covered by the single payer system, they might not show in the #'s in the same manner as those for the U.S. They also don't mention factors, such as salary, that will be very important in trying to sell the plan; if health care workers have to take a 30% pay cut to make your numbers line up and be like those competitive 30hour a week giants, the French, good luck with your "hands down" good idea. And you don't mention the idea that other industrialized nations benefit from the capital and R&D investment that the U.S. supports. France and Canada wouldn't have their miracle drugs to slap price controls on if the U.S. didn't sell them in a free market.

Finally, in boiling this down to simple terms, I travel to Canada a lot. Their system is by no means better. Just get in line for a visit to an oncologist as a potential tumor grows, and then come back with that cock-and-bull premise. Americans drive up to Canada to get prescription drugs, but Canadians drive down here to get health care that their government fails to efficiently offer.

Overall, as a country, we can do better providing health care to our citizens, but I can guarantee that the government, annexing this burden and carrying it solely on its own shoulders, isn't going to acquit itself well.

Posted by: Grant at December 12, 2002 02:36 PM

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