The good news is, it looks hopeful that the US will catch up with the rest of the world soon. Some form of single payer health care is looking more and more inevitable. To those who say “I told you so,” and argue that this was the obvious next step when the ACA couldn’t do everything or live up to expectations … to you I say “yep, I think you’re right.” I don’t know if Obama planned it that way, but it certainly could be coming to pass.

Right now though, we have no clue what I’ll call “single payer” will look like. There are a lot of possibilities out there, from Bernie’s “Medicare for all” to forms of Medicare advantage for all, and some who use the generic “single payer.”

What pretty much all of them mean is that at it’s core, we need to change health care such that everyone is covered, and the government is the primary single source of payments for that coverage. There is broad agreement on this, growing every day, but the devil will be in the details. This piece is intended to throw out some ideas, including my personal preferences at this time. I reserve the right to change my opinion here as new data comes in, including new views of the political reality of making this happen. (if I have a preference that can’t be achieved with our current politics, I may be willing to compromise my preference – that’s how politics is supposed to work!)

One thing I think we haven’t done enough of in our current debate is look at what other countries in the industrialized world are doing on single payer. What works, what doesn’t work well, and what might fit best in the US. Our “exceptionalism” has politicians pretending, at least in their rhetoric, that we need to do this from scratch. In fact, we are not exceptional here. We are way behind, and there are a lot of lessons we can learn from others. I’ve been teaching a class on comparative health care systems for several years now, and there are many different examples out there.

I’ll address four areas here to start: who is covered, cost, what is covered and how does this change the current US health care industry.

Who is covered?

Everyone. This MUST be a part of the system, and there is broad agreement among the American people here. It may be that everyone is covered by a basic government health plan like medicare (thus Medicare for all). It is more likely that everyone is covered for certain costs, and you can get supplemental insurance (likely through your employer as one option) to cover other things. Dental, vision and cosmetic care are things typically not covered in other countries. It may be that medicare is available to anyone, but you can keep your employer coverage if you like. But if everyone is not covered, the system will soon feel the weight of the unemployed (as we do now) and costs will grow out of control.

Who pays and what does it cost?

There are a lot of models for this. Health care will never be “free” — someone has to pay for it. Right now, it is paid for through medicare (for older populations and some disabled), employment based insurance, self-paid insurance through the ACA (sometimes with government subsidies), self-paid insurance, and out of pocket expenses. What we know is, overall the United States pays an ENORMOUSLY greater cost per person for health care than any other country.

A quick rundown of the stats: the US (in 2016) was the world leader in health care costs at $9892/capita. Switzerland, with an excellent system that combines private insurance and public funding, was next at $7919. Only the top 4 most expensive countries were over $6000, and there were many excellent health care systems that came in at around half of what US citizens pay, including France at $4600 (#1 in WHO rankings), the Netherlands at $5385, Belgium at $4840, Canada at $4753, the UK at $4192 and Italy at $3391. The US currently spends 17.8% of our GDP on health care, while on average all high income countries spend 11.5% GDP. Except for diagnostic tests (where we have soaring rates of testing that are very inefficient), the US uses health care at very similar levels to other rich countries

A key problem is that we don’t get anywhere near the care that other countries get for our money. We typically rank between 35th and 40th in world rankings, in 2019 the WHO has the US at 37th, with France and Italy (both spending half as much) at #1 and 2. According to the Commonwealth Fund, our key issues are that health care costs a lot, we don’t insure everyone, and population health is highly correlated to wealth.

What drives US costs? Doctor’s salaries (driven up in part by malpractice insurance); pharmaceutical costs (US $1443/person, avg $749); and health care administration (US is at 8%, industrialized world average is 3%). Admin costs are especially important here, in that our privatized system includes things like advertising, inefficiencies in duplication (lots of companies with people doing the same things), executive bonuses, and of course profits.

[Sources for the above stats are the World Health Organization, OECD and the Commonwealth Fund]

The KEY issue on our health care system: the US system is NOT efficient when it comes to costs!!! Public funded (and sometimes publicly provided) health care is more efficient than private health care! This goes against the religious convictions of those who insist that the free market will always be more efficient than government, but health care realities prove that in some parts of the economy, those predictions are absolutely wrong.

And of course the harshest issue here is that a significant amount of the inefficiencies comes from profit – health care companies profiting off of the ill health of others. When decisions are made by profit, not only do costs increase, but care decreases. And as is the case in the US, some people and procedures simply aren’t covered.

How do we pay for single payer?

Here we have a wide variety of models from a variety of very successful systems. There is no one answer, and that can give us flexibility to find the best choice for the US people and culture.

There are three basic ways to cover the costs of single payer health care: income taxes, payroll taxes, or a combination of the two. Income taxes are typically highly progressive, with those on the lowest end paying no additional taxes and those on the highest bearing the largest burden of the costs. Payroll taxes are very similar to the current US social security/medicare deductions, with the employee and employer each paying a part of the tax burden. And costs can also be covered by combining these two.

Payroll taxes are the most common method of payment, and are generally seen as positive because they spread the burden well between individuals and employers. Unlike in the US, where low-wage employers can get away without paying for medical insurance, these systems have costs for every employee. And again similar to the US system, if you are a low wage employee, you may see some of your tax costs returned to you at the end of the year, or have very low percentage payments.

In addition, there are no systems that currently cover ALL medical expenses, as this would be prohibitively expensive. Canada did this at one point, but the system was found to be ineffective. Small co-pays are typical to be sure that individuals have at least some skin in the game and don’t over-visit doctors, but these are usually capped anywhere between a few hundred and a thousand dollars per year. Dental, vision and discretionary procedures (cosmetic surgery, etc) are also usually not covered, or not covered fully. Patients may be expected to pay these out of their pockets, again with a yearly cap. These costs may also be fully covered until individuals are 18 years old, and then a different system kicks in. Most countries have supplemental insurance that you can pay for privately, or that is typically provided as a benefit through your employer. This may cover copays, dental (etc), and additional charges that come up. In all of these systems it is typical to have an absolute cap that any individual must pay for medical expenses in a year, such that medical bankruptcy is only an issue in the United States.

There are often wait times for non-critical procedures, but not significantly moreso than in the United States, and less if you factor in those individuals who wait forever because they cannot afford a procedure. Supplementary insurance also may pay more to reduce wait times with private physicians.

How are costs kept lower than current US costs?

The key here is that a single payer has ENORMOUS efficiencies when negotiating with providers, and can set rules that significantly limit profits. In economic terms, this is no different than Walmart or Costco cutting deals with major providers — meet our price, or you don’t get to have a product in this market. Medicare already negotiates prices with doctors, and this system is the basis for all medical costs in the US. This can also be the basis for a future system, but with only one negotiator, the power is put into the hands of the consumers (all US citizens) who will be able to pay the best possible price for medical services.

In addition, many of the efficiency issues mentioned above will come into play. Advertising budgets will be much more limited (or non-existent in many cases), drug prices can be negotiated to much lower levels, excess profits can be cut, along with executive bonuses. Hospitals, and insurance companies that will still be needed to some extent or another, can be required to be either non-profit, or turned into regulated monopolies with a cap on profits. These are all measures taken in other countries, with the result that care is significantly better than it is in the poorly ranked US system.

What is covered?

While the specifics vary around the edges, all industrialized systems cover what US private insurance typically covers, and frequently more. With US insurance, patients often have to fight with their insurance providers in order to get access to the most costly procedures. These are often technically covered in their policies, but the insurance companies deny coverage and put up a fight in an effort to save costs and increase profits. This is both morally bankrupt, causes inefficiencies in service, and in some cases ends with the patient not getting needed coverage before they die.

In single payer systems, there is a list of what is covered and what is not, and when a procedure approved by a doctor is covered it is provided and paid for with no questions. The question of “what is covered” becomes a political one, not one based on the profit of insurance companies or hospitals.

Areas that need the largest political debates and agreements typically involve early births and end of life decisions. In the US, we make extraordinary efforts to save the lives of any child that leaves the womb, as long as the parents have insurance. This is one of the highest cost areas of medical care, and most industrialized countries limit premature birth care to the last weeks of pregnancy. If we want to continue at this level, we will need to take those costs into account and accept slightly higher payments. Supplemental insurance can also be used to cover these costs. Similarly, end of life care can be precipitously expensive, particularly care for those who are incapacitated and unlikely to recover. The same societal decisions will be needed, or supplementary insurance may apply. Note that right now in the US, if you don’t have insurance, these questions aren’t really an issue — the patient is left on their own in many cases and dies.

Bottom line: given the examples of other countries, and with the exception of premature babies and the incapacitated elderly, every other health care system now covers at least as much as the US system through private insurance, and often more.

How does this change the US health care industry?

Changes will be most significant for four groups. Doctors and medical providers will likely see lower salaries, but also much lower costs. Many private doctors are being forced out of practice or into larger institutions because of the rising costs of medical practice. Malpractice insurance can be lowered significantly with a single payer system. More importantly, doctors won’t need multiple staff members just to make insurance claims and to enter data. Each doctor can enter procedures on a computer that will link directly to the single payer, with one or a small number of administrative staff to check and process the work. In the US now, paying for the people who do the admin work needed to process payments is one of the highest costs for private practitioners.

Pharmaceutical companies will be one of the two groups who will see the biggest changes. The US is right now the only country where political power protects pharma interests over consumers, allowing pharmaceutical companies to not only continue to make enormous profits and charge enormous costs for needed drugs, but also to limit innovation through politicized intellectual property laws. They have bought and paid for the right to make huge profits off of their products, at the cost of the consumers. This is not just a cost in money, but also in lives as many people on the lowest end don’t use the life saving/extending drugs that they are prescribed because of costs. One of the biggest savings in a single payer system will be the ability to have the single payer negotiate pharma costs.

Insurance companies will also see enormous changes in any single payer system. While some might cease to exist, most will adapt to a new system in several ways. First supplementary insurance, either sold to individuals or through employers, is very likely to still be an option.

Second, one option that may fit the US system well is the potential for “Medicate Advantage” type accounts run by private insurance companies. In this system, the federal government would be the single payer, and the insurance companies would do the administrative work to provide payments to the providers (doctors, hospitals, etc.) This would take away a large amount of the need for government staffing to administer the system. This is very comparable to how Medicare is currently implemented, and even now Medicare Advantage programs have caps on the profits that the insurance company can make in providing the administrative service, and are effectively regulated monopolies. This could fit in very well with the current US system.

Finally, hospitals would see many new rules for efficiency and cost savings, and most would likely become real non-profit organizations. Public hospitals might also become more common, as they are in many other countries.

The underlying issue on costs is that a single payer system will allow profits to be cut to the lowest possible level. And taking profit out of health care is both morally correct, and a benefit to efficiencies of both costs and service.

More significant options to consider:

Many of the richest countries have very different systems from the US, and while it is unlikely we will make this big a change, these should be considered. Changing health care to a publicly run system exists in several countries, either with all public hospitals/health care, or public/private options. This could mean public hospitals where many doctors practice, with their salaries/costs paid by the single payer system. In countries where this is done, many doctors prefer to be able to practice medicine without having to think of the business end of the profession. Public/private combinations may look like the above, but with other doctors choosing to enter private practice. They may be able to charge more for those with supplemental insurance or the means to pay more out of pocket.

Another option involves paying for the education of medical professionals. Countries that do this, including France, leave doctors with no student loans at the end of their education. In exchange, those doctors are required to work in public hospitals for a certain number of years (typically based on their years of education), and are free after that time to choose public or private practice. This is effectively an “Americorps” or similar program for doctors.

Conclusions – for now…

This piece has not yet answered the key question for most people on health care: do you get to keep your doctor? The answer is absolutely YES! All other systems discussed allow you a choice of any doctor available. In fact, this is more so than in the current US system, where if you change jobs, or your employer changes insurance plans, you may also need to switch doctors to find one who is in your plan.

Another politicized question is: but will we pay more in taxes? For most people, the answer to this is “yes, but…” — and the “but” is the important part. Single payer health care will shift the burden from what you pay at work, to the federal government. So yes, you may very well pay more in taxes, BUT you will pay less overall for your health care costs. Right now, most people pay payroll taxes (Medicare), plus part of the cost of the insurance your employer provides, plus whatever your employer contributes to your insurance (this is a benefit of your job that you never see in your paycheck, but it is real money!) In a single payer system, all costs would be paid through taxes of some type (discussed above), BUT the costs overall will be significantly lower as discussed above through greater efficiencies and less excess profit. So if right now we each pay $10,000 total for our health care a year, and $3000 of that comes out of our taxes, in the future we might pay $6-7000 total per year, with all of it in our taxes. This will result in higher taxes, but also a $3-4000 (in this example) total savings on costs. So we will pay less, and have more money in our pockets at the end of the day/year.

In conclusion: I firmly believe that single payer health care is coming in the United States. It is now a question of how soon, and what will it look like. As consumers of health care and citizens who elect the people who will make these decisions, it is up to us to get as much education as possible on this topic, and to participate in the debate intelligently and in our own interests. If we don’t, you can be sure that someone else will lead us around, and that someone is more likely to be looking out for their own interests, and not yours.