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Three Reasons Why Conservatives Should Support Single Payer

With the most recent challenge to the Affordable Care Act still pending in the Supreme Court and election season hovering on the horizon, the time is ripe to examine possible opportunities for deepening health reform.

The conservative alternative health reform plan proposed by Paul Ryan is a plan to “voucherize” Medicare- in other words, to provide older adults with a credit that can be used towards the purchase of private health insurance.  This would effectively decimate Medicare as we know it.

Meanwhile, the preferred policy option for many liberals is to dramatically expand Medicare to a much wider segment of the population than only those 65+ through the adoption of a “single-payer” option, or Medicare for All.

While the partisan division on this issue could not be more stark, below I outline three reasons why conservatives should actually be single-payer’s biggest fan.

  1. Single-payer would dramatically reduce health care expenditures by increasing the efficiency of the system and eliminating waste. Although conservatives purport to be against government waste and in favor of “efficient” markets, our current private insurance system is the most inefficient in the world. That the US spends triple the amount on health care as other countries is a , but what is less well understood is the fact that the overwhelming majority (if not all) of this excess cost can be attributed to waste within the system. It is estimated that over 20% of the cost of the health system goes towards “administrative costs”- basically to pay for all of the redundant claims processors across multiple insurers who determine what is reimbursable and for how much. Doctors and their staffs also lose precious time and resources chasing down insurers to determine what benefits are covered. But the higher administrative burden is only part of the high cost equation. The decentralized system of claims processing also means that the prices providers charge varies widely with the potential for providers to overcharge insurers and since patients do not face the full cost of care, they have little incentive to discourage unnecessary or expensive procedures. By contrast, single-payer systems like Medicare have a single reimbursement rate for specific services and one centralized claims processing body- the government. This is in fact how single-payer gets its name- having just one payer rather than multiple payers saves precious time and resources and allows for more oversight of the system.  Don’t believe me? Well the proof is in the pudding- rates of cost-inflation in Medicare have been growing much more slowly than cost inflation for private insurance. The stark reality is that more centralized control begets more efficiency, not less.
  1. Single-payer preserves private physician practice. A common myth about single-payer systems is that providers under such a system are necessarily public sector employees. While this is true of providers that are part of the British National Health Service in the UK (and the Veteran’s Administration system in the US), this is not the case in systems like Canada where providers operate in the private sector. Although most of their payments come from the government, they are not government employees. They are no more government employees than teachers at private schools that receive vouchers from the government, a system supported by most conservatives.
  1. Single-payer systems ensure that everyone pays their fair share and eliminates so-called “free-riders.” A major preoccupation amongst conservatives has been the “free-rider” problem that individuals without health insurance benefit from the system without paying in. A major defect in private insurance insurance markets is that without government intervention, healthy people have little incentive to purchase insurance. Private insurance plans require enough healthy people to enroll to offset the cost of the unhealthy people who are more likely to sign up because they know they will use health services more. This is why the idea of the individual mandate was originally advocated by the conservative think-tank the Heritage Foundation.  Prior to the introduction of the individual mandate, healthy individuals who chose not to purchase insurance coverage could get away without coverage by seeking care at the emergency room. Requiring everyone to “prepay” for health insurance coverage ensures that the “healthy invincibles” do not transfer costs onto paying customers.

From a pragmatic standpoint, it would behoove conservatives to reframe their policy stance when it comes to single-payer since Medicare is extremely popular, especially among older adults, a critical vote bank for either party.  Even if conservatives are still not convinced by the merits of single-payer alone, instrumentally, it would be in the interest of conservative politicians to tread lightly in writing off single-payer entirely. If Paul Ryan’s plan were to succeed, health care for older adults would rapidly revert to a system in which access to health care is purely based on ability to pay; for a more thorough treatment of why, see this article in The Nation.

Even as I write this, I know that it is but a pipe dream to believe that conservative politicians will suddenly rally behind single-payer, but given the general level of confusion about the public roots of Medicare as exemplified by such Tea Party slogans as “Keep your Government Hands off of my Medicare,” perhaps there is hope among the conservative public.

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Featured image courtesy of Photo Pin under Creative Commons license

About Ashley Fox

Ashley Fox, Ph.D., is an Assistant Professor at the Mount Sinai School of Medicine, Department of Health Evidence and Policy. Learn more about Ashley here.

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