Single Payer: Predictions and Questions

Assume that we will establish a single payer system not unlike the Canadian system. What will happen?

The first effect will be a genuine cost reduction simply because a lot of administrative overhead is eliminated. That is the good news. The bad news happens when everyone lines up for medical services the bulk of which is not paid out of the consumer's pocket. The queues will lengthen.

The adjustments will come, as sure as sunrise. First there will be non-trivial co-pay to discourage people from going to clinics and hospitals for a bandaid. Not bad so far. Then there will be prioritization based on some definition of "need". Who will determine the "need". Will it be doctors or will it be some gummint Suit? Then there is the matter of supply of doctors. Will steps be taken to produce more qualified doctors? Who will pay for that? Then there will be the matter of capital investment in various technologies. Who will determine that? Will it be the gummint or will it be the hospitals.

How will hospital pay be determined. Will it be prices established by decree?

And what of drug costs? Will the gummint cap what the drug companies can charge? If so, what effect will this have on the development of new drugs? What of the regulatory burden that the gummint imposes on the drug companies? I would suggest the reader look at what happened until the FDA finally approved TpA (tissue plasminogen activator). Hundreds of thousands died because they could not get the most effective treatment.

With single pay there is no relation between the premium and what customers do to guard their health. The illusion that the government will pay for it will promote rather careless decisions regarding prudence and life style. Will the glutton restrain himself knowing the the government will pay for his liposuction? I doubt it.

I see some real long range problems with single pay insurance adminstered by a government charterd non-profit corporation. The only relief will be a parallel cash and carry medical system that co-exists with the government system. Those who can afford to will opt out of the government system and go to private vendors. If they have the cash they will get more prompt treatment. And then the collectivists will move to illegalize or restrict the cash and carry system claiming that it drains resources from the single pay system that services the masses. It will be similar to the Post Office illegalizing private delivery of first class mail on the grounds that private vendors will "cherry pick" the most capable payers.

Just wait and see. The short term effects will look very good. The long term prospects are grim.

Bob Kolker
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