Friday, June 12, 2009

Some Downsides of Single Payer?

So, today I had the pleasure of appearing on the Anthony McCarthy show ( on WEAA ( in Baltimore. I must say it was an interesting experience. My fellow guest, Kevin Zeese (imagine having two Kevins as guests on the same show) is a single payer advocate. Nothing wrong with that. As I have said beofre on this blog, there is a lot to be said for the single payer idea. Ther would be one set of rules. One set of paperwork. No advertisting among insurers. If it was run by the government and they could match the administrative cost rate for Medicare, we'd be looking at around 3%. In many ways it seems great. Proponents also point out that it would give ultimate choice of providers and facilities because everyone would accept the insurance.

That is all well and good. However, before we go too far down this path, let us assess what some reasons for being a little wary of this are. I am not advocating either side at this point. I am simply wanting to make sure that I (as I "think out loud") and you consider what this means.

First, if you don't like the benefits in the single payer plan you are stuck. Single payer proponents say that people really want choice of provider and are not so interested in choice of insurance product. In general, I would agree with the intuition behind that statement. However, some basic observation of the heterogeneity of preferences that people show suggests that we might want to allow for variable policies.

Second, the government is not known for paying a lot for health care. Providers may find that they are not making enough. Proponents of a single payer system note that many providers state that they approve of a single payer system when polled. They are probably frustrated with the administration and paperwork. They may not appreciate the payment they end up with.

Third, consider comparative effectiveness research. If the government uses it in a single payer system to prescribe the care that must be given that limits choice of approaches to treatment. It could be argued that this would also be true for private plans. However, if there were multiple private plans some may more or less strictly adhere to the evidence and consumers would have their choice among different plans with different levels of adherence.

So, if we were to go down this path we would have to think very carefully about whether people value choice of payments, whether people value choice of treatment, and how well providers would be paid. As a society, we may decide that a single payer system (because of the potential savings) does make sense. However, we may decide that the limits that are imposed cause problems that outweigh the savings.

Over the next two days I'll talk about some thoughts on the public option idea and what elements I think we need to combine to have a good plan--although it may make no one particularly happy.

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