The Promise and Peril of A Single-Payer Comeback

With it looking like there’s a decent chance the Supreme Court will strike down the Affordable Care Act, there’s increasing buzz around the fact that this would in effect force progressives to choose between a push for a “single-payer” health care system (i.e., cover non-elderly people with something like Medicare) and giving up on universal health care altogether.

The great virtue of a single-payer system is that all the evidence suggests it would be cheaper. The problem with a single-payer system is that in my experience a lot of progressives are confused about why single-payer saves money. But think about what it means to have a single payer for health care services? It means that there’s only one buyer of health care services. And guess how you would feel if there were only one buyer of the services you or your firm provides? You’d hate it! Because that one buyer would have all the bargaining power. Medicare pays doctors and hospitals and other providers less than what big insurance plans pay which is less than what individuals pay. A Universal Medicare system would have even more bargaining power than existing Medicare. The presence of multiple payers/buyers is one of the main reasons that American doctors are paid so much more than Canadian or British doctors. This is perhaps a good idea, but it highlights the fact that the politics of a serious single payer push are more complicated than a simple poll asking people how they feel about Universal Medicare. Doctors and other health care professionals have very high status in the United States and the public trusts them. A policy initiative that reaps budgetary savings by taking a bite out of their income will face a major challenge over and above the fact that health insurance companies and their thousands of employees would struggle mightily to avoid being put out of business.