Public-option to Single-payer?

[anvi]

Ok, let's at least get straight what a single-payer system is, who has one, and what the differences are between various models of health care financing.  (This info comes from T.R. Reid's new book The Healing of America, which is worth reading.)

The so-called "single-payer" system is also known as a "National Health Insurance" model.  In this system, the providers (hospitals, clinics, doctors) are private.  The only insurance plan available is run by the federal or provincial government; it collects premiums and pays all claims, and negotiates costs with providers.  However, such National Insurance plans do limit the kinds of procedures they cover on a case-by-case basis, and thereby create those famous waiting lists.  Canada is the best known example, but Taiwain and South Korea adopted versions too.

The Beveridge Model enables the government both to own hospitals and employ or pay providers as well as pay all medical bills, and it is financed through tax payments.  In such a system, the government determines which treatments may be given in which circumstances and how much various procedures and medicines cost.  This kind of system is found in Great Britain, Italy, Spain, Scandanavia and Hong Kong.

The Bismarck Model features both private providers and insurance companies, and compaines collect their premiums largely through employer payroll deductions.  However, the insurance companies must by law in this system be non-profit, and where profits are collected by offering special coverage to the wealthy or coverage for special services, those profits, apart from modest bonuses given to executives, must be reinvested in the company.  While providers are also private, the procedures they offer as well as their costs, along with the costs of medicines, are heavily regulated by the government.  This is a "multi-payer" system, and is found in countries like Japan, Germany, France, Belgium and Switzerland.  In contrast to other systems, waiting times in many countries with the Bismarck model are shorter, in Japan's case much shorter, than American waiting periods.

As Reid points out in his book, some parts of the fragmented health care financing system in the U.S. are patterned after some of these models: Medicare works like the Canadian National Insurance model (and is even named after it), medical coverage for active-duty military personnel and the VA works like the Beveridge model.  

I lived in Germany for a year and a half and in Japan for a year and a half, and personally, I like the Bismarck model a lot.  I think, if we ever do move to a different model of health care financing in the U.S., it will look more like the Bismarck model than the "single-payer" or NIH models, largely because Americans are accustomed to getting health insurance through their employers and are more comfortable with privately owned companies and providers.  The biggest change here would be getting next to the idea that insurance companies should be non-profit entities.  I for one happen to believe that it's just fundamentally wrong for health care financing to be administered by for-profit companies, because for these, the most effective cost-cutting measure is the denial of coverage, and I think this is almost barbarically unjust.  What's more, all the actuarial and administrative costs associated with coverage-denial in for-profit companies represents a large portion of high premium rates--in other words, we pay extra in this country so that we can get screwed out of coverage when we need it.

Is the public option a slippery slope to "single-payer?"  Well, the financing structure is more like Canada's, with the government health plan collecting premiums to pay for medical bills, and unlike the Beveridge system that finances health care through taxes.  But public option-style health coverage will not be able to control provider costs nearly as much as in other systems, and because there are elligibility requirements for the public option, it will not drive for-profit private insurers out of buisness.  So, both those who want the public option to creep toward "single-payer" and those who fear that it will are both wrong, IMO.  

[anvi]

Dude awesome analysis.
After hearing "those who oppose UHS support death and holocaust" for almost a week from other forumites it's good to hear a rational voice that lists exactly what each different type of healthcare is. I have a friend from Brazil who says that they have both a public and private option and that the private option is actually cheaper than our private option because the private hospitals have pressure to lower costs to compete with the government.

Thanks.  
Yeah, Brazil is an interesting case.  Their government coverage is financed through federal, state and local taxation, and so follows the National Health Insurance model.  However, an interesting and very democratic wrinkle in Brazil's system is that the public basically gets to vote on what sorts of coverage for given procedures should be offered under national insurance.  But, the system also allows citizens to opt out of the national coverage and buy insurance from (pretty heavily regulated) private companies, and tax rebates are available for citizens who opt to buy from the private maket.  I think the current ratio of Brazilians under government coverage as opposed to those under private coverage is at about 80-20.  The Brazilian system would at first glance seem to support the idea that a public option (assisted by its large pool of customers, bargaining power with providers and government regulations) does force private insurers' rates down.  However, the current form of a public option being conceived in the U.S., unlike the Brazilian version, would have means-tested eligability requirements, and so, while its customer pool would be large, it would not rival Brazil's and would not have nearly the amount of leverage with providers that exists in other systems.  This just goes to show you that the currently crafted U.S. public option, for all the improvements I do think it would offer to American health care financing, would be relatively small potatoes compared to public funding in other countries with more unified systems.

But, one problem in Brazil, as in all countries with a universal health care system, is that the providers (hospitals, clinics, doctors) get pretty uniformly low  rates for their services, and this does in certain ways compromise care quality (even though these counties still outperform the U.S. in many types of care).  If these countries would only increase payment rates to providers by a few percent, maxing out total health care expenditures at 10-11% of GDP instead of the standard (6-9%), this problem could be greatly alleviated.

In Reid's analysis, which I think is largely on target, there are several pillars to a successful national health care system.  1.) universal coverage, which creates pools of maximum size to enhance insurers' bargaining power with providers; 2.) a significant degree of available non-profit financing of health care; 3.) as unified a system of finacing as is possible between public and private insurers so that automation of health records can be easily acheived.