A lot of buzz is circulating around healthcare. Obamacare has been extremely controversial and unpopular with many. The aim of the bill was to curb the rising costs of health insurance premiums and provide affordable coverage to the population, by both measures the bill has failed.
The GOP has opposed the bill since its inception, and has run on the promise to repeal and replace it with “something better”. The recent botched roll out of Trumpcare has given a glimpse of what they are offering, and its not good. According to CBO estimates, the GOP “healthcare” bill will leave 24 million more Americans without coverage while insurance premiums sky rocket. But don’t worry, the wealthy will receive massive tax cuts, and the insurance industry will be free to pay their executives even more. So the question is – are we ready for Single Payer Healthcare?
Many people are talking about Single Payer Healthcare, but from what I have seen, nobody has crunched the numbers. Will Single Payer really save money while covering all Americans? If this is so, why hasn’t anyone done the research to prove it? Fear not fellow Americans, I have done the research and crunched the numbers!
What is Single Payer?
For those of you who are unaware, here is a brief explanation. For those of you who already know, skip ahead. Single payer healthcare is a system in which a universal healthcare fund is developed and administered by a public or quasi-public agency. Medicare is a perfect example of a single payer healthcare system in America. People pay into the system through a payroll deduction and the funds are administered directly to care givers when a person needs medical services. The “single payer” administers the funds for doctor visits, preventative care, specialists, surgeries, hospital visits, and all other medical needs.
What do we have now?
Under our current system thousands of private, for profit insurers administer care and decide your coverage based on patient needs, losses to the insurance company, profit margin, and whether the healthcare providers are in or out of network, whereas a single payer systems provides care based only on the patient’s need.
The private health insurance industry we currently have operates on the spread between what it charges the consumer (premiums) and what it allows providers to spend (care). If they can charge more and spend less, that translates into more profits for the insurance company. Their business model depends on spending as little as possible on patient care while charging as much as they can in premiums; this routinely means denied and delayed coverage.
“The consulting firm McKinsey & Company developed the strategy for several of the companies called "Delay, Deny, Defend". It is pretty simple. Concerning really big or controversial claims, the insurer will delay the claim as long as they can (make money on financing), then deny it (improve their loss ratio), then defend it if the claimant sues (in-house legal staff can spend a lot more than most consumers operating on their own).” - Forbes
Under a single payer healthcare system, this profit motive will be completely eliminated on the administrative end - in theory.
Would Single Payer Really Be Less Expensive?
To determine this, we will analyze a few different things. The first thing we will compare is our healthcare spending to countries that have a single payer healthcare system.
In 2015 the US spent $3.2 trillion or $9,990 per person on healthcare. As a share of the nation's Gross Domestic Product, health spending accounted for 17.8 percent.
Even though we spent $9990 per person on healthcare, as of March 2016 we still have 29 million Americans who have no health coverage.
Our neighbor to the North, Canada, has a single payer healthcare system. Today, Canada devotes 10.4 percent of GDP to healthcare (2014), while the United States devotes a whopping 17.1 (2014). Canada currently spends $6300 per person for healthcare.
Canada has better health statistics and all of its citizens are fully covered under their plan, even for catastrophic illnesses like cancer or AIDS. In the United States, some 9 percent of people have no insurance coverage at all and medical costs are the leading cause of bankruptcy.
So just on the spending side of the equation, we can see that Canada spends 60% less than the United States on Healthcare while covering every single citizen. We spend more money than them and we have 29 million people without coverage! Let that sink in.
Canada is not an outlier either, we are. All of the industrialized countries with a single payer system pay much less than we do while covering everyone. As the graph below shows, we spend far more than any other industrialized country.
So we spend more, do we get better care though?
People may be wondering, isn’t it a good thing to spend more on healthcare? That all depends on the level and quality of care we are getting. We spend almost twice as much as most other industrialized countries without covering everyone, but do we get better care?
The answer is no. In almost every metric, from obesity to life expectancy, we are ranked far worse than most other developed countries. “America was 50th out of 55 countries in 2014, according to a Bloomberg index that assesses life expectancy, health-care spending per capita and relative spending as a share of gross domestic product. Expenditures averaged $9,403 per person, about 17.1 percent of GDP, that year — the most recent for which data are available — and life expectancy was 78.9. Only Jordan, Colombia, Azerbaijan, Brazil and Russia ranked lower.”
Below is a list of country ranked by the efficiency of the Health Care system.
Not only is our healthcare system extremely inefficient, we get far worse results than most other developed countries.
As we can see by the various statistics and figures laid out in this article, we spend far more than any other major country on the planet for healthcare. Despite spending far more, we have tens of millions of people who are not covered at all, and millions more who have inadequate coverage. We have one of the most inefficient healthcare systems in the world, and due to this our results are horrendous. Obesity is out of control, our life expectancy is extremely low, heart disease, cancer, and other illnesses are all very high in the United States. Despite spending trillions of dollars per year, our healthcare system is a failure.
It is clear that our healthcare system in riddled with waste and inefficiencies, and on top of that it is not providing adequate results. We spend an unjustifiable amount of money on healthcare, while millions go uncovered. For the reasons laid out in the article, we can conclude that a Single Payer Healthcare system will not only save money, it will do so while covering every single American with quality care.
If you enjoyed this article, please share it with your friends. We must educate our neighbors about the waste and inefficiencies of our current system if we ever wish to change it!
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