The Cure For Health Care: Single Payer, Private Provider

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percentage-of-gdp-spent-on-healthcare-canada-us-france-germany-sweden-uk-2015For many years I have argued that the solution to high health care costs with universal access is “Single Payer” with “Private Providers”. In other-words, the government collecting taxes from everyone for prescribed services though provided private health care companies that compete for those dollars through their own hospitals, clinics, home care… .

And before you get your twitter-rage up, yes, I know that “prescribed services” is a particularly thorny phase that will cause many to recoil, but I think we can all agree that as heart breaking as it may be governments (i.e. you and me) cannot collectively cover EVERY treatment.

Also note that I am not saying the Federal Government should set a fixed fee schedule.  In a competitive market those private providers will provide increased service at reduced costs.

For your reference, the graphic to the right shows the amount of money spent or each citizen in 2015 Canadian Dollars and what that represents as a percentage of Gross Domestic Product (GDP).

As a center/right, moderately well traveled Canadian with a Commerce Degree, family in the UK, and friends in various EU countries, it seems to me there are three key factors supporting this fix for health care:

1 – The United States Private Health Care System is Broken:

The American “User Pay” health care model leaves too many people out and is it is just too expensive.

To be clear, in my OPINION (and I know some will disagree so I want to make my bias clear), no-one should die or live pain pain just because they are poor.  So if you want a tummy tuck or a face-lift, enjoy paying for it yourself, but if you have a heart condition or need a broken leg worked ond, society should help.

It is estimated that about 12% of Americans do not have health insurance and a great number of those with insurance cannot afford to pay the average $4,358 deducatable /co-pays.

The table below shows the per capita cost of health care in top 25 countries around the world.  As you can see the United States has, by far, the most expensive health care in the world and that cost is increasing at at one of the fastest rates in the world.  That simply is not sustainable, es

Rank Country 2013 2014 2015 2016 % Increase
2013 – 2016
1 United States  $          8,616  $          9,036  $          9,507  $          9,892 13%
2 Switzerland  $          6,794  $          7,096  $          7,536  $          7,919 14%
3 Luxembourg  $          6,693  $          6,850  $          6,818  $          7,463 10%
4 Norway  $          5,979  $          6,136  $          6,190  $          6,647 10%
5 Germany  $          4,961  $          5,200  $          5,353  $          5,551 11%
6 Ireland  $          5,033  $          5,082  $          5,276  $          5,528 9%
7 Sweden  $          5,070  $          5,170  $          5,266  $          5,488 8%
8 Netherlands  $          5,303  $          5,322  $          5,297  $          5,385 2%
9 Austria  $          4,861  $          5,001  $          5,100  $          5,227 7%
10 Denmark  $          4,772  $          4,906  $          5,058  $          5,205 8%
11 Belgium  $          4,505  $          4,656  $          4,778  $          4,840 7%
12 Canada  $          4,461  $          4,502  $          4,613  $          4,753 6%
13 Australia  $          4,186  $          4,289  $          4,493  $          4,708 11%
14 France  $          4,331  $          4,464  $          4,530  $          4,600 6%
15 Japan  $          4,207  $          4,269  $          4,436  $          4,519 7%
16 Iceland  $          3,707  $          3,891  $          4,106  $          4,376 15%
17 United Kingdom  $          3,845  $          3,989  $          4,125  $          4,192 8%
18 Finland  $          3,920  $          3,935  $          3,993  $          4,033 3%
19 New Zealand  $          3,402  $          3,496  $          3,545  $          3,590 5%
20 Italy  $          3,235  $          3,271  $          3,352  $          3,391 5%
21 Spain  $          2,941  $          3,057  $          3,180  $          3,248 9%
22 Slovenia  $          2,586  $          2,647  $          2,731  $          2,835 9%
23 Israel  $          2,423  $          2,595  $          2,713  $          2,822 14%
24 Portugal  $          2,536  $          2,599  $          2,664  $          2,734 7%
25 Korea  $          2,252  $          2,396  $          2,535  $          2,729 17%

SOURCE

2 – The Canadian & UK Government Run Health Care is Both Too Expensive & Too Slow

health-care-wait-times-canada-sweden-norway-france-australia-us-ntherlands-germany-switzerland-2005-2008-2010Take a look at the table to the right.  It shows the average wait times in Canada, Sweden, the UK, the US and many other countries.  It is plain to see that the UK ad Canadian systems are failing their citizens despite increased spending and a never ending stream of claims from health care boards and politicians that these wait time will be reduced.

In Canada the political spectrum responded as follows to a “How To Fix Health Care” discussion in 2011.  It is representative of health care claims all over the world:

  • Moderate Right – Canadian ‘Conservatives’: We recognize the importance of affordable access to drugs as part of our high-quality health-care system. …That is why we have increased funding to provinces and territories by 33 per cent since we formed government so that they continue to meet the health-care needs of their residents…
  • Moderate Center – Canadian ‘Liberals’: We would engage provincial and territorial governments in a co-ordinated action on drugs, including measures to cover financially catastrophic drugs, cost-reducing bulk purchasing strategies, and improving access to breakthrough pharmaceuticals…
  • Moderate Left – Canadian ‘NDP’: We will work with the provinces to establish a universal prescription-medications insurance plan – saving billions from health-care budgets – and immediately create an independent Pharmaceutical Research Council to ensure that research dollars are spent in accordance with expert-driven, patient-centred research priorities.

In the end, all three groups attempt to placate the public by spending a lot more money to not get very much more done.  This is just ‘kicking the can down the road’ to future generations to both fix and pay off the massive government debts being accumulated to pay for health care.

When researching this article I reviewed the much ballyhooed Swedish system and found this well written argument against 100% government owned/controlled health care:

“…There is nothing economically mysterious about health care — it is just another service. Like any other it can be plentifully provided on a free market at affordable prices and constantly improving quality. But like everything else, it breaks down when the central planners get their hands on it, which they now have. To claim that the problems are due to a “market failure” in health care is like saying that there was a market failure in Soviet bread production.

…The bureaucracy of a public healthcare system cannot use market prices to allocate resources. It must use some other means. First it will try to plan according to estimated demand. It will try to guess the number of bone fractures, open-heart surgeries and kidney transplants in the coming year. The estimates will invariably be wrong, causing shortages in some places and overcapacity in others — at the same — which translates into human suffering and economic waste.

Without the profit motive, there is no incentive to adapt to reality, to utilize expensive equipment to the optimum capacity, to improve the level of service, or treat patients with dignity…”

3: Health Care is a High Pressure Big Business That Needs Boundaries

Over the decades we have seen that very large companies in all industries, (computers, oil, internet…) correctlyattempt to maximize profit by:

  1. gaining near monopoly positions
  2. stifling competition thereby stifling innovation

The reasonable fear here is that private health care companies can easily become too powerful and need an equally powerful counter force (law, regulation, oversight, single payer…) to counteract their otherwise good intentions.  I argue that single payer is the least evasive of those remedies.

Conclusion

In a complex world with many competing interests there is no one simple answer to the question of how to “fix healthcare” but there are definitely some large scale changes that will help.  We need to do something beyond spend more money and hope that future generations will come up with a magic bullet.

Put simply: In the real world, the free market needs some regulation and the socialist model is a formula for increased costs with decreased services.

Single payer / private provider just make sense… does it not?

I would very much like to hear your responses to this but please hold the political vitriol and the one-off examples to a minimum.

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