A Regional Approach to Single Payer Health Insurance

Editor's Note: I apologize for not posting yesterday as promised but we were having problems with the cable modem, which have thankfully been resolved.

On Thursday I had began a discussion of why single-payer options might be a good candidate for the type of aggressive reform in health care that I personally think we need. I should begin by saying that although I think Mr. Nader has some good ideas, I want to be perfectly clear in my disappointment that none of the three remaining candidates who actually have some semblance of a chance of being elected have formulated a plan that takes into account single payer options. Here's why I believe that:

1) A single payer option can be coupled with existing health care payment options, public and private more easily than brand new programs.
2) Single payer options can be administratively less burdensome than some of the policies currently being offered.
3) Single payer is the option that best allows drug companies and insurers to partner with the government to negotiate costs and streamline service delivery. Frankly, any option that discounts the role of insurers in the solution is shortsighted. (I should give fair credit to Sen. Obama for his plan, which in fact does involve insurers heavily.)

One of the proposals that I believe is most well thought-out and seems most likely to succeed in this country is the proposal that was offered some years ago by Physicians for a National Health Program (http://www.pnhp.org/). In the proposal, PNHP offers the same sorts of arguments that I outlined on Thursday. Namely that single payer is a method of reducing health insurer bureaucracy and freeing up resources that now are spent in billing and collections that could, and perhaps should be used to provide clinical care. But does PNHP's proposal go too far when they offer up a solution for hospital care that would in essence convert every hospital to a non-profit and mete out a monthly budget from the National Health Insurer? I believe so. We have seen India attempt the same situation with its government-run hospitals, as well as Britain. One of the major criticisms that opponents of universal health care level is that Britain, often held up as the standard for universal health care has tremendous problems with equalizing the quality of their care across clinics and hospitals and that patients often have to endure agonizing waits to get necessary care. These criticisms, by and large are accurate, and should be taken into account when we rush into believing that a universal health care system must swallow whole all of the providers to ensure the evil profit monster of corporate health care is vanquished.

As an aside, if you'd like to look through some of the most reasoned criticism on single payer health insurance Goodman and Herrick produced an excellent paper for the National Center for Policy Analysis available here.

I disagree with any attempt to nationalize health care assets because nationalizing inherently kills the competitive spirit that advances health care facility's ability to improve their quality of care. In Britain, as Goodman and Herrick adequately point out, it is not unusual to see advanced technology in one room coupled with poor technological health care equipment for other types of care within the same facility. Providers are going to be paid the same for their relative investments, why should the providers improve?

Providing avenues for profit is not necessarily a bad thing, and we quite honestly have numerous government programs that either directly provide or open avenues to incredible profits for contractors and grantees alike. Why then can we not allow a single payer system, whereby the Federal Government is the payer, to provide these mechanisms?

One way I believe this can be accomplished is through regionalization. MEDICAID, TANF and numerous other assitance programs are delegated to states to implement. It should be no surprise that any new federal single-payer program would be delegated as well. This would allow for difference in reimbursement rates among different states, to accomodate the different health care needs. The technological advancement for care needed in rural Northern Idaho will be far different than mid-town Manhattan. And truthfully, given the different standards of living in those areas, the national insurer should allow for fluctuations in service cost.

Allowing states to recommend different reimbursement rates for various services would not leave us with the same problem of skyrocketing costs. Rather, it would allow for some standardization among states for essential services and preventative care, while allowing those providers who have invested heavily in a particular speciality...say cancer treatment...to recoup their investment. True, people might still have to travel long distances to get this specialized care, but what universal program would solve this problem? It is reasonable to believe that providers will go where their services are most needed. And because these specialists will now have the added benefit of simplified billing and collections, they will be able to offer the same level of care to many, many more patients. That equals more business for them, and more profits.

Where does these leave the insurers? More on that tomorrow. The insurers will play a significant role in this process, and will even find themselves able to continue competing with other insurers and improving their ability to bring profits to their shareholders.