National spending on healthcare reached $3.3 trillion in 2016 according to government data. That represents $10,348 per person, and 17.9% of GDP (gross domestic product). That is huge and it is growing faster than the economy as a whole. It is also much more than other developed nations, by nearly a factor of 2, with the quality of healthcare less than those other developed nations. There is a clear affordability issue here. We are spending more than we can afford. At the same time many of us believe that every citizen is entitled to access to healthcare. So the big question is ‘How do we do this in an affordable way?’
‘Single Payor’ is a current hot topic. This a single payor, public, universal health insurance system managed by the government the government – modeled after Medicare. Currently the private, for profit, health insurance companies represent a major segment of our economy and they wield a large amount of political clout that they use to protect their business. Private health insurance companies impose an administrative overhead of ~18%. This is compared to Medicare’s overhead of ~2%. This is a good example of how our capitalist system impinges on our ability to achieve a fair, viable and healthy democracy – of, for, and by the people.
The sources of funds for healthcare are the government (Medicare & Medicaid), private insurance companies, and individuals. In large part our system is based on a group of for-profit, competing healthcare companies. This presents us with a fundamental question: should our healthcare be treated as a right for every citizen or a service to be purchased, if affordable, from for-profit corporations? The argument for the latter is that we have a capitalist system that will work and contain costs with competition. This argument, however, fails to address healthcare for all or the containment of rapidly inflating healthcare costs. To my way of thinking a healthy democracy needs to address equality and that means care for all, not just for those fortunate enough to be able to afford it. The most straight forward way to achieve this, is a single payor system where the government is the provider. This would eliminate our past practice of employer paid insurance for employees and probably require adjustments to our tax code.
A single payor system on the surface exacerbates the cost issue. So how to afford? This takes a major rethink of our tax system. I believe that there is a possible strategy, however. Define what is guaranteed as basic healthcare for all. This would certainly include wellness visits, emergency service, care for common illnesses, inoculations, etc. It would, however, exclude ‘extraordinary’ services such as organ transplant and joint replacements among other very expensive, high tech procedures. These extraordinary services could be covered by supplemental insurance provided by for-profit insurance companies to anyone who wanted to purchase and could afford it. This doesn’t treat all as ‘equal’ but it is a first step toward our goal for a healthy democracy. Over time, with experience and cost data, the definitions of ‘basic’ and ‘extraordinary’ could be reviewed and revised. Maybe this is a possible transition strategy. Comments?