“Single Payer” is the idea of one type of health insurance for all of us, provided by the federal government though our tax dollars. Think of it as “Medicare for All.”

This is akin to what occurs in Canada (where it is also known as ‘Medicare’) and the U.K. (where it is known as the National Health Service [NHS]).

vermontThe advantage of a single payer plan is that all citizens are covered, and basic health services are provided to everyone. Single payer systems are much more efficient on the payment side, as service providers (doctors, hospitals, etc.) only have to bill one entity, not dozens of different public or private insurers all with their own arcane rules. In a country that devotes nearly a fifth of its GDP to health care goods and services, this is a big consideration. Many experts estimate that we waste 1/3 of what we spend on health care. A significant component of that waste is due to the excess administrative costs of dealing with so many different rules of so many different insurers. Hundreds (thousands?) of employees are needed in hospital billing departments to tease apart these regulations and follow the rules to keep cash flowing.

Proponents of single payer appreciate its basic fairness — everyone is covered, and it’s arguably a most cost-effective structure.

Detractors point out several flaws with single payer:

  1. long queues for elective services. Ask an elderly arthritic Canadian how long s/he has to wait for that hip replacement.
  2. too much centralized power. Local control leads to more ground-up innovation in service delivery and cost reduction.
  3. a loss of freedom. Doctors don’t want to work for the government. Americans have faith in the free market. See #2.

Vermont is the only state to have actually passed a law calling for a single payer system. This itself was newsworthy. Arguably, such a law could only be passed in a small, sparsely populated, liberal state.

Several years later, after working hard to implement the law, Vermont’s Governor Peter Shumlin has admitted defeat, telling a state health board that the cost of enacting a single payer plan is simply too expensive. If you’re interested, you can read more about it here and here.