By Request: The Prospects for Single-Payer

Jim asks:

Paul Krugman wrote in today's column that the vote this week on Medicare (that Ted Kennedy returned to take part in) encouraged him to believe that universal health care stands a good chance of becoming a reality should Obama win and the Democrats increase their majority in both Houses. If this is true, and you can comment on this, what are the chances of us ever seeing single payer? I would think the greatest obstacles to this would be the Socialist, Government Medicine charge (gov't selects your doctor, the gov't can't run anything right) and the "loss of jobs" from the insurers.

I think the odds are really bad. And I think that the greatest political vulnerability a single-payer scheme would face is not so much the "socialist, government medicine" charge as it is desire among liberals to do something to ease the plight of the uninsured. Substantively, the most likely route to a single-payer health care system would be something along the lines of what John Edwards proposed during his late presidential campaign. That would have built upon the current system with the mandate/regulate/subsidize troika but would also have created a public sector health plan modeled on Medicare. The idea, then, is that if liberals and conservatives both have the courage of our convictions, we'll see over time whether or not people like the public plan. If they do, we transition over time to a single payer system.

I think this is a totally sound plan, but there is one problem. To get it enacted into law, liberals need to be credibly willing to walk away from the legislative bargaining table if we don't get our public-private plan. There'll be a million moving parts to a big health care reform package, and you can be sure plenty of legislators will be willing to walk away from the table if one special interest or another doesn't get its way on this or that. Will anyone walk away from the table over public-private competition? I have my doubts. Reform advocates have done a very good job of putting big-time health care reform near the top of the political agenda, and will stand a very good chance of enacting something in 2009 that makes health insurance affordable for everyone and I don't see reformers walking away from the chance to do that over the public-private issue and I don't think anyone will believe them if they try to bluff.

I have sort of mixed feelings about this. I think if I were in charge of progressive politics, I wouldn't have made this push for big reform in 2009 precisely because having done it liberals are now in the position of needing to compromise on all kinds of side issues in order to get a deal. Instead, I would have focused on expanding existing public sector programs as far as possible and then just kept coming back incrementally over and over again over a period of a few years. But pretty much nobody agrees with that, so instead there's going to be an effort for large-scale reform -- and that means saying "yes" to any package that does a reasonable job of covering everything. That, in turn, means it'll probably be impossible to drive a hard bargain over the public-private competition issue.

But see Jon Cohn for a slightly different perspective on this.

Comments

I think the problem with the Edwards plan is different. I don't believe that you can ever have a fair competition between public and private plans. The Republicans and those Democrats in the tank for industry will either sabotage the public plan or overly subsidize the private ones. See the direct student loan program for the former, and Medicare Advantage for the latter.

Instead, I would do what Matt once proposed a year or so ago-- start expanding eligibility of existing single payer plans, like the VA, Medicare, and S-CHIP, until they get more and more universal. As more and more people see that they work well and don't cause all the harm that the conserative movement claims they do, there will be a push to just make them completely universal.

Posted by Dilan Esper | July 14, 2008 4:48 PM

I would have focused on expanding existing public sector programs as far as possible and then just kept coming back incrementally over and over again over a period of a few years. But pretty much nobody agrees with that

I advocated that approach in Ezra's comment section in late 2006. Everyone just screamed "Coward!!!!!1!" at me a lot.

Posted by Another Chris | July 14, 2008 5:02 PM

This "chipping away" or incremental movement towards public health care strategy is one I've favored, and one that there's a lot of evidence that Obama supports if you read between the lines of his plan. Allowing people to opt out of public insurance mandates, and then forcing them to opt in should they require care and not be able to afford it is a great way to compromise on a less-socialized system that inevitably becomes more inclusive over time. Similarly, a mandate for those under 18 without one for adults ensures that the next generation will grow up with guaranteed healthcare and hopefully bring with it a change in public opinion in pretty short order as the composition of the public changes.

Obama can sell his plan as being more affordable because some people won't opt-in to the program, and wind up with a more generous benefit for those that do out of this compromise than he might be able to achieve by demanding mandated universal coverage. If the system works and is affordable, you'll rapidly see more people and employers opt in, and if you add in maturing minors opting in out of convenience and the mandated fines/opt-ins for those that seek care and can't afford it, choosing not to mandate coverage for everyone is a great way to sneak more coverage of essentially everyone in short order.

Posted by Zach | July 14, 2008 5:20 PM

I would think the greatest obstacles to this would be the Socialist, Government Medicine charge (gov't selects your doctor, the gov't can't run anything right) and the "loss of jobs" from the insurers.

So, help me see why this is wrong. My experience with government institutions that are set up to deal with very large groups are: DMV, TSA, IRS, and the SSA.

While the IRS has certainly improved their experience lately, the actual process of preparing taxes is quite daunting. The DMV and TSA are sometimes competent, sometimes not. I had to deal with SSA as a young man (regarding a name change), and after a very long wait, the service agent was remarkably rude to me (such that I remember it quite well 15 years later), and proceeded to lose (or "lose") my paperwork.

None of this inspires me to want the government taking a firmer handle on my medical life. I know we have a broken system, I'm just not sure why this sounds like a good fix.

Posted by Brad L | July 14, 2008 5:30 PM

Single-payer is deader than the dinosaurs. You'll be lucky to get even "health insurance affordable for everyone." Most likely, there'll merely be some expansion of coverage and affordability that falls far short of "universal" coverage. But if they manage to get even that, congressional Democrats will declare victory and systemic reform will be off the table for another fifteen years.

Posted by Mixner | July 14, 2008 5:51 PM

Brad L, have you ever worked with a large insurance company? Did you notice any substantive superiority in politeness, competence, efficiency, and all-around user-friendliness when compared to, say, the IRS? I know I sure haven't.

DMV branches tend to be remarkably bad by any standards, but most government agencies these days arguably have better customer service than major for-profit corporations. They don't outsource their call centers to Bangalore. They don't require you to argue with robots before speaking with a human being. They have no incentive to deceive you with massive hidden fees. Certain agencies at certain times are mismanaged and controlled by surly idiots, but this is by no means unique to the public sector. If arrogant government bureaucrats drove Americans away from liberalism in the '70s, you can probably credit the likes of Cigna (or Sprint or Comcast) for driving them back in the '00s.

Conservatives love to "educate" us about the glories of competition, the natural efficiency of the marketplace, and the perverse incentives of bureaucratic entrenchment. And this litany contains a great deal of truth. But for-profit businesses have their own set of perverse incentives -- rejecting customers who need more costly services, B2B package deals that force you to pay for things you don't want, degrading service to cut costs, misleading advertising, screwing you over in the fine print, skimming money off the top... and all of these worst tendencies come to the fore when they have a captive audience and competition is subsumed by cartelization. Which is why just about every other major country in the world has rejected the American health care model.

Posted by LaFollette Progressive | July 14, 2008 6:19 PM

The path to single-payer runs through the recognition of the unique moral and pragmatic horrors of the health insurance industry. It should not really be that hard. No one who has had more than a trivial encounter with it has come away whole. That's a LOT of people and some of them have friends.

Posted by Frank Wilhoit | July 14, 2008 6:23 PM

Brad L, have you ever worked with a large insurance company? Did you notice any substantive superiority in politeness, competence, efficiency, and all-around user-friendliness when compared to, say, the IRS?

To the first, yes. To the second, I have had mixed experiences. I've found some of them to be markedly better (and how I wish I still had Aetna!), some of them to be roughly equally poor. But in this context, substituting one for the other doesn't sound like much of an improvement to me.

Certain agencies at certain times are mismanaged and controlled by surly idiots, but this is by no means unique to the public sector.

Of course not, but this is one place where the market has actually worked well for me. I've long held the stance that if a company can't treat me with basic respect, I won't do business with them (or terminate the business that I am doing with them). It is very rare when I am forced to continue with a company I dislike for other practical reasons. I got no choice about the TSA -- they get to yell at me whether I like it or not.

But for-profit businesses have their own set of perverse incentives -- rejecting customers who need more costly services, B2B package deals that force you to pay for things you don't want, degrading service to cut costs, misleading advertising, screwing you over in the fine print, skimming money off the top... and all of these worst tendencies come to the fore when they have a captive audience and competition is subsumed by cartelization.

There is a great amount of truth to this, though I think many of those perverse incentives can be dealt with in better ways. I wonder whether private, blind insurance (where they get a handful of key stats when setting a price) that is decoupled from employment (with generous lower-income subsidies) would be a better path.

Posted by Brad L | July 14, 2008 6:33 PM

Ask anyone on Medicare about how much government bureaucracy affects their medical coverage. The answer is nada. One has freer choice of docs and hospitals than many private plans, and together with a relatively inexpensive medicare supplement insurance policy, it works great. Seniors like me got it because we vote, and Congress knew it. Isn't it time that the rest of the population learn to battle bamboozlement at the ballot box? Given the disaster of current health policy for most Americans, it strikes me as a natural campaign issue.

Posted by Etaoin Shrdlu | July 14, 2008 7:58 PM

Wow, "a million moving parts." Now that's serious policy analysis. Fortunately, America is an exceptional nation, and none of the reasons that have led every other Western industrialized nation to adopt single payer apply here. I say, give the insurance companies as many seats at the table as they want -- they've earned it!

Posted by lambert strether | July 14, 2008 8:01 PM

Wow, "a million moving parts." Now that's serious policy analysis. Fortunately, America is an exceptional nation, and none of the reasons that have led every other Western industrialized nation to adopt single payer apply here. I say, give the insurance companies as many seats at the table as they want -- they've earned it!

Posted by lambert strether | July 14, 2008 8:04 PM

You can make an appointment at the DMV and many are open on Saturday now. I haven't had to spend more than 30 minutes or gotten the run around at the DMV in years.

Major health care reform died as soon as Obama won the nomination. While Obama might sign a universal healthcare bill without the President twisting arms Congress will never pass such a bill. We will most likely end up with tax credits and subsidies an not much else.

Posted by thank God Yglesias isn't in charge | July 14, 2008 8:11 PM

You can make an appointment at the DMV and many are open on Saturday now. I haven't had to spend more than 30 minutes or gotten the run around at the DMV in years.

Major health care reform died as soon as Obama won the nomination. While Obama might sign a universal healthcare bill without the President twisting arms Congress will never pass such a bill. We will most likely end up with tax credits and subsidies an not much else.

Posted by thank God Yglesias isn't in charge | July 14, 2008 8:16 PM

C'mon, lambert -- any nation that can implement universal health coverage for soldiers (that truly worked, until Congress let neglect settle in), Congresspeople and senior citizens just doesn't have the stuff anymore to figure out how to extend a healthcare system to work for everyone.

That's man-on-the-moon talk, and we know those landings were staged....

Posted by cgeye | July 14, 2008 8:46 PM

Major health care reform died as soon as Obama won the nomination

Yeah, expecting Obama to sign HR 676 is like expecting Ronald Reagan to sign economic sanctions against Apartheid South Africa. Not going to happen. Or something.

Posted by dcblogger | July 14, 2008 8:50 PM

"I don't believe that you can ever have a fair competition between public and private plans."

Got that right: Competition between the guy with the gun, (Government) and the guy who needs to get you to voluntarily agree to his plan, can never be fair.

Look, if all you've got is a hammer... The government's "hammer" is the power to coerce people. That's ALL it brings to the table. Ever. Everything else the private sector can do, too.

The idea that the government is going to put together a plan that doesn't involve some form of coercion is silly, and that means the competition won't be a fair one, because at SOME level, the choice between the plans WILL be coerced.

Posted by Brett Bellmore | July 14, 2008 9:05 PM

Re: DMV branches tend to be remarkably bad by any standards

The last few times I had to deal with a DMV (in Florida and Ohio) the service level, courtesy and efficiency were all quite decent-- not the best, but far from the worst. Of course the GOP has forced the RealID act onto the states on the lame excuse that that making DMVs inefficient and obnoxious again will somehow deter terrorists (maybe they'll get so annoyed they'll give up and go home?), but the real agenda, I suspect, apart from general Big Brotherism, is to ruin the reforms that made many DMVs less ghastly.
Meanwhile, my Customer Service Hall of Shame is populated by various private businesses, including Comcast Cable, Time Warner, McDonalds, Taco Bell, Walmart, and, at the very bottom, Expedia.com.

Re: I don't believe that you can ever have a fair competition between public and private plans."
Got that right: Competition between the guy with the gun, (Government) and the guy who needs to get you to voluntarily agree to his plan, can never be fair.

Odd then that we manage to have both public and private alternatives flourishing side by side in education, transportation, even security. Why not healthcare? Some on the Left think a general public health plan would drive private insurers out of business, but then why are there still private school all these generations after free public schooling became universal?

Posted by JonF | July 14, 2008 9:50 PM

Posted by lambert strether | July 14, 2008 8:04 PM

Fortunately, America is an exceptional nation, and none of the reasons that have led every other Western industrialized nation to adopt single payer apply here. I say, give the insurance companies as many seats at the table as they want -- they've earned it!

Nobody else has a system like the US ... but Canada and the UK do not add up to "every other Western industrialized nation". Heck, given that Australia does not have single payer, its not even every other English speaking Western industrialized nation that has single payer.

I think there is some semantic confusion here between universal health care and single-payer health care.

Of course, having lived in Australia, I prefer the French approach to multi-payer to the Australian approach, where there is a single public plan providing the bulk of coverage and there is public and private coverage supplemental coverage on top of that.

Given that the big political obstacle is the expressed satisfaction of a majority with their coverage, it is inevitable that any system that can be enacted will leave people with the option in the short term of retaining the coverage that they have.

Posted by BruceMcF | July 14, 2008 10:48 PM

Of course, having lived in Australia, I prefer the French approach to multi-payer to the Australian approach, where there is a single public plan providing the bulk of coverage and there is public and private coverage supplemental coverage on top of that.

i'd rather we adopt the french system too, but none of my canadian friends, and none of my australian friends either, would give up what they have if the alternative were the present u.s. system.

Substantively, the most likely route to a single-payer health care system would be something along the lines of what John Edwards proposed during his late presidential campaign. That would have built upon the current system with the mandate/regulate/subsidize troika but would also have created a public sector health plan modeled on Medicare. The idea, then, is that if liberals and conservatives both have the courage of our convictions, we'll see over time whether or not people like the public plan. If they do, we transition over time to a single payer system.

i really liked john edwards, voted for him in my state's primary, but there's a very real danger that the for-profit insurance industry could undercut the public program in a side-by-side plan like this. if we're eventually aiming for a public plan based on medicare, why not skip all those million moving parts and just expand medicare to everyone in the country? it's already in place and we already know that it works.

65% of the public likes the idea. sounds politically feasible to me.

Posted by hipparchia | July 14, 2008 11:33 PM

Compromise is both unnecessary and dangerous

The problem with a public/private hybrid is that if we leave the private sector profitable, if we don't kill it, it will dedicate itself and the considerable funds generated by its profitability, to making the public part of the hybrid not work. The industry will find ways, and by operation of the Golden Rule (He who has the gold makes the rules), get these ways legislated, to make the public part of the plan shoulder all of the burden of actually caring for sick beneficiaries, while they skyve off with the premiums paid by the healthy. No amount of inherent efficiency advantage to the public part will save it from the burden of risk that will be loaded onto it by the lobbyists in their back rooms.

The only way to beat the health insurance industry is by one, public act, that destroys the industry and takes from it the means of its self-perpetuation in its present parasitic existence. The people are ready for this. The doctors are ready for this. Only the intended victim, the industry, will object, and it shouldn't count because it will soon be dead, if only the rest of us have the will to kill the cursed thing.

Posted by Glen Tomkins | July 14, 2008 11:52 PM

JonF, I didn't say that you couldn't have competition, I said that it couldn't be fair competition. And your examples scarcely contradict that assertion.

Take the competition between public and private schools: At the K-12 level, you can opt for the private school, but you still have to continue PAYING for the public school. That's not a fair competition, and as I said, such a situation arises only because the government has that "gun", the ability to coerce people into paying for it's option even if they don't chose it.

Public and private health insurance systems could co-exist for a while, but the competition between them could never be on a level playing field. The government doesn't DO level playing fields, that's not it's gig.

Glen, thanks for demonstrating why so many people become terrified when liberals start talking about 'reforming' the health care system.

Posted by Brett Bellmore | July 15, 2008 8:30 AM

Single-payer is in our future, whether anybody likes it or not. The only question is how many years it will take for the current "system", and ineffectual attempts to tinker with it that will only enrich insurance executives, to fail so completely and catastrophically that public demand for REAL reform becomes irresistible.

Posted by Steve LaBonne | July 15, 2008 8:55 AM

The private healthcare system failed a long long time ago. The only thing that keeps in running, from top to bottom, is a huge ocean of public money. For all of those saying there cannot be "fair" competition between public and private there can be. The government can stop financing the private payers and let them try to remain profitable on premiums alone.

Posted by hetherjw | July 15, 2008 9:25 AM

I think there is some semantic confusion here between universal health care and single-payer health care.

Are you just saying that any country where private insurance is legal doesn't have single-payer health care? Even if there is a universal publicly funded system?

Posted by MQ | July 15, 2008 9:33 AM

Obama's plan has a public component in that individuals will be able to enroll in a "Federal Employees Health Benefits Program," essentially the same plan that members of congress and other public employees have. This could later be used as a basis for moving towards a more single-payer-like system, as could expansion of medicare, or s-chip type state assistance expansion.

Important point: A single-payer doesn't mean a fully public system. It means the government would pay, as in it would be the insurer. There could still be private health care providers, who would compete amongst each other to control costs through various incentives (co-pays and the like, for example.)

Posted by hoping for health care | July 15, 2008 10:16 AM

hoping- Absolutely, and that's how it works in some of the better European systems. But for damn sure those private providers can NOT be our current, purely parasitic insurance companies. Nothing will be accomplished as long as they're around. Which is exactly what, in our political system of legalized bribery, makes the whole thing so difficult.

Posted by Steve LaBonne | July 15, 2008 10:42 AM

re Brett Bellmore: I didn't say that you couldn't have competition, I said that it couldn't be fair competition.

It isn't intended that the competition be fair; fair competition isn't the point. The public system is supposed to win so we can use it as a launch point for a universal single-payer system.

The "unfair" advantage a public system would have over private industry in providing quality health care is the same "unfair" advantage that makes it desirable in the first place.

The whole underlying motivation is that competition in the health care market doesn't work. Public-private competition is merely an intermediate stage that is intended to build public support for the next step.

Posted by Idonior | July 15, 2008 3:40 PM