Editorial: Single-Payer Health Care: President Obama and Health Care Reform

by CHINELO IKPEAMA, MBA
Editor-in-Chief, Journal of the Student National Medical Association

Crisis of Abundance: Rethinking How We Pay for Health Care by Arnold Kling has peaked my interest in the single-payer health care system. Before reading Kling’s book, I did not know what the single-payer system entailed, but I did know that it had been quickly discarded as an option for health care reform. When President Obama campaigned for health care reform, the single-payer system was lambasted as “liberal” and “progressive.” Arguably, the single-payer system received the most criticism from pundits even though the same pundits admitted that the single-payer system was as close to universal health care as President Obama could get. As an aspiring physician, I am very interested in the health care debate, and now that I am more knowledgeable of the single-payer system, I am curious about why the single-payer health care system was swiftly rejected as an option for health care reform. Most economists agree that a single-payer system would be an economical type of health care reform, so why did President Obama have a hard time conveying the merits of a single-payer system to United States citizens?

A single-payer system distributes health care to a population from a single insurance fund. There may be multiple contributors to the fund such as benefactors, the government, or employers, but the costs of health care come from a single fund. My mother works at the Veteran’s Affairs (VA) Hospital in Houston and explained to me that the VA Hospital is a prime illustration of a single-payer health care system. The majority of veterans who my mother sees have their health care paid for by the government. To some extent, Medicare can also be considered a single-payer system because the funds to pay for Medicare come from a single fund in the government.

Kling asserts that a single-payer health care system with the government as financier is the optimum solution for the current health care crisis. There are three options for such a system. The doctor-friendly single-payer approach would reimburse doctors at their usual rates, the doctor-hostile single-payer approach would reimburse doctors at lower rates, and the doctor-limiting single-payer approach would ration the supply and/or use of health care providers.

Table 1. Crisis of Abundance by Arnold Kling, pp. 29.

 
 
 
 
 
 
 
 
Kling believes that the doctor-friendly and doctor-hostile approaches cannot work because both insulate the consumer from health care costs, thus causing costs to rise. He therefore points to the doctor-limiting approach as the single-payer health care system that would result in lower health care costs. Kling is among several economists who believe that a single-payer health care system can help solve the problem of inflated health care costs. Kling’s deduction presents a paradox: considering the economical benefits, why was a single-payer system one of the first alternatives rejected during President Obama’s campaign for health care reform?

President Obama promised to change the face of health care when he ran for president in 2008. During the 2008 presidential election, health care reform was a top issue in voter’s minds, and presidential candidates addressed the topic in some form or fashion. While some presidential candidates were vague about their intentions, President Obama was specific in stating that universal health care was a top priority.

After he was elected into office, President Obama soon realized that he would not be able to pass universal health care. Much like former First Lady Hilary Clinton, President Obama met stiff opposition and a resolute, unyielding population wary of changing a health care system they had grown accustomed to. People realized that the current health care system was failing, and while they wanted a change, they did not want their own health care to change.

President Obama’s attempts at health care reform were seen as a do-or-die part of his presidency. Many agreed that if he were unable to pass health care reform, his presidency would be forever marred and he would most likely be unable to be competitive in the 2012 presidential elections. Because of such pressure, President Obama’s former attempts at passing universal health care were hastily discarded. Opponents condemned universal health care as socialism, Nazism, and much worse. Attempting to pass universal health care would be long, tedious, and would most likely result in defeat; people were just not ready for such a huge change in their health care system.

Once it became clear that universal health care was no longer an option, liberals turned to the next best option: the single-payer system. Liberals and those on the far-left hailed the single-payer system as the next best thing to universal health care. The single-payer system would rid the country of private insurance; all health care costs would come from a single government fund. A single-payer system would enable President Obama to come as close to universal health care as possible.

While President Obama originally supported a single-payer system, he quickly took a more moderate attitude when conservatives accused the single-payer system of being an attempt at socialized medicine. As President Obama attempted to pass health care reform, people began nit-picking at the details, and there was a time where it looked like health care reform would not pass. It was at this time that the single-payer system was discarded as a viable option for health care reform, much to the disappointment of liberals and economists. President Obama decided that passage of any health care reform bill was more important than passage of a single-payer system. While there is a multitude of evidence suggesting that a single-payer system can significantly lower health care costs, President Obama was unable to convey this message to the American people.

I believe that the single-payer option was quickly abandoned as an option because President Obama was not effective in conveying to the American people the system’s economic merits. While President Obama effectively conveyed how a single-payer option can increase the number of people with health insurance, he did not successfully demonstrate how a single-payer system results in lower health care costs. President Obama’s emphasis on single-payer health care centered on increasing health care for all people, thus putting a spotlight on universal health care. Universal health care is a controversial subject, and those involved have strong, deep-seated opinions. Instead of considering the economical benefits of a single-payer system and its ability to possibly lower health care costs, people looked at single-payer health care as another avenue toward universal health care. Those opposed to universal health care immediately rejected such a reform.

President Obama did not successfully convey the benefits of single-payer health care; for example, although I love to watch news channels, I did not fully understand the single-payer system until I read Crisis of Abundance. Therefore, my thoughts on the single-payer system during the health care debates were neutral rather than positive.

President Obama campaigned on universal health care during the presidential election, so it is not surprising that he would stress the universality of the single-payer system when he was attempting to pass the health care reform bill. I posit that he would have been more successful in keeping a single-payer system as a viable option to the American people if he had been able to stress the money-saving benefits of such a system. Not only can a single-payer system increase the number of people with health insurance, it can also lower health care costs. Approaching the single-payer system from an economical perspective would have kept American citizens from immediately categorizing a single-payer system as universal health care, and more citizens would have given a single-payer system real consideration.

Buy Arnold Kling’s great book here.

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