What If Multi-Payer Is Just Better Than Single-Payer?
By: Chris Dobro
Tags: Politics, Healthcare, Insurance, Bernie Sanders, Obamacare

What If Multi-Payer Is Just Better Than Single-Payer?

According to many other developed countries, hybrid systems do pretty well.

Health care is a really complex issue. Some politicians and pundits like to insist that it’s simple, that “every other country” just figured it out at some point, and the only things holding the US back are a lack of political will and the power of corporate greed. While it is true that most developed countries besides the US have invested in some form of universal health care, the models vary from country to country, with some favoring single-payer systems and others sticking with multi-payer systems.

One of the most publicized rifts between the “establishment” wing of the Democratic Party and the left-populist wing is the disagreement over which type of health care system to pursue. Some on the left have brazenly declared that anything short of the most comprehensive single-payer system in the world would amount to a worthless half-measure. To advocate for anything less, some of them say, must literally mean that you want people to die.

I could go into detail about all the ways the Affordable Care Act has helped Americans in need — the Medicaid expansion alone has been extremely consequential, and don’t even get me started on pre-existing conditions — or how the watered-down version of the ACA was not really an act of wishy-washiness or corporate kowtowing on President Obama’s part. It was, in fact, the most maximal reform the administration could push through Congress at the time (thanks a lot, Joe Lieberman). But what is more interesting to me is that Obama’s original vision for health care reform (creating a public option to compete with private insurance) has finally become mainstream.

To be fair, folks like Bernie Sanders deserve some credit for this, too. Pushing the Overton window to the left on public health issues is likely part of the reason why a public option now has a realistic chance of succeeding. Unfortunately, Sanders and company are venturing into the world of alternative facts when they state that their maximalist plan has been adopted by the rest of the developed world.

Several of the countries that single-payer absolutists will point to, such as Germany, Switzerland, Australia, and France, actually have hybrid systems in which private insurance competes with public insurance to some degree. The Dutch system is actually entirely private — basically a souped-up ACA. These countries are still outperforming the US in terms of accessible, quality health care, despite hanging on to private insurance. Rankings vary, but France has consistently been at or near the top of the heap.

It seems to make some progressives’ blood boil when they hear the likes of Biden, Bloomberg, or Buttigieg question the practicality of eliminating private insurance. And to be sure, the arguments these candidates are making are often less than exuberant. If your whole case is essentially, “single-payer would be great, but it just ain’t gonna happen,” then it’s only natural that enthusiasm will wane. Perhaps these candidates should do a better job of arguing that a universal mutli-payer system isn’t merely a compromise, but actually the optimal health care path for America.

This may be confusing to Americans who have been led to believe that the insurance companies are public enemy number one when it comes to health care. It’s a compelling narrative for understandable reasons. Many Americans have had the infuriating experience of paying steep monthly premiums for bare-bones health insurance plans, only to still end up paying outrageously high out-of-pocket medical bills because their insurance failed to cover them in full, or at all. It feels like a racket, and in some ways, it can be. I’ll remind the ACA-doubters again that there was a time, not too long ago, when insurance companies could simply reject the sickest people.

But an abundance of evidence points away from insurance companies as the source of high health care costs. Think about it this way: insurance companies (at least in theory) have an incentive to pay out as little as possible, so why would jacking up prices be in their selfish interest? In reality, the health care providers (i.e., physicians and hospitals) are the ones bleeding us dry and getting away with it.

Of course, providers are not solely to blame. Out-of-control pharmaceutical prices play a part, along with a lack of price transparency. In addition to providing universal coverage, other countries do a lot more to regulate prices for medicine and medical treatment, something that is still unique in the US.

A well-crafted multi-payer system, like the one laid out in Pete Buttigieg’s “Medicare for all who want it” plan, would save Americans from ruinous medical debt, in part by providing a low-cost public option, but also by better regulating health care providers and putting stricter limits on how much they can charge. His plan would also ban surprise medical billing. Say what you want about Mayor Pete, but he is one of the few candidates in the race who has actually been attacking the health care expense problem at its roots.

Single-payer advocates love to promote this talking point:

“Nobody really likes their health insurance, they just like their doctors.”

It makes intuitive sense. You are more likely to form a bond with another human attempting to heal you in-person than you are to form any kind of connection with Blue Cross.

But this strategy is misguided, given that doctors’ and hospitals’ lobbying power is the primary reason the US spends more on health care than any other country. That doesn’t mean your family doctor is a villain, or that big insurance companies are really saints who care passionately about your well-being, it simply means that any industry, medical or otherwise, once large enough, will try to rig the system in its favor. This is crony capitalism 101. Turning this into a political rallying cry is not as easy as pointing fingers at the big, bad insurance companies, but we have to acknowledge the real source of the problem if we ever hope to solve it.

Furthermore, while most Americans are not in love with insurance companies, polling data show that a majority of Americans do like their personal plan. Forcing them off of it, therefore, is not likely to be well-received. Single-payer purists will often respond to this by saying, “But your employer can force you off your plan whenever they want!” Yes, hence the case for having another option available. If people hate it when their boss kicks them off their plan, why would we expect them to love it when the government does? Because public trust in government is so high?

There is a certain logic to pushing for maximalist policies with the hope of getting a more moderate version to pass. Buttigieg’s proposal would not turn American health care into France’s highly efficient and generous multi-payer system on its own, but maybe that is what a watered-down version of Sanders or Elizabeth Warren’s plan would ultimately look like.

But the electoral obstacle is important to consider. Eliminating private insurance is still really unpopular with voters. If it’s possible to achieve similar health outcomes with a multi-payer or single-payer system, but single-payer is a much harder sell, the winning strategy seems obvious. If one flank of the Democratic Party wanted to argue for a more conservative German-style multi-payer system (as the Biden/Buttigieg wing have been) while the other pushed for France’s more generous version, that would probably be more productive and less contentious than the misleading smears we’ve been seeing.

All the evidence I have seen up to now has made a strong case for taking the multi-payer route to universal health care. If we can dramatically reduce the cost of American health care without needing major tax hikes, and not take away patients’ choices in the process, why on earth shouldn't we? Other countries prove that it can be done.