Does Single Payer Mean Public Funding and Delivery?
Myth

Single payer healthcare implies that funding and delivery of care are publicly controlled by a government agency.

Is Single Payer Government HealthCare? Single Payer: Funding Versus Delivery

Single payer isn’t “government run healthcare,” single payer only describes funding, not who manages the fund or how healthcare is delivered.

What is Single Payer Healthcare?

  • Single payer is a system that replaces some or all private health insurance with a single public fund.
  • Single payer can also use private supplemental insurance.
  • Single payer does not describe how healthcare is delivered.

In other words, single payer describes how healthcare is funded (a single public fund), it doesn’t describe healthcare delivery (who doctors work for or how care is administered).

  • Healthcare Funding: How healthcare is funded. Single payer denotes a single public fund financed by a single public body, private insurance can still exist along side this.
  • Healthcare Delivery: How healthcare is delivered by doctors, hospitals, pharmacies, etc. Single payer doesn’t describe how healthcare is administered, who doctors work for, or even how practices are regulated. Delivery can be privately, publicly, or jointly administered in a single payer system.

Single payer is sometimes confused with the political buzzword “socialized medicine” which refers to public healthcare delivery (i.e. a system where doctors work for the state). Below we explain the many different ways single payer systems have been implemented across the world to illustrate the different ways single payer can work.

TIP: For more reading see Single Payer Health Care, What is Single Payer?, and “Socialized medicine

Understanding Single Payer Healthcare

Single payer describes a single public healthcare fund financed by a single public body (typically in an effort to achieve universal access to healthcare). It doesn’t denote how delivery is administered or for whom doctors work. The fund would typically be administered by the government, but this isn’t always the case. This can be proved easily by looking at healthcare systems around the world (many of which are single payer universal healthcare systems).

Vox explains single payer from the lens of America.

FACT: Single payer shouldn’t be confused with “universal healthcare” (which means everyone automatically has coverage) or the terms “public option” and “Medicare-for-all” (both of which describe specific alternatives to the pre-ACA system in the US). This said, most single payer systems would be universal healthcare systems by nature.

Does Single Payer Mean Public Funding and Delivery?

Single Payer Versus Socialized Healthcare

Most people confuse single payer with “socialized healthcare”. Putting aside the fact that “socialized medicine” is a political buzzword created by the AMA, socialized healthcare denotes government control of delivery and single payer doesn’t. That said, it’s essentially a matter of semantics. We could call the UK’s NHS, or the US Armed Force’s VA and TRICARE, “socialized medicine” using a narrow definition, and we can call anything that isn’t completely controlled by the private market “socialized medicine” using a broad meaning.[8]

Semantics aside, if we want to describe a system that uses public funding and delivery we would use “socialized healthcare” and not “single payer”. The reality is most governments use a mix of the two types to create unique quasi-public healthcare systems. The terms are typically only used in United States politics.

Bernie Sanders on C-Span describing the difference between socialized healthcare and single payer healthcare (people confuse the two).

Examples of Single Payer Systems

Many countries around the world use different types of single-payer healthcare systems, and almost all use a mix of public and private funding and delivery. While every country is unique in what works best for them, we can look at different countries for examples of how single payer can work.

Let’s look at a few countries that we all know to see how they have implemented Single Payer.

  • In Australia, everyone pays a 2% income tax (nothing at low incomes and an extra 1% at high incomes) for basic public health insurance. They can buy supplemental coverage from a private company for additional coverage (just like Medicare works in the US). Australia has both public and private hospitals just like the US. This system has been in place since 1984.[1][2]
  • In Canada, a similar system is in place to Australia. There is a group fund, healthcare is free to use mostly, and mostly uses private entities to deliver care. There is less dealing with administration, but on the downside, they experience some “brain drain” as their doctors are more likely to choose higher-paying jobs in the US. This system has been in place since 1984.[1]

Canada’s Medicare system explained.

  • In the UK England, Northern Ireland, Scotland and Wales all use unique mixes of public and private funding referred to as National Health Service (NHS). NHS England is the largest and the oldest single-payer healthcare system in the world. It uses a public fund, but unlike another system, it uses a public delivery system as well (meaning that in England the state employs public doctors and runs public healthcare centers). About 8% of the population chooses private insurance and private care, which is also offered alongside the public system. NHS provides medical, prescription, dental, and vision coverage, but there is typically a fixed payment required for the services (or in the case of vision a voucher that reduces costs). This system has been in place since 1948.[3]

England’s NHS system.

  • In Japan, no one can be denied coverage and all residents have coverage by law. Those who don’t have insurance through work participate in the national healthcare system and hospitals are non-profit by law. People pay 30% of costs and the government pays 70% for essential care (or less based on income). Clinics must be owned and operated by physicians.[9]

Japan’s healthcare system.

As you can see, each country uses a mixed system, still offer private options, and pay for this mostly through taxation. Comparing two countries to each other is generally not useful, as every country is different, but by seeing single payer in practice, we can certainly prove that it simply denotes funding and nothing more.

Now let’s look at two systems that use a different approach to healthcare.

Examples of Non-Single Payer Healthcare Systems

Switzerland and the United States both use quasi-public healthcare funding and delivery. In other words, both are rooted in the private market but have some sort public regulation. In both health insurance is compulsory (required by law). Both have rejected single payer measures in favor of this system.

  • In Switzerland, everyone must buy health insurance from private companies. However, private companies can’t profit off of catastrophic coverage. Private insurers can only make money off of supplemental plans. So they have opted to allow the free market to administer the plans with government regulation, rather than simply converting to a public fund. Deductibles are adjusted based on premium chosen with the max being about $ 1,534 USD. Premiums are also $243 USD for 26+, $223 USD for 19 -25, and $56.14 for under 18. If your premium would cost more than 8% of income you get a cash subsidy to pay your premium. [4][5]

Switerland’s healthcare system explained. Thanks, Healthcare Triage.

  • In the United States of America, under the Affordable Care Act, everyone must buy health insurance from private companies or pay a tax (individual mandate). Employers must provide coverage to full-time employees, and those with low incomes are exempt or get Medicaid (if their state expanded Medicaid). All private plans are for profit, but private insurers must use 80 percent of premium dollars on claims and activities to improve health care quality (85% in large group markets). Private insurers can sell and profit off supplemental plans in the Medicare market, but can’t profit off original Medicare. Private insurers can’t profit off or sell Medicaid plans. The US opted to allow the free market to administer plans with government regulation, rather than simply converting to a public fund (Medicare-for-all was rejected prior to the passing of the ACA). Deductibles are adjusted based on premium chosen with the max for 2016 being $6,850 for an individual plan and $13,700 for a family plan. Premiums are cost controlled by limiting what insurers can charge for and limiting the amounts that things like age and smoking status can affect premiums. If the lowest premium would cost more than 8% of income you are exempt. If your income is below 400% of the Federal Poverty Level you can get a tax credit to lower your premium, if your income is below 250% FPL you can get cost-sharing assistance on state or federal “marketplaces”, if your income is below 138% and your state expanded Medicaid you can get free or low-cost Medicaid or CHIP (for kids).[6][7][8]

The Healthcare System of the United States.

As we can see the US and Switzerland are very similar. The biggest difference, aside from their population and cultural differences, is the way in which they approach catastrophic coverage. In the US catastrophic coverage is a for-profit business, in Switzerland, only supplemental coverage is for profit. Also, importantly the US allows states to exclude their poorest from coverage while Switzerland offers assistance to it’s poorest.



Notes

Disclosure: The author of this page is the head author of ObamaCareFacts.com, a privately run informational site focus on the Affordable Care Act. Neither site is connected to any state or federal government or insurer.


Conclusion

Single payer systems come in all shapes and sizes. They can be primarily a for-profit and privately run venture and they can include supplemental options. The thing that makes a system single payer is the single fund part. Most single payer systems will be universal healthcare systems (meaning they provide coverage to all citizens).

The bottom line here is: Single payer does not mean government run healthcare, it means a single public fund for at least basic coverage, typically paid as a tax.


References

  1. Single-payer healthcare“. Wikipedia.org. Retrieved Jan 20, 2016.
  2. Health Service Delivery Profile“. Wpro.who.int. Retrieved Jan 20, 2016.
  3. National Health Service (England)“. Wikipedia.org. Retrieved Jan 20, 2016.
  4. Switzerland rejects single-payer, will keep its own version of Obamacare“. Washingtonpost.com. Retrieved Jan 20, 2016.
  5. Healthcare in Switzerland“. Wikipedia.org. Retrieved Jan 20, 2016.
  6. Explaining Health Care Reform: Medical Loss Ratio (MLR)“. Kff.org. Retrieved Jan 20, 2016.
  7. Single Payer Health Care“. Obamacarefacts.com. Retrieved Jan 20, 2016.
  8. Out-of-pocket maximum/limit“. Healthcare.gov. Retrieved Jan 20, 2016.
  9. Health care system in Japan“. Wikipedia.org. Retrieved Jan 20, 2016.
  10. Socialized medicine“. Wikipedia.org. Retrieved Jan 20, 2016.


"Single Payer Means Government Run HealthCare" is tagged with: American Politics, Markets, United States of America


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billy roberts on

Government funds many types of health care designed to meet the needs of a particular segment of society.To continue to meet the needs of those segments keep these organizations in place but consolidate their administration under one government agency.Consolidate their common functions while leaving the individual organizations in control of service delivery.

Thomas DeMichele
Thomas DeMichele on

Yeah, exactly. One important idea behind single payer is to address funding (which is currently handled by a wide range of public and private industries and at least consolidate the public side while opening up a public option. There are many ways that can work, some would be single payer, some would be a quasi-single payer public option, but that is the gist.

It would at the very least decrease bureaucracy.