The WasteWatcher: The Staff Blog of Citizens Against Government Waste

The Dangers of Single-Payer Healthcare

The WasteWatcher is the staff blog of Citizens Against Government Waste (CAGW) and the Council for Citizens Against Government Waste (CCAGW). For questions, contact blog@cagw.org.

CAGW’s June 2017 Porker of the Month was Sen. Bernie Sanders (I-Vt.), who earned the “honor” in part due to his outspoken and unwavering support of the single-payer healthcare system.  Sen. Sanders touts the system as the “morally principled” option; in reality, it would create long waiting times, cause a massive increase in taxes, and allow bureaucrats in Washington to make decisions that ought to be made between doctors and patients.  

Sen. Sanders speaks for many supporters of single-payer when he claims that the U.S. lags behind other developed nations that have made the “morally principled and financially responsible” decision to provide universal healthcare.  But single-payer proponents stubbornly overlook the fact that competition drives innovation, and innovation saves lives.  Sen. Sanders is correct that the “U.S. spends more on healthcare per person” than other advanced nations, but ignores the fact that more money is being channeled into developing new life-saving drugs and medical technology than in those countries. 

A May 22, 2017 New York Post article noted that developed nations with single-payer care, such as the United Kingdom and Canada, are able to lower costs only by restricting access to expensive treatments, as well as paying their doctors substantially less, which in turn reduces the motivation for excellence provided by competition.  As a May 16, 2016 American Enterprise Institute report described, “The average family physician in the United States earns $207,000, according to the Medscape Physician Compensation Report.  General practitioners in Britain, which has a single-payer system, earn $81,000 to $122,000.”

Additionally, single-payer systems are plagued by long wait times.  The Fraser Institute’s November 7, 2016 study examined wait times in Canada, valuing each hour spent waiting according to the work week time lost:  “The estimated cost of waiting for care in Canada for patients who were in the queue in 2016 was more than $1.7 billion.  This works out to an average of about $1,759 for each of the estimated 973,505 Canadians waiting for treatment in 2016.”

Sen. Sanders should stop using the broken healthcare systems of nations such as Canada and Britain as examples of what the U.S. should do.  His own state, Vermont, has tried and failed to implement a single-payer system.  Governor Peter Shumlin (D), a long-time proponent of single-payer, had to back down from the plan in December, 2014.  Faced with the daunting prospect of massive tax increases for both employers and consumers, Shumlin realized that the single-payer plan was simply impossible to finance. 

Sarah Wheaton reported for Politico on December 20, 2014, that Shumlin “concluded the 11.5 percent payroll assessments on businesses and sliding premiums up to 9.5 percent of individuals’ income ‘might hurt our economy.’”  In fact, the cost would have been incredible.  The Boston Globe reported on January 25, 2015, “To implement single-payer, the analysis showed, it would cost $4.3 billion in 2017, with Vermont taxpayers picking up $2.6 billion and the federal government covering the rest.  To put the figures into perspective, Vermont’s entire fiscal 2015 budget, including both state and federal funds, is about $4.9 billion.”

Perhaps Gov. Shumlin feared that a single-payer system in Vermont would end in a disaster similar to the system in Tennessee.  In 1994, Tennessee implemented a modified single-payer system, TennCare, which enrolled all Medicaid patients into a managed care system and extended coverage to many that were previously uninsured. 

Reps. Marsha Blackburn (R-Tenn.) and Phil Roe (R-Tenn.) pointed out the following in their July 22, 2009 article for Real Clear Politics, “Lessons for Healthcare Reform”:  “So while a TennCare card guaranteed you access to care, it did not guarantee the availability of care.”  Patients soon began to over-utilize the “free care,” opting to visit their doctor when they had a cold, rather than simply buy over-the-counter cold medicine.  Many employers chose to move their employees from private care to TennCare, causing TennCare to swell with members that previously had private insurance. 

As the price of TennCare rose, benefits for beneficiaries, as well as payments to doctors and hospitals, were reduced.  Doctors and hospitals in turn began to limit the number of TennCare patients they cared for.  Eventually TennCare was discontinued, after it almost bankrupted the state.

The bottom line is that “free” healthcare is exorbitantly expensive.  Other states in addition to Vermont have backed out of proposed single-payer systems after realizing that their pockets simply are not deep enough to sustain the program.  A December 20, 2014 article in Politico revealed that “States’ pockets also need to be deep and wide” to handle even the startup costs of a single-payer system.  Single-payer proponents claim savings would occur down the road, but failures like TennCare reveal the emptiness of that promise. 

On June 23, 2017, California Assembly Leader Anthony Rendon (D-63), shelved SB 562, a single-payer healthcare bill, calling it “woefully incomplete.”  The bill was expected to cost $400 billion annually, yet there was no financing for such a plan.  Single-payer supporters condemned Leader Rendon for shelving the bill.

New York Democrats are also pushing for single-payer healthcare.  Lead by Assemblyman Richard Gottfried (D-75), the New York Health Care Act passed in the Democratic-controlled Assembly on May 16, 2017, by a vote of 94 to 46.  The Act already has 31 sponsors in the Senate, leaving it one vote short of passage.

Notorious inefficiency at the Department of Veterans Affairs provides an additional warning against a government-run healthcare system.  VA doctors receive a monthly salary rather than compensation based on each patient they treat.  As Lorne Gunter of the Toronto Sun explained in a May 24, 2014 column, in which he compared the flaws of the Canadian system to those of the VA, “Many full-time VA doctors see one-third as many patients in a day as their private care counterparts.  In several cases, VA doctors have been seeing as few as two veterans per day.”  This causes wait times for veterans to skyrocket.

CNN reported in September 2015 on problems with applications for care that were processed through the VA:  “The VAs inspector general found that out of about 800,000 records stalled in the agency’s system for managing health care enrollment, there were more than 307,000 records that belonged to veterans who had died months or years in the past.”  CNN also described how staffers who hid veteran’s application in their desks were never disciplined for such behavior.

The private sector can and will make better decisions than bureaucrats in Washington.  A single-payer system would not only be a recipe for financial disaster, it would also increase wait times, limit care options, and take control away from patients.  Those who tout a single-payer system as morally and financially responsible, such as Sen. Sanders, need to touch base with reality and realize that the opposite is true. 

The dangers of government over-involvement in healthcare have been seen clearly in the disaster of Obamacare.  There should be less government involvement in healthcare, not more.  Congress needs to return health insurance regulation back to the states and purchasing power and decision-making back to individuals.

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