Monday, January 08, 2007

Some Truths About "Single Payer"

Post lifted from David Frum

From the horse's mouth: Tom Campbell had the experience of actually trying to run a "single-payer" system. As deputy minister of health in the province of Ontario (a civil service not a political position), Campbell had absolute operational control of the healthcare services available to nearly 10 million people. He decided what doctors would be paid, what procedures would be made available, where hospitals could be built and where they must be shut. And here is what he had to say about his experience as a healthcare sultan:

"[O]ur system could be much better. It lags behind the best international standards in waiting times and availability of new technology and drugs. Our medical staff are overworked and stressed. We seem to lurch from crisis to crisis with constant government attempts at micromanagement, punctuated with cutbacks and bailouts.

It is time for a different approach: less government, not more. Our current problems are caused by the failure of a rigid, centralized control system that inevitably follows from single-source funding. In the absence of economic user fees, paid directly to service providers, central funding leads to shortages and rationing as a means of cost control. We see the results in unacceptable waiting times and lack of adequate services. The current shortage of trained medical staff is the result of botched government decisions in the name of cost control. As a result, a significant number of people do not have a family doctor.

The way we fund health care rules out any market forces or signals that might improve efficiency. We provide free coverage for minor services to all, including the most affluent, so we don't have enough funds for timely cancer treatments and catastrophic drug plans. This creates the ultimate two-tier system where the more affluent can pay for drugs and travel to the United States, while those of more modest means are denied service.

Campbell has written a detailed paper proposed solutions to these problems, and any congressperson who is contemplating a government monopoly for the United States would be well advised to read it. (I'll append some highlights below.) Better yet: invite Campbell down to testify to Congress before experimenting with any "reforms" that would further reduce competition, choice, and accountability in a US system that already suffers from too little of these basics of rational decision-making, not too much. Here is what we should do.

1. Freeze existing levels of funding as a percentage of G.D.P. Take distribution out of the hands of politicians and put it in the hands of an independent, arms-length health commission overseen by a non-partisan board of outstanding citizens.

2. Create new funding through reasonable patient cost-sharing directly at the point of service rather than indirectly through taxes and government. Make patients responsible for the first dollar costs up to the average per-capita system cost. Through tax credits, set the maximum net cost for those in the highest tax bracket at $2,500 per annum, with provision for inflation. This would taper to zero for those with incomes under $25,000. Children under age 18 and students would be exempt.

3. Give service providers a share of the new money collected at point of service, as an incentive. Now hospitals have no incentive to service more patients and every incentive to ration them through long wait times. All services would become significant revenue generators, bringing about a different way of thinking about the way hospitals are run. There would now be a powerful incentive to provide more and timely service rather than to ration it.

4. Deregulate enrolments and fees in all medical training schools so they can accept all qualified candidates. One of the scandals of our time is the way that our health system has come to depend on draining trained medical people from poorer countries with more severe shortages than us. This is unethical and should stop. Government control has brought about continuing staff shortages in almost all health disciplines, while large numbers of our qualified young people have been denied career opportunities because of restrictive enrolments in our medical training institutions.


Under this plan, the government would have a reduced but still important role. It would get out of day-to-day micromanagement of the system. Its role would be to establish the necessary legislative and tax framework on the advice of the independent health commission. Within this framework, a decentralized, democratic and all-inclusive health system could flourish.

Australia: Another unused government medical facility

A private business that acted like this would quickly go broke

An operating theatre in one of Queensland's busiest hospitals sits idle four years after being built, while waiting lists for surgery grow. The purpose-built "E1" theatre has never been used since the new Princess Alexandra Hospital in Brisbane was rebuilt in 2002.

The State Government is considering a bid from the Australian Medical Association Queensland to set up a brokerage system to cut waiting lists by arranging for patients to have publicly-funded surgery at private hospitals. Meanwhile, the operating theatre on the fourth floor of the hospital in Woolloongabba continues to gather dust.

After being contacted by The Sunday Mail, a Princess Alexandra spokesman said the "E1" operating theatre would be brought into use next month. But Opposition health spokesman John-Paul Langbroek said it was "a travesty" that it had taken so long to begin operations in the theatre while thousands of people were on waiting lists. "It seems to be a recurring theme with certain areas within Queensland Health that there's inefficient use of expensive resources," he said. "This is a classic example. There are people writing to my office and contacting me - people whose parents have had operations cancelled three or four times."

The latest available figures for the June to September 2006 quarter showed the number of people waiting for elective surgery had grown in 12 months from 34,641 to 35,665. Those needing urgent operations had blown out 45 per cent and the list for semi-urgent surgery grew by 65 per cent. Health Minister Stephen Robertson argued that the system was more efficient than in the past and that any growth in waiting lists was due to the large number of people moving to Queensland.

The Sunday Mail first revealed 17 months ago that the "E1" operating theatre was being used as a storeroom. Hospital officials said at the time it was not needed. After being contacted by The Sunday Mail last week, a hospital spokesman said: "The theatre is due to have cases put through it in February this year. "It will be used mainly for liver surgery." The spokesman said it was the last operating theatre to be brought into commission and any further growth would require the construction of new facilities.



For greatest efficiency, lowest cost and maximum choice, ALL hospitals and health insurance schemes should be privately owned and run -- with government-paid vouchers for the very poor and minimal regulation. Both Australia and Sweden have large private sector health systems with government reimbursement for privately-provided services so can a purely private system with some level of government reimbursement or insurance for the poor be so hard to do?

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1 comment:

Anonymous said...

"put it in the hands of an independent, arms-length health commission overseen by a non-partisan board of outstanding citizens"

Outstanding citizens ... appointed by whom?

Do people really want health care controlled the same way that, say, the National Endowment for the Arts operates?