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Analysis

Single-Payer Healthcare is Not 'One-Size-Fits-All'

By Jack O'Brien  
   January 24, 2019

As some federal lawmakers and state legislatures consider implementing a single-payer healthcare system, there are numerous options across the spectrum available to them, according to researchers from RAND Corporation.

With the growth of the Medicare-for-All Caucus on Capitol Hill and legislation pending in both California and New York, the proposal of a single-payer healthcare system continues its ascendance in mainstream health policy. 

A majority of Americans have expressed displeasure with the current state of healthcare and are more open than they have been in years past to embracing single-payer healthcare as a viable solution. 

Still, many declarative misconceptions about single-payer, espoused by both supporters and detractors, have dominated the discussion at the policy table. Some see it as the only way to rectify the clinical and financial issues plaguing the American healthcare system while others deride such a proposal as nothing more than another expensive, inefficient government program.  

Related: Can States Fix the Disaster of U.S. Healthcare?

Jodi Liu, associate policy researcher at the RAND Corporation, addressed members of Congress on Wednesday about the potential impact of enacting single-payer legislation and common mischaracterizations, both positive and negative, about the concept.

Liu told HealthLeaders that single-payer healthcare is not a 'one-size-fits-all approach' and defined the broader program would achieve universal or near-universal coverage, generally operated by the government, and funded by a broad base of taxes.

Liu added that such a program covers a large spectrum of possibilities, including the overall cost of the plan, coverage included, and the structure of the model.

"There are people who say [single-payer] is going to cost a lot more money or save a lot more money, and I think the reality is we don't know, there's a lot of uncertainty about how these things will play out," Liu said. "I think it's entirely possible that [single-payer] could go one way or the other, but that nuance depends on what's in the actual legislation."

Progressive advocates and lawmakers across the country have wasted no time piecing together what a potential single-payer program could look like. 

At the federal level, House Ways and Means Committee Chairman Rep. Richard Neal, D-Mass., has stated that the committee will hold a hearing on potential Medicare for All legislation this year. 

At the state level, Gov. Gavin Newsom, D-Calif., has made state-run single-payer healthcare a primary platform of his administration, while lawmakers in New York State once again consider their own version of single-payer legislation, the NY Health Act. 

Related: Quick: What's the Difference Between Medicare-For-All and Single-Payer?

Exploring the single-payer spectrum:

  1. Baseline scenario:
    1. Initially, total spending would be similar to current law, though the projections vary based on how the state negotiates prices.
    2. Estimated 1% decrease in total spending due to administrative efficiencies among other factors.
    3. If state can lower prices for services and prescription drugs, there can be savings over time.
    4. RAND projects a slower rate of growth compared to current law, leading to a 3% decrease in total spending. 
       
  2. Single-payer without lower prices:
    1. Seven percent increase in total spending.
       
  3. Single-payer with lower prices:
    1. Twelve percent decrease in total spending.
       
  4. More rigid cost containment strategies mirroring the NY Health Act:
    1. Budget based on fixed dollar amount to spend each year for system or on components like capital and administrative expenses.
    2. Spending would be expected, not based on results of negotiations.
       

Liu said the outcomes are difficult to predict due to the larger extent of challenges states would face enacting single-payer compared to the federal government. States typically have less leverage when negotiating drug prices, according to Liu, and even if a state passed its own single-payer system, it would have to apply for a waiver to bring in Medicare and Medicaid funding.

The Trump administration has repeatedly made statements indicating they would not approve such waivers.

Single-payer has encountered opposition not only from Republicans in the Trump administration and on Capitol Hill, but also from business organizations and the head of the American Medical Association, who cite cost concerns and limited patient access as reasons for their stance.

Related: Chamber of Commerce CEO Vows to 'Use All Our Resources' to Fight Single-Payer Proposals

Related: AMA President: It's Still 'No' to Single Payer

Jack O'Brien is the finance editor at HealthLeaders, a Simplify Compliance brand.


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