Subcommittee Hearing – Access and Cost: What the US Health Care System Can Learn from Other Countries
Committee on Health, Education, Labor and Pensions (HELP) , Subcommittee on Primary Health and Aging
United States Senate, March 11, 2014
Statement by:
Tsung-Mei Cheng, LL.B., M.A.
Health Policy Research Analyst
Woodrow Wilson School of Public and International Affairs, Princeton University
Today’s hearing is focused on “international single payer health system models that provide universal coverage of health care.” I will tailor my remarks according to the three sub-themes the Committee wishes to explore, namely:
* Primary care access in single payer systems
* Health care costs in single payer systems, and
* Cross-country comparisons of health outcomes
Before proceeding with the Committee’s agenda in more detail, however, I would like to provide the Committee with a summary of my main points:
1. If equity and social solidarity in access to health care and financing health care were fundamental goals of a health care system, the single payer system provides an ideal platform for achieving these goals.
2. Single-payer systems typically are financed by general- or payroll taxes in a way that tailors the individual’s or family’s contribution to health-care financing to their ability to pay, rather than to their health status, which until this year has long been the practice in the individual health insurance market in the U.S.
3. These systems protect individual households from financial ruin due to medical bills.
4. Single-payer health systems typically afford patients free choice of health-care provider, albeit at the expense of not having a freedom of choice among different health insurers. Remarkably, in the U.S. households have some freedom of choice of health insurers – to the extent their employer offers them choice – but most Americans are confined to networks of providers for their insurance policy. In other words, Americans appear to have traded freedom of choice among providers for the sake of choice among insurers.
5. In single-payer systems “money follows the patient.” Therefore providers of health care must and do compete for patients on the basis of quality and patient satisfaction, but not price.
6. In a single payer health insurance system, health insurance is fully portable from job to job and into unemployment status and retirement. The “job-lock” phenomenon prevalent in the US is unknown in those systems, contributing to labor-market efficiency.
7. Because all funds to providers of health care in a single-payer system flow from one payer, it is relatively easy to control total health spending in such systems. Indeed, total national health spending as a percent of GDP in countries with single-payer systems is lower than it tends to be in non-single-payer health systems. This does not mean providers are left without a voice. Provider inputs are part of the formal negotiations over health-care budgets.
8. For the most part, single-payer systems achieve their cost control by virtue of the monopsonistic market power they enjoy vis a vis providers of health care. It is a countervailing power that the highly fragmented U.S. health-insurance system lacks vis a vis providers.
9. As part of their effort to control total health spending, however, and to avoid the waste of excess capacity that easily develops in health care, some single-payer systems (the UK and Canada) put constraints on the physical capacity of their health system (number of inpatients beds, MRI scanners, etc). That approach can lead to rationing by the queue. The alternative to rationing by such administrative devices, of course, is rationing by price and ability to pay, an approach used by design or by default in the United States. Rationing by price or by non-price mechanism are just alternative forms of rationing.
10. A single-payer system is an ideal platform for a uniform electronic health information system of the sort, for example, used by our Veterans Administration health system (a single-payer system in its own right). There is a common nomenclature which enables 100% electronic billing and claims processing, thus yielding significant savings in administrative costs.
11. Because they conveniently capture information on all health-care transactions, single-payer systems provide a data base that can be used for quality measurement, monitoring and improvement, and also for more basic research on what drives health spending and what clinical treatments works and does not work in health care. It enables evidence based medicine and the tracking of efficacy and safety of new drugs and devices once they are introduced after approval by government based on results of clinical trials.
Statement of Tsung-Mei Cheng (28 pages): http://www.help.senate.gov/imo/media/doc/Cheng.pdf
Video of the hearing and links to statements of all participants: http://www.help.senate.gov//hearings/hearing/?id=8acab996-5056-a032-522e-e39ca45fcfbe
Comment:
By Don McCanne, M.D.
Sen. Bernie Sanders chaired a Senate committee hearing on what the health care system in the United States can learn from other countries. Tsung-Mei Cheng provided an excellent overview of single payer and of the sharp contrasts between the United States and other nations. Her 28 page statement is well worth downloading to use as an information resource in educating others about single payer.
Other informative presentations included those of Victor Rodwin on France, Ching-Chuan Yeh on Taiwan, Danielle Martin on Canada, and Jakob Kjellberg on Denmark. Even the presentations from the other side by Sally Pipes and David Hogberg were helpful in that they showed how silly (sadly) their views were when contrasted with a group of experts who understand well how systems based on solidarity work. If you can find the time, viewing the entire video (1 hour & 46 minutes) and reading the statements would be well worth the effort (link above).
If you don’t have the time, at least view this 4 minute YouTube video of clips from the hearing: https://www.youtube.com/watch?v=9WdqtPLRc1A