(This entire page is courtesy Physicians for A National Healthcare Plan)

Single-payer is a term used to describe a type of financing system. It refers to one entity acting as administrator, or “payer.” In the case of health care, a single-payer system would be setup such that one entity—a government run organization—would collect all health care fees, and pay out all health care costs. In the current US system, there are literally tens of thousands of different health care organizations—HMOs, billing agencies, etc. By having so many different payers of health care fees, there is an enormous amount of administrative waste generated in the system. (Just imagine how complex billing must be in a doctor’s office, when each insurance company requires a different form to be completed, has a different billing system, different billing contacts and phone numbers—it’s very confusing.) In a single-payer system, all hospitals, doctors, and other health care providers would bill one entity for their services. This alone reduces administrative waste greatly, and saves money, which can be used to provide care and insurance to those who currently don’t have it.

Access and Benefits

All Americans would receive comprehensive medical benefits under single payer. Coverage would include all medically necessary services, including rehabilitative, long-term, and home care; mental health care, prescription drugs, and medical supplies; and preventive and public health measures.

Care would be based on need, not on ability to pay.

Payment

Hospital billing would be virtually eliminated. Instead, hospitals would receive an annual lump-sum payment from the government to cover operating expenses—a “global budget.” A separate budget would cover such expenses as hospital expansion, the purchase of technology, marketing, etc.

Doctors would have three options for payment: fee-for-service, salaried positions in hospitals, and salaried positions within group practices or HMOs. Fees would be negotiated between a representative of the fee-for-service practitioners (such as the state medical society) and a state payment board. In most cases, government would serve as administrator, not employer.

Financing

The program would be federally financed and administered by a single public insurer at the state or regional level. Premiums, copayments, and deductibles would be eliminated. Employers would pay a 7.0 percent payroll tax and employees would pay 2.0 percent, essentially converting premium payments to a health care payroll tax. 90 to 95 percent of people would pay less overall for health care. Financing includes a $2 per pack cigarette tax.

Administrative Savings

The General Accounting Office projects an administrative savings of 10 percent through the elimination of private insurance bills and administrative waste, or $150 billion in 2002. This savings would pay for providing medical care to those currently underserved.

Cost Containment

The Congressional Budget Office projects that single payer would reduce overall health costs by $225 billion by 2004 despite the expansion of comprehensive care to all Americans. No other plan projects this kind of savings.

Different Perspectives on the Benefits of Single-Payer

Patients

Each person, regardless of ability to pay would receive high-quality, comprehensive medical care, and the free choice of doctors and hospitals. Individuals would receive no bills, and copayment and deductibles would be eliminated. Most people would pay less overall for health care than they pay now.

Doctors

Doctors’ incomes would change little, though the disparity in income between specialties would shrink. The need for a “wallet biopsy” before treatment would be eliminated; time currently wasted on administrative duties could be channeled into providing care; and clinical decisions would no longer be dictated by insurance company policy.

Medical endorsements include PNHP (9,000), the American Public Health Association (30,000), American Association of Community Psychiatrists, Massachusetts Academy of Family Practice, American Medical Women’s Association (13,500), Alameda-Contra Costa Medical Society, American Medical Student’s Association, D.C. Medical Society, National Medical Association (6,500), American College of Physicians (Illinois Chapter), Long Island Dermatological Society, Islamic Medical Association, American Nurses Association, the Nurses’ Network for a National Health Program, and the D.C. chapter of the American Medical Association.

Hospitals

The massive numbers of administrative personnel needed to handle itemized billing to 1,500 private insurance companies would no longer be needed. A negotiated “global budget” would cover operating expenses. Budgets for capital would be allocated separately based on health care priorities. Hospitals would no longer close because of unpaid bills.

Insurance Industry

The need for private insurance would be eliminated. One single payer bill currently in the House (H.R. 1200) would provide one percent of funding for retraining displaced insurance workers during its first few years of implementation.

Business

In general, businesses would see Single Payer limit their health costs and remove the burden of administering health insurance for their employees.

Congress

Single payer would be the simplest and most efficient health care plan that Congress could implement.

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Single-Payer National Health Insurance

Single-payer national health insurance is a system in which a single public or quasi-public agency organizes health financing, but delivery of care remains largely private.

Currently, the U.S. health care system is outrageously expensive, yet inadequate. Despite spending more than twice as much as the rest of the industrialized nations ($7,129 per capita), the United States performs poorly in comparison on major health indicators such as life expectancy, infant mortality and immunization rates. Moreover, the other advanced nations provide comprehensive coverage to their entire populations, while the U.S. leaves 46 million completely uninsured and millions more inadequately covered.

The reason we spend more and get less than the rest of the world is because we have a patchwork system of for-profit payers. Private insurers necessarily waste health dollars on things that have nothing to do with care: overhead, underwriting, billing, sales and marketing departments as well as huge profits and exorbitant executive pay. Doctors and hospitals must maintain costly administrative staffs to deal with the bureaucracy. Combined, this needless administration consumes one-third (31 percent) of Americans’ health dollars.

Single-payer financing is the only way to recapture this wasted money. The potential savings on paperwork, more than $350 billion per year, are enough to provide comprehensive coverage to everyone without paying any more than we already do.

Under a single-payer system, all Americans would be covered for all medically necessary services, including: doctor, hospital, long-term care, mental health, dental, vision, prescription drug and medical supply costs. Patients would regain free choice of doctor and hospital, and doctors would regain autonomy over patient care.

Physicians would be paid fee-for-service according to a negotiated formulary or receive salary from a hospital or nonprofit HMO / group practice. Hospitals would receive a global budget for operating expenses. Health facilities and expensive equipment purchases would be managed by regional health planning boards.

A single-payer system would be financed by eliminating private insurers and recapturing their administrative waste. Modest new taxes would replace premiums and out-of-pocket payments currently paid by individuals and business. Costs would be controlled through negotiated fees, global budgeting and bulk purchasing.

The links below will lead you to more specific information on the details of single-payer:

Single-Payer Overviews

The Physicians Proposal for National Health Insurance

“Proposal of the Physicians’’ Working Group for Single-Payer National Health Insurance,” JAMA 290(6): Aug 30, 2003

Key Features of Single-Payer
A useful handout detailing the main features of single-payer.

Statement of Dr. Marcia Angell introducing the U.S. National Health Insurance Act
A great overview of the need for and logic of a single-payer system. Perfect as an introductory handout.

Liberal Benefits, Conservative Spending
Another great introductory handout.

Public Citizen's Response to the Citizens' Health Care Working Groups Interim Recommendations (En Español)
A great overview on the benefits of a single-payer system by Public Citizen.

Rep. Dennis Kucinich Tackles Health Care
Rep. Kucinich talks with Truthdig about the health care crisis in America.

Single Payer: Facts and Myths

Single Payer FAQ
A frequently-updated catalog of the most-asked questions about single-payer.

Myths as Barriers to Health Care Reform
A paper refuting many of the myths associated with single-payer.

“Mythbusters” by the Canadian Health Services Research Foundation
A series of brief papers debunking the common misconceptions about the Canadian health system.

“Moral Hazard:” The Myth of the Need for Rationing

Rasell, E “Cost Sharing in Health Insurance – A Reexamination,” New Eng J Med., 332(7) 1995

Roos, et al “Does Comprehensive Insurance Encourage Unnecessary Use?” Can. Med. Assoc. J 170(2) Jan. 20, 2004

Gladwell, M. “The Moral Hazard Myth,” New Yorker Aug. 29, 2005

Health Economics and Financing

Introduction: How Much Would a Single-Payer System Cost?
A review of government and independent studies of the cost of single-payer system.

Administrative Waste Consumes 31 Percent of Health Spending

Woolhandler, et al “Costs of Health Administration in the U.S. and Canada,” NEJM 349(8) Sept. 21, 2003

Administrative Costs in U.S. Hospitals are More Than Double Canada’s

Woolhandler, et al “Administrative Costs in U.S. Hosptials,” NEJM 329, Aug. 5, 1993

60 Percent of Health Spending is Already Publicly Financed, Enough to Cover Everyone

Woolhandler, et al. “Paying for National Health Insurance – And Not Getting It,” Health Affairs 21(4); July / Aug. 2002

A Proposal for Financing National Health Insurance

Rasell, Edith “An Equitable Way to Pay for Universal Coverage,” International Journal of Health Services. 29(1); 1999

"Liberal Benefits, Conservative Spending"
Grumbach, et al. JAMA, May 15, 1991, Vol. 265 No. 19

"Markets and Medical Care: The United States, 1993-2005"
Joseph White, Case Western Reserve University, The Milbank Quarterly, Volume 85, Number 3, 2007

The Case Against For-Profit Care

Overview: The High Costs of For-Profit Care

Editorial by David Himmelstein, MD and Steffie Woolhandler, MD in the Canadian Medical Association Journal

For-Profit Hospitals Cost More and Have Higher Death Rates

Devereaux, PJ “Payments at For-Profit and Non-Profit Hospitals,” Can. Med. Assoc. J., Jun 2004; 170

Devereaux, PJ “Mortality Rates of For-Profit and Non-Profit Hospitals,” Can. Med. Assoc. J, May 2002; 166

For-Profit Hospitals Cost More and Have Higher Administration Expenses

Himmelstein, et al “Costs of Care and Admin. At For-Profit and Other Hospitals in the U.S.” NEJM 336, 1997

For-Profit HMOs Provide Worse Quality Care

Himmelstein, et al “Quality of Care at Investor-Owned vs. Not-for-Profit HMOs” JAMA 282(2); July 14, 1999

For-Profit Medicare Plans Cost 11 Percent More Than Traditional Medicare
MedPac Report, Jun 9, 2006

Quality and Malpractice

Introduction: Medical Malpractice, Health Care Quality and Health Care Reform (pdf)
A Forum Report by Gordon Schiff, MD

How Single-Payer Improves Health Care Quality (pdf)
A brief by PNHP (makes a great handout!)

A Better Quality Alternative: Single-Payer National Health Insurance

Schiff, et al “A Better Quality Alternative” JAMA, 272(10); Sept. 12 1994

Comprehensive Quality Improvement Requires Comprehensive Reform (pdf)

Schiff, et al “You Can’t Leap a Chasm in Two Jumps,” Public Health Reports 116, Sept / Oct 2001

The Failures of Other Reform Options

Individual Mandates (The Massachusetts Plan)

Consumer Directed Health Care and Health Savings Accounts

Tax Credits for Private Insurance

Why HSAs Won't Cure What Ails U.S. Health Care

Critique of Sen. Wyden's (OR) "Healthy Americans Act"

Comparison between Schwarzenegger Health Plan and Single Payer for California

State Single-Payer Bills

Arizona

California - SB840

Colorado

Illinois

International Health Systems

I. Canada
The Canadian Health System: Lessons for the United States
US General Accounting Office Report, June 1991

A Survey of the Canadian Health System

Armstrong, et al “A Perfect System?” excerpted from Universal Health Care, New York Press, 1998

A Survey of Studies Comparing the U.S. and Canada (pdf)
PNHP Brief, May 2006

The Future of Health Care in Canada (pdf)
Report of the Romanow Commission


II. International Comparisons
The U.S. spends more for less because of its fragmented financing system

Anderson, G. et al, "It’s the Prices, Stupid: Why the United States is so Different from Other Countries," Health Affairs 22(3), May/June 2004

U.S. Care Quality is No Better Than Other Countries

Hussey, P. et al "How Does the Quality of Care Compare in Five Countries?" Health Affairs 23(3) May/June 2004

Single-Payer Bibliography

A bibliography of single-payer studies and papers