In 2017, we reached total national health expenditures of about $3.7 trillion, with federal health expenditures of about $1 trillion. These expenditures comprise about 18% of our gross domestic product. They are a cause for increasing concern, not only because of their magnitude and rate of growth, but also because what we are achieving is so very dismal. Our health outcomes rank with those of third-world nations, not with those of modern developed nations. And our costs are many times those of much more successful countries.
The question we need to consider is what courses of action could begin to remedy these problems. We need to think about potential solutions not in terms of months or even a single year, but rather in terms of one to two decades, or even longer. To implement any solutions on a more stringent timeline could cause very severe disruptions to our economy and disaster to whole segments of our health care system.
Below, I recommend two very radical solutions designed to address these problems, and I recommend against another solution likely to follow in their wake. The solutions are draconian because the problems are wicked. These proposals are intended to stimulate discussion and actions that potentially are less radical, but have the promise of addressing our payment-cost-outcome dilemma.
Single-payer system. We long have discussed the merits of a single-payer system, such as Medicare, as advocated most recently by Sen. Bernie Sanders. Such a system could standardize benefits and payment protocols. It also could introduce much better standardization of interventions, both in evidence-based practice and practice-based evidence.
If operated by the federal government on a not-for-profit basis, such a system could have the immediate and continuing impact of reducing health insurance premiums, since they would no longer include profits. A federally-operated system also could be set up to induct different age groups over time. For example, those age 26 to 30 could be inducted at the same time as those age 60 to 64, to counter adverse selection problems.
It should be pointed out that any national health insurance system must ultimately be based upon universal enrollment, such as the current Social Security system. To do anything less runs the risk of triggering the “adverse selection death spiral of insurance”—fewer and fewer healthy enrollees to balance more and more sick enrollees.
I recommend that we discuss a single payer system and actually do the necessary work to understand how it would operate and how we ought to move in that direction.
Single-price system. Setting up a new single-payer payment system likely would be accompanied by other more undesirable effects. Robert Samuelson, a conservative economist, recently suggested that we consider a single-price system. Such a system likely would cause dramatic business failures among provider entities by driving price to the lowest common denominator.
It also would reduce necessary variations in care delivery protocols adapted to local circumstances, and promote underutilization of highly skilled personnel even when needed. At the same time, it also likely would reduce care quality to the lowest common denominator, and eliminate the practice of searching for care quality based upon price. Healthcare consumers would be even more bewildered than they are today.
I recommend that we oppose a single-price system.