The Single-Payer Remedy Is Worse Than the Disease

No one denies that America's health sector faces problems. Costs continue to rise, and 45 million people lack insurance. Even worse, many politicians think they've discovered the cure in a single-payer system.

But that remedy would be worse than the disease. The government-dominated health systems of Europe and Canada are struggling with serious cost pressures, inefficient bureaucracies, and unmet demands for more advanced medical care.
 
For the privilege of their supposedly "free" care, other countries pay much higher taxes. In 2005, taxes consumed 41% of GDP in Canada, 42% in Britain, and 51% in France, compared to 32% in the U.S.

Single-payer systems invariably involve rationing. What good is free care if the government denies access to it?

About one million people in the U.K. are on waiting lists for hospital care, including surgeries. And 200,000 more are waiting just to get on the waiting list.

Cancer patients in Britain have resorted to waging public relations campaigns because their government won't pay for new medications for breast and kidney cancer.

In Canada, the situation is no better. Long waiting lines lead to restricted access to care.  There were 45 inpatient surgical procedures per 1,000 Canadians in 2003, compared to 88 in the United States. Canadians received only one-third as many MRI exams and half as many CT scans.  

Meanwhile, patients in Sweden have been sent to veterinarians for diagnostic tests so the government could reduce waiting lists.  

Proponents of a single-payer system argue that the United States would be different -- that we could get all the money we need to finance universal health insurance by eliminating profit in the private health sector.

But that's like trying to cure a disease with arsenic. Socializing our health care system would mean that one-sixth of our economy would operate under different economic rules, with the government setting prices, allocating resources, and deciding what medical care would be available to whom and when.

There is a better way.   

We should embrace competition, not stifle it. We should reward innovators, risk-takers, and entrepreneurs for providing faster, better, more affordable health care. And we should recognize that progress depends upon innovation and profit.

The U.S. market already is pointing the way by responding to consumer demands for more convenient, more affordable health services. Health plans are offering programs to help patients better manage chronic diseases like diabetes, lowering costs and improving health.

Small clinics are springing up in retail stores around the country, providing customers with easy access to nurses who treat common ailments like ear infections and poison ivy. These clinics cost less than a visit to the doctor or emergency room.  

Competition is leading to more affordable prescription drugs. Wal-Mart started a price war by announcing it would sell a long list of generics for only $4 for a month’s supply. Target and other pharmacies followed suit. Today, more than half of the prescriptions Wal-Mart fills are $4 generics.

And the new Medicare drug benefit shows how competition can lower costs and provide better benefits.

When the Part D program started in 2003, Congress estimated the drug benefit would cost beneficiaries an average of $37 a month. But because private drug plans compete to deliver the Medicare benefit, prices have been far lower than predicted. The average monthly cost of the standard benefit is just $22.

Coming in below cost is unprecedented for a government program – and it shows the government can lower prices by encouraging competition. It's virtually the opposite of a single-payer system, in which governments shut out the private sector.  

Rather than regressing to the failing systems of Europe -- with waiting lines and rationing -- we must develop our own unique solution. Ultimately, that means embracing the truly American qualities of innovation and competition.
 
Grace-Marie Turner is president of the Galen Institute in Alexandria, Va.