The Myths of Single-Payer Health Care
By David Hogberg (about)

A single-payer health care system is one in which a single-entity — the government — collects almost all of the revenue for and pays almost all of the bills for the health care system. In most single-payer systems only a small percentage of health care expenses are paid for with private funds. Countries that have a single-payer system include Australia, Canada, Sweden and the United Kingdom.

Single-payer is popular among the political left in the United States. Leftists have emitted tons of propaganda in favor of a single-payer system, much of which has fossilized into myth.

Here are some of the more prominent single-payer myths:

  • Myth No. 1: Everyone has access to health care a single-payer system.
  • Myth No. 2: Claims of rationing are exaggerated.
  • Myth No. 3: A single-payer system would save money on administrative costs.
  • Myth No. 4: Single-payer will provide fair and quality care for everyone.
  • Myth No. 5: Single-payer leaves medical decisions to patients & doctors.
  • Myth No. 6: Single-payer systems achieve better health outcomes.
  • Myth No. 7: The U.S. systems also engages in rationing.
  • Myth No. 8: A single-payer system will not hamper medical research.
  • Myth No. 9: Single-payer will save money as patients seek care earlier.
  • Myth No. 10: The free market in health care has failed in the U.S.

  • Myth No. 1: Everyone has access to health care a single-payer system.

    Everyone in a single-payer system has health insurance, not necessarily health care.

    While the government in a single-payer system will pay for everyone’s health care, it limits the access to health care. In a single-payer system, citizens often believe that “the government” is paying for their health care. When people perceive that someone else is paying for something, they tend to over-use it. In a single-payer health care system, people over-use health care. This puts strain on government health care budgets, and to contain costs governments must ration care.

    Governments in a single-payer system ration care using waiting lists for surgery and diagnostic procedures and by canceling surgeries. As the Canadian Supreme Court said upon ruling unconstitutional a Quebec law that banned private health care, “access to a waiting list is not access to health care.” [Back to Top]

    Myth No. 2: Claims of rationing are exaggerated.

    Jonathan Cohn, author of Sick, wrote that the “stories about [rationing in] Canada are wildly exaggerated.” Yet advocates of single-payer never say what they mean by “exaggerated.”

    The fact is that people often suffering great pain and anxiety while they spend months on a waiting list for surgery. Others spend months waiting for a surgery, only to have it cancelled, after which they will spend even more time waiting for another surgery. Sometimes people even die while on the waiting list.

    Media in foreign nations are full of stories about people suffer while on a waiting list. In Canada, Diane Gorsuch twice had heart surgery cancelled; she suffered a fatal heart attack before her third surgery. In Great Britain, Mavis Skeet had her cancer surgery cancelled four times before her cancer was determined to have become inoperable. In Australia, eight-year-old Kyle Inglis has lost 50 percent of his hearing while waiting nearly 11 months for an operation to remove a tumor in his ear. Kyle is one of over 1,000 children waiting over 600 days for ear, nose and throat surgery in Warnbro, a suburb in Western Australia.

    These are not mere anecdotes. Much academic literature has examined the impact of waiting lists on health. A study in the Canadian Medical Association Journal found that 50 people died while on a wait list for cardiac catheterization in Ontario. A study of Swedish patients on a wait list for heart surgery found that the “risk of death increases significantly with waiting time.” In a 2000 article in the journal Clinical Oncology, British researchers studying 29 lung cancer patients waiting for treatment further found that about 20 percent “of potentially curable patients became incurable on the waiting list.” [Back to Top]

    Myth No. 3: A single-payer system would save money on administrative costs.

    Single-payer advocates often claim that the U.S. private sector health care system is wasteful, spending far more on administrative costs than do government-run single-payer systems. According to single-payer advocates David Himmelstein and Steffie Woolhandler, “Streamlining administrative overhead to Canadian levels would save approximately $286.0 billion in 2003, $6,940 for each of the 41.2 million Americans who were uninsured as of 2001.”

    Yet comparisons of private sector administrative costs with those of government are misleading. Many government administrative expenses are excluded in such comparisons, such as what it costs employers and government to collect the taxes needed to fund the single-payer system, and the salaries of politicians and their staff members who set government health-care policy (the salary costs of executives and boards of directors who set company policy are included in private sector administrative costs).

    But even if the U.S. would save money on administrative costs by switching to a single-payer system, the savings would prove temporary. The main cause of rising health care costs is not administrative costs, but over-use of health care. A single-payer system would not solve that problem. Indeed, it would make it worse. [Back to Top]

    Myth No. 4: Single-payer will provide fair and quality care for everyone.

    Leftist Dave Zweifel claims that the U.S. “could make the system so much more fair by enacting a national single-payer health plan.” Jonathan Cohn, when asked why he had faith that the government could run the health care system for all when it didn’t do it very well for the poor, responded, “My answer is that they do it, and do it well, abroad.”

    Well, no they don’t. According to Canada’s Fraser Institute:

    … a profusion of research reveals that cardiovascular surgery queues are routinely jumped by the famous and politically-connected, that suburban and rural residents confront barriers to access not encountered by their urban counterparts, and that low-income Canadians have less access to specialists, particularly cardiovascular ones, are less likely to utilize diagnostic imaging, and have lower cardiovascular and cancer survival rates than their higher-income neighbours.

    It isn’t much better in Great Britain. Take a look at the Saga ‘Good Hospital Guide’ for British hospitals. Compare the ones in Inner London, which tend to be in wealthier areas, to the ones in Outer London, which tend to be in poorer areas. You’ll notice that in general, the ones in Inner London have more doctors and nurses per bed, shorter wait times for MRIs and hip replacements, and lower mortality ratios. [Back to Top]

    Myth No. 5: A single-payer system will leave medical decisions to a patients and his or her doctor.

    According to Physicians for a National Health Program (PNHP), a group pushing for a single-payer system in the U.S.:

    There is a myth that, with national health insurance, the government will be making the medical decisions. But in a publicly-financed, universal health care system medical decisions are left to the patient and doctor, as they should be. This is true even in the countries like the UK and Spain that have socialized medicine.

    Yet PNHP seems to be talking out of both sides of its mouth. Here is how PNHP addresses the question of how to keep doctors from doing too many procedures in a single-payer system:

    [Doing too many procedures] is a problem in systems that reimburse physicians on a fee-for-service basis. In today’s health system, another problem is physicians doing too little for patients. So the real question is, “how do we discourage both overcare and undercare”? One approach is to compare physicians’ use of tests and procedures to their peers with similar patients. A physician who is “off the curve” will stand out. Another way is to set spending targets for each specialty. This encourages doctors to be prudent stewards and to make sure their colleagues are as well, because any doctor doing unnecessary procedures will be taking money away from other physicians in the same specialty.

    In practice what this will mean is medical decisions will be left up to you and your doctor as long as your doctor isn’t doing too many (or too few) procedures and is within a spending target.

    The truth is that single-payer systems often interfere with treatment decisions. For example, most single-payer systems have bureaucracies that delay the approval of new drugs, preventing patients from using them. Alice Mahon, a former member of the British parliament, needed the drug Lucentis to slow her macular degeneration. Because of delays due to the National Health Service not yet having approved Lucentis at the time of her diagnosis, Mahon lost much of the sight in her left eye.

    In 1999, Canadian patient Daniel Smith, a cystic fibrosis sufferer, and his doctors agreed that he needed a lung transplant. But his surgery was cancelled by administrators because an open hospital bed could not be found.

    So much for medical decisions being left to patients and their doctors. [Back to Top]

    Myth No. 6: Single-payer systems achieve better health outcomes.

    Most single-payer advocates point to life expectancy and infant mortality as evidence that single-payer systems produce better health outcomes than the U.S. And, indeed, the U.S. has lower life expectancy and higher infant mortality than many nations with a single-payer system.

    The problem is that life expectancy and infant mortality tell us very little about the quality of a health care system. Life expectancy is determined by a host of factors over which a health care system has little control, such as genetics, crime rate, gross domestic product per capita, diet, sanitation, and literacy rate.

    The primary reason is that the U.S. has lower life expectancy is that we are ethnically a far more diverse nation than most other industrialized nations. Factors associated with different ethnic backgrounds — culture, diet, etc. — can have a substantial impact on life expectancy.

    A good deal of the lower life expectancy rate in the U.S. is accounted for by the difference in life expectancy of African-Americans versus other populations in the United States. Life expectancy for African-Americans is about 72.3 years, while for whites it is about 77.7 years. What accounts for the difference? Numerous scholars have investigated this question. The most prevalent explanations are differences in income and personal risk factors. For example, one study found that about one-third of the difference between white and African-American life expectancies in the United States was accounted for by income; another third was accounted for by personal risk factors such as obesity, blood pressure, alcohol intake, diabetes, cholesterol concentration, and smoking and the final third was due to unexplained factors.

    Infant mortality is also impacted by many of the same factors that affect life expectancy — genetics, GDP per capita, diet, etc. — all of which are factors beyond the control of a health care system. Another factor that makes U.S. infant mortality rates higher than other nations is that we have far more pregnant women living alone; in other nations pregnant women are more likely to be either be married or living with a partner. Pregnant women in such households are more likely to receive prenatal care than pregnant women living on their own.

    Perhaps the biggest drawback of infant mortality is that it is measured too inconsistently across nations to be a useful measure. Under United Nations’ guidelines, countries are supposed to count any infant showing any sign of life as a “live birth.” While the United States follows that guideline, many other nations do not. For example, Switzerland does not count any infant born measuring less than 12 inches, while France and Belgium do not count any infant born prior to 26 weeks. In short, many other nations exclude many high-risk infants from their infant mortality statistics, making their infant mortality numbers look better than they really are.

    In areas where a health care system does have an impact, such as treating disease, the U.S. outperforms single-payer systems. For example, the U.S. has a higher five-year survival rate for victims of heart attacks than Canada, due to the fact that we do more bypass surgeries and angioplasties in the U.S. Hospitals in the U.S. also commit fewer errors than hospitals in countries with single-payer systems like Australia, Canada, New Zealand, and the United Kingdom. [Back to Top]

    Myth No. 7: The U.S. systems also engages in rationing – 18,000 people die each year due to lack of insurance.

    According to PNHP, “Rationing in U.S. health care is based on income: if you can afford care you get it, if you can’t, you don’t. A recent study by the prestigious Institute of Medicine found that 18,000 Americans die every year because they don’t have health insurance.”

    The Institute of Medicine study purporting to show that 18,000 people die each year due to a lack of health insurance is actually a “meta-analysis,” a study that summarizes the results of other studies. Yet many of the studies the Institute relied on have some rather odd results. One study in the New England Journal of Medicine found that women with private insurance were more likely to survive breast cancer than those uninsured. However, data in the study also showed that those who were uninsured had a higher survival rate than women covered by Medicaid. This suggests that factors other than health insurance, like education and income, were at play in determining breast cancer survival.

    Furthermore, everyone in the U.S. can get care regardless of income. In 1986 the U.S. Congress passed the Emergency Medical Treatment and Active Labor Act. This requires emergency rooms to treat any person who shows up seeking medical treatment, regardless of their ability to pay. [Back to Top]

    Myth No. 8: A single-payer system will not hamper medical research.

    The PNHP claims:

    Medical research does not disappear under universal health care system. Many famous discoveries have been made in countries that have national health care systems. Laparoscopic gallbladder removal was pioneered in Canada. The CT scan was invented in England. The new treatment to cure juvenile diabetics by transplanting pancreatic cells was developed in Canada.

    While it is true that medical research will not “disappear,” it will surely decline. Consider what has happened to pharmaceutical research in single-payer systems, where the government imposes price controls on prescription drugs. A study (PDF) conducted by U.S. Commerce Department found that drug price controls in other nations reduced annual investment in pharmaceuticals by $5-8 billion, resulting in 3 to 4 fewer drugs being launched each year. The Boston Consulting Group found (PDF) an even bigger effect of price controls, showing a loss of $17-22 billion annually in pharmaceutical research resulting in the loss of 10 to 13 new drug launches.

    In a free market, producers make a profit by providing services that consumers find useful. Profits also act as a signal to research – research dollars go toward services that make more profit. This is desirable because services that make more profit are the ones that consumers find most useful. Medical services that make profit — i.e., the ones that patients find most useful — will attract more research dollars.

    In a single-payer system, government sets the prices for medical services. Since government is not good at setting prices, it inevitably over-pays for some services. Research dollars will go not necessarily toward the services that patients find most useful but toward the services that government over-pays since those will be the ones that will be most profitable. [Back to Top]

    Myth No. 9: Single-payer will save money because patients will seek care earlier (since they will no longer face financial barriers to health care) when it is easier and more affordable to treat diseases.

    This assumes that patients will be able to get access to health care easily in a single-payer system. But as nations with single-payer have shown, even the most basic health care, like routine doctors visits, are rationed. According to a report by Statistics Canada:

    • Despite the fact that most individuals had a regular family doctor, almost one in five individuals of those who required routine care experienced difficulties accessing care. The rates were significantly lower in Saskatchewan (12%), Alberta (13%) and British Columbia (12%), and significantly higher in Newfoundland and Labrador (20%) and Quebec (19%).
    • The top two barriers to receiving routine or on-going care were difficulties getting an appointment, and long waits for an appointment.
    • Overall, 16% of Canadians who had required health information or advice indicated that they had experienced difficulties accessing care. The rates were significantly lower in Saskatchewan (13%) and Alberta (13%), and significantly higher in Ontario (18%).

    Seeking care earlier will make little difference if patients have trouble getting a routine appointment with a doctor. [Back to Top]

    Myth No. 10: The free market in health care has failed in the U.S.

    What has failed in the U.S. is government micromanagement of the health care system. Over the past 40 years government’s role in the health care system has continually expanded, from programs like Medicare, Medicaid and SCHIP, to regulations like HIPPA and COBRA. Like most government interventions, it has only made the problem worse.

    The fact is we do not have a free market in health care in the U.S. Ask yourself: How many markets in the U.S. do you get a tax break for buying a product, but only if you buy it through your employer, as we do with health insurance? In how many markets are you prohibited from purchasing a product out of state, as we are with health insurance? In how many markets are employers prohibited from providing bonuses to employees for improving quality and productivity, as hospitals are prevented from doing with doctors? If government policy inhibited other markets that way, those markets would be dysfunctional too.

    The solution to our health care problems is to reduce the role of government, not increase it by switching to a single-payer system. [Back to Top]