tazzygirl
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I found this. Hope you enjoy and really read the whole thing. There are a few parts i will include here.
WHAT IS SINGLE PAYER?
Single payer refers to a way of financing health care, which includes both the collection of money for health care and reimbursement of providers for health care costs. In a single payer system, both the collection of funds and the reimbursement are the responsibility of one entity: the government. The government collects funds from individuals and businesses, mainly in the form of taxes, and the government reimburses providers for health care services delivered to individuals enrolled in the public health insurance program.
In the United States, there are multiple payers, not a single payer. The collection of money for health care is a joint responsibility of the private insurance industry, which collects premiums and other payments from individuals and businesses, and the government, which collects taxes from individuals and businesses. Similarly, reimbursement responsibilities fall on both the private insurance industry, which reimburses providers for health care services delivered to privately insured individuals, and the government, which reimburses providers for health care services delivered to publicly insured individuals (e.g. people enrolled in Medicare, Medicaid, S-CHIP, or the VA).
Denmark, Sweden, and Canada are example of countries with single payer financing of health care. There is also a single payer system in America: the Medicare program, which is the health insurance program for almost every American aged 65 and over. A provider taking care of a Medicare patient has only one entity to bill: the government. In contrast, a provider has multiple entities to bill when dealing with privately insured individuals due to the large number of private insurance companies in America.
Importantly, the term “single payer” is different from “socialized medicine” and “universal health care.” Socialized medicine refers to a system like the National Health Service of the U.K., in which the mechanisms of delivery of health care are owned by the government. That is, the government owns the health care facilities and physicians work for the government. In contrast, the mechanisms of delivery of health care in a single payer system are not necessarily owned by the government. Physicians can be either in private practice or public practice, and hospitals can be both publicly or privately owned. In Canada, for example, physicians are predominantly in private practice, while hospitals are both public and private. As another example, American physicians and hospitals that take care of Medicare patients are usually private. Single payer does not specify a health care delivery mechanism; it specifies a health care financing mechanism.
The term “universal health care”, in a general sense, refers to providing every citizen of a country with health insurance. Although universal health care connotes a national public insurance program to some people, there are in reality a variety of ways of achieving universal health care, some of which are predominantly public, and others of which use a mixture of public and private elements. Single payer is one way of achieving universal health care, but other ways include the multi-payer systems of Germany and Japan.
FEATURES OF SINGLE PAYER SYSTEMS
Single payer systems are heterogeneous; Canada’s system is different from Sweden’s system, which is different from U.S. Medicare, and so on. The well-known Proposal of the Physicians’ Working Group for Single Payer National Health Insurance illustrates one way single payer might look in the United States. The following discussion is based on the details of this proposal.1
Eligibility and Benefits:
Every resident of the United States would be enrolled in a public insurance system (the National Health Insurance or “NHI” program). Coverage would include all necessary medical care, including mental health, long-term illness, dental services, and prescription drugs. Coverage decisions would be determined by a national board of experts and community representatives; unnecessary or ineffective interventions would not be covered. Patients would not be billed for medical care covered under the NHI program; rather, all costs for covered services would be paid by the NHI program.
Private insurance that covers services covered by the NHI program would be forbidden, although private insurance would be available to insure patients for services not covered under the NHI program.
Financing:
The program would be funded by combining current sources of government health spending (Medicare, Medicaid, etc.) into a single fund with modest new taxes, such as a small payroll tax or earmarked income taxes. While taxes will increase for individual citizens, the increase will be offset by reductions in premiums and out-of-pocket spending. Employees may also receive higher wages from employers, who will no longer have to pay as much for health benefits as part of employee compensation (i.e. instead of paying employees in health benefits, employers will pay higher wages).
Hospitals:
Hospitals would receive a global budget from the NHI program, which means that they would receive a lump sum to cover all operating expenses every month. Hospitals would need to find a way to stay within their global budget while still providing all necessary medical care.
The global budget for the hospital would not cover “capital expenditures” (e.g. facility expansions, purchasing new equipment). Such expenditures would be funded by the NHI program separately from the global budget. Approval for capital expenditures would be based on community needs to prevent over-concentration of technology and facilities in one area.
Physicians:
Physicians would remain in private practice or continue to work for private hospitals. In terms of reimbursement, physicians could choose one of three ways of being reimbursed:
• Fee-for-service: A national fee schedule will be negotiated each year between the NHI program and provider organizations (e.g. medical associations).
• Salary at health care facility: Physicians who work for hospitals and other health care facilities would receive an annual salary.
• Salary within a capitated group: A group practice or nonprofit HMO that employs physicians would receive payments from the NHI to pay their physicians. These payments would be capitated – that is, a payment would be made every month for each patient enrolled with a physician to cover the cost of taking care of patients.
Medications and supplies:
An expert panel would create and maintain a national formulary of prescription drugs covered under the NHI program. Prices for drugs and supplies would be negotiated with the NHI program, which would get a good price from manufacturers due to its bulk purchasing power.
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Even with all these caveats in mind, there is little doubt that the administrative costs in America are higher than that in Canada. More importantly, much evidence also suggests that a large portion of administrative costs in the U.S. go to functions that likely do not improve patient care. In support of this notion, a 2005 study showed that in California, private insurers devote 20-22% of their spending to “billing and insurance-related functions” (BIR). While the definition and measurement of BIR is potentially controversial, one conclusion that can be comfortably drawn from the study is that physicians, hospitals, and insurers devote a large amount of money to handling claims and hiring administrative staff to deal with billing.9 These costs, along with costs like marketing and advertising, are among the administrative costs that would be saved by switching to a single-payer system. The specific amount saved would vary according to the design and functions of the new system.
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ADVANTAGES OF SINGLE PAYER TO VARIOUS GROUPS OF PEOPLE
The benefits of single payer are numerous, but they do not accrue to all sectors of society. Clearly, private health insurance companies do not stand to gain from a single payer system, as their role would be dramatically minimized. Furthermore, the pharmaceutical industry does not stand to gain from a single payer system because of the potential for price controls and bulk purchasing.
For most Americans, though, single payer would represent a clear improvement over the current system:
Advantages to patients
• Improved health. The most prominent benefit of single payer is that patients will be able to access health care with minimal financial barriers. This improved access will increase health by increasing preventive/primary care and allowing patients to afford their treatment regimens.
• Free choice of provider. Patients will have free choice to choose their doctor. In the current system, not every provider accepts every form of health insurance, and the existence of managed care preferred provider networks is an impediment to free choice of providers.
• Portability of coverage. In the current system, insurance status is linked to employment. In a single payer system, a person can go from job to job without experiencing interruptions in health insurance coverage. De-linking insurance status with employment will also increase the number of small businesses, as there are many people who refrain from starting their own businesses because they are afraid to lose their health insurance (the “job lock” phenomenon).15
Advantages to physicians
• Restoration of clinical autonomy: The United States arguably has some of the most intrusive regulation of physician behavior of any industrialized country.16 This regulation comes mainly through private insurance companies, particularly managed care companies that require pre-approval for interventions and institute heavy utilization reviews. In a single payer system, physicians will be relieved from the burden of these regulations, increasing their clinical autonomy.
• Lower malpractice premiums: Currently, a significant portion of malpractice jury awards are devoted to future medical costs for the patient. Under a single payer system, this percentage would decrease, as the government would pay for these future medical costs.8 In addition, a single payer system may be able to decrease medical errors and therefore the number of malpractice suits by increasing continuity of care. That is, patients would not shuttle from doctor to doctor because they change insurance companies or their insurance company alters its preferred provider network.
• Improved patient care. Physicians will be able to make clinical decisions based on best practices, as the influence of a patient’s financial circumstances will be decreased. Physicians will also enjoy increased compliance by patients, who will be able to afford the medications and interventions prescribed to them.
• Simplified billing. Since physicians will have only one entity to bill, billing will be greatly simplified. Physicians will save money on overhead because they will not have to hire to hire as many administrative staff to deal with billing.
Advantages to businesses
• Decreased health care costs. In 2005, the average employer-based health insurance premium for a family of four was $10,880, while the premium was $4,024 for an individual.17 Under a single payer system, businesses will no longer be required to cover the vast majority of health insurance premiums for their employees. Depending on the specific proposal, businesses might be required to fund the new health care system through a payroll tax, but for most businesses,such a payroll tax is likely to cost less than providing health insurance for employees.
• Equal playing field. The businesses that stand to lose money in a single payer system are those that do not currently provide health insurance. Workers in such businesses either enroll in Medicaid, which is taxpayer-funded, or they become uninsured and receive uncompensated care, which is predominantly financed by taxpayer money. Moreover, businesses that do not provide health insurance gain an advantage over businesses that do provide health insurance. Single payer would eliminate this advantage, thus leveling the playing field for businesses.
• Improved global competitiveness. The relief of the health care burden on businesses will help stimulate the economy and improve the global competitiveness of U.S. businesses. Currently, U.S. businesses are a competitive disadvantage to foreign companies, which have lower health care costs and therefore lower prices on their products.18
http://www.amsa.org/AMSA/Libraries/Committee_Docs/SinglePayer101.sflb.ashx
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