Health care reform: Socialized medicine?

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Is America ready for socialized medicine?

It’s an intriguing question in light of the stormy reception afforded the Affordable Care Act. It’s also a reasonable one considering that certain aspects of President Barack Obama’s historic health care reform seem to serve as test balloons, and maybe even precursors, for a form of universal health care coverage.

To begin to answer the question requires two definitions upfront.

‘Socialized medicine’ and ‘single payer’

Socialized medicine is generally defined as a system in which all are insured (“universal health care”), all medical facilities are owned and operated by the government, and citizens are charged based on their ability to pay. Great Britain’s National Health Service and Soviet bloc health care systems are prime examples. The United States has a limited version of socialized medicine in the Department of Veterans Affairs’ VA health system.

A far more likely universal health care permutation on these shores is what’s known as “single payer.” Under a single-payer system, health insurance is administered by the government, which serves as the “single payer” for health services on behalf of its citizens, who are taxed for it based on their ability to pay.

Single-payer systems coexist well with privately owned hospitals and health care providers, as illustrated by the health systems in Canada and Sweden.

The U.S. boasts a very popular but limited version of single payer called Medicare. The Expanded and Improved Medicare for All Act, recently reintroduced in Congress by Rep. John Conyers, D-Mich., advocates expanding Medicare into a single-payer system to cover all Americans.

Single payer has its fans …

A U.S. single-payer movement “is alive and well,” in part because of Medicare’s enduring popularity, says Deborah Chollet, a senior fellow at Mathematica Policy Research in Washington, D.C.

“No matter where you move in the country, you keep your Medicare,” she says. “It allows you to go to any doctor or hospital you choose, and it’s not wildly expensive given the relatively expensive population it serves.”

Who favors single payer? Obama has offered qualified support, while acknowledging that a single-payer system is not the goal of his health care reform law. In 2009, he said, “I want to cover everybody. Now, the truth is that, unless you have what’s called a single-payer system in which everyone’s automatically covered, then you’re probably not going to reach every single individual.”

Staunch proponents include the more than 18,000 members of Physicians for a National Health Program, or PNHP, a nonprofit research and education organization of doctors advocating for a single-payer solution.

… and its foes

Who’s opposed? “Everyone who makes a living off of health care,” says Dr. Deb Richter, a family practitioner in Montpelier, Vt., and past president of the PNHP.

“This is big, big money,” Richter says. “Nationally, we’re spending nearly 18 percent of our (gross domestic product), something like $2.9 trillion a year, on health care. The fact is, single payer stands to wipe out an entire industry that is making a lot of money and has a lot of power. The insurance industry doesn’t want it. The drug industry doesn’t want it. Even not-for-profits in those sectors are making a lot of money.”

How a US single-payer system might work

How would single payer change your health care? For starters, say goodbye to out-of-pocket copays, deductibles and premiums. PNHP says all of that would be replaced by a progressive health care tax, meaning those who can afford it pay more.

Medical networks would vanish. You could choose your own hospitals and doctors. And all of your medically necessary care — like vision, dental, prescriptions, mental health and even long-term care — would be paid for by the government. And because the government would negotiate rates, costs likely would be contained.

Chollet says some states, including Massachusetts, Minnesota and Vermont, have been moving toward single payer for years, while others, including Colorado, New York and Washington, are testing the waters with the help of up to $300 million in State Innovation Models Initiative grants awarded by the Center for Medicare & Medicaid Innovation.

Socialized medicine, here we come?

What are the chances that America will adopt single payer anytime soon?

“Higher than a lot of people think,” predicts Tom Billet, a senior benefits consultant with the global consulting firm Towers Watson. He says once employers are faced with health reform’s $2,000 penalty per uninsured employee next year and the trickle-down cost from a 40 percent excise tax on insurers who underwrite high-cost “Cadillac plans” starting in 2018, many may find it cheaper to pay the penalty and drop health insurance altogether.

“If we get to the point where employers start dropping insurance en masse, that could really change the equation,” Billet says. “There are conspiracy theorists who believe that was President Obama’s idea all along. I don’t happen to subscribe to that.”

Maybe not so fast

Chollet has a different prediction. She says the Obama health care reform law — with its simplifying and streamlining of how doctors are paid, together with its core quality and cost controls — can do what’s needed without the expense and political dogfight that would likely ensue over single payer.

But Richter begs to differ. She predicts a state-by-state domino effect, possibly fueled by employers who may relocate to single-payer states to escape the high cost of health insurance.

“Single payer is inevitable. There is no other way to cover the population with what most people consider humane health care, for what you would consider a reasonable cost,” she says. “When you have a block of states that, in effect, say, ‘Look, we’re getting better coverage for lower cost and you guys are getting hosed,’ that’s when you’ll see the tipping point.”