Will the Next President Bring Multi-Payer Healthcare to the U.S.?
This has been one of the most unusual election seasons in recent memory. Among other issues, it has started a debate on the future of healthcare in the United States. Will the next U.S. president introduce plans to migrate towards a multi-payer health care system?
Presidential Candidates Attempt to Tackle Healthcare Woes
During the democratic primaries, Bernie Sanders discussed the need to move towards a single payer healthcare system. He introduced a healthcare plan that was criticized by both conservative pundits and liberal economists, such as Kenneth Thorpe and Paul Krugman.
There were several concerns with the single payer healthcare system that Sanders proposed. Sanders own estimates showed the system would have cost $18 trillion, which is about half the current federal budget. However, Thorpe’s analysis showed the system would cost twice as much and found that the majority of Americans would be paying more than they currently pay on premiums.
While Sanders plan didn’t seem politically or economically feasible, he still deserves credit for starting a conversation about the future of healthcare in America. Presidential hopeful Hillary Clinton has pledged to continue with some of the promises Sanders made during the democratic primary. She is moving forward with her own healthcare plan, which may resemble a multi-payer system.
Single-Payer or Multi-Payer – Which is the Future of the United States?
While single payer healthcare sounds like a good idea, there are a number of logistical and political challenges that it faces. If the next president chooses to further reform the United States healthcare system, they are more likely to pursue a multi-payer system instead.
Here are some reasons the country is more likely to transition to a multi-payer system.
Steep Medical Expenditures
Per capita medical expenditures in the United States are much higher than most other countries. While many pundits claim this is due to the inefficiencies of the health insurance industry, the truth is that health care costs are inflated due to excessive consumption. Here are some statistics that put that into context:
- Americans consume three-quarters of the world’s prescription drugs, even though they only account for about 5% of the global population. Part of this is due to drug addiction, which highlights the need for addiction treatment services in Florida, but also reflects an overdependence on medication for even legitimate healthcare problems.
- Americans also receive 20% of all surgeries, which are often expensive, elective procedures.
- The American lifestyle leads to a higher risk of many chronic illnesses. The United States has the highest prevalence of diabetes in the world, which often leads to more expensive problems down the road. High rates of diabetes, heart disease and other problems are major contributors to the expensive healthcare system.
- The aging population is causing healthcare costs to rise, as more people are admitted to assisted living Chicago facilities.
The truth is that most of these expenses wouldn’t be easily fixed with a single payer system. A single-payer system would lead to some form of rationing, but many essential expenditures would be needed.
The high cost of prescription drugs is also a problem. Bernie Sanders and many other proponents of single payer claimed that drug prices would drop under a single payer system since they are currently twice as high as most other countries on earth.
Unfortunately, these predictions are overly optimistic. The drug industry generates the vast majority of its revenue from United States consumers. They operate on a 17% profit margin. While this is a very healthy level of profitability, drug companies still couldn’t cut prices in half to remain solvent.
Cost Sharing Controls Are Needed
Cost sharing is a very important part of most universal healthcare systems. It has a dampening effect on demand because consumers are less likely to rush to the doctor and request a prescription every time they have a mild sinus infection.
A multi-payer system would have cost-controls that the Sanders plan did not.
Multi-Payer is Closer to Our Current Healthcare Model
The Affordable Care Act is already very similar to most other multi-payer health care systems, such as those in Germany and Switzerland. The difference is that many people still fall into the “coverage gap.”
Hillary Clinton has pledged to expand the Affordable Care Act to ensure everyone gets coverage. This is much easier, both politically and logistically.
Income inequality is one of the biggest concerns in this election. Although Sanders made a genuine effort to address growing inequality, some of his policies would have achieved the opposite. His single payer healthcare plan would have incurred regressive payroll taxes on the working class. A multi-payer system would be funded with more progressive taxes.