Wanna Sail Away To A Distant Shore

I know the exact day that the United States will adopt a single payer health care system: It will be at high noon the day after the Catholic Church canonizes Karl Marx.

For those who don't know, the advantages of a single-payer system are myriad:

• Since the taxpayer dollars that fund single payer comprise a finite budget, it forces efficiency.
• A politically elegant approach to single payer can encourage improved outcomes and responsible fiscal management. For example, Finland raises, budgets, and spends most of its health care dollars at the municipal level. This is the largest part of a municipality's budget, meaning that the electorate can hold local officials accountable for health care system performance. Consider the advantages of mayoral and city council positions being dependent on voter satisfaction with medical care.
• Public health is one of the two biggest bangs for the health care buck. Since the central government is ultimately responsible for the health of the population and since the health budget is finite, single payer creates a powerful incentive to invest in public health. And, indeed, strong public health programs are a signature of single-payer systems.
• The second big buck bang is preventive care (such as physical examinations at recommended intervals). Preventive care tends to get short shrift in the United States because insurance companies have determined that policy holders are unlikely to hold a policy long enough for the expense of preventive care to justify offering it. That's why preventive care is typically not a part of standard policies, and why businesses usually have to pay extra to offer it as a benefit. But when considered from the perspective of general population health, preventive care is a no-brainer: It's cheap and effective. Thus, single-payer systems stress preventive care as part of the primary care around which single payer is built.
• Because the central government ultimately administers a single payer system, it can develop a health policy for the nation that sets goals, directs funding, and monitors expenses. The U.S. has no health care policy.

Has single payer driven into bankruptcy the countries that have adopted it? Contrary to popular belief, single payer systems do not force countries into bankruptcy: Instead they save the taxpayer money hand over fist. Don't believe me? Read on.

We can all agree that 2009 was tough year economically for any country not named China. Nonetheless, Norway, with its double-platinum health care plan rated 11th in the world, ran a budget surplus. (Source: CIA World Fact Book.)

But, you say, that's not fair: Norway had the foresight to nationalize its immense petroleum reserves. These not only fund Norway's social services, they keep the country in the black. What about countries that don't have oil to do their blocking?

Fair enough. So let's take a look at the rest of Scandinavia. Single payer health in those countries must wreak havoc on their budgets. Sure enough, Sweden's ran a deficit in 2009 of around 2% of its revenue; Denmark and Finland check in at around 5%. In 2009, the U.S. deficit was a shade over 28% of revenues.

That's not a typo: 28%, not 2.8%.

And we spend a higher percentage of Gross Domestic Product on health care than any other country in the world. If any country's health care system is driving it to bankruptcy, it's ours.

Is adopting single payer health care the solution to America's health and fiscal problems? The grass in my lawn could solve many of my problems if only it sprouted blades of gold. I'm not counting on it, though. And the truth is that if our politicians miraculously agreed that America needed single-payer health care, we'd screw it up anyway: By the time the special interests finished with the legislation, every single cost-effective element would be stripped from it.

Take Finland's typically clever approach to the national pharmaceutical formulary. The Finns manage costs by controlling price: Drugs are sold on a cost-plus basis in which a profit margin is added to the wholesale price. They adjust the margin up for cheaper drugs, and down for more expensive prescriptions, which encourages use of less expensive medication. Moreover,nothing gets into the formulary without demonstrating both therapeutic value and economic sense. Combined with an ongoing physician education program, this approach gives the Finnish public a powerful voice in determining the use of prescription medications in their country and serves as an effective brake on the rising costs of drugs.

We should do the same here, right?

BUT...Finland is country of 5.25 million people with a GDP of less than $200 billion. The United States has a population of 300 million and a GDP in excess of $14 trillion. In short, the money is huge. In short, try to enact a program like the one described above -- exactly the opposite of what the pharmaceutical companies want -- and Big Pharma will go absolutely ape and strike back with everything they've got. Given the unrestricted access lobbyists have to our political system, any final legislation would likely increase Big Pharma profits at taxpayer expense.

Look no further than Medicare, Part D for evidence: Republicans put the federal government in a straitjacket by preventing it from negotiating Medicare drug prices. The single biggest piece of leverage that taxpayers have -- their sheer number -- was neutered to maximize Big Pharma profits. What do you think would happen if the government attempted to actually dictate profit margins?

The same would happen over and over to every single useful element of an imagined American single payer program. Which would eventually prove the nay-sayers right: Single payer does bankrupt a country.