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Mar
5

Single Payer – time to get real

So, what would the most expensive version of Single Payer cost? Eliminating all deductibles, copays, coinsurance, premiums for Bernie Sanders’ super-duper Rolls Royce plan would run about $32,000 for a family (a gross simplification to be sure).

There are 22 million jobs in the US healthcare and related industries (that includes mine, one of our daughters, and her husband – they are nurses.) Let’s add all the college and grad school institutions that employ tens of thousands to educate people on healthcare administration, and the support infrastructure  – IT companies, paper form printers, App developers, pundits and commentators, real estate occupied by insurers…you get the idea. The health care industry is at least a fifth of our economy.

The private health insurance industry alone employs 540,000 workers.

If we switched to a true single payer system, millions of administrative jobs would disappear.  Remember what happened to manufacturing in the rust belt? That happened over 30 years; this would affect a much bigger share of the economy over a much shorter time.

The result would be an economic collapse that would surpass the Great Depression and devastate the economy.

Lest you think this is hyperbole, Taiwan employs a grand total of 300 people to administer a single payer healthcare system for a population of 24 million.

Using Taiwan as a basis, we’d only need 4,125 people to administer a universal single payer system.


5 thoughts on “Single Payer – time to get real”

  1. Joe, your series on universal health coverage continues to be thought-provoking. And this particular post has provoked these thoughts. While the impact on our health insurance industry would be significant, as you point out, is that sufficient reason not to pursue reforms such as single payer if it turns out to be the most rational approach to solving this escalating crisis? And note the “if” as I’m certainly not sure that single payer is the best solution. As you have noted there are other schemes in Europe that guarantee and regulate universal coverage but still retain private insurers and funds. But in all probability any reform measures that are implemented would have some degree of impact on the vast health insurance system we have created over many decades. Isn’t this a bit like coal mining? In order to minimize or eliminate its climate impact and move toward more desirable renewable energy sources, we have seen, and will continue to see, job losses among miners and other workers in the regions where mining takes place.

    1. Hello Dr Jake – thanks for providing a perspective from one who has lived and worked in both a single payer and whatever we call this system we have here.

      I wholeheartedly agree that we should not discard any option without fully considering costs, benefits, and tradeoffs. More posts to come on those topics – and thanks again.

      best Joe

  2. I agree with your estimate of almost 20% of our GDP goes to healthcare. Most developed nations spend about half that amount with several of those nations having better outcomes. Obviously the U.S. healthcare system is extremely wasteful. I also agree a single payer system would be disruptive to many jobs…..and this involves millions of highly skilled people. But at the same time, our economy has millions of unfilled job openings as there is a shortage of skilled workers.

    1. Both great points Sam. besides, making something or fixing stuff is a lot more productive than administering stuff that doesn’t need any more administering!

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Joe Paduda is the principal of Health Strategy Associates

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