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Where single payer works – part 1

I’m reading Uwe Reinhardt’s last book, Priced Out. Reinhardt, a universally respected and admired economist with a strong focus on healthcare, died in late 2017. He left a legacy of curiosity and compassion – and practical results.

Reinhardt was instrumental in convincing the government of Taiwan to implement a simple and very effective single payer healthcare system.

Besides an 80% patient approval rating, Taiwan’s system:

  • allows people to see any provider they wish
  • is funded by a payroll tax, with some contributions from other government funds as well as patient copays (which are quite inexpensive)
  • has the lowest administrative expense in the world – 2% of total cost
  • every member has a smart card with their medical records and other key data encrypted. This enables any provider to quickly access key information.
  • costs about a third of the US system.

It is by no means perfect; global budgets and a perceived lack of doctors and nurses are frequently noted as problems.

Yet it has addressed many of the problems we have with our system – medical record transferability, patient costs, paperwork, overall expense, and administrative expense.

What does this mean for you?

The more you know, the better it is.



5 thoughts on “Where single payer works – part 1”

  1. Uwe Reinhardt’s wife, Tsung-Mei Cheng, a formidable medical economist and researcher in her own right, wrote an excellent summary of her late husband’s work in Taiwan for Health Affairs in February, 2019. It can be found here:

    Joe points out that Reinhardt was “practical.” To get an idea of just how practical (and smart) he was, see his article, The Perennial Quest To Lower Health Care Spending, written for the New York Times in 2010. Reading it almost calls to mind Swift’s A Modest Proposal. The article can be found here:

    Final Point: Reinhardt and his colleagues believed the only way national health expenditures are controlled is when government sets prices. Good luck with that one.

    The Perennial Quest to Lower Health Care Spending

  2. The difference between the US and other countries is that we are orthodox Capitalists, and they aren’t. We despise government intervention into the economy, and they don’t. They read Adam Smith’s The Theory of Moral Sentiments, we stopped at The Wealth of Nations. Their politicians aren’t in the pockets of the medical-industrial complex, ours are bought and paid for by the insurers, pharmaceutical companies, hospital systems, physicians, medical device manufacturers, and consultants and riders of the gravy train that health care is in this country (You know who you are).

  3. Here is a very interesting sentence from Wikipedia……

    “The insurer is billed the medical bill, and it is automatically paid. ”

    The doctors appear to be fee for service. I believe that the French, German, Spanish, and Dutch systems operate about the same way for office visits at least, maybe for outpatient care and hospitals too.
    And right in this sentence, you see the enormous challenge that would face a single payer system in America. We have a extremely (almost ludicrously) detailed fee schedule, and doctors would merrily bill for the highest applicable code all day long. The fee schedules in these other nations are a lot flatter, and the medical providers are generally not entrepreneurs.

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Joe Paduda is the principal of Health Strategy Associates



A national consulting firm specializing in managed care for workers’ compensation, group health and auto, and health care cost containment. We serve insurers, employers and health care providers.



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