Why the Single-Payer Health Care System Will Not Work
The missing ingredient in the logic of single-payer healthcare proponents is extremely simple: human behavior. Their proposed system can only work if they can count on each player in the chain of health care events to behave exactly as they assume he or she will. If anyone refuses to perform at his or her minimum, prescribed levels, everything falls apart.
The statist mind has no problems in making such assumptions. Players in the system are robot-like droids with on-off switches to govern their behavior. Congress passes the law, and voila! All switches turn on. The machine purrs along precisely as planned. Congress watches over the equipment with tiny screwdrivers to tweak it here and there, turn this up slightly from time to time, turn that down slightly from time to time, and that’s all there is to it. It’s beautiful! Everybody is happy!
Problem. These robots don’t exist. They never will. That means that nasty human beings are doing what the robots are supposed to do. These human beings are downright impossible to control. If they don’t get what they want, when they want it, they reach up and turn their switches off. And they are never satisfied. The pay that motivated them a year ago no longer suffices. They want raises, bonuses and perks. The levels they performed at a year ago no longer hold true. They do less and less and want more and more for it. It’s maddening.
And so, let’s superimpose this template on the single-payer health care system and see what happens. First, we have to identify the players. To keep it simple, I will reduce it to six representative cogs in the system: Society, congress, the taxpayer, the bureaucrat, the healthcare provider and the patient. Will each of these players behave according to the prescribed guidelines? Will they increase their demands or decrease their productivity? Will they progress according to projected statistical norms? Critical relationships exist between all the players and this interdependency cannot be overstated. In the physical world, for example, if water doesn’t boil at 212 degrees or freeze at 32 degrees, the entire ecosystem will be thrown into chaos. In a system as critical as health care delivery, if any player falls below minimums or exceeds maximums, chaos ensues.
Society. Societies are dynamic, not static. Nearly any category we consider is capable of undergoing telling changes. What happens if the labor pool is impacted by an excessive number of young and inexperienced workers coming into the system, an excessive number of retirees leaving the system or too many workers have earned benefits that exceed the optimum level that the system can sustain? What if the population migrates to urban areas in significant numbers? What if we suffer a major epidemic that affects millions of people? What if we have another 9/11? Moreover, social policy can have profound consequences on a society, e.g. abortion. Since becoming legal in 1973, over fifty million citizens are missing from the population. That represents a shrinkage in numbers of nearly 20%. Who would dare postulate that abortion has made little or no difference in the state of the nation? The point is that needs, trends, shifts and developments that occur in society do not happen in a vacuum.
Congress. Legislative bodies frequently pass laws that deliver unintended consequences to the constituency. In taxation, the power to tax entails the power to encourage, restrict or punish the consumers of the taxed commodity. For example, a tax hike of one dollar on Product A that sells one million units does not—as statists apparently believe—equal one million dollars. Why? Because the tax dampens interest in the Product A or puts it out of range for enough people that it may only raise a half million dollars. Those who do buy Product A may not be able to buy Product B anymore, thus the tax generated by Product B is lost. In the end, the tax revenue going to the government increases by very little, but those who manufacture and sell both products—and their workers—are deeply affected. Real life examples abound in agriculture, energy, food processing, automobile manufacturing, construction trades and so on. Health care, in fact, may serve as the prime example of this occurrence. What if congress bans a product or procedure in the health care industry, an action which occurs on a regular basis? Shock waves reverberate through the industry, and health care practitioners may be forced to prescribe a more expensive substitute or perform a more costly procedure than the one now banned.
The Taxpayer. I have already alluded to the change in behavior of the taxpayer as a result of a tax hike. (By the way, the taxpayer is not a nameless, faceless statistic somewhere on the face of the earth. I am the taxpayer. You are the taxpayer.) The taxpayer is the one who makes all the government programs and policies viable because we fund them all. For ease of communication, I will speak in the first person singular in this paragraph. I don’t like paying taxes. I avoid paying them as much as is legally possible. If the government keeps narrowing my legal loopholes to force me to give it more and more of my money, it will change my behavior.
Let me illustrate. If I work hard enough to make one hundred dollars an hour (I don’t), then I want to keep as much of that as possible. If the government now says that I have to give it forty of those one hundred dollars, I have less incentive to make the one hundred dollars. Why should I work at a hundred dollar pace to make sixty dollars? Instead, I will give my employer a sixty dollar hour because that’s all I am going to get out of it. Each time my taxes go up, I have less reason to work harder. At some point, I don’t have any motivation to work at all because the government is going to take so much of it that it doesn’t matter anyway.
Studies in behavioral sciences demonstrate this very clearly. If a monkey gets an electric shock every time he reaches for a piece of food, he will continue reaching only as long as the satisfaction of his hunger is greater than the pain of the shock. When the pain of the shock becomes greater, he will choose to die of starvation rather than risk the electrical shock. That’s what I will do.
And guess what? The government is not going to let me die of starvation. It is going to force some other taxpayer (you) to work for me and give me your money. You are now going to support me. You are going to pay for my open heart surgery, my oncology treatments and my medications. You are not going to do this, are you? Let me guess what you are going to do. You are going to quit working and let the government force some other taxpayer to take care of both of us. If this keeps up, when are we going to run out of taxpayers? I hope we never do. Would you call that a wild, unfounded assumption? Hey! You’re starting to get it.
The Bureaucrat. The bureaucrat has a nice job. He doesn’t know you or me. We are just numbers to him. He doesn’t have to worry about making a profit or a loss to his employer. He has job security; he gets substantial raises automatically; he needs little aptitude and even less personality. He just has to keep the boss happy. His boss cannot suffer politically for any decision or action that he makes or takes. If he can avoid that, he’s in for life. The bureaucrat need not be particularly bright or extraordinarily competent; in fact, too much competence can get him fired. The bureaucrat makes decisions every day. He decides whether or not I have to pay a tax, a fine, a fee, a tariff, a duty or a levy. He decides whether or not I get the surgery I need from the doctor I want or if it is too expensive at my age. It all depends on the budget of his agency and the availability of the surgeons. He decides whether or not I qualify for an exemption, a privilege, a special consideration, a restricted status, an admission into a program or a payment. He can pay me, charge me, stonewall me, ignore me, deny me or throw the book at me. He can go as fast as he wants to or as slow as he wants to.
What motivates the bureaucrat? Little or nothing. If he thinks I am a political nightmare for him, I might get my way. If I am an obscure little nobody, he has no pressing reason to do anything for me. He is guided by his political calculus and his budget—period. At five o’clock, his lights go off and don’t come back on until eight o’clock the next morning—unless it is one of eleven federal holidays or one of thirteen sick days or one of twenty-six vacation days he gets. Most of us despise the bureaucrat but we all have to work with him and through him. As long as there are government programs, there will be bureaucrats. As long as the government gets bigger, there will be even more bureaucrats.
Will a government run, single-payer health care system overload the bureaucracy? From our standpoint, yes. From the perspective of the bureaucrat, no. He continues at a steady pace. Studies show that he takes care of a certain number of customers on average. He has no need to beat the average. Those he doesn’t get to will be handled tomorrow. It really doesn’t matter if there are ten people or a hundred people in line. He moves at his own pace. Anyone who dies in line will be handled by another bureaucrat. It’s just easier that way.
The Health Care Provider. The health care providers—the doctors, nurses and hospitals—bear the brunt of the single-payer system. They have to deal with both the bureaucrats on the one end and the patients on the other. Pressure from both sources will become increasingly intolerable. Anticipating this colossal overhaul of the system, many would be health care professionals are already choosing alternative careers. (More about this in a moment). They understand that the demand for service will go up with the addition of millions of previously uninsured consumers to the clientele pool. At the same time, they know that they will be forced to negotiate with one source of all their income: the government run by bureaucrats.
When the government has no competition, they essentially own a monopoly over the industry. All the bad things that corporations did a hundred years ago when monopolies were legal will be repeated by the government all over again. They will force providers to submit to their demands. They will pay when and how much they want to. Anyone who doubts this must remember that everything is a function of the budget, regardless of a policy that sets the standard rates for all medical procedures and medications. If the health care providers don’t get satisfaction, where can they run for relief? Another government agency, of course—also run by bureaucrats. Whistleblower laws? Not likely. Complaints will be moved to the second Tuesday of next week.
Health care providers will be pushed into ethical dilemmas on a daily basis. Will they sign off on a patient who needs a procedure that the system will not pay for? Will they fail to schedule vital tests that are necessary for a correct diagnosis? Will they factor in a patient’s age, gender, race, abilities or aptitudes in their decision to treat? Will they walk away from a patient that could be cured but will not receive treatment because of non-medical factors?
Back to career choices. If fewer American citizens opt for a career in the medical profession because of low pay, the flood gates will swing open wide for foreign doctors and nurses. Will their educational background be on par with U. S. doctors? Will foreign health care professionals with specialties that don’t match the precise openings in the U. S. be allowed to practice here as a way to get a foot in the door? Will the quality of health care go down as a result? A nod in the affirmative seems likely for all questions.
The Patient. Patient behavior under a single-payer system will change from the status quo. First, anything offered for free precipitates a flurry of activity in almost any field. If patients know that the visit to the doctor, a trip to the emergency room or the dispensing of medications will not cost them any out-of-pocket expenses, they will access these services in record numbers. This is known behavior, proven by hundreds, even thousands of years of observing how markets operate. Why do retail outlets lower prices and have sales? Because it works! People flock to cheap and free. Medical care will be no different from the typical marketplace experience.
Second, free health care will encourage patients to remember—even manufacture—other medical conditions that need to be diagnosed and treated. Conditions that were ignored or dismissed for years will suddenly become acute problems that require professional attention.
Third, when health care becomes a right instead of a privilege, the level of legal involvement necessarily escalates. For example, if the government denies certain treatments for too many persons diagnosed with the same condition, red flags will go up and class action lawsuits will pop up everywhere. At the very least, test cases will be tried in jurisdictions all over the country until one of them yields the result that the lawyers were looking for. Jurists will not be the doctors’ friend. Why? Because the primary reason that single-payer health care was passed into law was to extend health care coverage to the little guy who was shut out of the previous system. In the end, I believe that the little guy will prevail in the courts.
As a matter of fact, we have single-payer systems in place now. Veterans receive their care through this kind of a system. So do Native-Americans. Medicare is a hybrid, but it depends on government support as the major payer. If you were to ask those who are involved in this system if they like the way it is working, you will get a resounding NO! Requests for reimbursements by insurance companies and billings from doctors offices and hospitals meet with the same interminably slow pace and illogical decisions that will surely become the norm for any future single-payer system. Many doctors would be forced out of business if they had to depend on Medicare patients for all of their income. The government pays pennies on the dollar for procedures and treatments.
Those who believe in single-payer systems are either hopelessly naïve or maliciously attempting to destroy the finest health care system in the world. I predict that if the government succeeds in taking over the health care industry, it will fall into shambles sooner than we could imagine.
So what do we do about health care? Doing nothing is better than the present proposal.* Yet, we don’t have to do nothing. In a subsequent post, I will discuss some solutions that have a good chance of working. Let’s not destroy what we’ve got in the dim hopes of getting something better. Nearly two-thirds of Americans dislike the plan now before the congress. Throwing them overboard will be a mistake that may be our undoing.
*Update: This article was written before “Obamacare” became law. As my post of 2-16-12 stated, we are already beginning to feel the impact of the new system. This is a critical time in our history. God help us.