A limited and conservative case for a single-payer option
© Getty Images

The case against a single-payer public option typically made is that it is a one size fits all government-run health insurance system that ignores individual preference, interfering with choice thereby disrupting the free market. Perhaps true, but was the healthcare marketplace ever truly a free market? One problem with trying to make this determination is that healthcare is not monolithic.

Visiting your family physician for an annual check-up is quite different than being admitted to the hospital for an emergency appendectomy or going to the local emergency department (ED) with chest pain.

If we were to apply a market imperfection index to each, it might be fair to describe a visit to a family physician as mildly imperfect, an admission to a hospital as considerably more imperfect and a trip to the local emergency department as fully imperfect. If this application of a market imperfection index is even remotely accurate, how then could we design a uniform healthcare plan that efficiently provides health coverage across the entire healthcare spectrum?

It is here that we find an opportunity to bridge the ideological divide between Democrats and Republicans or conservatives and liberals. It is here that we might find a possible roadmap to provide the multiple healthcare efficiencies needed to also achieve long term entitlement reform.

By its very nature the provision of care at an ED is antithetical to a free market. The Emergency Medical Treatment and Labor Act (EMTALA) as an unfunded burdensome mandate further distorts the ED healthcare market. In its current form how does an ED differ from the care rendered by the first responders who often provide the transportation to the ED?

ADVERTISEMENT
Like police, fire departments and EMS the ED meets the test for being a public good and should be financed accordingly. Similarly, the provision of hospital based care is impeded by market distortions. In fact, hospitals behave more like a public utility than an efficient competitive healthcare marketplace where prices for patient services are determined by unfettered supply and demand. Patients are at a distinct disadvantage during a hospital admission often faced with a significant asymmetry in information and power.

 

Making use of a single-payer plan to resolve these market imperfections is a conservative solution that could also provide the underpinnings needed to bend the healthcare cost curve and create a personal healthcare market much more amenable to market forces, competition, lower premiums and the goals of the American Health Care Act (AHCA) currently before Congress.

A considerable component of the expense associated with pre-existing conditions is for hospital based care. That means the negative impact of adverse selection and the size of stop loss reserves needed to mitigate risk would be substantially reduced and much more easily managed.

Given the market power and size of the pharmaceutical industry the prescription drug component of the healthcare marketplace is also a good candidate to be included within a single-payer plan. In each of these instances a single-payer plan would be less susceptible to market power or asymmetry in information and in a far stronger position to negotiate terms and prices.

Too often the healthcare debate has been dominated by the assumption that healthcare is monolithic. Instead, in this approach the healthcare marketplace is recognized for what it truly is; an amorphous assemblage of disparate parts that should be addressed independently.

Recognizing the uniqueness of the ED, hospital and prescription drug market allows for the implementation of a single-payer plan that will possibly satisfy the ideological requisite for Democrats and at the same time allow

Republicans to support a conservative based plan to resolve significant healthcare market distortions. The effect would be to liberate the remaining healthcare marketplace setting the groundwork for the design of a more effective and beneficial patient-friendly healthcare plan.

Further supporting this plan is the ease at which it could be implemented. Much of the needed infrastructure is already in place at the Centers for Medicare and Medicaid Services (CMS) within Medicare Parts A and D. Further, with the enactment of this approach a more balanced playing field and the apparatus needed would be in place to more easily achieve long term entitlement reform with substantially less impact on the remainder of the personal healthcare market.

In summary, adopting a single-payer plan for ED care, hospital-based care and prescription drugs would satisfy the ideological requisite for Democrats and at the same time allow Republicans to support a conservative plan that would correct market distortions while allowing the remainder of the personal healthcare market to respond to and satisfy the needs of patients and providers.

Rich Manski is Professor and Chair of the Department of Dental Public Health at University of Maryland School of Dentistry.


 

The views expressed by contributors are their own and are not the views of The Hill.