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These posts are the creation of Doran L. Barton (AKA Fozziliny Moo). To learn more about Doran, check out his website at fozzilinymoo.org.

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Pondering single-payer healthcare

Posted: 15 November 2015 at 06:27:03

Tonight, the Democrats running for president had a debate. Senator Bernie Sanders from Vermont spoke about his single-payer healthcare plan which would effectively eliminate the health insurance marketplace in the country. Sanders argued that it would also lower costs for medications, procedures, etc. which are currently very expensive in a comparison to costs in other countries.

And he's right.

Single-payer healthcare is ONE way to lower these costs. A single-payer system would implement a large bureaucracy whose job it is to determine people's eligibility for medication and services, costs for medication and services, etc. If the single-payer healthcare system says a vial of insulin should cost $60, then a vial of insulin will cost $60.

Currently, if I want to pay out-of-pocket for a vial of fast-acting insulin like Novolog or Humalog, I'm probably looking at $200-250. Why? Because that's how much the insulin manufacturers can charge the insurance companies and get away wiht it. It's easily an order of magnitude higher than what diabetics pay in other countries.

In the past, when I switch jobs or my company switches preferred health insurance companies, frequently I'll get a notice that I should talk to my doctor about discontinuing use of Novolog and start using Humalog instead, or vice-versa, because one or the other is preferred by the insurance company.

I bring this up because under a single-payer system, the government will pick winners and losers... on everything. The upside will be lower costs, but the downside could be far fewer choices.

On the other hand, if we loosened up the way healthcare and health insurance works in the US, we could lower costs a different way: by increasing competition.

What if patients and doctors could decide which medications, medical devices, and procedures were best, most affordable, etc.? For most people, the fast-acting insulins Humalog and Novolog are mostly compatible with each other. If a vial of Humalog was available for $100 while a vial of Novolog was available for $250 and you were making the decision about which one to buy, you'd choose the lower cost medication because, all things considered, they're functionally equivalent and you'd prefer to save money.

This dynamic, which has all but disappeared in our current healthcare system, is called free-market competition, and it drives prices down because companies are forced to compete at a price level to try to offer the best value to their customers, the patients (as opposed to the insurance companies).

Returning healthcare to free market competition could lower prices as much as a single-payer healthcare system and it would provide people with some things a single-payer system can not: choice and control.