America: Beware of Single-Payer Health Care

June 9, 2014 Topic: Domestic PoliticsHealth Region: United States

America: Beware of Single-Payer Health Care

The real lesson of the VA scandal. 


Before Bowe Bergdahl dominated the headlines, the country was engrossed by the Veterans Affairs scandal. The VA was subjecting veterans to onerous wait times while massaging the data to show otherwise.

Much has been said about how poorly this reflects on President Obama’s managerial prowess. Secretary Eric Shinseki, a hero of the last war, has already been forced to resign. And the conduct of the bureaucrats involved was, in Shinseki’s own words, “indefensible.”


The real lesson of the VA scandal, however, is even more sobering. It’s that a single-payer healthcare system would be a calamity in the United States. Given the political difficulty of enacting Obamacare, which mainly subsidizes private insurance, and the fact that Medicaid expansion stops well short of single-payer health care, discussing the possibility of a single-payer system may not seem terribly relevant.

Think again. Dr. Toby Cosgrove, formerly considered a front runner to take over Shinseki’s post at the VA, predicted Obamacare would lead to single-payer health care. Donald Berwick, dubbed Obamacare’s “founding CEO,” is running on single-payer health care in his campaign for governor of Massachusetts, where Obamacare has destroyed the Romneycare system that spawned it.

Vermont is already trying to set up a single-payer system, if it can ever get a waiver from the federal government and come up with the extra $2 billion a year in revenues (compared to the $2.7 billion the state already raises annually) it would take to run it.

Leading liberals such as New York Times columnist Paul Krugman and Vox editor Ezra Klein have repeatedly praised the VA system and held it up as a model for the rest of the country. The Washington Examiner’s Philip Klein and the Washington Free Beacon’s Andrew Stiles have published detailed accounts of the system.

The “public option” that was stripped from Obamacare and various proposals to expand Medicare eligibility beyond senior citizens—even “Medicare for all”—are concrete federal proposals to move the country toward single-payer health care. Moreover, as the problems created by the Affordable Care Act—higher premiums, narrower provider networks, canceled insurance policies—grow they will be blamed on private insurers. Most of the solutions will involve increasing the government role in health care.

Single-payer proponents claim to have seen the future in Europe and Canada, where such systems work reasonably well and produce comparable or better outcomes at a lower cost than the U.S. system. There are of course many problems with these government-run systems too, including VA-style long wait times, but there are good reasons to believe single-payer health care wouldn’t even work as well in the United States as it does abroad.

We now know the VA was cooking the books to achieve its rosy health care outcomes. Medicare works reasonably well while paying less than the average cost for care, though there is some cost-shifting involved that could no longer exist under a true single-payer system. Medicaid pays doctors at such low rates that between a third and a half won’t accept new patients. This leads to lower-quality care, with some studies showing worse results than not having any health insurance at all.

Even after a 106 percent increase in the VA budget between 2003 and 2013, the inspector general report found that 84 percent of veterans had to wait a minimum of two weeks for treatment. “The real test is that only 16 percent of veterans identify the free services of VA as their primary source of medical care, and only one-third more even use it in emergencies,” writes former Reagan Office of Personnel Management director Donald Devine. “They know what they’re doing.”

The end result is that Medicare doesn’t control costs much better than the private sector and Medicaid achieves its cost controls by providing a quality of care lower than what most Americans would want. Neither offers much hope of cutting costs to the level of other major industrial democracies while providing comparable care.

Megan McArdle recently argued that there is no precedent for any single-payer system cutting healthcare costs as much as the United States would have to in order to reach European levels. “Europe didn’t gain fabulous cost savings by making their systems more like Europe's,” she wrote. “Its nations started from a lower base, and held down cost growth, but they did not actually use single-payer systems to cut what they were spending.”

McArdle concludes, “Single-payer would have to be paid for at the extremely high prices that Americans pay, not the lower European prices that we’d rather have.” At that point, “free” health care is no longer such a bargain.

Sooner or later, better functioning healthcare markets must be explored. The president’s emergency solution involves giving veterans vouchers, much like earlier versions of Paul Ryan’s maligned Medicare plan. The solution is likely more competition, not less.

W. James Antle III is editor of the Daily Caller News Foundation and author of the new book Devouring Freedom: Can Big Government Ever Be Stopped? He tweets at @jimantle.