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Single Payer Universal Health Insurance for the USA William C. Hsiao, Ph.D. FSA K.T. Li Professor of Economics Harvard School of Public Health PNHP 2009 Annual Meeting October 24, 2009 Cambridge, MA
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Single Payer Universal Health Insurance 10 24 09

Dec 14, 2014

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Page 1: Single Payer Universal Health Insurance 10 24 09

Single Payer Universal Health Insurance for the USA

William C. Hsiao, Ph.D. FSAK.T. Li Professor of EconomicsHarvard School of Public Health

PNHP 2009 Annual MeetingOctober 24, 2009Cambridge, MA

Page 2: Single Payer Universal Health Insurance 10 24 09

Single Payer

Definition:• Single risk pool• Single benefit package• Single payer of providers

• Typically government runs it

Page 3: Single Payer Universal Health Insurance 10 24 09

Single-payer and Non-Single Payer-Advanced Nations

Canada, UK, Taiwan, New Zealand,

Germany, Japan

USA Singapore

SinglePayer

Non-SinglePayer

Australia

Page 4: Single Payer Universal Health Insurance 10 24 09

A Closer Examination of Single Payer

Single payer is a means to ends. What are the ends? Risk-pooling: pool together health risks of all citizens Equity in distribution of financing burden: uniform

premium rate scaled by income Equity in benefit: single benefits package Manage health expenditure: single payer of providers Manage quality of patient care and some patients’

abuse of services: uniform electronic record Manage providers: uniform electronic records to

create provider profile

Page 5: Single Payer Universal Health Insurance 10 24 09

An Example: Taiwan

• Universal coverage, risk pooling, equity in finance:Mandate all employers and individualsEmployers pay 60%, employees 30%, gov’t 10%Poor—100% premium subsidy; farmers, self- employed and veterans--partial subsidy

• Equal access: uniform comprehensive benefit package, includes Chinese medicine, home care.

• Providers: paid on fee-for-services basis with uniform fee schedule

• Single payer—government (Bureau of NHI)

Page 6: Single Payer Universal Health Insurance 10 24 09

Taiwanses Single-Payer Organized

• Uniform administrative procedures for patients’ access (Smart Care) and claim payment reduce paper work and administrative expenses

• Uniform electronic patient records improve the continuity and effectiveness of health care and reduce repetition of tests

• Uniform claim records Can produce complete profile of providers’ medical practice and billing; reduce fraud, over-charges, over-treatments and billing.

Page 7: Single Payer Universal Health Insurance 10 24 09
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Advantages of Single-Payer (Bend the Curve)

• Reduce cost shifting• Reduce Administrative Expenses of:

– Insurance plans– Providers

• Reduce (or eliminate) risk selection and adverse selection

• Manage health expenditure inflation rate– Impose overall budget on health care expenditure– Technology diffusion– Resource allocation– Control aberrant patients and providers

Page 9: Single Payer Universal Health Insurance 10 24 09

Behind The Bill: Who Pays What

Official Charge

Official Charge

Official Charge

Official Charge

Official Charge

HMOs and Health Plans

HMOs and Health Plans

HMOs and Health Plans

HMOs and Health Plans

HMOs and Health Plans

Medicaid

Medicaid

Medicaid

Medicaid

Medicaid

Medicare

Medicare

Medicare

Medicare

Medicare

0 50 100 150 200 250 300 350 400 450 500

Payment in Dollars ($)

UCLA Medical Center(Los Angeles)

Oregon Health and Science University(Portland)

Jamaica Hospital(Queens, NY)

Johns HopkinsHospital(Baltimore)

Grinnell RegionalMedical Center(Grinnell, Iowa)

Page 10: Single Payer Universal Health Insurance 10 24 09
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Disadvantages of Single-Payer (USA)

Patients Fewer choice of insurance plans

Physicians •Income

•Monitor medical practice

Hospitals Revenue

Pharmaceutical and Medical Devise Companies

Rate of diffusion for new products

Profits

Society: Technological Advancement

?

Page 13: Single Payer Universal Health Insurance 10 24 09

Technological Advancements

• In manufacturing and service sectors – Improve efficiency about 1-2% annually

• In health sector– Cost 2% more annually

Page 14: Single Payer Universal Health Insurance 10 24 09

Political and Technical Feasibility of Single-Payer in the USA

• A Modified German model– Several insurers in a state, each has to offer a

standard benefit package– Uniform fee schedule– Uniform patient and claim electronic records– Integrated delivery system for selected

chronic diseases

• Medicare model with contract to private insurers for administration at state level.

Page 15: Single Payer Universal Health Insurance 10 24 09

A Simple Fact: One Person’s Expense Is Another’s Income

Expenditure (Price x Quantity) = Providers’ Income

Premium payment =Insurers’ income and profit

Page 16: Single Payer Universal Health Insurance 10 24 09

THANK YOU