Single-Payer Would Sicken, Not Cure, Massachusetts – Pacific Research Institute

Single-Payer Would Sicken, Not Cure, Massachusetts

Progressives in Massachusetts believe they’ve taken the first step toward a government-run, single-payer health care, thanks to a bill that passed the state Senate in November.

The measure would, among other things, commission a study to analyze the cost of a statewide single-payer system. If the tab is less expensive than the status quo, lawmakers would be obligated to start transitioning to such a system. The bill will soon head to the state House for consideration.

But the Bay State’s cheerleaders for single-payer shouldn’t get their hopes up. Studies conducted in other states have found that implementing single-payer requires tens of billions of dollars in new taxes. Voters and legislators are unlikely to approve of such an eye-watering price tag — not to mention the rationing of care endemic to single-payer systems.

Massachusetts isn’t the first state to consider single-payer. Vermont, Colorado, California, and New York have all done so recently. And they’ve all concluded that such a program would be too expensive.

Vermont — home of the pied piper of single-payer, Sen. Bernie Sanders — was the first to reject it. In 2011, then-Gov. Peter Shumlin signed a single-payer bill into law. But by 2014, he had abandoned his push. He concluded that the new 11.5 percent payroll tax on businesses and 9.5% income tax required to fund the program “might hurt the economy.”

Last year, Colorado voters rejected Amendment 69, a ballot initiative to replace private health insurance with a single government-run health plan called ColoradoCare, by an 80-20 margin. The measure would have required a new 10 percent payroll tax. The program’s yearly budget would have approached $36 billion — and thus more than doubled the state budget.  Even Democratic Governor John Hickenlooper discouraged voters from supporting the amendment.

ColoradoCare’s price tag is a fraction of that for California’s proposed single-payer system. The Healthy California Act, which passed the state Senate 24-13 in early June, would run $400 billion a year, according to an analysis by the chamber’s Appropriations Committee. A more sympathetic review, conducted by University of Massachusetts, Amherst, economist Robert Pollin, estimated the bill’s cost at $331 billion.

Healthy California’s proponents claim that much of that money would come from the federal government, as beneficiaries of Medicare, Medi-Cal, and other federal programs are folded into the new state system. But the state would still have to raise about $200 billion; the Senate Appropriations Committee thinks a 15% payroll tax would be needed to do the trick.

New York’s State Assembly recently green-lit a similar single-payer proposal that would cost an estimated $226 billion by 2019.  That’s more than three times what the state currently collects in taxes.

Single-payer’s proponents claim it’s a bargain for ordinary people. Sure, they may pay more in taxes. But they no longer face premiums or deductibles. And single-payer cuts for-profit insurers out. So overall healthcare spending must be lower.

Not necessarily. The California state Senate’s Appropriations Committee estimated that the Healthy California Act would require new spending of between $50 billion and $100 billion per year.

The only way Massachusetts or any other state can reduce health spending under single-payer is by paying doctors, hospitals, and drug companies less than they would earn in a more market-oriented system. Providers respond by curtailing how much care they’ll provide. And that results in long waits for patients.

Single-payer systems around the world rely on this low-reimbursement approach — with disastrous results. Patients in the United Kingdom’s single-payer system, the National Health Service, commonly wait more than a year for basic operations.

Canada’s single-payer system is no better. In 2016, patients waited a median of 20 weeks between referral from a general practitioner and receipt of treatment from a specialist.  This is more than double the median wait time of 9.3 weeks in 1993. It’s no wonder more than 63,000 Canadians left the country last year to obtain treatment elsewhere.

Here at home, the single-payer Veterans Health Administration, is failing our nation’s heroes. Despite a $15 billion reform effort launched in 2014 to clean up the agency,  the VA remains a hotbed of incompetence. In 2015, more than 200 patients died while waiting for care at a Pheonix VA medical center.  More than one in three veterans who call the VA’s suicide hotline don’t get through to a professional.

This is precisely the kind of ineptitude and tragedy that Massachusetts can expect if it turns its health sector over to government bureaucrats. If Bay State lawmakers insist on pushing forward with single-payer, taxpayers and patients should brace for higher costs and worse care.

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Nothing contained in this blog is to be construed as necessarily reflecting the views of the Pacific Research Institute or as an attempt to thwart or aid the passage of any legislation.

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