The United States healthcare system is fraught with problems. Even after the enactment of the Affordable Care Act (ACA), 12.5 percent of Americans are uninsured, and almost 45 percent are inadequately insured. Healthcare spending has reached almost $4 trillion (about $11,582 per person), even though it was down .5 percent in 2020 due to the COVID-19 pandemic.
In addition to the high cost of healthcare, prices for many services and procedures aren’t readily transparent. Those who are uninsured are more likely to delay or forgo healthcare due to costs, and patients who utilize the system are sometimes left with surprise bills.
The U.S. is the only developed country that doesn’t have universal healthcare. Many nations, including Canada, the United Kingdom, France, Australia, Norway, Denmark and Sweden, offer their residents either single-payer health insurance or something similar to it.
The programs run by these countries all decrease out-of-pocket costs for patients but don’t all cover the same services. Most offer physician, diagnostic and hospital services and inpatient pharmaceuticals but don’t cover mental health care and outpatient pharmaceuticals. Some residents in these countries procure supplemental health insurance to cover what their government-sponsored benefits package does not.
Understanding the System
Unlike a multiple payer system, which includes private health insurance providers and financing through individual premiums paid directly by beneficiaries, employers and/or the government, a single-payer health system is paid almost entirely by a single entity, such as the government. It’s not the same as universal healthcare, through which funding comes from tax revenue, consumers or both, and providers are paid either by one or many entities. In universal healthcare, residents have the ability to choose from a group of insurance providers to finance their healthcare.
The goal of a single-payer health system is to provide affordable access – for all residents – to preventive, reproductive and long-term care, mental health treatment, prescription drugs and some medical supplies. It’s similar to Medicare, in which individuals still have the choice of where to receive care, which is why some refer to it as “Medicare for All.”
Proponents of it believe it would improve access to care and reduce costs. This would be achieved by a reduction in administrative expenses, an emphasis on preventive medicine and the universal adoption of electronic medical records (EMRs).
Increasing Price Transparency
Although a single-payer health system is designed to promote equality in healthcare, it has both benefits and disadvantages. One is cost. Though transitioning to such a system would likely be extremely expensive, one study posited that the U.S. could save more than $600 billion in administrative costs by doing so. Physicians for a National Health Program (PNHP), predicts that 95 percent of all households would save money under a single-payer framework.
Some in the healthcare industry believe that because under a single-payer system the government would be able to reimburse providers at a lower cost for services than a private payer, long-term savings would be achieved along with increased price transparency. A single fee schedule would set prices for all providers and patients, enabling care to be based on need rather than ability to pay. Other proposed benefits of a single-payer system include targeted funding toward chronic diseases, increased physician autonomy over patient care and the elimination of employer responsibility for healthcare costs.
Finding New Financing
The U.S. healthcare system and how to improve it is a politically-divisive issue. Some fear a loss of jobs for payer employees, while others fear the government would be able to pay whatever it wants for healthcare. The government would be required to acquire new financing streams, which could include either raising taxes or passing new ones. Some physicians assert that a single-payer system would give the government unnecessary oversight into healthcare decisions.
One of the biggest negatives of transitioning to a single-payer system in America would be increased wait times. Individuals wouldn’t have as much choice in selecting their preferred provider, and some elective or cosmetic procedures wouldn’t be as readily available. Many would still have to invest in some other type of health insurance to supplement the government program.
For medical billing companies, the move to a different type of healthcare system would transform the industry. Most billing will be sent to one carrier. There would still be private insurance but on a a much smaller scale. It will require a new set of policies, procedures and guidelines. However, it would simplify charge capture through more transparent and unified pricing and possibly aid in reducing the number of costly medical errors.
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