Single Payer Universal Healthcare - Research Paper Example

?I. Executive Summary The establishment of a single-payer healthcare has often been debated in several communities. Several proponents argue that thegovernment has to be the sole authority when it comes to providing health insurance. In the United States, this concept has already been implemented through the Medicare. The U.S. approximately shells out USD 7,129 per capital for health insurance which is twice as much as other industrialized countries. Despite these staggering costs, the U.S. ranks in the low end when statistics such as life expectancy, mortality and both preventive and primary care. Even developed countries provide wide health coverage whereas the U.S. has about 47 million individuals uninsured and more households insufficiently covered by health insurance. There are several reasons attributed for the abovementioned observations. Cost is considered as the primary concern when implementing government-anchored health provisions. The structure in which health insurance is based is also flawed. Most important, inefficiency on the part of the government is a major issue that keeps current healthcare insurance systems from fulfilling their roles in communities. II. Introduction A single-payer healthcare would establish a fund in each state and the government will cover the cost of hospitals, physicians, medicines and other healthcare services. This system would serve as an alternative to a multi-payer scheme provide by several private healthcare firms. The goals of a government-backed single-payer healthcare is to cover the over 40 million uninsured individuals in the U.S, as well as others who have no access to long term healthcare plans and prescription drugs (McCally, 2002). Healthcare is an important aspect discussed in state debates in other forums. There are several reasons for promoting a single-payer healthcare with the U.S. government as the primary provider. The system will eliminate huge administrative costs incurred from private hospitals. The current proposal is also deemed as more efficient because the reliance to a multi-player healthcare environment will be reduced. The PNHP (2009) estimates that through a single-payer system, the U.S. government will spend about USD 2 trillion but will gain savings of more than USD 300 billion. In previous experiences, the U.S. government, companies and individuals spend approximately USD 2.3 trillion to cover for their healthcare needs. McCally (2002) explained that a single-payer scheme funds from existing public healthcare programs and would be augmented by allocated taxes. Recent proposals to implement the system cover benefits such as hospital care, doctor visits, mental healthcare, and prescription medicines. Other benefits suggested to be included were provision of nurses, dental care, and other medical services. Hospitals identified for this system will be provided an annual capital and operating budget. Doctors and other services providers will be compensated using a general fee-for-service payment method. In this system, healthcare provision will become a social commodity instead of a service that is affected by market forces such as competition. III. The Concept of Health Economics Health Economics (HE) is a branch of Economics that deals with the allocation of scarce health and healthcare among unlimited demands. Primarily HE tackles major issues and concerns that affect the distribution of health care (Williams, 1987). Like other branches of economics, there are certain subdivisions that specifically discuss various subjects related to Health Economics. These distinct topics include: influences to health; health and its value; demand for health care; supply of health care; microeconomic evaluation and treatment level; market equilibrium, system level evaluation; and planning, monitoring, and budgeting mechanisms. The value of Health Economics is indispensable is a society. Its scarcity is a primary concern especially among countries without ample resources to provide healthcare (Culyer, 1989). Another major issue that makes Health Economics important is the mode of distribution. There have been situations showing lack of logistic strategies that effectively deliver health to major recipients. Finally, the sustenance of supply and allocation of health care makes Health Economics valuable. In ensuring the both necessities are satisfied costs have to be incurred consistently. It is the spending capacity of countries that decide supply and distribution of healthcare. According to Fuchs (1996), the level of expenditures incurred by governments in healthcare delivery has increased precipitously. The sudden rise in cost can be attributed to intellectual advances, greater availability of information, and the ever-increasing demand for such service. The dedication of government spending to health care services results to various economic sacrifices. Aside from health, there are pressing needs that the society needs to acquire. Concentration in healthcare looms problems such as forging quality education and the generation of sustainable income through investments and government spending. Direct costs of delivering healthcare involve purchase of medicines, establishments of medical institutions, and hiring of personnel knowledgeable of health services. Other costs also include research and development, which at present is the most critical item being propagated by governments. Moreover, the government needs to incur indirect costs such as building of infrastructures to ensure that transportation and communication improves healthcare delivery. The marginal cost of health care needs to be evaluated. Unlike the total cost, which is simply an aggregate, marginal cost accounts the movement in the cost. It is more important to monitor the effect of population increase in total healthcare than measuring the total cost alone. IV. Measuring Efficiency Health Economics can be approached scientifically using tools and mechanisms. Analytic evaluation of cost management in Health Economics serves as the primary point of these discussions. First, the cost-minimization analysis (CMA) economic compares a particular health care product or service. The goal of the method is to find the least costly option among a pool of choices (Donaldson and Shackley, 1997). It has to be noted that the alternative chosen needs to demonstrate an effect that is substantially similar to the other choices provided. There are several conditions in this analysis that have to be verified before arriving as conclusive findings. The initial comparison will use price as the gauge. Indeed, it is easy to identify which among the alternatives is the most economic. Another important consideration in this analysis is the negative effects provided by a medicines being compared. It is important to emphasize on the level of toxicity and the option being considered needs to be as low-risk as the other medicines. Lastly, the effectiveness of the medicine being prioritized has to within the level of the other medicine it is being compared with. Cost-benefit analysis (CBA) necessitates program results to be valued monetarily (Nas, 1996). This allows analysts the incremental cost including the incremental units as health programs are being implemented. CBA compares the discounted future inflow of aggregate program benefits with incremental program losses. Basically, the goal of the analysis is to determine the excess of benefits when equated with the losses. Positive net return means that benefits exceeded the cost and the program is described as worthwhile. CBA has always been a primary tool used by governments in evaluating projects and programs. Usually, the costs and benefits of a particular health program will cause several interventions in the public (Harington and Portney, 198). The process includes monetary amounts of the incurred costs and the expected return. Aside from the realizable benefits, intangible gains can also be included. CBA aims to set both costs and benefits on a common temporal position. Discounts are also included to ensure that the benefits will be treated using their present value. Cost-effectiveness analysis (CEA) is commonly used when the range of options is limited. The assumption, however, considers a fixed amount of budget and timeframe given to the decision-maker. In most instances, CEA considers the monetary value of the program. Measurement of monetary value pertains to the determination of the required budget for the program. The most important aspect for CEA in making comparisons is the results (Neumann, 2005). Since CEA measures effectiveness, goals will be established and subsequently targeted. Logically, the program that has reached the goals will be highly considered. It is expected that the program with the highest effectiveness and lowest cost will be selected. One of the main concerns by analysts using CEA is the veracity of data being used (Drummond, et al., 2006). The most credible information that can be analyzed using CEA is based from previous studies made. These literatures are considered as the most reliable sources for CEA. Aside from the goals, which were discussed previously, there are also criteria being set to serve as the parameters for the comparison. It is critical for both compared programs to be established on two equal and unbiased platforms. The final technique used in Health Economics is the Cost-Utility Analysis (CUA). Medical institutions have long histories of using CUA as guide for procurement decisions. CUA specifically focuses on the outcomes of health programs are either generated or forgone (Gerard, 1992). In CUA, the incremental gains of the programs based on a perspective are compared with the incremental health enhancement attributable to the programs. The health improvement is measured using the quality-adjusted life-years (QALY). The results of the analysis is presented as cost per QALY gained. CUA was created to specifically address the shortcoming observed from the use of CEA. The method allows broad range of substantial results to be included through creation of methods that create results that will be eventually consolidated to form one solid result. In addition, CUA allows the analysts to determine the quantity of life and the quality of life (Luce and Elixhauser, 1990). Moreover, the broadness of CUA is terms of usability are highly advantageous for decision-makers. Evidently, health programs are dynamic and changes pace through time. CUA is being preferred by analysts because the techniques addresses all important issues and takes into account the less noticeable aspects that can become major obstacles in the future. IV. The Pitfalls of Single-Payer Healthcare One of the primary concerns on a single-payer healthcare is funding. For the U.S government, the most glaring issue is where to get the budget for this kind of program. A suggestion was made in Maryland where the state would ration healthcare provision because the government would not resort to increasing current taxes (Kilmer, 2008). As soon as the public sector assumes healthcare provision, private healthcare providers will be affected. Less revenues on their end means that government revenue targets will also be reduced. The implementation of a universal healthcare scheme means that the U.S. government will have to reduce budget allocation to other national concerns. The most important challenge for the U.S. government is to improve the efficiency in collecting taxes and improve revenue generation. The current data possessed by the U.S government is also considered as inaccurate, Inefficiency in data collection and the integrity of the information is a concern before any sing-payer healthcare plan is introduced. In 2006, a survey on healthcare insurance coverage among American was commissioned. Based on the figures, about 200 million individuals have access to private insurance while 80 million people have public health insurance coverage. Of the total 329 million U.S. individuals as of 2006, only 297 million was measured in the survey (Skinner et al., 2008). The 32 million disparities represent an issue that should be addressed when proposing a single-payer healthcare system. This also indicates that initial estimates made on costs and coverage could be affected because of inaccurate data. In terms of cost, the NCPA has attempted to discredit the assumption that a single-payer healthcare lowers administrative cost. NCPA’s arguments are based on the following erroneous assumptions: low administrative cost and efficiency could be equated; high administrative costs from private providers are worse; low administrative cost from public provision is better. A survey in 1994 conducted by the Council for Affordable Health Insurance revealed that Medicare and Medicaid programs spent 27% of their funds for administrative expenses as compared to a 16% allocation from private healthcare insurance providers (Goodman and Herrick, 2002). The NCPA report mentioned that a multi-payer scheme translates to more choices and allows the population to gain access to diverse healthcare services. A single-payer scheme also promotes inefficiency and waste of resources. There needs to be an established limit as to the form of healthcare service to be accorded to individuals. The NCPA disputes the claim that single-payer healthcare give access to modern technology (Geyman, 2005). In addition, NCPA maintains that better technology has no direct link on better healthcare services. The United States houses some of the most innovative healthcare provided in the world. Despite this reality, the U.S. ranked worst in terms of potential years from all causes. The NCPA contended that receiving the best healthcare service is not an indicator of having a good healthcare system. Even in other industrialized countries, the rates of mortality and other forms of disability have been high. Geyman (2005) stated that single-payer healthcare systems promote efficiency in delivering healthcare services. Promoters for the aforementioned system claim that low healthcare spending coupled with healthcare insurance mean efficiency. One important note that needs to be considered is that health cost was reduced because health services were denied instead of health services being efficient. The NCPA cited a critical difference between the government as payer and private firms are payer. The former has no profit motive and the latter is controlled by investors which provide incentive to efficiency. Most important, the issues of administrative bureaucracy hinder any efficiency within public funded health insurance. When decision making passes through several layers, then urgency and efficiency are compromised. V. Recommendations The establishment of the public funded single-payer healthcare program is vital. Healthcare provision is a government responsibility that needs to be executed effectively and efficiently. But depending on the government is not the best case scenario. There must be help coming from other entities in particular the population. The creation of the system requires meticulous planning. The process starts with obtaining accurate data on the healthcare needs of individuals in the U.S. Information on diseases, mortality, accidents and immunization are only some of the indicators needed. The next phase involves identification of beneficiaries. There are individuals with health coverage from private insurers and other without any form of health insurance. That distinction is important in determining the extent of coverage accorded to individuals. Overall healthcare service provision also depends on the quality of hospitals, doctors and hospital care. The government must ensure first that the facilities are complete and that the physicians and other medical practitioners are well aware that their role is more public service oriented instead of revenue generation. VI. Conclusion The issue on single-payer healthcare funded by the funded by the government is best summed by the NCPA (Geyman, 2005). Single-payer insurance is not the solution to the healthcare problems in the U.S. Recent issues involving costs and consumer backlash mean that there are aspects of the system that requires fixing. The scheme is limited some individuals prefer access to varied healthcare services. Professionals in the medical field have also complained that their income has been affected. It is best that aside from the single-payer healthcare scheme, other options have to be made available. References Culyer, A.J. (1989). 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