Single-payer complexities

Health care initiatives often get derided as a patchwork, an inefficient and uncoordinated effort to fix something that really needs a more comprehensive approach.

By comprehensive, most think single-payer European-style health systems.  But would a single-payer system avoid looking like a patchwork?

Not by a long shot.

Consider Great Britain’s single-payer system.  Just last month, an MP (Members of Parliament) report branded government workforce planning a “disastrous failure” after discovering nurse and doctor hires, between 1999 and 2004, exceeded targets by 240 percent and 105 percent, respectively.  According to the report, “It was too easy to throw staff into the task of meeting targets rather than consider the most cost-effective way of doing the job.”  As a result, staff are now being hit by “widespread job reductions, sweeping education and training cuts and severe pay restrictions.”

A quick survey of the Times of London reveals other grave issues, all in the past year, including deliberate rationing of specialty dermatologists, intense doctor dissatisfaction with a heavy-handed transformation of the medical profession’s information technology (IT) systems, and hospitals threatening to cut heart, brain and spinal surgeries in response to huge budget deficits.   Except for IT, these are mercifully not headline issues in Minnesota.

Clearly, single-payer in Great Britain has not delivered a comprehensive remedy.  Indeed, there is no comprehensive patch for health care’s shortcomings.  Rather, the trick is keeping government focused on health care problems that private markets cannot mend on their own.  Unfortunately, states, especially Minnesota, tend to micromanage problems best left to the market.

Health care is particularly susceptible to micromanagement because many believe the market cannot be trusted to best serve high-stakes health matters.  Overly trusting government, however, tends to reduce choice, raise costs, and might even lead to poorer health outcomes.

Consider a proposal before the Minnesota legislature that would require high deductible health plans to pay for every dollar of preventive care.  Many insurers already offer that type of policy.  Nonetheless, some think preventive care is too important to let consumers choose freely.

Yet isn’t fully covering preventive care the best option?  Prevention does, indeed, keep people healthy and costs down.  Can’t government step in when it’s a no-brainer?

Actually, according to Blue Cross, this well-intentioned mandate would wind up removing a lower-cost insurance option, making insurance less affordable for many people.

Also, the health benefits of such a mandate aren’t at all clear.  Yes, more preventive care leads to better health, but relying on full reimbursement from insurance plans might not always lead to more preventive care.  How might this be?

To save money, insurance companies often ratchet down rates paid to doctors, giving them less financial incentive to provide such services.  In fact, a recent study in the journal Pediatrics found that kids received fewer preventive services from doctors who were paid lower reimbursement rates.

Impatience also can lead to micromanagement.  Innovations sometimes don’t move at the pace government or the public expect, and when private companies fail to deliver speedily, the temptation for government action can be overwhelming.  But when providers and insurers move slowly, they usually do so for good reason.  After all, mistakes can be very bad.

Recall doctor frustrations with a heavy-handed IT rollout in Great Britain.  Bipartisan proposals currently call for similar reforms in Minnesota’s medical technology infrastructure.  But IT initiatives at most clinics and hospitals I visit are already moving along.  Yes, it’s been slow, but the complexity and sensitivity of health care data bases have not made the process easy.  Is it really wise for the government to step in?

In Minnesota, problems which would require parliamentary hearings and political gamesmanship to solve in Europe, get solved in the market, often in provider and health insurer board rooms.  It’s not magic, but it’s usually quicker, more informed, more accountable, and more likely tailored to specific needs.  (How long, do you suppose, until British central command hires the right number of nurses and doctors?)  Since the market can and is addressing important issues like IT and preventive care, let’s leave those alone.

Peter J. Nelson is a policy fellow with Center of the American Experiment in Minneapolis.