Arnold Kling  

Single-Payer vs. Socialism

Morality, Prudence, Desire: A ... Mass Delusion on Health Care...

Ezra Klein writes,

Once and slowly: Medicare operates within America's private health system context, bargaining with private providers at near-market rates. It's new drug plan is entirely operated through private insurers, and Medicare as a centralized market isn't allowed to negotiate for lower prices. Nevertheless, it's held down spending growth slightly better than the private industry and has 1/7th the administrative costs.

Here's the analogy: imagine I said a government-run auto industry would be more efficient. Now imagine that there was one particular group of car dealerships that was run by the government. They still bought from private cars made with private parts by private corporations. They were able to hold down costs only slightly more than private dealerships. Would that be evidence against my view, or would it just prove nationalizing the point of sale doesn't make a damn bit of difference?

As I read it, what he is saying is that Medicare is not as efficient as it could be, because it operates within the context of a private health care system. Only truly socialized medicine would be truly efficient.

I wish we could pin down this point. There is a tendency for single-payer advocates to slide back and forth. Sometimes they say, "Single-payer is just single-payer. It's like Medicare for all. It's like the French system." At other times, they advocate "honest-to-God socialism." If Ezra Klein is willing to stick to a single point of view about what he means by single-payer, then he is one step ahead of Paul Krugman.

If someone on the left is willing to go along with Klein's viewpoint that single-payer health insurance a-la-Medicare "doesn't make a damn bit of difference" to total health care spending, then we can agree, and move on to debate the merits of "honest-to-God socialism." But if they go back to saying, "No, no, we don't mean socialism, where government controls everything about medical care. We just mean national health insurance," then it's back to square one.

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COMMENTS (3 to date)
John writes:

I think you misunderstood his point. He is saying that it (single payer) is better than private practice, because the administrative costs are lower.

Therefore, QED, we must all immediately see his point and start advocating for single payer or we're all stupid.

Objections that "full scale" single payer has different market-changing dynamics than "small-scale" single payer will be met with derision and being labelled a "tool".

(The reason I believe my analysis of Ezra's statement is accurate is because he characteristically makes very, very bad analogies.)

Tim Worstall writes:

Worth pointing out that the French system is not single payer at all.
There is indeed a system of national insurance (funded from a levy on wages and run by a joint group of employers and unions, subsidized out of general tax revenues) but this does not cover all health care costs. There are substantial deductibles (except in the case of cancer care) and most take out further private insurance to cover these.
I’m not quite sure exactly how to describe this but single payer isn’t it.

R.J. Lehmann writes:

Of course, Medicare achieves this remarkable efficiency largely by eschewing the time-honored practice of actually adjusting claims and looking to weed out fraud. Private insurers could be similarly "efficient" if they adopted the strategy of "pay everything, no matter how shady."

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