Why Isn’t Single Payer on the Table in the Health Care Debate?

BY busadmin  August 26, 2009 at 11:07 AM EST

doctor; via Getty Images

Question: I am the slightly nervous person who you interviewed recently on Broadway and 30th Street. We spoke briefly about jobs, the economy, and when and if the green shoots will sprout.

I wanted to tell you that the phrase I was looking for when you kindly bailed me out Is “single payer.” So, I wanted to ask you why you thought the Obama administration left that off the table when negotiations began.

Paul Solman: “Slightly nervous” seems appropriate while talking to a camera crew on the sidewalks of New York, Jeff, a line of job seekers snaking around the block behind us. (The piece — on unemployment — should run this week.)

As to your question, I guess the answer is: They didn’t think they had the votes. As it is, the president is being excoriated as a socialist: The mantra of the opposition is “government-controlled” health care. What would have been the outcry had he pushed for single payer?

That said, consider the main pros and cons for a moment. One key selling point of single payer is its potential to cut administrative costs, estimated to be as high as 25 percent of the health care tab right now, what with the billing nightmares of which we’re all aware. Another is the government’s ability to use its “monopsony” power to negotiate lower prices from providers — doctors, hospitals, pharma big and small. (A “monopsony” is a buyer’s monopoly.)

About administrative costs, we won’t know til we’ve tried it. There are various studies and arguments on both sides. You’d think one payer would almost HAVE TO BE less expensive than many. And as evidence, I can point to footage I’ve recorded over the past 20 years of back offices at hospitals and insurance companies, trying to outfox each other with regard to billing. But then behavioral economist and FOBD Richard Thaler reminds us, in a recent Economic Scene column in the NYT, that government isn’t exactly famous for its efficiency.

As to Big Government muscling suppliers of health care and driving down costs thereby, be careful what you wish for. Or perhaps DON’T wish for, now that the hue and cry has been raised over “death panels” once government becomes more involved. It reminds me of what a Harvard Business School professor named Collyer Crum said to me, at the start of my career in the ’70s: We all want everything; we just don’t want to pay for it.