How do the “premiums” (i.e. taxes) balance out against outlays in various single-payer systems? I would guess that given the large pool of insured, the state should have pretty accurate actuarial information on them. The administrative agencies would need legislative leeway regarding premiums, I would expect.
Rob
The answer almost certainly differs by country, but for Britain’s NHS I found the following…
“As each division of the NHS is required to break even at the end of each financial year, the service should in theory never be in deficit. However in recent years overspends have meant that, on a ‘going-concern’ (normal trading) basis, these conditions have been consistently, and increasingly, breached. Former Secretary of State for Health Patricia Hewitt consistently asserted that the NHS would be in balance at the end of the financial year 2007-8;however, a study by Professor Nick Bosanquet for the Reform think tank predicts a true annual deficit of nearly £7bn in 2010.”
The main advantages, especially in the Canadian (provincial) systems, revolve around the government’s effective monopoly and ability to write the rules as well as play the game. While the Canadian system is pretty good, it has some serious problems; typically it alternates between cutting outlays to save money, and then fixing the problems caused by those cuts.
The federal government pays part of the bill for the provinces. Originally, they promised to pay 50%. When they saw the consequences of an unlimited promise, they backtracked and pay a transfer grant instead using their own calculation method. As a part contributor, they set the rules - doctors may not extra-bill the patient extra above the provincial rates, and doctors cannot be partly in the system - if they do covered procedures outside the system, they cannot be a part of the system. So, basically every doctor works for the provinces’ fee schedule.
At times, the provinces set rates so low they lose all their doctors. For example, in 2008:
there have been cases of the doctors in a province going “on strike” for a higher fee schedule. “Hallway medicine”, cramming extra patients into the hospital that’s short of beds, is a common complaint. Waiting lists, quotas for things like hip replacements, and difficulty finding a doctor with openings are a common complaint.
When things get noisy and there’s an election coming up, the government will start spending more money to fix these issues. My impression is that specialists here make a lot less than in the USA. Hospital bills (not that anyone sees one) or rather hospital costs are much lower.
So you’re comparing apples and oranges. The costs are low because the government dictates them, not because the system brings that efficiency. True, we aren’t buying anyone a Rolls Royce either - the head of the health authority for a city of a million and half a dozen hospitals was a civil servant who made $C500,000 a year while I read of one hospital CEO in New York who made several million a year; the claims here are processed by civil servants, not a private corporation needing to pay off shareholders and its CEO - so there’s that sort of savings… but some of these options wouldn’t fly in the USA.
I was under the impression that insurance companies broke even on premiums. They made their money on investments. Is this not so?
Rob
Well apparently Vermont decided that single-payer system doesn’t make economic sense.
I find the question odd. It’s sort of like asking if the government loses money on providing police services, or fire services, or schools, or courts.
In Canada, health care is one of the public services which are provided by government out of general tax revenue. There’s no specific health care tax and no individual premiums. It’s not really an insurance model.
I think what the OP is asking is simply if the taxes earmarked for health care cover 100% of the costs. Kinda like how Social security taxes cover all of Social Security’s outlays, at least until a few years ago before the trust fund started running a deficit.
And the answer in Canada is that there aren’t taxes earmarked for health care. It’s a general expense, paid out of the general revenue, just like other public services like police and education.
By definition, taxes cover 100% of the costs of the system, because there are no premiums, co-pays, or deductibles.
For historical reasons (it was originally based on healthcare coverage being provided by employers), the French system is separate from the State and has its own source of funding (a tax on salaries). It is in fact chronically in deficit, and the state always end up covering it.
The NHS generally works in terms of budgets and targets - one of the key dynamics to this kind of system is that most people who works in it supports the idea itself so everyone works hard to make the very most of what resources are available.
Hospitals usually operate in clusters (called Trusts), budgets are usually allocated at local level. Trusts will be given guidelines on how to use the money (for example, current target areas for preventative care).
Monies for capital projects are not included.
From single hospital Trust to Gov policy, data analysis plays a huge role in the allocation of resources.
If you want a clumsy comparison with schools, if a budget goes up class sizes might come down. In the NHS you either find savings or a waiting list starts to form - budget is tied to some extent to the performance of the national economy though much is made by politicians of some NHS resources being ring fenced.
This was the healthcare budget for England last financial year:
http://www.england.nhs.uk/allocations-2013-14/
To make a really simple but probably hopelessly flawed point, you might argue that entire budget was raised by tax on gas/petrol, which is ovb. expensive in Europe as compaered with the US.
But, on the other hand, you and your family get to walk into any hospital anytime and ask to be treated. Without paperwork or conditions.
I guess at every election the choice of the population is reaffirmed.
How come British voters never ask for substantially higher taxes to make the system more generous? it’s by far the cheapest system in the West, why not jack up spending on it by 20% or so?
It’s often more in terms of (political) phrases like “investment”. For example,Tony Blair’s first and second govenments campaigned on - and invested hugely in the system, both in terms of infrastruture and resources - increased resources.
Most people generally accept a good NHS - there is alwasys a balance to strike with, for example, Education, Defense, wider social provision, national infrastucture projects, etc. And, as mentioned, much of this is tied to national economic performance. It seems people are happy to pay just enough tax to get just enough social provision … corporations less so …
Apart from taxpayer money in/healthcare funding out, you also have to take into account the effects on the economy of having a populace that has access to free healthcare.*
It means that people are more likely to get treated earlier or treated at all, which means they’re less likely to get really sick, which means they’re less likely to take time off work, get a long term disability, die leaving dependants, etc.
However, the NHS of recent years is not a terribly good example to use due to the govt’s ongoing attempts to privatise it by the back door.
*Dental care in the UK is not free to everyone, but it is cheap. Prescriptions are not free for most working people but you can buy a “season ticket” that costs just over £100 a year, which is pretty close to free considering you have to be working and earning a certain amount to even pay that much.
Getting treated earlier depends on wait times though. And while one is waiting, they are more likely to need to take time off work, get disability, etc.
UK central Gov is totally aware of the consequences.
You’re not going to find a more integrated system - witness the move to preventative concepts like ‘digital healthcare’:
Another point to make - everyone is covered. There is no “employer insurance premium” in Canada. I don’t think income taxes are that much higher in Canada than the USA, certainly not when you consider the US additional health care cost. (On income of $C70,000 paid $15,500 roughly in tax, $2425 to CPP -like social security, $900 to unemployment insurance.) Yes, total sales tax can hit 12% or more. That income tax might be high compared to some states, but probably not if you figure in an average US health premium for two people.
But there’s no golden handcuffs. Nobody stays in a crap job just to keep health care. Employers don’t figure health care as a cost of labour (something US industry has complained is our “unfair” competitive advantage) “Benefits” is stuff like dental, prescriptions, ambulance coverage, chiropractic, and life insurance.
If you are really really sick and can’t get a doctor’s appointment - many cities have walk-in clinics, and if you want to wait a few hours depending on severity, the provinces still haven’t figured out or more likely don’t care that (like in the USA) emergency rooms are basically walk-in clinics for a lot of people. Wait 2 to 4 hours and you will see a doctor.
Plus, with doctors mostly being pretty much free agents like in the USA, it’s tough to get doctors to move out into the smaller towns and countryside far from the big cities, so those places have a more acute shortage.
If it’s a real emergency, no wait. My boss had to get a hip replacement and got the bureaucratic shuffle - oops, off the hip list after 6 months while we put you in a different queue to take the screws out of your thigh bone, then get on the back end of the hip list again - took 16 months. OTOH, my grandfather-in-law fell and broke his hip (going into the hospital) and had a new hip within 12 hours, at 89 years old. Neither paid a dime in hospital costs.
So, to get back to the OP - money has very little to do with it… but that’s because the province can within reason set the rate they pay and are pretty much the only game in town. Doctors can either take it or leave town.
That thing in the US about healthcare being tied to employment is very, very weird; like some kind of Middle Age serfdom.
Better to have healthcare as a basic, independent (human) right you can vote on regularly as a national community. Think: dignity.
It’s almost certainly a sort of accidental historical legacy from the days when health care went from being something that was rarely done, to something that people had to budget for, and some of the hospitals got the wise idea to market it to groups of workers, teachers being the first one.
Then when WWII happened, health coverage was used as an incentive to attract workers, and for whatever reason, the goverment decided health insurance should be tax-exempt. The combination of these two things made the enrollment rates go from 9% in 1940 to 63% in 1953, and 70% by the 1960s, and it’s continued from there.
A joke when I was growing up:
“Mommy, mommy, what’s Santa doing here in September?”
“If I told once, I’ve told you a thousand times, Sheldon - you’ve got leukemia”
In the Good Old Days, health care didn’t cost a lot - there were not fancy drugs, diseases like leukemia were a death sentence rather than months of expensive chemotherapy, heart attacks or strokes - just bed rest and see if you make it. So medical costs were not a significant part of everyday life, and doctors did not get rich. Some even made house calls.
But even in Canada - Medicare first became a universal system in Saskatchewan, a poorer province of mostly farmers, and country doctors could occasionally get paid in chickens, like a bad cliché. Even there, when told by the socialist government they were all working for a fixed fee schedule for the government, they screamed “communism” and many went on strike for quite a while.
So I can’t see imposing this system on the USA being a fun event. My impression of the way it should come about would be that the basic Medicare coverage income limit would creep up to cover more and more of the working class, until only the top few percent would use private doctors.
After all, you have the system - IIRC, the number of people already covered by US Medicare is greater than the total population of Canada.