Versions of Healthcare Systems

People mean different things when they speak of single payer. Taiwan is the only true single payer system in the world. Our closest neighbor to the north is often describes as a single payer, but in Canada, there are 13 provincial and territorial health plans, with the federal government providing financial support. Moreover supplementary private insurance is growing in Canada and is important in most countries. Most doctors are private and hospitals are tightly-regulated government-funded institutions.

Single payer is different from universal healthcare. Universal healthcare implies that everyone has access to healthcare. Single payer suggests the government pays for the whole thing, so that the entire show is run centrally. So you can have a single payer that supports for-profit private facilities and doctors, or you could have a government-owned and administered health system. Moreover physician services, hospital care, long-term care, social services, community services, medications, mental health and dental care can all be funded by different mechanisms. Sometimes portions are not funded at all.

As in Canada, France has self-employed physicians billing a single payer. But there are gaps and balance billing is permitted, so 90% of the French carry supplementary private insurance. Except for people on public assistance, the patient pays the full bill for out-patient care and are very quickly reimbursed by the government. this allows some degree of market forces to influence prices, but generally prices are dictated by an official government fee schedule. Hospitals are entirely paid for at public (government-run) hospitals that account for 65% of French facilities. . The private hospitals are funded by a blend of public and private insurance payments.

Because supplementary insurance is a big part of the French healthcare system, it resembles a tiered medical system, with one set of rules for those on public assistance and another for those who can afford private supplementary insurance.

England of course has the NHS which covers about 90% of people. It is a classic two-tier system with 10% of the people carrying supplementary insurance. Most countries that offer universal healthcare have statutory tax-funded heath plans supplemented by private insurance. This includes Australia, New Zealand, Japan, Brazil, Denmark and many others. Many lower-income countries offer universal healthcare access to government-run facilities which offer limited services.

Germany has the oldest statutory health system that goes back to Bismarck in 1883, but there are hundreds of payers; insurance companies (sickness funds) that are highly regulated, much like utilities. Individuals have the choice to opt out of the public system and substitute private insurance, which 12% of Germans do. This is a two-tier multi-payer system.

Israel mandates that everyone sign up with one of four non-profit health plans funded by income taxes. Out of pocket expenditures account for 22% of healthcare spending, so copays are high.

In Sweden, local and regional authorities pay for all care, so technically, there are 21 different payers. In Norway, counties, municipalities and the central government share responsibilities for payments to different sectors, like GPs, specialists and hospitals. The Netherlands runs a hybrid public/insurance scheme where everyone is enrolled in the public system and about 80% supplement with private insurance.

India offers free healthcare to everyone at government operated facilities. These are not necessarily well-funded and most people use the parallel private system. Only 37% of Indians have insurance. Both access and quality of care vary tremendously from state to state.

Singapore has multiple funding streams, including one for large hospital bills, a health savings account and a safety net. People use their savings account to purchase insurance and to purchase services directly. Singapore relies on market mechanisms to keep costs down.

Japan has a mandated universal coverage from one of 1400 employment-based plans and 47 regional plans for the unemployed and elderly.

Taiwan is the only true mandated single-payer system in the world, where the central government funds private physicians and hospitals. There are still copays and out-of-pocket payments except for select populations, like government employees and low-income populations.

So there are a lot of ways to skin the healthcare cat. Designing a healthcare system that includes universal coverage is a slippery, squirmy sausage-making process.

The only way to secure universal healthcare is to mandate that everyone contributes tax revenue and has access, whether they want to or not. Opting out is problematic if people can opt back in when they become ill. That’s like calling the insurance company after the house is on fire. In the language of actuaries, this is called “adverse selection.”

There is good reason to make sure there is universal coverage, but single payer is problematic for reasons we will go into in the next post. The distinction is of extreme importance as we shall see.