Structuring National Health Care in America

I’ll be honest in admitting that a part of me, from time to time, thinks that we should just adopt a single-payer, nationalized health care system like that of the UK. There are some wonderful arguments for equality and gains to be made through standardization. Believing that we’re ready to move basic health care from the capitalist to the citizenship model, a fully government-run program seems the most effective way to do so.

But then I think about the need for flexibility and entrepreneurship that comes so much more easily in the capitalist model. Though there will necessarily be some trade-offs (as there already are), I think we need to preserve some room for innovation. With this balance in mind, here are the elements I believe a federal health insurance system should include:

Single-Payer Financing

Right now Americans are divided into thousands (millions?) of smaller health insurance pools by a variety of factors. State and local boundaries make some difference but the biggest division is by employer. If you have health insurance through your employer (as encouraged by the tax code), you won’t be able to take that coverage with you to a new job. If you lose your job you likely lose your health insurance, though you may be able to keep it for a few months at a much higher premium. There are historical reasons for that system but not compelling arguments for keeping it. Concern for personal health or family illness should not tie one to a specific employer.

As consumers, we would be in a better financial position if we were part of the same very large insurance pool. For starters, this would decrease a lot of cost-increasing inefficiencies built into the present system. For instance, a local hospital could treat all local patients in all of its facilities, instead of accepting everyone for emergency medicine and only those with the right insurance for other procedures. The same would go for local doctors, dentists, medical clinics, etc.

We would also be in a better position to negotiate prices. Right now insurance companies negotiate on behalf of their patients for the price of each procedure, then pass on some of that reduced price to their members according to deductible policies, etc. So those without insurance pay a huge premium to balance the books against the lower prices paid by members of the largest insurance pools (which bring greater negotiating power). Negotiating as a single entity would allow consumers to set prices at or near cost. Together, though more of the cost would be channeled through government, we could actually lower the cost of health care in this nation.

Finally, a single-payer system would provide for a citizen model of health care. As I argued earlier, I think this fits with the goals laid out in the Declaration of Independence. I’ll write later about how I think it fits with the Constitution. And fundamentally I think American is sufficiently prosperous to afford to extend health care to all its citizens as a basic right.

Taxpayer Funded

As I also argued earlier, a federal health care system would be on much stronger Constitutional footing if it relied on the tax power rather than the Commerce Clause. I would favor a dedicated, progressive tax to fund the federal health care system, with exemptions for those below a basic income/asset threshold.

Private Care Providers

Here’s where the capitalist model starts to come in. At present I’ve concluded that we should not entirely nationalize the health care system. That is, I don’t believe that the government should take over hospitals and other private health care providers to become both the single-payer and single-employer for health care in the nation. Instead, I’d prefer that we maintain an element of competition and accompanying innovation.

The trick — and I admit I don’t have this figured out yet — will be to provide an appropriate incentive structure. One approach might be a fee-for-patient model. If everyone chose a primary care physician, each doctor would receive a steady fee for that patient. If they did a better job of keeping their patients healthy more cheaply, they would be able to keep more money. This would diminish the incentives for unnecessary tests and increase the incentives for quality preventative care. A similar system for hospitals would provide a greater incentive for working to diminish recidivism. I would pair this with a fee-for-service system to preserve flexibility in the system. That way if you went to a new doctor for a checkup (and to consider switching primary care providers) there would be a mechanism for paying for that doctor’s time. The same would apply to specialists whom patients would only visit occasionally.

Basic, Preventative, and Catastrophic Care

To make more room for the capitalist model, I would also limit the coverage of national health care. To begin, it should cover basic medical care, preventative care, and catastrophic care. Regular doctors visits, routine exams, programs to help people lose weight or quit dangerous addictions, etc. should all be part of the standard single-payer insurance. It should also consume the current Medicare and Medicaid systems. And it should cover catastrophic medical needs: the kind of unpredictable accidents or medical conditions that will occur in a small portion of the population and cost millions of dollars. Because we’ll all be in the same pool, the individual tax burden of this latter category will be small even though it will mean huge savings for those who need the care.

Beyond this basic single-payer care, individuals could purchase additional health care through private carriers. I’ll be honest that I haven’t figured out all the nuts and bolts here. I’m not a doctor or a health-insurance executive. So I can’t tell you the boundary of what should be covered publicly and what would be included in private plans. I do expect that the public plan would include co-payments and deductibles for most treatment (except preventative care), so private plans could pick up those costs. And optional treatments, excluded from the public plan, could be available through private coverage. Health care providers would negotiate separately with insurers, as they do now. This would provide some competition for the government-run plan, which could be a positive thing.


So, those are the details of the system I’d prefer, at least for now. I recognize that it’s a complicated and imperfect plan. But I’m serious about preserving some of the benefits of the capitalist model even as we expand health care under the citizenship model. I welcome your comments, criticism, and suggestions regarding what I’ve proposed here.



This is the fifth post in a series explaining why I favor a national health care system. For the introduction to the series and a list of the posts, click here. Or, for all my health care related posts, see here.

3 Responses to Structuring National Health Care in America
  1. dave
    April 13, 2012 | 10:17 pm

    Jason, I really like your thoughts here. It seems that the biggest hindrance to getting our health care changed for the benefit of the American people is cutting out elements of the capitalist system that have failed the health care market. Money, is the controlling influence.

    In your system, how do you feed the insurance companies that would be opposed to government and taxes taking over their jobs? How can you do that when they have their hands in the back of the politicians wallets? I may be wrong, but it seems to me that without wide scale political finance reform, healthcare and much of the American people’s best interest will come second to one, money!

    Also, how do you convince someone who isn’t willing to read a 6 post argument that giving health care to our citizens isn’t going to lead to another holocaust with death panels?

    I think these two sociological issues are just as much of an issue as coming up with mechanisms and structures. I think with Obama’s efforts, you see an imbalance on the capitalist side and half of America is freaking out over it.

    Just as I am writing i think perhaps the only way to do this is to use their arguments and get them to think it was their idea? Perhaps the BFG could deliver dreams to shaun hannity at night for a minimal fee?

  2. Jason
    April 14, 2012 | 11:23 am


    Reform is always going to require some major employment shifts, especially when switching between the capitalist and citizenship models. Can you imagine the displacement if we dramatically simplified our tax code? We’d likely bankrupt H&R Block and plenty of private tax accountants. But sometimes that restructuring is necessary, as I think is the case with health care. Fortunately, the citizenship model of health care would still require a fair number of bureaucrats, so there would be new jobs for some of those who lose them in the shift. In any case, a fundamental principle of the capitalist model is that such disruptions are a natural and necessary part of the dynamic system. If some people must lose their jobs for the greater efficiency of the market, why should employment disruption be an argument against reform?

    You’re right that we need structural reform in our system of government as well, in order to shift accountability more to the people away from the lobbyists. But that’s all a post for another day.

    Regarding death panels: I think a big failure of that debate (on the Democratic side) was not explaining to people that they already exist. Health care is already rationed in this country, it’s just that we leave it up to private companies to do that rationing. People who can’t get insurance due to pre-existing conditions can only have the treatments they can afford to pay for. Those with insurance can only get the treatments their insurance company agrees to pay for. In both instances, private corporations determine whether it is worth while in terms of their bottom line to provide certain individuals with certain types of care.

    The difference is that with a single-payer plan we would shift the responsibility of such decisions to our government. One advantage of such a shift is that the government is actually tasked with taking care of its citizens, a mandate not shared by any corporation.

    Thanks for your questions and comments.

  3. Seth
    April 24, 2012 | 12:59 pm

    You make some good arguments here [edit]. I’ve been busy and have had to wait a while to read this post. I wasn’t disappointed.