Berko: Single-payer health insurance is in the cards

Dear Mr. Berko: I strongly object to “Medicare for everyone.” Can you explain to me how it makes economic sense?

— C.L., Jonesboro, Akansas

Dear C.L.: “Medicare for all,” snappy shorthand for a single-payer health care system, may be a huge plank in the Democratic Party’s platform, and it’s not a fantasy for the 156 million Americans (about half the population) who get health insurance through their employers. Canada, France and Denmark have successful single-payer systems. Their taxes are higher, but they’re not charged premiums, co-pays or deductibles. They spend half as much on health care as we do and enjoy better medical outcomes.

In 2018, there were at least 125 health insurers in the United States and they took in almost a trillion dollars in premiums. The largest 25 health care insurers, such as United Health Care, WellPoint, Kaiser Foundation, Aetna and Humana, collected about $646 billion in premiums. And probably all of the 125 health insurers made a profit.

With 125 companies selling health insurance, that’s 125 CEOs, 125 presidents, 125 treasurers, 125 executive vice presidents, 125 vice presidents, 125 assistant vice presidents and each of these officers has a computer and each has a secretary who also has a computer. Each of these 125 companies has a legal staff, sales and marketing director, human resources department, payroll and accounting departments, and each of those departments has computers in every nook and cranny that are attached to a bigger office computer and stored in the cloud.

Now imagine the number of desks and chairs, wastebaskets, copy machines, desk equipment, stationery and coffee cups in constant use by 125 health insurers. A famous Aztec chef once said, “Too many cooks spoil the stew,” and this guy wasn’t kidding. Can you imagine the cost to pay 125 CEOs and all the other officers and directors? Can you imagine the cost to meet the 56,000-person payroll every two weeks at Anthem or the 41,000-person payroll at Centene or the 120,000 person payroll at Community Health, the 230,000 folks at HCA Healthcare and the 260,000 employees at United Health Care?

Can you imagine the attractive buildings and richly designed offices these insurers occupy, and can you also imagine the rent costs for offices, cubicles and workspace for over 1 million employees? Including cooling in the summers and heating in the winters and constant maintenance? I marvel at how a company like UnitedHealth Group that collected $2.2 billion in premiums can pay the salaries for 236,000 employees plus hundreds of millions in rent, utilities, legal, accounting, etc. and still have enough cash left over to pay the medical bills of those they insure, then make a profit!

Rather than paying 125 cooks to make stew and 125 payroll departments to write checks and pay bills located in 125 different office buildings, a single-payer plan would consolidate everything under one CEO, one president, one treasurer, one accounting department, one central office location, one computer system. The amount of money — tens of billions of dollars annually — that could be saved would buy a lot of aircraft carriers, ice cream cones and pizzas, and perhaps better care.

There are some negatives. Some say hospitals and physicians would have to accept reimbursement rates somewhat lower than today’s rates. This could create an exodus of doctors and deter other bright young people from entering the field. Though most doubt it. Still, a single-payer system is in the cards, and within the next 10 to a dozen years it may be a certainty. Access to health care must be a right, not a privilege.

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