Single-Payer Healthcare and Three-Way Balance … Lessons Learned on a Train

Recently, I had the distinct pleasure of embarking on the Grand Canyon Railway from Williams, Arizona to the Grand Canyon Village on the South Rim. Spectacular train ride there and back — I highly recommend! — and incredible views once you got there.

As is my habit, I met some people in our comfortable coach on the train ride. Three of the gents, let’s call them Joe, John and William, were all from the United Kingdom, England specifically. Joe and John emigrated to the United States when they were younger and are now retired (they call themselves “pensioners”). William is still a U.K. resident. All three were in their 60s, like me. And can you imagine, once they found out what I do for a living, they wanted to talk about healthcare!

Joe, the most vocal of the group, moved with his wife to the U.S. in his late 40s and now lives in Las Vegas. He told me with great relish how healthcare back in the U.K. let him and his family down over and over again. “How can you get well when you have to wait months for a doctor’s appointment? And then after all that, he decides whether you get to see a specialist or not, it’s not your call! Once the wife and I came to the states, we could get a CT scan or an MRI without having to go through triage three times and wait for months!” I stored that anecdote away for later…

John had a different story. His wife had some health conditions, and he moved here to get her advanced treatment. “She would have died back home fairly quickly because of the backlogs and lack of a drug she really needed. Here, she got treatment and here she is, five years later!” He was there with his wife, daughter and grandson. His complaints about the U.K.’s National Health Service were drug related. I didn’t want to dig too much — I was on vacation, after all — but the gist was that a drug already approved and commonly prescribed here in the U.S. was rejected in the U.K. because it was “expensive and redundant,” as he put it. Here, that drug has kept her going and healthy. I spoke at length with John’s wife and she was quite vocal about what happened to her.

William and his wife still live in the U.K., near Bournemouth, and are perfectly content with their U.K. healthcare. “We don’t have a lot of health issues. I only see the doctor once a year and I’m not on any medication. My wife had some issues a few years back, but a surgery resolved it and she’s great now.”  He seemed less vocal about the problems with the National Health Service than the others and he had no intention of emigrating. He was a college professor and his healthcare is entirely free.

The entire time I’m listening to them, in great fascination, a balance equation my Dad told me more than 50 years before came to my mind. He used it in project management when he was a VP of logistics for an oil company and people requested gear or support from him:

“Well, you can have it fast, or you can have it good, or you can have it cheap! Pick two, because all three ain’t gonna happen!” I can still hear him on the phone talking to guys 200 miles out in the Gulf and short some part or service. It’s like it was yesterday.

Two Out of Three Can Be Bad (Sorry, Meatloaf)

There is a movement afoot at all times in Washington, D.C. and in various state capitals to take the whole of healthcare (financing, delivery, drugs, follow-up visits, wellness and prevention programs, EVERYTHING) and put it under one single system controlled by the only agency big enough to run something like that: the U.S. government. And every now and then, I think it’s healthy to remind everyone of the trade-offs that would be involved if we moved to a single-payer system as exists in most other countries.

For this comparison, I find it useful to divvy up everyone into the three “payer buckets” that represent how the majority of us get our healthcare coverage today.

Bucket 1: Around 82 million U.S. citizens on Medicaid programs around the country. Then the ~68 million on Medicare.

Bucket 2: About 170 million citizens on various types of employer plans and commercial health insurance coverage.

Bucket 3: Approximately 30 million U.S. citizens who, on a day-to-day basis, aren’t covered at all.

There are tons of different Medicaid programs, Medicare plans and commercial insurance plans. But to transition to something new, like one government-run, single-payer plan, let’s start simple.

People on Medicaid typically pay nothing for their care. No premiums, no deductibles, no copays, in general $0 out of pocket. In most cases, Medicaid also pays medical providers and pharmacies the least amount of money for the services they provide to patients. It’s typically below (sometimes well below) the actual cost of delivering that care.

People on Medicare almost always spend some money to get care. They pay Part B premiums, they pay Part D premiums, they pay copays for drugs, deductibles and the like.  Typically, they do not have to pay as much out of pocket as people who are covered on employer or commercial health insurance plans. Medicare payments to docs and hospitals and reimbursements for drugs are usually higher than what Medicaid pays, but often still not enough for healthcare providers to break even or turn any profit.

Employer plans and other commercial insurance plans require their members to pay the most out of pocket. This comes in the form of premiums, deductibles, copays and coinsurance. These members pay the most for drugs when they need them. And likewise, when these plans pay healthcare providers, their reimbursement almost always far exceeds what Medicaid or Medicare pays for the exact same treatments, drugs and services.

Cheap, Fast AND Good? Not Happening

So, you want to merge all 340 million of these members into a single, government-run plan? You’ve got choices. You can do that fast, cheap or good. Pick two.

Since you only get two out of three, it implies you’re going to have to leave something behind. Which one do you go without? Speed of service? Cost of service? Quality of service?

My friends on the train say their National Health Service has sacrificed fast for cheap. The health system there is  often FORCED to compromise on quality because of the focus on keeping healthcare affordable, but they’ve kept their system alive and afloat for almost 80 years. And their system only burns about 11% of the U.K.’s Gross Domestic Product (which is a much lower per-citizen cost, too) while the U.S. burns 20% of our GDP on our healthcare. So for the extra money, what are we getting?

More speed? Definitely. In most cases, U.S. citizens can get appointments when they need them much sooner.

More quality? Getting treatment faster typically has a quality component all its own. We know delaying treatment can often complicate care.

Lower cost? Not in the U.S. We set global records on healthcare spending every year.

So, Mike, why are you bothering me with this?

The Straight Talk is, for years people have ranted about the inequity of our current system and demanded that the U.S. should handle healthcare the same way other countries do — with a single-payer, government-run system. I expect them to keep ranting about it. And if we could take the current system to the ground and start over, maybe that would be possible. But we can’t. And I need you, as educated consumers and citizens, to understand what the real possibilities are, the things that we can actually do. Because pushing in this direction could easily make things worse, and you need to test what you hear.

Faster? Cheaper? Better?  Pick two.