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McGee ‘9 (Patrick, McElveen Professor of English at Louisiana State University, Theory and the Common from Marx to Badiou, pp. 161-200)

In Logics, Badiou develops the notion of resurrection by which the truth of an event resurges in a new context, a new world, through the incitement of a new event.133 In my own history, the names of these events would include Wittgenstein, Marx, Nietzsche, Wilde, Lawrence, Derrida, Lacan, Gramsci, Bourdieu, and Badiou (more or less in that order), though this would be to limit the events of my intellectual history through which the subject of a truth has been resurrected and kept alive. Furthermore, this generic truth that unbinds me from the categories of everyday social existence creates the condition for a universal address that recognizes the one thing that all human beings have in common, the foundation of their existence on the void of infinite possibilities, however different the import and significance of the events that force human beings into the subjective formation of a truth. For example, the Holocaust survivor, the victim of torture in Iraq, the political prisoner, the innocent and probably the guilty at Guantanamo, the terrorists and those who survive their terror, the cancer patient whose insurance won’t cover a treatment, the bulimic who has to lie in order to get health care, the raped woman and possibly the rapist, not only the victims of child abuse but the perpetrators who were themselves abused, the displaced and exiled, and all the usual suspects that would include the poor, the exploited, the homeless, and so forth—such people are not merely victims or perpetrators but potential subjects of truth, even though the truth they bear is usually prescribed to inexistence by the hegemonic state of the situation that names them. Even they themselves usually evade the truth by accepting the categorical judgments of the State. It is always easier and more negotiable to be a victim or a perpetrator than to insist on the methodical exposition of the truth that has derived from the event, however negative, that transformed a person into a subject. I don’t mean to say that all these experiences are the same or of equal value in the world as it currently exists. Still, there is no reason to wait for an apocalyptic event that would guarantee the universal disclosure of the truth. The events that make truth possible by forcing the inexistent into existence are everywhere, and the only true universal is the subtractive power of the void that has the creative-destructive power to force a change of base, a change of the transcendental ordinary.134

O’Neill 20 – Lecturer in Moral & Political Philosophy in the Department of Politics at the University of York.

Martin O’Neill, “Power, Predistribution, and Social Justice,” Philosophy, vol. 95, no. 1, January 2020, pp. 70-71, https://www.cambridge.org/core/journals/philosophy/article/power-predistribution-and-social-justice/02449FCC840979032236220D38D11A4F.

O’Neill 20 – Lecturer in Moral & Political Philosophy in the Department of Politics at the University of York.

Martin O’Neill, “Power, Predistribution, and Social Justice,” Philosophy, vol. 95, no. 1, January 2020, pp. 76-78, https://www.cambridge.org/core/journals/philosophy/article/power-predistribution-and-social-justice/02449FCC840979032236220D38D11A4F.

Galea 18 – Sandro Galea, Professor of Public Health at Boston University (Healthier: Fifty thoughts on the foundations of public health, (date is correct), pages 116-7)

How should we in academic public health engage with the issue of racism, at both interpersonal and structural levels? How might we best mitigate its effects? I suggest four possible approaches. First, we must tackle racism at the community level. In this capacity, some of us may choose to express solidarity with affected groups, participating in public shows of support. Such actions ensure that the issue of racism moves to the forefront of the public debate and stays there. Indeed, peaceful public statements of concern about a pressing social issue always have a place in an open society, and our responsibility to make these statements is not in any way inconsistent with our role as members of an academic community. Given that we are members of this community, my second suggestion relates to how our scholarship may pave the way for progress on this issue. The work of knowledge generation can help inform acute social needs, developing constructive strategies to help solve the urgent problems of our time—problems such as racism. This nudges us toward a scholarship of consequence, where we aim to shed light on the root causes of racial divides and the link between racism and the health of the public. To do this, we must prioritize our research questions accordingly. By focusing on what matters most, and orienting our scholarship toward areas of inquiry that tackle the foundational drivers of population health, we stand to make a real difference in creating a fairer, less racially fraught society. Third, we are charged at our various institutions with fostering an education environment that both teaches the foundations of our field and prepares students to engage with evolving issues of contemporary public health importance. That calls for an education that is dynamic and reflexive, but also one that is encouraging and respectful of the sharing of ideas. Such an academic climate does much to advance the goals of engendering mutual understanding and identifying solutions grounded in diversity of experience, opinion, and perspective. It is not enough to merely acknowledge disparities; we need to engage in difficult, sometimes uncomfortable discussions about these issues in order to understand one another and improve the often unacceptable conditions our scholarship makes all too apparent to us. Finally, insofar as public health centers around shaping the conditions that make people health, and insofar as those conditions depend on the introduction of health in all sectors, we need to work toward a health conversation that extends well beyond the walls of academia. This agitates for an engagement with the public conversation around the issue of racism wherever the conversation may arise. Public health’s unique perspective, informed by its scholarship, is well positioned to influence how we understand racism and its consequences for the well-being of populations. By clarifying the links between racism and health by making them unignorable in the public debate, we can then begin to advance solutions. Needless to say, racism and hate of any kind are intolerable, even when we do not take into account their health consequences. But health, as a universal aspiration, can serve as a clarifying lens for action, elevating the importance of creating a society free of racism, where health will no longer be determined by the color of a person’s skin. The actions of a committed, activist public health will go far toward bringing this about.

In the United States, medical costs have been increasing inexorably for many years, as have the numbers of the uninsured; the latter is currently estimated to be as high as 47 million persons. A single-payer system has long been suggested by some as the most logical solution to the current crisis in health care access and affordability (1). Under a single-payer health system, the federal government would ultimately be responsible for reimbursement of most medical services provided by clinicians and hospitals. The hope is that a single-payer system will both improve access to health care and reduce health care costs. By definition, under a single-payer system no one would be without health insurance, and cost savings might be achieved through a reduction in administrative expenses coupled with an emphasis on preventive medicine and the universal adoption of electronic medical records. However, I have substantial concerns over whether these potential benefits can actually be accomplished. It is the history of government bureaus to become large and complex rather than lean and efficient. Furthermore, access to preventive care does not equate to individual adherence to the precepts of such care. Finally, I fear that the ultimate toll of a single-payer system will be a reduction in the quality of health care that Americans may be unwilling to bear.

Proponents of a single-payer system argue that government-sponsored insurance would save money by reducing wasteful administrative costs. Yet comparisons of administrative expenditures between private and government-run insurance programs are misleading (2). For instance, the cost of administering a private insurance plan includes the expense of collecting premium dollars, which also applies to government insurance programs such as Medicare. However, this expense does not register on Medicare's budget insofar as a separate government agency (the Internal Revenue Service) performs this function. Furthermore, many states tax premiums paid to private insurers, and also tax their profits; government programs are not so encumbered. Finally, Medicare spends approximately twice as much on claims than most private insurers (older patients consume more services), and administrative expense is expressed as a percent of claims paid. Thus, Medicare looks more thrifty than it really is (2). Estimates of the bureaucratic cost savings under a single-payer system do not account for the expense of administering a greatly expanded Medicare-like program or the price of collecting new employer and individual taxes.

Because of the research teams’ different assumptions, the two sets of findings are not directly comparable. The Urban Institute team’s 10-year estimate of the increase in federal spending would be higher, closer to $40 trillion, if we had estimated program costs over the same period as the Mercatus Center. The additional federal costs would be $2.9 trillion lower ($3.6 trillion lower using the later budget window) if we had not assumed expansion of long-term care services. These two adjustments would move the Urban Institute estimates of a 10-year increase in federal costs to roughly $36 trillion dollars, which would be even lower if we had assumed a phase-in period. The Urban Institute estimates would also be lower if we had assumed hospitals would be paid at Medicare rates, instead of reimbursing hospitals at the level of their costs. The Urban Institute assumed that prescription drugs would be paid for at levels midway between Medicare and Medicaid rates; it is not clear from the Mercatus Center analysis how they derived their prescription drug cost savings. The Urban Institute analysis may also have estimated larger increases in health care utilization because the currently insured would have comprehensive first-dollar coverage under the reform (Blahous 2018, 9; Holahan et al. 2016, 10). The two research teams have made similar assumptions on the level of administrative costs associated with the single-payer plans, and thus their estimated savings from lower average administrative costs seem similar. Both teams’ estimates indicate that federal spending on health care (Medicare, Medicaid, tax subsidies, and other federal payments) would more than double under the Sanders proposal. It would also increase total federal government spending, both mandatory and discretionary, by about 50 percent in 2022 (Blahous 2018) and 60 percent in 2017 (Holahan et al. 2016). 4 The studies’ estimates of national health expenditures also differ. The Urban Institute estimates that, under Sanders’s presidential campaign plan, national health spending would have increased by $450.5 billion in 2017 (without long-term services and supports), or by about 13 percent. The Mercatus Center study estimates $93 billion in health savings in 2022, or a 2.0 percent decrease in spending, E S T I M A T I N G T H E C O S T O F A S I N G L E-P A Y E R P LA N 3 though savings would decrease once the plan was fully phased in. The difference between a 13 percent increase and a 2 percent decrease in national health spending is largely attributable to the studies’ different assumptions about hospital payment rates and the Mercatus Center’s use of a phase-in schedule. And, although the Mercatus Center study assumed Medicare provider payment rates in its central estimates, the report includes estimates with higher assumed payment rates too. Charles Blahous, author of the Mercatus Center study, has said that, although he used Medicare hospital and physician payment rates as specified in the MFA bill, he believes the payment rates would be significantly higher in practice.5 The Mercatus Center paper does provide alternative estimates of the effects of MFA with higher payment rates that yield a $219 billion increase in national health expenditures in 2022. This compares with the Urban Institute’s estimated increase in National Health Expenditures of $450.5 billion in 2017, noted above. Although the studies’ findings are not directly comparable as published, after taking different assumptions into account and making adjustments for them, the estimates of the impact on both federal and national health spending are not substantively different. A health reform that provides such a large increase in coverage with very broad benefits and essentially no cost-sharing requirements will lead to higher levels of national expenditures, even when private sector provider payment rates are reduced to the level of provider costs. Reducing provider payment rates further risks creating provider supply shortages and impeding access to necessary medical care. Having the federal government take responsibility for national health spending would mean an extremely large impact on the federal budget, although it would create substantial private sector savings by eliminating employers’ and households’ premium and direct spending on care. Lowering provider payment rates to the levels suggested in the Urban Institute analysis would still best be phased in over a considerable period to minimize disruption to the health care system. Even the payment rate cuts assumed in the Urban Institute study could be politically infeasible to implement. If so, estimates in both studies could significantly understate the federal and system-wide costs of this reform. Rather than significant, abrupt reductions in provider payment rates, a more practical goal may be to put a system in place that would focus more on slowing the rate of growth in per capita health care spending to approximate the growth in per capita gross domestic product. Once that goal is reached, further savings could be achieved by modest, incremental reductions in provider payment rates. If that can be achieved, increases in economic output would not be disproportionately devoted to increasing health spending. Per capita health spending in the US could remain considerably higher than that of other nations, but the difference would decrease over time.

Healthcare is a very popular, but sensitive subject in today’s world. With much of the world focusing on single-payer health systems, the U.S. has been slowly wondering if we should follow suit. And while the single-payer health system sounds ideal, you may be wondering what it means for the country’s finances. We’ll take an in-depth look at this kind of healthcare system and if it can be afforded.

How much would a Single-Payer Health System Cost?

Advocates of this idea suggest that Americans currently covered by private health plans would be financially better off, even after their taxes are raised to fund the proposed new government program. For example, Senator Bernie Sanders (I–VT) has said: “Are people going to pay more in taxes? Yes. But at the end of the day, the overwhelming majority of people are going to end up paying less for health care because they aren’t paying premiums, co-payments or deductibles.”2

That assertion is incorrect. Our analysis finds that in order to fund such a program, it would be necessary for the federal government to impose substantial, broad-based taxes equal to 21.2 percent of all wage and salary income. Those taxes would be in addition to the payroll taxes that most workers already pay for the existing Social Security and Medicare programs, bringing total payroll taxes to 36.5 percent for most workers.3

Universal access to coverage is not the same as universal access to care. If health care is a legal right—a government entitlement free at the point of service—then it is what economists call a free good. The demand for a free goods unlimited. Unlimited demand, at any given point in time, must collide with limited supply; access to care is not, and cannot, therefore, be universal. Rationing, of course, occurs in all systems. Rationing decisions in single-payer systems are primarily budgetary, bureaucratic, or political meaning that government officials must, in some way or another, establish a scheme for determining who gets care, as well as how, when, and under what circumstances they get care.

Waiting lists are the primary rationing mechanisms. A team of researchers writing for the Journal of the American Medical Association reported in 2018 that 39% of patients in Canada, which is a single-payer system, and 19% of patients in Britain, the oldest model of a single-payer system, had to wait more than two months to see a medical specialist compared to only 6% of patients in the United States. British patients must often wait for hours in Britain’s overcrowded and understaffed emergency departments. By the end of 2020, with British hospitals and other medical facilities trying to cope with the pandemic, British waiting lists could approach nearly 10 million patients. In normal times, British waiting lists are routinely scandalous. In 2017, there were 4.1 million British patients on the waiting lists of the National Health Service (NHS), including waiting lists for cancer surgery. Nor do British patients get timely access to breakthrough medications.

Single-payer universal health care has long been perceived as politically and economically impractical in the USA. However, the national health insurance programme Medicare is a 54-year-old, real-world test for the viability of single-payer, government-funded health care. In 1965 Medicare was established in response to the widespread refusal of private sector companies to provide insurance for older patients (≥65 years), it has significantly and cost-effectively improved the health of older people. 14, 15, 16 Public opinion is clear: the vast majority of Americans view Medicare as an important programme that works well. 17 If Medicare can succeed in the age cohort that uses health-care services most frequently, it is reasonable to expect that extending coverage to all Americans would only be more feasible and less costly per capita. Previous estimates of the national cost of health care under the Medicare for All Act range from a 16·9% increase to a 27% decrease. 18, 19, 20, 21, 22, 23, 24 In this study, we estimate the national health-care expenditure under the single-payer universal health-care system detailed in the Medicare for All Act. Furthermore, we consider the robustness of our budgetary projections by systematically altering the values of key parameters that underlie health-care system costs in our model. As highlighted by the divergent conclusions of the previous Medicare for All Act evaluations, 18, 19, 20, 21, 22, 23 these inputs can vary as a result of differing expert opinions or empirical uncertainties. Accordingly, we develop the Single-payer Healthcare Interactive Financing Tool (SHIFT) in which these parameters can be adjusted (figure 1). SHIFT similarly enables the customisation of a national financing plan in which insurance premiums paid by employers and individuals would be replaced with other options, such as a payroll tax. Projections from SHIFT indicate that the Medicare for All Act would yield net savings for the health-care system across a wide range of assumptions regarding insurance expansion, service improvements, administrative efficiency, and pharmaceutical pricing (figure 2; panel). [Charts omitted] Parameter defaults and bounds for the Single-payer Healthcare Interactive Financing Tool (SHIFT) The following parameters are adjustable within our user-friendly tool, SHIFT. We provide a rationale for the default values, which correspond to our base case (default) analysis and the lower (minimum parameter value) and upper (maximum parameter value) bounds. Further details on input parameters and assumptions are provided in the appendix pp 1–13. Health-care budget Reducing reimbursement rates for hospitals If all hospital fees were reimbursed at 2017 Medicare amounts, the fees would overall be 5·54% lower (default); however, if reimbursed at Medicaid rates, fees would be reduced by 18·74% (upper bound). Reducing reimbursement rates for physician and clinical services If all physician and clinical services were reimbursed at current Medicare rates, the fees would be 7·38% lower (default), and if reimbursed at Medicaid rates, fees would be reduced by 19·23% (upper bound). Reducing pharmaceutical prices via negotiation The Department of Veterans Affairs has the authority to negotiate prices in accordance with therapeutic value, achieving prices that are 40% lower than those paid by the Medicare scheme (default). 25 Reducing overhead expenditure Within the US health-care system, insurance overheads range from 2·2% for Medicare (lower bound; default) to 12·4% for the private sector (upper bound). 26 Improving fraud detection Given estimates that 4% of health-care expenditure (default) could be eliminated through fraud detection within the first two years of implementing a single-payer system, 27 we allow fraud reduction to range from 0% (lower bound) to 10% (upper bound) upon enactment of the Medicare for All Act. Expansion in service use Health-care service use by people who are uninsured and underinsured is expected to range from current levels (lower bound) to usage commensurate with those who are fully insured (default, upper bound). Revenue generation Payroll tax The $536 billion spent by employers on health-care premiums is equivalent to a 12·29% payroll tax (upper bound). Any payroll tax that collects revenue below the 12·29%-level expenditure would represent savings, including our default value of 10%. Household income tax Households currently pay $738 billion towards premiums and out-of-pocket expenditures. Only $64 billion of out-of-pocket costs would remain under the Medicare for All Act. If the remaining $674 billion in spending were replaced by a 5% household income tax (default) on income beyond the standard deduction, the tax would yield $375 billion annually. 28 The $674 billion replaced by Medicare for All Act would be equivalent to a tax rate of 9% (upper bound). The Sanders net worth tax A 1% tax on household net worth above $21 million, applied to 0·1% of all households in the USA, would yield $109 billion annually. 28 This tax rate can be modified to range from 0% (lower bound, default) to 2% (upper bound).

The cost of administering health care in the United States costs four times as much as it does in Canada, which has had a single-payer system for nearly 60 years, according to a new study.

The average American pays a whopping $2,497 per year in administrative costs — which fund insurer overhead and salaries of administrative workers as well as executive pay packages and growing profits — compared to $551 per person per year in Canada, according to a study published in the Annals of Internal Medicine last month. The study estimated that cutting administrative costs to Canadian levels could save more than $600 billion per year.

A single-payer healthcare system would save money over time, likely even during the first year of operation, according to nearly two dozen analyses of national and statewide single payer proposals made over the past 30 years.

The study, published Wednesday, Jan. 15, 2020, in PLOS Medicine, comes as California Gov. Gavin Newsom has named a state commission to find ways to achieve universal coverage, possibly through a single-payer system, and as the Democratic presidential candidates are debating “Medicare for All” proposals on the national stage.

APHA has called for universal coverage of health care for all U.S. residents for decades.[32] This has included calls for a unified, nationally coordinated, and nationally funded approach (i.e., SP) to health care expenditure since the late 1970s. This goal for coverage, met by the majority of other developed countries in the world, is no longer in question, but the best approach is still being debated in policy and political spheres. In this debate, the evidence in support of SP has grown rapidly in the past decade. In addition, recent polls conducted with broad clinician samples have shown that a majority of doctors “strongly support” policy reform to implement SP.[33] The American College of Physicians (ACP), the second largest provider organization in the United States, has also recommended that U.S. policy initiate a transition to a system of universal coverage, through either an SP or a public payer choice capable of supporting universal coverage.[34]  Single-payer health system: In 1993, the APHA leadership and executive board developed 14 Points on Health Reform in order to organize and guide the essential criteria for reform of public health.[35] These points continue to guide the principles of the public health field in developing proposals for national health reform.[36] Overall, the evidence clearly demonstrates that SP is the most optimal structure for health reform in order to support these principles.  Designing, implementing, and transitioning to a single-payer system may entail significant changes in the sources and extent of coverage, provider payment mechanisms, and financing of health care services in the current U.S. health care system.[37] The federal government could administer some functions of the single-payer health plan at the national level and delegate other functions to state and local governments. Alternatively, state governments could administer the single-payer health plan with broad federal oversight.[37] Single-payer system implementation can be done in incremental stages starting with people who have health insurance coverage through various public sources (Medicare, Medicaid/ Children’s Health Insurance Program, Veterans Administration) who could continue to have such coverage under a single-payer system, although covered benefits and cost-sharing agreements might change.[38] People who have private insurance (primarily employer-based insurance) may enroll in the public plan and might retain private coverage that supplements the coverage under the public plan, preserving public financing and redistributing revenues among the pools to attenuate risk selection.[39] With regard to health insurance, several countries progressively transitioned from multiple large insurance pools to single-payer systems while building the financial and administrative capacity to establish a single insurance pool. An alternative approach would be to first standardize the health plans that can be offered in the market.[38] All of these approaches may be slowed by legal challenges from states or business interests, but they each reflect a lower risk as changes to taxation and federal program reimbursement do not involve the constitutional rights issues posed by individual mandates to purchase private plans.    Overall, a single-payer system will significantly simplify revenue collection and benefit payouts to a single agency.[40] Countries with single-payer systems experience significant cost savings over their multipayer counterparts through streamlining of billing and insurance procedures, creation of a more equitable and predictable spread of risk throughout the entire populace, and leveraging of bargaining power to control costs.[40]

Access and equity issues: Lack of insurance is the primary systemic barrier to health care access in the United States, demonstrating that multiple financing systems fall short of universal coverage. Universal health coverage means that all people have access to the health services they need, when and where they need them, without financial hardship.[18] It includes the full range of essential health services, from health promotion to prevention, treatment, rehabilitation, and palliative care. In addition, the high cost of health care in the United States exacerbates existing health care disparities that result in premature morbidity and mortality and intersects with race, social and socioeconomic status, age, and disability. One feature of the United States health care system is the prevalence of high-deductible health care plans. These plans, intended to incentivize patients to not overutilize health care, disproportionately affect individuals with low incomes. In the period from 2003 to 2014, when high-deductible health plans proliferated and overall increases in U.S. health care spending slowed down, health care expenditures for the wealthiest quintile grew by 20% while falling by 3.7% in the lowest quintile group, despite this group having the worst health outcomes.[19] In addition, since health care expenses are not proportional to personal income, individuals with low incomes pay a larger percentage of their household income toward health care costs. Thus, the private health insurance market exacerbates wealth inequality by functioning in a manner similar to a regressive tax. A survey of health care expenditure data showed that this system effectively redistributes 1.7% of total income from individuals with lower incomes to those with higher incomes.[20] 

Efficiency in the United States relative to single-payer countries: While the United States spends more per capita on health care than any other OECD country, the additional spending contributes little value from either an economic or a health outcomes perspective.[3,5,10] Countries with SP spend less while their populations live longer, healthier lives.[11] The average life expectancy and the burden of adverse health outcomes for almost all major chronic illnesses (apart from cancer treatments) in the United States also fall short of the OECD median.[7,10,11] As far back as 2003, administrative costs of health care (including insurance, reimbursement, and other administrative tasks) accounted for nearly a third (31%) of the U.S. NHE.[12,13] By 2011, the country still spent more of its NHE on the administrative costs of the reimbursement system than any other country (8%–18% of health care spending).[4,5,14] Analyses between countries with a variety of health insurance systems showed that both SP (most optimal) and “two-tiered” systems, such as those in France and Japan, operated with lower administrative costs than the insurance-mandated systems of the United States and Switzerland.[5] A two-tiered system involves a public insurance-and-delivery system and another based on private health insurance. Notably, the Swiss system (with the second highest NHE per capita of OECD countries) demonstrated significantly lower administrative costs than the United States, indicating that there is room for correction even within public-private systems.[5] According to one analysis updating the 2003 analysis through 2017, excess administrative costs in the United States relative to Canada (SP) have persisted and still account for 17% of the NHE.[15] 

Rising per capita costs of health care in the United States: National health expenditure (NHE) in the United States grew by 4.6% in 2018, to $3.65 trillion ($11,172 per capita).[1] This accounted for 17.7% of the gross domestic product (GDP) at the time.[1,2] The United States spends the most by far on health care among all 36 countries in the Organisation for Economic Co-operation and Development (OECD), both as a proportion of GDP and per capita.[3,4] Despite using fewer health care resources, the country spends $2,000 more per person than the next-highest-spending country, Switzerland, and nearly twice as much per capita on health care as the median for OECD countries.[3,5] The pricing system is inherently the single greatest driver of health care costs while providing fewer key health resources.[3] There is also a large and widening gap in the prices that public and private payers are charged for identical services, which indicates that the rising total NHE is primarily driven by private health care insurers[3] and pharmaceutical expenditures in particular.[6]  U.S. pharmaceutical expenditures: U.S. prescription drug expenditures reached $335 billion in 2018, a 28% increase in a decade.[6] The growth is expected to continue and is projected to increase 67.3% to $560 billion by 2028.[6] In 2018, annual per capita U.S. prescription drug spending was $1,221, well above that of the United Kingdom ($526), Sweden ($534), and Germany ($884).[7] Prescription drug expenditures alone will represent 19.7% of the U.S. GDP by 2028.[6] Increased prescription drug expenditures will be largely driven by manufacturers’ increases in drug prices.[8]  One of the distinctions in U.S. prescription policy is the burden of drug costs borne by patients as out-of-pocket costs. For instance, the Medicare Part D prescription drug benefit has no cap on out-of-pocket costs for beneficiaries.[9] Drug prices are significantly higher in the United States than in any other OECD country. By contrast, the United Kingdom requires little or no cost sharing by patients. Countries that have implemented single-payer (SP) financing systems offer multiple examples of ways to reduce drug prices, including harmonization of pharmaceutical coverage, pricing over a single formulary or across formularies, exclusion of added administrative costs from pharmacy benefit managers, and leveraging of scale to negotiate prices with suppliers.

Close to half of all Americans receive health insurance coverage through their jobs. In no other major country is health care coverage tied as closely to employment as in the United States. American-style ESHI has several major unintended consequences.38 One problem is “job-lock” * the reluctance of many workers to move to a more suitable job, to become self-employed, or to start one’s own business for fear of losing insurance coverage. Even in other countries like Germany where employers play a role in health insurance, special measures exist to ensure that transition from job to job; from a job to self-employment; or from work to nonemployment does not interrupt coverage. The severe inequity of EHSI is a second problem. Health insurance benefits are tax-deductible, but the deduction is of greater value to people in higher tax brackets. The inequity is amplified by the fact that higher-paid workers are far more likely to get health benefits to begin with. According to data from the Social Security Administration, fewer than 20 percent of workers in the lowest quintile of the wage distribution get health benefits compared to more than 80 percent in the highest quintile.39 Robert Kaestner and Darren Lubotsky, economists at the University of Illinois, Chicago, estimate that workers in the bottom fifth of the family income distribution get annual tax benefits of less than $500 from ESHI, while those in the top fifth get benefits averaging $4,500. What is more, their data show that the inequity has become worse over time.40 A third problem is that the existence of thousands of ESHI plans, some of them quite small, adds to the fragmentation of the U.S. health care system and contributes to high administrative costs. As discussed earlier, although ESHI is nominally part of the private sector, it is by no means a creature of market forces. Inasmuch as it allows employers to pay a part of their labor cost as tax-deductible health benefits, the tax deductibility serves as an implicit wage subsidy. The benefits of the subsidy are presumably split between employers and employees according to the elasticity of demand for labor in various submarkets and according to the tax status of employees. However, the fact that the carrot of the deduction is backed up by the stick of the employer mandate clouds the picture. Although the mandate is apparently not binding on many employers, where it is binding, it is clear that the cost to employers of offering ESHI outweighs the value of the implicit subsidy. That possibility presumably lies behind the gradual decline in ESHI coverage. Any way one looks at it, it is hard to see any overall public policy justification for a program that primarily benefits high-wage employees while undermining labor mobility and adding to the fragmentation of the health care payment system. Any serious health care reform proposal should aim to eliminate ESHI once and for all. However desirable, the transition away from ESHI will not be easy. In part that is because a strong majority of beneficiaries who receive ESHI say they are satisfied with their coverage. In part, that is probably because many workers have little chance of getting other coverage, have no interest in changing jobs, or are on the favored end of the unequal distribution of tax benefits. In part also, it may be because workers do not understand that their cash wages would be likely to rise if EHSI were removed from the cost of labor. The experience with the ACA shows that reformers need to act cautiously in demanding that people change their health plans. A transition that induced people to move voluntarily onto UCC because they find it attractive would presumably be more politically acceptable than one that pushed people from ESHI to UCC by fiat. One way to make the transition from EHSI to UCC as voluntary as possible would be to lift the employer mandate, phase out the tax deductibility of EHSI, and allow employees to opt into UCC if they chose. Most lower-paid workers would probably take that option. Employers who wanted to use health care benefits to retain higher-paid employees could offer them supplemental policies to cover out-of-pocket costs, but without the tax deduction. That way many fewer people would be forced to make a change of plans against their will. Whether voluntary or compulsory, any transition away from EHSI would also have to decide what to do about the 20 percent of national health care costs that are now paid by employers. If ESHI disappeared, to be replaced with UCC, much of what is now spent by employers on health care would be passed through to employees as increase in cash wages, and some, perhaps, to business owners as increased profits. In that case, the federal budget would recapture some of the 20 percent through an increase in income tax revenues.

Under UCC, deductibles have three effects. First, they limit the cost to the government budget in comparison to plans such as Medicare for All, which extend first-dollar coverage to everyone. Second, they serve the goal of fairness by requiring that people who can afford it to assume responsibility for their own non-catastrophic health care expenses. Third, together with coinsurance and copays, they define the cost-sharing zone of Figure 4, within which people face a direct tradeoff between spending on health care or on other goods and services. The third effect is the most controversial. The issue is whether the tradeoff created by deductibles induces people not just to spend less (which they do), but also to spend more wisely. According to many advocates of market-based health care, giving consumers “skin in the game” encourages them to compare the cost and quality of services from various providers, avoid excessive and inappropriate tests and procedures, and budget prudently to meet foreseeable medical expenses. However, numerous studies cast doubt on the idea that high deductible health plans (HDHPs) automatically make people better shoppers. For example, an NBER Working Paper by Zarek C. Brot-Goldberg et al. found “no evidence of consumers learning to price shop after two years in high deductible coverage.”14 The authors noted that consumers reduced quantities consumed across the board, including potentially valuable preventive care as well as potentially wasteful care such as unnecessary imaging. Similarly, a recent review of the literature in Health Affairs concluded, “Current evidence suggests that HDHPs are associated with lower health care costs as a result of a reduction in the use of health services, including appropriate services.”15 And a research letter by Jeffrey Kullgren and colleagues published by JAMA Network found that HDHPs were ineffective in inducing enrollees to set up health savings accounts, compare prices or quality of services across providers, discuss prices with their physicians, or negotiate prices.16 Studies such as these, which cast doubt on the most facile versions of the “skin in the game” argument, raise both technical and political issues for policymakers. The technical issues concern the extent to which the negative effects of high deductibles can be mitigated through better policy design. For example, although some consumers are reported to make no effort to obtain or act on price information, others who attempt to do so are frustrated by a lack of pricing transparency. Measures to make price and quality information more readily available to consumers could help. So could changes in training and incentives that encouraged physicians to discuss the relative cost effectiveness of treatment options.

The objective of UCC is to relieve the threat of financially ruinous medical bills for the very poor and very sick while requiring those who can to pay an affordable share of the cost of their own non-catastrophic care. To accomplish that, UCC sets an income-based cap on each household’s health care spending. The cap is defined by a number of parameters. The simplest version of UCC would have just two parameters, a low-income threshold and, for those above the threshold, a deductible that varies with household income. The low-income threshold is a level of household income below which even moderate medical expenditures would threaten serious financial distress. Under UCC, people whose incomes are at or below the threshold would have their health care costs covered in full. The dollar value of the threshold would vary with family size. For example, the threshold could be set equal to the federal poverty level (FPL) or a fixed percentage of it. As of 2019, the FPL stood at approximately $12,500 for an individual and $25,000 for a family of four. A household’s eligible income is defined as the amount by which household income exceeds the low-income threshold. In a simple version of UCC, the deductible could be set at, say, 10 percent of eligible income and the low- income threshold at the FPL. A family of four with total income of $50,000 would then have eligible income of $25,000 and a deductible of $2,500. A family with total income of $100,000 (approximately the upper limit of eligibility for premium subsidies on the ACA exchanges) would have a deductible of $7,500. A family with total income of $1 million would have a deductible of $97,500, and so on. Income could be defined as adjusted gross income reported on the previous year’s tax return, with some form of averaging for people with highly variable incomes. In addition, a UCC plan could include additional cost sharing in the form of coinsurance and copayments. For example, suppose the low-income threshold were set to the FPL and the deductible at 10 percent of eligible income. Coinsurance of 20 percent could then be assessed for health care expenses from 10 percent to 35 percent of eligible income. A family of four with eligible income of $50,000 would then face a deductible of $5,000 and 20 percent coinsurance on expenditures from $5,000 to $17,500. The family’s out-of-pocket maximum would then be $7,500, consisting of the $5,000 deductible plus $2,500 in coinsurance. Some UCC proposals also include a premium, which would be paid whether or not a household had any health care expenses in a given year. The premium, too, could vary with income, starting at zero for families below the lowincome threshold and following a sliding scale for those with higher incomes. A household’s total contribution to the cost of care would then be the sum of its out-of-pocket spending and its premium. Finally, many versions of UCC include a package of preventive services that would be exempt from cost sharing to avoid discouraging their use. Taken together, these UCC parameters define two zones, shown schematically in Figure 4. Households fall into one zone or the other according to income and health care spending. The full coverage zone includes those whose incomes are so low or whose health care needs are so great that any additional medical expenses would threaten financial catastrophe. They get full, first-dollar coverage of their health care expenses, at the margin, although those who are above the lowincome cutoff must first satisfy their deductible, copay, and coinsurance requirements. Access to care for people who fall into the full-coverage zone is a key concern of reformers who favor a single-payer approach. The cost-sharing zone comprises people who are healthy and/or wealthy enough that they do not fully meet their cost-sharing requirements. People in this zone face immediate economic incentives to shop carefully for health care services and to manage their expenses in a prudent manner. Some of them may do so by paying out of pocket, others may pay from health savings accounts, and still others may buy supplemental insurance or join health care sharing organizations. These incentives and mechanisms play an important role in market-based reform strategies. Figure 4: Coverage Zones The relative sizes of the two zones and the location of the borders between them depend on the values assigned to the various UCC parameters. The next section examines some of the considerations that go into deciding how those parameters should be set.

https://journals.plos.org/plosmedicine/article?id=10.1371/journal.pmed.1003013