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Single Payer Health Care is NOT Socialized Medicine

Crossposted from

Single Payer health care means that there is one entity that pays for all healthcare.  Typically, it also means that the single payer is also the single entity that collects the money to pay for health care.  Since the early 20th century, the AMA and (later) the health insurance-hospital industry (collectively, the medical-industrial complex) have labeled this form of payment “socialized medicine.”  That is an untruth.


Socialism is when the government owns the means of production–as in, for instance, when the government buys stock in a big insurance company (AIG) or a bank (Citibank) or an auto maker (GM??).  Therefore, “socialized medicine” means that the government owns the hospitals, the doctor offices, and employs the doctors, etc.  As a matter of fact, we have a very large “socialized medicine” entity in theUS now–it is called the Veteran’s Administration.  We have long had other forms of “socialized medicine” such as county, city and state hospitals.  We have clinics run by various governments.  All of these are “socialized medicine.’

In contrast, single payer is similar to Medicare in its original form (before the privatization by Bush.)  In that form, the government collects the money to finance the system and pays it out to the producers (hospitals, doctors, clinics, etc.)  This is the form of health care financing that all of the world’s industrialized nations have in one or another flavor.  The US is the only exception:  we have more than 1200 payers called “health insurance companies.”

Typically, competition is thought to reduce costs.  The problem with our system is that competition among multiple payers in health care does not reduce costs; it increases costs.  The reason is that health care is a very complex product and health insurance to pay for health care adds another layer of complexity.  In other words, it is possible to compare houses, cars, laundry soap. bags of carrots–they are all relatively easy to understand and compare.  In contrast, it is almost impossible to compare health insurance plans.  There is no standardization among plans, each plan has long lists of coverage, each plan has long lists of different doctors, and there is no way to know the underlying prices.  Think about the problems with buying health insurance:  your employer may pay part of the premium and decides who to buy insurance from.  The doctor list from insurer to insurer may vary.  You have no way to know what the insurer pays each doctor.  You really cannot understand the details of what an insurer does and does not cover.  You have no way to find out the hidden restrictions (‘pre-authorization”) that the insurer places on the doctors and hospitals it contracts with.

It’s even worse if you aren’t told by your employer who the company buys insurance from.  When you are on your own, you may have a choice of two, three, ten or a hundred different insurance companies.  Each company will have a list of various plans, each with varying costs and levels of coverage.  Try comparing one to the other–it is a daunting task and unless you are prepared to spend hours and hours, it is impossible for most people.  Even when you can get the information, the  comparison is still not apples to apples.  More like apples to moon rocks.

Because 1200-plus health insurers are competing with each other to get the most and healthiest people in their plan, and are competing to pay the least possible amount to doctors and hospitals, the cost of administering these insurers is inflated far beyond the cost of the medical care they pay for.

Add to that the complexity for hospitals and doctors of dealing with multiple different insurance plans, each with different criteria for payment, many administered by poorly-trained clerks.

The result: we spend 25% of our health insurance dollar on administration.

is the government more efficient?  Yes.  When health insurance is administered by the federal government (Medicare), the administrative cost is 3%.

The potential savings is something like 400-500 billion.  Annually.  That is several times what is needed to pay for a gold-plated Blue Cross plan for every uninsured person in the US.

Dr. Newhall is principle attorney at the Law Firm of Clark Newhall MD JD in Salt Lake City, Utah.  


  1. …as a Brit, the US has the best medicine in the world, and probably the worst health care system.

    The insurance industry is not only massively inefficient, it also – in my experience – does every trick in the book to avoid paying legitimate claims (pre certing etc.) And that’s if you have insurance, which obviously a large minority do not.  

  2. DennyCrane

    Why do you hate America? Why must you liberals continue to try to get health care for people who can’t afford it? If poor people can’t afford health care, well, they better not get sick!

    Believe it or not, one of my co-workers actually believes this.  Pretty incredible, eh? Especially since she wouldn;t be able to afford it on her own either, just like the rest of us.  WE have a lot of work to do if we’re going to educate people on single payer.

  3. HappyinVT

    contained within this diary, I have a few questions.  🙂

    1) would there be uniform coverage for everyone or would it be graduated based on income (or some other method)?

    2) who actually administers the program?

    3) what would happen to the insurance companies?  (a curious question, not based on any intense compassion for the blood sucking pigs)

    Is there a reliable source for any other questions I may come up with?


  4. What is socialized medicine?  What is Universal Healthcare?  I don’t think most people (including me) know.

    I’ve wandered back and forth on this issue, as some of you are familiar with.  Having lived in Canada several times I appreciate the ubiquitous coverage, but I recognize that it comes at a price.  Is Canadian healthcare classified as Socialized, and is it what we are pushing for here?  From the definition above I would think that Canadian healthcare is socialized: the government controls all aspects of healthcare, from how many people are allowed into medical school to where and what kind of facilities are permitted to exist.  I honestly don’t know if the gov’t actually owns the hospitals, but it would be hard to imagine how that would change anything if they don’t.

    I would love to hear what we are proposing here to provide Universal Healthcare (if in fact there is a single proposal of any sort).  Specifically:

    o  Are people looking for Socialized, by Dr. Newhall’s definition, or Universal Health Insurance?

    o  Would it be single-tier, disallowing private healthcare (such as smileycreek and Mr. Creek)?

    o  How much control of wages are we proposing, if any?

    o  If we are prosing to control drug prices, does that affect the ability of pharmaceuticals to spend on research?

    The system in the US is at best “non-optimal”, at worst it is tragic.  The horror stories of bankruptcy and denied coverage go on all day, and if anyone else has ever figured out how to comparison shop effectively for insurance they’re better folks than I.  As Brit said, we have “the best medicine in the world, and probably the worst health care system”.  I think I speak for a fair number of fence-sitters who are concerned that we could lose the “best medicine” by fixing the “worst health care”.  If we had a succinct explanation of how we keep the first while fixing the second we might be able to get more of a mandate behind it.

    Thanks for posting this, Dr. Newhall.  And welcome to the Moose!


  5. as a recipient of “socialized” medicine (and the fact that anyone really cares about the semantics illustrates the number that special interests has done to this issue in the US) i can tell you that this domestic american issue is near and dear to my heart.

    a couple of other things – as someone asked above – i have third-party health insurance above and beyond (provided by my employer) that covers hospital stays, drug plan, dentist visits, ambulatory care, etc.  and the insurance companies in canada are doing just fine.

    also – i would like to share a personal story that sort of puts an exclamation point on the differences in our two systems.  a few years ago i was going to LA to meet up with my mom.  prior to my departure my ma called me asking if i could spring by the pharmacy and pick up a prescription for a bladder infection to bring to her.  she simply called her doctor, he called it in and i picked it up.

    anyhoo – i stupidly (lesson people, lesson) packed the drugs in my checked in luggage – and lo and behold – they lost my bag.

    upon hearing this news my mom (who now days later – couldnt wait any longer) decided to go to the ER.  so off we went to cedars sinai.  stunned, we arrived to the fanciest hospital we had ever seen…  marble and no wait!  ushered in – to a canadian nurse (of course) we patiently waited for the dr.  a few minutes (gasp!) later the dr. came in and my mom explained the situation, the doctor listened, pulled out his little pad – and wrote the prescription – never laying a finger on her.

    we left and were ushered into a cashier(!) where we were charged $400 for this visit.  shaking our heads, while glad we paid for our US travel medical insurance – we both waxed poetic about how glad we were to have our health care system.

    clark, i have also heard from a few friends who are doctors here – that the days of making big $ are over for doctors in the US and that you can now do better in canada.  is this true?

  6. anna shane

    those who know, already know. Those who won’t probably think anything that profits someone who isn’t them is socialization.  I have a pug friend who’s wife was in a coma for fifteen years, paid for by medicare, but he’s against single payer and he doesn’t believe in paying taxes. When his hand is out, it’s all very cool, but someone else, they’re just lazy bloodsuckers trying to spend his money (which he keeps rather than pays out in taxes).  Good try though.  

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