Health Insurance Reform Lingo

Health Care Reform Debate: Single Payer, Multi-Party Payer

Oct 7, 2009

However the complex health care insurance, access and cost crises are managed in coming years, one thing seems clear for the short term: Americans won't have single-payer

The more things change, the more they stay the same. Americans hoping for a fundamental overhaul of the U.S. health care system have discovered that seismic shifts, in politics at least, come slowly.

What is a Single Payer Health Care System

Single payer may be one of the most abused and misunderstood terms of the 2009 health reform debate.

Single payer refers to a system in which there is one central entity that pays the medical bills. The Canadian health care system is an example of this. In single payer systems, doctors operate in the private sector (mostly in non-profit entities) but receive payment on a fee-for service basis, and are paid according to government-established standards. One goal of a single payer system is to control costs. Another is to provide universal coverage.

However, confusion arises when people incorrectly equate single payer with “socialized medicine.” Under socialized medicine, all doctors and health care providers work for the state. This was the case, for instance, with the now-defunct National Health Service in Britain in the 1970s.

Multi-Payer Health Care System

Of course, there are problems with a so-called multi-payer system, in which different sectors pay for direct kinds of health care for different people. First of all, it's confusing to consumers, as anyone knows who has tried to figure out how to get the most bang for the buck through Medicare (government) and supplemental Medicare plans, or who has tried to compare various health insurance packages. And, a multi-payer system has inherent inefficiencies, because every organization duplicates back office functions, such as billing, data base management, consumer education and so on. Third, because there's no single entity in charge, some people just won't get well served - often, those at the bottom rung of the socio-economic ladder.

To understand the health care reform debate of 2009-2010, it's important to understand what everyone's talking about. Words such as "public option," "moral hazard" and"mandates" may be complicated and a tad technical. But, the reality of the U.S. health care system is that reform - or its failure - will impact all Americans.

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