Episode 4: Introduction to Single Payer

Stacey and Jake are joined by Professor Bill Hsiao.

After listening to Episode 4: Introduction to Single Payer, we hope listeners have a better understanding of Single Payer healthcare systems, what a few look like, and how they are created. Bill will share his experience and knowledge with listeners and introduce the ethics and values behind Single Payer systems and why countries choose to create Single Payer health systems. Medicare For All is a form of Single Payer health system.

A summary of Episode 4: Introduction to Single Payer and additional learnings can be found down below.

Thank you for joining us!

Our Guest

William Hsiao Ph.D.

K.T. Li Research Professor of Economics

Department of Health Policy and Management

Department of Global Health and Population

William Hsiao is the K.T. Li Research Professor of Economics in Department of Health Policy and Management and Department of Global Health and Population, at Harvard T.H. Chan School of Public Health. He received his Ph.D. in Economics from Harvard University. He is also a fully qualified actuary with extensive experience in private and social insurance. Dr. Hsiao’s health economic and policy research program spans across developed and less developed nations.

He is a leading global expert in universal health insurance, which he has studied for more than forty years. He has been actively engaged in designing health system reforms and universal health insurance programs for many countries, including the USA, Taiwan, China, Colombia, Poland, Vietnam, Hong Kong, Sweden, Cyprus, Uganda and most recently for Malaysia and South Africa. He also designed a single payer universal insurance model for the state of Vermont which intended to serve as a vanguard for the USA. Vermont passed a law based on his recommendations. However, the recent set-back in Vermont’s economic development has put the implementation of the single-payer system in question.

To learn more about Professor William Hsiao, please visit the Harvard T.H. Chan Department of Health Policy and Management Faculty page.

Summary

Medicare For All is a form of Single Payer system, but what does a Single Payer system mean and represent?

In this episode, Bill shared that he worked with the Carter Administration to design a single payer health care system (Carter national Health Insurance Plan) and then was invited to work with Taiwan to develop the Taiwanese system. After comparing and learning about health systems from around the world, he determined that a Single Payer system had the greatest merits. In his study of healthcare systems, no other system preformed better than Single Payer.

Looking deeper at Taiwan:

Taiwan has three goals when developing its healthcare system: 1) Universality - every person would receive equal medical treatment, 2) Efficiency - reducing non-medical system waste, and 3) Sustainability - its system has lasted 29 years already.

Taiwan demonstrated that:

1) you can have universality and if the payment system is designed well, people can have equal access to care;

2) it can reduce administrative costs by simplifying payment methods, claims filings and the confusing providers and patients' experience. Taiwanese people do not experience the same list of questions that Americans do, i.e. What is covered or not covered; what forms do I need to fill out and where do I sent them; how much will this cost out of pocket; will insurance cover this procedure, no - why not?; and

3) by creating one uniform clinical and claims record system you can create continuity of care from primary, to specialty care, to hospital care. It reduces paperwork and prevents providers and insurance companies from abusing the system and making a lot of profit.

In 1990, Taiwan's system was the best it could be; however, with anything that ages, Single Payer systems require modifications and improvements. As it ages, you must renew and improve with new knowledge and experience from around the world. Sadly, Taiwan has not kept up with these improvements.

Bill likes to describe Single Payer as a Single Pipe in which one agency is financed and pays providers. This is the ideal form. Currently, providers are paid by numerous insurance companies, patients, and sometimes the State and Federal governments. Within a Single Payer system, providers would be paid by a single agency by a set of uniform rules and procedures that reduce administrative costs, confusion, and challenges. The source of the agency's financing would come through designated taxes which would replace the current financing of healthcare in the U.S. which occurs through a combination of sales taxes, state and federal taxes, income taxes on employees, and employers' taxes and contributions, and individual out-of-pocket contributions.

Bill notes that Sanders and Jayapal proposed the ideal form of Single Payer: universal coverage of Americans; a single source of financing and payment; and expanded services. However, the U.S. already has it's own starting point as we learned in our episodes with Anna and John. It is important to start with what you already have. In the U.S. most likely employers would continue to pay for insurance but through taxes rather than out-of-pocket.