Question

Some politicians have proposed that the U.S. implement a “single payer” healthcare system. Please provide brief (non-political) answers to Parts A, B, and C.

1. Identify ONE economic argument in favor of this type of system

2. Explain why this system could lead to the over-consumption of medical services

3. Identify two reasons why this system could lead to the under-consumption of (necessary) medical services.

Answer 1

A) Under a single-payer healthcare system, everyone receives medical coverage regardless of their ability to pay. The government is the only one paying for the coverage provided to these people, and the money for this is obtained through taxing. In this system, the term single-payer refers to the government. Tn Single-payer systems , the govt may have contracts for healthcare services with private organizations or may own and employ healthcare resources and workers

A universal care system would reduce administrative costs by expanding economies of scale,cutting insurance companies' marketing costs and profits from national health care bill. Businesses also would reduce the costs of administering health care benefit programs

B) Overuse, which is defined as the provision of medical services that are more likely to cause harm than good, is a problem to be looked at. Overuse of health care, particularly that involving expensive new technologies and drugs is likely to occur under the single healthcare system.Additional monitoring of access and quality would be needed and would require additional administrative spending.  Overuse of unneeded services can harm patients physically and psychologically, and can harm health systems by wasting resources which could be used for other services.

C) Underuse—the failure to use effective and affordable medical interventions. Those with high incomes would likely continue to pay out of pocket to receive some care on terms they are more satisfied with than those of a uniform government health care system. The more this occurs, the more problems it would create on supply in the government system. In simpler terms , if more people can support themselves on private-paying patients, fewer people would provide care under the single-payer system. This would lead to inadequate supply of services under this system and thus underconsumption of medical services.

Underuse can be seen in form of :
inadequate access, health system failures, medical professionals  being unaware or unskilled to provide required interventions, and patients not accessing or declining them. Single-payer health insurance would also lead to rationing and long waiting lists for medical services.and thus people will start looking for alternatives . Thus again leading to under-consumption of medical services in this system