Terry McLaughlin: Single-payer health care could bankrupt California | TheUnion.com
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Terry McLaughlin: Single-payer health care could bankrupt California

Senate Bill 562 recently passed the California Senate Health committee. SB562 would establish a publicly run single-payer system of health care that would cover all 38 million Californians, including its undocumented residents.

The state would pay for inpatient and outpatient care, emergency services, dental, vision, mental health and nursing home care. Democrats and Republicans alike signaled unease with the major question of how this program would be paid for, particularly when the State Appropriations Committee released a report estimating SB562’s price tag at $400 billion a year — more than double the state’s entire projected $180 billion annual budget.

The appropriations committee explained that about $200 billion would be covered by existing federal, state and local health-care funding. However, that funding is based heavily on the ability to divert funds from Medicare and Medicaid, and it is not clear that the federal government would grant the waivers necessary to do that. Even if it did, a $200 billion hole remains to be covered by California’s taxpayers.



And even if the $100 to $150 billion currently spent by employers on health benefits each year could be used to help offset total costs, the committee still estimates a shortfall of $50 to $100 billion. Every single year. Obtaining these funds would require massive job-crushing tax increases on everyone across the board. One suggestion of the committee to bridge this gap is a 15 percent payroll tax — on top of the current 13 percent state income tax.

There is no question that America’s health-care system has ample flaws requiring reform, but they are associated with cost, not outcomes.

Many of the European nations often cited by supporters as models for the United States to follow impose staggeringly high payroll taxes on their citizens, in addition to double-digit consumption taxes (like valued added taxes). Scott Atlas, M.D., a senior fellow at the Hoover Institute has reported that, as their public systems falter, a number of those European nations are now moving back toward privatization.




“About six million Brits now buy private health insurance … More than 50,000 Brits travel out of the country per year and spend $250 million to receive medical care due to lack of access,” he said. “About 250,000 now choose to pay for private treatment out-of-pocket each year — even though they are already paying for their NHS insurance.”

The socialized-medicine model is struggling elsewhere in Europe as well, according to Atlas’ study. In Sweden, often heralded as the paradigm of a successful welfare state, “the Swedish government has aggressively introduced private market forces into health care to improve access, quality and choices. Once entirely public, over a quarter of Swedish primary care clinics are now run by the private sector … Despite the fact that an average Swedish family already pays nearly $20,000 annually in taxes toward healthcare, according to Swedish economist Per Bylund, about 12 percent of working adults bought private insurance in 2014, a number that increased by 67 percent in five years … Half a million Swedes now use private insurance … even though they are already ‘guaranteed’ public health care.”

In 2014, Vermont was heralded as the beacon for a single-payer healthcare system in America with the enactment of a bill establishing the nation’s first single-payer program. But reality hit when Gov. Peter Shumlin released a financial report showing the cost of the program would nearly double the size of the state’s budget in the first year alone, and would require large tax increases for all residents and businesses. Shumlin, a Democrat and long-time advocate for single-pay, opted to not seek funding for the law, effectively tabling the program. Said Jack Mozloom, spokesman for the National Federation of Independent Businesses: “If cobalt blue Vermont couldn’t find a way to make single-payer happen, then it’s very unlikely any other state will.”

And should they? A recurring argument for a single-payer system is America’s supposedly poor outcomes relative to other developed nations, based largely on a 2000 World Health Organization study ranking U.S. life expectancy at 42nd worldwide. Further analysis reveals the perceived crisis to be false, as evidenced by economists Robert Ohsfeldt and John Schneider. In “The Business of Health” the authors demonstrated that the life expectancy rate cited by WHO included immediate deaths from murder or fatal accidents, which no healthcare system could prevent. They set out to determine where the U.S. would rank in life expectancy among developed nations if homicides and accidents were factored out. The data showed that the answer was first place.

Another point frequently cited as an indictment of U.S. health care is a high infant mortality rate. In most developed nations, premature births are immediately recorded as miscarriages or stillbirths. Doctors in the United States more often go to extraordinary lengths to save these at-risk infants. Those efforts often fail, and the recording of those deaths becomes a misleading statistic when juxtaposed against the lives healthcare providers from other nations may not attempt to save, and do not record as “live births.” When births before 24 weeks of gestation were excluded by the CDC, the American infant-mortality rate fell from 6.1 deaths per 1,000 live births to 4.2, a number which is comparable to the rest of the developed world.

There is no question that America’s health-care system has ample flaws requiring reform, but they are associated with cost, not outcomes. Simply shoving more taxpayer dollars at the problem will only exacerbate its appetite for more, and bankrupt California in the bargain.

Terry McLaughlin, who lives in Nevada City, writes a twice monthly column for The Union. Write to her at terrymclaughlin2016@gmail.com.


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