Single Payer ‘Hands Down’ the Best Way to Solve High Healthcare Costs, Advocate Says

In this series, MedPage Today is asking healthcare economists and policy experts the same questions about the high costs of U.S. healthcare. They’ll reveal what they believe is working, what’s not working, and what else can be done to bring costs down.

In this interview, Robert Weissman, co-president of Public Citizen, an advocacy group that works extensively on healthcare, explains why he believes moving to a single-payer system is the only way to reduce healthcare costs in the U.S.

An edited transcript of the conversation follows.

What has been the greatest contributor to high healthcare costs in the U.S.?

Weissman: The thing that raises healthcare costs in the United States above competitor nations more than anything is the massive administrative waste that’s due to a multi-payer private system. There’s also a huge amount of profit-taking by the insurance companies, by drug companies, and by for-profit hospitals and private equity. The thing that’s driving the growth is increasing use of technology and increasing profit extraction in particular sectors of the healthcare economy.

It’s all kinds of things from too many tests, too many monitors, and of course, increasingly expensive pharmaceutical products that may not be any more expensive to manufacture, to do R&D [research and development] on, but where the drug companies are charging 10 times what they would have charged not too many years ago.

Has physician pay contributed to high costs?

Weissman: The biggest problem with physicians is that they spend too much of their time filling out paperwork instead of actually providing care. The amount of money we pay a physician per amount of care they deliver is out of balance because so much of their time is wasted filling out papers for insurance companies.

If they actually could spend 100% of their time delivering care, the salaries might be a little high, but it’s not really that consequential an issue. The real issue when it comes to physicians is the real issue when it comes to the healthcare system, which is the massive bureaucracy that private insurance imposes.

Have administrative costs contributed to high costs?

Weissman: Yeah, administrative costs are the thing that distinguishes the United States from other countries, along with our unwillingness to make sure that everybody receives care. People should understand … that the administrative costs are massive and built-in because of the private insurance system. The administrative costs in the private sector versus the administrative costs in the public sector where we have a single payer-like plan, Medicare, it’s almost 10 times more.

So those are avoidable and preventable and could be eliminated with policy choices. But for right now, we’re spending massive dollar amounts and massive time amounts on filling out paperwork, which is often not about even providing care, it’s about denying care.

What is the best solution you’ve heard for lowering the cost of healthcare?

Weissman: The best solution, hands down, is a Medicare-for-all system. First off, it would eliminate all this paperwork. You’re wiping out about 20% of the cost in the system, which is all devoted to needless waste. Nothing else can come close to that.

Then with a single payer, you have the ability to drive other kinds of efficiencies. Once you have a single payer, you’re going to solve the problem of excessive drug pricing, because the single payer is going to refuse to be ripped off the way Americans are now being ripped off. Whether it’s through a system of fair negotiations with the drug companies or other arrangements that are going to force the companies to lower prices, I think we would reasonably expect to see prices come down by half or more.

You actually have the ability to do surveillance in a way that we don’t now and to identify all kinds of efficiencies. And also to take examples of where there are successful micro-programs and nationalize them, because you have a single payer that would organize some rationality into a system that delivers high-quality care for a few, but it’s really pretty low quality for most Americans.

The next question is specifically about single payer and we know how you feel about that, so instead I’ll ask, do you see any issues with access to care under a single payer?

Weissman: No, the problem we have right now is massive limitations on access to care. We’ve got 30 million or more Americans who don’t have insurance and a larger number who are underinsured. We have huge numbers of Americans who don’t go to the doctor, like one in five, because the cost is too high or they’re worried about what happens if they do go in and they’re stuck with more bills.

Depending on what survey you look at, one in four, up to one in three Americans don’t take their prescription drugs because the price is too high. So we have a massive access problem right now. What single payer does is change the paradigm altogether. It says everyone has access to healthcare as a matter of right, not based on your ability to pay. So we solve that problem.

Am I worried about issues that are alleged to occur in Canada with delays? Well, we actually have delays here and the worst delays — people who can’t get care at all. So no, I’m not. Of course you need to fund the system adequately so that you have enough people to provide enough care to all Americans. But there’s no reason we can’t do that without spending a single dollar more than we currently do on healthcare.

Would greater transparency in pricing help bring down costs?

Weissman: Not so much. I mean, obviously transparency in pricing is a good thing. On the margins, it may help individuals or individual payers avoid getting ripped off in the worst way. And it is no question that players throughout the healthcare system hide prices as a way to impose higher prices. But those are problems really on the margin.

So yeah, it’d make a marginal difference and we should have transparency, but it’s not a solution. The solutions we need have to be much more systemic than transparency. At the end of the day, again, while I’m for it, it’s a little bit of a red herring because the companies can live quite fine with transparency and still impose the massive costs they do on us.

Will artificial intelligence (AI) be able to help control costs?

Weissman: I think what we’ve seen overall in healthcare and elsewhere is that the benefits of AI are being massively overhyped. Maybe it will over time deliver meaningful benefits. I think probably the greater hope is for new AI-generated innovation.

Whether we’re gonna have AI replacing care, basically just replacing humans and making care better and more efficient, there’s not a lot of evidence. In fact, there’s almost none to suggest that’s coming anytime soon.

And across the economy, for all this massive investment in AI, there’s some contrary evidence, but the best evidence suggests we’re not seeing productivity increases. And if we’re not seeing it in the office space, you should be very skeptical that it’s going to happen in the hospital or doctor office.

Other Interviews in This Series:

Price Controls ‘Inevitable’ in U.S. Healthcare, Economist Says

Hospital Prices Drive High Healthcare Costs, Economist Says