Single Payer Sclerosis

The Economist has an interesting article on innovation in health care (h/t John Goodman) focusing on a dashboard approach to ward by ward performance in an English hospital. While the utilization of the dashboard is an interesting application of real time information management, the real bite of the article is at the end where the inherent difficulties of innovation diffusion in a single payer system is discussed.

Cost Control Is Inevitable

In the United States, the ACA, will succeed in increasing demand but it does not have any significant cost control mechanisms. Sooner or later cost controls will need to be enforced.  As the payment mechanism for US health care becomes increasingly federalized the US system will look increasingly like a single payer system. The UK single payer is system is under significant cost constraints, or austerity measures to use the new buzz phrase. Or, to look at a different single payer system, Canada, where cost controls are implemented through waiting list rationing (see the latest Frasier Institute report). As The Economist points out, innovation is driven by competition, not by government control.

Quality Measures as Constraints

In a single payer system quality measures, once enacted, will ossify. Any attempt to update or change them will result in costs to providers and will inevitably become subject to political pressure. We have often discussed here that the bureaucratization is care is inevitable once federal standards for quality are implemented. Any change to a quality measure will result is some group losing reimbursement. All care will be focussed on meeting a particular measure.

Single Payer Inevitabilty

Whether it takes a couple years or a couple decades, the ACA will lead the United States down the path to a single payer system. Will this result in a better society or in a decrease in innovation that we see in other country’s health care systems?