THE CASE FOR A SINGLE-PAYER SYSTEM by Ole J. Thienhaus,M.D. , M.B.A.

Our system for delivering health care services is failing, because the health care financing system is fragmented. It is time to replace the existing system , not just fix it. Any change must include mental health care and bring it into the mainstream of health care.

Resources are limited. The quality of health care, access to it, and cost containment cannot all be maximized simultaneously. If we want to achieve and maintain high-quality services and operate within a set budget, we must manage access. Not everyone can have access to every service at every time at the expense of the insured community.

A single-payer system aims to manage access by using professional medical criteria. Physicians and other health care professionals act as the decision makers, deciding whether an individual suffers from a condition for which effective treatment is available. Cost will be contained through prospective enforceable budgeting.

There are three parties to transactions in the health care market; consumers, providers. and payers. It has been argued that health care cost rise because consumers do not directly pay for the product - "health care". But the health care market is not subject to the economic laws of perfect competition. Nevertheless, health insurance currently relies on demand-side constraints on patients’ utilization of health care services. Deductibles and copayments reduce demand by increasing the cost of care to individual consumers.

Unfortunately, demand-side disincentives reduce access to necessary as well as elective care.

The single-payer system replaces demand-side constraints with mechanisms for setting and enforcing an overall health care budget. In other words, utilization management will focus on the supply side of the global transaction.

Over the past decade, the trend toward proprietary ownership of insurance and delivery systems has accelerated. Investor-owned managed behavioral health firms currently control access to more than 100 million lives. The success of parity bills in federal and state legislatures reflects a growing political awareness of the importance of mental health care.

How is a single-payer system funded? First of all, the irrational tie between employment and health insurance coverage is terminated. Instead, the system is financed with taxes specifically earmarked for health care. All funding is held in a health care trust fund. This revenue replaces the current expensive patchwork of health insurance premiums, Medicare tax assessments, VA allocations, etc. The health care trust fund supports an annual global federal health care budget. The federal government then allocates funds to the states according to actuarially predicted health care needs. The state subdivides this allocation into its components, one of which is mental health care services. Next, the state allocates portions the global mental health budget to institutions, community programs, and the fee-for-service sector. This may sound complicated. yet it is precisely what HMOs do now except that HMO funds come from subscriber premiums, not from the federal government.

Savings will accrue as a result of administrative-cost streamlining, separating capital budgeting from operations, and from the federal government’s monopsonistic purchasing power. For instance, as a bulk purchaser of medications, the single payer can save on pharmacy costs by negotiating price discounts for consumers.

The proposed program provides access to diagnostic assessment, selected psychotherapies, and biological therapies along a continuum, aimed at maximizing ability to live independently, work productively, and contribute to family and community. The single payer system pays for all care, allocating funding among services to optimize patient outcomes.

A National board of mental health experts will determine the mental health component of the benefits package. Part of this task is to identify services that are unnecessary or ineffective, so that the plan can exclude these from coverage.

Treatment options outside the universal health plan will remain open to people who want to make individual investments in a particular plan outside the guide-lines of the single payer system. This would permit people to pursue and individual psychoanalysis or seek counseling for divorce related distress, etc.

The single-payer system would improve access and would offer patients and clinicians more choices than alternative proposals. Even so, a single-payer system is obviously not a panacea. Rather, it tries to offer the most ethical solution in the endeavor to reconcile the conflicting goals of ensuring high quality, containing costs, and optimizing access. ( Psychiatric News. Jan. 21, 2000, page 17)