Senate Democrats are taking advantage of Republican disorganization on health care to push a single-payer platform, and the Dems seem excited about the momentum they’ve gained. The main proposal comes from Senator Bernie Sanders (I-VT) and is formatted as a “Medicare for All” policy that essentially eliminates private insurance, replacing it with federally provided and paid-for coverage.
Critics like Sanders have long bemoaned the “capitalist” health care system in the United States as proof that we need a single-payer system and more government involvement in health care. What Sanders’s proposal is missing (in addition to information on what it would cost or how it would be paid for) is an understanding of how government policies since the 1940s have contributed to escalating costs of care. Without revamping the fundamental way the US government invests in health care, a Medicare for All plan is the equivalent of sticking a Band-Aid on a gunshot wound.
While there are lots of reasons for our expensive and relatively low-quality health care and lots of great discussions of them, I’m going to focus this short blog post on just one way government contributes to costs: for years, the federal government has aimed most of its investments at centralized care in hospitals. The effects of this investment choice have been profound.

How Primary Care Got Squeezed Out of US Health Care

Since the Hill-Burton Act of 1946, government has encouraged the centralization of care in hospitals by funding new hospitals throughout the United States while tightly regulating those investments, including requiring hospitals to provide free or low-cost care. The unrecognized side effect of a laudable goal is that by pumping money into centralized care, the government, through policies like certificate of need (CON) laws, squeezed out other competitors like community-based health care providers and primary care physicians, to the point where we now face a crisis of primary care in this country. Americans are sicker than their counterparts in other developed countries in part because the government decided long ago to prioritize acute and crisis care over primary care.
The government further sought to protect its investments in hospitals through the reimbursement policies of both Medicare and Medicaid. These policies privilege the high-intensity medical care provided in hospitals while failing to reimburse for low-tech, high-touch care that can prevent hospitalizations in the first place.
As just one example, Medicare pays doctors much less for communicating with patients and coordinating care than it pays for doing surgery. Yet the former is critical to managing chronic conditions and preventing the acute outcomes that lead to expensive medical crises. As of 2014, 23% of Medicare funding went to inpatient hospital stays, with very little going to the home care and other kinds of primary care that could keep people out of hospitals.

What Bernie Sanders’s Single-Payer Health Care Proposal Overlooks

The American Academy of Family Physicians has argued that Medicare’s inadequate reimbursement rates for primary care actively harm patients and escalate costs, since more patients end up in hospitals as a result. While the current political debate centers on how to insure very sick people, no one is paying attention to the fact that current US insurance programs like Medicare and Medicaid already fail these very sick people by denying them the high-quality, low-cost care that could keep them healthier and prevent the medical crises that burden the entire system.

Since the 1940s, hospitals have grown in both economic force and political clout.

Since the 1940s, hospitals have grown in both economic force and political clout. Lobbying expenditures by the American Hospital Association (AHA) have gone up like clockwork every year since the late 1990s, largely because hospitals have a lot to gain and a lot to lose from various reforms. The AHA is currently the third largest health care lobbying organization after the American Medical Association and the Pharmaceutical Research and Manufacturers of America.
Don’t get me wrong. Hospitals are wonderful places to be if you’ve been in a car accident or have appendicitis. They are not great places to be if you’re giving birth, dying of old age, or have a chronic condition to treat and manage. And yet they are where most Americans end up to do precisely these things. And we do these things in hospitals because government policies have made hospitals the only places to do them.

Why Single-Payer Health Care Won’t Solve Our Crisis

It is no accident that the current political debate over health care reform talks about almost none of these issues. Instead, the focus is on getting people into insurance exchanges or covered under Medicare so that we can keep spending far more money than any comparable country on health care.

Government policies themselves have actually made us sicker.
What we need to be focusing on is how government policies themselves have actually made us sicker by emphasizing acute and crisis care at the expense of high-quality primary care. We also need to focus on the ways in which government policies have privileged the most expensive kinds of care over lower-cost but higher-quality care. And in discussing these failures, we need to be clear-eyed about how any of this would change under a single-payer system. If the government is making these mistakes now and has been since the 1940s, why do we believe it will change if it gains total control?
Any true health care reform will need to reintroduce competition into the health care field. Not the cutthroat strawman of competition that single-payer advocates have created, but competition that provides people with options for their care, that permits experimentation in new ways of thinking about and providing health care, and that challenges the health care structures put in place in the 1940s and allows us to innovate for a truly 21st-century health care system. Getting more people into a dysfunctional system will do little to address why health care in the United States fails so many people in the first place.