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October 16, 2006

single-payer and democracy

(On my way to Chicago for Campus Compact's 20th Anniversary.) On Friday, I heard a good paper by David DeGrazia, who argued for a single-payer health insurance system. Everyone would be insured by the federal government. Healthcare providers would be private companies, but the government would be the only "payer."

I generally favor this approach, but I asked a devil's advocate question--just to provoke discussion--and ended by convincing myself that single-payer would pose serious risks.

What would the government pay for, and how would it set prices? If it paid too much, it would waste taxpayers' money. If it paid too little, services would be inadequate. And if it paid for the wrong things, it would waste money and provide bad services.

The procedural answer is that the government would negotiate with representatives of physicians, nurses, hospitals, and pharmaceutical companies to set prices. In principle, the government would represent us, the people, and would set prices in the public interest. But no government represents "the people" in an unproblematic way. Campaign contributions, professional lobbying efforts, differences in seniority among legislators, gaps in voter participation by class, asymmetries in information, differences between swing districts and safe seats, clashes between local and national interests, incumbents' advantages, organized interests versus general interests, threats to withdraw capital, human ties between lobbyists and officials, prospects of corporate jobs for former public servants--all these factors distort decisions by democratic governments.

Thus I can easily imagine that negotiations between Big Government and Big Medicine would produce excessive payments and bad priorities. Huge hospitals would be built in favored congressional districts, but there would be inadequate preventive care for weak political constituencies, such as the urban poor. Health care would be like defense--lavishly funded, but with striking gaps. Just as we have stealth bombers but not enough body-armor, so we'd have sweetheart deals for Eli Lilly and Co but not enough pediatricians in poor neighborhoods.

This nightmare scenario has not beset Medicare, which is a single-payer system for those over 65. But Medicare sets prices based on market signals. If there were one "payer" for all medicine, there would be no market. Besides, the new Medicare drug benefit is a nightmare.

Probably single-payer wouldn't be worse than the status quo. We spend more in taxes on health care than the Germans or the French do, yet we must also buy private insurance; and so many people are left uncovered that our health outcomes are poor. All that is true, yet I can easily imagine single-payer evolving into a giant duopoly (government plus medicine) that worked only for those interests. Any advantages over the status quo would be modest, at best.

Since "civic engagement" is my hobby-horse, I'm tempted to say that we need single-payer health care along with a more participatory democracy. Higher turnout, more competitive districts, better informed voters, a revived watchdog press, and procedural innovations such as Citizen's Juries or Deliberative Polls would help. (Citizens would be randomly selected to set priorities after deliberating.) Maybe community groups could build clinics and hospitals that would enter the negotiations representing genuine grassroots interests.

But civic engagement is quite weak in the United States, and strengthening it is a hard struggle. We democrats can't "assume" better public participation any more than economists can assume perfect information or efficient markets. Assigning a huge new responsibility to the public sector might stimulate democratic participation. Or it might overwhelm the public's capacity for self-government, given the civic institutions and habits we have today.

Posted by peterlevine at October 16, 2006 07:37 AM

Comments

Eli Lilly 10% profit rise is nearly all from Psyche drugs including zyprexa.

How have they schemed to squeeze more money from their zyprexa cash cow when pill production has actually gone down?

ANS-Eli Lilly profiteers have jacked up the price of zyprexa to the federal govt,from the Medicare D payouts.

Eli Lilly is a big drug company that puts profits over patients.

They covered up findings that their Zyprexa has a TEN times greater risk of causing type 2 diabetes

Only 9% of Americans trust big pharma,right around the same rating as tobacco companies.

Daniel Haszard Eli Lilly zyprexa drug caused my diabetes www.zyprexa-victims.com

Posted by: DannyHaszard [TypeKey Profile Page] at October 20, 2006 02:41 PM

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