Single-Payer System Would Be a Boon to the Economy, Public Citizen Report Says

New System Would Boost Economy, Reduce Costs and Eliminate Unfair Burdens on Companies That Provide Health Insurance Benefits

WASHINGTON, D.C. – A publicly funded, universal health care system would aid businesses by engendering a more dynamic economy, taming costs and freeing businesses that provide health insurance of the costs of administering benefits and subsidizing the nation’s health care, a Public Citizen report released last week concludes.

“Small businesses have rated the cost of health insurance as their top concern for a quarter century, and large businesses struggle with health care obligations that their international competitors do not have to worry about,” said Taylor Lincoln, research director of Public Citizen’s Congress Watch division and author of the report. “If it weren’t for entrenched partisan alliances, business leaders would have demanded that Congress relieve them of health care burdens long ago.”

Publicly funded universal health care systems – such as the Canadian “single-payer” system, in which the government pays for all covered services – exist in nearly every developed country in the world. In the United States, universal care systems could be implemented either at the federal or state levels. The Affordable Care Act of 2010 includes language permitting states to apply for waivers that would enable them to institute universal care systems beginning in 2017. Vermont has passed legislation declaring an intention to do just that.

Public Citizen’s report, “Severing the Tie That Binds,” outlines three ways a universal health care system would benefit businesses.

First, it would end “job lock” and other economic distortions stemming from our health care financing system that hinder the freedom of individuals to pursue new ventures. Despite common perceptions that the United States is an entrepreneurial bastion, we have among the lowest rates of self-employment and small businesses among industrialized countries, researchers at the Center for Economic and Policy Research reported in 2009.

The researchers hypothesized that the dismal numbers in the United States were due to the high costs that individuals and small businesses here must pay for health care, which those in countries with universal access to health care do not face. By facilitating more entrepreneurship, a universal health care system here would likely boost economic growth, leaving businesses with a larger pool of potential customers.

Second, a universal care system would significantly dampen future increases to health care costs – and perhaps reduce costs – even as it greatly increased access to care. Numerous studies have concluded that the United States spends much more on administrative functions, such as billing and interactions with insurance companies, than other wealthy countries. Meanwhile, pharmaceuticals and procedures in the United States cost much more here than elsewhere.

A universal care system would reduce administrative costs by expanding economies of scale, streamlining processes and cutting insurance companies’ marketing costs and profits from our national health care bill. At the same time, costs for drugs and procedures would be kept in check by increased transparency, as well as increased governmental bargaining power and rate-setting authority.

Third, although a publicly funded, universal care system would likely rely on significant revenue from businesses (such as through a payroll tax), there is reason to believe that total health care-related costs for businesses now providing benefits would decline, in part because a new system would spread costs more fairly.

Businesses that provide health care benefits would no longer have to essentially subsidize those that do not by covering the unreimbursed cost for care provided to the uninsured. Businesses also would be spared the costs of administering health care benefit programs. Meanwhile, funding formulas for universal care may reduce the overall share of national health care costs borne by the business sector by garnering revenue from a broader array of sources.

Elements of the solutions laid out in Public Citizen’s report already exist at the state level or are under consideration. For 35 years, Maryland has set across-the-board rates for hospital care, including care funded by Medicare and Medicaid. This program has saved tens of billions of dollars. In 2014, the scope of Maryland’s program was broadened by establishing overall caps on hospital budgets to counter the economic incentive to provide a greater volume of care. Establishing rate-setting authority and capping overall hospital budgets are hallmarks of the cost-savings mechanisms in universal care systems.

Vermont in 2011 passed legislation that called for it to create a “universal and unified health system” that would take advantage of provisions in the Patient Protection and Affordable Care Act that permit states to apply for waivers to craft their own health care systems beginning in 2017.

“The states might be flying below the radar, but they have a chance to implement solutions that should have widespread appeal,” said Lisa Gilbert, director of the Congress Watch division of Public Citizen. “If businesses leaders allow common sense to guide them, we think they will join the campaign for universal care.”


  1. Patrice Mitsos on April 21, 2014 at 3:17 pm

    Our family has known for 20 years that a single-payer healthcare system is the only way to go. Obama capitulated WAY TOO SOON….he threw out everything before necessary (the public option) in his talks with Rethuglicans a few years back. The current healthcare system, while a touch better than it was beforehand, is still a system run by and for the insurance industry. With a single-payer system, EVERYONE (except those at the poverty level, just like today) pays into it, and EVERYONE benefits with much, much better healthcare.

    • Keith Ensminger on April 21, 2014 at 5:39 pm

      No kidding, and insurance companies took him and us to the cleaner. Insurance companies made sure prices on the CA exchange were the same as off the the exchange. Forget any leveraged discount. In addition, any child in a family that qualifies for a subsidy gets dumped into Medicaid, a completely unwarranted gift to the insurance industry. They can sell a “family” policy, only cover the parents, and the rest of us pick up that tab for the kids when they’re dumped on welfare.

      • CherMoe on April 23, 2014 at 10:36 am

        Believe me, my friend, the “tab” for kids on welfare or people receiving Medicaid is NOTHING compared to what your family pays for the Pentagon, the WARS, the OIL subsidies, the MILITARY INDUSTRIAL COMPLEX that the Republicans are so heavily invested in. Not the mention their TAX CUTS which is more of a way to rob the Middle Class and the poor to shift all of America’s wealth to the very top 1 or 2%. Sorry, but I’d much rather my tax $$$$ go to pay from poor families & kids than to the rich and greedy people who have become DICTATORS and CONTROLLERS of anyone and anything weaker or poorer than themselves. And their WAR ON WOMEN is nothing short of criminal. They are SADISTS!

  2. Jean on April 21, 2014 at 3:18 pm

    single payer is the answer

  3. Jan Howe on April 21, 2014 at 3:33 pm

    Neither the GOP nor the health insurance industry has ever initiated any meaningful reform to improve health care. They react, never lead with new ideas to boost health, expand real access, or keep costs in check.
    Inclusion of insurance companies in American health care as unnecessary brokers adds more expense and waste to the system. The insurance industry would have us believe they are on our side, holding down costs, helping us get more access, etc. Lies to line the pockets of their shareholders or CEOs. If they really could accomplish any of those actions, they would have done it by now.
    Insurance companies add no value to the process because they give no direct care.

  4. Mike Pollock on April 21, 2014 at 10:26 pm

    In New Jersey. Thanks to Christie Medicaid has been privatized and it has been a disaster for the patient. It’s gets worse. On July 1st the Medicaid Waivers that provide extra help for the chronically disabled are also being turned over to The HMOs. In New Jersey things are going in the wrong direction.

  5. Sarah Bundtzen on April 22, 2014 at 5:44 am

    We need single payer so badly, and we have to keep fighting for it. The one thing I worry about going the state by state route is that some of the advantages of a true national single payer system would not be fully realized (for instance, I read that about 1/4 of patients in Vermont are from out of state, so their doctors and hospitals would still be dealing with the administrative work of multiple payers). Still, I hope they succeed in their endeavor, and that others will follow. The ACA is such a mess, leaving most of the uninsured without help.

  6. John "Hai" Knapp on April 22, 2014 at 8:37 pm

    I have long been concerned that our healthcare is eating up our economy, even kind of blamed it (at least partially) for the cause of this bad recession we went through. While still employed at Lester Electrical, a battery charger maufacturer, I wrote this song, The Charger Plant, the Brave White Knight, a healthcare justice song.
    *A-For-Da-Ble Health’ will save our economy,
    *it is in the best interest of everybody.
    *If every job moved out of the country,
    *than (tell me) whose gonna pay the medical fee?

  7. Jeff Joseph on April 23, 2014 at 3:43 pm

    Our country is run by Oligarchs and Plutocrats makes no difference which Party. Red/Blue Fox/MSNBC is all BS. Political parties should be banned just like George Washington said. God help us if Hillary is elected that would complete the Wall ST takeover of our Country. Can you imagine her getting paid $ 200,000 from Goldman Sachs and another $ 200,000 from Citi Group for a one hour speech.

  8. Allan Tweddle on May 5, 2014 at 2:53 pm

    Insurance companies not only do not add any value whatsoever to the healthcare challenges, their profits, and outrageous
    CEO salaries, and their dedication to denying claims is what is keeping this country back in the global competitive marketplace.

    My colleagues and I are moving our manufacturing operations to Ontario, and healthcare is one of the primary driving reasons. The payroll burden differential is 18%!

    So whether you are a supporter or not of the ACA, you better wake up to the fact that by not employing single-payer healthcare, America is losing its competitive position in the world.

    And as a market driven and market sensitive entrepreneur, a business owner, I fanatically believe that healthcare is a human right, and there is no such thing as a healthcare market.