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Beyond Obamacare: How A Single Payer System Can Save Health Care in the U.S.

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    By Physicians For A National Health Care Plan

    Published on April 15 at Physicians For a National Health Care Plan

    Unlike Medicare, which President Johnson had up and running eleven months after passage, the Obama administration cynically delayed the full effect of its “Affordable Care Act” also called Obamacare, till 2016, when he would be leaving office because they know it won't come near to keeping the promises they made for it. But there's still a way to provide affordable quality care to everybody --- single payer.

    How a single-payer system can save health care in the United States

    By Dave Dvorak, M.D., M.P.H.
    Minnesota Medicine, April 2013

    As Minnesota’s physicians, health care leaders and legislators grapple with the complex changes brought by the Affordable Care Act (ACA), many are concerned that even after the law is fully implemented, hundreds of thousands of people will remain uninsured while health care costs continue to spiral.

    What if there were a simple, streamlined solution that would guarantee health coverage for every Minnesotan while saving the state billions of dollars? A growing number of Minnesota physicians are endorsing what they consider to be such a solution: single-payer health care. Weary of having to comply with hundreds of different insurance plans’ administrative requirements while their patients are denied needed tests and treatments, these physicians are drawn to the simplicity, cost-effectiveness and truly universal coverage offered by a single-payer system.

    Their views were supported by an independent analysis last year demonstrating that with a state-based single-payer system, every Minnesotan could have comprehensive coverage while the state would save billions annually.[1]

    A deeply flawed system

    The desire for meaningful reform comes in the face of the U.S. health care system’s long-recognized dysfunction. Despite health care accounting for 18 percent of the nation’s economy—twice that of other wealthy democracies—48 million Americans lack health coverage.[2,3] Another 29 million are underinsured, having poor coverage that exposes them to unaffordable out-of-pocket expenses.[4] Health insurance premiums have doubled over the past decade, with the average annual cost for family coverage now exceeding $15,700;[5] and health care costs now account for two-thirds of personal bankruptcy filings in the United States.[6]

    At the root of these problems is the fact that we have a fragmented, highly inefficient system. Employed Americans younger than 65 years of age have job- based insurance, if their employer chose to provide it; the elderly and disabled are covered through Medicare; the poor by Medicaid; military veterans through the Veterans Administration; and American Indians through the Indian Health Service. Persons who do not fall into any of those categories must try to purchase individual coverage in the private market, where it is often prohibitively expensive or unobtainable if they have a pre-existing health condition.

    Owing largely to this fragmentation and inefficiency, a staggering 31 percent of U.S. health care spending goes toward administrative costs, rather than care itself.[7] Inefficiency exists at both the provider and payer level. To care for their patients and get paid for their work, physicians and hospitals must contend with the intricacies of numerous insurance plans—which tests and procedures they cover, which drugs are on their formularies, which providers are in their network. Meanwhile, private health insurance companies divert a considerable share of the premiums they collect toward advertising and marketing, sales teams, underwriters, lobbyists, executive salaries and shareholder profits. The top five private insurers in the United States paid out $12.2 billion in profits to investors in 2009, a year when nearly 3 million Americans lost their health coverage.[8,9]

    The ACA of 2010, known widely as Obamacare, is expected to extend coverage to 32 million more Americans.[10] But it accomplishes this goal primarily by expanding the current fragmented, inefficient system and maintaining the central role of the private insurance industry in providing coverage. As a result, the ACA is expected to do little to rein in health care spending.[11] Furthermore, it will fall far short of achieving universal coverage, as tens of millions of Americans (including 262,000 Minnesotans) will remain uninsured after its full implementation.[1,10]

    The solution

    The central feature of a single-payer health care system would be one health plan that covers all citizens, regardless of their employment status, age, income or health status. Having a public fund that pays for care would slash administrative inefficiencies and eliminate profit-taking by the private insurance industry.

    Under a single-payer system, the way society pays for health care would change, but the market-based health care delivery system would remain. Physicians and hospitals would continue to compete with one another based on service, quality of care and reputation. The chief difference is that they would bill a single entity for their services, rather than numerous insurers.

    Individuals would benefit immensely by having continuous coverage that is decoupled from their employment. This would alleviate “job lock,” in which people remain in undesirable employment situations in order to maintain coverage. In a single-payer system, individuals could choose to see any provider, in contrast to the current system in which choice is restricted to those who are in-network. Deductibles and copays would be minimal or eliminated, removing cost as a barrier to obtaining needed care.

    A single-payer system would be funded through savings on administrative costs, along with modest taxes that would replace the premiums and out-of-pocket expenses currently paid by individuals and businesses. The cost savings to individuals, businesses and government would be considerable. The nonpartisan U.S. General Accounting Office concluded that single- payer health care would save the United States nearly $400 billion per year, enough to cover all of the uninsured.[7,12,13]

    Physician support for a simplified, universal health care system is robust and growing. A 2008 survey published in Annals of Internal Medicine found that 59 percent of physicians supported a national health insurance system—up from 49 percent in 2002.[14] Physicians for a National Health Program, a national organization advocating for single-payer reform, reports a membership of 18,000.[15] In Minnesota, single payer has been formally endorsed by nearly 800 physicians, other providers and medical students.[16]

    The Minnesota model

    Recognizing the implausibility of achieving single-payer reform at the national level in the current political climate, many single-payer advocates have turned their attention to state-level reform. The ACA provides for “state innovation waivers” to be granted beginning in 2017, allowing states to implement creative plans they believe would work best for them. With this in mind, organized single-payer movements have taken root in states as varied as Colorado, Hawaii, Illinois, New York, California, Oregon and Vermont. Vermont’s governor and Legislature passed a law in 2011 setting the path for the state to move toward single payer.[17]

    In Minnesota, two advocacy organizations—Health Care for All Minnesota and the Minnesota chapter of Physicians for a National Health Program—are garnering public support for a single-payer system. Gov. Mark Dayton has expressed support for single payer,[18] and Sen. John Marty (DFL-Roseville) has authored legislation to establish such a system in Minnesota. Known as the Minnesota Health Plan, it would replace the current inefficient patchwork of private and public health plans with a single statewide fund that would cover the health needs of all Minnesotans—inpatient and outpatient services, preventive care, prescription drugs, medical equipment and mental health and dental care.[19] A 2012 study by the Lewin Group confirmed the feasibility of single payer in Minnesota. It concluded that adoption of a single-payer system would provide coverage to every Minnesotan, including the 262,000 left uncovered by the ACA, while saving the state $4 billion in the first year alone.[1] The average Minnesota family would save $1,362 annually in health costs, while the average Minnesota employer that currently provides insurance would realize savings of $1,214 per employee per year. The analysis showed these savings came primarily from administrative simplification; provider compensation remained unchanged.


    With nearly 50 million uninsured people in the United States and skyrocketing health costs, the need for profound reform of our health system could not be more clear. The ACA is a start, but it will fall far short of achieving universal coverage, and it allows unsustainable spending growth to continue. Single-payer health care would eliminate administrative waste and inefficiency, thereby creating an opportunity to achieve truly universal, cost-effective health care.

    Dave Dvorak practices emergency medicine at Fairview Southdale Hospital.


    1. Sheils J, Cole M. Cost and economic impact analysis of a single-payer plan in Minnesota. 2012. Available at: sites/2d9abd3a-10a9-47bf-ba1a-fe315d55be04/ uploads/LEWIN.Final_Report_FINAL_DRAFT.pdf. Accessed February 14, 2013.

    2. The World Bank. Health expenditure, total ( percent of GDP). 2012. Available at: indicator/SH.XPD.TOTL.ZS. Accessed February 14, 2013.

    3. DeNavas-Walt C, Proctor BD, Smith JC. Income, poverty, and health insurance coverage in the United States: 2011. September 2012. Available at: www. Accessed February 14, 2013.

    4. Schoen C, Doty MM, Roberston RH, Collins SR. Affordable Care Act reforms could reduce the number of underinsured by 70 percent. Health Aff. 2011; 30(9):1762-71.

    5. Kaiser Family Foundation. Employer health benefits 2012 annual survey. Available at: http://ehbs.kff. org/?page=charts&id=1&sn=6&ch=2659. Accessed February 14, 2013.

    6. Himmelstein DU, Thorne D, Warren E, et al. Medical bankruptcy in the United States, 2007: results of a national study. Am J Med. 2009. Available at: Bankruptcy-2009.pdf. Accessed February 14, 2013.

    7. Woolhandler S, Campbell T, Himmelstein DU. Costs of health care administration in the United States and Canada. N Engl J Med. 2003;349(8): 768-75.

    8. U.S. Securities and Exchange Filings. 2010.

    9. Health Care for America Now. Health insurers break profit records as 2.7 million Americans lose coverage. 2010. Available at: a9ce29d3038ef8a1e1_dhm6b9q0l.pdf. Accessed February 14, 2013.

    10. Congressional Budget Office. Updated estimates for the insurance coverage provisions of the Affordable Care Act. 2012. Available at: www.cbo. gov/sites/default/files/cbofiles/attachments/03-13-Coverage%20Estimates.pdf. Accessed February 14, 2013.

    11. Keehan SP, Cuckler GA, Sisko AM, et al. National health expenditure projections: modest annual growth until coverage expands and economic growth accelerates. Health Aff. 2012;31(7):1600-12. Available online at: Accessed February 14, 2013.

    12. Woolhandler S. Cutting health costs by reducing the bureaucracy. New York Times. November 20, 2011.

    13. U.S. General Accounting Office. Canadian health insurance: lessons for the United States. June 1991. Available at: pdf. Accessed February 14, 2013.

    14. Carroll AE, Ackerman RT. Support for national health insurance among US physicians: 5 years later. Ann Intern Med. 2008;148(7):566-7.

    15. Physicians for a National Health Program. Available at: Accessed February 14, 2013.

    16. Physicians for a National Health Program Minnesota. Available at: signers.php. Accessed February 14, 2013.

    17. Marcy J. Vermont edges toward single payer health care. Kaiser Health News. October 2, 2011. Available at: stories/2011/october/02/vermont-single-payer-health-care.aspx. Accessed February 14, 2013.

    18. On the Issues. Mark Dayton on health care. Available at: Mark_Dayton_Health_Care.htm. Accessed February 14, 2013.

    19. Campaign for the Minnesota Health Plan. Available at: Accessed February 14, 2013.


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