1-21-14 – Is single payer health care necessary?

In pushing Vermont toward a single payer healthcare system, Governor Shumlin and many others seem to equate universal health insurance with a single payer system.  In their view, all of the other developed/industrialized countries provide universal insurance coverage, and we need a single payer system to provide universal coverage as well.  My purpose here is simple:  Vermonters should be aware that universal health insurance does not require a single payer approach.

As described in the blog True Cost, there are three approaches used by thirty-two developed nations to provide universal coverage [1]:

Single Payer: The government provides insurance for all residents (or citizens) and pays all health care expenses except for copays and coinsurance. Providers may be public, private, or a combination of both.  Sixteen of the nations use some variation of this approach:  Bahrain, Brunei, Canada, Cyprus, Finland, Iceland, Italy, Japan, Kuwait, Norway, Portugal, Slovenia, Spain, Sweden, United Arab Emirates, and United Kingdom.

Two-Tier: The government provides or mandates catastrophic or minimum insurance coverage for all residents (or citizens), while allowing the purchase of additional voluntary insurance or fee-for-service care when desired. In Singapore all residents receive a catastrophic policy from the government coupled with a health savings account that they use to pay for routine care. In other countries like Ireland and Israel, the government provides a core policy which the majority of the population supplements with private insurance.  Nine nations employ some variation of two-tier; the remaining six are Australia, Denmark, France, Hong Kong, Netherlands, and New Zealand.

Insurance Mandate: The government mandates that all citizens purchase insurance, whether from private, public, or non-profit insurers. In some cases the insurer list is quite restrictive, while in others a healthy private market for insurance is simply regulated and standardized by the government. In this kind of system insurers are barred from rejecting sick individuals, and individuals are required to purchase insurance, in order to prevent typical health care market failures from arising.  Seven nations use this approach:  Austria, Belgium, Germany, Greece, Luxembourg, South Korea, and Switzerland.

Of these thirty-two nations then, half utilize single payer, and half use either a two-tier or an insurance mandate approach to providing universal insurance coverage.

The other often-used argument for single payer is that it will result in significant cost savings.  Consider the following comparison of health care spending per capita for thirteen industrialized nations with universal health insurance, plus the United States, from International Profiles of Health Care Systems, 2013 [2]:

Country Type of Health Care System

Health Care Spending per Capita, 2011


Single Payer

New Zealand



Single Payer

United Kingdom

Single Payer




Single Payer






Insurance Mandate


Single Payer




Insurance Mandate


Single Payer

United Statesb



Note: The nations at the top and bottom of this list, Italy and Norway respectively, both have single payer systems.

a2010 data

bIncluded for comparison

Of these thirteen nations, seven of them have either a two-tier or insurance mandate health care system.  Clearly, single payer is not the only approach to controlling health care spending.

Advocates for single payer would like us to believe that it is the “only game in town” for providing universal, affordable health coverage.  Vermonters should challenge both the Governor and the Legislature to objectively examine all universal health care solutions that will meet the needs of Vermonters.  Vermonters deserve health care reform without a single payer bias.

[1] http://truecostblog.com/2009/08/09/countries-with-universal-healthcare-by-date (accessed 1/18/2014).

[2] http://www.commonwealthfund.org/~/media/Files/Publications/Fund%20Report/2013/Nov/1717_Thomson_intl_profiles_hlt_care_sys_2013_v2.pdf (accessed 1/18/2014).


Posted by Richard Jesse of Essex, Vermont

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