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What Is a Single Payer Healthcare System?


Updated October 16, 2008

Question: What Is a Single Payer Healthcare System?

A single payer healthcare system is exactly what it sounds like -- healthcare is paid for by only one entity. In all cases across the world where a single payer system has been implemented, that payer is the government.

In conversations about healthcare reform, people often confuse a single payer system with universal healthcare, which instead refers to the fact that every citizen in that system has access to basic healthcare. Universal systems may be a combination of private and publicly funded care.

Examples of single payer systems are found in the United Kingdom and Canada. Some consider these systems to be "socialized healthcare" because all funding comes from the government.

In the United States, Medicare is a single payer system for people age 65 and older. Those who favor a single payer system suggest it would look like Medicare for everyone. They also cite the fact that the total administrative cost for Medicare services is only 3%, whereas private insurance administrative costs may amount to 25% or more.

Most Americans are surprised to learn that many physicians in the United States support a single payer system. In fact, more than 15,000 doctors support an organization called Physicians for a National Health Plan (PNHP) which has actively pursued a single payer system for many years.

The biggest reason these physicians support a single payer system is because the billing aspects of their practices often cost more than the rest of their practice. It's not unusual for a doctor to devote more staff, therefore more expense, to billing than to patient care.

Most opposition to a single-payer system comes from the health insurance companies that would no longer provide the services they now offer, which means to them a reduction in revenue streams and profits.

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