A Central Payer for the American Health Care System: Financing

Presuming that over the coming election cycles we choose candidates who place common sense over ideology, civil service over serving corporate masters and who therefore get their politics right, I am hopeful that they will arrive at a structure for our American health care system which resembles the structure I have drawn above. Please see my two previous posts for a general explanation of this figure and how it should be created:



How do we finance a 2 trillion dollar health care fund which I say should pay for everyone’s entire health care bill without the need for deductibles, co-pays, cash out of pocket at the place of service, insurance premiums, health savings accounts or any other business derived dollar garnering mechanisms? Is 2 trillion dollars annually enough? I have a reference, which states that health care spending in 2012 increased 3.7% to 2.8 trillion dollars ($8,915 per person).


My feeling about these figures is this: If you can’t run the American health care system with an annual budget of 2 trillion dollars, there is something wrong with you. I believe I could. Actually, I believe I could do it for significantly less than 2 trillion dollars while keeping all the necessary health care businesses very profitable and while leaving the doctorpatient relationship alone to do its work.

What are my specific ideas for financing? I have discussed this at length in my first health care book, Equal Health Care For All.   http://equalhealthcare.org/books/  However, since the publication of this book in 2007, my thinking regarding the financing of a central payer has changed for a couple of reasons:

  • Some of the ideas in this first book promote, inadvertently I would add, the redistribution of wealthThis concept, I think, encourages further anger, resentment and discrimination towards the impoverished.
  • I avoided the concept of a national sales tax on all our purchases as contributing to this health care fund believing, at that time, that it would be quite regressive for the economically less-well-off and noting the adage, there is a big difference in living when you don’t have to worry about how much money is in your pocket when you go grocery shopping. Given the absolute plethora of people now receiving food stamps, my thinking regarding this mechanism of financing has changed, i.e., I think it is an important consideration. http://www.trivisonno.com/food-stamps-charts
Some specific ideas for financing a 2 trillion dollar health care fund annually and for reducing unnecessary health care spending:
  1. Do we really need the Department of Education? Send that budget to our health care fund.  http://www2.ed.gov/about/overview/budget/index.html
  2. Can we not identify some more of the government waste, fraud, abuse and unnecessary spending and send those monies to our health care fund? http://www.washingtonpost.com/business/capitalbusiness/federal-government-continues-to-lose-billions-to-waste-fraud-and-abuse/2013/03/08/a3fb7736-82b5-11e2-b99e-6baf4ebe42df_story.html                                                                               http://www.heritage.org/research/reports/2013/08/tight-budget-congress-can-save-42-billion-by-eliminating-bad-government-programs
  3. Should we reduce our government’s annual charity to other countries, at least until we have clarified how to pay for our own health care expenses, and send those public monies to our health care fund?                                       http://www.globalissues.org/article/35/foreign-aid-development-assistance
  4. Unhealthy choice taxes: tobacco products, alcohol, gambling.
  5. I bet there are many other examples of federal, state and local politicians just wasting cumulative totals of hundreds of billions of dollars of our money on unnecessary, self serving discretionary spendingIt needs to stop and all that money be directed to our national health care fund or be accounted for by future significant reductions in required tax payments in those locales.
  6. A national sales tax on our purchases. This spreads the financial burden across all economic strata in America, i.e., everyone pays by being taxed on what they consume. Nothing is free in the USA.
  7. Efforts to reduce the total annual required amount of our health care fund by eliminating unnecessary health care businesses, greatly simplifying the coding for health care payment, removing the bogus not-for-profit status of the majority of our hospitals, i.e., since they function as independent business fiefdoms, then they pay taxes like other businesses. Send this money back to our health care fund.
Some potential benefits of creating a central payer, which is funded by ideas like these, are that the Medicare portion of the FICA tax can be deleted; no more taxes for Medicaid; auto insurance premiums can be greatly reduced (no more health care liability in their policies); and removal of the words, indigentpoorunable to afford it from our health care lexicon
Future essays will discuss actual mechanisms of how a central payer should interact with necessary health care businesses.
R. Garth Kirkwood, MD



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