Why a Single-Payer System Won’t Work in the U.S.

This video provides an in-depth analysis of the structural differences between public and private healthcare models, specifically contrasting the U.S. system with those in the United Kingdom and New Zealand. The discussion, featuring Ahmed Marmoush, CEO of Handl Health, focuses on why a fully publicly funded, single-payer system is impractical for the United States, primarily due to its immense size (over 300 million people) and the resulting bureaucratic complexity. The speakers argue that the U.S. system's private-public mix is essential because it uses legislation to govern delivery while leveraging private market incentives—capital, competition, and profit—to spur innovation, leading to better quality and outcomes in specific areas.

A central theme of the analysis is the critical failure point of the U.S. model: universal access. While tax-funded systems ensure access regardless of financial means, the U.S. system, despite having government programs for the very poor, leaves a large segment of the population unable to afford optimal care. This lack of access is cited as the primary driver behind alarming population-level statistics, such as higher mortality rates compared to peer nations. The speakers highlight that one in five families lack the savings to cover their total out-of-pocket healthcare costs, illustrating the widespread financial vulnerability within the current structure.

The conversation progresses to identify the "middle ground" population—those who are functionally uninsured or underinsured—as the segment most severely impacted by the U.S. system's flaws. These individuals often delay or forego necessary care because they cannot afford deductibles or co-pays (e.g., $500 or $1,000 expenses), even if they possess insurance. The speakers note that current solutions, such as HSAs or gap financing, are merely "Band-Aids" that fail to address the underlying affordability crisis for this majority bracket. Conversely, the U.S. system excels in providing individual choice, allowing patients to select specific providers or specialists by name—a luxury often unavailable in centralized public systems like New Zealand, where patients are allocated to the next available specialist group.

Ultimately, the analysis concludes that the inherent complexity and vastness of the U.S. healthcare system mean that a single, sweeping solution is impossible. Instead, the problems are so numerous and vast that they create continuous, micro-level opportunities for entrepreneurs and specialized businesses to innovate and solve specific access and affordability challenges. The private market model, despite its flaws regarding access, is recognized as the necessary environment that attracts the capital and competition required to foster this continuous stream of problem-solving innovation.

Key Takeaways: • Size Inhibits Single-Payer Feasibility: The sheer scale of the U.S. population (over 300 million) makes a fully publicly funded, tax-based system impractical, primarily due to the massive bureaucratic overhead and complexity that would be required to manage it. • Private Market Drives Innovation: The U.S. private healthcare model is crucial for spurring innovation, competition, and capital investment, which globally positions the U.S. as a leader in developing high-quality, advanced medical solutions. • Universal Access is the Primary System Failure: The core weakness of the U.S. system is its failure to ensure universal access, leading to significant disparities in health outcomes and high mortality rates compared to countries with tax-funded systems. • The "Middle Ground" Suffers Most: The majority of Americans who are insured but underinsured—the "middle ground"—are the most vulnerable, often delaying or foregoing essential care due to high out-of-pocket costs, despite having coverage. • Financial Vulnerability is Widespread: Statistics indicate that approximately one in five U.S. families lack the necessary savings to cover their total out-of-pocket healthcare costs, highlighting a systemic affordability crisis that impacts population health. • Market Failure Requires a Safety Net: Healthcare is defined as a market failure because consumers cannot choose when they need care; therefore, a robust safety net is required to catch those who cannot afford services, a requirement the U.S. system currently struggles to meet comprehensively. • U.S. System Excels in Individual Choice: A primary benefit of the U.S. private model is the ability for patients to exercise individual choice, including selecting specific specialists or providers by name, a feature often absent in centralized public systems. • Solutions are Currently Band-Aids: Existing financial mechanisms intended to bridge the affordability gap, such as HSAs or specialized lending for medical costs, are viewed as temporary fixes that fail to solve the fundamental problem of high costs and lack of access for the underinsured. • Entrepreneurial Opportunity is Infinite: The complexity and vastness of the U.S. healthcare system create continuous, specialized opportunities for businesses to solve micro-level problems related to access, affordability, and operational efficiency within the macro structure. • Focus on Improving Access and Affordability: Companies targeting the U.S. healthcare market should focus their efforts on solutions designed to improve access and affordability for the large segment of the population that is currently underinsured.

Key Concepts:

• Market Failure (Healthcare): The concept that healthcare does not operate as a typical consumer market because demand (the need for care) is often involuntary and unpredictable, meaning consumers lack the ability to shop or delay purchases, necessitating regulatory oversight and safety nets.
• The Middle Ground: The demographic segment of the U.S. population that possesses some form of health insurance but remains functionally underinsured due to high deductibles, co-pays, and out-of-pocket maximums, leading to delayed or foregone care.