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Single-payer Healthcare

Sigma Investment Counselors

October 11, 2017

Healthcare remains a headline issue with a wide range of proposals.  The discussion is highly politicized and generally tends to emphasize benefits while glossing over costs.  Inevitably, there are comparisons with other national systems and recurring comments, from advocates and critics, without much clarity as to what actually comprises single-payer healthcare.

Wikipedia defines single-payer healthcare as a system in which the state, financed by taxes, covers basic healthcare costs for all citizens and legal residents, regardless of income, occupation or health status.

Most nations, world-wide, have some form of single-payer healthcare.  These programs generally provide universal healthcare, which is implemented in a variety of ways.  In some cases, doctors are employed and hospitals run, by the government, such as in the UK or Spain.  Alternatively, the government may purchase healthcare services from outside organizations, such as the approach taken in Canada.

A key common denominator, regardless of plan structure, is cost.  Universal healthcare is expensive.  Investors should be aware that the whole issue of universal healthcare appears to be gaining some momentum in political discourse, with several approaches emerging to various reception.  Investors would be well advised to carefully assess the potential financial impact of various plans as they surface.  It should also be noted that the future of healthcare in the US and changes in the Federal tax code may be inexorably entwined.

All comments and suggestions are welcome.

Walter J. Kirchberger, CFA®

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