01:00 AM EDT on Friday, June 2, 2006

WASHINGTON

I WAS DISAPPOINTED that Massachusetts did not choose a single-payer approach to health-care reform: a system in which the government pays the health insurance for all residents.

I am not among the many who believe that single-payer health care is the best solution. However, I think that an experiment with single-payer coverage would bring out the pros and cons of government-provided health insurance. Moreover, it would force the single-payer advocates to finally define what it is that they are talking about.

In reviewing health-care policy issues, I have found at least three versions of single-payer health care under discussion: one that is doctor-friendly, one that is doctor-hostile, and one that is doctor-limiting.

Doctor-friendly single-payer health care would have the government write checks to reimburse doctors for whatever procedures they and their patients deemed appropriate, at whatever fees doctors saw as reasonable. It would continue the American tradition of fee-for-service medicine. However, it would eliminate the features of American health insurance that annoy doctors: the need for approval from an insurance company before undertaking procedures; the need to deal with multiple insurance companies; and the delay and clerical overhead required to process claims.

Unfortunately, doctor-friendly single-payer health care would have no mechanism to restrain costs.

The biggest reason for the rapid rise in U.S. health-care spending -- which has more than doubled as a share of national income in the past 25 years -- is the increase in expensive procedures, involving specialists and sophisticated equipment. Often, such procedures are precautionary and do not affect health outcomes. Fee-for-service compensation, paid for by insurance, drives up the use of this "premium medicine."

A doctor-hostile single-payer system would seek to limit the incomes of physicians, drug companies and other health-care deliverers. Government would force down the prices of medical services. The question is how far those prices could be forced down without reducing incentives -- for individuals to attend medical school, for pharmaceutical companies to spend money on development of new drugs, and so on.

America's largest experiment with single-payer health care, Medicare, has taken some tentative steps toward limiting physician payments. Many doctors are not convinced that Medicare's fees are sufficient. A doctor-limiting single-payer system would ration health care by limiting its availability. This takes place in many countries with single-payer systems.

For instance, in Canada routine screening for colon cancer through colonoscopy is not possible, because of a shortage of both equipment and trained personnel. Canada's waiting times for operations such as hip replacements have received notoriety, even earning a rebuke from the Québec provincial Supreme Court.

Each form of single-payer health care has benefits and drawbacks. The doctor-friendly approach requires the least cultural adjustment for American consumers and health-care providers, but it is the most expensive. The doctor-hostile approach brings short-term relief to high health-care costs, but to the long-term detriment of morale and innovation in health-care delivery. The doctor-limiting approach forces doctors and hospitals to cut back on low-priority medical procedures, but it leaves consumers frustrated by their inability to obtain whatever care they require whenever they want it.

Single-payer advocates sometimes talk as if they could have the benefits of all three approaches to single-payer health care, and none of the drawbacks. This is easier to believe as long as single-payer coverage is an abstraction.

If Massachusetts had adopted an experiment with single-payer health care, the proponents would have been forced to choose from among the three versions. We would then have been able to see single-payer coverage in reality.

I am sorry that the political leaders of Massachusetts did not give us the opportunity.

Arnold Kling, an adjunct scholar at the Cato Institute, is the author of Crisis of Abundance: Rethinking How We Pay for America's Health.