Health insurance as a state institution: The effect of single-payer insurance on expenditures in OECD countries.

Abstract

A growing literature in comparative political economy and health economics has argued several cost-saving effects of a single-payer healthcare system. Despite this growing evidence, there has been no large-scale empirical examination of whether such an effect exists cross-nationally over time. This paper serves as the first attempt to find and calculate the extent to which healthcare spending is affected by the utilization of a single-payer scheme. I introduce an original dataset for OECD countries that measures when and where systems that qualify as single-payer exist, and employ it to test whether significant differences exist in health expenditures. Results demonstrate a significant difference between single- and multi-payer system expenditures. I estimate the utilization of a single-payer system is associated with decreased expenditure equal to 0.750 percentage-points of a nation's GDP. This would equate to the United States saving well over $1.5 trillion over ten years.