Implementing a single-payer healthcare system in California raises profound economic concerns that challenge its feasibility and sustainability. While the idea of healthcare as a fundamental right is appealing, the reality of such a system—particularly one that eliminates private insurance—suggests it could lead to significantly higher costs, diminished quality, and increased rationing. Understanding these issues requires a careful examination of the economic principles at play, the experience of other countries, and the potential impact on California’s fiscal health.
Many politicians, including all current Democratic presidential candidates, promote slogans like “Medicare for All” and “Healthcare is a right, not a privilege.” These messages resonate with voters but often ignore the complex economic realities behind implementing such sweeping reforms. The most extreme versions, such as Bernie Sanders’ proposals, aim to replace private health coverage entirely with a government-run, single-payer system. California’s recent legislative efforts, like SB-562, exemplify the push toward this model by proposing to absorb all existing health plans—including Medi-Cal—into a state-controlled network that provides comprehensive coverage without co-pays or deductibles. Under such a plan, private insurance would become illegal, and residents would either be enrolled in the state plan or pay out of pocket for services.
Proponents argue that a single-payer system could streamline care and eliminate bureaucratic overhead, but the economic implications are alarming. Analysts estimate that implementing such a system in California would cost between $330 billion and $400 billion annually. Given California’s population of approximately 40 million, this translates to roughly $10,000 per person each year—almost doubling the current state budget. This figure is likely understated because it does not fully account for potential increases in demand from new residents and patients with costly medical conditions, which could add another 5% or more to the total cost, roughly an additional $20 billion.
The core problem with these proposals is that they ignore the fundamental economic flaw: consumers of healthcare have insufficient incentives to control costs. When co-pays and deductibles are eliminated, demand for medical services can skyrocket, leading to increased rationing and waiting times. The promise that “You can’t be denied” is misleading; in reality, procedures deemed too expensive by state health authorities will be rationed, delayed, or denied altogether. Waiting lines and treatment delays are inevitable, as the economic principle of rationing at zero cost applies universally.
Looking at the UK’s National Health Service (NHS) offers a cautionary tale. Despite being one of the world’s oldest nationalized healthcare systems, the NHS struggles with long waiting times, with nearly a quarter of a million patients waiting over six months for treatment. Emergency room wait times are also problematic, with only 84% of patients seen within four hours—well below the 95% target. These delays result from staffing shortages, budget constraints, and bureaucratic inefficiencies. British doctors, frustrated by working conditions and overcrowding, are threatening to strike, and many are choosing to practice abroad. Currently, around 35% of British doctors are imported from poorer countries, highlighting the systemic staffing crisis.
These issues are projected to worsen. Forecasts suggest a shortfall of 250,000 healthcare workers in the UK by 2030, exacerbating existing delays and reducing the quality of care. For example, only 81% of breast cancer patients in the UK survive at least five years after diagnosis, compared to 89% in the US. Such disparities underscore the critical importance of market-based incentives that reward efficiency and innovation—elements that are largely absent in a government-controlled system.
In the United States, the market economy allows individuals to privately purchase a wide array of goods and services, often without long waits or restrictions. This flexibility results from the competitive nature of markets, which tend to allocate resources efficiently and foster innovation. The stark contrast with UK healthcare systems—where waiting times and rationing are commonplace—should serve as a warning for California. The statistics from Britain should not be replicated in California or anywhere else in the US, as there are far better approaches to healthcare reform.
To develop effective healthcare solutions, stakeholders must focus on improving technological development, patient engagement, and operational efficiency—areas where innovations like developing advanced healthcare applications can contribute significantly. Additionally, embracing new technologies such as artificial intelligence in healthcare can optimize diagnostics and treatment plans, reducing costs and improving outcomes. Moreover, advancements in visualization techniques, such as from molecules to market the new era of pharmaceutical visualization, are transforming drug development and delivery. Finally, integrating VR and AR in healthcare, pharmaceuticals, and sports opens new avenues for training, therapy, and patient care.
The key takeaway is that markets work efficiently when individuals and providers are motivated by incentives. California’s move toward a government-run system risks replicating the UK’s failures—long waits, rationing, and reduced quality—unless it adopts reforms that foster competition, innovation, and consumer choice. Better healthcare reform will involve strategic improvements rather than sweeping government controls, ensuring that California’s residents receive timely, high-quality care without the pitfalls of a bureaucratic monopoly.