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May 18, 1994

The United States Needs a Health System Like Other Countries

JAMA. 1994;271(19):1481-1482. doi:10.1001/jama.1994.03510430032020

To the Editor.  —Dr Glaser1 believes that market-based approaches to health care reform will not succeed and, therefore, that the United States should adopt an all-payer, payroll-tax-financed health system. However, he fails to note many of the drawbacks and limitations of this proposal.First, as with all payroll taxes, his plan is fundamentally regressive and thus, to many, unfair. Enacting a new payroll tax to finance health care would result in both high and low wage earners' paying the same tax rates for health care.Second, higher payroll taxes will force the price of labor up. Employers will have to absorb some of these new costs, but most of them will be passed on to employees. As a result, adopting an all-payer system will lead to higher levels of unemployment, to more business failures, and to reductions in wages. Some econometric models predict that adopting a modest 7% payroll