Sen. Baucus wants CBO to be "creative"

Posted by on Monday, Mar 2, 2009

This entry is from Dr. McCanne's Quote of the Day, a daily health policy update on the single-payer health care reform movement. The QotD is archived on PNHP's website.

Hearing: Scoring Health Care Reform: CBO’s Budget Options

United States Senate Committee on Finance
February 25, 2009

Closing comments

Sen. Max Baucus, Chairman: Thank you very much, Dr. Elmendorf. We have a huge problem, haven’t we? This is the most difficult public policy undertaking I’ve experienced in my Senate life here. I’ve been here thirty years, and nothing is as difficult as this. Nothing is as important as this, and I cannot think of anything that depends so much on CBO, especially at a time we’re in new territory. We’re not in the old situation where Sen. Grassley once said whatever CBO says is God, you’re God. My judgement, you’re not God.

Douglas Elmendorf, CBO Director: Correct

Sen. Baucus: My judgement is that you got the whole new era – you might be Moses, but not God – but you got the whole new era… where as I said earlier it’s not too much of an overstatement to say CBO can make or break health care reform, and I mean that because we got to go by your numbers…

Dr. Elmendorf: Senator, may I respectfully disagree that…

Sen. Baucus: I do believe that there are several different intellectually honest pathways to get from here to there. It’s not just one automatic, and so it needs – you got to be ever more creative to find intellectually honest pathways to get the savings we have to have – practically and both politically – to get health care reform.

Dr. Elmendorf: Senator, I would like to just respectfully disagree with the make or break role that you have assigned to us. We will do our very best to provide you and all of the members of this committee and the rest of the members of the Congress with the technical information that you need, the best estimates that the knowledge of the world can provide about the effects of alternative policies, but, as you understand, the hard decisions will be yours.

Sen. Baucus: No, that’s incorrect. The hard decisions will be all ours, both of us, you and me. You can’t pass the buck. The hard decisions are here, and the hard decisions are yours and the hard decisions are all of us in this country in trying to make this work. Meeting’s adjourned.

Dr. Elmendorf: Thank you, Senator

Video of hearing – click link of 2/25/09:

In this closing exchange, Sen. Max Baucus seems to be annoyed with Douglas Elmendorf, Director of the Congressional Budget Office. What is the background here?

Sen. Baucus is determined to lead the way to comprehensive health care reform. His model is basically the Hacker/Obama/Kennedy/Daschle/Massachusetts/Commonwealth model which is based on expanding the use of regulated private health plans, while continuing to expand existing public programs.

To help Congress with its efforts on reform, CBO recently released two volumes on 1) issues on analyzing health insurance proposals, and 2) budget options for health care (both available at the CBO website It is quite clear, based on these two reports and on the innumerable analyses in the health policy literature, that Baucus’s model would be scored by the CBO as outrageously expensive while falling far short on many of the important goals for health care reform.

The CBO is noted for its impartiality in providing Congress with intellectually honest evaluations of various Congressional proposals. From Sen. Baucus’s comments, it’s obvious that this constitutes a major barrier to his ambitions to enact reform along the lines of his model. Rather than an arm’s-length analysis, Sen. Baucus is demanding that Dr. Elmendorf shift from the role of an impartial analyst to the role of a policymaker by becoming “creative,” making the “hard decisions,” to “find intellectually honest pathways to get the savings we have to have.”

We can understand Sen. Baucus’s frustration in his inability to obtain a favorable analysis of his highly flawed, “wish-they-would-work” policies. But we can fault him for demanding that Dr. Elmendorf compromise his professional integrity by participating in the policy decisions over a fundamentally flawed framework of reform, and then applying to the final product his personal stamp of endorsement. That is not and must never be the role of the CBO Director.

This also partially explains why Sen. Baucus is becoming ever more strident in his demand that single payer be totally excluded from the dialogue on reform. Innumerable analyses, including some by the CBO, have shown that the single payer model actually would achieve our goal of affordable health care for everyone. Objective, side-by-side CBO analyses would destroy any chance of convincing Congress to enact Sen. Baucus’s model.

Since reform should be based on the best data available, isn’t such an analysis exactly what we should have right now? If Sen. Baucus is sincere in wanting reform that works for all of us, he should be the first one to request that CBO do that study.

DrSteveB also covers this well in his Daily Kos blog today:

David Himmelstein and Len Nichols debate

Posted by on Friday, Feb 27, 2009

This entry is from Dr. McCanne's Quote of the Day, a daily health policy update on the single-payer health care reform movement. The QotD is archived on PNHP's website.

Can US Achieve Meaningful Healthcare Reform Within For-Profit System?

Hosted by Amy Goodman and Juan Gonzalez
Democracy Now!
February 27, 2009


We host a debate between Dr. David Himmelstein of Physicians for a National Health Program and Len Nichols of the New America Foundation.

Juan Gonzalez: …if these private insurance companies will remain involved in the healthcare — in healthcare insurance in the future, how can those costs be controlled?

Len Nichols: …a lot of the administrative costs that David talked about, which is borne by the providers, I agree completely, they’re wasting a lot of energy now satisfying a lot of different kinds of claims forms. You could have a common claims form required by the government. You would get the industry to agree on what it is or tell them you’re going to impose one. They would agree in about an hour. And then you could have very much more efficient ways of billing and collecting, so that the extra costs that we’re spending now could be taken out of the system by rules and regulations that would make their self-interest pursue our social interest.

Dr. David Himmelstein: …Len Nichols claims all we need is a common billing form for hospitals. We already have that. It’s called UB82. And we have computerized virtually all hospital billing. It hasn’t saved a nickel. It’s because the insurance companies aren’t actually interested in saving money on administration. That’s where they make their dime. And no amount of government regulation is going to change their behavior, as long as they’re still in the game.

Amy Goodman: Len Nichols, we’re talking nationalizing banks. Why not nationalize health insurance? Why not nationalize healthcare in this country?

Len Nichols: You know, it certainly is tempting, and at a certain level, you’re right. The atmosphere is one where it seems like all things are possible. But I would just say the American people, by and large, are not ready for government-run healthcare. Look at the way people can be scared by one-size-fits-all kinds of rhetoric. …but I think the American people are nowhere near ready to have the government take over their healthcare, because that set of decisions about how you treat your illness, etc., is so private and so emotional. They do want choice. They want to believe in their doctor, and they do, in large part, believe in their individual doctor.

Amy Goodman: So, Dr. Himmelstein, respond to that. It’s not practical right now. It’s not achievable.

Dr. David Himmelstein: Well, yeah. I mean, people want choice. They want to be able to choose their doctor, and they want to be able to choose their hospital. They want to choose their care. And that’s what they can’t do at this point. We’re saying every American should be able to go to any doctor, any hospital in the country, and have a completely free choice. And under the private insurance system, they don’t have that.

Juan Gonzalez: …I’d also like to throw in a little personal experience that I’ve had recently. I just had a minor shoulder surgery a few weeks ago. And I have to tell you, because I am insured through my company, and I have to tell you the amount of time that I have had to spend on the phone with my employer, with the health insurer, with the hospital, the various bills from both the hospital, the surgeon, the laboratories, the amount of time that I’ve had to spend to try to maneuver through this incredibly complex system — and is it in network or out of network? And I have to imagine that millions and millions of Americans every day are going through the same procedure, even those who have insurance, enormous amounts of time and energy and frustration spent trying to maneuver through the system.

Len Nichols: Sir, I agree. I’ve shared some of that same frustration in my own life, as have we all. And I would agree, our system is a mess. …Today, insurers make money by excluding the sick and by making it hard for people to get the carrier talking about it. I agree that’s what they’re doing. It’s about that. But if you change the rules and you say, “Look, we’re going to publish patient satisfaction. We’re going to publish what things cost. We’re going to publish what it would cost to be covered by you,” and make all that very clear, and you make — essentially you give people choices among them, they will compete on the right dimensions, because that’s the way they’ll make money.

Amy Goodman: Len Nichols, we started with you. Fifteen seconds, Dr. Himmelstein, we’ll end with you.

Dr. David Himmelstein: Well, we need single-payer national health insurance. If private insurance could solve this problem, I’d be all for it. Unfortunately, it can’t. My patients desperately need it. Our nation desperately needs it. There are things we say are not appropriate for the market, like the fire department and the police department. Medical care ought to be one of those.

Amy Goodman: We’ll leave it there. Dr. David Himmelstein, associate professor of medicine at Harvard University, co-founder of Physicians for a National Health Program. And Len Nichols, director of the Health Policy Program at the New America Foundation.

For the full 18 minute video, audio, and transcript:

Primarily because of political perceptions, Len Nichols continues to support what he believes to be the pragmatic approach of covering everyone with regulated private plans. However, when experts like David Himmelstein continue to confront him with the facts about our flawed financing system, Nichols’ support for private insurance seems to be shifting from knowing that it would work, to wishing that it could, even though “our system is a mess.” He needs to take the next step of acknowledging that private insurance can’t work so that we can move forward and fix the “mess” by enacting a single payer national health program.

Nobel Laureate Joseph Stiglitz on single payer

Posted by on Thursday, Feb 26, 2009

This entry is from Dr. McCanne's Quote of the Day, a daily health policy update on the single-payer health care reform movement. The QotD is archived on PNHP's website.

Nobel Prize-Winning Economist Joseph Stiglitz

Democracy Now!
February 25, 2009

We get reaction to President Obama’s speech from Nobel economics laureate and former World Bank chief economist, Joseph Stiglitz.

Amy Goodman: And healthcare? He’s called for universal healthcare, but he does not call for single-payer healthcare.

Joseph Stiglitz: I think that there are some fundamental problems in the efficiency of our healthcare system. And what we’ve seen is that the private healthcare insurers do not know how to deliver an efficient way.

Amy Goodman: Do you support single-payer healthcare?

Joseph Stiglitz: I think I’ve reluctantly come to the view that it’s the only alternative. You know, we’ve tried a lot of other things. And we’ve been — you know, I was in the Clinton administration, and we debated a lot of alternatives, and I’ve watched things as they’ve emerged and, you know, evolved over the last twelve, sixteen years, and I think there’s a growing consensus that the private market exclusion is not going to work.

Amy Goodman: Joe Stiglitz, I want to thank you for being with us, the Nobel Prize-winning economist, professor at Columbia University, co-author of The Three Trillion Dollar War: The True Cost of the Iraq Conflict.

These are the closing comments in this 28 minute video, audio and transcript:


By Don McCanne, MD

What does Joseph Stiglitz have to say?

That’s a question we ask when we are faced with difficult issues such as the current financial crisis, and what we should do about the troubled banks. To our benefit, Amy Goodman did ask him, and we learn what he has to say.

At the end of the interview, Amy Goodman tacked on this crucial question regarding our health care crisis. Single payer?

Joseph Stiglitz’s response must be shared with the nation, and especially with those in Washington who say that single payer is not feasible. We should inundate Washington with his statement that single payer is “the only alternative.”

Health care spending for 2009

Posted by on Wednesday, Feb 25, 2009

This entry is from Dr. McCanne's Quote of the Day, a daily health policy update on the single-payer health care reform movement. The QotD is archived on PNHP's website.

Health Spending Projections Through 2018: Recession Effects Add Uncertainty To The Outlook

By Andrea Sisko and colleagues at Office of the Actuary, Centers for Medicare and Medicaid Services
Health Affairs
February 24, 2009

Projected spending for 2009:

$2,509.5 billion – National Health Expenditures (NHE)

$8,160.3 – NHE per capita

17.6% – NHE as percent of GDP

These are the most reliable numbers to use that represent our health care spending for this year. Rounding off these numbers makes them easier to remember and eases communication of the amounts:

Total health spending is two and one-half trillion dollars

Health spending per person is over 8100 dollars

That amounts to about seventeen and one-half percent of our GDP

IOM report: America's Uninsured Crisis

Posted by on Tuesday, Feb 24, 2009

This entry is from Dr. McCanne's Quote of the Day, a daily health policy update on the single-payer health care reform movement. The QotD is archived on PNHP's website.

America’s Uninsured Crisis: Consequences for Health and Health Care

Institute of Medicine
The National Academies
February 24, 2009

Web briefing

Lawrence S. Lewin, Chair, Committee on Health Insurance Status and Its Consequences (and also founder of The Lewin Group):

We were asked… to basically answer three questions, and this was a follow-on to the IOM studies that were produced in six volumes between 2000 and 2004. The first is what are the dynamics driving an apparently persistent downward trend in health insurance coverage? The second, is being uninsured harmful to the health of children and adults? And third, are insured people affected by high rates of uninsurance in their communities, so called spill-over effect? …I think that it’s important to point out some things that we were not able to cover. The first were a whole series of economic and financial impacts of uninsurance, impact on medical debt and global competitiveness. These are issues where the data are not very sound, and where there is a lot of disagreement in any event. We were not able to, because of the non-availability of data, to look at the impact of different levels of insurance, so in a sense we treated insurance coverage as a binary issue – you either had it or you didn’t have it, and we know that there are a lot of shadings in between, but we believe that the research is clear enough – very clear indeed – about even the binary decision. And finally, we were specifically asked not to deal with the potential approaches to solving the problem. There are lots of people doing that – indeed as we speak.


Lawrence S. Lewin:

The conclusions are, yes indeed, health insurance coverage does matter… That question, which I think is at the heart of the debate, really should no longer be an issue… Secondly, particularly given the fact that it does make such a difference, we believe that there is a compelling need to do something to off-set this persistent decline with which we’re faced, and that there is an argument to be made that even those who currently have insurance, even if they don’t lose it which they are at greater risk of doing, should have an interest in these issues. As a consequence, the committee unanimously adopted the following recommendations… The committee recommends that the president work with Congress and other public and private sector leaders on an urgent basis to achieve health insurance coverage for everyone, and, in order to make that coverage sustainable, to reduce the cost of health care and the rate of increase in per capita health care spending.


A web question from Dr. Don McCanne from Physicians for a National Health Program:

Although this report is limited to the importance of being insured, shouldn’t reform efforts also be directed toward adopting policies that would ensure that coverage actually enables access and affordability? Since there are questions about the limits of the private insurance model in accomplishing this, shouldn’t all options be on the table, including a single payer national health program?

Lawrence S. Lewin:

Without taking any position implied by the very last point about a particular proposal, I think the answer is yes, of course, all options should be on the table until they’re more thoroughly analyzed, and I believe many things are being considered right now. But I think to opine on the question itself is really beyond the scope of the committee.

Links to this audio briefing, the news release, the report in brief, the project web page, and the full report:

In six previous reports, published from 2001 to 2004, the Institute of Medicine concluded that “being uninsured was hazardous to people’s health and recommended that the nation move quickly to implement a strategy to achieve health insurance coverage for all.”

After a five year lapse, the Institute is issuing an update which concludes, “Health insurance coverage matters. Expanding health coverage to all Americans is essential. Action to reduce health care expenditures and the rate of increase in per capita health care spending is also of paramount importance if health insurance coverage for all is to be achieved and sustained.”

Is this earthshaking news or what? Having health insurance can be beneficial for your health, and everyone should have it, especially since it makes communities healthier as well. Uh, I think we all knew that.

What is surprising is Lawrence Lewin’s statement that there is “disagreement” on the economic and financial impacts of uninsurance, and the data on this “are not very sound.” Is he suggesting that we should discard a couple of decades of extensive, highly credible studies demonstrating that those without health insurance face impaired access to care, financial hardship, and often personal bankruptcy, not to mention physical suffering and perhaps even death?

Just as astounding is his statement that there is a “non-availability of data to look at the impact of different levels of insurance.” Again, is he recommending that we discard the plethora of highly credible studies, which demonstrate that the explosion in underinsurance products is also causing much of the same suffering as that experienced by the uninsured?

Lewin’s statements provoked me enough to submit the question on whether we should include on the table a consideration of single payer as a financing model that would enable access and affordability. He did let slip out the obvious answer, “yes,” before retreating to the position that he should not “opine” on it.

The answer is YES! Single payer definitely needs to be on the table.

Lewin may not want to opine, but that shouldn’t stop us from opining that we should remove from the table any reform model that would leave us short of providing all necessary care for everyone without exposing anyone to financial hardship. That would really clear the table. Then we could get serious about working on a single payer national health program.

OECD: Health Care Reform in the United States

Posted by on Monday, Feb 23, 2009

This entry is from Dr. McCanne's Quote of the Day, a daily health policy update on the single-payer health care reform movement. The QotD is archived on PNHP's website.

Economic Department Working Paper No. 665: Health Care Reform in the United States

By David Carey, Bradley Herring and Patrick Lenain
OECD (Organisation for Economic Co-operation and Development)
February 6, 2009


In spite of improvements, on various measures of health outcomes the United States appears to rank relatively poorly among OECD countries. Health expenditures, in contrast, are significantly higher than in any other OECD country. While there are factors beyond the health-care system itself that contribute to this gap in performance, there is also likely to be scope to improve the health of Americans while reducing, or at least not increasing spending. This paper focuses on two factors that contribute to this discrepancy between health outcomes and health expenditures in the United States: inequitable access to medical services and subsidized private insurance policies; and inefficiencies in public health insurance. It then suggests two sets of reforms likely to improve the US health-care system. The first is a package of reforms to achieve close to universal health insurance coverage. The second set of reforms relates to payment methods and coverage decisions within the Medicare programme to realign incentives and increase the extent of economic evaluation of different medical procedures.

OECD reports are important not only because of their credible studies of economic conditions throughout the world, but also because they are used for policy decisions in the thirty member nations (including the U.S.) plus more than one hundred other countries and economies. Thus it is important to understand this new OECD report, “Health Care Reform in the United States,” especially at this time when intensive reform efforts are taking place in Washington.

The thirty member nations are “countries committed to democracy and the market economy.” Although the data provided by OECD can be very helpful in addressing each nation’s economic problems, the recommendations offered must be evaluated with a recognition that there is a bias toward market solutions, with governments being relegated to a supportive role in improving the functioning of markets.

As expected, this report describes well the poor performance of our health care system in spite of the very high level of spending – by far the highest of all nations. Special attention is directed to the increasing proportion of both the uninsured and the underinsured, and the failures of the private insurance market and current government policies to correct these deficiencies.

The most serious problem with this report is that their recommendations are primarily limited to those that would improve the functioning of private insurance markets, with a government role limited to refining policies that would enable improvements in the private markets (plus minor changes in Medicare design that might have a minimal impact in improving value, but with some policy tradeoffs). Although they parenthetically hint that single payer policies in other nations have been effective in achieving some of the reform goals, at no time do they suggest that a single payer approach might benefit the United States; in fact, they specifically reject it as “radical.”

Considerable attention is directed to the work of Jonathan Gruber and his efforts to use private insurance plans as a foundation for reform, including the real-life experience of the Massachusetts plan. Although the authors of this report echo some of his suggestions, their recommendations fall short of an optimal program of social insurance based on private health plans (a model that we believe is inadequate anyway). Except for tweaks to Medicare, they remain silent on public insurance programs. Last week we provided a critique of the Massachusetts plan, explaining why it is an unsatisfactory model for reform in the United States. (

Just one example of the inadequacies of their recommendations is the inconsistency between their discussion of the financial hardships faced by the underinsured, and their recommendation to “decrease the generosity of supplemental Medicare insurance designs for beneficiaries without chronic conditions to reduce moral hazard risks, which supplemental insurance accentuates by insulating Medicare beneficiaries from Medicare’s cost-sharing provisions.” Again, they provide good data on problems with our system (underinsurance), but they provide a terrible recommendation for policy changes (prevent “moral hazard” by expanding underinsurance) based on market theory instead of social solidarity.

In sum, OECD’s credibility as an important resource on economic data does not extend to credibility for its recommendations that are based on pro-market ideology. This report is valuable for its data showing how poorly our health care financing system is functioning, but it is almost worthless as a guide for policies on how to repair our system since it reinforces the obsolete model of private health plans and ignores the more efficient and effective model of a single payer national health program.

Who is behind those closed doors in the Senate?

Posted by on Friday, Feb 20, 2009

This entry is from Dr. McCanne's Quote of the Day, a daily health policy update on the single-payer health care reform movement. The QotD is archived on PNHP's website.

Health Care Industry in Talks to Shape Policy

By Robert Pear
The New York Times
February 19, 2009

Since last fall, many of the leading figures in the nation’s long-running health care debate have been meeting secretly in a Senate hearing room. Now, with the blessing of the Senate’s leading proponent of universal health insurance, Edward M. Kennedy, they appear to be inching toward a consensus that could reshape the debate.

The 20 people who regularly attend the meetings on Capitol Hill include lobbyists for AARP, Aetna, the A.F.L.-C.I.O., the American Cancer Society, the American Medical Association, America’s Health Insurance Plans, the Business Roundtable, Easter Seals, the National Federation of Independent Business, the Pharmaceutical Research and Manufacturers of America, and the United States Chamber of Commerce.

What?! In this time of transparency and Change, when we have an open window of opportunity to finally fix our very sick health care system, we are reverting to a closed door process dominated by the most powerful lobbyists in the nation whose interests take precedence over the American patient?!

Robert Pear reports that they are inching toward a consensus, but read his description of the memorandum prepared by director of the health staff of Senator Kennedy’s Health, Education, Labor and Pensions Committee. They have agreed on almost nothing. “…the sense of the room is that an individual obligation to purchase insurance should be part of reform…” is as close as they have come, and, even there, there is no agreement on what that coverage should be and on how you would enforce it.

At best, this process can end only with recommendations for a few tweaks in our system, just as the window slams shut and everyone walks out.

Have these people no decency?!

A few in the room do, but they are overpowered by those who… Well, you know. People can go broke and die for all they care, as long as we keep our public institutions out of their private businesses.

Stall and walk out. How’s that for CHANGE WE CAN BELIEVE IN?

(The following aired as a commentary on Northeast Public Radio and was also distributed via email by the Unions for Single Payer Healthcare.)

COBRA is a law that allows you to keep your employer-sponsored health insurance for 18 months if you lose or change jobs. To do so, you have to pay 102% of the cost (the full premium plus a 2% surcharge.)

The stimulus package just passed provides for laid off workers, who had health insurance on the job, to receive a subsidy of 65% of the health insurance premium for up to nine months.

According to a report by FamiliesUSA, the national average unemployment benefit is $1,278 monthly. Under COBRA, national family coverage averages $1,069 per month. So laid off workers, in order to keep health insurance for their families, will have to pay more than $375 a month but after nine months will have to come up with the full $1,069.

Here in New York, to keep family health insurance under COBRA costs an average of $13,618 a year, 85% of the average unemployment benefit in New York. For those eligible in New York, the 9-month COBRA subsidy will lower the the average cost for a family to keep health insurance to about $7,000 for a full year. The family also gets to keep the out-of-pocket expenses — co-pays, co-insurance and deductibles.

A recent study by the Commonwealth fund reported that only 9% of unemployed workers continued health insurance under COBRA. The 65% subsidy should allow some to consider keeping health insurance under COBRA, where before it would have been just unthinkable. This can help those with chronic illnesses, or those with very sick family members, or where a spouse continues working.

To keep family coverage under COBRA, with the subsidy, for up to nine months, it will cost people who are laid off, on average, one-third of every unemployment check. This money will go to a health insurance company, instead of food, housing and school expenses for the family.

But while the subsidy makes private health insurance through COBRA slightly more affordable for the unemployed, purchasing it remains a Faustian bargain. What “stimulus” is there in asking a person who has just lost their job to give a third of each unemployment check to the private insurance industry? And what will they do after nine months have come and gone?

Despite the good intentions in Congress and the White House, subsidized COBRA payments are not feasible for the unemployed — and terrible policy for the nation. There is no reason on why Congress should shovel our money into an industry that pits its profits against our health, with a program that holds one-third of our limited unemployment check hostage and only lasts nine months.

If the leaders of this nation wanted to provide health security for all they would enact a single-payer mechanism to finance health care.

Single payer would mean that no one would ever be without health care. Not first time job seekers, not workers changing jobs, not laid off or striking workers. Everyone would be covered.

A single payer health program would: — save at least $400 billion in health spending per year, — create millions of new jobs, — create enormous savings for employers (including federal, state and local governments as well as schools and not-for-profit agencies) who now pay private health insurance premiums, — allow the unions to get back to bargaining for wages and working conditions instead fighting over premiums, co-pays, deductibles, co-insurance payments, dental, vision, drug coverage, mental health benefits, etc.– and, in relieving the worry about health coverage that comes with the loss of a job, single payer would raise us all up.

Now that would be a stimulus! We really need single payer national health care.

Single payer – over on the side table

Posted by on Thursday, Feb 19, 2009

This entry is from Dr. McCanne's Quote of the Day, a daily health policy update on the single-payer health care reform movement. The QotD is archived on PNHP's website.

Canada and the Recession: Angles of Deflection

By Nancy Folbre, a professor of economics at the University of Massachusetts Amherst
The New York Times
February 19, 2009

As the economist (and fellow Economix blogger) Uwe Reinhardt explains, the single-payer Canadian health care system delivers very good results for about half the per-person cost of ours — with huge savings from reduced paperwork. Economic disparities in access to health care are significantly lower there.

President Obama promises to expand health insurance coverage in the United States with little threat or inconvenience to the private sector. But some Democrats in Congress, led by Representative John Conyers, advocate a single-payer “Medicare for All” bill strongly influenced by the Canadian model.


Worthwhile Canadian Initiative

By Fareed Zakaria
February 7, 2009

(Canada’s) health-care system is cheaper than America’s by far (accounting for 9.7 percent of GDP, versus 15.2 percent here), and yet does better on all major indexes. Life expectancy in Canada is 81 years, versus 78 in the United States; “healthy life expectancy” is 72 years, versus 69. American car companies have moved so many jobs to Canada to take advantage of lower health-care costs that since 2004, Ontario and not Michigan has been North America’s largest car-producing region.


This Won’t Hurt a Bit

by Jonathan Cohn
The New Republic
February 18, 2009

Advocates of single-payer systems complain frequently that the mainstream political debate doesn’t give their idea the attention it deserves. They are right. Public insurance programs enjoy huge economies of scale; they don’t fritter away money on profits or efforts to skim healthier patients from the population. When it comes to billing, they tend to be a lot simpler than, say, a system with dozens of competing insurance plans. All insurance systems require providers to file a lot of paperwork; single-payer systems, though, require just one set. The centralized power of single-payer systems also gives them unparalleled sway over not just the amount of money they pay but how they dole it out; with that kind of leverage, they can push the medical system toward making key improvements in quality.

In an ideal world, then, single-payer would almost certainly be the best option. But is it politically feasible? Single-payer advocates like to point out that Representative John Conyers has a single-payer bill in Congress with close to 100 co-sponsors. But many of those co-sponsors have signed on because, until now, it has been a cheap, meaningless way to win points with liberal interest groups.


How the U.S. measures up to Canada’s health care system

Interview of Uwe Reinhardt
January 28, 2009

We have a Canadian health plan in America. It’s called Medicare. It works. Don’t tell me Medicare doesn’t work. Tell that to the elderly. One way to test it is to say “Let’s take it away.”

You have to, in the end, cover people. And if you, the private health insurance agency, are not able to do it, we can do it. The government can do it. And we’ll discover this more and more.

The good news is that individuals from the media and from the policy community are acknowledging, on the side, that single payer would cover everyone, would improve health outcomes, and would cost less than the other current proposals for reform. Today’s quotes are only a few examples of a multitude of such comments. Single payer has not been removed from the national dialogue on reform.

The bad news is that all too often these are only side comments as the discussion then moves forward with the need to support “feasible” approaches that do not cover everyone, waste tremendous resources, and cost far more than would a publicly-administered and publicly-financed system.

Are we such automatons that we need to set aside facts about an approach that would benefit all of us, and reflexly accept deficient, perverse policies that would benefit the private insurance industry? Why is gifting our funds to the private insurance industry feasible, while spending those funds on health care that people need is not?

As Sen. Daniel Patrick Moynihan said, we’re entitled to our own opinions, but not our own facts. Let’s dump the opinions and craft reform based on the actual facts. Seriously!

Massachusetts' plan is the wrong model for the U.S.

Posted by on Wednesday, Feb 18, 2009

This entry is from Dr. McCanne's Quote of the Day, a daily health policy update on the single-payer health care reform movement. The QotD is archived on PNHP's website.

Massachusetts’ Plan: A Failed Model for Health Care Reform

Prepared by Dr. Rachel Nardin, Assistant Professor of Neurology, Harvard Medical School, with Drs. David Himmelstein and Steffie Woolhandler (both Associate Professors of Medicine, Harvard Medical School)
February 18, 2009

Executive Summary

The Massachusetts Health Reform Law of 2006 expanded Medicaid coverage for the poor and made available subsidized, Medicaid-like coverage for additional poor and near-poor residents of the state. It also mandated that middle-income uninsured people either purchase private health insurance or pay a substantial fine ($1,068 in 2009). Smaller fines (up to $295 per employee) were also levied on employers who fail to offer insurance benefits.

The reform law has not achieved universal health insurance coverage, although half or more of the previously uninsured now have some type of insurance policy.

The reform has been more expensive than expected, costing $1.1 billion in fiscal 2008 and $1.3 billion in fiscal 2009. In the face of a state budget crisis in fall 2008, Gov. Deval Patrick announced that he will keep the reform afloat by draining money from safety-net providers such as public hospitals and community clinics.

While the number of people lacking health insurance in Massachusetts has been reduced, several recent surveys demonstrate that substantial problems in access to care remain in the state. While the new health insurance improved access to care for some residents, many low-income patients who previously received completely free care under the state’s old free care program now face co-payments, premiums and deductibles that stop them from getting needed care.

In addition, cuts to safety-net providers have reduced health resources available to the state’s remaining uninsured, as well as to others who rely on safety-net providers for services in short supply in the private sector. These safety-net services include emergency room care, chronic mental health care, and primary care. The net effect of this expensive reform on access to care is at best modest, and for some patients, negative.

By mandating that uninsured residents purchase private health insurance, the law reinforced the economic and political power of health insurance firms. Thus, the reform augments the already high administrative costs of health care. Moreover, the agency that administers the new law (the “Connector”) adds an extra 4 to 5 percentage points to the already high overhead of private health insurance policies.

The reform failed to reduce overreliance on expensive, high-technology services. Indeed, some of its provisions such as changes in Medicaid rates and cuts to safety-net providers (who do more primary care) have further tilted health spending toward expensive, high-technology care.

A single-payer system of non-profit national health insurance could save about $8-$10 billion annually in the state through reduced administrative costs. This money could be used to cover all of the state’s uninsured residents and to improve coverage for those who now have insurance, without any increase in total health care costs.

The Massachusetts reform law is not providing universal access to care, even in a state with highly favorable circumstances, including previously high levels of spending on health care for the poor, high personal incomes, and low rates of uninsurance. It is not a model for the nation.

Report: Massachusetts’ Plan: A Failed Model for Health Care Reform

Press release: Massachusetts Is No Model for National Health Care Reform

Those supporting the leading Democratic model for reform frequently cite the Massachusetts plan as an example of how building on our current system of health care financing is the best path to success. Unfortunately, they use selected positive numbers to define success, while ignoring the fact that Massachusetts has failed in its efforts to achieve the real goals of reform. You can understand how pathological the politics of reform has become when they have to dig into the data of a failed reform effort in order to redefine failure as a success.

Let’s look at some of the goals, and how Massachusetts has fared:

* Everyone should be included – We should quit being dishonest when we say universal, and start demanding that universal means absolutely everyone. The Massachusetts model has left perhaps five percent of individuals without any coverage whatsoever, and there is little likelihood that the numbers of uninsured will be reduced further because of serious flaws in their model.

* The growth in health care costs must be slowed – The Massachusetts model has been ineffective in addressing the primary causes of excess cost escalation.

* Health care must be affordable for each individual – Insurance premiums and cost sharing in private plans have remained unaffordable for many in Massachusetts, impairing access to care. Insurmountable debt or personal bankruptcy from medical bills remains a very real threat in Massachusetts.

* Under-insurance must be eliminated – Massachusetts has expanded the problem of under-insurance in an attempt to make premiums affordable, failing to achieve either goal of adequate plans or affordable premiums.

* Administrative waste must be reduced – Massachusetts has added complexity to an already complex financing system, significantly increasing the administrative waste in their system.

* Coverage should be automatic, portable, and permanent – Massachusetts has provided further confirmation that no model built on our dysfunctional financing system can achieve these goals.

* Health care must be accessible – The Massachusetts model has further exacerbated the deficiencies in the state’s primary care infrastructure, resulting in increased difficulty in accessing their system. Their fragmented financing model has very little capability of realigning resource allocation to improve access.

* Private intermediaries that waste resources and impair access must be eliminated – But isn’t this what the Massachusetts plan is all about? Their view is that we must use our public agencies and tax funds in an all-out effort to protect the private insurance industry, regardless of the harm to patients in the form of physical suffering and financial hardship.

Suppose Congress and the administration accept the message that the Massachusetts plan is the wrong model for reform. Will they then move forward with a single payer national health program – a model that would actually achieve our goals? It is unlikely, based on all signals emitting from Washington. Instead, they will develop a uniquely American plan designed for Americans.

It will be a plan built on our uniquely American, dysfunctional, fragmented system of financing health care. But it won’t be like the Massachusetts plan that was developed in a wealthy state with greater health care resources, and with fewer financing problems than the rest of the nation. No, it won’t be like Massachusetts. It will be much worse… much, much worse.

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