Professor Bradley Herring on single payer

Posted by on Wednesday, Mar 4, 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.

Covering the Uninsured: Options for Reform

Kaiser Commission on Medicaid and the Uninsured
Alliance for Health Reform
March 2, 2009

Bradley Herring, Ph.D., Assistant Professor, The Johns Hopkins University, speaking on “Potential Complications with the Different Approaches to Health Reform”:

First off, single payer, HR 676. The underlying appeal of this is essentially that it is very elegant, and simple. You pay taxes into the system and in return you get the medical care that you need. And then also it’s universal. This is probably the only approach that’s actually going to get us to having no uninsured. That kind of notion of being universal – getting everyone covered. This is probably the only one that’s going to do it. But then moreover if you think about universal as having the system in which everybody essentially has got the same kind of coverage, and we’re all in the same boat together – single payer is really probably the only way we might get there. Another thing underlying the appeal about single payer is that there would be large reductions in the administrative costs. So Medicare has administrative costs between about 2 to 3 percent whereas private insurance varies considerably across different markets but averages about 14 to 15 percent.

Potential complications. Well, if you look at the description of single payer, and particularly on John Conyers’s website, it kind of seems like a health care utopia. You get the health care you need, cost sharing is reduced – right now there is pretty significant cost sharing in the Medicare program – and that is going to go away. But I think many of us might agree that somebody’s got to say no, right, that you can’t consume all of the health care that we’d like. Someone’s got to be in place to say no. There are certain treatments that we shouldn’t be receiving or certain patients that shouldn’t receive certain treatments.

Taxes is a big issue, right, so I don’t want to be hysterical. I actually think that taxes should kind of go up a little bit to address the fiscal situation we’re in in the U.S. But many people probably balk at the extent to which taxes have to go up to pay for a single payer. HR 676 includes payroll taxes, increasing from about 1.5 percent to 4.75 percent, on the employee side and the employer side. Repeal the Bush tax cuts. Get in line. Everyone’s targeting these Bush tax cuts – the single most popular pay-for in history. And then on top of that, the proposal would increase the marginal tax rates for the top 5 percent and the top 1 percent of income, an additional 5 percent or 10 percent respectively. And also include a tax on stock transactions.

The final thing I’ll say about single payer is that it most likely is going to result in lower payments to providers. If you look at the MedPAC data comparing private reimbursements and public reimbursements, they’re about 15 to 20 percent lower on the public side.

(Prof. Herring then discusses the three other models of reform: the Republican/McCain proposal, Obama/Baucus proposal, and the Wyden/Bennett proposal)

Q & A:

Audience member (from Center for Budget and Policy Priorities): Dr. Herring and the other panelists, I was wondering if you could discuss the ability of all of the various options to control costs of the health system. If health costs grow at their current rate, no insurance system, no matter how well designed, will be able to cover everyone because we won’t be able to afford it. Thank you.

Prof. Herring: So, off the top of my head, I would think that the single payer approach yields the most promise towards reducing health care costs because it can essentially happen by fiat, right. The government can say what we’re going to spend, and, if Congress is so willing to actually follow through on that, I mean, kind of decide what we’d want to spend. I think the Republican vision of tax reform and getting people into individual plans has a lot of promise for lowering the growth in spending in the sense that people would face strong incentives to purchase cheaper plans with higher deductibles, less access to costly technology, which will certainly, I think, reduce spending, but, taking a step away, we have to ask is that really appropriate? Is that where we want to go? I think the Wyden bill then, in turn, might probably rank third in terms of its ability to reduce the growth in spending. I think for some of these reasons alluded to in the more Republican approach in which there’s a system by which individuals are choosing, on cost, plans – in making decisions to purchase basic versus more comprehensive plans. And then finally I think with the Obama plan, and Baucus’s, the result is that, yes, we might get everybody covered but in a wildly fragmented system that it might be really hard to control costs moving forward with these different things, you know, to kind of plug (moves arms as if plugging multiple leaks in the system).

Should we care what Johns Hopkins Professor Bradley Herring has to say about single payer? Emphatically, yes. Prof. Herring is theoretically an academic purist, and has no relationship with the single payer community. Many of his policy studies on private health insurance have been done with Mark Pauly, of “moral hazard” fame. That would certainly place him outside of the single payer camp.

A recent Quote of the Day (2/6/09) covered the OECD working paper, “Health Care Reform in the United States.” My comment was quite critical because the paper ignored single payer while discussing the merits of private insurance reform, especially the work of Jonathan Gruber on the Massachusetts plan. The working paper was coauthored by two staff economists from OECD and, yes, Prof. Bradley Herring. In no way could he be considered to be a single payer ideologue.

Although I transcribed only his comments on single payer, you should listen to him on all four models (at the link above – a transcript will be available soon). He describes single payer as a system that actually gets everyone covered, that you get the medical care that you need, that there would be large reductions in administrative costs, and that “the single payer approach yields the most promise towards reducing health care costs.”

The other three models fall short on these goals, but look at what he says about how they control costs. Each model spends more money on administration in order to control costs by reducing benefits and by erecting financial barriers to care. As Prof. Herring asks, “Is that where we want to go?”

Tomorrow President Obama holds the White House summit on health care reform. A broad spectrum of special interests have been invited, but the single payer community has been explicitly excluded, except for Congressman John Conyers. Does that mean that they will search guests at the door to be certain that none of them bring in a copy of Prof. Herring’s comments? The turfs of the special interests would certainly be threatened by exposing the attendees to sound policy science.

Deliberate, explicit rationing of hospital beds – in the U.S.!

Posted by on Tuesday, Mar 3, 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.

Doctors Fight Plan to Limit Beds in ER

By Thomas M. Burton
The Wall Street Journal
February 28, 2009

A plan to curb the number of beds available to emergency-room patients at one of the nation’s most prestigious hospitals has spurred a divisive internal debate that is being closely watched by hospital physicians across the country.

At issue at the University of Chicago Medical Center, located in the South Side’s Hyde Park neighborhood, is a proposal that could limit the number of beds available to emergency-room patients. In February, two high-ranking doctors quit their administrative posts to protest the plan, saying it could lengthen already long waiting times for patients who visit the ER.

The dispute touches on one of the most critical questions facing hospitals that serve low-income populations: How many patients on Medicaid insurance, and older patients on Medicare, can a hospital afford to serve?

Many emergency physicians across the country say limiting beds for ER patients could become a means of economizing that might spread to other hospitals.

One 2007 internal report on the emergency department said, “On many afternoons/evenings, 30 or more patients are waiting with longest wait-to-be-seen times often exceeding 8-9 hours.” The same document showed that by 2007 the sickest ER patients who need intensive care waited, on average, 14 hours before being transferred to the ICU. In recent interviews, hospital doctors said those waits have been increasing.

Peer-reviewed studies suggest lengthy waits can be dangerous. “Critically ill emergency department patients with a greater than six-hour delay in intensive-care-unit transfer had increased hospital length of stay and higher intensive-care-unit and hospital mortality,” according to a 2007 study in Critical Care Medicine.

James L. Madara, the University of Chicago’s chief executive and dean of medicine, declined to comment on specific wait times at his hospital, but said the administration’s intent is to set aside more beds for specialties like oncology, gastroenterology and neurosurgery that attract patients from around the U.S.

Among other moves, the hospital is considering cutting the number of beds available to ER patients who are so acutely ill that they must be transferred to general-medicine or intensive-care wards. It plans to close, for economy reasons, a 24-bed general medicine unit and an intensive care unit of just under half that size. These units at present serve many emergency patients, hospital doctors say.

In his Feb. 1 letter to the administration, Dr. Vanden Hoek suggested that several of the changes could favor patients with private insurance. “Some patients will have rapid access to an ICU or private bed,” he wrote, but lower-income emergency patients who require admission to the hospital “will not be so lucky.”

This article points out that a final decision has not been made, but it is nevertheless shocking that a non-profit university hospital has had under consideration a proposal to reduce the number of beds in an emergency room that already has a strained capacity.

The reason given for even considering rationing of emergency room beds demonstrates just how sick our health care financing system is. They would increase the overload of the emergency room to a level that would drive away low income populations so that they would not have to admit those who are “so acutely ill that they must be transferred to general-medicine or intensive-care wards” within their hospital. Just to be sure, they would reduce those acute in-patient beds as well. At the same time that they would create deliberate rationing for acutely ill, low-income individuals, they would expand their bed capacity for lucrative services for insured patients.

Sick, sick, sick!

This isn’t about a lack of money, because we already spend more than enough to pay for these services. This is about the way we finance health care. The uninsured and those in the under-funded Medicaid program are a drain on resources, and it is understandable that the administrators would want to reduce that drain. But our sick system of financing care leads them to the consideration of truly perverse methods of reducing that burden.

The current leading proposal to expand our fragmented, dysfunctional system of financing health care will not correct the perversities of a multi-tiered system. But imagine if we re-directed the $2.5 trillion that we are already spending into a single payer national health program, these perversities would be sharply curtailed. Health delivery system design would be based on patient needs rather than on the nature and distribution of the financing sources. Can’t those in Washington working on reform understand this? It’s not that complicated of a concept.

Originally published in the Boston Globe.

Massachusetts has been lauded for its healthcare reform, but the program is a failure. Created solely to achieve universal insurance coverage, the plan does not even begin to address the other essential components of a successful healthcare system.

What would such a system provide? The prestigious Institute of Medicine, part of the National Academy of Sciences, has defined five criteria for healthcare reform. Coverage should be: universal, not tied to a job, affordable for individuals and families, affordable for society, and it should provide access to high-quality care for everyone.

The state’s plan flunks on all counts.

First, it has not achieved universal healthcare, although the reform has been a boon to the private insurance industry. The state has more than 200,000 without coverage, and the count can only go up with rising unemployment.

Second, the reform does not address the problem of insurance being connected to jobs. For individuals, this means their insurance is not continuous if they change or lose jobs. For employers, especially small businesses, health insurance is an expense they can ill afford.

Third, the program is not affordable for many individuals and families. For middle-income people not qualifying for state-subsidized health insurance, costs are too high for even skimpy coverage. For an individual earning $31,213, the cheapest plan can cost $9,872 in premiums and out-of-pocket payments. Low-income residents, previously eligible for free care, have insurance policies requiring unaffordable copayments for office visits and medications.

Fourth, the costs of the reform for the state have been formidable. Spending for the Commonwealth Care subsidized program has doubled, from $630 million in 2007 to an estimated $1.3 billion for 2009, which is not sustainable.

Fifth, reform does not assure access to care. High-deductible plans that have additional out-of-pocket expenses can result in many people not using their insurance when they are sick. In my practice of child and adolescent psychiatry, a parent told me last week that she had a decrease in her job hours, could not afford the $30 copayment for treatment sessions for her adolescent, and decided to meet much less frequently.

In another case, a divorced mother stopped treatment for her son because the father had changed insurance, leaving them with an unaffordable deductible. And at Cambridge Health Alliance, doctors and nurses have cared for patients who, unable to afford the new copayments, were forced to interrupt care for HIV and even cancers that could be treated with chemotherapy.

Access to care is also affected by the uneven distribution of healthcare dollars between primary and specialty care, and between community hospitals and tertiary care hospitals. Partners HealthCare, which includes two major tertiary care hospitals in Boston, was able to negotiate a secret agreement with Blue Cross Blue Shield of Massachusetts to be paid 30 percent more for their services than other providers in the state, contributing to an increase in healthcare costs for Massachusetts, which are already the highest per person in the world. Agreements that tilt spending toward tertiary care threaten the viability of community hospitals and health centers that provide a safety net for the uninsured and underinsured.

There is, though, one US model of healthcare that meets the Institute of Medicine criteria: Medicare. Insuring everyone over 65, Medicare achieves universal coverage and access to care, is not tied to a job, and is affordable for individuals and the country. Medicare simplifies the administration of healthcare dollars, thereby saving money. We need to improve Medicare, and expand this program to include everyone.

A bill before Congress, the United States National Health Insurance Act, would provide more comprehensive coverage for all. The bill includes doctor, hospital, long-term, mental health, dental, and vision care, prescription drugs, and medical supplies, with no premiums, copayments, or deductibles.

People would be free to choose doctors and hospitals, and insurance would not be tied to a job. Costs would be controlled because health planning in a national health program can reestablish needed balance between primary/preventive care and high-tech tertiary care. A modest, progressive tax would replace what people currently pay out of pocket. This program would pay for itself by eliminating the wasteful administrative costs and profits of private insurance companies, and save $8 billion to $10 billion in Massachusetts alone.

We must let Congress know we want improved access to affordable healthcare for all, not more expensive private health insurance we can’t afford to use when we are sick. Massachusetts healthcare reform fails on all five Institute of Medicine criteria. Congress should not make it a model for the nation.

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?

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