Citizen juries demonstrate massive support for single-payer
By Kip Sullivan, JD

“They contradicted both beltway and public opinion polls. The whole damn world seems to think the Clinton plan is the way to go. Yet they like the single-payer system, which isn’t even getting considered in Washington.”

That was how the president of the Jefferson Center characterized the outcome of a five-day “citizen jury” experiment in which 24 “jurors” listened to and questioned 30 experts on health care reform. (Patrick Howe, “‘Citizens jury’ supports Wellstone’s health care proposal over Clinton plan,” Minneapolis Star Tribune, October 15, 1993, 10A.) Of those 30 experts, only one, Senator Paul Wellstone (D-MN), spoke in favor of single-payer. (Gail Shearer of Consumers Union, which had endorsed single-payer by 1993, was one of the 30 experts to speak to the jury, but it is not clear from the Jefferson Center record that she spoke in favor of single-payer.)

The jury heard expert testimony for and against all three of the major types of health care reform legislation that have been promoted in the US over the last four decades. Senator Wellstone presented the case for his single-payer bill, numerous speakers made the case for Bill Clinton’s managed competition bill (a bill based on competition between insurance companies that use managed-care cost-control techniques), and numerous speakers made the case for what later came to be called “consumer-driven” health insurance policies (competition between insurance companies that sell policies with deductibles on the order of $2,000 for individuals and $5,000 for families).

The jury voted by massive majorities to reject the market-based proposals – managed competition and high-deductible policies – and, by a landslide majority (17 out of 24, or 71 percent), to endorse Wellstone’s single-payer bill. At the time the Jefferson Center report noted only that a majority of jurors voted for single-payer. The actual vote count was reported years later by Barry Casper in his book, Lost in Washington: Finding the Way Back to Democracy in America.

The unbearable lightness of polls

Observers were surprised at the jury’s rejection of the Clinton plan because polls taken at the time the Jefferson Center jury was meeting (the second week of October 1993) were reporting that a majority of the public supported Clinton’s Health Security Act, his “managed competition within a budget” bill that was supposed to create a system of universal health insurance. For example, a Gallup/CNN/USA Today poll (see Exhibit 1 page 10) released on September 24, 1993 showed 59 percent endorsed Clinton’s bill. But just three weeks later, on October 14, 1993, the jury rejected Clinton’s bill by a vote of 19 to 5. Five jurors out of 24 comes to 21 percent, far below the 60-percent level one would have expected based on polls.

The enormous gap between the citizens jury’s vote on Clinton’s bill and contemporary poll results illustrates a well known problem with polls: Although they can produce consistent and accurate results when the question is about something the respondents are familiar with, such as whether they have health insurance, they can produce wildly divergent and inaccurate results when the question is about a complex issue that respondents have had little time to study or even to think about.

Contrast, for example, a 2007 AP-Yahoo poll, which found 65 percent of Americans support a Medicare-for-all system, with a 2009 CBS poll which found only 50 percent think “government” would do a “better job” of providing health insurance than the insurance industry. The AP-Yahoo poll posed this question (the order of the two solutions was reversed from one respondent to the next):

Which comes closest to your view?

The United States should continue the current health insurance system in which most people get their health insurance from private employers, but some people have no insurance;

The United States should adopt a universal health insurance program in which everyone is covered under a program like Medicare that is run by the government and financed by taxpayers.

Sixty-five percent of respondents chose the second solution – the Medicare-for-all solution – while only 34 percent chose the current system.

Now consider the June 12-16, 2009 CBS poll which asked: “Do you think the government would do a better or worse job than private insurance companies in providing medical coverage?” Fifty percent said “the government” would do a better job versus 34 percent who said “the government” would do a worse job.

Now, just to raise your skepticism about polls another notch, consider this wrinkle. When CBS asked the same question two months later – during August 27-31, 2009 – they found 13 to 14 percent of respondents had changed their minds in favor of the insurance industry. That is, by late August (by which time dozens of tumultuous “town hall” meetings about the Democrats’ health care “reform” legislation had taken place), the percent who thought “the government” would do a better job had fallen to 36 (from 50 percent) while the percent who thought “the government” would do a worse job had risen to 47 (from 34 percent).

How do we make sense of these seemingly contradictory results? Do we trust the late-August CBS poll and say only one-third of Americans support single-payer? Or do we go with the AP-Yahoo poll and say two-thirds support single-payer? Or do we split the difference and say the June CBS poll got it about right – that half of Americans support single-payer?

Fortunately, we are not reduced to rolling dice or drawing straws. We can examine research that uses methods more reliable than those used by the typical poll, notably two citizen jury experiments. And we can examine polls that have produced contradictory results to see if we can find a reason why. I will use the remainder of this paper to report on the two citizen juries. I’ll examine polling data more closely in Part III of this series.

The Jefferson Center’s methodology

The Jefferson Center, a non-profit organization created in 1974 by Ned Crosby, invented the “citizen jury” label and developed the rules for them that are now used around the world, especially in the United Kingdom. These methods include: random selection of jurors; selection of experts and moderation of the discussion in a manner that minimizes bias; recording of the proceedings; a report from the jury indicating votes taken on major issues presented to it and recommendations from the jury; questionnaires for jurors after the jury has completed its work to inquire about their perception of the fairness of the process; and oversight and review by a steering committee to minimize bias.

The 24 jurors who gathered in a Washington, DC hotel on Sunday, October 10, 1993 were randomly selected from a pool of 2000. They included a 23-year-old college student from Colorado, a 27-year-old carpenter from Wisconsin, a 32-year-old janitor from Minnesota, a 44-year-old village clerk from New York, a 46-year-old banker from Indiana, a 51-year-old antique dealer from California, a 59-year-old retired nurse from Louisiana, and a 75-year-old retired insurance agent from Florida. Ten had voted for Clinton in the 1992 election, nine for George H.W. Bush, and five for Ross Perot. Three had no health insurance.

The experts who addressed the jury included three sitting US Senators, two former members of the House of Representatives, and 25 other experts including Gail Wilensky (who was the director of Medicare under the first President Bush and is a member of numerous corporate boards), Ira Magaziner (who directed Hillary Clinton’s health care reform task force), and Ron Pollack (director of Families USA). The discussion was moderated by Kathleen Hall Jamieson, dean of the Annenberg School for Communication at the University of Pennsylvania. Former CBS and NBC TV anchor Roger Mudd was on hand to film a documentary which aired in April 1994.

After five days of listening to and cross-examining the 30 experts (the jury asked the experts more than 500 questions), the jurors refused even to vote on the “managed competition lite” proposal presented by Senator Dave Durenberger (R-MN) and a high-deductible (Medical Savings Account) proposal presented by Senator Don Nickles (R-OK). In other words, the jury rejected the Durenberger and Nickle’s legislation by a vote of 24 to zero. They rejected Clinton’s Health Security Act by a vote of 19 to 5. When they were asked how many supported Sen. Wellstone’s single-payer bill (S. 491), 17 of 24 (71 percent) raised their hands.

Washington Post columnist William Raspberry wrote at the time:

Perhaps most interesting about last week’s verdict is its defiance of inside-the-Beltway wisdom that says a single-payer … plan can’t be passed. These jurors think it can – and ought to be. (William Raspberry, “Citizens jury won over by merits of Wellstone’s single-payer plan,” Washington Post, October 21, 1993, 23A)

I have already noted one reason why observers were surprised by the jury’s votes, namely, polls taken around the time the jury met indicated a majority of the public liked Clinton’s bill. But there was another reason to be surprised: The Jefferson Center created a playing field that was steeply tilted against Wellstone’s single-payer bill.

To begin with, the Center limited the jury to two questions: “Do we need health care reform in America?” and, “Is the Clinton plan the way to get the health care reform we need?” Second, the agenda called for presentations by a team of Republicans and their expert witnesses arguing for Republican proposals, and a team of Democrats and their expert witnesses arguing for Clinton’s Health Security Act. (The Republican team was managed and represented by former Minnesota Congressman Vin Weber; the Democrats were led by Hill and Knowlton lobbyist and former Connecticut Congressman Toby Moffett.) There was no team advocating for single-payer. There was only Wellstone.

But the jury was so attracted to Wellstone’s description of his bill during his initial presentation that they voted 22-0 to invite him back for two more question periods (see page 10 of the Jefferson Center report). No other witness was asked back even once. “In fact,” noted columnist Raspberry, “when the Minnesotan [Wellstone] dropped in at the jury’s farewell dinner Thursday night, he got a standing ovation.”

To sum up: The Jefferson Center’s citizen jury methodology was far more rigorous than any two- or three-sentence poll can be, and yet even the methods used for that jury permitted substantial bias against the single-payer approach. A total of 30 experts spoke to the Jefferson Center jury over five days. Only one of them, Senator Wellstone, made the case for single-payer. Even though the question of whether to support or oppose single-payer was not on the agenda, the jury took the initiative to get more information about it. The jury did not have to do that for any other proposal. Despite these obstacles, the single-payer proposal won by a 71-percent majority.

Minnesota citizen jury endorses single-payer by 79 percent

On October 1, 1996 I was part of another citizen jury project sponsored by the Minneapolis Star Tribune and Twin Cities Public TV which used a methodology similar to the Jefferson Center’s jury and which had a nearly identical outcome. In this case, the jury consisted of 14 randomly selected Minnesotans, only three experts spoke, and the entire event lasted just four hours. I made the case for single-payer (at that time I represented Minnesota Citizens Organized Acting Together), Michael Scandrett (then the director of the Minnesota Council of HMOs) stated the case for managed competition, and a woman who had just left a job with the Minnesota Department of Health to create her own advocacy group for Medical Savings Accounts (MSAs, now referred to as Health Savings Accounts) presented the argument for MSAs.

At the end of four hours, the moderator for the evening (an officer of the Minnesota League of Women Voters) put several questions to the jury for a vote. Her first question asked each juror which proposal they supported. Eight voted for single-payer, three voted for managed competition, one woman split her vote between single-payer and managed competition (she said she wanted the two proposals to be married somehow), no one voted for MSAs, and two of the 14 abstained. If we allocate a half of the vote by the woman who wanted some combination of managed competition and single-payer to each proposal, single-payer’s total was 8.5, or 61 percent of the 14 jurors.

The moderator’s second question asked whether the jurors would support universal coverage under a single-payer system if citizens had to pay $1,000 more in taxes that were offset by $1,000 in reduced premiums and out-of-pocket costs. (This is a conservative estimate of what would happen. It is likely that aggregate premium and out-of-pocket costs would decline more than aggregate taxes would go up under a single-payer system, and very likely that premium and out-of-pocket costs would decline substantially more than taxes would go up for lower- and middle-income Americans.) Eleven said yes to this question, and three abstained. If we treat this latter vote as the definitive vote for single-payer, then it would be accurate to say 79 percent voted for single payer. Finally, the moderator asked if the jury thought Congress had failed to give single-payer a fair hearing. Again, 11 (79 percent) said yes and three said no. (Glenn Howatt, “Canadian-style care starting to look more attractive to panelists,” Minneapolis Star Tribune October 9, 1996, A15)

Stay tuned for Part 3: “Informative polls show two-thirds support for single-payer.”

In a previous paper I described the transformation of the “public option” from an enormous program that would insure 130 million people to a tiny program in the Democrats’ health “reform” legislation that will insure somewhere between zero and 10 million people. I predicted that the “options” in the Democrats’ bills would be unable to succeed in all or most markets in the country. I characterized the main barrier facing the Democrats’ shrunken “options” as a “chicken and egg” problem: A person or group trying to create a new insurance company can’t tell prospective customers what the premium will be until they have determined how much they will pay providers; but the person or group can’t know how much it will pay providers until it knows how many people it will insure.

In this comment I elaborate on this chicken-egg barrier by presenting an illustration of the barrier at work – the departure of the Prudential Insurance Company from the Minnesota managed care health insurance market in 1994. Although Prudential was (and still is) a huge Fortune 500 company, it was unable to survive Minnesota’s highly concentrated group health insurance market and was forced to withdraw. If a company as large and as experienced as Prudential could not crack the Minnesota market, why should we hold out any hope for the little “options” proposed by the Democrats?

A recap of the transformation of the “public option”

Jacob Hacker laid out his vision of what is now called “the public option” in papers published in 2001 and 2007.  Hacker spelled out five criteria he believed the “option” had to meet:

(1) It had to be pre-populated with tens of millions of people;

(2) Only “option” enrollees could get subsidies (people who chose to buy insurance from insurance companies could not get subsidies);

(3) The “option” and its subsidies had to be available to all non-elderly Americans (not just the uninsured and employees of small employers);

(4) The “option” had to be given authority to use Medicare’s provider reimbursement rates (which are typically 20 percent below the rates paid by insurance companies); and

(5) The insurance industry had to offer the same minimum level of benefits the “option” had to offer.

Although I question some of the assumptions Hacker made in these papers, including his assumption that the “option” will inevitably enjoy Medicare’s low overhead costs, I have little doubt that an “option” which met Hacker’s five criteria would stand an excellent chance of surviving its start-up phase in most markets in the U.S. (I am ignoring here the question of whether an “option” as strong as Hacker’s original has a better chance of being enacted than a single-payer system does. Events of the last few months should disabuse the entire world of that myth.)

But when the Democrats drafted legislation early in 2009 that included provisions creating an “option,” they abandoned the first four of Hacker’s criteria and kept only the last one (the one requiring insurance companies and the “option” to cover the same benefits). Proponents of the “option,” including Hacker, did not raise a fuss about this. Not surprisingly, the “option” provisions of the bills introduced in July – one by the Senate Health, Education, Labor and Pensions (HELP) Committee and the other by the chairs of the three House committees with jurisdiction over health care reform – were basically unchanged from those in the draft versions. The Congressional Budget Office estimates the HELP Committee’s “option” will insure approximately zero people and the “option” in the House bill (HR 3200) will insure roughly 10 million people.

The advent of managed care augmented the chicken-egg problem

Prior to the advent of what came to be called “managed care,” an entrepreneur or group seeking to start a new insurance company only needed to focus on amassing a large number of customers as opposed to providers (clinics and hospitals). But with the advent of managed care in the 1980s, groups seeking to start a brand new insurance company also had to amass a supply (or “network”) of clinics and hospitals as well. Some insurers amassed this critical supply of providers by buying them out (or merging with them), but most did so by signing contracts with them.

This new provider-network requirement for market entry arose because the spread of managed care tactics meant that survival and success would go to the insurance company with the greatest ability to exert influence over providers. Insurance companies throughout the country sought to increase their influence over providers by limiting patient choice of provider so that they could steer their enrollees to fewer providers. Developing this power to steer more patients to some providers and away from others gave an insurance company two substantial advantages over an insurance company that did not do that. First, it gave the insurer the ability to force the providers they dealt with to give them discounts off their usual charges. Second, it enhanced the power of the insurer to force providers to play by the insurer’s “managed care” rules (for example, rules requiring providers to get permission from the insurer before hospitalizing a patient).

But creating a network of providers that is large enough to satisfy a widely dispersed customer base but still exclusive enough to give the insurer leverage over the in-network providers is a time-consuming and expensive process. This requirement gives an enormous advantage to the home team – the insurers that have been doing business for a long time in a given market – and, conversely, creates an enormous barrier to entrepreneurs seeking to create new insurance companies.

When the U.S. Department of Justice investigated a proposed merger between Aetna and Prudential in 1999, it concluded that “effective new entry for an HMO or HMO/POS [point-of-service] plan [that is, an insurance company that limits patient choice of provider] in Houston or Dallas typically takes two to three years and costs approximately $50 million.” Because insurance markets have become more concentrated in the decade since the DOJ published this report, the time and money required to break into today’s markets is even greater than that required a decade ago.

Insurance companies which failed to grasp this new rule of the managed care era – that success will depend not only upon the size of your customer base but also your ability to limit patient choice of provider – lost market share and many went out of business. The decision by Prudential Insurance Company to leave the highly concentrated Minnesota health insurance market in 1994 illustrates this trend.

Prudential’s departure from Minnesota’s group market

As of 1994, Minnesota’s four largest health insurance companies insured 80 percent of all Minnesotans who had health insurance of any sort. Blue Cross Blue Shield of Minnesota enrolled 1.33 million people, Medica enrolled 900,000, HealthPartners enrolled 650,000, and PreferredOne enrolled 450,000. Two of these insurers – Medica and HealthParters — were so powerful in the Twin Cities area they could extract discounts from Twin Cities hospitals that were approximately equal to Medicare’s (at that time, a discount of about one-third). They extracted these discounts not because they were as big as Medicare was (nationally Medicare insured 40 times more people than Medica did in 1994 and about 55 times as many as HealthPartners), but because they were big in the Twin Cities insurance market and, unlike Medicare, they made a point of limiting patient choice of provider. This meant they could exercise enormous leverage over the providers they did choose to deal with.

Even though Prudential was and still is a huge company nationally (it is a Fortune 500 company and is among the nation’s largest health insurance companies) and had been selling health insurance for decades, it did not react fast enough to the gradual spread of managed care tactics in Minnesota during the 1970s and 1980s. (Minnesota, along with California, led the nation down the managed care path.) By 1994 Prudential decided it couldn’t compete in the Minnesota market.

Prudential made its decision known on July 8, 1994. As the following excerpt from a Minneapolis Star Tribune article published the next day indicates, Prudential had established a toehold – it was well on its way to creating both a customer base and a provider network – but the toehold wasn’t enough.

… Prudential Insurance Co. said Friday that it will discontinue its Twin Cities managed care health plan due to intense competitive pressures. Eighty metro-area jobs will be eliminated….While Prudential … is now in 42 cities, only the Twin Cities market posed a particular problem and will be shut down….

Prudential Plus of Minnesota operates mainly in the Twin Cities and deals with 800 primary care physicians and 1,500 specialists. Nationwide, the managed care plan has 5 million members. Regardless, Prudential did not grow large enough or fast enough in the Twin Cities market to maintain a substantial lead, analysts said. The firm was easily overshadowed by heavyweights such as HealthPartners and Medica…. And these bruisers and others like them are merging or forming alliances that kept welterweights like Prudential Plus on the ropes. Gary Schultz, executive director of Prudential Plus of Minnesota, said, “Recent mergers, acquisitions and strategic alliances involving health care plans and providers … have combined to make it increasingly difficult to compete in this market place….

“Prudential only has 30,000 (members) in the Prudential Plus plan,” [Prudential marketing director Pat] McLaughlin said. “They are not the big player they needed to be and as a result may not have been able to negotiate the best deals with providers” (Dee DePass, “Prudential to discontinue managed care health plan,” Star Tribune, July 9, 1994, 1D).

An article in BNET reported an identical explanation for Prudential’s demise in Minnesota: “A Prudential spokesperson said the clout of its bigger competitors had made it difficult to recruit a critical mass of new employers and enrollees.”

Lessons for “option” advocates

This story illustrates three facts “option” advocates must address.

First, it clearly illustrates the “chicken and egg” problem facing the “option” program, or to be more precise, facing the corporations that will be hired by the Secretary of the Department of Health and Human Services to create the “option” program. (Both the HELP bill and HR 3200 authorize the Secretary to contract with corporations that the HELP bill calls “contracting administrators” for the purpose of creating the “options” throughout the U.S.) The contracting administrators are going to have to build up provider networks and a customer base from scratch, simultaneously, and market by market, even though they will suffer the disadvantage of entering the insurance business long after the insurance companies they are competing with began introducing themselves to customers and cobbling together their own provider networks.

Second, this story should put the entire country on notice that the “option” may never be able to deliver on the promise, made over and over by “option” advocates, that the “option” will offer complete freedom to choose one’s doctor and hospital. If the contracting administrators who create the “options” around the country refuse to create “options” that limit enrollees’ choice of provider, those “option” programs will have less power to drive provider rates down. That means, of course, those “option” programs will have to set their premiums higher than existing insurers that do limit patient choice of provider. That will in turn make attracting a critical customer base very difficult if not impossible.

The third fact the Prudential story illustrates is that the size of an insurer at the national level is not an important factor in decisions by clinics and hospitals about whether to sign contracts with an insurer and whether to give that insurer discounts. What matters to clinics and hospitals is size at the local level. Minneapolis hospitals, for example, could have cared less whether Prudential insured 20,000 people in Tulsa or half-a million in Florida. (Size at the national level does have some bearing on whether an insurer can extract discounts from drug and equipment manufacturers. But drugs and equipment amount to roughly 15 percent of medical costs for the non-elderly. It is clinic and hospital costs that make or break an insurance company.)

The “chicken and egg” problem is, of course, not limited to entrepreneurs trying to break into the Minnesota market. The conditions that create the “chicken and egg” problem – high concentration levels within the insurance industry and near-universal use of managed care tactics including limited choice of provider – exist throughout the country. As Senator Charles Schumer (D-NY) said in a press release about a May 2009 report from Health Care for America Now, the entire U.S. health insurance industry suffers from “extreme … consolidation.” According to the HCAN report, eleven states have more concentrated insurance markets than Minnesota does.

“Option” advocates should stop comparing the “option” to Medicare

To test your understanding of the “chicken and egg” problem, let me end with a pop quiz:  Did Medicare face a “chicken and egg” problem when it started up?

The answer is:  No, it did not.  It did not because it didn’t have to create a “customer” base from scratch. Its base was created by the law (signed on July 30, 1965) that created Medicare.

Medicare is, by design, the sole insurer for people over age 64. That means that Medicare’s administrators had a precise idea of how many Americans they would be representing on July 1, 1966, the day Medicare commenced operations. Equally importantly, every clinic and hospital in America had a good idea of how many elderly patients they would be getting if they participated in Medicare and, conversely, how many they would lose (and how much money they would lose) if they refused to accept Medicare patients. And because the Medicare law gave the nation’s entire elderly population – the portion of the population with the greatest need for medical care – to Medicare, Medicare’s administrators had a good idea of how much leverage they had on day one over the nation’s providers. This allowed them (eventually) to make an offer to America’s providers that the providers could not refuse – accept Medicare’s below-average rates or lose a lot of money. The offer was not refused. Today, virtually all American clinics and hospitals accept Medicare enrollees even though there is no requirement in the Medicare statute that providers accept Medicare enrollees. In short, having pre-established enrollment, which in turn gave Medicare the ability to set its rates below those of the insurance industry, meant that Medicare did not face the “chicken and egg” problem.

More importantly, Medicare didn’t face a “chicken and egg” problem because it has always been the single insurer for the services covered under Medicare. Medicare has never had to compete with the insurance industry for “customers.”  A pernicious consequence of the tendency of “option” advocates to describe the “option” as “just like Medicare” is that “public option” supporters and members of Congress have been lulled into thinking the “option” is bound to succeed just as Medicare did. The tendency of “option” advocates to ignore the daunting “chicken and egg” problem is one manifestation of the lazy thinking that has been induced by the constant comparison of the “option” to Medicare.  ”Option” advocates should stop comparing the “option” to Medicare.

Kip Sullivan is a member of the steering committee of the Minnesota chapter of Physicians for a National Health Program.  He is the author of The Health Care Mess: How We Got Into It and How We’ll Get Out of It (AuthorHouse, 2006).