By Margaret Flowers, M.D.
May 21, 2014
Thank you for inviting me to participate in this important discussion today.
The first step in the work to move to a single payer plan must be to take stock of where we are and where we are headed. We must do what we can to prevent further damage while we organize for the real solution to our healthcare crisis: a national single payer health system.
We are continuing a trend that began in the 1980s of privatization of every facet of our healthcare system. This is the opposite direction from where we need to go. If we viewed the U.S. healthcare system as an experiment, which it largely is – one that defies sound health policy – we would see that it has failed. If we treated our system as an experiment, we would be required to stop it because of the high number of preventable deaths, wide health disparities and financial ruin caused by illness and medical costs. These are our outcomes despite the fact that the U.S. spends the most per capita each year on health care, two and a half times more than the average OECD nation.
There is no affordable market solution to the healthcare crisis even though the public is being steeped in market rhetoric as we speak. The private health insurance industry has proven for decades that it defies regulation. Our market-based system will continue to increase healthcare spending, leave people out and result in poor health outcomes because the bottom line is profit, not health. Until we change this fundamental dynamic, we will continue to fail to significantly improve the health of our population.
It is time for an honest national conversation about our healthcare system. We must ask ourselves whether we want to continue to treat health care as a commodity so that people receive only what they can afford or whether we want to join the rest of the industrialized world and create a healthcare system that treats health care as a public good so that people receive the health care they need.
The primary obstacle to a national single payer health system is political will. But we know from past experience that political will can change through public pressure. To effectively create this pressure we must recognize that the U.S. is not a legitimate democracy. It is an oligarchy, or more accurately a plutocracy. Health spending is almost one fifth of U.S. GDP. The medical industrial complex wields tremendous political influence. Therefore, single payer will only be on the table when the public puts it there. There is no easy way to do this, no secret back door. A national single payer health system will come from steadfast determination and strategic organizing and action.
As we are educating, organizing and mobilizing the public to demand a single payer health system, we need to take steps to challenge further privatization of our health system. I have three major areas of concern: the privatization of our public insurances, the trend towards more people being required to purchase inadequate insurance through the exchanges and increasing subsidies to private insurers that will be used as justification to cut social programs.
One harmful trend that should be addressed immediately is the privatization of our public insurances, Medicaid and Medicare. Currently at least 75 percent of Medicaid enrollees are in Managed Care Organizations, private administrators that act like private insurers by keeping a high percentage of their payment for administration, profits and salaries and cherry picking the healthiest patients. This percentage is expected to grow. It is no coincidence that WellPoint moved to buy AmeriGroup after the ACA was passed. They saw a huge profit opportunity in the Medicaid expansion.
We should examine the impact of private industry involvement in Medicaid. Two states have already moved to make their Medicaid completely public – Oklahoma in 2005 and Connecticut in 2012. They cited lower costs and better quality by doing so. They were able to shift more funding to direct patient care. In Maryland, our Medicaid program for children with chronic conditions has an overhead of less than 2 percent and is easier for patients and health professionals to use. We are currently looking into the overhead of our MCOs which we suspect is significantly higher than the public plan. This committee should investigate how much of our public dollars for Medicaid are going to private insurance administration.
Likewise, Medicare Advantage is a private insurance for Medicare patients. Although the Affordable Care Act (ACA) was supposed to curb the wasteful Medicare Advantage plans, reimbursement to them has risen and enrollment has grown at least 30 percent since the ACA was passed in 2010. A study in 2013 found that private insurers in Medicare Advantage were overpaid $34.1 billion in 2012 alone, money that could have gone to expanding Medicare services instead of padding private insurer’s pockets. This committee should be examining why this wasteful spending is occurring especially when Medicare is facing pressure to make cuts.
A very concerning trend is the movement of people eligible for public insurance into purchasing private health insurance on exchanges. The White House signaled early in 2010 through a Fact Sheet that it was OK with this approach for Medicaid. Arkansas was granted a waiver by HHS to subsidize its Medicaid population’s purchase of private insurance on the state exchange. And top White House health care experts, David Cutler and Jonathan Gruber, have indicated support for moving seniors onto the exchanges to purchase private insurance using a defined contribution (read waiver) approach.
Movement in this direction must be adamantly opposed because it would ultimately destroy our public insurances and place our most vulnerable populations at the hands of private industry rather than protecting them through the social safety net.
And finally, we must be wary of further increases in public subsidies for private insurance. The ACA has taken on tremendous financial responsibility for the cost of health care through subsidies to purchase private insurance and to offset out of pocket costs. Hundreds of billions of public dollars are being given directly to the private insurance industry without guarantees that people will be able to afford the health care they need. We must examine whether this transfer is the best use of our public dollars and question any demand for more from the industry. We must not allow what is essentially corporate welfare to be used to justify cuts to necessary social programs.
I want to close with a comment on the approach to single payer. There are currently many efforts towards single payer at the state level including in my own state of Maryland where I am on the steering committee of the Maryland Health Care is a Human Right campaign. Of course, the most advanced state is your home state, Vermont. I believe that these state efforts are important for pushing state health legislation to be the best that it can be and are a way to educate and organize movement towards national single payer. I do not believe that we should allow these efforts to take our focus off of the ultimate goal of a national single payer healthcare system.
There are significant barriers to single payer systems at the state level as you are learning in Vermont. Without a national movement, there is no guarantee that state reform will translate to the national level. And there is no need to experiment. We know what works. We have three health systems in the United States and the ones that have the greatest savings and best outcomes are the Veterans Health Administration and traditional Medicare. These are two types of single payer health systems and both are more effective than the market-based system.
We must continue to communicate that a national single payer health system is possible and that improved Medicare-For-All is the best solution to guarantee that all people living in the U.S. have access to the health care that they need, that people are covered no matter where they are and that will allow the leverage necessary to control healthcare spending in a way that doesn’t reduce coverage. We must move forward without delay because every day our current market-based health system is resulting in preventable suffering, financial ruin and death. This is unacceptable in the wealthiest country in the world. Thank you.
Dr. Margaret Flowers is a pediatrician and an editor of PopularResistance.org. She is co-chair of the Maryland chapter of Physicians for a National Health Program and serves on the board of the Maryland Health Care is a Human Right campaign.