By Peter Durantine
Franklin & Marshall College News, Nov. 19, 2013 PHILADELPHIA – The Affordable Care Act, also known as Obamacare, will not heal America’s “wasteful, fractured healthcare system,” a four-member panel of healthcare experts told a Franklin & Marshall College audience Nov. 18.
The panelists advocated for a single-payer system in which the federal government would absorb the cost of care. Funding would come from a healthcare tax that would be based on income level. They also said it would drive down costs by eliminating the majority of administrative expenses.
“Single-payer is not only fair, it’s moral,” said Patty Eakin, president of the 5,500-member Pennsylvania Association of Staff Nurses and Allied Professionals, who has been a registered nurse for 37 years. “I’d say the system we have now is immoral.”
Organized by F&M’s Department of Economics under the direction of Professor of Economics Sean Flaherty, the public event, “Beyond Obamacare: Fixing a Broken Healthcare System with a One-Payer Solution and a Focus on Prevention and Healing, Not Profits,” brought together members of the campus and local community in Lisa Bonchek Adams Auditorium in Kaufman Hall to gain insights into the national conversation on health care reform.
“We’re not trying to undo Obamacare,” said the event’s moderator, Chuck Pennacchio, executive director of the grassroots advocacy group Healthcare For All PA. “We’re trying to work with Obamacare and take it to the next step.”
In arguing for a single-payer system, which, among other things, would eliminate filing insurance claims, the panelists provided an array of statistics that showed that the poor pay more for healthcare than the wealthy, and that administrative costs and waste consumed two-thirds of the nation’s healthcare costs.
“Healthcare is becoming more and more expensive, and the burden is not being borne equally,” said Professor of Economics Gerald Friedman of the University of Massachusetts, Amherst. Friedman has conducted a comparative study on the economics of the single-payer systems employed around the world.
During his presentation, Friedman showed the cost of healthcare has increased from 6 percent of average wages in 1970 to 20 percent in 2010. The percentage is projected to rise to 24 percent in 2021. Among low-income working Americans, 25 percent of income goes to healthcare, versus 5 percent for the wealthiest Americans.
Healthcare costs vs. life expectancy
Friedman said the United States spends more per capita on healthcare than any other nation, yet ranks among the lowest in life expectancy.
“The reason we die young compared to other countries is because we lack access to healthcare,” Friedman said. And why? “Because of costs.”
Rising costs limit access to quality care, even for people with insurance, and compel manufacturers to move operations overseas to avoid labor-related healthcare costs, said another panelist, Walter Tsou, board adviser to Physicians for a National Health Program and an expert on health reform and healthcare financing. He briefs members of Congress on healthcare issues.
“Our labor costs are out of control,” Tsou said. “In another 50 years we really are going to become a second-class nation.”
Tsou said that in 2008 the U.S. spent $7,538 per capita on healthcare, with 31 percent of that total covering administrative costs. That same year, Taiwan spent $1,087 per capita, of which 1.6 percent went to administrative costs. Yet, Taiwan has a higher life expectancy than the U.S., he said.
“The current trend in healthcare costs are going to bankrupt this country,” Tsou said.
The fourth panelist, Tom Gates, a physician for 30 years who works in Family and Community Medicine at Lancaster General Hospital, said wasteful spending, to the tune of $765 billion a year, inflates healthcare costs by 30 percent.
A fundamental change in how physicians are paid could significantly reduce costs, he said, noting that the current process of paying doctors on a fee-for-service basis creates incentives for ordering unnecessary office visits and procedures.
Gates said that a single-payer system would also eliminate the high markups hospitals place on certain services, procedures and prescriptions in order to realize a profit from what insurance companies are willing to pay.
The decline of general practitioners over the last five to six decades, and the rise of doctor specialists, also have contributed to lower-quality care and higher costs, Gates said. In 1930, the ratio of general practitioners to specialists was 80:20. By 1970 those numbers had reversed.
“We let the tradition of general practice disappear,” Gates said.
One F&M student, senior Adam Taylor, a government and economics major, wasn’t convinced America needed a single-payer system, but he called the event “informative.”
Another student, Jack Mandy, a senior business major who said he came in thinking that a single-payer plan was socialist, said the discussion was enlightening.
“I didn’t realize how much waste was going on,” Mandy said. “I thought it was socialist. Now I agree that [single-payer] is very patriotic.”
Flaherty, who was pleased by the student and public turnout for the event that filled about half the auditorium, said, “I don’t know how you can hear these statistics and not think that something radical has to be done. I’m not saying something radical is going to be done, but the fight has to be fought.”
By Peter Durantine