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By Daniella Grossman
Modern Medicine
August 15, 2009

This is the first in a series of reports analyzing various aspects of healthcare reform Congress is considering. –Ed.

Sixteen years after the late Democratic Sen. Paul Wellstone proposed the American Health Security Act of 1993, which would have created national health insurance and extended benefits to all Americans, lawmakers are once again considering a single-payer healthcare system.

On both sides of the ideological battle, policy makers, analysts, and healthcare providers agree that reform is needed. A shortage of primary care physicians, imbalanced coverage, and exorbitant costs that don’t always correspond with exorbitant care are just a few of the countless reasons why the healthcare status quo, which left more than 43 million people in the United States without insurance in 2007, is under attack.

“A single-payer system in theory can help control costs and help with patient outcomes,” says Kevin Pho, MD, an internist practicing primary care in Nashua, New Hampshire. “But a lot of physicians are against it, based on the idea of a Medicare-for-all system where the government will be the only payer. Politically, it’s very controversial.”

Several bills introduced in Congress isolate a clear culprit for the biggest failings of the healthcare system: insurance companies. “There’s no question that the private insurance companies would be most negatively affected,” Dr. Pho says. “They won’t exist in a single-payer system.”

Private insurance companies would be eliminated, in addition to current benefits through government programs such as Medicare, Medicaid, and the State Children’s Health Insurance Program (SCHIP). States would operate their own health-security programs to cover all citizens, nationals, and legal residents.

In mid-July, the House Committee on Education and Labor approved an amendment to the national healthcare reform bill that would enable individual states to adopt single-payer, Medicare-for-all style reforms. Introduced by Rep. Dennis Kucinich (D-Ohio), the amendment would remove potential legal impediments for states to pass single-payer bills by waiving federal exemptions that apply to employer-sponsored health plans.

The amendment passed on a bipartisan vote of 25-19, with the support of both progressive, single-payer Democrats and many Republicans who endorsed the ability of individual states to pass their own versions of healthcare reform.

THE SUPPORT

For Anne Scheetz, MD, a single-payer healthcare system is both socially and financially sound. She’s one of 16,000 members with Physicians for a National Health Program (PNHP), she serves as the Chicago co-chair for the Illinois Single Payer Coalition, and she’s an ardent advocate of national health insurance. “We have two slogans,” Dr. Scheetz says of PNHP. “One is ‘everybody in, nobody out,’ and the other is ‘one nation, one plan.’ Although some people say it’s not politically feasible, it’s inevitable. We can’t survive without it, economically or as a citizenship that stands together.”

Dr. Scheetz makes house calls to her mostly elderly patients, all of whom are insured through Medicare. She says the fragmented network of multiple payers that most doctors, nurses, and technicians rely on takes critical time away from medical work. With one source of reimbursement, providers could spend more time caring for patients instead of arguing with insurers on the phone. “Right now, with private insurance companies you don’t know what’s covered until you don’t get paid for it, and you don’t know how they arrived at that decision,” she notes. “It’s not good for the patient-physician relationship [to say], ‘I know you need this, but your insurance company won’t pay for it.'”

A single healthcare payer could also mean major budget cuts and less paperwork at most doctors’ offices. Dr. Scheetz says national health insurance would be “a tremendous administrative relief.” Healthcare-NOW! campaign coordinator Tom Knoche says his friend, a primary care doctor in Camden, New Jersey, bills more than 200 insurance plans, each with its own regulations. “He has to have a staff just to figure out who’s responsible for what,” Knoche adds. “That’s incredibly cumbersome and adds a tremendous amount of overhead to his practice.”

Another case for single payer, Dr. Scheetz argues, is that patients will have complete choice since everyone is covered by the same plan. She would rather have patients who see her because they have similar values than patients who have been “coerced into coming to me through an HMO or PPO.”

According to Knoche, every healthcare professional, salaried or temporary, will benefit from the security that national insurance could bring to the system. “Patients will have continuity of care and care regardless of whether their life situation changes–if they get divorced, change jobs, have a mental health issue,” he explains. “For doctors and nurse practitioners, it’s the whole idea that nobody’s going to be involved in treatment other than patients and the healthcare professional they choose.”

THE OPPOSITION

While Dr. Scheetz, Knoche, and Kucinich stand behind a Medicare-for-all model as the answer to healthcare woes, critics believe it is too focused on costs and too simplistic a “solution” for the system’s complicated failings.

“We need a system that is more responsive to patient needs and what patients value, and this proposal does not take this into account,” says Robert Book, PhD, a senior research fellow in health economics at the Heritage Foundation. “It’s totally focused on spending and limiting the amount of healthcare available–limited access to care for everybody.”

Book argues that the top-down structure proposed by the bill is restrictive, rather than liberating, for patients and doctors alike. As state health-security programs create global budgets for individual facilities every year, Book says the lack of financial flexibility is dangerous.

If a certain neighborhood in Dallas sees a flu surge and the majority of patients are all going to the same hospital, which has a lower annual budget than the hospital 10 miles away, he says the proposed legislation provides no way to move resources from the second to the first, where they would be most needed. “Now, they can hire more nurses and technologists if there’s a greater need. Now, money follows the patient,” Book says. “With this system? Money follows the facility. And there will be less demand for temporary [healthcare] workers of all sorts. They won’t be able to hire more people unless they pay less.”

As far as the administrative relief logic goes, Book and Dr. Pho dismissed the real value of trading in paperwork from multiple sources for bureaucratic paperwork from the government. “There’s a myth that Medicare has fewer overhead costs and less administrative paperwork, but it’s just as onerous as with a private insurer,” Dr. Pho comments.

Another concern for Book and other single-payer detractors is a substantial change in earnings. “Doctors’ incomes are going to have to be cut, and the same goes for other allied health professionals” to allow hospitals and health organizations to handle millions of new patients across the country, Book notes.

Dr. Pho agrees that lower salaries will be a real issue if the single-payer legislation becomes law. He says that Medicare–the single largest insurer in the United States–only covers 60 to 70 percent of costs at the doctor’s office. “Doctors see Medicare patients, they lose money on that, and with any business like a doctor’s office, you can’t sustain your business that way,” he says.

And with a serious shortage of working healthcare professionals, a broad set of medical mandates from the government will not help matters much. “How would you feel if you were told your income could never go up, no matter how hard you work?” Book asks of the medical community. “And you’re going to be fighting for your slice of a fixed pie of your industry that won’t be allowed to grow. ”

Healthcare professionals will not only be limited in their financial resources, but in their decision-making power, as well. Book says a single-payer system could dramatically threaten the doctor-patient relationship because the American Health Security Standards Board, to be created under proposed legislation, would actually prohibit through its broad oversight healthcare workers from serving their patients’ needs on an individual, case-by-case basis. “[The board] decides what the best treatment is for everybody, for the average patient,” Book says. “What if you aren’t average?”

THE STAFFING

No matter what their views on national insurance, reform advocates all agree that the healthcare system faces a severe staffing shortage that needs to be addressed before millions of previously uninsured patients can receive quality care.

Dr. Pho and Knoche say the primary care field, which the newest single-payer bill confronts, needs a serious boost. Some proposals set a benchmark
for medical students by state, of which at least 50 percent would be primary care residents in five years or the government will reduce funding. “There’s a several hundred thousand dollar a year discrepancy between primary care and specialty doctors’ salaries,” Dr. Pho notes. “[Students] are not stupid; that’s where they’ll go unless the incentive changes.”

A stronger corps of primary care doctors could also reduce costs over time. “That’s where people can be most effective in catching things in the early stages, seeing that they’re treated before they become costly and complicated issues,” Knoche adds.

Dr. Scheetz says underemployment is worst in the emergency room, where employees work “under terrible stress” with a high volume of patients and must quickly decide how to treat them based on their insurance.

With regard to nursing, Pat McFarland, RN, executive director of the Association of California Nurse Leaders, says that there’s a “false sense of security” about the end of a nursing shortage. “Older nurses are continuing to work longer or they’re picking up more shifts,” she says. “We are going to see a huge number of nurses retiring in the next 10 years or so, [and] we have to make sure there’s an infrastructure to train and replace them.”

While McFarland says that temporary or traveling healthcare professionals could be more vulnerable under a single-payer system, if permanent employees put off retirement and hospitals begin operating with a fixed annual budget, their prospects aren’t too different from those of their salaried medical colleagues.

“At all levels, professionals would be challenged to be responsive and really focused on the patient,” says Kathy Flaster, RN, the CEO of California-based staffing company HRN Services. “Where do you begin to say this is a program that would service all interests, all levels of care?”

Flaster says the current demand for physicians, nurses, pharmacists, and allied health professionals through HRN Services reflects the magnitude of the system’s shortcomings. Education is a vital part of solving the reform riddle, and the earlier the better. “We need to do much more in the way of promoting and illuminating healthcare careers, and we need to start young,” she says. “You have to start academic preparation as well as stimulate interest and tickle the intellect of people as early as elementary school.”

Like McFarland, Flaster rejects a single-payer model as too simplistic. When it comes to healthcare, “There are so many issues sociologically, and you run into what is often in the literature [called] the ‘moral hazards’ of what is in front of us,” she explains. “Do we really have an obligation to provide healthcare to the homeless? To pay for the able-bodied who choose not to work and accept government programs as their standard of living? If you think about how huge these issues are to our quality of life, we are so far removed from making an intelligent choice about single payer.”

In the end, national health insurance is a “horizon question,” Flaster says, “and there is much more traffic that needs to be navigated” before such a major policy change takes effect in an already distressed healthcare system.