PNHP

Testimony of Quentin Young, M.D., to the House Ways and Means Committee

Testimony of Quentin Young, M.D., to the House Ways and Means Committee

[The following testimony is the prepared text of the remarks given by Dr. Quentin Young at a hearing on health care reform conducted by the House Ways and Means Committee on June 24 in Washington.]

Testimony of Quentin D. Young, M.D., M.A.C.P., national coordinator, Physicians for a National Health Program

Mr. Chairman, members of the Committee, thank you for giving me the opportunity to comment on the proposal that has emerged from the three key House committees and to articulate the single-payer alternative. I am national coordinator of Physicians for a National Health Program, an organization of 16,000 American physicians who support single-payer national health insurance. Our organization represents the views of the majority of U.S. physicians, 59 percent of whom support national health insurance.

I wish to make two points to the Members of this Committee. The first is that the best health policy science, literature, and experience indicate that the Tri-Committee proposal will fail miserably in its purported goal of providing comprehensive, sustainable health coverage to all Americans. And it will fail whether or not it includes a so-called “public option” health plan.

The second point I wish to make is that single-payer national health insurance is not just the only path to universal coverage, it is the most politically feasible path to health care for all, because it pays for itself, requiring no new sources of revenue.

The difference between single payer and the Tri-Committee proposal could not be more stark: single-payer has at its core the elimination of U.S.-style private insurance, using huge administrative savings and inherent cost control mechanisms to provide comprehensive, sustainable universal coverage. The Tri-Committee discussion draft preserves all of the systemic defects inherent in reliance on a patchwork of private insurance companies to finance health care, a system which has been a miserable failure both in providing health coverage and controlling costs. Elimination of U.S.-style private insurance has been a prerequisite to the achievement of universal health care in every other industrialized country in the world. In contrast, public program expansions coupled with mandates, like those in the Tri-Committee proposal, have failed everywhere they’ve been tried, both domestically and internationally.

First, because the discussion draft is built around the retention of private insurance companies, it is unable — in contrast to single payer — to recapture the $400 billion in administrative waste that private insurers currently generate in their drive to fight claims, issue denials and screen out the sick. A single-payer system would redirect these huge savings back into the system, requiring no net increase in health spending.

Second, because the discussion draft fails to contain the cost control mechanisms inherent in single payer, such as global budgeting, bulk purchasing, negotiated fees and planned capital expenditures, any gains in coverage will quickly be erased as costs skyrocket and government is forced to choose between raising revenue and cutting benefits.

Third, because of this inability to control costs or realize administrative savings, the coverage and benefits that can be offered under the discussion draft will be of the same type currently offered by private carriers, which cause millions of insured Americans to go without needed care due to costs and have led to an epidemic of medical bankruptcies.

Virtually all of the reforms contained in the discussion draft have been tried, and have failed repeatedly. Plans that combined mandates to purchase coverage with Medicaid expansions fell apart in Massachusetts (1988), Oregon (1992), and Washington state (1993); the latest iteration (Massachusetts, 2006) is already stumbling, with uninsurance again rising and costs soaring. Tennessee’s experiment with a massive Medicaid expansion and a public plan option worked — for one year, until rising costs sank it.

The inclusion of a so-called “public option” cannot salvage this structurally defective reform package. A public plan option does not lead toward single payer, but toward the segregation of patients, with profitable ones in private plans and unprofitable ones in the public plan. A quarter-century of experience with public/private competition in the Medicare program demonstrates that the private plans will not allow a level playing field. Despite strict regulation, private insurers have successfully cherry-picked healthier seniors, and have exploited regional health spending differences to their advantage. They have progressively undermined the public plan — which started as a single-payer system for seniors but has now become a funding mechanism for HMOs — and a place to dump the unprofitably ill.

The $1 trillion price tag on the Tri-Committee proposal already threatens to capsize our new President’s flagship initiative. In contrast, single payer avoids these hazardous political waters entirely because it requires no new sources of funding.

In tumultuous economic times, single payer is the only fiscally responsible option. Two-thirds of the American people support it. The majority of physicians are in favor of it, as are the U.S. Conference of Mayors, 39 state labor federations and hundreds of local unions across the country. Millions of Americans are mobilized to struggle for single payer, but your leadership is crucial. I hope this Committee will see fit to provide it.

Thank you.

Testimony of Steffie Woolhandler, M.D., to the Health Subcommittee of the House Energy and Commerce Committee

[The following testimony is the prepared text of the remarks given by Dr. Steffie Woolhandler at a hearing on health care reform conducted by the Health Subcommitee of the House Energy and Commerce Committee on June 24 in Washington.]

Testimony of Steffie Woolhandler, M.D., M.P.H.

Mr. Chairman, members of the Committee. I’m Steffie Woolhandler. I am a primary care doctor in Cambridge, Massachusetts, and associate professor of medicine at Harvard. I also co-founded Physicians for a National Health Program. Our 16,000 physician members support nonprofit, single-payer national health insurance because of overwhelming evidence that lesser reforms — even with a robust public plan option – will fail.

Private insurance is a defective product. Unfortunately, the Tri-Committee health reform plan would keep private insurers in the driver’s seat, and, indeed, require Americans to buy their shoddy goods. Once failure to buy health insurance is a federal offense, what’s next? A Ford Pinto in every garage? Lead-painted toys for every child? Melamine-laced chow for every puppy?

Even middle-class families with supposedly good coverage are just one serious illness away from financial ruin. My colleagues and I recently found that medical bills and illness contribute to 62 percent of all personal bankruptcies — a 50 percent increase since 2001. Strikingly, three-quarters of the medically bankrupt had insurance — at least when they first got sick.

In case after case, the insurance families bought in good faith failed them when they needed it most. Some were bankrupted by co-payments and deductibles, and loopholes that allowed their insurer to deny coverage. Others got too sick to work, leaving them unemployed and uninsured. And insurance regulations like those proposed in the tri-committee bill cannot fix these problems.

We in Massachusetts have seen in action a plan like the one you’re considering. In my state, beating your wife, communicating a terrorist threat and being uninsured all carry $1,000 fines. Yet despite these steep fines, most of the new coverage in our state has come from expanding Medicaid-like programs at great public expense. According to the state’s disclosure to its bondholders, our health reform has cost about $5,000 annually for each newly insured adult. That’s equivalent to over $200 billion annually to cover all of America’s uninsured.

But even such vast expenditures haven’t made care affordable for middle-class families in Massachusetts. If I were to lose my Harvard coverage I’d be forced to lay out $4,800 for a policy with a $2,000 deductible before it pays for any care, and 20 percent co-payments after that. Skimpy, overpriced coverage like this left 1 in 6 Massachusetts residents unable to pay their medical bills last year.

Meanwhile, rising costs have forced the Legislature to rob Peter in order to pay Paul. Funding cuts have decimated safety-net hospitals and clinics, and the current budget drops coverage for 28,000 people.

As research I published in the New England Journal of Medicine showed, a single-payer reform could save about $400 billion annually by shrinking health care bureaucracy — enough to cover the uninsured and to provide first dollar coverage for all Americans. A single-payer system would also include effective cost-containment mechanisms like bulk purchasing and global budgeting. As a result, everyone would be covered with no net increase in U.S. health spending. But these savings aren’t available unless we go all the way to single payer.

Adding a public insurance plan option can’t fix the flaws in Massachusetts-style reform. A public plan might cut private insurers’ profits, which is why they hate it. But their profits account for only about 3 percent of the money squandered on bureaucracy. Far more goes for marketing (to attract healthy, profitable members) and demarketing (to avoid the sick). And tens of billions are spent on the armies of insurance administrators who fight over payment and their counterparts at hospitals and doctors offices. All of these would be retained with a public plan option.

And overhead for even the most efficient competitive public plan would be far higher than Medicare’s, which automatically enrolls seniors when they turn 65 and disenrolls them only at death, deducts premiums directly from Social Security checks, and does no marketing.

Unfortunately, competition in health insurance involves a race to the bottom, not the top. Insurers compete by NOT paying for care: by denying payment and shifting costs onto patients or other payers. These bad behaviors confer a decisive competitive advantage. A public plan option would either emulate them — becoming a clone of private insurance — or go under. A kinder, gentler public plan option would quickly fail in the marketplace, saddled with the sickest, most expensive patients, whose high costs would drive premiums to uncompetitive levels.

In contrast, a single-payer reform would radically simplify the payment system and redirect the vast savings to care. Hospitals could be paid like a fire department, receiving a single monthly check for their entire budget, eliminating most billing. Physicians’ billing could be similarly simplified.

Eight decades of experience teach that private insurers cannot control costs or provide families with the coverage they need. A government-run clone of private insurers cannot fix these flaws. Only single payer national health insurance can assure all Americans the care they need at a price they can afford.

Thank you.

The Health Care Industry vs. Health Reform

By Wendell Potter
Center for Media and Democracy
June 24, 2009

I’m the former insurance industry insider now speaking out about how big for-profit insurers have hijacked our health care system and turned it into a giant ATM for Wall Street investors, and how the industry is using its massive wealth and influence to determine what is (and is not) included in the health care reform legislation members of Congress are now writing.

Although by most measures I had a great career in the insurance industry (four years at Humana and nearly 15 at CIGNA), in recent years I had grown increasingly uncomfortable serving as one of the industry’s top PR executives. In addition to my responsibilities at CIGNA, which included serving as the company’s chief spokesman to the media on all corporate and financial matters, I also served on a lot of trade association committees and industry-financed coalitions, many of which were essentially front groups for insurers. So I was in a unique position to see not only how Wall Street analysts and investors influence decisions insurance company executives make but also how the industry has carried out behind-the-scenes PR and lobbying campaigns to kill or weaken any health care reform efforts that threatened insurers’ profitability.

I also have seen how the industry’s practices — especially those of the for-profit insurers that are under constant pressure from Wall Street to meet their profit expectations — have contributed to the tragedy of nearly 50 million people being uninsured as well as to the growing number of Americans who, because insurers now require them to pay thousands of dollars out of their own pockets before their coverage kicks in — are underinsured. An estimated 25 million of us now fall into that category.

What I saw happening over the past few years was a steady movement away from the concept of insurance and toward “individual responsibility,” a term used a lot by insurers and their ideological allies. This is playing out as a continuous shifting of the financial burden of health care costs away from insurers and employers and onto the backs of individuals. As a result, more and more sick people are not going to the doctor or picking up their prescriptions because of costs. If they are unfortunate enough to become seriously ill or injured, many people enrolled in these plans find themselves on the hook for such high medical bills that they are losing their homes to foreclosure or being forced into bankruptcy.

As an industry spokesman, I was expected to put a positive spin on this trend that the industry created and euphemistically refers to as “consumerism” and to promote so-called “consumer-driven” health plans. I ultimately reached the point of feeling like a huckster.

I thought I could live with being a well-paid huckster and hang in there a few more years until I could retire. I probably would have if I hadn’t made a completely spur-of-the-moment decision a couple of years ago that changed the direction of my life. While visiting my folks in northeast Tennessee where I grew up, I read in the local paper about a health “expedition” being held that weekend a few miles up U.S. 23 in Wise, Va. Doctors, nurses and other medical professionals were volunteering their time to provide free medical care to people who lived in the area. What intrigued me most was that Remote Area Medical, a non-profit group whose original mission was to provide free care to people in remote villages in South America, was organizing the expedition. I decided to check it out.

That 50-mile stretch of U.S. 23, which twists through the mountains where thousands of men have made their living working in the coalmines, turned out to be my “road to Damascus.”

Nothing could have prepared me for what I saw when I reached the Wise County Fairgrounds, where the expedition was being held. Hundreds of people had camped out all night in the parking lot to be assured of seeing a doctor or dentist when the gates opened. By the time I got there, long lines of people stretched from every animal stall and tent where the volunteers were treating patients.

That scene was so visually and emotionally stunning it was all I could do to hold back tears. How could it be that citizens of the richest nation in the world were being treated this way?

A couple of weeks later I was boarding a corporate jet to fly from Philadelphia to a meeting in Connecticut. When the flight attendant served my lunch on gold-rimmed china and gave me a gold-plated knife and fork to eat it with, I realized for the first time that someone’s insurance premiums were paying for me to travel in such luxury. I also realized that one of the reasons those people in Wise County had to wait in long lines to be treated in animal stalls was because our Wall Street-driven health care system has created one of the most inequitable health care systems on the planet.

Although I quit my job last year, I did not make a final decision to speak out as a former insider until recently when it became clear to me that the insurance industry and its allies (often including drug and medical device makers, business groups and even the American Medical Association) were succeeding in shaping the current debate on health care reform. While the thought of speaking out had crossed my mind during the months leading up to the day I gave notice, I initially decided instead to hang out my shingle as a consultant to small businesses and nonprofit organizations.

I decided to take the shingle down, though, at least for a while, when I heard members of Congress reciting talking points like the ones I used to write to scare people away from real reform. I’ll have more to say about that over the coming weeks and months, but, for now, remember this: whenever you hear a politician or pundit use the term “government-run health care” and warn that the creation of a public health insurance option that would compete with private insurers (or heaven forbid, a single-payer system like the one Canada has) will “lead us down the path to socialism,” know that the original source of the sound bite most likely was some flack like I used to be.

Bottom line: I ultimately decided the stakes are too high for me to just sit on the sidelines and let the special interests win again. So I have joined forces with thousands of other Americans who are trying to persuade our lawmakers to listen to us for a change, not just to the insurance and drug company executives who are spending millions to shape reform to benefit them and the Wall Street hedge fund managers they are beholden to.

Take it from me, a former insider, who knows what really motivates those folks. You need to know where the hard-earned money you pay in health insurance premiums — if you lucky enough to have coverage at all — really goes.

I decided to speak out knowing that some people will not like what I have to say and will do all they can to discredit me. In anticipation of that, here are some facts:

* I am not doing this because my former employer was pushing me out the door or because I had become a disgruntled employee. I had not been passed over for a promotion or anything like that. As I noted earlier, I had a financially rewarding career in the industry, and I’m very grateful for that. I had numerous promotions, raises, bonuses, stock options and stock grants over the years. When I left my last job, I was as close on the corporate ladder to the CEO as any PR person has ever climbed at the company. I reported to the general counsel, the company’s top lawyer, whose boss is the chairman and CEO, a man I like and worked closely with over many years.

* The decision to leave was entirely my own, and I left on good terms with everybody at the company. In fact, I agreed to postpone my last day at work by more than two months at the company’s request. My coworkers gave me a terrific going-away party, and I received dozens of kind notes from people all across the country including friends at other companies and at America’s Health Insurance Plans, the industry trade association.

I still consider all of them my friends. In fact, the thing I have missed most since I left is working as part of a team, even though I eventually came to the conclusion that I was playing for the wrong side. Being a consultant has its advantages, but I have missed the camaraderie. After a few months, I thought that maybe I should consider working for another company again. At one point, a former boss told me that another insurer had posted a PR job and encouraged me to contact a former CIGNA executive who worked there about it. Against my better judgment, I did, but I immediately decided not to pursue it. The last thing I wanted to do was to go from one big insurer to another one. What the hell was I thinking?

I’m writing this because, knowing how things work, I’m fully expecting insurers’ PR firms to quietly feed friends of the industry (which include a roster of editorial writers and pundits, lawmakers and many others who fall under the broad category of “third-party advocates,”) with anything they can think of to discredit me and what I say. This will go on behind the scenes because the insurers will want to preserve the image they are working so hard to cultivate — as a group of kind and caring folks who think only of you and your health and are working hard as real partners to Congress and the White House to find “a uniquely American solution” to what ails our system.

I expect this because I have worked closely with the industry’s PR firms over many years whenever the insurers were being threatened with bad publicity, litigation or legislation that might hinder profits.

One of the reasons I chose to become affiliated with the Center for Media and Democracy is because of the important work the organization does to expose often devious, dishonest and unethical PR practices that further the self interests of big corporations and special interest groups at the expense of the American people and the democratic principles this country was founded on.

After a long career in PR, I am looking forward to providing an insider’s perspective as a senior fellow at CMD, and I am very grateful for the opportunity to speak out for the rights and dignity of ordinary people. The people of Wise County and every county deserve much better than to be left behind to suffer or die ahead of their time due to Wall Street’s efforts to keep our government from ensuring that all Americans have real access to first-class health care.

Wendell Potter is the Senior Fellow on Health Care for the Center for Media and Democracy in Madison, Wisconsin.

Physicians to tell House panels: single payer is only true health reform

Doctors say Democrats' plan offers micro-coverage for macro-costs

Media Advisory
June 23, 2009

Contacts:
Quentin Young, M.D., (312) 782-6006
Steffie Woolhandler, M.D., M.P.H., steffie_woolhandler@hms.harvard.edu
Mark Almberg, PNHP, (312) 782-6006, cell: (312) 622-0996, mark@pnhp.org

Two leading physician advocates for single-payer national health insurance will testify on Capitol Hill Wednesday, June 24, telling lawmakers that the latest House “Tri-Committee” proposal to reform the U.S. health care system — with or without a “public plan option” — will be unable to deliver on its stated goal of providing comprehensive and sustainable health coverage to all Americans. Only single payer can accomplish that goal, they will say.

Dr. Quentin Young, national coordinator of Physicians for a National Health Program, is scheduled to testify shortly after 9 a.m. EDT before the House Ways and Means Committee in the main committee hearing room, 1100 Longworth House Office Building. The committee is chaired by Rep. Charles Rangel (D-N.Y.).

Dr. Young’s testimony reads in part: “I wish to make two points to the Members of this Committee. The first is that the best health policy science, literature, and experience indicate that the Tri-Committee proposal will fail miserably in its purported goal of providing comprehensive, sustainable health coverage to all Americans. And it will fail whether or not it includes a so-called ‘public option’ health plan. The second point is that single-payer national health insurance is not just the only path to universal coverage, it is the most politically feasible path to health care for all, because it pays for itself, requiring no new sources of revenue.”

Dr. Steffie Woolhandler, associate professor of medicine at Harvard Medical School and a primary care physician in Cambridge, Mass., is set to testify before the Health Subcommittee of the House Energy and Commerce Committee at 1 p.m. EDT or shortly thereafter in Room 2123 of the Rayburn Office Building.

Her testimony reads in part: “As research I published in the New England Journal of Medicine showed, a single-payer reform could save about $400 billion annually by shrinking health care bureaucracy — enough to cover the uninsured and to provide first dollar coverage for all Americans. A single-payer system would also include effective cost-containment mechanisms like bulk purchasing and global budgeting. As a result, everyone would be covered with no net increase in U.S. health spending. But these savings aren’t available unless we go all the way to single payer.”

Both Dr. Young and Dr. Woolhandler will be available for comment upon the adjournment of their respective panels.

David Brooks – Kill this effort and start over

Something for Nothing

By David Brooks
The New York Times
June 22, 2009
On May 12, the Senate Finance Committee held a hearing on health care reform. There was a long table of 13 experts, and a vast majority agreed that ending the tax exemption on employer-provided health benefits should be part of a reform package.
They gave the reasons that experts — on right or left — always give for supporting this idea. The exemption is a giant subsidy to the affluent. It drives up health care costs by encouraging luxurious plans and by separating people from the consequences of their decisions. Furthermore, repealing the exemption could raise hundreds of billions of dollars, which could be used to expand coverage to the uninsured.
Democratic Senator Ron Wyden piped up and noted that he and Republican Senator Robert Bennett have a plan that repeals the exemption and provides universal coverage. The Wyden-Bennett bill has 14 bipartisan co-sponsors and the Congressional Budget Office has found that it would be revenue-neutral.
The Finance Committee’s chairman, Senator Max Baucus, looked exasperated. With that haughty and peremptory manner that they teach in Committee Chairman School, he told Wyden and the world that this idea was not going to happen.
In the World’s Greatest Deliberative Body, senators don’t run things. Chairmen and their staffs run things. During the spring, as the Obama administration faded to invisibility, the finance and health committees separately put together plans. These plans did not alter the employer exemption. They did build on the current system. They did include approaches that have been around since Richard Nixon.
The problem with the committee plans is that they don’t do much to change the underlying incentives, and consequently don’t do much to control costs. “The single most expensive option is to build on the existing system,” says the health care costs guru John Sheils of the Lewin Group.
The C.B.O. measured the plans, and the results were devastating. A successful plan has to be revenue-neutral for the government over the next 10 years, and it has to reduce the total health care burden over the long term so the country doesn’t go bankrupt. The Senate committee plans failed both criteria. They would cost the government more than $1 trillion this decade and send total health care costs zooming at least twice as fast as the economy as a whole.
The C.B.O. reports sent shock waves through Washington. Senators and staffs began casting about for a way to get a good C.B.O. score. President Obama redoubled his rhetoric about fundamentally reducing health care costs. Everybody continued looking around for a compromise that could get a bipartisan majority.
Now you might think that in these circumstances someone might take a second look at the ideas incorporated in the Wyden-Bennett plan, which already has a good C.B.O. score, bipartisan support and a recipe for fundamental reform.
If you did think that, you are mistaking the Senate for a rational organism. For while there are brewing efforts to incorporate a few Wyden-Bennett ideas, there is stiff resistance to the aspects that fundamentally change incentives.
The committee staffs don’t like the approach because it’s not what they’ve been thinking about all these years. The left is uncomfortable with the language of choice and competition. Unions want to protect the benefits packages in their contracts. Campaign consultants are horrified at the thought of fiddling with a popular special privilege.
So the process is moving along as it has been. There is a great deal of talk about the need to restrain costs. There’s discussion about interesting though speculative ideas to bend the cost curve. There are a series of frantic efforts designed to reduce the immediate federal price tag. Some senators and advisers suggest cutting back on universal coverage. Others have come up with a bunch of little cuts in hopes of getting closer to the trillion-dollar tab. The administration has ambitious plans to slash Medicare spending.
But there is almost nothing that gets to the core of the problem. Under the leading approaches, health care providers would still have powerful incentives to provide more and more services and use more expensive technology.
We’ve built an entire health care system (maybe an entire government) on the illusion of something for nothing. Instead of tackling that basic logic, we’ve got a reform process that is trying to evade it.
This would be bad enough in normal times. But the country is already careening toward fiscal ruin. We’ve already passed a nearly $800 billion stimulus package. The public debt is already projected to double over the next 10 years.
Health care reform is important, but it is not worth bankrupting the country over. If this process goes as it has been going — with grand rhetoric and superficial cost containment — then we will be far better off killing this effort and starting over in a few years. Maybe then there will be leaders willing to look at the options staring them in the face.

http://www.nytimes.com/2009/06/23/opinion/23brooks.html

Readers’ Comments:
Don McCanne
San Juan Capistrano, CA
June 23rd, 2009
9:16 am
Two very pertinent points left out would entirely change any conclusions drawn from this commentary:
1) You state that John Sheils has shown that building on the existing system is the single most expensive option for reform. What you didn’t state is that Sheils has also shown that a single payer national health program is the least expensive, and is the most effective in achieving the goals of universality and cost containment.
2) Although you state that Wyden-Bennett has a favorable C.B.O. score, you left out the fact that it was achieved after months of negotiation with the C.B.O. during which numerous changes were made that would shift the burden of future cost increases from the federal budget to individual patients. Financial hardship and bankruptcy due to medical debt is already a problem for insured individuals, and Wyden-Bennett would compound that problem.
Instead of worrying about the federal budget as an isolated problem, Congress needs to start addressing the combined public and private costs for patients. Policy solutions that would work are no secret.

David Brooks – Kill this effort and start over

Something for Nothing

By David Brooks
The New York Times
June 22, 2009

On May 12, the Senate Finance Committee held a hearing on health care reform. There was a long table of 13 experts, and a vast majority agreed that ending the tax exemption on employer-provided health benefits should be part of a reform package.

They gave the reasons that experts — on right or left — always give for supporting this idea. The exemption is a giant subsidy to the affluent. It drives up health care costs by encouraging luxurious plans and by separating people from the consequences of their decisions. Furthermore, repealing the exemption could raise hundreds of billions of dollars, which could be used to expand coverage to the uninsured.

Democratic Senator Ron Wyden piped up and noted that he and Republican Senator Robert Bennett have a plan that repeals the exemption and provides universal coverage. The Wyden-Bennett bill has 14 bipartisan co-sponsors and the Congressional Budget Office has found that it would be revenue-neutral.

The Finance Committee’s chairman, Senator Max Baucus, looked exasperated. With that haughty and peremptory manner that they teach in Committee Chairman School, he told Wyden and the world that this idea was not going to happen.

In the World’s Greatest Deliberative Body, senators don’t run things. Chairmen and their staffs run things. During the spring, as the Obama administration faded to invisibility, the finance and health committees separately put together plans. These plans did not alter the employer exemption. They did build on the current system. They did include approaches that have been around since Richard Nixon.

The problem with the committee plans is that they don’t do much to change the underlying incentives, and consequently don’t do much to control costs. “The single most expensive option is to build on the existing system,” says the health care costs guru John Sheils of the Lewin Group.

The C.B.O. measured the plans, and the results were devastating. A successful plan has to be revenue-neutral for the government over the next 10 years, and it has to reduce the total health care burden over the long term so the country doesn’t go bankrupt. The Senate committee plans failed both criteria. They would cost the government more than $1 trillion this decade and send total health care costs zooming at least twice as fast as the economy as a whole.

The C.B.O. reports sent shock waves through Washington. Senators and staffs began casting about for a way to get a good C.B.O. score. President Obama redoubled his rhetoric about fundamentally reducing health care costs. Everybody continued looking around for a compromise that could get a bipartisan majority.

Now you might think that in these circumstances someone might take a second look at the ideas incorporated in the Wyden-Bennett plan, which already has a good C.B.O. score, bipartisan support and a recipe for fundamental reform.

If you did think that, you are mistaking the Senate for a rational organism. For while there are brewing efforts to incorporate a few Wyden-Bennett ideas, there is stiff resistance to the aspects that fundamentally change incentives.

The committee staffs don’t like the approach because it’s not what they’ve been thinking about all these years. The left is uncomfortable with the language of choice and competition. Unions want to protect the benefits packages in their contracts. Campaign consultants are horrified at the thought of fiddling with a popular special privilege.

So the process is moving along as it has been. There is a great deal of talk about the need to restrain costs. There’s discussion about interesting though speculative ideas to bend the cost curve. There are a series of frantic efforts designed to reduce the immediate federal price tag. Some senators and advisers suggest cutting back on universal coverage. Others have come up with a bunch of little cuts in hopes of getting closer to the trillion-dollar tab. The administration has ambitious plans to slash Medicare spending.

But there is almost nothing that gets to the core of the problem. Under the leading approaches, health care providers would still have powerful incentives to provide more and more services and use more expensive technology.

We’ve built an entire health care system (maybe an entire government) on the illusion of something for nothing. Instead of tackling that basic logic, we’ve got a reform process that is trying to evade it.

This would be bad enough in normal times. But the country is already careening toward fiscal ruin. We’ve already passed a nearly $800 billion stimulus package. The public debt is already projected to double over the next 10 years.

Health care reform is important, but it is not worth bankrupting the country over. If this process goes as it has been going — with grand rhetoric and superficial cost containment — then we will be far better off killing this effort and starting over in a few years. Maybe then there will be leaders willing to look at the options staring them in the face.

Readers’ Comments

Don McCanne
San Juan Capistrano, CA
June 23rd, 2009
9:16 am

Two very pertinent points left out would entirely change any conclusions drawn from this commentary:

1) You state that John Sheils has shown that building on the existing system is the single most expensive option for reform. What you didn’t state is that Sheils has also shown that a single payer national health program is the least expensive, and is the most effective in achieving the goals of universality and cost containment.

2) Although you state that Wyden-Bennett has a favorable C.B.O. score, you left out the fact that it was achieved after months of negotiation with the C.B.O. during which numerous changes were made that would shift the burden of future cost increases from the federal budget to individual patients. Financial hardship and bankruptcy due to medical debt is already a problem for insured individuals, and Wyden-Bennett would compound that problem.

Instead of worrying about the federal budget as an isolated problem, Congress needs to start addressing the combined public and private costs for patients. Policy solutions that would work are no secret.

Medicare 2.0: Doctors group urges health care for all

By Casey Selix
MinnPost.com
Monday, June 22, 2009

Dr. Oliver Fein, president of the 16,000-member Physicians for a National Health Program, thinks the civil rights movement of the 21st century will be health care.

As health policy reform moves up the domestic agenda of the president and Congress, a single-payer, government-run program appears to be off the table. But Fein, who was in the Twin Cities last week to launch the Hazardous to Your Health! series at St. Catherine University, thinks the single-payer concept is gaining momentum in the United States.

He urges skeptics to think of a single-payer system as Medicare 2.0 or a new and improved Medicare for All. Fein, an internist and professor at Weill Medical College of Cornell University, explained his reasoning in a Q&A with MinnPost.com.

MinnPost: One report says that those at either end of the health policy spectrum — a single-payer, government-run plan on one end, a free-market approach on the other — are being marginalized in Congress and the administration. Is there any way to revive a single-payer proposal at this point and how would your group go about doing that?

Dr. Oliver Fein: We have been very active in attempting to do that over this period, and what we would say, frankly, is that actually we’ve gotten more visibility during this time, more discussion of single payer over the last six months than we’ve had before. So whether people say that we’re marginalized or not, the fact of the matter is there seems to be more actual discussion of single payer. What I think is really interesting is that although Sen. [Max] Baucus says that single payer is off the table, at the minimum, we’re the elephant under the table. Everybody is referring to us.

So, you have someone like [Health and Human Services Secretary Kathleen] Sebelius now saying we’ll create a public option that will not go to single payer. You have Republicans saying that the thing they fear is single payer; you have a whole variety of discussion that’s going on that keeps referring to this thing called single payer. Probably one of the real problems is there’s not enough of a definition for the public to make an assessment about what that really is.

MP: Would you like to explain that?

OF: I think there are certain principles that really define what single payer is. The first is automatic enrollment in a national plan, which would lead to universal coverage. What we have now are discussions of universal coverage favored by the health insurance industry — provided that there’s a mandate to buy their product. There’s every evidence that that is not going to lead to universal coverage.

Principle two is that benefits ought to be really comprehensive. There’s a lot of discussion that single payer should be a basic package. We think it ought to be a comprehensive benefit package going from prevention, doctor, hospital, pharmaceuticals, to dental, mental health — all medically necessary services.

Principle three is that these things should be publicly financed; that means one would not use insurance premiums for financing. Premiums are really regressive because the president of a company pays the same as the secretary of a company. That seems to us grossly unfair because the incomes of those two parties are so different. So, we would propose either a payroll tax the way the Medicare program, Part A, is funded, or a mix of payroll and income taxes so that you have a progressive way of paying for health insurance. The only way you can do that is through public financing.

The fourth principle is single payer, and what that means is we’re really able to eliminate the administrative waste that occurs when you have multiple payers. The Medicare program has an overhead of about 3 percent in contrast to private health insurance which, on average, has an overhead of 20 to 30 percent. It’s not just the insurance overhead, but every hospital has to have a large billing department to deal with the multiple payers. In my personal office, I have to hire extra people to deal with prior approval, denials of claims, each insurance company having different regulations and different things that I have to fill out.

Single payer would eliminate all of that. A study published in the New England Journal shows that $300 billion could be redirected if we went from a multi-payer system to a single-payer system. That would cover everyone who’s uninsured and many of the people who are underinsured because they have high deductibles — without costing the overall system more. And that’s the real dilemma that the Obama administration is facing right now with their notion of mandates.

The fifth principle is maximizing choice. Under our present private insurance system, health plans limit you to their network of doctors and network of hospitals and you have to pay more if you go out of network or not get covered at all. Many employers offer only one plan — 42 percent of employees in America are offered only one plan. That doesn’t increase choice. The program in the country now with the most choice is Medicare. You have a choice of physician, a choice of hospital; so, again, single payer would lead to increased choice.

The final principle is essentially that this system would be delivered through a nonprofit, privately controlled system. Doctors would not be employed by the government; hospitals would not be owned by the government. What you have is public financing and collection of money by the single payer, but the private delivery system would continue.

So, then people usually ask me is there a model for this, any place in the world that does this? And I respond, “Yes, right here in the United States. It’s the Medicare program.” The traditional Medicare program is very much what we’re talking about. It needs improvement and better coverage. Dental care isn’t covered, for instance; nursing home care isn’t covered; the prescription drug benefit is a real problem because you have to use a private insurance company. The Medicare program can’t negotiate directly with pharmaceutical companies. Medicare is structured on an 80-20 rule where the beneficiary has to come up with 20 percent of the cost. I would eliminate that.

So, what we talk about is Medicare 2.0 — an expanded program of Medicare for all and an improved program that deals with many of these other programs. That would be the way a single-payer program would operate in the United States.

MP: What is your best hope — and worst fear — about the health reform proposals floated by Congress and the Obama administration?

OF: I guess our worst fear would be that Congress would pass essentially an individual mandate that everybody had to purchase health insurance AND that there would be nothing like a public option. That would be our worst fear because what that would do is essentially act as a bailout for the private health insurance industry — just like the bailout for Wall Street, frankly. It probably would not benefit patients but benefit the industry. Private health insurers have been losing people who pay premiums because essentially employer coverage has dropped over 10 million people over the last decade. We think they’re out now for this individual mandate so that they can reverse that and have more people buy private health insurance.

When it comes to the public option, we think there are many problems with it potentially. It could become a multi-payer system where private health insurance persists — a system in which the sickest patient would be dumped into the public option. The public option would, in fact on a per-beneficiary basis, become very expensive. People would say, “Oh, the government can’t run a program.” There would be strong attempts to underfund the program; it could become a total fiasco.

The other thing that worries us a little bit is how are we going to pay for this public option and some of the proposals like taxing health benefits — why are we doing such a ridiculous thing? So we really think that’s the major dilemma for the Obama administration at this point.

MP: Your best hope?

OF: It’s really difficult to say what that would be other than that there would be an increasing awareness of the single-payer option and essentially out of all of this, an increasingly large mass movement that really begins to say, “Well, we need this kind of Medicare 2.0 type program in the United States.” I’m not impressed with the idea that that’s impossible.

One has to think of the kinds of things we thought were really impossible. If you were in the 1960s and looking at the segregation that was in our society — separate waiting rooms in bus stations, train stations … in the South, you would come to think it was impossible that segregation would be erased in our lifetimes. But in four short years because there was a civil rights movement, we got the Civil Rights Act.

My best hope is that there would be a growing awareness and mass movement for health care as a right. What I think that means is health care as a single payer. I think that is growing in the country. It’s just not yet being recognized by politicians. Politicians are, to some degree, beholden to various interest groups, and that can change if there is this growing mass movement.

The civil rights movement of the 21st century, I think, is going to be for health care as a right.

MP: Why do you think this nation has resisted universal coverage and/or a single-payer program for so long?

OF: I think it’s an accident of history. During World War II, wages were frozen and unions couldn’t bargain for raises. But they could bargain for fringe benefits. So, what happened is that health insurance got linked to employment and that then began to expand. Government involvement in guaranteeing health care is very young in the world. In Europe, it started in post-World War II. There, the accident of history was that they were in very devastated economies and devastated societies; they were rebuilding. The decision there was we’ve got to offer medical care, in essence, as a right.

Well, we had a different model linking it to employment. Gradually, we got to 1965, the Medicare program was passed; why was that? What happened to most people when they turned 65? They retired. They lost their health insurance because they were no longer working for an employer. So, we instituted single-payer national health insurance for the elderly.

Now, we have many more formidable interest groups that have built up since 1965 — the private health insurance industry, the pharmaceutical industry who really worry that they’re at jeopardy if we go to single payer — and they’re probably right. So I think it’s no mystery why things have moved a little slower here. The problem is it’s not sustainable in a global world, and in a global world, which is really the way things are moving, we’re going to see single payer in the United States. It’s inevitable.

Casey Selix, a news editor and staff writer for MinnPost.com, can be reached at cselix[at]minnpost[dot]com.

House Tri-Committee public option

The House Tri-Committee Health Reform Draft

June 19, 2009
H.R. (discussion draft)
Short Title (to be supplied)
SEC. 223. PAYMENT RATES FOR ITEMS AND SERVICES.
(a) RATES ESTABLISHED BY SECRETARY.–
(1) IN GENERAL.–The Secretary shall establish payment rates for the public health insurance option for services and health care providers consistent with this section and may change such payment rates in accordance with section 224.
(2) INITIAL PAYMENT RULES.–
(A) IN GENERAL.–Except as provided in subparagraph (B) and subsection (b)(1), during Y1, Y2, and Y3, the Secretary shall base the payment rates under this section for services and providers described in paragraph (1) on the payment rates for similar services and providers under parts A and B of Medicare.
(b) INCENTIVES FOR PARTICIPATING PROVIDERS.–
(1) INITIAL INCENTIVE PERIOD.–
(A) IN GENERAL.–The Secretary shall provide, in the case of services described in sub paragraph (B), for payment rates that are 5 percent greater than the rates established under subsection (a).
(B) SERVICES DESCRIBED.–The services described in this subparagraph are items and professional services furnished during Y1, Y2, and Y3, under the public health insurance option by a physician or other health care practitioner who participates in both Medicare and the public health insurance option.
(2) SUBSEQUENT PERIODS.– Beginning with Y4 and for subsequent years, the Secretary may adjust such rates in order to promote payment accuracy, to ensure adequate beneficiary access to providers, or to promote affordablility and the efficient delivery of medical care.
http://edlabor.house.gov/blog/2009/06/health-care-reform-house-dems.shtml
PUBLIC HEALTH INSURANCE OPTION PROVISIONS IN THE DISCUSSION DRAFT:
OVERVIEW
Available in the new Health Insurance Exchange (Exchange) along with all of the private health insurance plans.
LEVEL PLAYING FIELD
Require public plan to meet the same benefit requirements, and comply with the same insurance market reforms as private plans.
Establish the public planā€™s premiums for the local market areas that are designated by the Exchange, just as other insurers do.
PROVIDER PAYMENTS AND PARTICIPATION
Initially utilizes rates similar to those used in Medicare; this tie is severed over time as more flexible payment systems are developed.
http://edlabor.house.gov/documents/111/pdf/publications/DraftHealthCareReform-PublicOption.pdf

And…

House Health Care Plan

Posted by Karen Tumulty
TIME
Swampland (a blog)
June 19, 2009
The key committee chairmen put out an outline today of their approach to health care reform, and there’s one thing they want you to know about it: “Uniquely American,” said House Education and Labor Committee Chairman George Miller.
“We need a uniquely American approach to health care reform,” warns Robert Zirkelbach, a spokesman for the trade lobby America’s Health Insurance Plans.
Anyone who has followed this debate for more than 20 seconds will immediately recognize all this talk of unique Americanism as another way of saying NOT SINGLE PAYER, which is the government-financed system that just about every other industrialized country uses in one form or another. And all this skittishness about single payer explains the delicacy with which the House drafters have tried to finesse the question of whether their system will have a public plan, something like Medicare, but for people under 65.
The answer is, it will have a public plan, and a strong one–at first.
In the early stage, the public plan would reimburse health care providers at rates that are “similar to those used in Medicare”–that is, significantly lower than most private insurers pay them. This is something that the insurance industry, doctors and hospitals will all hate. “A government-run plan that pays based on Medicare rates — for any period of time — is a recipe for disaster,” Scott P. Serota, president and Chief Executive Officer of the Blue Cross and Blue Shield Association, said in a statement issued by the association.
Advocates would argue, on the other hand, that those lower rates could be a powerful engine to bring down health costs. Which is why they won’t be happy with what happens next. According to the summary, this tie to Medicare rates would be “severed over time as more flexible payment systems are developed.” In other words, this public plan would eventually evolve into something that looks–and competes–more like a private insurance company, albeit one that happens to be run by the government. At the news conference, I asked the committee chairmen precisely what that means–When would that happen? And under what circumstances? They couldn’t tell me, and demurred that this is the kind of thing that still needs to be worked out. Waxman said it would take “a period of time” for the public plan to get started, but that “they will at some point compete.”
The House committee chairmen are trying to have it both ways on the public plan.
Of course, the biggest thing that needs to be worked out is how they are going to pay for this bill, which they said would ultimately assure that 95% of Americans have health coverage. What they are looking at is a combination of reductions in Medicare and Medicaid spending and taxes.
Until they figure that part out, all of this other stuff is written in smoke.
http://swampland.blogs.time.com/2009/06/19/house-health-care-plan/

With the release of the discussion draft of the House Tri-Committee reform proposal, the progressive community is celebrating the decision to include a “strong public option” within the health insurance exchange. Its innovative feature, different from other public option proposals, is that it would use lower Medicare-based rates for the first three years, enabling the public option to displace some higher-premium private plans within the insurance exchange. Then in the fourth year, rates would be adjusted to provide a level playing field with the private plans.
Is this the model of the public option that is going to ensure that reform will bring affordable health care to everyone? Well, here are a few things that this reform will NOT accomplish:
* Not a single one of the Republicans or conservative Democrats who are opposed to the public option will sign on to this version. It is a government program not only in name, but in fact. Not only would it eliminate any hope of bipartisan legislation, it is quite likely that it could not even muster the vote of a simple majority.
* By requiring the public option to have the same market reforms as the private plans, it will prevent the government from using the great power of beneficent public social policies. A regulated insurance exchange within a fragmented, multi-payer, business-oriented insurance market would provide a very shaky infrastructure for delivering to the community the benefits of a social insurance program. Even with greater regulation, our private insurers have a business mission whereas the European private insurers have a social mission.
* A public plan that is required to comply with private insurer rules could never provide a back door entry to a single payer system. As Medicare Advantage demonstrates, the private insurers will always use devious means to provide them with an unfair advantage over our public program, even though they provide lower value per dollar spent.
* An insurance exchange, with or without a public option, perpetuates a fragmented system that prevents us from obtaining greater health care value by having the powerful purchasing strength of our own public monopsony – the secret of other systems that have slowed cost inflation.
* The administrative complexity of this model of reform makes it impossible to cover everyone. Initial estimates that this would cover 95 percent of the population are likely overly optimistic. Regardless, supporting a program that would leave even 15 million people on their own to fend for health care reflects a callous disregard for the needs of these individuals, and certainly belies the notion that we are a caring nation.
* Although this proposal shifts spending between individuals, employers and the government, creating the appearance of financing reform, it does very little to slow the continuing escalation in health care costs. Until that is seriously addressed, as it could be through an improved Medicare for everyone, the rest of this “stuff is written in smoke,” as Karen Tumulty writes.

House Tri-Committee public option

The House Tri-Committee Health Reform Draft

June 19, 2009
H.R. (discussion draft)
Short Title (to be supplied)

SEC. 223. PAYMENT RATES FOR ITEMS AND SERVICES.
(a) RATES ESTABLISHED BY SECRETARY.–
(1) IN GENERAL.–The Secretary shall establish payment rates for the public health insurance option for services and health care providers consistent with this section and may change such payment rates in accordance with section 224.
(2) INITIAL PAYMENT RULES.–
(A) IN GENERAL.–Except as provided in subparagraph (B) and subsection (b)(1), during Y1, Y2, and Y3, the Secretary shall base the payment rates under this section for services and providers described in paragraph (1) on the payment rates for similar services and providers under parts A and B of Medicare.

(b) INCENTIVES FOR PARTICIPATING PROVIDERS.–
(1) INITIAL INCENTIVE PERIOD.–
(A) IN GENERAL.–The Secretary shall provide, in the case of services described in sub paragraph (B), for payment rates that are 5 percent greater than the rates established under subsection (a).
(B) SERVICES DESCRIBED.–The services described in this subparagraph are items and professional services furnished during Y1, Y2, and Y3, under the public health insurance option by a physician or other health care practitioner who participates in both Medicare and the public health insurance option.

(2) SUBSEQUENT PERIODS.– Beginning with Y4 and for subsequent years, the Secretary may adjust such rates in order to promote payment accuracy, to ensure adequate beneficiary access to providers, or to promote affordablility and the efficient delivery of medical care.

http://edlabor.house.gov/blog/2009/06/health-care-reform-house-dems.shtml

PUBLIC HEALTH INSURANCE OPTION PROVISIONS IN THE DISCUSSION DRAFT:

OVERVIEW
Available in the new Health Insurance Exchange (Exchange) along with all of the private health insurance plans.

LEVEL PLAYING FIELD
Require public plan to meet the same benefit requirements, and comply with the same insurance market reforms as private plans.
Establish the public planĆ¢ā‚¬ā„¢s premiums for the local market areas that are designated by the Exchange, just as other insurers do.

PROVIDER PAYMENTS AND PARTICIPATION
Initially utilizes rates similar to those used in Medicare; this tie is severed over time as more flexible payment systems are developed.

http://edlabor.house.gov/documents/111/pdf/publications/DraftHealthCareReform-PublicOption.pdf

And…

House Health Care Plan

Posted by Karen Tumulty
TIME
Swampland (a blog)
June 19, 2009

The key committee chairmen put out an outline today of their approach to health care reform, and there’s one thing they want you to know about it: “Uniquely American,” said House Education and Labor Committee Chairman George Miller.

“We need a uniquely American approach to health care reform,” warns Robert Zirkelbach, a spokesman for the trade lobby America’s Health Insurance Plans.

Anyone who has followed this debate for more than 20 seconds will immediately recognize all this talk of unique Americanism as another way of saying NOT SINGLE PAYER, which is the government-financed system that just about every other industrialized country uses in one form or another. And all this skittishness about single payer explains the delicacy with which the House drafters have tried to finesse the question of whether their system will have a public plan, something like Medicare, but for people under 65.

The answer is, it will have a public plan, and a strong one–at first.

In the early stage, the public plan would reimburse health care providers at rates that are “similar to those used in Medicare”–that is, significantly lower than most private insurers pay them. This is something that the insurance industry, doctors and hospitals will all hate. “A government-run plan that pays based on Medicare rates — for any period of time — is a recipe for disaster,” Scott P. Serota, president and Chief Executive Officer of the Blue Cross and Blue Shield Association, said in a statement issued by the association.

Advocates would argue, on the other hand, that those lower rates could be a powerful engine to bring down health costs. Which is why they won’t be happy with what happens next. According to the summary, this tie to Medicare rates would be “severed over time as more flexible payment systems are developed.” In other words, this public plan would eventually evolve into something that looks–and competes–more like a private insurance company, albeit one that happens to be run by the government. At the news conference, I asked the committee chairmen precisely what that means–When would that happen? And under what circumstances? They couldn’t tell me, and demurred that this is the kind of thing that still needs to be worked out. Waxman said it would take “a period of time” for the public plan to get started, but that “they will at some point compete.”

The House committee chairmen are trying to have it both ways on the public plan.

Of course, the biggest thing that needs to be worked out is how they are going to pay for this bill, which they said would ultimately assure that 95% of Americans have health coverage. What they are looking at is a combination of reductions in Medicare and Medicaid spending and taxes.

Until they figure that part out, all of this other stuff is written in smoke.

http://swampland.blogs.time.com/2009/06/19/house-health-care-plan/

Comment:

By Don McCanne, MD

With the release of the discussion draft of the House Tri-Committee reform proposal, the progressive community is celebrating the decision to include a “strong public option” within the health insurance exchange. Its innovative feature, different from other public option proposals, is that it would use lower Medicare-based rates for the first three years, enabling the public option to displace some higher-premium private plans within the insurance exchange. Then in the fourth year, rates would be adjusted to provide a level playing field with the private plans.

Is this the model of the public option that is going to ensure that reform will bring affordable health care to everyone? Well, here are a few things that this reform will NOT accomplish:

* Not a single one of the Republicans or conservative Democrats who are opposed to the public option will sign on to this version. It is a government program not only in name, but in fact. Not only would it eliminate any hope of bipartisan legislation, it is quite likely that it could not even muster the vote of a simple majority.

* By requiring the public option to have the same market reforms as the private plans, it will prevent the government from using the great power of beneficent public social policies. A regulated insurance exchange within a fragmented, multi-payer, business-oriented insurance market would provide a very shaky infrastructure for delivering to the community the benefits of a social insurance program. Even with greater regulation, our private insurers have a business mission whereas the European private insurers have a social mission.

* A public plan that is required to comply with private insurer rules could never provide a back door entry to a single payer system. As Medicare Advantage demonstrates, the private insurers will always use devious means to provide them with an unfair advantage over our public program, even though they provide lower value per dollar spent.

* An insurance exchange, with or without a public option, perpetuates a fragmented system that prevents us from obtaining greater health care value by having the powerful purchasing strength of our own public monopsony – the secret of other systems that have slowed cost inflation.

* The administrative complexity of this model of reform makes it impossible to cover everyone. Initial estimates that this would cover 95 percent of the population are likely overly optimistic. Regardless, supporting a program that would leave even 15 million people on their own to fend for health care reflects a callous disregard for the needs of these individuals, and certainly belies the notion that we are a caring nation.

* Although this proposal shifts spending between individuals, employers and the government, creating the appearance of financing reform, it does very little to slow the continuing escalation in health care costs. Until that is seriously addressed, as it could be through an improved Medicare for everyone, the rest of this “stuff is written in smoke,” as Karen Tumulty writes.

Single-minded on healthcare

By ELIZABETH COONEY
Boston Globe
June 22, 2009

The debate in Washington about how to overhaul the nation’s healthcare system has included little from advocates for a single-payer plan. Dr. Steffie Woolhandler, a Cambridge Health Alliance internist and Harvard Medical School professor who cofounded Physicians for a National Health Care Program, has been raising her voice for a national plan for more than two decades, contending that the current system based on private insurance – including the Massachusetts model mandating near-universal coverage – does not serve people well, whether they are rich or poor, insured or uninsured. Here is an edited version of an interview last week.

ELIZABETH COONEY

Q. What do you think of current efforts in Washington to improve healthcare?

A. What’s currently on the table, what [President] Obama and [Senator Edward M.] Kennedy are talking about, will not fix healthcare. They don’t have any way to pay for it. We can’t just keep pumping money into the system. We actually have to fix the system.

Q. Why aren’t single-payer advocates at the table?

A. I think that was due to the tremendous influence of the private health insurance industry. We’ve pushed some and the process has moved some. At first Senator [Max] Baucus had 13 people, mostly doctors and nurses, arrested outside the hearing he was leading. We did get a hearing on single payer for the first time in history in the House Education and Labor Committee.

Q. How would a single-payer system pay for itself?

A. A single-payer system contains its own funding. It would fix the system by dramatically reducing administrative costs. Just the complexity of having competing insurance firms and the system overhead make costs go way up. In the United States, administration costs us 31 cents of every healthcare dollar. In Canada, it’s about 16.5 cents for every healthcare dollar. If we could have the administrative efficiency they have in Canada, we could move $400 billion in annual costs.

Q. What about waiting lists for care?

A. Canada spends half of what we do per capita on healthcare and they do have some waiting lists, but they’re really not as bad as the right wing portrays them. The waiting lists are a result of their level of spending. Our problem in the US is we spend a lot of money but we have a bad system. In Canada they have a good system but they just don’t spend enough money on it. We have great hospitals and great nurses and well-trained doctors and lots of fancy technology. We have what we need, and yet we still can’t take care of patients because the financing system doesn’t work.

The Health Reform We Need & Are Not Getting

By Arnold Relman
The New York Review of Books
Volume 56, Number 11 ƂĀ· July 2, 2009

Healthcare, Guaranteed: A Simple, Secure Solution for America
by Ezekiel J. Emanuel, with a foreword by Victor R. Fuchs
PublicAffairs, 219 pp., $14.95 (paper)

President Obama has placed health care reform high on his domestic agenda. He believes that a better health care system is essential for the nation’s economic recovery, so health reform “will not wait another year.” However, he has made only general proposals for reform, leaving Congress to work out the details of the legislation. The Democratic-led Congress has already passed some limited health legislation and its leaders say that they will put a comprehensive reform bill on the President’s desk before the end of this year.

Despite wide popular support for major reform, there will be powerful opposition. Most Republicans in Congress, allied with a small band of fiscally conservative “Blue Dog” Democrats, and most people in the for-profit health care industry will resist significant change. Many others with ideological objections to “big government” pay lip service to reform, but will balk at proposals that threaten private insurance. Compromises will be necessary, so it remains to be seen what legislation emerges and how effectively it addresses the basic problems of the US health system.[1]

The central problem is its expense. Health care in the US is about twice as expensive per capita as in other developed countries–nearly 17 percent of US GDP in 2008–and its costs are rising faster. High costs partly account for another huge health care problem–nearly 50 million people are uninsured, and the number is rapidly increasing. Economists say that the main reason for high costs is the ever-expanding use of expensive kinds of diagnosis and treatment, such as new drugs, diagnostic tests, imaging methods, and surgical procedures. Physicians in most other advanced countries have access to virtually the same resources, but use them less.

This difference is partly explained by a higher proportion of specialists in the US, who rely more than primary care physicians on expensive technical procedures for their livelihood, and in general are much more highly paid than primary care physicians–one reason why primary care doctors are now in short supply. The American College of Physicians attributes much of the high cost of the US health system to its relative excess of well-paid specialists and lack of primary care doctors.

There are also much greater financial incentives in the US to use technology, since health insurers pay doctors and clinical facilities most of what they charge for such services. In most advanced countries with universal coverage, the government determines how medical expenses are reimbursed, and the income of health care providers from technical services is therefore more modest. Also, relatively more practicing physicians in those countries are paid salaries, and relatively more hospitals (where most advanced technology is concentrated) are controlled by government budgets. This limits the availability and use of expensive technology.

Another very important but often overlooked reason for greater health expenditures in the US is that, more than in any other advanced country, large parts of the system are owned by investors. As a result, the entire system behaves like a profit-driven industry, as I described two years ago in my book A Second Opinion.[2] The commercialization of our health system dates back only a few decades, but its consequences are profound. Investors now own about 20 percent of nonpublic general hospitals, almost all specialty hospitals, and most freestanding facilities for ambulatory patients, such as walk-in clinics, imaging centers, and ambulatory surgical centers. These medical care businesses, like other businesses, need profits to satisfy their investors, and for this purpose they use marketing and advertising, directed at physicians and the general public.

To remain competitive, many not-for-profit hospitals promote their bottom line just like their for-profit counterparts, vigorously advertising their facilities and services to the public. No other health care system is as focused on generating income as ours, and in no other country is medical care marketed and advertised so aggressively, as if it were just another commodity in trade. This increases health costs, while hospitals concentrate on the delivery of profitable, rather than effective, services. It also favors those who can pay over those who need medical care but can’t afford it.

The behavior of US physicians has been changed by the commercialization of medical care, and this too has increased costs. US medical practice has traditionally relied on fee-for-service, which has always given it some of the attributes and incentives of a business. However, the American Medical Association (AMA) maintained for many years that medical practice was a profession, not a business. The AMA’s ethical guidelines therefore advised physicians to limit their income to reasonable earnings from the care of patients, and to refrain from advertising and from entering financial arrangements with drug and device manufacturers. Those restrictions were lifted after the US Supreme Court decided in 1975 that lawyers, and by extension members of other professions, including physicians, are engaged in interstate commerce and therefore must be subject to antitrust law (from which they had largely been exempt).[3]

This decision had an enormous effect on the medical profession, but its consequences have received relatively little public attention. Although the courts did not initiate the commercialization of medicine, they certainly accelerated it and gave it legal justification. In 1980, after medical organizations lost some costly antitrust trials, in which they were accused of such offenses as limiting doctor fees or denying staff privileges, the AMA changed its ethical guidelines, declaring medicine to be both a business and a profession. This lowered the AMA’s barriers to the commercialization of medical practice, allowing physicians to participate in any legal profit-making business arrangement that did not harm patients.

Nearly a half-century ago, Stanford economics professor Kenneth Arrow, later a Nobel laureate, convincingly argued that medical care cannot conform to market laws because patients are not ordinary consumers and doctors are not ordinary vendors.[4] He said that sick or injured patients must rely on physicians in ways fundamentally different from the price-driven relation between buyers and sellers in an ordinary market. This argument implied that, contrary to the assumptions of antitrust law, market competition among physicians cannot be expected to lower medical prices. And since physicians influence decisions to use medical services far more than patients do, the volume and types of services provided to patients–and hence total health costs–need to be controlled by forces other than the market, such as professional standards and government regulation. But Arrow’s argument was largely ignored in the rush to exploit health care for commercial purposes that ensued after the passage of Medicare and Medicaid in 1965.

The effects of investor ownership on health costs are perhaps most evident in the US private insurance system, which covers about 170 million people under age sixty-five–most of them through employment-based private plans. The great majority of private health insurers today, such as Aetna and Cigna, are investor-owned businesses. Most of these were established just a few decades ago, when–as a result of the rapid expansion of employment-based insurance–huge amounts of money began to flow into health care, creating profitable opportunities for investors.

Profits and management expenses take at least 10 to 20 percent of the premiums charged by investor-owned plans, including the costs of selecting those they will insure, whereas the overhead costs of Medicare–a government-run insurance plan covering everyone sixty-five and older–are about 3 percent. When private insurance companies provide coverage for Medicare patients (as in the Medicare Advantage plans), they cost the US government about 13 percent more than standard Medicare coverage.

In comparison with public insurance, a much smaller fraction of private insurance premiums goes to the actual provision of care, and the cost of providing acceptable care for those under sixty-five is probably much higher than if the same population were covered by Medicare. The private US health insurance industry has revenues from premiums of at least $500 billion, so its business overhead and profits add many billions to the cost of health care. Furthermore, the overhead costs of physicians and hospitals, whose offices must deal with the red tape of multiple private insurance companies when billing and collecting for services, add substantially to the expense these insurers inflict on the US system.

When considered in the light of what has been said about health costs, the proposals now being debated in Washington seem to be missing the main target. They will expand insurance coverage in the short term, which is certainly needed, but they will create a system even less affordable than at present.

Consider, first, the health proposals made in late February by President Obama in his budget message (most of which were also part of his campaign platform). He stressed the need to cover the uninsured and reduce the costs of health insurance. He suggested that people should not be locked into their jobs just to secure health coverage, that they should have a choice of health plans and physicians, and should be able to keep their employment-based plans if they wished, but should have other options. To reduce costs he urged elimination of high administrative expenses, unnecessary tests and services, and other inefficiencies. He also advocated more use of electronic records and the development of data on the effectiveness of specific medical interventions. He expected that these measures would not only improve the reformed system but also help it to pay for itself and maintain “fiscal sustainability.”

The coverage problem had already been partially addressed through the Recovery Act of 2009, signed by the President on February 17, which provides tax credits for the recently unemployed to help them keep their health insurance. Coverage had been increased further by separate legislation reauthorizing the Children’s Health Insurance Program (CHIP), which includes funds to insure an additional four million children under Medicaid–mainly children from poor families.

The Recovery Act also provides funds to improve the health care system and control costs. It authorizes $19 billion to support computerizing health records and about $1 billion for preventive public health programs (such as control of smoking and obesity), as well as community clinics and case management. As he said in his budget message, Obama believes that these initiatives will in the long run result in more efficient and less expensive care, although many people would remain uninsured. So beyond the already enacted measures, the President requested a reserve fund of more than $630 billion over ten years for health reform, most of which would expand and improve health insurance coverage.

The President proposed to finance half of his health expenditures over the next ten years through increased taxes on the wealthy, and half through savings from improved medical care. He also proposed to save money by reducing excessive payments to private insurers who cover Medicare beneficiaries (Medicare Advantage plans); by reducing drug prices and encouraging the use of generics; and by curtailing fraudulent billing practices.

These objectives are laudable, but as many knowledgeable authorities–including the Congressional Budget Office–have pointed out, there is very little evidence that the President’s initiatives would actually produce substantial savings. Whatever improvements these measures may make in the quality and efficiency of care–and they could well be significant–they are unlikely, over the next ten years, to generate the $300 billion in savings assumed by the President’s budget. And even if such savings were to be realized, most health economists believe that universal coverage would cost over twice what Obama allocated in his budget, and that does not count the cost of medical inflation.

The President apparently wants to achieve nearly universal coverage now, hoping to deal with the cost problem later. That probably explains why he invited representatives of the health industry to the White House on May 11. According to the White House, the meeting was a “watershed” event that resulted in a pledge from industry officials to reduce costs by $2 trillion over the next decade. But leaders of the American Hospital Association and the private insurance industry told The New York Times a few days earlier that a specific amount of savings had not been promised, and that the savings would be more gradual. This episode is best described as part of the industry’s strategy to appear supportive, more by words than action, hoping thereby to fend off legislation that would seriously threaten its interests. To facilitate passage of health reform, the President solicits the health industry’s support, but he must know this will require making compromises with vested interests. He also must know that health care businesses cannot be much interested in reducing expenditures that are their income.

The President no longer insists that people under sixty-five whose income is too high for Medicaid should have the option of buying public insurance, although that was part of his campaign platform and Secretary of Health and Human Services Kathleen Sebelius says he still favors it. Representative Pete Stark, the California Democrat who chairs the House Ways and Means Health Subcommittee, strongly supports this idea. Such a public insurance option is strongly opposed by the private insurance industry and by some influential legislators like Iowa Republican Senator Charles Grassley, who see it as unfair competition and the opening wedge of a move toward the ultimate replacement of private plans with a government-operated insurance system. The industry and its allies have so far been emphatic that they will not agree to a reform plan that offers the choice of public insurance.

A compromise has been suggested by Senator Charles Schumer in which the public insurance option is supported entirely by premiums and co-payments and administered by an independent agency enforcing the same rules that regulate the private plans. Whether this, or any other, version of the public option would satisfy industry’s concerns is not clear. The private insurance industry has made clear its willingness to compromise on a proposal that subsidizes expanded coverage and improvements in medical care, provided that the legislation mandates private coverage for all those under sixty-five not already covered by a government program. The private insurance industry might even accept a requirement that private insurers offer insurance to all applicants without increasing premiums to those with preexisting illnesses, provided that insurers are allowed to set rates based on age and other demographic factors. The insurance industry’s conciliatory public position may be concealing what will ultimately be its usual resistance to any policy threatening its current stranglehold on the under-sixty-five health insurance system. It will be interesting to see how these issues are resolved. As the May 11 meeting at the White House suggests, the administration does not want a direct confrontation with vested interests and probably will settle for arrangements the insurance industry suggests.

In seeking a consensus, Obama’s health reform policies do not address the central causes of rising costs, and propose nothing likely to have much effect on them. He does not mention the ways that investor ownership and the fee-for-service payment system provide incentives for increasing costs. Nor do his policies recognize as a major problem the fragmented, entrepreneurial organization of a medical care system that is dominated by specialists and is deficient in primary care doctors. And yet reforms that do not address these problems cannot produce an affordable or sustainable system.

In many respects, Obama’s proposals resemble the widely acclaimed reforms enacted three years ago under Governor Mitt Romney in Massachusetts. That initiative has achieved wider insurance coverage in the state but has not challenged the private insurers or made any changes in the delivery of medical care, which is among the most expensive in the country. Consequently, while federal funds from the Recovery Act may keep the Massachusetts plan alive for the time being, the state is now confronting cost problems that could bankrupt the entire program. Like Obama, Massachusetts lawmakers decided to begin by expanding coverage, apparently hoping to control costs later on.

Five congressional committees, two in the Senate and three in the House, are working on health care proposals, but to judge from the advice they are getting and from comments in the media by members of these committees, the resulting legislation is unlikely to go beyond the expanded coverage and the marginal improvements in the existing medical care delivery system proposed by Obama. Max Baucus, Democrat from Montana, chairman of the influential Senate Finance Committee, released a white paper last November outlining a reform plan largely resembling the President’s. There is little evidence in this document of a strong determination to challenge the private insurance plans with a competing public plan, or to make basic changes in the organization and funding of medical practice. Timid legislative tinkering with the current medical care system and a focus on increasing coverage, rather than major reform, are not going to control costs or make much difference in the quality of care.

This is one of the main conclusions of Ezekiel Emanuel’s recent book, Healthcare, Guaranteed. Although its views stand apart from the current consensus, it will get attention from Washington’s policymakers, not least because the author, a physician with clinical training, is the older brother of Rahm Emanuel, Obama’s chief of staff. He is also chair of the Department of Bioethics at the National Institutes of Health and the medical adviser to Peter Orszag at the Office of Management and Budget.

Emanuel shares many of the criticisms of the current system that I have put forward here, including the problems of private insurance and fragmented, fee-for-service medical care. However, he says nothing about the role of investors and commercial behavior in creating these problems, and none of his suggested reforms addresses the lack of primary care doctors. Still, to his credit, he proposes comprehensive reforms in all parts of the system, arguing that incremental changes like those advocated by Obama and Baucus will be ineffective.

Emanuel proposes, first, that everyone be issued a government certificate guaranteeing access to a broad range of health care services, which would be provided through certified, competing private health insurance plans. These plans would be paid by a government agency, with premiums adjusted for the degree of risk estimated for each patient. The plans would be required to accept everyone regardless of preexisting medical conditions. They would then organize integrated teams of physicians and other health professionals to provide the guaranteed care. Hospitals, selected by the doctors and their patients, would be reimbursed by the plans. Employment-based insurance would disappear, to be replaced by increased wages for employees. Medicaid would also end and Medicare would be gradually phased out, to be replaced by membership in the new national system. Individuals would be free to buy alternative or supplemental services at their own expense, but these costs would not be tax-deductible.

Emanuel’s proposed system would be funded by a dedicated, VAT-type of consumption tax, the rate to be set by Congress. The amount collected would in effect limit total federal expenditures on health. Costs would also be moderated by a more rational use of expensive technology, based on the recommendations and research findings of a federally supported Institute for Technology Outcomes and Assessment. A National Health Board would oversee the operation of the entire system, monitor and report on the performance of the plans, and determine the risk-adjusted per capita payments to them.

Apart from the question of its political chances, how should this proposal be judged? In my view it has much to commend it, but is seriously flawed by its dependence on competing, for-profit private insurance plans to reorganize and manage the medical care delivery system, and to determine the reimbursement of physicians and hospitals. It recalls the “managed care” era of the 1990s, when, in an effort to control costs and maximize profits, the HMOs restricted access to specialists and hospitals and regulated physicians’ use of technical procedures, causing many patients and physicians to rebel against them. As that experience has shown, insurers should not make decisions about the use of medical resources, whether the insurers are private or public. Such decisions should be left to physicians and their patients–provided, of course, that there is appropriate accountability, and public mechanisms are in place for controlling total expenditures and the prices paid for services.

Emanuel is right in wanting to reform the present insurance system, but he is mistaken in thinking that it should be replaced by regulated competition among private, for-profit insurers. The experience of the last few decades with such insurers–Medicare Advantage plans are a case in point–shows that they add costs without commensurate benefit. Private, investor-owned insurance plans are a failed experiment and should be phased out or marginalized.

The logical alternative would be a universal insurance plan administered by the government and funded by taxes–some sort of “single-payer” arrangement, which would eliminate paying for the profits and administrative expenses of private insurance middlemen. Emanuel admits that a single- payer system would save a lot of money, probably at least $120 billion per year, but he fears single-payer plans, and argues against them. He says that they do little or nothing to improve the quality or efficiency of care, while exposing the system to the risks of government meddling, rationing, and unpredictable financial support.

The obvious response to those criticisms is that single-payer plans concern the method of insurance and not the delivery of medical care. Medicare, for example, is a single-payer system in which medical care is privately delivered, with a minimum of government interference. The medical care delivery system could be reformed and reorganized to control costs and improve quality while still being funded through a single payer plan.

That solution, in fact, is one that I proposed two years ago in A Second Opinion. It would include a single public payer that guaranteed comprehensive health care for all, funded by a progressive tax whose proceeds would be dedicated to medical care. This insurance and funding plan would be combined with a delivery system, overseen by a public agency but managed entirely on a not-for-profit basis by privately organized doctors and hospitals. The delivery of care and the use of health resources would be the responsibility of organized multispecialty groups of salaried physicians and other health professionals, which would include adequate numbers of primary care doctors.

Multispecialty group practice with salaried physicians has many advantages for the delivery of low-cost, high-quality care, in which the different medical services needed by a patient are effectively integrated. Evidence for these advantages, as well as the problems faced by group practice in the current system, are thoroughly discussed in a book edited by Alain C. Enthoven and Laura A. Tollen.[5] Despite the problems, a few large multispecialty groups have managed to thrive–for example, the Mayo Clinic, Kaiser-Permanente, Marshfield, Geisinger, Scott-White, and Lahey. Patients at these groups are covered by a variety of insurance plans, public and private. They receive high-quality care by integrated teams of physicians, primary care doctors, and specialists, who are paid mainly by salaries.

The Mayo Clinic, for example, has been very successful as a large, private, not-for-profit, self-governing organization, in which the participating physicians elect medical leaders who set professional standards, hire and fire staff, and determine salaries. I envision a system that would encourage the development of many smaller community-based group practices of this kind, and would help them survive, with subsidies if needed. These groups would be certified by a new central health agency, which would set guidelines for salaries and administrative policies.

As in Emanuel’s plan, total costs would be limited by the amount of money collected through a health tax, but I favor a progressive, income-related tax rather than a VAT. Deci-sions on the use of available resources would be the responsibility of physicians, who would be helped, but not controlled, by clinical guidelines and assessments of technology. Hospitals and other facilities would be not-for-profit and would be paid through the central health agency, but the choice of these facilities would be a private decision made by doctors and their patients.

Congressman John Conyers of Michigan has introduced a single-payer proposal (HR 676) that would pro- vide universal health care through a Medicare-like public insurance system with private, nonprofit providers. Although his bill now has many cosponsors in the House, it remains held up in committee and is unlikely to be part of any legislation emerging from the 111th Congress. A single-payer system, despite its many advantages over the present insurance system, and despite its growing public acceptance, is clearly “off the table” in current legislative discussions. At the start of the public hearing of the Senate Finance Committee on May 5 and 12, Senator Baucus insisted that he was “open” to all views; but among the twenty-eight invited witnesses, no single-payer advocate was allowed to testify. In fact, Baucus has repeatedly said that the legislative debate would not consider a single-payer option.

Neither my proposal, nor Emanuel’s, nor Conyers’s, nor any other plan that starts with the elimination of private employment-based insurance and depends largely on public funding stands much of a chance of being enacted now. It would be too great a change, and it would threaten insurance companies and other powerful vested interests that influence Congress. The same is true of any major reorganization of medical care that phases out fee-for-service practice in favor of nonprofit multispecialty groups of salaried physicians and dampens the commercial fire that has converted US medical care into an ever-expanding profit-seeking industry.

As bad as they already are, things will have to get still worse before major reform becomes politically possible. The legislation likely to emerge from this Congress will not control–and will probably even exacerbate–the inflation of costs. But sometime in the not-too- distant future, health expenditures will become intolerable and fundamental change will at last be accepted as the only way to avoid disaster. When that time arrives, the opportunity to enact real health reform will finally be at hand.

Notes

[1]I briefly summarized my view of the health system’s problems in an earlier commentary on the McCain and Obama campaigns, but an assessment of the legislative remedies now being discussed requires a deeper analysis of what’s wrong with US health care. See “McCain, Obama, and the National Health,” The New York Review, November 6, 2008.

[2]A Second Opinion: Rescuing America’s Health Care: A Plan for Universal Coverage Serving Patients over Profit (PublicAffairs, 2007).

[3]Goldfarb v. Virginia State Bar, 421 U.S. 773 (1975).

[4]Kenneth J. Arrow, “Uncertainty and the Welfare Economics of Medical Care,” The American Economic Review, Vol. 53, No. 5 (December 1963).

[5]Toward a 21st Century Health System: The Contributions and Promise of Prepaid Group Practice (Jossey-Bass, 2004).

The Policy That Dare Not Speak Its Name

Robert Kuttner
The Huffington Post
June 22, 2009

I’m sure I’m not the only reader who noticed the juxtaposition of two front page stories in Sunday’s New York Times dealing with health care. The first article cited a new Times-CBS poll showing that 72 percent of Americans favored a government run health plan comparable to Medicare, which would be available to everyone.

The second reported on a rogue radiologist at a Philadelphia VA hospital who botched 92 prostate procedures.

The right will doubtless go to town on that one, as what we can expect of government-sponsored medicine. I’ll have more to say about the VA in a moment, but first let’s consider the poll findings.

The poll is relevant because Congress will soon decide whether to include the so-called “public option” in the Obama health reform bill. As drafted by three House leaders and unveiled last Wednesday, the 852-page bill would include a government-sponsored, Medicare-like public plan.

Republicans and the health industry have been kicking and screaming that this is socialistic. But the poll suggests that defenders of the public plan have nothing to fear politically, and that Republicans are in danger of getting on the wrong side of a popular issue.

However, that’s only the beginning of the story. The reform package, as drafted by the Obama administration and the House leadership, is dubious legislation even with the inclusion of a public option. Basically, it leaves the two worst aspects of the system intact. First, private insurers will continue to dominate. Second, most people will continue to get their insurance through their employers. Given these two bedrock realities, there is no way that the bill can make serious inroads on cost without cutting back on care. The high cost of the approach is already causing key legislators to back off. The current system wastes huge sums, but because it is so fragmented the money flows to profit opportunities and not to the most cost-effective forms of health care.

Also, as my American Prospect colleague Paul Starr warns, a mixed system with a public option effectively invites the most expensive and hard-to-treat people to opt for the public plan, while private insurers will seek to insure the young and the healthy. This is a familiar problem known as adverse selection. The private insurers will then smugly point out that the public plan is less “efficient,” when in fact it simply will have a more costly population. The only way to avoid this problem is to have everyone in the same universal plan–what’s otherwise known as a single-payer plan.

The public option is a not-very-good second best–because our leading liberal politicians lack the nerve to embrace the one reform that simultaneously solves the problem of cost, quality, and universal inclusion. The policy that dare not speak its name is of course comprehensive national health insurance, or Medicare-for-All. I try to avoid using the term “single payer,” because a technical, policy-wonk phrase not understood by most civilians has become insider shorthand for national health insurance. Let’s call the thing by its rightful name. Medicare-for-All is something regular people understand.

The Times-CBS poll is evidence that this is what more than two Americans in three really want. Most voters have not followed the nuances of how the public option in the Obama plan would compete with private insurance. The poll simply indicates that voters want access to a straight-up, Medicare-style plan to be available to one and all. In past polls, when Times-CBS pollsters ask whether people favor national health insurance, responses generally favor Medicare-for-All by margins of about two-to-one.

In the current debate, liberals find themselves fighting to keep the public option alive, so that some form of efficient, publicly-run health insurance will stay in the mix–but knowing that it is embedded in a reform package that is far more costly and inefficient than it should have been. Instead of validating the common sense and reformist demands of ordinary Americans and identifying the insurance, drug, and corporate elites as the obstacles to real reform, too many of our liberal leaders from President Obama on down hope to co-opt business elites with a convoluted scheme that undermines the efficiencies of a comprehensive and universal system. And just wait until it gets watered down further in order to retain the support of these same elites. A plan that all of these groups would endorse would not be worth having.

So what’s the matter with our politicians? Why are the people so far ahead of their elected leaders on this one? One reason, as usual, is money. The combination of the insurance industry, the drug industry, the American Medical Association, the hospital lobby–all of whom oppose Medicare-for-All–represents a huge amount of political spending. It takes a brave politician to face down all of these industries, even though the people are on the side of real reform. The AMA’s position is especially shameful, since the professional societies that represent most actual physicians favor national health insurance.

The second reason that liberal politicians wimp out on single payer is that the self-styled realists in this debate have decided that Medicare-for-All, even if it’s the first-best system, is too hard politically. But think about it. Has the administration picked up one Republican vote by supporting the present system plus a public option? Hardly. The current House leadership bill, offering a mixed system, with a robust public option, a requirement that employers provide good insurance or pay a tax, and that insurers not discriminate against pre-existing conditions, is just as heavy a political lift as national health insurance–and far inferior policy. So why not just go for the first-best?

The advocates of Medicare-for-All have become something of an embarrassment to the liberals. The White House forum on health reform on March 5th, which boasted a diverse range of viewpoints, including representatives of the Business Roundtable, the health insurance industry, the drug lobby, as well as a broad spectrum of business, labor and Congressional leaders, left advocates of Medicare-for-All banging on the door. None were included, despite requests for invitations.

When Sen. Bernie Sanders recently arranged for five prominent advocates of national health insurance to have a courtesy meeting with Senate Finance Committee Chair Max Baucus, the story was newsworthy because the political elite usually pretends that this viewpoint doesn’t exist, much less that it represents the desires of two Americans in three. The mainstream media have also colluded in the general effort to keep the single-payer option out of the limelight. The organization FAIR recently published an important study in its heroic magazine, “Extra”, titled “Media Blackout on Single-Payer Healthcare.”

Indeed, the Sunday New York Times-CBS poll didn’t even offer Medicare-for-All as a free-standing option. It took the Obama position as the left edge of the debate.

As for that rogue doctor at the Philadelphia veterans’ hospital, quality control is not what it should be throughout our fragmented system. And the oases of public medicine are particularly starved for resources. Yet studies consistently find that on average, the VA does more with less than its private sector competitors. Phil Longman has written the definitive book on the subject, “Best Care Anywhere.” Here is a summary.

In this case, the offending radiologist, Dr. Gary D. Kao, was actually a contract employee and not a VA physician.

Only by having a comprehensive system can we marry quality, cost-effective care, and universal access. One of these days, a national leader will have the nerve to embrace national health insurance and fight for it. Until then, we will keep paying more money for less care, and liberals will defend reforms they themselves scarcely believe in.

Robert Kuttner is co-editor of The American Prospect, and senior fellow at Demos. His recent book is “Obama’s Challenge”.

Robert Kuttner is Co-Founder and Co-Editor of The American Prospect