PNHP

CBO’s deficient report on analyzing health insurance proposals

CBO’s deficient report on analyzing health insurance proposals

Key Issues in Analyzing Major Health Insurance Proposals

The Congress of the United States
Congressional Budget Office (CBO)
December 2008

Chapter 4 – Proposals Affecting the Choice of an Insurance Plan

Medicare-for-All

Many of the considerations that arise in designing a new option for individuals to enroll in Medicare would also affect the analysis of proposals to establish a single-payer system based on Medicare through which all U.S. residents could obtain their health insurance. In particular, the federal costs of such a proposal would depend primarily on the benefits that the system provided; the rates it used to pay doctors, hospitals, and other providers of health care; and the extent of any premium subsidies it offered to enrollees–all of which could differ from Medicare’s current design. The rules and processes used to determine eligibility for the program and to enroll individuals who are eligible would also have significant implications.

Even under a single-payer system, individuals could have a choice of insurance plans or benefit designs, but the extent and nature of those options would also depend on the features of the proposal. If enrollees were allowed to choose a private health plan paid through Medicare or could purchase supplemental private insurance (as many Medicare enrollees currently do), the rules governing those choices and the possibility of adverse selection would remain important considerations. If, instead, the Medicare plan was the only option offered and all residents were required to enroll in it, then adverse selection would not occur. That approach could reduce the administrative costs that doctors and hospitals currently incur when dealing with multiple insurers. Some enrollees might prefer a different design, however, and the lack of competition from private health plans could take away a benchmark that is commonly used to assess the adequacy of Medicare’s payments and the efficiency of its performance. More generally, that approach would raise important questions about the role of the government in managing the delivery of health care.

CBO Study (196 pages):
http://www.cbo.gov/ftpdocs/99xx/doc9924/12-18-KeyIssues.pdf

Comment:

By Don McCanne, MD

Everyone who is participating in the efforts to reform health care financing in the United Sates should have a copy of this CBO report. It describes in considerable detail the various policy decisions that must be made as we approach the goal of affordable health care for everyone, but only those policies that would apply to a multi-payer system of private and public programs.

What is clear is that each policy decision under this scenario increases the administrative complexities of the financing system, and that the inevitable tradeoffs that must be made can only result in compromises that cause us to fall short on our goals of universality, equity, efficiency, quality, access, and affordability. Once the decision is made that we must build on our current system, there is no possible way to avoid spending more money for reform that would fall so short of a high-performance system.

There is a very serious deficiency in this study. In the 167 pages constituting the main body of this report, there are only two paragraphs (above) on a model that would be far less expensive and would come as close as possible to achieving our goals. To say that single payer received short shrift in this important policy document is not simply an understatement; it is a glaring example of the extent to which Congress has gone to glibly dismiss single payer as not being a feasible option. They are going to make policy decisions impacting not only one-sixth of our entire economy, but also the physical and financial well being of each of us.

All of us throughout the nation need to rise up and express our outrage! We need to contact our members of Congress immediately and demand the urgent preparation of a CBO report that describes the policy options, and the impact that they would have, under a single payer national health program. We, the people, deserve the same detailed analysis as was given the multi-payer model catering to the special interests.

Family budgets strained by out-of-pocket health spending

Living on the Edge: Health Care Expenses Strain Family Budgets

By Peter J. Cunningham, Carolyn Miller, and Alwyn Cassil
Center for Studying Health System Change
December 2008
Affordability of medical care is a central focus of health care reform efforts. As health care costs continue to increase and the economy declines sharply, there is very little cushion in family budgets for health care costs, even for families with insurance coverage. Financial pressures on families from medical bills increase sharply when out-of-pocket spending for health care services exceeds 2.5 percent of family income, according to a new national study by the Center for Studying Health System Change (HSC). Low-income families and people in poor health experience financial pressures at even lower levels of spending, largely because they have already accumulated large medical debts they are unable to pay off.
There is little consensus among policy makers on how to set affordability standards in medical care, in part because there is little empirical evidence to guide these decisions. In addition, most of the policy focus has been on identifying affordability standards for insurance premiums, such as in the Massachusetts health reform, with much less attention on affordability standards for out-of-pocket spending on medical services. Some analysts propose setting affordability standards based on the current distribution of out-of-pocket spending for services, such as typical spending levels for a privately insured, middle-income population.
However, a limitation with this approach is that unlike spending for premiums, mortgages, rents, and other household necessities, out-of-pocket spending on medical care is much less predictable, often unexpected and not entirely discretionary. While families may be able to budget for preventive and routine health care needs, high out-of-pocket medical spending by families is more often associated with urgent or serious health conditions, as well as provider recommendations for treatment, rather than discretionary patient choices. Thus, what people actually spend out of pocket on medical care reflects–at least in part–what they need or are prescribed, not necessarily what they can afford.
http://www.hschange.org/CONTENT/1034/

Everyone is concerned about health care costs, and there is now a consensus that we must do something about it.
The leading proposals for health care reform are designed primarily to make health insurance affordable, when what we really need to do is make health care affordable. These proposals use insurance product design and tax policies to try to balance the health benefits provided with the ability of the individual to contribute to the premium. In an effort to keep the premium affordable, patient cost sharing is included as an incentive to reduce utilization of both beneficial and marginal health care services and products.
This study demonstrates a major flaw with this approach. Although the family may be able to budget for a modest component of an insurance premium that remains the same each month, family budgets are now so tight that a mere 2.5 percent of family income that might be required for out-of-pocket cost sharing can be a family budget buster. This study shows that cost sharing can impair both family finances and family health care access.
Financing of our health care system should be totally separated from health care access. Even modest financial barriers to access should be removed from the delivery side of health care. Cost sharing has only a negligible impact on our total national health expenditures yet it can have a serious impact on the finances and health of individuals and their families.
On the financing side, attempting to establish insurance premiums that would be affordable based on family income requires an administratively complex system of matching premiums with benefits and using tax policies to establish equitable contributions by families. This is because we have been fixated on the concept that each family must have a specific, designated private health plan and the financing must fit that plan.
It doesn’t have to be that way. Look at the traditional Medicare program. A single risk pool is established for all Medicare beneficiaries and that pool is financed primarily through equitable taxes. Medicare does have cost sharing, but this study shows us that Medicare would serve us even better if cost sharing were eliminated, fully funding the risk pool to cover payment for all essential services.
The most efficient and equitable method of financing health care for all of us would be to establish one single, universal risk pool and fund it with a system of progressive taxes. We can all pay our fair taxes, but, with fairly spartan family budgets now being the norm, we shouldn’t have to budget medical costs that are less predictable, often unexpected, and frequently in excess of discretionary income.

Family budgets strained by out-of-pocket health spending

Living on the Edge: Health Care Expenses Strain Family Budgets

By Peter J. Cunningham, Carolyn Miller, and Alwyn Cassil
Center for Studying Health System Change
December 2008

Affordability of medical care is a central focus of health care reform efforts. As health care costs continue to increase and the economy declines sharply, there is very little cushion in family budgets for health care costs, even for families with insurance coverage. Financial pressures on families from medical bills increase sharply when out-of-pocket spending for health care services exceeds 2.5 percent of family income, according to a new national study by the Center for Studying Health System Change (HSC). Low-income families and people in poor health experience financial pressures at even lower levels of spending, largely because they have already accumulated large medical debts they are unable to pay off.

There is little consensus among policy makers on how to set affordability standards in medical care, in part because there is little empirical evidence to guide these decisions. In addition, most of the policy focus has been on identifying affordability standards for insurance premiums, such as in the Massachusetts health reform, with much less attention on affordability standards for out-of-pocket spending on medical services. Some analysts propose setting affordability standards based on the current distribution of out-of-pocket spending for services, such as typical spending levels for a privately insured, middle-income population.

However, a limitation with this approach is that unlike spending for premiums, mortgages, rents, and other household necessities, out-of-pocket spending on medical care is much less predictable, often unexpected and not entirely discretionary. While families may be able to budget for preventive and routine health care needs, high out-of-pocket medical spending by families is more often associated with urgent or serious health conditions, as well as provider recommendations for treatment, rather than discretionary patient choices. Thus, what people actually spend out of pocket on medical care reflects–at least in part–what they need or are prescribed, not necessarily what they can afford.

http://www.hschange.org/CONTENT/1034/

Comment:

By Don McCanne, MD

Everyone is concerned about health care costs, and there is now a consensus that we must do something about it.

The leading proposals for health care reform are designed primarily to make health insurance affordable, when what we really need to do is make health care affordable. These proposals use insurance product design and tax policies to try to balance the health benefits provided with the ability of the individual to contribute to the premium. In an effort to keep the premium affordable, patient cost sharing is included as an incentive to reduce utilization of both beneficial and marginal health care services and products.

This study demonstrates a major flaw with this approach. Although the family may be able to budget for a modest component of an insurance premium that remains the same each month, family budgets are now so tight that a mere 2.5 percent of family income that might be required for out-of-pocket cost sharing can be a family budget buster. This study shows that cost sharing can impair both family finances and family health care access.

Financing of our health care system should be totally separated from health care access. Even modest financial barriers to access should be removed from the delivery side of health care. Cost sharing has only a negligible impact on our total national health expenditures yet it can have a serious impact on the finances and health of individuals and their families.

On the financing side, attempting to establish insurance premiums that would be affordable based on family income requires an administratively complex system of matching premiums with benefits and using tax policies to establish equitable contributions by families. This is because we have been fixated on the concept that each family must have a specific, designated private health plan and the financing must fit that plan.

It doesn’t have to be that way. Look at the traditional Medicare program. A single risk pool is established for all Medicare beneficiaries and that pool is financed primarily through equitable taxes. Medicare does have cost sharing, but this study shows us that Medicare would serve us even better if cost sharing were eliminated, fully funding the risk pool to cover payment for all essential services.

The most efficient and equitable method of financing health care for all of us would be to establish one single, universal risk pool and fund it with a system of progressive taxes. We can all pay our fair taxes, but, with fairly spartan family budgets now being the norm, we shouldn’t have to budget medical costs that are less predictable, often unexpected, and frequently in excess of discretionary income.

Only in our failed health care system

CHARLES I. WOHL, M.D.
Berkshire Eagle
Letters
Tuesday, December 16

The extensive layoffs at KB Toys, as described in the Dec. 13 Eagle, will cause far more misery for KB employees than the loss of their jobs alone.

The laid-off workers also lost their medical insurance on the day their jobs ended. Many unemployed KB workers will not receive subsidized health insurance through Commonwealth Care, the Massachusetts health plan, because their incomes before the layoffs exceeded 300 per cent of the poverty level, making them ineligible for subsidized coverage. They must buy health insurance or they face fines; and if they require medical care while uninsured, they face bankruptcy. Adequate health insurance for a family of four can cost around $12,000 per year, unaffordable for many laid-off workers — and for many employed people as well. The only affordable coverage for such people will have high deductibles and co-pays, meaning that many will have to choose between paying for medicine and paying for food and housing.

The KB layoffs are just the tip of the iceberg. As the unemployment rate rises throughout Massachusetts, tens of thousands will remain unemployed long enough to qualify for state subsidized health insurance through Commonwealth Care. When this happens, the Massachusetts health plan, already under great financial stress, will simply run out of money.

What is happening in Massachusetts is a microcosm of the severe economic recession in the U.S. and much of the world. As more Americans lose their jobs and thus their employer-based health insurance, the ranks of the uninsured (now 47 million and counting) and underinsured will swell, meaning that many millions will forego or delay medical care.

This scenario can only happen in America and is the result of our perverse health system in which employer-based health insurance written by private for-profit insurance companies is the predominant form of health coverage for those under age 65. This has lead to a fragmented, inefficient system in which nearly one-third of medical expenditures is consumed by insurance company profits and administrative costs. Medicare overhead is under five per cent. The expense and administrative costs of providing private health insurance for their employees has greatly burdened small and large American businesses, such as the automobile companies, and has made it difficult to compete with foreign companies whose workers are covered by government insurance.

Many small businesses have dropped health insurance for their employees all together or are asking them to contribute to their insurance premiums, which many employees cannot afford to do. And, as we have seen with the laid-off KB workers, when employees lose their jobs they often lose their health insurance. This cannot happen anywhere else in the industrialized world, even though unemployment is rising in Canada and Europe. Every other industrialized country has some form of universal health care. None uses profit making, investor-owned insurance companies like ours to provide health care for their citizens.

Most of my fellow physicians and an even larger proportion of other Americans believe it is time for single-payer national health insurance or “Medicare for All” in the U.S. This system is embodied in a bill in Congress, H.R. 676, sponsored by Rep. John Conyers and 92 other members of Congress. Urge Congressman John Olver to support this legislation.

President-elect Barack Obama has promised to reform the health care system from the grassroots up. As a first step in this effort, Secretary-Designate of Health and Human Services Tom Daschle is organizing Health Care Community Discussions all over the country. One such forum will be at Bagels Too, 166 North St., Pittsfield, on Wednesday, Dec. 17 from 5 p.m. until 7 p.m.. Members of MassCare will be there to discuss health care reform and the Massachusetts health plan and to elicit your views. Your feedback will be transmitted to Secretary-Designate Daschle and, through him, to President-elect Obama’s transition team. We look forward to seeing you there.

The public insurance option and AHIP's battle against it

The Case For Public Plan Choice In National Health Reform

By Jacob S. Hacker, Ph.D.
Berkeley Law Center on Health, Economic, and Family Security
December 16, 2008
This brief has made three main points. First, public health insurance outperforms private insurance in controlling costs while maintaining access and benefits–even when compared with private plans that are regulated to ensure broad coverage. Second, public insurance has also made major strides in quality improvement, and a new public plan working with Medicare alongside private plans would be able to make much greater strides in the future. Third, a competing public plan is essential to set a benchmark for private plans, providing a “check and balance” that ensures private plans, as well as the public plan, uphold high standards.
Even within a reformed system, private plans will continue to have incentives to engage in activities that undermine health security, such as tailoring their benefits or provider networks to discourage less healthy people from enrolling. Moreover, acting alone, private plans have historically paid insufficient attention to obtaining greater value. This is in part because of their limited reach, inherent instability, and the frequent movement of patients in and out of their subscriber base, and in part because of their generally weak incentives to invest in broadly distributed information on quality or to share their performance data with other interested parties. Public plan choice creates an institutional “check and balance,” encouraging private plans to uphold high standards of quality, affordability, and access.
The Case For Public Plan Choice In National Health Reform (27 pages):
http://institute.ourfuture.org/files/Jacob_Hacker_Public_Plan_Choice.pdf
Key Findings (2 pages):
http://institute.ourfuture.org/files/Hacker_Keyfindings.pdf

And…

Insurers Seek Presence at Health Care Sessions

By Robert Pear
The New York Times
December 17, 2008
When supporters of President-elect Barack Obama hold house parties to discuss ways of fixing the health care system over the next two weeks, they may find some unexpected guests.
Robert Zirkelbach, a spokesman for America’s Health Insurance Plans, the main lobby for insurance companies, said the group was “mobilizing our grass-roots coalitions and encouraging industry employees” to participate in meetings for the Obama transition team.
Before Mr. Obama even takes office, insurance companies are raising questions about a central element of his plan that calls for creation of a new public insurance program to compete directly with private insurers. A public program would, they fear, have inherent unfair advantages.
http://www.nytimes.com/2008/12/17/us/politics/17health.html?_r=1&%2334;health%20insurance=&sq=+&st=nyt&%2334;=&scp=1&pagewanted=print

In this window of opportunity for health care reform, the model that has gained traction and is moving forward is reform based on a combination of employer-sponsored plans, an individual mandate to purchase regulated private plans through an insurance pool or insurance exchange, and an option to purchase a public plan based on an improved version of Medicare.
The private insurance industry knows that if it is to survive, it must be willing to accept everyone in both the employer-sponsored and individual markets, and they now have expressed a willingness to do so. They support a market of competing health plans, with one exception. They oppose the creation of a new competing public program because it would have “inherent unfair advantages.”
What are those advantages? Jacob Hacker, in “The Case For Public Plan Choice In National Health Reform,” explains the many reasons why a public plan is superior to the private plans in providing greater value through higher quality, better access, and greater effectiveness in controlling costs. He states that, by establishing a level playing field, the public plan option would set a benchmark as a standard for private plan performance.
The private plans profess to believe in market competition. Why should they object to a level playing field? Read this paper and you’ll find twenty pages of reasons on why they cannot compete with a public program.
So we’re once again back to the argument that we cannot go straight to a single payer national health program because it is not politically feasible. But what about the feasibility of a public option in a multi-payer system? The insurance industry is opposed because the government has “unfair advantages.” The Republicans say that they are cooperating on a bipartisan approach to reform, but once the doors close, they have made it very clear that a public option will never be approved. Hacker tells us why the public option is absolutely essential in the multi-payer model, but AHIP and the Republicans tell us that it will never happen (and they have the Senate votes to prevent it).
This report is well worth downloading since it explains so well why we need to change to a public insurance program. With minimal editing, such as removing comments about competing private plan innovation, we could use it as a treatise for a new and improved Medicare – a single payer national health program.
The HCAN coalition could use the unedited version to advocate for the multi-payer model, and we could use the edited version to advocate for single payer. Since neither approach is “feasible,” why don’t we just go for broke? To Medicare for All in one single leap!

The public insurance option and AHIP's battle against it

The Case For Public Plan Choice In National Health Reform

By Jacob S. Hacker, Ph.D.
Berkeley Law Center on Health, Economic, and Family Security
December 16, 2008

This brief has made three main points. First, public health insurance outperforms private insurance in controlling costs while maintaining access and benefits–even when compared with private plans that are regulated to ensure broad coverage. Second, public insurance has also made major strides in quality improvement, and a new public plan working with Medicare alongside private plans would be able to make much greater strides in the future. Third, a competing public plan is essential to set a benchmark for private plans, providing a “check and balance” that ensures private plans, as well as the public plan, uphold high standards.

Even within a reformed system, private plans will continue to have incentives to engage in activities that undermine health security, such as tailoring their benefits or provider networks to discourage less healthy people from enrolling. Moreover, acting alone, private plans have historically paid insufficient attention to obtaining greater value. This is in part because of their limited reach, inherent instability, and the frequent movement of patients in and out of their subscriber base, and in part because of their generally weak incentives to invest in broadly distributed information on quality or to share their performance data with other interested parties. Public plan choice creates an institutional “check and balance,” encouraging private plans to uphold high standards of quality, affordability, and access.

The Case For Public Plan Choice In National Health Reform (27 pages):
http://institute.ourfuture.org/files/Jacob_Hacker_Public_Plan_Choice.pdf

Key Findings (2 pages):
http://institute.ourfuture.org/files/Hacker_Keyfindings.pdf

And…

Insurers Seek Presence at Health Care Sessions

By Robert Pear
The New York Times
December 17, 2008

When supporters of President-elect Barack Obama hold house parties to discuss ways of fixing the health care system over the next two weeks, they may find some unexpected guests.

Robert Zirkelbach, a spokesman for America’s Health Insurance Plans, the main lobby for insurance companies, said the group was “mobilizing our grass-roots coalitions and encouraging industry employees” to participate in meetings for the Obama transition team.

Before Mr. Obama even takes office, insurance companies are raising questions about a central element of his plan that calls for creation of a new public insurance program to compete directly with private insurers. A public program would, they fear, have inherent unfair advantages.

http://www.nytimes.com/2008/12/17/us/politics/17health.html?_r=1&%2334;health%20insurance=&sq=+&st=nyt&%2334;=&scp=1&pagewanted=print

Comment:

By Don McCanne, MD

In this window of opportunity for health care reform, the model that has gained traction and is moving forward is reform based on a combination of employer-sponsored plans, an individual mandate to purchase regulated private plans through an insurance pool or insurance exchange, and an option to purchase a public plan based on an improved version of Medicare.

The private insurance industry knows that if it is to survive, it must be willing to accept everyone in both the employer-sponsored and individual markets, and they now have expressed a willingness to do so. They support a market of competing health plans, with one exception. They oppose the creation of a new competing public program because it would have “inherent unfair advantages.”

What are those advantages? Jacob Hacker, in “The Case For Public Plan Choice In National Health Reform,” explains the many reasons why a public plan is superior to the private plans in providing greater value through higher quality, better access, and greater effectiveness in controlling costs. He states that, by establishing a level playing field, the public plan option would set a benchmark as a standard for private plan performance.

The private plans profess to believe in market competition. Why should they object to a level playing field? Read this paper and you’ll find twenty pages of reasons on why they cannot compete with a public program.

So we’re once again back to the argument that we cannot go straight to a single payer national health program because it is not politically feasible. But what about the feasibility of a public option in a multi-payer system? The insurance industry is opposed because the government has “unfair advantages.” The Republicans say that they are cooperating on a bipartisan approach to reform, but once the doors close, they have made it very clear that a public option will never be approved. Hacker tells us why the public option is absolutely essential in the multi-payer model, but AHIP and the Republicans tell us that it will never happen (and they have the Senate votes to prevent it).

This report is well worth downloading since it explains so well why we need to change to a public insurance program. With minimal editing, such as removing comments about competing private plan innovation, we could use it as a treatise for a new and improved Medicare – a single payer national health program.

The HCAN coalition could use the unedited version to advocate for the multi-payer model, and we could use the edited version to advocate for single payer. Since neither approach is “feasible,” why don’t we just go for broke? To Medicare for All in one single leap!

Time to fight for new health system

By Dr. William Davidson Jr.
Lebanon Daily News (PA)
December 17, 2008

This year America will spend $2.4 trillion on health care, well more than $7,000 for every man, woman and child existing within our borders. Thirty years ago the price tag was less than $1,000 per person, but then there were no CAT scans or MRIs, and laparoscopic surgery was in its infancy.

Yes, the incredible expansion in technology that has created the miracles of modern medicine has also produced a huge economic burden such that one-third of our taxes now go to pay for health care. Were that money used wisely and efficiently then perhaps the burden would not seem so onerous.

Unfortunately, only 70 cents of every dollar paid into the system actually returns to us in the form of health care. Thirty cents out of every dollar goes to administer a very dysfunctional system that has become a profit center for special interests that do not have the best interests of our people at heart.

Thirty years ago when the price tag was affordable, very few of the players in the system were getting rich off of it. Insurance companies were truly “nonprofit.” The pharmaceutical industry had acceptable profits, and health-care providers didn’t need advertising agencies and marketing specialists.

While technology is here to stay, we cannot afford to tolerate those who exploit the system to the tune of $300 billion a year. That’s right. If we eliminate the private medical-insurance industry, group-negotiate the price of medicines and make patient care the primary focus of health care providers, we could provide health care for everyone at an affordable price. Only a single-payer, publicly financed and privately delivered system can accomplish such a feat.

To implement such a change, the American people will need to send a clear message to our legislators. In order for the people to speak with a clear voice they must grow wise to the propaganda that has distracted and divided them in the past.

* For instance, is providing health care to everyone a communist plot or simply a good idea that appeals to everyone of good will?

* Do we understand that as in Canada, where most of the care is delivered by private physicians, a single-payer system here would give everyone his choice of privately practicing physicians and hospitals?

* Do we allow the pharmaceutical industry to hold us hostage with exorbitant prices or do we group-negotiate with them like the Veterans Administration, who gets medicines for 40 percent less?

* Do we accept the mantra that raising taxes is always a negative, or do we look at the bottom line that shows that after eliminating premiums, co-pays, deductibles, etc., most of us will pay less than they do now?

* Do we accept the lies about waiting lines causing premature deaths in other countries or examine the facts that show their medical outcomes are no worse than ours while their elderly live longer and their infants are healthier?

* Do we accept that the loss of a job means you lose your medical insurance and go bankrupt, or do we provide a system like the rest of the industrialized world where employment is not connected to health insurance, and being stuck in a dead-end job because of “health benefits” is no longer necessary?

* Do we remember that the discoveries of penicillin and the polio vaccine were made by men driven by the love of science and humanity rather than the pursuit of wealth as the free market advocates would have us believe?

* Do we accept the notion that the government can’t do anything right or let it be the insurance company with a 3 percent (Medicare) overhead or stay with Blue Cross and Aetna and their 20 percent overhead, multimillion dollar CEOs and “pre-existing conditions?”

Even now, the medical insurance industry is hard at work to control the dialogue concerning health-care reform in this country. Any discussion that leaves out single-payer will, in essence, leave out middle America. The choice is ours, but the longer we delay the more we suffer.

Davidson is a partner in Lebanon Cardiology Associates.

The public insurance option and AHIP’s battle against it

The Case For Public Plan Choice In National Health Reform

By Jacob S. Hacker, Ph.D.
Berkeley Law Center on Health, Economic, and Family Security
December 16, 2008

This brief has made three main points. First, public health insurance outperforms private insurance in controlling costs while maintaining access and benefits–even when compared with private plans that are regulated to ensure broad coverage. Second, public insurance has also made major strides in quality improvement, and a new public plan working with Medicare alongside private plans would be able to make much greater strides in the future. Third, a competing public plan is essential to set a benchmark for private plans, providing a “check and balance” that ensures private plans, as well as the public plan, uphold high standards.

Even within a reformed system, private plans will continue to have incentives to engage in activities that undermine health security, such as tailoring their benefits or provider networks to discourage less healthy people from enrolling. Moreover, acting alone, private plans have historically paid insufficient attention to obtaining greater value. This is in part because of their limited reach, inherent instability, and the frequent movement of patients in and out of their subscriber base, and in part because of their generally weak incentives to invest in broadly distributed information on quality or to share their performance data with other interested parties. Public plan choice creates an institutional “check and balance,” encouraging private plans to uphold high standards of quality, affordability, and access.

The Case For Public Plan Choice In National Health Reform (27 pages):
http://institute.ourfuture.org/files/Jacob_Hacker_Public_Plan_Choice.pdf

Key Findings (2 pages):
http://institute.ourfuture.org/files/Hacker_Keyfindings.pdf

And…

Insurers Seek Presence at Health Care Sessions

By Robert Pear
The New York Times
December 17, 2008

When supporters of President-elect Barack Obama hold house parties to discuss ways of fixing the health care system over the next two weeks, they may find some unexpected guests.

Robert Zirkelbach, a spokesman for America’s Health Insurance Plans, the main lobby for insurance companies, said the group was “mobilizing our grass-roots coalitions and encouraging industry employees” to participate in meetings for the Obama transition team.

Before Mr. Obama even takes office, insurance companies are raising questions about a central element of his plan that calls for creation of a new public insurance program to compete directly with private insurers. A public program would, they fear, have inherent unfair advantages.

http://www.nytimes.com/2008/12/17/us/politics/17health.html?_r=1&%2334;health%20insurance=&sq=+&st=nyt&%2334;=&scp=1&pagewanted=print

Comment:

By Don McCanne, MD

In this window of opportunity for health care reform, the model that has gained traction and is moving forward is reform based on a combination of employer-sponsored plans, an individual mandate to purchase regulated private plans through an insurance pool or insurance exchange, and an option to purchase a public plan based on an improved version of Medicare.

The private insurance industry knows that if it is to survive, it must be willing to accept everyone in both the employer-sponsored and individual markets, and they now have expressed a willingness to do so. They support a market of competing health plans, with one exception. They oppose the creation of a new competing public program because it would have “inherent unfair advantages.”

What are those advantages? Jacob Hacker, in “The Case For Public Plan Choice In National Health Reform,” explains the many reasons why a public plan is superior to the private plans in providing greater value through higher quality, better access, and greater effectiveness in controlling costs. He states that, by establishing a level playing field, the public plan option would set a benchmark as a standard for private plan performance.

The private plans profess to believe in market competition. Why should they object to a level playing field? Read this paper and you’ll find twenty pages of reasons on why they cannot compete with a public program.

So we’re once again back to the argument that we cannot go straight to a single payer national health program because it is not politically feasible. But what about the feasibility of a public option in a multi-payer system? The insurance industry is opposed because the government has “unfair advantages.” The Republicans say that they are cooperating on a bipartisan approach to reform, but once the doors close, they have made it very clear that a public option will never be approved. Hacker tells us why the public option is absolutely essential in the multi-payer model, but AHIP and the Republicans tell us that it will never happen (and they have the Senate votes to prevent it).

This report is well worth downloading since it explains so well why we need to change to a public insurance program. With minimal editing, such as removing comments about competing private plan innovation, we could use it as a treatise for a new and improved Medicare – a single payer national health program.

The HCAN coalition could use the unedited version to advocate for the multi-payer model, and we could use the edited version to advocate for single payer. Since neither approach is “feasible,” why don’t we just go for broke? To Medicare for All in one single leap!

Speak up at Sen. Daschle's house parties

Participant Guide for Health Care Community Discussions

Obama-Biden Transition Project
Policy Background and Key Questions
II. The President-elect’s Health Care Plan
Expand Coverage to all Americans:
* Build upon and strengthen employer coverage;
* Allow people to keep the coverage that they have and maintain patients’ choice of doctor;
* Establish a National Health Insurance Exchange that offers a range of private insurance options as well as a new public plan option;
* Require insurance companies to cover pre-existing conditions so all Americans regardless of their health status or history can get comprehensive benefits at fair and stable premiums;
* Expand Medicaid and SCHIP and provide sliding-scale premium assistance for low-income people.
III. QUESTIONS
1. Briefly, from your own experience, what do you perceive is the biggest problem in the health system?
2. How do you choose a doctor or hospital? What are your sources of information? How should public policy promote quality health care providers?
3. Have you or your family members ever experienced difficulty paying medical bills? What do you think policy makers can do to address this problem?
4. In addition to employer-based coverage, would you like the option to purchase a private plan through an insurance-exchange or a public plan like Medicare?
5. Do you know how much you or your employer pays for health insurance? What should an employer’s role be in a reformed health care system?
6. Below are examples of the types of preventive services Americans should receive. Have you gotten the prevention you should have? If not, how can public policy help?
7. How can public policy promote healthier lifestyles?
http://change.gov/page/-/Health%20Care%20Community%20Discussion%20Participant%20Guide.pdf
Health Care Community Discussion: Host and Moderator Guide
II. Your Role
If you are serving as the moderator, you should not strongly advocate for specific health policy positions. Instead, your role is to listen, facilitate discussion that elicits the views of all attendees, and help the participants draft a submission to the Transition Health Policy Team. In addition, please identify the most compelling personal stories that illustrate the need for health care reform in our country.
http://change.gov/page/-/Health_Care_Community_Discussion_Moderator_Guide.pdf
To sign up as a host:
http://change.gov/page/s/hcdiscussion

Throughout the nation during the next two weeks HHS Secretary-designate Tom Daschle is encouraging grassroots, community level discussions of health care reform. The purpose is to give the public a sense that they are actively involved in the reform process, avoiding a repetition of the Clinton political error of crafting reform behind closed doors.
If you look at both the moderator guide and the participant guide, it’s quite clear that this is not an effort to collect information to guide the policy makers in their decisions. The fundamental policy decisions have already been made, and they are listed above. This is strictly a process to build on the momentum for reform.
We have seen this process before. In 2006, a series of community hearings for the Citizens’ Health Care Working Group (CHCWG) were held throughout the United States:
“When given a choice of ten reform options at public hearings held by the CHCWG, participants clearly favored a national health program by a margin of at least 3 to 1. At meetings where participants were asked to rank the 10 options, national health insurance was ranked first 16 of 19 times (Billings, MT; Denver; Des Moines; Detroit; Eugene, OR; Jackson, MS; Kansas City, MO; Memphis; Miami; New York, NY; Philadelphia; Phoenix; Providence, RI; Sacramento; and Seattle). At two meetings participants were neither polled nor options ranked. Despite the clear public mandate, the CHCWG’s report makes no mention of the vast support for a national health program. Instead, the group’s official recommendations include only generic suggestions such as promoting ‘efforts to improve quality of care and efficiency,’ and finding a way to protect ‘against very high health costs.'” (https://pnhp.org/news/2006/october/citizens_health_ca.php)
The organizers of the CHCWG process were caught off guard by the intense support for a national health program. During the sessions the computer programs had to be modified to include serious consideration of the public insurance option. Yet the final report did not reflect the intensity of this support.
The scripted discussions for Sen. Daschle’s community meetings exclude any consideration of a single payer national health program. The closest they come is to discuss a “public plan like Medicare” that can be purchased as another option to a private plan through an insurance exchange. Yet a legislative staff member for a Democratic Senator recently stated that the “public option” proposal looked at present to be completely blocked by the Republicans – they will only discuss changes based upon the existing private insurance industry. One of the reform negotiators, Republican Senator Mike Enzi, last week wrote, “… we must focus on promoting new options and choices for patients. This means expanding competitive, free market plans ā€“ not moving toward a single payer health care system.”
Even though the process is a sham, that doesn’t mean that we shouldn’t speak up. We should do so, though in a civil but firm manner. The very first question asking what is the biggest problem in the health system can be answered by stating that our fragmented financing system based on private plans and public programs is wasting a huge amount of funds that should be used for health care for the uninsured and underinsured, and we can actually do that by replacing our dysfunctional financing system with a single payer national health program. We need to be certain that Sen. Daschle is shocked yet pleasantly surprised to see overwhelming support for single payer about which he has written is “brilliantly simple, ensures equity by providing all people with the same benefits, and saves billions of dollars by creating economies of scale and streamlining administration.”
Be sure to stay at the meetings long enough to be certain that the single payer message is included in the submission to the Transition Health Policy Team. We need to send that message. It remains to be seen whether or not the bureaucrats are going to try to bury it again. If they do, then maybe it’s time for a march on Washington.

Speak up at Sen. Daschle's house parties

Participant Guide for Health Care Community Discussions

Obama-Biden Transition Project

Policy Background and Key Questions

II. The President-elect’s Health Care Plan

Expand Coverage to all Americans:

* Build upon and strengthen employer coverage;

* Allow people to keep the coverage that they have and maintain patients’ choice of doctor;

* Establish a National Health Insurance Exchange that offers a range of private insurance options as well as a new public plan option;

* Require insurance companies to cover pre-existing conditions so all Americans regardless of their health status or history can get comprehensive benefits at fair and stable premiums;

* Expand Medicaid and SCHIP and provide sliding-scale premium assistance for low-income people.

III. QUESTIONS

1. Briefly, from your own experience, what do you perceive is the biggest problem in the health system?

2. How do you choose a doctor or hospital? What are your sources of information? How should public policy promote quality health care providers?

3. Have you or your family members ever experienced difficulty paying medical bills? What do you think policy makers can do to address this problem?

4. In addition to employer-based coverage, would you like the option to purchase a private plan through an insurance-exchange or a public plan like Medicare?

5. Do you know how much you or your employer pays for health insurance? What should an employer’s role be in a reformed health care system?

6. Below are examples of the types of preventive services Americans should receive. Have you gotten the prevention you should have? If not, how can public policy help?

7. How can public policy promote healthier lifestyles?

http://change.gov/page/-/Health%20Care%20Community%20Discussion%20Participant%20Guide.pdf

Health Care Community Discussion: Host and Moderator Guide

II. Your Role

If you are serving as the moderator, you should not strongly advocate for specific health policy positions. Instead, your role is to listen, facilitate discussion that elicits the views of all attendees, and help the participants draft a submission to the Transition Health Policy Team. In addition, please identify the most compelling personal stories that illustrate the need for health care reform in our country.

http://change.gov/page/-/Health_Care_Community_Discussion_Moderator_Guide.pdf

To sign up as a host:
http://change.gov/page/s/hcdiscussion

Comment:

By Don McCanne, MD

Throughout the nation during the next two weeks HHS Secretary-designate Tom Daschle is encouraging grassroots, community level discussions of health care reform. The purpose is to give the public a sense that they are actively involved in the reform process, avoiding a repetition of the Clinton political error of crafting reform behind closed doors.

If you look at both the moderator guide and the participant guide, it’s quite clear that this is not an effort to collect information to guide the policy makers in their decisions. The fundamental policy decisions have already been made, and they are listed above. This is strictly a process to build on the momentum for reform.

We have seen this process before. In 2006, a series of community hearings for the Citizens’ Health Care Working Group (CHCWG) were held throughout the United States:

“When given a choice of ten reform options at public hearings held by the CHCWG, participants clearly favored a national health program by a margin of at least 3 to 1. At meetings where participants were asked to rank the 10 options, national health insurance was ranked first 16 of 19 times (Billings, MT; Denver; Des Moines; Detroit; Eugene, OR; Jackson, MS; Kansas City, MO; Memphis; Miami; New York, NY; Philadelphia; Phoenix; Providence, RI; Sacramento; and Seattle). At two meetings participants were neither polled nor options ranked. Despite the clear public mandate, the CHCWG’s report makes no mention of the vast support for a national health program. Instead, the group’s official recommendations include only generic suggestions such as promoting ‘efforts to improve quality of care and efficiency,’ and finding a way to protect ‘against very high health costs.'” (https://pnhp.org/news/2006/october/citizens_health_ca.php)

The organizers of the CHCWG process were caught off guard by the intense support for a national health program. During the sessions the computer programs had to be modified to include serious consideration of the public insurance option. Yet the final report did not reflect the intensity of this support.

The scripted discussions for Sen. Daschle’s community meetings exclude any consideration of a single payer national health program. The closest they come is to discuss a “public plan like Medicare” that can be purchased as another option to a private plan through an insurance exchange. Yet a legislative staff member for a Democratic Senator recently stated that the “public option” proposal looked at present to be completely blocked by the Republicans – they will only discuss changes based upon the existing private insurance industry. One of the reform negotiators, Republican Senator Mike Enzi, last week wrote, “… we must focus on promoting new options and choices for patients. This means expanding competitive, free market plans Ć¢ā‚¬ā€œ not moving toward a single payer health care system.”

Even though the process is a sham, that doesn’t mean that we shouldn’t speak up. We should do so, though in a civil but firm manner. The very first question asking what is the biggest problem in the health system can be answered by stating that our fragmented financing system based on private plans and public programs is wasting a huge amount of funds that should be used for health care for the uninsured and underinsured, and we can actually do that by replacing our dysfunctional financing system with a single payer national health program. We need to be certain that Sen. Daschle is shocked yet pleasantly surprised to see overwhelming support for single payer about which he has written is “brilliantly simple, ensures equity by providing all people with the same benefits, and saves billions of dollars by creating economies of scale and streamlining administration.”

Be sure to stay at the meetings long enough to be certain that the single payer message is included in the submission to the Transition Health Policy Team. We need to send that message. It remains to be seen whether or not the bureaucrats are going to try to bury it again. If they do, then maybe it’s time for a march on Washington.

Letter to American College of Surgeons on single payer: enact Medicare for all

Sherif Emil, MD, CM, FACS
Irvine, CA
Bulletin of the American College of Surgeons
Volume 93, Number 12

In August 2003, an article endorsed by 7,784 physicians and medical students, “Proposal of the Physicians Working Group for Single-Payer National Health Insurance,” was published in the Journal of the American Medical Association.1 In his commentary on the article, Thomas Russell, MD, FACS, Executive Director of the American College of Surgeons, reminded us that “tremendous administrative costs and competition between plans that have a for-profit mentality have resulted in an arcane and costly system, which diverts money from patient care and breeds the corporate mindset that has become pervasive in the medical profession,”2 a position espoused by me and thousands of my colleagues in Physicians for a National Health Program. However, Dr. Russell did not believe that “the crisis in health care has reached a threshold that would command such a startling transformation.”2 To this, I responded, “The crisis in our health care system may be below the threshold only because we keep elevating the threshold.”3 Five years later, it appears that we may have finally reached the threshold, as evidenced by the resurfacing of health care as a major issue on the national agenda and in the presidential election.

Our present system of health care delivery is not sustainable. It may putter along for a decade or two, but it will finally collapse. And as it self-destructs, tens of thousands more will be hurt. Presently, the Institute of Medicine estimates that 1,500 Americans die every month due to lack of health care coverage. I would argue that it is not universal health care that is un-American–it is our present system.

Few in the surgical and medical profession would disagree that change is needed. Respected surgical leaders are speaking out. Donald Trunkey, MD, FACS, called the U.S. health care system the “best mediocre health care in the world.”4 In a lecture at Rice University, the late Michael DeBakey, MD, FACS, stated, “Our health care system is in disarray and cannot be rectified by the incrementalism approach.”5

The disagreement has to do with the type of change. You cannot build a second floor on a house with a rotten foundation. Although we have all the components to indeed have the best health care in the world, our health care delivery system is terminal. The problem of the uninsured is the most visible and perhaps the most profound. I travel frequently on surgical missions to east Africa. I am ashamed to say that I am starting to see here in California the type of late presentations and catastrophes I typically see in Kenya, Tanzania, and Zambia. But multiple other problems abound. Private insurers thrive by denying care and injecting tremendous inefficiency into the system. The burden of insuring the riskiest patients-the elderly, the poor, end-stage renal failure patients, Native Americans-is shifted to the government. Physicians practice with their hands tied behind their backs. I cannot get a simple X ray or blood test on most of my patients until the test is authorized. Often, the patient has to be sent to another facility.

Patients are trapped in health care plans that treat them as widgets that can be manipulated for financial gain. Choice of physician has become a luxury most patients cannot afford. This, in turn, has created stagnation among some physicians who, consciously or unconsciously, know that they have a trapped audience. Continuity of care is easily disrupted if insurance shifts to a different plan or is lost altogether, the treating physician changes practice, or job changes occur. Resources are poorly utilized due to competition driven by market forces, not quality. While 46 million are uninsured and millions more are not getting the care they need, hospitals are closing under financial stress. Why would we want to take this system, which is already at the breaking point, and expand it to cover everyone?

Medicare for all! Despite all the criticisms directed at Medicare, it has survived for more than 40 years, given our elderly the peace of mind we all deserve, improved the health of its beneficiaries, avoided micromanagement of clinical interventions, preserved patient freedom to choose their physician, and sustained efficiency in claim reimbursement. It has done all that with virtually no shared risk, providing services for almost all its beneficiaries. Despite its difficulties, the program’s popularity was recently evidenced by the congressional overturn of a presidential veto, an effort the College valiantly led. When we advocate for a single-payor model, our opponents immediately bring up waiting lists in Canada and other industrialized countries. Joint replacement is typically the sentinel operation used to demonstrate inadequate wait times in Canada. Ironically, most joint replacements in the U.S. are also paid for by a single-payor system: Medicare! Under Medicare, waiting lists are not an issue because spending and system capacity are significantly higher than those in Canada. We should also remember that Canadians spend approximately half of what we spend per capita on health care, cover everyone, and have public health and some tertiary care outcomes superior to ours. Shrinking the waiting list is a national priority in Canada, as evidenced by last year’s attendance of Prime Minister Stephen Harper at the annual “Taming of the Queue” conference. The Canadians have problems with their system, but they have a system.

The conventional wisdom is that a single-payor system is not popular with the public or physicians and cannot be realized in the U.S. But in a recent survey by the American Academy of Pediatrics, one-third of pediatricians favored a single-payor system, a substantial finding given that it is very difficult to get this many physicians to agree on another specific alternative. In a survey of 904 Massachusetts physicians randomly chosen from the American Medical Association master file, almost two-thirds of respondents identified single payor as “the structure that would provide the best care for the most people for a fixed amount of money.”6 In poll after poll, a majority of Americans favor a universal health care system, even if financed through increased taxation.

Americans, the public, and their physicians have a major decision ahead. Will health care continue to be treated as a commodity bought and sold according to means or as a service sought and delivered according to need? American surgeons should continue to lead the world in innovation and creativity, but they should also apply the results of their resourcefulness to any patient in need, in an atmosphere of evidence-based care, patient freedom to choose their doctor, and resource optimization, free from micromanagement and bureaucratic hassles. I don’t believe this can be achieved through expanding or amending our current nonsystem.

As called for by an idealistic, young surgeon in the August Bulletin, “When physicians place the health of our patients as our first consideration, we reclaim our autonomy, our morale, and ultimately our dignity as a profession.”7 A radical shift in our approach and our priorities–a shift that would produce a startling transformation–is necessary! References

1. Proposal of the physicians’ working group for single-payer national health insurance. JAMA. 2003;290:798-805.
2. Russell TR. From my perspective. Bull Am Coll Surg. 2003;88(10):3-4.
3. Emil S. Crisis in health care [Letters]. Bull Am Coll Surg. 2004;89(1):53.
4. Trunkey DD. A growing crisis in patient access to emergency care: A different interpretation and alternative solutions. Bull Am Coll Surg. 2006;91(11):1322.
5. DeBakey ME. The role of the government in health care: A societal issue. Am J Surg. 2006;191:145-157.
6. McCormick D, Himmelstein DU, Woolhandler S. Single-payer national health insurance. Physicians’ views. Arch Intern Med. 2004;164:300-304.
7. Kuy’S. Stand..d up for patients. Bull Am Coll Surg. 2008;93:(8):23-24.

The Politics of Healthcare Reforms in US Presidential Elections

Vicente Navarro, MD, PhD
Harvard Health Policy Review
Vol. 9, No. 1, Spring 2008 35

I appreciate the invitation from the Harvard Health Policy Review to discuss the relationship between national health care systems and the policy process. One cannot analyze this relationship without analyzing the political context in which it occurs, and since the U.S. is now in the midst of a very important political process — the presidential primaries of 2008 — it may be of special interest to readers of the Review to focus on the impact of the political process on the health care reform proposals put forward by the presidential candidates in this and past elections.

The invitation from the senior editor of the Review left open the possibility of presenting a comparison of the political context of health policy formation in the U.S. with that in other countries. Rather than making such comparisons, however, I am going to focus on the U.S., but with a few notes on how this country compares with other developed democratic countries at levels of economic development similar to that of the U.S. — specifically, the countries of the European Union (E.U.).

I use the E.U. countries for reference because I know them well. I was born in Spain, and received a degree in medicine there. I then had to leave Spain because of my participation in the anti-fascist underground in the 1950s. I went first to Sweden and studied economics, and was much influenced by my intellectual mentor, Gunnar Myrdal, from whom I learned everything I know about economics. I have always been a great admirer of the Swedish welfare state, although I am not oblivious to some of its weaknesses. (I described this in my book The National Health Planning in Sweden, published by the Fogarty Center of the National Institutes of Health in 1974.) I then studied social policy at the London School of Economics, under another great influence in my intellectual life, Richard Titmus, and later studied health policy and management at Edinburgh University, Scotland. I admired Britain’s National Health Service, the jewel of the British welfare state (as Churchill once called it), but again was aware of some of its faults (as expressed in my book Class Struggle, The State of Medicine: An Historical and Contemporary Analysis of the Medical Sector in Great Britain, published in 1978). In 1965 I arrived in the U.S. and joined the Johns Hopkins University, where I have worked ever since. My early analysis of the U.S. health care system was published as Medicine under Capitalism (1976), which described the greatness but also the miseries of the U.S. house of medicine. Much has changed since then, yet much has remained the same.

Before focusing on the U.S., with some comparative notes on the European situation, let me make several observations that are necessary to a better understanding of health policy on both sides of the Atlantic. The U.S. and E.U. political cultures are very different. Just one example: red is the color of the conservative forces (the Republican Party) in the U.S., and blue is the color of the progressive forces (the Democratic Party). The reverse is true in the E.U.: red is the color of the left and center-left parties, and blue the color of the right and center-right parties. In Europe, a “red region” is a region such as Barcelona, which has always been governed by leftwing parties during Spain’s democratic period. In the U.S., a “red state” is one governed by the Republican Party. This difference may seem a minor point, but it isn’t. It shows how even the symbols of the political cultures differ. Such differences also appear in the political discourse. A “liberal” in the U.S. is a politician, such as Jesse Jackson Sr., who is in favor of a larger role for the state (or, in popular language, the “government”) in society, supporting higher public expenditures for social ends and encouraging redistributive policies backed up by more progressive taxation. A liberal in the E.U. is precisely the opposite — someone who favors reducing the role of government in society, advocates lower taxation, is against redistributive policies, and supports a reduction of public expenditures. These opposite meanings of “liberal” explain the enormous confusion created in Europe when the media there translate the term “liberal” literally. In Europe, the parties that advocate the types of policies called “liberal” in the U.S. are referred to as social democratic. Liberals in the E.U. are small parties that usually have limited influence in the political representative institutions.

The nature of the medical problem in the U.S.

Let’s now turn to the U.S. One of the major problems faced by large sectors of the population is their limited access to medical services in time of need, their insufficient health benefits coverage if they do have health insurance, and their difficulties in paying premiums to the health insurance companies and paying the medical bills they receive. None of these problems, experienced in the U.S., are found in the publicly funded health services of the E.U. (or in Canada for that matter).

In 2006, 47 million Americans did not have any form of health benefits coverage, and 108 million had insufficient coverage. And people die because of this. Estimates of the number of preventable deaths vary, from 18,000 per year (estimated by the conservative Institute of Medicine) to a more realistic level of more than 100,000 (calculated by Professor David Himmelstein of Harvard University). The number depends on how one defines “preventable deaths.” But even the conservative figure of 18,000 deaths per year is six times the number of people killed in the World Trade Center on 9/11. That event outraged people (as it should), but the deaths resulting from lack of health care seem to go unnoticed; these deaths are not reported on the front pages, or even on the back pages, of the New York Times, Washington Post, Los Angeles Times, or any other U.S. newspaper. These deaths are so much a part of our everyday reality that they are not news.

But besides the problem of the uninsured, the U.S. has another major problem: the underinsured. Most people believe that because they have health insurance, they will never face the problem of being unable to pay their medical bills. They eventually find out the truth, however — that their insurance is dramatically insufficient. Even for families with the best health benefits coverage available, the benefits are much less comprehensive than those provided as entitlements in Canada and in most E.U. countries. Paying medical bills in the U.S. is a serious difficulty for many people. In fact, inability to pay medical bills is the primary cause of family bankruptcy, and most of these families have health insurance. Furthermore, 20% of families spend more than 10% of their disposable income on insurance premiums and medical bills (the percentage is even higher for those with individual insurance: 53%). In 2006, one of every four Americans lived in families that had problems with paying medical bills. And most of them had health insurance. None of the E.U. countries face this dramatic situation.

Can the U.S. afford a comprehensive universal health care program?

The roots of this human and economic problem cannot be lack of resources. The U.S. spends 16% of its GNP on medical care, almost double the percentage spent by Canada and most E.U. countries on providing their populations with universal, comprehensive health care coverage. We in the U.S. spend $2.1 trillion annually on medical care, making the medical care sector one of the largest economies in the world (if the medical care sector were a country, rather than a massive sector within a country). And it has been estimated that this spending will reach 20% of GNP in a few years (7 years according to some, 12 years according to others). Lack of money is not the root of the medical care problem in the U.S. We spend far, far more than any other developed country, and far more than we would need to spend to provide comprehensive health care coverage for everyone. The frequently heard argument that the U.S. cannot afford universal, comprehensive care has no credibility. It is a poor rationale for keeping the situation as it is.

If lack of resources is not the problem, then what is? The answer is fairly easy to see. The root of the problem is the channels through which the money is managed and spent. The U.S. is the only country where medical care is predominantly private (although if we include the tax exemptions for private insurers, most of the funding in the U.S. is public). And the health insurers play a critical role in the funding and management of medical care in the U.S. The current system of funding and managing medical care is based on an employers-insurers alliance that was established in 1948 in the Taft-Hartley Act. Immediately after World War II, a pact was established between the major employers associations and the insurance companies and was crystallized in the Act (initially vetoed by President Truman). The health benefits coverage of the working population was to be provided, not through the state (as in the majority of European countries), but through people’s place of employment by a process of negotiation between trade unions and employers that takes place in a highly decentralized collective-bargaining process. Employers and employees pay the insurance premiums for health benefits coverage, coverage that varies enormously depending on the strength of the labor unions. Wherever trade unions are strong (as in manufacturing) the health benefits coverage has been good, although never as good as in the publicly funded medical care systems in the E.U. Wherever trade unions are weak or absent, the health benefits coverage has been very limited or nonexistent. This is the reason for the enormous variability in health benefits coverage in the U.S. One reason why employers supported this arrangement was that this system of funding is one of the most powerful ways of controlling employees. The U.S. is the only country where, when workers are fired, they lose not only their salary but also their health benefits coverage for their family. This is one reason for the U.S. being the country with the fewest working days lost due to strikes: workers think twice before striking. Today, the high costs of health insurance premiums are weakening employers’ support for this employer-based insurance. But the majority of large employers (major components of the “corporate class”) still favor this system. Individuals who don’t receive health insurance through their place of employment must buy their own, or they have no insurance. If a person has a chronic illness or disability, the price of the premium may be prohibitive, or the person is not accepted by an insurer because of a “preexisting condition.”

The other side of this employer’s insurer’s alliance is that the health insurance industry is one of the most profitable in the U.S. The insurance industry and other sectors of the medical-industrial complex enjoy the highest rates of profit in the country. Just last year, insurance industry profits reached $12 billion, and pharmaceutical industry profits $49 billion, the highest in the U.S. and in the world. According to Fortune magazine, health-related industries are among the most profitable industries in the U.S. A lot of money is being made from people’s suffering. This scandalous situation is easy to document. For example, Lanzoprasol, a gastric-secretion-reducing medicine widely used in the U.S., costs $329 in Baltimore, Maryland; the same medicine (same number of doses) costs $9 in Barcelona, Spain! And the current Bush administration signed legislation for a program that, in theory, covers drug costs for elderly people, but in practice this is an enormous rip-off. It forbids the government to negotiate with drug companies on the cost of drugs — that is, the price of their products. What this means is that the federal government pays the prices dictated by the pharmaceutical industry.

Why have U.S. governments consistently failed to resolve this situation?

Why does this continue? Why hasn’t the U.S. government done something about it? Is it that the government could not provide comprehensive health benefits coverage? It certainly could. All E.U. governments do so. All provide publicly funded, comprehensive health care coverage to their entire population. And on this side of the Atlantic, Canada (which once had a system identical to ours, health insurers included) also provides this entitlement to all its citizens. In Canada in the 1960s, a social democratic government in Saskatchewan did a very logical thing. My good friend Dr. Samuel Wolfe, who was then Chief Health Officer of Saskatchewan, proposed to the province’s social democratic government that rather than paying premiums to insurance companies, people would pay earmarked taxes to a public trust fund, controlled by their representatives. This trust fund would negotiate with doctors and hospitals for the payments they receive for the care they provide. This saved a lot of money by bypassing the insurance companies. The Saskatchewan Health Plan provided comprehensive care to everyone in the province at a much lower cost than before. Soon, the other provinces adopted similar plans, eventually establishing Canada’s nationwide health plan that now covers everyone. The overhead for the public system in Canada is only 4%, compared with 30% in the U.S. insurance industry — 30% that goes to marketing, administration (a lot of paper shuffling goes on in U.S. health care), and the salaries of extremely well paid executives and insurance lobbyists. One of the best-paid individuals in the U.S. is William McGuire, CEO of an insurance company — UnitedHealth. He makes $37 million a year, plus $1.7 billion in stock options. And all of this money comes from premiums paid by people, many of whom have insufficient coverage.

The political context: it’s not just the medical sector that is privatized — the electoral process is also privatized

The U.S. is also the only country where the electoral process is privatized. This means that most of the money for candidates’ political campaigns is private money. And we are speaking of big money. The idealized version of the U.S. electoral process, in which candidates are funded by a conglomeration of small contributions from ordinary citizens, is plain wrong. According to Common Cause, the most credible center for the study of elections in the U.S., most of the funding for candidates comes from large economic interests (insurance companies, drug companies, professional associations, banking, construction industries, and a long list of others) and from the 30% of the population with highest incomes. Candidates need this money for, among other things, buying media space in the private broadcasting industry that sells airtime to the highest bidder. The more money your campaign takes in, the greater is your chance of winning the election. According to Common Cause, 94% of the best-funded candidates won in the last Congressional election, in 2006.

Money is indeed the major motor behind politics. This is what gives the insurance companies their enormous power, both in Washington, DC, and in most state legislatures. In Maryland, for example, a former governor arranged for candidates for Insurance Commissioner to be interviewed by the insurance associations before he made his final selection. But insurance industry influence is strongest in Washington. The insurance companies pay a lot of money to candidates. According to the Center for Responsive Politics, as of February 12, 2008, the insurance industry had contributed $525,188 to Hillary Clinton, $414,863 to Barack Obama, and $274,724 to John McCain. As a consequence, not one of the candidates is asking for a publicly funded health care system. The major players in medical care in the U.S. — insurance companies, drug companies, professional associations, and so on, as noted above — have given a lot of money to the candidates. The splendid document called the U.S. Constitution, which begins “We the people,” should have a footnote: “and the insurance companies, the drug companies . . .” The U.S. Congress is indeed the best Congress money can buy (for a further discussion of how money corrupts the electoral system, see my article “How to Read the U.S. Primaries: Guide for Europeans,” CounterPunch, February 13, 2008). Privatization of the electoral process corrupts the democratic process. I am not implying that politicians are corrupt (although some are). I am willing to admit that most are honorable persons. But the need to constantly raise funds for their campaigns (for election and reelection) corrupts the democratic process. And the unwillingness of most members of Congress to change this situation makes them accomplices in that corruption. Such practices are illegal in most democratic countries. Many ministers of European governments have had to resign when it came to light that they had received private funds for the electoral process.

And people know all about this. In surveys, 68% of people believe the U.S. Congress does not represent their interests, but represents the interests of the financial and economic groups that fund political campaigns. But the establishments, including the political, media, and academic establishments, want everyone to believe that the reason we don’t have a universal health program is that people don’t want it. They would like people to believe that Congress legislates what people actually want. Meanwhile, the long list of public policies that people want but do not get from their government is growing: 65% of people want a publicly funded health care system similar to that in Canada, a single-payer system. In a single-payer system, the government, rather than the insurance companies, negotiates with providers — doctors, hospitals, nurses, and so on — for the provision of medical care. We already have a system of this type in Medicare (with an administrative overhead of only 4%, compared with the 30% overhead in the insurance system). By eliminating the huge administrative expenses, we could provide comprehensive health care coverage for everyone without spending an extra penny. Let me add that according to Annals of Internal Medicine, 59% of physicians across the U.S. “support government legislation to establish a national health insurance.”

The political response: the proposals for health care reform

These enormous problems in obtaining medical care in the U.S. explain why medical care reform has become — along with the economy and Iraq — a top issue in this year’s presidential election. For this reason, candidates in the presidential primaries (the Democrats more often than the Republicans) have been recounting stories about the health-related tragedies they have encountered in meetings with ordinary people around the country (an exercise conducted in the U.S. every four years, at presidential election time). These stories tell of the enormous difficulties and suffering faced by many people in their attempts to get the medical care they need. I have been around long enough — I was senior health advisor to Jesse Jackson in the Democratic primaries of 1984 and 1988 — to know how frequently Democratic candidates, over the years, have referred to such cases. The only things that change are the names and faces in these human tragedies. Otherwise, the stories, year after year, are almost the same.

In the Democratic Party primaries of 1988, for example, candidate Michael Dukakis talked about a young single mother who had two jobs and still could not afford medical insurance for herself and her children. In 1992, Bill Clinton did the same, changing the story only slightly. This time it was the case of a woman with diabetes who could not get health insurance because of her chronic condition. And now, in the 2008 primaries, Hillary Clinton (whom I worked with on the White House Health Care Reform Task Force in 1993) describes a similar case. This time it’s a single woman, with two daughters, who cannot pay her medical bills because her congenital heart defect makes it impossible for her to get insurance coverage. And Barack Obama describes similar cases, with the eloquence that characterizes all of his speeches. He frequently refers to his own mother, who had cancer and had to worry not only about her illness but about paying her medical bills. Republican candidates rarely make references to such situations.

All these cases are tragic and are representative of a situation faced by millions of people in the U.S. every year. But, I am afraid that unless the winning Democratic candidate, once elected president (and I hope he or she will be), develops a more comprehensive health care proposal than any of those put forward in the primaries so far, we will see the same situation continue. Democratic candidates in the 2012 primaries, and in the 2016 primaries, will still be referring to single mothers with chronic health conditions who cannot pay their medical bills. The proposals put forward by Obama and Clinton (not to speak of McCain) underestimates the gravity of the problem in the U.S. medical care sector. The situation is bad and is getting worse: the number of people who are uninsured and underinsured has been growing since 1978. There were 21 million uninsured people in the U.S. in 1972. By 2006, that number had more than doubled to 47 million. And this increase has occurred independent of economic cycles. The number of uninsured grew by 3.4 million from 2004 to 2006, even as a resurgent economy raised incomes and lowered poverty rates. Meanwhile, during those years, the Republican establishment ignored the situation altogether and the Democratic establishment distanced itself from any commitment to resolving these problems. Even though the 1976, 1980, 1984, 1988, and 1992 Democratic platforms included calls for health care benefits coverage for everyone (or “universal health care”), that call was usually made without much conviction. In the primaries of 1988, when I was involved in preparing the Democratic platform, Dukakis (the winner of the primaries) resisted including universal health care in the party platform. He was afraid of being perceived as “too radical.” He had to accept it, however, because Jesse Jackson agreed to support Dukakis (Jackson had 40% of the Democratic delegates at the Atlanta convention) only if the platform included this call for universal care.

Then, in 1992, Bill Clinton (who borrowed extensively from Jackson’s 1988 proposals) put the call for universal health care at the center of his program. But, once president, his closeness to Wall Street, and his intellectual dependence on Robert Rubin of Wall Street (who became his Secretary of the Treasury), made him leery of antagonizing the insurance industry. It was President Clinton’s unwillingness to confront the insurance companies that led to his failure to honor his commitment to work toward a universal health care program (see my article “Why Hillary-Care Failed,” CounterPunch, November 12, 2007). The type of reform President Clinton called for was a health-insurance- based model called “managed care,” in which insurance companies remain at the center of health care. An alternative approach could have been to establish a publicly funded health care program (which was favored by the majority of the population) that would cover everyone, providing medical care as an entitlement for all citizens and residents. This could have been achieved, such as by expanding the federal Medicare program to cover everyone. To do so, however, would have required neutralizing the enormous power of the insurance companies with a massive mobilization of the population against them and in favor of a comprehensive and universal health care program.

But President Clinton’s loyalty to Wall Street prevailed. His administration’s top priorities were reduction of the federal deficit (at the cost of reduced public social expenditures) and approval of NAFTA (without amending President George H. W. Bush’s proposal, which Clinton had inherited, and refusing to address the concerns of the labor and environmental movements). These actions antagonized and demoralized the grassroots of the Democratic Party. Clinton lost any power to mobilize people for the establishment of a universal health care program. This frustration of the grassroots, and especially the working class, also led to the huge abstention by the Democratic Party base in the 1994 congressional elections and the consequent loss of the Democratic majority in the House, the Senate, and many state legislatures. At the root of this disenchantment with the Clinton administration was its unwillingness to confront the insurance companies and Wall Street. Could that happen again? The answer is yes. Regardless of who wins the coming presidential election, we are likely to face a similar situation. I doubt that the Republican candidate would dare carry out proposals that might antagonize the powerful forces that shape the funding and organizations of medicine in the U.S. But, the same could occur with the Democratic candidate. Unless there is a profound change in the way the U.S. funds the electoral process, we are not going to see major reforms in the health sector. It is as plain as that.