Minneapolis/St.Paul Star Tribune Editorial
Published: January 28, 2007

For Americans who hope the United States might one day have a health care system that makes sense, this is an exciting time. Massachusetts has adopted a plan to achieve universal coverage, and California Gov. Arnold Schwarzenegger has pledged to do the same in the nation’s most populous state. Last week President Bush committed himself to a radical overhaul of federal tax subsidies in a bid to hold down health care costs and expand insurance coverage.

Yet the closer you look at these ambitious plans, the more you see they are mere patchworks. In Massachusetts, which will require most residents to buy private insurance, policies are coming on the market with higher prices and less coverage than experts hoped. Economist and columnist Paul Krugman points out that the Schwarzenegger plan will require big new state bureaucracies to regulate insurance companies and police individual behavior. As for the president’s plan, even the White House admits it will cover only 5 million of the nation’s 46 million uninsured; that’s because it relies on tax deductions, which aren’t much use to low-income families who represent the bulk of the uninsured population.

It’s good to see political leaders think boldly. But the lesson is that they aren’t thinking boldly enough. It’s time for the United States to think about just making the leap to single-payer insurance.

This radical notion would seem unthinkable, except that every other civilized nation already has thought about it and embraced it — from conservative societies such as Japan and Australia to nanny states such as Germany and France. Every one of them covers more people, produces better medical outcomes, wastes less revenue on overhead and marketing, and spends less money than the United States.

The biggest argument against a single-payer system is it’s “politically unrealistic” in a free-market society like the United States. We think that gives too little credit to the impatience and common sense of American voters. But then we won’t know until a leader has the courage to find out.

By Marcia Angell
Guest Columnist
Boston Globe
January 29, 2007

Today the Globe launches a rotating seat on the op-ed page. Each guest columnist will appear each Monday for six weeks, before the next columnist takes over.

THE GREATEST source of insecurity for many Americans is the soaring cost of health care. Leaving jobs can mean losing health insurance, and even when insurance is offered, many workers turn it down because they can’t afford their growing share of the premiums.

Businesses are having trouble, too. Those that provide good health benefits see more of their revenues siphoned off by the health insurance industry, with a resulting loss of competitiveness (General Motors spends far more on health benefits than Toyota).

Insurance is not the same thing as health care — not by a long shot. Private insurers maximize profits mainly by limiting benefits or by not covering people with health problems. The United States is the only advanced country in the world with a health care system based on avoiding sick people.

It’s not surprising, then, that health care reform is at the top of the political agenda. Most current proposals de-couple health benefits from employment and encourage individuals to buy their own insurance. The fact that they were ever coupled is a historical accident; there is no logical reason for it. Yet, employment-based insurance has been the only practical option for people not old enough for Medicare or poor enough for Medicaid, since the individual insurance market is notoriously treacherous.

In his State of the Union address, President Bush proposed tax deductions for individuals who venture into that market and buy insurance on their own. Family premiums above $15,000 and single premiums above $7,500 would be taxed. This is a gesture, not a plan. It is just one more example of the conceit, shared by many on the right, that nearly any problem can be solved by jiggering the tax code. In fact, many of the uninsured don’t pay taxes at all, and many more would find their small tax relief greatly outweighed by the price of insurance.

More serious proposals are coming from the states, with Massachusetts in the lead. These aim for universal coverage by requiring uninsured individuals to purchase health insurance, under pain of — you guessed it — tax penalties, with state subsidies for the poor and near poor. In Massachusetts, there will be a token contribution by employers who don’t provide health benefits, but most of the cost will be borne by individuals. A new state agency, the Commonwealth Health Insurance Connector, is charged with seeing that insurers offer adequate benefit packages at reasonable premiums.

Though well-intentioned, plans like these all have the same fatal flaw: They offer no workable mechanism to control costs, mainly because they leave the private insurance industry in place. Yet, soaring costs are the fundamental problem ; lack of coverage follows from that. Already the Massachusetts Connector is having difficulty holding premiums down to the levels forecast when the plan was enacted. Even if they are held down at the start, there is little to stop insurers from raising them afterward , shrinking benefits, or both. It will take a large and costly bureaucracy to ride herd on all the ways to game this system. Perhaps the biggest risk is that failure will give universal care a bad name, just as the failure of the Clinton plan did 13 years ago. (That plan, too, made the mistake of giving the private insurance industry a central role.)

We need to change the system completely and get the insurance industry, as well as employers, out of it. Private insurance companies offer little of value, yet skim off 15 to 25 percent of the health care dollar for profits and overhead. It would make much more sense to extend Medicare to everyone. That could be done gradually by dropping the eligibility age a decade at a time, while phasing out the insurance companies. The loss of insurance jobs would probably be more than offset by job gains in other industries no longer saddled with health costs.

Medicare is not perfect, but its problems are readily fixed. It is far more efficient than private insurance, with overhead of less than 4 percent, and since it is administered by a single public agency, controlling costs would be possible. Unlike private insurers, it cannot select whom to cover or deny care to those who need it most.

It is time to stop tinkering at the margins. Medicare for all is the only reform that has a prayer of providing universal coverage while containing costs.

Dr. Marcia Angell is a senior lecturer at Harvard Medical School and former editor-in-chief of the New England Journal of Medicine.

Patchwork health proposals show the need to think big.

Minneapolis/St.Paul Star Tribune Editorial
Published: January 28, 2007

For Americans who hope the United States might one day have a health care system that makes sense, this is an exciting time. Massachusetts has adopted a plan to achieve universal coverage, and California Gov. Arnold Schwarzenegger has pledged to do the same in the nation’s most populous state. Last week President Bush committed himself to a radical overhaul of federal tax subsidies in a bid to hold down health care costs and expand insurance coverage.

Yet the closer you look at these ambitious plans, the more you see they are mere patchworks. In Massachusetts, which will require most residents to buy private insurance, policies are coming on the market with higher prices and less coverage than experts hoped. Economist and columnist Paul Krugman points out that the Schwarzenegger plan will require big new state bureaucracies to regulate insurance companies and police individual behavior. As for the president’s plan, even the White House admits it will cover only 5 million of the nation’s 46 million uninsured; that’s because it relies on tax deductions, which aren’t much use to low-income families who represent the bulk of the uninsured population.

It’s good to see political leaders think boldly. But the lesson is that they aren’t thinking boldly enough. It’s time for the United States to think about just making the leap to single-payer insurance.

This radical notion would seem unthinkable, except that every other civilized nation already has thought about it and embraced it — from conservative societies such as Japan and Australia to nanny states such as Germany and France. Every one of them covers more people, produces better medical outcomes, wastes less revenue on overhead and marketing, and spends less money than the United States.

The biggest argument against a single-payer system is it’s “politically unrealistic” in a free-market society like the United States. We think that gives too little credit to the impatience and common sense of American voters. But then we won’t know until a leader has the courage to find out.

By Paul Heise
Lebanon Daily News

The only part of the American health-care system that seems to be working is Medicare and Medicaid. Our employment-based, managed-care system is clearly collapsing from inefficiency, rising costs and loss of the industrial base that paid for it. Now, when we don’t have enough health coverage as it is, President George W. Bush proposes fiddling with the tax code to set up tax incentives for workers to buy less insurance. Not to worry. Bush is simply making political noises. He only means to look responsive to health-care complaints, to make sure he reframes the later debate and, more importantly, to distract us from his Iraq surge. Nothing is going to happen to your health care until after the presidential election of 2008. However, that election could well be decided by the health-care issue.

Until then, everyone will lament the lack of progress; the states will tinker with patchwork solutions; and Bush will muddy the waters with the tax code fiddling we heard about in the State of the Union address.

In the interim, it is important to make sure we properly identify the problem and frame the question so we can address it in a national election.

The health-care crisis is real. As a nation, we spend twice as much as others and get worse outcomes. The U.S. spends $2 trillion per year, or 15 percent of our total output, on health care while other industrialized countries spend only six to 10 percent. Using an outcomes-based test, our infant mortality is higher than even some Latin American countries, our life expectancy is less than other rich countries, 15 percent of our people lack insurance, lawyers are undermining physicians, and medical bills are bankrupting even insured workers.

How bad is it? The U.S. spent $6,102 per person on health care in 2004 while Canada spent $3,165, France $3,159 and Australia $3,120, and 47 million people are not covered at all. We have a broken system.

When we round up the usual suspects, we blame soaring health-care costs on new and expensive technology, an aging population, rising expectations, lawyers and soaring drug costs in an ever-more-drug-focused therapy. The problem, aside from our peculiarly litigious nature, is that the rest of the industrialized world shares these “causes” but does not share anything near America’s cost problems.

To begin an intelligent debate, we have to isolate what is different about the American system that makes it the world’s highest-cost system with some of the world’s worst outcomes.

Two things pop up: the administrative costs of our multi-payer system and the control of prices by our suppliers. According to the New England Journal of Medicine, 30 percent, or $600 billion, of that $2 trillion we spend per year on health care goes for the administration, marketing and profits associated with a multiplicity of insurance collectors and payers. Medicare, a single-payer system, and much of the rest of the world pays as little as two percent in administrative costs.

The provision that forbids Medicare to negotiate prices is probably the most absurd thing in these last six years of this government of the absurd. Maybe even worse, the U.S. government pays for the research then gives the patents to the drug companies and research firms and lets them charge monopoly prices.

Medicare, at least Part A–Hospitalization, is the quintessential single-payer system: you choose your own doctor while medical practices, hospitals and pharmaceutical companies remain privately owned and compete. The government acts only as the payer. Part B–Medical, with its confusion of firms and forms, is an unnecessary concession to the insurance companies.

The point of putting health care into the State of the Union message is to reframe the debate away from the real problem, which is affordable health care, and put the focus on affordable insurance. The president has to get hold of this. If the Congress ever started looking at the sources of the increased health-care costs, the dysfunctional insurance industry could lose billions in profit.

The question has to be framed in terms of an affordable health-care system and not availability of insurance. The best way to do that is simply to take the age provisions and Part B firms out of Medicare and apply to all that single-payer system that we know and love.

I’m over 65; it works for me.

http://www.ldnews.com/portlet/article/html/fragments/print_article.jsp?articleId=5084586&siteId=139

A resident of Mt. Gretna, Heise holds a Ph.D. in economics and is professor emeritus of economics at Lebanon Valley College. His column appears every other Thursday. He maintains a web log at weboped.com, and he can also be reached at:

heise@lvc.edu

By PAUL KRUGMAN
Op-Ed Columnist
New York Times
January 26, 2007

American politics is ugly these days, and many people wish things were different. For example, Barack Obama recently lamented the fact that “politics has become so bitter and partisan” — which it certainly has.

But he then went on to say that partisanship is why “we can’t tackle the big problems that demand solutions. And that’s what we have to change first.” Um, no. If history is any guide, what we need are political leaders willing to tackle the big problems despite bitter partisan opposition. If all goes well, we’ll eventually have a new era of bipartisanship — but that will be the end of the story, not the beginning.

Or to put it another way: what we need now is another F.D.R., not another Dwight Eisenhower.

You see, the nastiness of modern American politics isn’t the result of a random outbreak of bad manners. It’s a symptom of deeper factors — mainly the growing polarization of our economy. And history says that we’ll see a return to bipartisanship only if and when that economic polarization is reversed.

After all, American politics has been nasty in the past. Before the New Deal, America was a nation with a vast gap between the rich and everyone else, and this gap was reflected in a sharp political divide. The Republican Party, in effect, represented the interests of the economic elite, and the Democratic Party, in an often confused way, represented the populist alternative.

In that divided political system, the Democrats probably came much closer to representing the interests of the typical American. But the G.O.P.’s advantage in money, and the superior organization that money bought, usually allowed it to dominate national politics. “I am not a member of any organized party,” Will Rogers said. “I am a Democrat.”

Then came the New Deal. I urge Mr. Obama — and everyone else who thinks that good will alone is enough to change the tone of our politics — to read the speeches of Franklin Delano Roosevelt, the quintessential example of a president who tackled big problems that demanded solutions.

For the fact is that F.D.R. faced fierce opposition as he created the institutions — Social Security, unemployment insurance, more progressive taxation and beyond — that helped alleviate inequality. And he didn’t shy away from confrontation.

“We had to struggle,” he declared in 1936, “with the old enemies of peace — business and financial monopoly, speculation, reckless banking, class antagonism, sectionalism, war profiteering. … Never before in all our history have these forces been so united against one candidate as they stand today. They are unanimous in their hate for me — and I welcome their hatred.”

It was only after F.D.R. had created a more equal society, and the old class warriors of the G.O.P. were replaced by “modern Republicans” who accepted the New Deal, that bipartisanship began to prevail.

The history of the last few decades has basically been the story of the New Deal in reverse. Income inequality has returned to levels not seen since the pre-New Deal era, and so have political divisions in Congress as the Republicans have moved right, once again becoming the party of the economic elite. The signature domestic policy initiatives of the Bush administration have been attempts to undo F.D.R.’s legacy, from slashing taxes on the rich to privatizing Social Security. And a bitter partisan gap has opened up between the G.O.P. and Democrats, who have tried to defend that legacy.

What about the smear campaigns, like Karl Rove’s 2005 declaration that after 9/11 liberals wanted to “offer therapy and understanding for our attackers”? Well, they’re reminiscent of the vicious anti-Catholic propaganda used to defeat Al Smith in 1928: smear tactics are what a well-organized, well-financed party with a fundamentally unpopular domestic agenda uses to change the subject.

So am I calling for partisanship for its own sake? Certainly not. By all means pass legislation, if you can, with plenty of votes from the other party: the Social Security Act of 1935 received 77 Republican votes in the House, about the same as the number of Republicans who recently voted for a minimum wage increase.

But politicians who try to push forward the elements of a new New Deal, especially universal health care, are sure to face the hatred of a large bloc on the right — and they should welcome that hatred, not fear it.

Copyright 2007 The New York Times Company