PNHP

Why We Would Benefit

Why We Would Benefit

Single Payer Health Care

By Don McCanne, MD
California Family Physician
Fall 2008

An efficient health care financing system should ensure that everyone receives the health care they need without facing undue financial hardship. Because of the millions of uninsured and the rapid expansion of inadequate underinsurance products, the burden of medical debt has become commonplace for all too many Americans.

Since affordability has become a major concern for most Americans, it is important to look at the true cost drivers that can be improved: deterioration in our primary care infrastructure, the overuse of non-beneficial, high-tech services, failure to establish a rational system of health care pricing, and the profound administrative excesses that waste financial resources that could be better spent on health care.

Our fragmented system of using a multitude of private and public payers is responsible for much of the administrative waste. Private insurers waste far more on administration than do public programs, but they all contribute to the costly administrative burden placed on the health care delivery system. Simply replacing this dysfunctional financing system with a single public insurance program would free up enough funds to expand reasonably comprehensive coverage to everyone.

Our fragmented system has also made it difficult to get our health care pricing right. Just think of what we pay for one MRI scan compared to what we pay for the initiation of a management program for a newly diagnosed diabetic. Or consider how we price pharmaceuticals compared to other nations. The administrators of a single, publicly administered financing system would have the ability to negotiate proper prices — high enough to cover legitimate costs and provide fair profits, yet restricting coverage for services without value, such as marketing or copycat drug research.

We will never be able to eliminate all non-beneficial high-tech excesses, but we are beginning to identify them more precisely. A single payer financing system could be used to realign incentives to discourage the excesses while making sure that appropriate high-tech services are delivered. Britian’s National Institute for Health and Clinical Excellence (NICE) program is a good start in that direction.

The most important affect that single payer financing would have on our health care delivery system would be to use incentives to reinforce our primary care infrastructure, thereby providing a medical home for everyone. There is no single step that would do more to bring us higher quality care while moderating spending excesses.

The private insurance industry wants to cover only the healthiest — primarily the healthy workforce and their young, healthy families — and turn those with significant health needs over to publicly financed programs. Acknowledging that their administrative services are expensive, they propose providing value by expanding their disease management programs. What could be worse than an intrusion into the medical home by a private insurance bureaucracy that siphons off health care funds that should be used for patient care?

A single payer national health program would provide all necessary care for everyone through a universal risk pool that is equitably funded through the tax system, without creating a financial hardship for anyone. It also very effectively addresses the problem of escalating health care costs, ensuring much greater value in our health care spending, beginning with providing each of us with a medical home.

Why County Administrators Should Advocate for Single-Payer Health Care

Paul Clay Sorum, MD

In my previous two articles,1 I pointed out that universal access to adequate health care would be beneficial to society as well as to patients; that we currently spend far more than other countries for a health care system that leaves millions un- or underinsured; and that the counties, in particular, must pay for the failures of our system. I also pointed out that private insurers generate billions of wasted dollars–on salaries for their millionaire executives and armies of employees; on marketing and profits; and on the costs to providers (and patients) of coping with the multiplicity of regulations, the denials and delays, and the barriers to getting reimbursed–that should have been spent on patient care. I argued that, driven by market forces to avoid enrolling sick people and to deny as much care as possible, private insurers can only exacerbate the problem, not solve it; and I concluded that the best solution would be to institute a single-payer system, an expansion of traditional Medicare, in which health care would be, for the most part, publicly financed but privately delivered. Single payer is exemplified by the Congressional bill HR 676, the US National Health Insurance Act, introduced by Representative John Conyers and co-sponsored, currently, by 91 others.2

Nine New Developments

In recent months, nine developments have taken place that mandate immediate action in support of HR 676 by county administrators.

First, health care expenses continue to rise. The projection by actuaries of the Centers for Medicare and Medicaid Services is that the health share of the gross domestic product will increase from 16.3% in 2007 to 19.5% by 2017.3 The current strategy of increasing cost-sharing by patients through deductibles and co-payments cannot prevent this rise. As Schoen and colleagues of the Commonwealth Fund point out, the 10% of the sickest patients, whose spending is not optional and far exceeds the limits of most costsharing agreements, account for 64% of all spending, while the healthiest half, whose health care spending can safely be deferred, account for only 3%. They conclude: “To the extent that higher cost sharing, particularly deductibles, is intended to create more prudent care decisions, the skewed distribution suggests that such a strategy will have little overall impact on spending.”4

Second, as health expenses and insurance premiums rise faster than incomes,5 the numbers of uninsured and, more importantly, of “underinsured” people also rise. The number of uninsured has increased because the decline in employer-sponsored insurance has exceeded the rise in publicly-sponsored insurance (Medicare, Medicaid, and SCHIP [the State Children’s Health Insurance Program]). Most Americans continue, nonetheless, to have employer-sponsored plans. In 2006, excluding those over age 65 (covered by Medicare) and those in the Armed Forces, 63.0% of people had employer-sponsored insurance (versus 67.8% in 2000), 13.6% public insurance (mostly Medicaid) (versus 10.9% in 2000), 5.5% private nongroup insurance (versus 5.1% in 2000), and17.9% no insurance (versus 16.1% in 2000).6

The major cause of underinsurance–not having enough insurance and other resources to cover health care needs–is the cost sharing imposed on those with employer-sponsored health insurance. Looking now only at adults ages 19-64, the number of people uninsured some or all of the year increased from 26% in 2003 to 28% in 2007, and the number of underinsured increased from 9% to 14%; i.e., those with adequate insurance decreased from 65% to 58%. The hardest hit are the sick and the poor. People who were sicker were less likely to be adequately insured than those who were healthier: in 2003, 30% of the sicker people were uninsured and 13% underinsured, while in 2007, 32% were uninsured and 18% underinsured. Among people wit incomes under 100% of the federal poverty line, the percentage with adequate insurance decreased from 31% to 24% and among those at 100-199%, from 35% to 33%; and even among those with incomes equal to 200-299% of the poverty line, only 53% had adequate insurance in 2007.7 Americans’ widespread vulnerability is revealed by analyses showing that, after taking debts into account, the average net financial assets of the uninsured below 300% of the poverty line were 0, of the insured below 300% of the poverty line were minus $600, of the uninsured above 300% of the poverty line were still only $100, and of the insured above 300% of poverty were $5,700.8

Third, recent studies continue to demonstrate the adverse consequences of both underinsurance and uninsurance. In 2007, Schoen and colleagues found that among adults ages 19-64:

* 68% of uninsured, 53% of underinsured, and 31% of adequately insured reported a problem in accessing needed care because of cost

* 38% of uninsured, 17% of underinsured, and 9% of adequately insured delayed preventive care screening because of cost

* 55% of uninsured with chronic disease, 39% of underinsured, and 19% of adequately insured skilled doses or did not fill a prescription for a chronic condition because of cost

* 45% of uninsured, 36% of uninsured, and 15% of underinsurance had problems paying medical bills.9

Schoen and colleagues conclude that “having a policy with substantial cost-sharing relative to incomes, including benefit limits, can undermine access to care and erode family finances in ways similar to having no insurance.” No wonder, therefore, that the US scored lower in 2008 than in 2006 on the Commonwealth Fund’s National Scorecard on U.S. Health System Performance.10

Fourth, public programs have been shown to be less expensive, in terms of overall costs, than private insurance. Society as a whole benefits from providing everyone with health insurance. In New York State, for example, the Fiscal Policy Institute calculated in 2007 that the additional cost of insuring everyone, $4.1 billion, would be less than the costs to society of having so many uninsured, $4.6-9.2 billion.11 In California, the plan for universal coverage through a state single payer system, which The Lewin Group found in 2003 to be cost-saving for the state, was in 2007 felt by the legislature’s analysts no longer to be cost-saving because of the interim rise in health care costs.12 Even if true, single payer has been consistently shown to be less expensive than other ways of achieving universal coverage.13 More evidence of the wastefulness of private insurance comes from recent calculations that total medical spending is much lower when coverage for people with low incomes is provided by public programs (such as Medicaid or SCHIP) than by private insurers.14

Fifth, the interim outcomes of the Massachusetts reform, which is the current, widely-imitated model of health reform, are mixed. It seeks to achieve universal coverage by requiring residents to obtain insurance and by setting up an agency to help them either enroll in public plans (if poor) or find an affordable private plan. The number of uninsured has subsequently decreased, and the public is still positive about the plan. But the private insurance companies are planning to raise their premiums and costs to the state are higher than anticipated.15 Furthermore, the nation has entered a recession from which Massachusetts cannot be exempt. The lesson of states such as Oregon that tried in the 1990s to expand public plans to cover the uninsured is worrisome. As the costs of the public plans increased, and especially when economic growth slowed, the voters refused to pay, and coverage returned to pre-reform levels.16

Sixth, primary care providers, who will be needed to care for the people who obtain adequate insurance when coverage becomes universal, are already in short supply. This is one of the current problems in Massachusetts.17 Colwill and colleagues estimate a deficit of 35,000-44,000 adult care generalists by 2025 if current policies continue.18 This shortfall is not likely to be prevented, in spite of recent decisions by US medical schools to increase their class sizes, as long as hospitals, who train US and international residents with reimbursement from Medicare, are not allowed to increase their numbers of reimbursed positions and as long as the financial and other disincentives to entering primary care are not rectified. These are public policy decisions that a splintered health care system is unlikely to make.

Seventh, support for single payer (or more specifically for HR 676) is growing. To be sure, the voters continue to be divided on health reform according to party affiliation. The Kaiser Family Foundation’s June 2008 poll19 found that 56% of registered voters (71% of Democrats and 34% of Republicans) indicated that the main goal of health reform efforts should be “to make sure that EVERYONE is covered by health insurance,” while 41% (26% of Democrats and 64% of Republicans) said that it should be “to make health insurance more available and affordable in the private marketplace, even if everyone doesn’t get covered.” When asked further about health insurance, 59% of the registered voters (74% of the Democrats and 39% of the Republicans) agreed that “We need to get everyone into the same insurance pool so that we can spread the costs of the sick and healthy over the whole population,” whereas 32% (20% of the Democrats and 50% of the Republicans) declared that “Healthier people should not be asked to pay more to subsidize sicker people by being in the same insurance pool with them.”

At the same time, certain key groups–including organized labor, physicians, and mayors–have recently spoken out in support of HR 676. As of July 28, 2008, HR 676 had been endorsed by 445 union organizations in 49 states including 110 Central Labor Councils and Area Labor Federations and 36 state AFL-CIO’s (KY, PA, CT, OH, DE, ND, WA, SC, WY, VT, FL, WI, WV, SD, NC, MO, MN, ME, AR, MD-DC, TX, IA, AZ, TN, OR, GA, OK, KS, CO, IN, AL, CA, AK, MI, MT, and NE).20 Meanwhile, a survey of US physicians found that support for “government legislation to establish national health insurance” increased from 49% in 2002 to 59% in 2008.21 Furthermore, the United States Conference of Mayors endorsed HR 676 at its national meeting at the end of June.22

Eighth, in July the US Congress reaffirmed its commitment to traditional Medicare. In recent years, the Republicans have worked to privatize Medicare through Part C (enrolling Medicare beneficiaries in private insurance plans, Medicare “Advantage”) and through Part D (adding coverage of medications but through the intermediary of private benefit managers). At the same time, they have tried to discredit Medicare by claiming it was going bankrupt (even though the eventual shortfall in funds can be prevented by an increase in payroll contributions) and by threatening physicians each year with a decrease in payments for their services, a consequence of the Balanced Budget Act of 1997 and the Medicare Modernization Act of 2003. This decrease, which has always been prevented by Congress, was this year to be 10.6% immediately and another 5.4% in January, jeopardizing physicians’ continued willingness to accept Medicare patients. Congress voted again to prevent the planned reduction and, in addition, to expand Medicare’s mental health and prevention benefits. Because these measures were to be financed by reducing the subsidies given to private insurance companies for participating in Medicare Advantage, President Bush vetoed the bill. But Congress overrode the veto by resounding votes of 383 to 41 in the House and 70 to 26 in the Senate.23

Ninth, at the same time, however, a broad coalition of health reformers has formed, under the rubric of Health Care for America Now, to support a plan intermediate between McCain’s proposal to help people buy private insurance24 and the single-payer plans. This intermediate plan aims to achieve universal access to comprehensive and affordable health care by expanding both public and private insurance.25 This is the type of solution exemplified by the Massachusetts plan and favored, with minor variations, by both Hilary Clinton and Barack Obama.26

The enthusiasm for this middle way is fueled, as explained in the earlier articles, by three factors. First is the perception that the voters want choice among insurance options, fear change and losing what they have, distrust government, and do not want to pay more taxes (even, apparently, if their total expenses would go down). This is a matter of voter education. Second is the conviction that such a radical change would be too disruptive. Obama, for example, stated in the New Yorker magazine in spring 2007: “If you’re starting from scratch, then a single-payer system would probably make sense. But we’ve got all these legacy systems in place, and managing the transition, as well as adjusting the culture to a different system, would be difficult to pull off. So we may need a system that’s not so disruptive that people feel like suddenly what they’ve known for most of their lives is thrown by the wayside.”27 This is a matter of realizing that a switch to a single payer system would build on the established and familiar, Medicare, and would not be disruptive to patients or providers but only to insurance companies. Third is the belief that the adoption of a single payer system would be politically impossible because of the power of the insurance lobbies and the resistance to change of our political system, namely the difficulty of getting Congress to pass and the President to sign any major reform. This is a matter for political witnessing and action. As Dr. Steffie Woolhandler, one of the founders of Physicians for a National Health Program, responded recently to a similar criticism by a member of the President’s Council on Bioethics, “I think that the argument you’re making is politics is the art of the possible. But I actually disagree with that. I actually think politics is the art of creating the possible, and what’s possible is what people believe is possible.”28

Moreover, we must recognize that this reliance on a mixture of private and public insurance to insure everyone will not only be more expensive29 and cumbersome than a single-payer system but is highly likely to fail. As demonstrated by all previous state reforms, the attempt to cover everyone through a mixed private-public system results in an inexorable death spiral for the public plans because of adverse selection. As the private insurers avoid and the public plans attract the sick and the poor, the voters, most of whom have private insurance, refuse to pay the rising costs of the public plans. It appears, therefore, that so-called political “realism” is leading health reformers to eschew or abandon single payer and espouse a reform plan that will end up as a reaffirmation of the status quo.

What Should County Administrators Do?

The time has come, therefore, for county administrators to act! A new Congress and new President are about to be elected, and it is highly likely that the Democrats will win the Presidency, maintain control of both houses of Congress, and increase their majority in the Senate. The politicians must be convinced, as they are writing a health reform bill, that the model should be HR 676, not the current Obama plan. County administrators have great credibility as professional public servants who are familiar with all the concrete problems caused by our current health care system. It is time for them not only to persuade their own county legislators to pass resolutions in support of HR 676, but more importantly to persuade the politicians in Washington to have the courage and foresight to institute truly universal coverage through a single-payer health care system.

1 Sorum P. Why a single-payer health care system would be good for counties. Parts 1 and 2. J County Administration, October 2007 and February 2008. See also the editorials by Bob McEvoy: Medicare: Cost effective capitalism, October 2007; and Medicare for All: Now is the time to act, and Medicare for All: A large city’s perspective, February 2008. In addition, the articles by Costes Toregas: Health care: Leveling the field with technology, October 2007; and The role of county technology in making single-payer health care work, February 2008. Also the article by Peter Salgo: The doctor will see you for exactly seven minutes, February 2008 (reprinted from April 2006).

2 The sponsors and text are available at http://thomas.loc.gov/. Accessed on 29 July 2008 by searching for bill number HR 676. Information on single-payer health care can be obtained from the website of Physicians for a National Health Program at www.pnhp.org.

3 Keehan S, Sisko A, Truffer C, Smith S, Cowan C, Poisal J, Clements MK, and the National Health Expenditure Accounts Projection Team. Health spending projections through 2017: The baby-boom generation is coming to Medicare. Health Aff 2008;27:w145-w155. The web and print articles in Health Affairs, the major health policy journal, are available, mostly by subscription, at www.healthaffairs.org.

4 Schoen C, Collins SR, Kriss JL, Doty MM. How many are underinsured? Trends among U.S. adults, 2003 and 2007. Health Aff 2008;27:w298-w309.

5 According to the Kaiser Family Foundation, between 2001 and 2007, family premiums for employersponsored insurance increased 78 percent–to an average of $12,106–while wages went up 19 percent and inflation went up 17 percent. The Employer Benefits 2007 Annual Survey is available at http://www.kff.org/insurance/7672/. Accessed on 28 July 2008.

6 Holahan J, Cook A. The U.S. economy and changes in health insurance coverage, 2000-2006. Health Aff 2008;27:w135-w144. The numbers is best interpreted, according to the authors, as the estimates at any point in time during the year.

7 Schoen et al. How many are underinsured? They define “underinsurance” as insured people with at least one of three indicators of financial exposure relative to income: 1) out-of-pocket medical expenses for care amounted to 10% of income or more; 2) among low-income adults (below 200 percent of federal poverty level), medical expenses amounted to at least 5% of income; 3) deductibles equaled or exceeded 5% of income. In this case, “insured” meant insured all the year (not just at one point in time), and “uninsured” (28% in 2007) meant insured when surveyed (18%) or at some time during the past 12 months (10%).

8 Jacobs PD, Claxton G. Comparing the assets of uninsured households to cost sharing under highdeductible health plans. Health Aff 2008;27:w214-w221.

9 Schoen, et al. How many are underinsured? They define access problems as not filling a prescription; skipping a recommended test, treatment, or follow-up care; not visiting a doctor even when the person had a medical problem; or not getting needed specialist care. See also Greene J, Hibbard J, Murray JF, Teutsch SM. Berger ML. The impact of consumer-directed health plans on prescription drug use. Health Aff 2008;27:1111-1119. In addition, Dixon A, Greene J, Hibbard J. Do consumer-directed health plans drive change in enrollees’ health care behavior? Health Aff 2008;27:1120-1131. Also Hoffman C, Schwartz K. Eroding access among nonelderly U.S. adults with chronic conditions: Ten years of change. Health Aff 2008;27:w340-w348. The Kaiser Family Foundation’s Commission on Medicaid and the Uninsured presented a similar analysis in December 2007: Schwartz K. How trends in the health care system affect low-income adults: identifying access problems and financial burdens. Available at www.kff.org. Accessed on 28 July 2008. See also the NPR/Kaiser Family Foundation/Harvard School of Public Health poll in Florida and Ohio in July 2008, available at www.kff.org/kaiserpolls/upload/7793.pdf (accessed on 30 July 2008).

10 The Commonwealth Fund Commission on a High Performance Health System. Why not the best? Results from the National Scorecard on U.S. Health System Performance, 2008. Available at www.commonweatlhfund.org (accessed on 25 July 2008). In 2007 the Fund compared the U.S. with five other countries (Australia, Canada, Germany, New Zealand, and the United Kingdom): Davis K, Schoen C, Schoenbaum SC, Doty MM, Holmgren AL, Kriss JL, Shea KK. Mirror, mirror on the wall: An international update on the comparative performance of American health care. Commonwealth Fund, May 2007. Available at www.commonwealthfund.org (accessed on 28 July 2008).

11 Fiscal Policy Institute. The Health Care and Social Costs of the Uninsured in New York State. Report prepared for BALCONY in December 2007. Available at www.fiscalpolicy.org (accessed 28 July 2008). The calculation of social costs was based on the Institute of Medicine’s report in June 2003: Hidden Costs, Value Lost: Uninsurance in America.

12 The legislative reanalysis is available at www.lao.ca.gov/2008/hlth/sb840/SB840_analysis.pdf. The 2004 Lewin analysis is available at http://www.healthcareforall.org/lewin.pdf. Both were accessed on 28 July 2008.

13 The clearest example is the Lewin Group’s analysis of competing health care plans for the California legislature in 2002. The report is available at www.health-access.org/expanding/hcop.htm (accessed on 28 July 2008).

14 Ku L, Broaddus M. Public and private health insurance: Stacking up the costs. Health Aff 2008;27:w318-w327.

15 Long SK. On the road to universal coverage: impacts of reform in Massachusetts at one year. Health Aff 2008;27:w270-w284. Also McDonough JE, Rosman B, Butt M, Tucker L, Howe LK. Massachusetts health reform implementation: major progress and future challenges. Health Aff 2008;27:w285-w297. In addition, the May 2008 report by the Kaiser Commission on Medicaid and the Uninsured, Massachusetts health reform: Two years later. May 2008, is available at www.kff.org (accessed 30 July 2008).

16 Wilson JF. Oregon surpasses struggles of early reform and develops a road map for future success. Ann Intern Med 2008;149:149-152.

17 Long. On the road to universal coverage.

18 Colwill JM, Cultice JM, Kruse RL. Will generalist physician supply meet demands of an increasing and aging population? Health Aff 2008;27:w232-w241.

19 The Kaiser Family Foundation polls are available at www.kff.org (accessed on 30 July 2008). See also the poll in July 2008 in Florida and Ohio, conducted with NPR and the Harvard School of Public Health, in which 55% in Florida and 53% in Ohio agreed that the government should guarantee health insurance for all Americans (referenced in endnote #9).

20 Unions for Single Payer H.R. 676 will make the updated list available at www.unionsforsinglepayerhr676.org/.

21 Of great significance as well was the change in policy by the American College of Physicians, the specialty organization of US internists. In a position paper issued in December 2007, single payer was presented as one of the two acceptable ways to achieve universal access (the other being a mixed publicprivate system): American College of Physicians. Achieving a high-performance health care system with universal access: What the United States can learn from other countries. Ann Intern Med 2008;148:1-21.

22 The resolution is available at www.usmayors.org/resolutions/76th_conference/chhs_03.asp (accessed on 28 July 2008). Other groups supporting HR 676 are listed at www.pnhp.org/action/organizations_and_government_bodies_endorsing_hr_676.php (accessed on 29 July 2008).

23 The text of HR 6331, the Medicare Improvements for Patients and Providers Act of 2008, is available at http://thomas.loc.gov/ (accessed on 29 July 2008).

24 McCain’s plan is available at his website: www.johnmccain.com/Informing/Issues/19ba2f1c-c03f-4ac2-8cd5-5cf2edb527cf.htm (accessed on 1 August 2008). The proposed tax credits of $2,500 for individuals and $5,000 for families are far below the cost of any insurance except high-deductible plans with limited benefits.

25 Health Care for American Now (HCAN) (www.healthcareforamericanow.org), should be distinguished from the single payer organization, Healthcare-NOW (http://www.healthcare-now.org). HCAN is attackedby single payer supporters such as Miles Mogulescu at, for example, www.huffingtonpost.com/milesmogulescu/why-not-single-payer-part_b_111718.html; HCAN’s director Richard Kirsch defends his shift away from single payer at www.huffingtonpost.com/richard-kirsch/why-not-single-payer_b_113089.html (both accessed on 1 August 2008).

26 Obama’s health reform plan is outlined at http://www.barackobama.com/issues/healthcare/ (accessed on 29 July 2008).

27 MacFarquhar L. The conciliator: Where is Barack Obama coming from? The New Yorker, May 7, 2007.

28 Steffie Woolhandler’s testimony is available at www.bioethics.gov/transcripts/june08/session4.html. (accessed on 29 July 2008).

29 Skepticism about the ability of Obama’s plan to generate savings, especially in the short term, is summarized in: Sack K. Health plan from Obama spurs debate. NY Times, July 23, 2008. He does not even refer to the preserved expenses of billing, marketing, profits, and hassle generated by the private insurers.

Senator Takes Initiative on Health Care

By ROBERT PEAR
New York Times
Wednesday, November 12, 2008

WASHINGTON – Without waiting for President-elect Barack Obama, Senator Max Baucus, the chairman of the Finance Committee, will unveil a detailed blueprint on Wednesday to guarantee health insurance for all Americans by facilitating sales of private insurance, expanding Medicaid and Medicare, and requiring most employers to provide or pay for health benefits.

Aides to Mr. Obama said they welcomed the Congressional efforts, had encouraged Congress to take the lead and still considered health care a top priority, despite the urgent need to address huge problems afflicting the economy.

The plan proposed by Mr. Baucus, Democrat of Montana, would eventually require everyone to have health insurance coverage, with federal subsidies for those who could not otherwise afford it.

Other Democrats with deep experience in health care are also drafting proposals to expand coverage and slow the growth of health costs. These lawmakers include Senator Edward M. Kennedy of Massachusetts and Representatives John D. Dingell of Michigan and Pete Stark of California.

The proposals are all broadly compatible with Mr. Obama’s campaign promises. But Mr. Baucus’s 35,000-word plan would go further than Mr. Obama’s in one respect, eventually requiring all people – not just children – to have coverage.

“Every American has a right to affordable, high-quality health care,” Mr. Baucus said. “Americans cannot wait any longer.” Far from being a distraction from efforts to revive the economy, he said, “health reform is an essential part of restoring America’s economy and maintaining our competitiveness.”

Mr. Baucus would create a nationwide marketplace, a “health insurance exchange,” where people could compare and buy insurance policies. The options would include private insurance policies and a new public plan similar to Medicare. Insurers could no longer deny coverage to people who had been sick. Congress would also limit insurers’ ability to charge higher premiums because of a person’s age or prior illness.

People would have a duty to obtain coverage when affordable options were available to all through employers or through the insurance exchange. This obligation “would be enforced, possibly through the tax system,” the plan says.

In an interview with CNN just four days before the election, Mr. Obama said his top priorities would be fixing the economy and promoting energy independence. But he added: “Priority No. 3 would be health care reform. I think the time is right to do it.”

Advisers to Mr. Obama said they expected him to take swift action on two fronts. First, they said, he will probably revoke a Bush administration directive that sharply restricted states’ ability to expand the State Children’s Health Insurance Program. In addition, they said, he will support Congressional efforts to expand the program before March 31, 2009, when at least 42 states are projected to exhaust their allotments of federal money.

Ronald F. Pollack, the executive director of Families USA, a liberal-leaning consumer group that has worked closely with Congress and the Obama team, said, “The prospects for meaningful health care reform have never looked better.” Among Mr. Obama’s health care strategists, Mr. Pollack said, are former Senator Tom Daschle; Jeanne M. Lambrew, a former Clinton aide; Neera Tanden, who was director of domestic policy for the Obama campaign; and Representative Rahm Emanuel, who will be White House chief of staff.

In his plan, Mr. Baucus makes these proposals:

* People age 55 to 64 should be able to buy Medicare coverage if they do not have access to a public insurance program or a group health plan. More than four million people in this age group are uninsured.

* Medicaid would be available to everyone below the poverty level, providing at least seven million more people with access to the program. In many states, adults with incomes well below the poverty level – $17,600 for a family of three – are ineligible for Medicaid.

* The State Children’s Health Insurance Program would be expanded to cover all uninsured youngsters in families with incomes at or below 250 percent of the poverty level ($44,000 for a family of three). This would raise the income limit in about half the states.

Mr. Baucus would also make it easier for many legal immigrants to qualify for Medicaid and the children’s health program. Under current law, such immigrants are generally barred from the programs in their first five years in the United States. He would lift that ban.

More than half of all Americans receive coverage through employers, and Mr. Baucus said he wanted to halt the erosion of such coverage. He would offer tax credits to small businesses to help them defray the costs of providing health benefits to employees.

To make insurance more affordable for those who buy coverage on their own, Mr. Baucus would offer tax credits to individuals and families with incomes at or below four times the poverty level ($70,400 for a family of three). Only 10 percent of the uninsured have incomes above that level, he said.

Medical group challenge of getting paid

Bottom line blues

By Karen Caffarini
American Medical News
November 17, 2008
Medical Group Management Assn. members were asked to name the tasks their practices found most challenging.
50.1% Collect from self-pay, high deductible and/or health savings account patients
28.7% Collect from commercial payers
14.5% Collect from Medicare
http://www.ama-assn.org/amednews/2008/11/17/bisa1117.htm

Medical groups certainly have many challenges, but one of the more important is getting paid. This survey of Medical Group Management Association members provides some important lessons.
Twice as many groups found that collecting from private health insurers was very challenging compared to the challenge of collecting from Medicare. This is not a surprise. Previous studies have confirmed that private insurers do place a significant administrative burden on the health care delivery system. It is difficult to comply with the various rules and procedures of a multitude of private plans, especially when those plans use innovative methods to delay (work the float) or avoid altogether paying claims for legitimate services.
Medicare does contribute to a lesser degree to this burden. Medicare is much more consistent in applying their rules, and they do not engage in behavior designed to avoid paying for services rendered in good faith. But Medicare does add to the complexity by using rules and administrative procedures that differ from those of the private plans. If Medicare were the only payer, the one set of rules designed to pay for legitimate services would greatly simplify the process for the providers of health care.
Much has been written about how out-of-pocket expenses have impaired access to beneficial health care products and services. Although cost sharing has caused some patients to decline services that they perceive to be of marginal value, many have also declined services that they know they should have. Many in the policy community oppose cost sharing because it is a blunt instrument that impairs access, and because it has only a negligible impact on our total health care spending.
This survey reveals another problem with patient cost sharing. Medical groups have found that collecting the patients’ share of the payments has been even more challenging. About twice as many groups find that this is a challenge compared to that of collecting from private insurers, and almost four times as many as that of collecting from Medicare. Cost sharing represents another excessive, inappropriate administrative burden placed on the health care delivery system.
The solution? A single payer national health program. (Yes, this is repetitive, but isn’t anyone listening?)

Medical group challenge of getting paid

Bottom line blues

By Karen Caffarini
American Medical News
November 17, 2008

Medical Group Management Assn. members were asked to name the tasks their practices found most challenging.

50.1% Collect from self-pay, high deductible and/or health savings account patients

28.7% Collect from commercial payers

14.5% Collect from Medicare

http://www.ama-assn.org/amednews/2008/11/17/bisa1117.htm

Comment:

By Don McCanne, MD

Medical groups certainly have many challenges, but one of the more important is getting paid. This survey of Medical Group Management Association members provides some important lessons.

Twice as many groups found that collecting from private health insurers was very challenging compared to the challenge of collecting from Medicare. This is not a surprise. Previous studies have confirmed that private insurers do place a significant administrative burden on the health care delivery system. It is difficult to comply with the various rules and procedures of a multitude of private plans, especially when those plans use innovative methods to delay (work the float) or avoid altogether paying claims for legitimate services.

Medicare does contribute to a lesser degree to this burden. Medicare is much more consistent in applying their rules, and they do not engage in behavior designed to avoid paying for services rendered in good faith. But Medicare does add to the complexity by using rules and administrative procedures that differ from those of the private plans. If Medicare were the only payer, the one set of rules designed to pay for legitimate services would greatly simplify the process for the providers of health care.

Much has been written about how out-of-pocket expenses have impaired access to beneficial health care products and services. Although cost sharing has caused some patients to decline services that they perceive to be of marginal value, many have also declined services that they know they should have. Many in the policy community oppose cost sharing because it is a blunt instrument that impairs access, and because it has only a negligible impact on our total health care spending.

This survey reveals another problem with patient cost sharing. Medical groups have found that collecting the patients’ share of the payments has been even more challenging. About twice as many groups find that this is a challenge compared to that of collecting from private insurers, and almost four times as many as that of collecting from Medicare. Cost sharing represents another excessive, inappropriate administrative burden placed on the health care delivery system.

The solution? A single payer national health program. (Yes, this is repetitive, but isn’t anyone listening?)

U.S. health care ranks first – as worst value

Health Spending In OECD Countries: Obtaining Value Per Dollar

By Gerard F. Anderson and Bianca K. Frogner
Health Affairs
November/December 2008
In 2005 the United States continued to spend much more on health care than any other OECD country. In spite of myriad cost containment initiatives during the past thirty-five years, the annual rate of increase in real U.S. health care spending is slightly above the average annual rate of increase in the median OECD country. And the United States experienced the largest increase in the percentage of its GDP dedicated to health care among all OECD countries during 1970-2005. What does the country have to show for this higher level of spending? U.S. life expectancy is lower than would be predicted based on U.S. per capita income. The United States is just as likely to be in the bottom or top half on a series of health indicators. The value per dollar for health care in the United States is further complicated by limitations in access to care; the country is not able to provide universal insurance coverage, despite its high levels of private and public spending per capita. Health reform efforts should focus on improving the value per dollar spent on health care, in addition to other reform goals of extending coverage to all and reducing unnecessary health care spending, so that Americans get the health care system they are already paying for.
http://content.healthaffairs.org/cgi/content/abstract/27/6/1718

The United States spends far more per capita on health care than any other nation, yet we are obtaining very poor value for our spending. How many times have we heard that? And it doesn’t change.
Although much of the discussion on reform has been on how we can get everyone covered, many in the policy community have cautioned that universal coverage is not enough. We need to introduce reforms that will result in a high performance system.
Some have used this to dismiss single payer as being inadequate because it only expands coverage without addressing the serious deficiencies in our health care system. Nothing could be further from the truth. Single payer not only covers everyone, it also creates our own public monopsony, or single purchaser of health care services and products. The single payer system, functioning as our own purchasing agent, finally would be in a position to demand value for our health care investment. We will never receive that from the private insurance industry, even though we have given them over half of a century to try to provide us with value.
We’re paying for a high performance system. It’s high time that we get it.

U.S. health care ranks first – as worst value

Health Spending In OECD Countries: Obtaining Value Per Dollar

By Gerard F. Anderson and Bianca K. Frogner
Health Affairs
November/December 2008

In 2005 the United States continued to spend much more on health care than any other OECD country. In spite of myriad cost containment initiatives during the past thirty-five years, the annual rate of increase in real U.S. health care spending is slightly above the average annual rate of increase in the median OECD country. And the United States experienced the largest increase in the percentage of its GDP dedicated to health care among all OECD countries during 1970-2005. What does the country have to show for this higher level of spending? U.S. life expectancy is lower than would be predicted based on U.S. per capita income. The United States is just as likely to be in the bottom or top half on a series of health indicators. The value per dollar for health care in the United States is further complicated by limitations in access to care; the country is not able to provide universal insurance coverage, despite its high levels of private and public spending per capita. Health reform efforts should focus on improving the value per dollar spent on health care, in addition to other reform goals of extending coverage to all and reducing unnecessary health care spending, so that Americans get the health care system they are already paying for.

http://content.healthaffairs.org/cgi/content/abstract/27/6/1718

Comment:

By Don McCanne, MD

The United States spends far more per capita on health care than any other nation, yet we are obtaining very poor value for our spending. How many times have we heard that? And it doesn’t change.

Although much of the discussion on reform has been on how we can get everyone covered, many in the policy community have cautioned that universal coverage is not enough. We need to introduce reforms that will result in a high performance system.

Some have used this to dismiss single payer as being inadequate because it only expands coverage without addressing the serious deficiencies in our health care system. Nothing could be further from the truth. Single payer not only covers everyone, it also creates our own public monopsony, or single purchaser of health care services and products. The single payer system, functioning as our own purchasing agent, finally would be in a position to demand value for our health care investment. We will never receive that from the private insurance industry, even though we have given them over half of a century to try to provide us with value.

We’re paying for a high performance system. It’s high time that we get it.

Unhealthy Solutions: Private Insurance, High Costs and the Denial of Care

Multinational Monitor

SEP/OCT 2008 — VOL 29 No. 2

An Interview with Steffie Woolhandler

Steffie Woolhandler is a co-founder of Physicians for a National Health Program, a not-for-profit organization for physicians, medical students and other healthcare professionals who advocate a national health insurance program. She is an associate professor of medicine at Harvard University and co-director of the Harvard Medical School General Internal Medicine Fellowship program. Woolhandler is a co-author of Bleeding the Patient Dry: The Consequences of Corporate Healthcare (2001).

Multinational Monitor: How many people are uninsured in the United States?

Steffie Woolhandler: Forty-seven million Americans were uninsured as of 2006.

MM: What are the health impacts for those without insurance?

Woolhandler: The Institute of Medicine estimates that there are about 18,000 excess deaths in the United States every year due to lack of health insurance.

In addition, people without insurance may not die, but suffer needlessly from a stroke, an amputation or kidney failure, things that could be prevented by good care. The United States has a high infant mortality rate. Our infant mortality rate is about twice the infant mortality rate in Sweden. Children are dying and being born with disabilities because they’re not getting the healthcare they need. So the biggest cost is really in terms of human suffering and loss of human life.

MM: What are the financial costs of the U.S. health insurance system?

Woolhandler: The United States has the world’s most expensive healthcare system on a per capita basis. We spend about twice as much as other developed nations spend on healthcare. And of course those other developed nations all use some form of nationalized health insurance.

MM: What are the financial costs to individuals and families, including especially the uninsured?

Woolhandler: We have looked at bankruptcy to see what share of all U.S. bankruptcies are due to medical illness and medical bills. It turns out that at about half of all U.S. bankruptcies are due at least in part to illness. The most surprising thing in our study on bankruptcy was that the overwhelming majority of those American families pushed into bankruptcy by medical bills had insurance, at least at the onset of the illness that bankrupted them. About 76 percent of all people in the U.S. pushed into medical bankruptcy do have health insurance when they first get sick.

There are two ways that they are bankrupted. Sometimes people have insurance through their job, but they become too sick to work, or have to take off work to care for a very sick child, and they lose their health insurance. So they have health insurance and then lose it because of the illness itself.

But another very frequent scenario in our bankruptcy data involved people who held onto their insurance, usually private insurance, throughout the illness that bankrupted them. They were insured the entire time, but were bankrupted anyway by gaps in their coverage — uncovered services, co-payments and deductibles.

Private health insurance is a defective product. On one hand, you may lose it when you need it most — when you get sick. On the other hand, even if you are able to hold onto private insurance, the gaps in the coverage mean that you may be bankrupted anyway.

MM: How does the current system of private insurance affect doctors?

Woolhandler: The main thing with private insurance is there are dozens, sometimes hundreds, of different rules — payment rules and eligibility rules that doctors have to keep track of. The doctors often feel that they spend a tremendous amount of time on paperwork and the administrative side of things because of private insurance and all the conflicting rules.

Going to a Medicare-for-All system — a single-payer, national health insurance system — would mean that doctors would have only one set of payment rules. Everyone would automatically be eligible, and no one would lose their insurance half-way through an illness. It certainly simplifies the paperwork and administrative side of medicine for doctors.

MM: One of the big arguments against single payer is that it would require the rationing of care. What kind of rationing exists under managed care and the current system for those with insurance?

Woolhandler: With managed care, people are very restricted in where they can go for care. That’s often a problem. A very common insurance plan in Boston, for instance, is one that doesn’t let you go to teaching hospitals for care. You have to go to less expensive hospitals. That’s not a very good way to distribute resources. Teaching hospitals should be reserved for more complicated patients and community hospitals should be used for patients with the more routine kinds of illnesses that we know community hospitals do a good job taking care of. But with this Boston plan, if you pay more money, you can get full access to all the hospitals, including teaching hospitals. And if you can’t afford to pay the full amount, you are stuck going only to community hospitals, even if you have an illness that would be better cared for in a teaching hospital. Community hospitals do a great job with certain types of illnesses, but if you get a rare or complicated disease, it’s not a good idea to be restricted.

That’s the major form of restriction that is currently being placed on patients in the Boston area. At other times and in other places, there have been many other types of restrictions.

I think the main way the insurance industry is rationing is by trying to avoid enrolling sick people in the first place. A lot of what the insurance companies are doing is trying to avoid the high-cost cases, which means avoiding people who have been sick in the past. There have been some recent stories, for example, about people who are unable to buy insurance because the insurance company went and bought the records from a pharmacy benefits company and discovered that the applicant for insurance had once filled a prescription for high blood pressure medication or for an antidepressant.

This undermines the whole idea of insurance. Insurance is supposed to be there when you’re sick. When the insurance companies decide that they’re going to focus on avoiding sick people, then they no longer play any socially useful role.

MM: One idea from within the current system about how to deal with rapidly rising costs is disease management. What is disease management and how effective is it as a cost-containment strategy?

Woolhandler: Disease management is one of these concepts that at some times and in some contexts is a great idea. But it has been transformed and reworked into something that is probably not a very good idea.

We have a lot of evidence that in a nonprofit setting, where the goal of the organization is to provide better care, if you use a team approach with social workers and nurses actively planning and scheduling and managing the care, particularly with chronic illnesses, patients will get better care. For instance, if a nurse is assigned to a diabetic patient, to assist in the teaching, to call them every couple of weeks to find out how their blood sugar is doing, to answer their questions — we know in a nonprofit setting that results in better quality of care. Similarly, there is very good evidence that, again in a nonprofit setting, having a nurse call patients with severe heart failure on a frequent basis and asking them if they are retaining fluids, or having breathing problems — so that they are intervening early — can help people avoid having to come into the hospital so often. That’s the nonprofit, patient-centered idea of disease management.

What happened is for-profit companies took that information and said, “Why don’t we change this into a for-profit business? We’ll hire some nurse managers to call up the patients, call up the doctors and see if we can make money.” It turns out that the for-profit businesses didn’t save any money. It isn’t clear that they improved the quality of care, either.

We know they didn’t save any money because Medicare got the idea that they were going to try disease management. Medicare recruited some for-profit companies to enroll Medicare patients. After many months of trying, it became clear that these for-profit disease management companies could not deliver financial savings.

I’m all for using teams — nurses, doctors, social workers, community people — to try and improve care of patients. I’m all for scheduling and planning care of people with complex diseases. But that is very different from what these for-profit companies are talking about — which is something that probably doesn’t do any good for the patients and clearly doesn’t save any money.

MM: John McCain’s health plan has three parts: one is individual options so individuals have more ways to buy health insurance; second, consideration would be given to a state plan of pool coverage for people who otherwise couldn’t get insurance; third, he would do various things to control costs. How well would that set of policies address current problems?

Woolhandler: The policy of allowing individuals to shop around is really worthless. Individuals try to shop around now. The problem is, if you have an illness like diabetes, you can’t get private insurance at an affordable price. And being able to choose between three private plans, or six private plans, is not going to reduce the price of your insurance. That idea has nothing to do with actually improving access to care.

The second issue deals with high-risk pools, where a person with diabetes who couldn’t get private insurance might be able to go to a high-risk pool. There is substantial experience at the state level with high-risk pools and they haven’t worked very well. They are very expensive and require either huge taxpayer subsidies or very high premiums. Most of the high-risk pools have had to put caps on the number of people enrolled because the costs are so high. The states’ experience with high-risk pools suggests that they don’t solve this problem.

We recently released a study where we found that nearly a third of all uninsured people have a chronic illness. So we’re talking about a situation where a really large share of all uninsured people in the United States might be too high a risk to qualify for routine purchase of insurance and might need to use some sort of high-risk pool if we went in that direction.

I don’t think McCain has proposed anything that is a meaningful cost control. There’s just no evidence that there is any cost control in disease management.

The emphasis on information technology is similar in some ways to disease management. That is, in the right setting, with the right leadership, information technology can improve care. But no one has ever proven that information technology reduces the cost of care, with one small exception. In Indiana, where there was a really good nonprofit system, with really good leadership, they did see a small decrease in the use of lab tests. In all the studies that have been done, that was the only place where there was any evidence of cost savings. There are other studies that have looked and found no evidence of cost savings with information technology. That doesn’t mean we shouldn’t do it. In the right setting, it might help us improve care, but there are no cost savings available.

Everyone likes to talk about disease management and information technology because they look like easy ways to save money. They don’t save money, and we need to get rid of the idea that we can save money through information technology and disease management.

MM: Obama says similar things on cost control, but the much more prominent piece of his proposal is for expanding coverage. How would he go about doing that and why have you been critical of it?

Woolhandler: Obama has said that he will mandate that children get coverage, that he will mandate that parents go out and buy coverage for the children. Obama has also talked about expanding Medicaid and similar programs which have been cut back under the Bush administration. And certainly Medicaid for poor people is better than nothing. But we’ve seen over the last decade numerous attempts to reduce the number of uninsured people by expanding Medicaid and that effort has really been unsuccessful.

He is not planning to do a mandate on anyone other than children. That was part of Hillary Clinton’s proposal, but Obama is not pushing the individual mandate, I think correctly. I think individual mandates are actually a terrible idea.

He also talks about making available a Medicare-like program that people could buy their way into. I guess for poor people it would resemble Medicaid. More affluent people would be able to buy their way in.

There’s no reason to think that would work. I think the private health insurance industry is not going to allow the government to run a program that really competes with them. That’s not just my opinion. If we look historically, when state governments have tried to run public programs side-by-side with private programs, the private health insurance industry has intervened to make sure that the public program is very low quality, with very limited coverage, because the private insurance industry doesn’t want the competition.

I think Obama would like to have a very good public program that would be better than the private programs and out-compete them. But experience has shown that the private health insurance industry won’t let you do that.

MM: By contrast, many supporters of the Obama plan say that this is the best that can be achieved given the political power of the private health insurance industry.

Woolhandler: What they are really saying is that it’s politically feasible, which may or may not be true. The problem is it’s not economically feasible. If you try to get to universal coverage, but leave the private health insurance industry in the middle, it’s incredibly expensive. You have to pour lots of money into the system and it becomes prohibitively expensive to cover everyone.

A key reason is that the private health insurance industry imposes massive administrative costs on the healthcare system. Administrative costs in U.S. healthcare are about 31 percent of total health spending. In nations with single payer national health insurance, the overhead costs are about 16.5 percent of spending. The possible administrative savings in going from a multipayer system to a single payer system are about $350 billion annually. That means that by going from the current multipayer, private insurance-dominated system to a nonprofit single-payer system, you have a built-in cost savings of about $350 billion.

We don’t believe you should take this out of the health system. We think you should take this $350 billion in money saved from paperwork costs and use that to cover the uninsured and improve coverage for people who only have partial coverage. The single payer system lets you expand coverage without expanding spending.

The type of plan that Obama is proposing is very similar to plans that have passed and been partially implemented at the state level, only to fail because they are too expensive to continue. The Obama plan is going to have exactly that problem. That is, when you go to implement this program, you’re left with the wasteful private health insurance industry in place. You try to add new coverage and you’re going to end up adding billions and billions in costs and it’s no longer economically feasible.

What people are really saying is, we’re going for political feasibility with the Obama plan, but we’re completely abandoning economic feasibility. I just don’t think that that can happen in the long run. The United States should not be spending any more than we’re already spending on healthcare. We spend plenty, we just need to be spending that money more wisely.

MM: Do you think that weakness would prevent that plan from being enacted in the first place or would you expect it instead to collapse some time after implementation?

Woolhandler: Historically at the state level, plans have passed, usually during an economic boom time. The states come up with a complicated plan that involves a lot of new government spending, put a whole lot more money into the healthcare system, adapt some sort of temporary expansions of Medicaid coverage, but over a year or two things collapse because the price is too high and it’s not sustainable economically. As soon as the next recession hits, the states say, “This is so expensive, we can’t possibly keep subsidizing these public plans; we can’t enforce employer mandates or individual mandates because employers or individuals can’t afford this.” When the recession hits, the plans have been rescinded.

That has happened over and over.

That happened in Massachusetts in 1998. We had both an employer and individual mandate along with Medicaid expansion. It happened in Oregon, Tennessee and Minnesota in 1992. It happened in Washington State in 1993. And I think we’re seeing the beginning of the same dynamic with the 2006 Massachusetts law.

At a federal level, would it pass and then collapse, or would it collapse before passing? I don’t know. But I do know that the plan that Obama is proposing is simply not economically feasible. The only mechanism he has for getting more coverage is pouring more money in, and the cost containment things he’s suggesting are really laughable.

MM: If single payer faces the serious political obstacles that come from calling for wiping out the private health insurance system, are there incremental things that can be done to take us in that direction?

Woolhandler: The only incremental thing that one can do that makes any sense at all would be placing all hospital care into a single payer system as a first step, and then later placing other types of care into a single payer system. That’s what happened in Saskatchewan. They initially enacted a single payer system that covered all the hospitals and then a few years later enacted a single payer system that covered everything.

That will work, because if you do the whole sector at a time, you can get the administrative savings. The thing that won’t work is a patch here, a patch there, because you don’t get any of the administrative savings.

MM: What about expanding Medicare to cover other age groups — down to age 55, say, or all children?

Woolhandler: Medicare by age group would be a much better idea than most of the rest of what’s on the table right now. It would be an expansion of a public program that’s not perfect, but it’s administratively efficient and fair in the way that it covers people. But it’s not really on the table right now.

AS I SEE IT: Health-care system needs more primary-care physicians

By Josh Freeman, MD
Kansas City Star
Monday, Nov 10, 2008

National discussions about which system of universal health coverage — and yes, we need a system of universal health coverage — will be the best to adopt often miss the point. The goal is not simply to “cover everyone,” but to provide universal access to high-quality, cost-effective care.

We need health professionals to practice in the right locations and a payment system that reimburses for providing the care we want and need. We now have too few primary care physicians and not enough physicians practicing in rural and underserved urban areas. And the situation is getting worse.

The Journal of the American Medical Association recently reported that only 2 percent of senior medical students planned careers in general internal medicine. It is one of three specialties providing primary care; the other two are general pediatrics and family medicine. The number of students entering all types of primary care training is dropping rapidly. Because family medicine residencies are having more difficulty finding U.S. graduates to enter that specialty, half are currently international graduates.

These trends create tremendous problems. Massachusetts has too few primary care doctors to see all the people now insured under its new health plan. Many studies have demonstrated that health systems built around primary care provide higher quality care at lower cost. The Commonwealth Fund’s recent “health scorecard” shows the U.S. scores very poorly, and our worst score is for “efficiency,” the area where primary care has the greatest impact.

The main reason for the precipitous drop in primary care doctors is that they earn much less than sub-specialists. Students deep in debt are choosing higher-paid specialties. We need to pay primary care doctors more and pay them for what we want them to do: provide us a medical home and manage our health care. This can be done by a change in Medicare policy, because most payers base their reimbursement on Medicare. Students would choose specialties based on what kind of doctors they wanted to be, not salary expectations. We would begin to produce the primary care physicians we need. This can happen. For our health, and our pocketbooks, it has to happen.

How Universal Health Care Changes Everything

By Sara Robinson
Campaign for America’s Future
October 28th, 2008

With one fell stroke, giving Americans universal access to health care will undermine some of the deepest and most persistent myths of the conservative worldview.

We’ve worked hard to build a progressive political juggernaut that will, God willing and the creek don’t rise, put us in control of both Congress and the Executive Branch starting just a week from now.

But it’s one thing to get power, and another thing to keep it.

Someone (OK, it was Rick Perlstein) recently asked a group of friends to name the single most important policy step progressives could take to solidify a long-term grip on the government — the kind of extended run we had from 1932 through to the Age of Reagan.

There were a lot of good answers. Ending privatization was, I thought, the best answer of all. Reinvesting in education is important if we want to ensure that the next generation will support and sustain our work and values. (I like to joke that the reason they call it “liberal education” is that the more of it you have, the more liberal you’re likely to be. It’s not quite accurate, but it’s true enough.) Ensuring that people’s interactions with government are useful and positive was another: In a lot of states, one afternoon at the DMV is enough to make the most ardent good-government partisan turn into Grover Norquist. (Maybe we don’t want to drag the whole government into the bathtub to drown it, but that SOB at Window 11 would be a fine place to start.)

But in the end, I settled on “provide universal health care–preferably single-payer” as my final answer. I chose this not just because health care is an important public good (though it is), but because I’m convinced that this single step will do more to rapidly and permanently undermine the conservative worldview than anything else we could possibly do.

How Universal Care Changes Everything: The Canadian Example

I’ve seen this happen, at very close range. Over the course of nearly five years living in Canada, I’ve been continually impressed by the durable, far-reaching role universal health care plays in expressing and reinforcing the entire country’s political philosophy. It’s probably not overstating things to say that the health care system is at the very core of the Canadian sense of national identity, right up there with the Mounties and the Hudson’s Bay Company and well above the Queen. Every time my neighbors go to the doctor, the experience reaffirms a set of cultural assumptions that, over time, have made and kept the country unwaveringly progressive.

First, they’re reminded that taking care of each other is a core Canadian value–a cherished piece of who they are. In the Harper era, the conservatives up here have tried hard to sell American-style rugged individualism and the belief that “you’re on your own” (or should be), beholden to no one, needing no one. Most Canadians reject this as a peculiar form of insanity: Their interdependence is so patently obvious to them that it’s like denying the existence of gravity. They’re so proud of their health care system–and what it says about them as a nation–that, when asked to name the greatest Canadian in history a few years ago, they chose Tommy Douglas, the provincial premier (governor) from Saskatchewan who was the father of the first single-payer plan.

Second, they’re reminded that their government does useful and important things that add immensely to their quality of life, and thus deserves their ongoing support. And their high hopes also lead to high expectations. They not only expect a lot from their health care system; they also expect that their police will be respectful and law-abiding, their city parks will be well-tended; and their public buildings will be beautiful. If it takes money to make that happen, they’ll spend it–but those who’ve been trusted with it had better be damned careful. Where Americans believe in “life, liberty, and the pursuit of happiness,” the Canadian Constitution calls for “peace, order, and good government.” And that set of aspirations is reinforced every time they walk into a doctor’s office and get the treatment they need.

Third, they’re reminded that certain rights are inalienable, and certain levels of inequality are intolerable–and that every Canadian has an intrinsic and equal entitlement to shelter, food, education, and health care. In the conservative era, America’s hypercompetitive society has been very quick to throw away people who haven’t made the cut in some way–people without money, connections, or education; people with disabilities that make them economically less viable; people who come from the wrong racial or religious group or the wrong part of the country. You only deserve what you, personally, are capable of earning. If you’re badly equipped to do that, it’s your own damned fault. If you can’t afford health care, you deserve to die. In no case is it the taxpayers’ job to step in and make it right.

That attitude is completely foreign up here. It’s notoriously hard for immigrants to find good jobs here, but even immigrants get health care. There’s a heroin problem in downtown Vancouver, but even junkies get health care. You don’t lose your insurance just because you got sick, or got disabled, or had to quit your job; even the unemployed get health care.

Nobody falls through the cracks, no matter what condition their condition is in. Nobody is chained to a job they hate because they can’t afford to lose their health care. Nobody has to pass up the chance to go back to school, or take a year abroad, or stay home with their kids. Nobody hesitates before starting their own business, either. The result is a healthier, more skilled, better-traveled, more fulfilled, more entrepreneurial and ultimately more competitive workforce.

A lot of Americans seem downright threatened by the idea that everybody deserves the same level of health care, delivered by the same doctors. It sounds like wild-eyed socialist ranting (all this crazy talk of “rights”!). For Canadians, though, that right is such a basic assumption that it’s not even up for discussion. A civilized country does not turn any of its citizens away from the table. And that idea, once set, opens up a broader sense of what we owe each other. Health care is the social contract in daily action. Ultimately, having that contract reaffirmed so intimately and so often affects how my neighbors do business, how they treat the environment, and how they relate to the rest of the world. The effects of this affirmation ripple out into everything Canada touches.

Which brings us to the last observation: sharing a common health care system reminds Canadians that they’re all in this together. From the richest to the poorest, everyone arrives and dies in the same hospitals, tended by the same doctors. It’s in nobody’s interest to let that system fail. (Prairie folks — Canada’s version of Midwesterners — will tell you that the northern climate extremes also encourage people to look out for each other. And that makes some sense, too: denying help to neighbors and strangers during the winter in places like Edmonton or Winnipeg can all too easily become an act of negligent homicide. In extreme conditions, free access to good hospitals becomes a critical piece of that caretaking.)

The upper classes occasionally try to introduce privatization options in one province or another; but the citizens/patients, the government, and the health care unions have usually brought tremendous pressure to bear to limit or end these experiments. Everybody understands that if the wealthy bail on the system, there won’t be the political will to keep the quality high. This conversation is ongoing–and the very fact that they keep having it also helps keep the symbolic importance of the system front and center. Everybody understands very clearly what’s at stake.

How Guaranteed Health Care Could Change America

If we could get Americans thinking along similar lines, all manner of impossible things will become possible. With one fell stroke, providing universal access to health care will instantly undermine some of the deepest and most persistent myths of the conservative worldview. People will, very quickly, remember that we cannot function as a democracy unless we’re deeply invested in common wealth and a common future–that “you’re on your own” is simply a conservative lie that allows the rich to divide and conquer. We’ll be startled at first to see just how much a single well-run government program can actually deliver–and then, as our confidence grows, we’ll start expecting more of other government efforts, and become more willing to experiment with other kinds of programs. It’s quite likely we’ll start asking hard questions about programs that divert taxpayers’ money away from these essential goods, and re-prioritize our spending. Thrown together into a shared health care system, we may even learn some compassion for each other, and start to heal some of the deep social and political rifts that have divided us for so long.

If it works in the U.S. half as well as it does in Canada, the conservatives will be forced to give up on all those plans for that big 2012 comeback they’re so eagerly anticipating right now. With roughly a third of the country either uninsured or under-insured; and everybody else at risk of losing their coverage at a moment’s notice, the sheer relief at having that burden lifted from 300 million souls is going to make the old conservative nostrums sound absolutely insane. Anybody who suggests that there’s something wrong with universal care, or that it was better the old way, or that this is that Pure Communist Evil they’ve been warning about since the days of McCarthy, is going to be dismissed out of hand as an ideological crank. Because only people who buy their Kool-Aid by the barrel could even think about going back to the awful way things were in 2008.

It’s all happened just this way before, of course. Social Security did all these same things in its time. It shut up the economic royalists and reintroduced Americans to the value of social contracts and a belief in the common good. Americans accepted these ideas so completely that liberals were able to seize control of the country’s political discourse, and dominate it for the next four decades. On most issues, the conservatives had no choice but to follow their lead.

Unfortunately, though, all this happened over 70 years ago–so far in the past that most Americans can’t even imagine what life was like before we had a guaranteed retirement income. We take that much too much for granted now. Creating a long-term 21st-century progressive renaissance depends on our ability to bring these same lessons home to a whole new generation in the most vivid and unforgettable way possible. Guaranteed health care will do that. It has the potential to become the catalyst for a new season of American progressivism that could last another 40 years.

This notion is no secret to conservatives, who figured out 15 years ago that universal health coverage could well become their undoing. In the heat of the 1993 debate over the proposed Clinton health care plan, Bill Kristol wrote a famous strategy memo in which he argued that “passage of the Clinton health care plan in any form would be disastrous. It would guarantee an unprecedented federal intrusion into the American economy. Its success would signal the rebirth of centralized welfare-state policy at the very moment that such policy is being perceived as a failure in other areas.”

Conservatives are already acutely aware that if we get health care that works, they’re going to be shut out of power and out of the conversation for decades to come. They also know that, come January, they may find themselves too weak to put up a fight.

Presidential candidate Barack Obama knows it, too, which is why he’s made universal health care a central part of his agenda. If he succeeds, I think people are going to be surprised at the depth and speed of the resulting leftward shift in American values. Seeing the government deliver such an essential and powerful good to so many people will permanently discredit many of the most fundamental assumptions of the conservative worldview–and in doing so, will make it much, much harder for the cons to ever make themselves politically relevant again.

There’s nothing else that will do so much for so many so quickly–and, at the same time, lay down the sturdy foundation for a long, strong progressive future.

Uwe Reinhardt explains family health care costs

The Health Care Challenge: Sailing Into a Perfect Storm

By Uwe E. Reinhardt
The New York Times
November 7, 2008
Even if the financial markets had not gone into a tailspin and the economy had not slouched toward a prolonged recession, non-elderly Americans in lower-middle-income families — those with family incomes between $20,000 and $60,000 — would have sailed into a perfect storm brewing in health care. Roughly one-third of American households fall into that category.
Consider a family headed by two income earners each with a gross wage base of $30,000. One might be a taxi driver, and the other a sales clerk in a department store or at, say, Home Depot.
By “gross wage base” is meant here the sum of all of the debits that an employer makes to the account “Payroll Expense” for an employee. It includes the employee’s cash take-home pay, all the income taxes and Social Security taxes and other deductions — for example, the employee’s contributions towards health insurance and pensions — withheld from the employee’s paycheck, as well as the employer’s share of Social Security taxes and the employer’s contributions toward the employee’s health insurance, pension, vacation pay, sick days and so on. It is a sum that supports all taxes paid by or on behalf of the employee and all fringe benefits earned by the employee, whether formally paid by the employer or taken out of the employee’s paycheck.
It follows from this definition of gross wage base that it must support all of the health expenditures made by or on behalf of the family in a given year — that is, the employer’s contribution to premiums for the employee’s health insurance, the employee’s own contribution and the employee’s out-of-pocket health spending.
According to the Milliman Medical Index, this total health spending figure for a typical non-elderly American family of four had reached an average of $15,600 by 2008. It had grown at an average compound growth rate of about 8.6 percent from $11,192 in 2004.
To return to our family with an assumed gross wage base of $60,000: If that gross wage base grew by, say, 3 percent per year over the next decade, to $80,600 by 2017, while total family health spending grew by, say, 8 percent per year over the same time frame, to $33,700 by 2017, then about 41 percent of the family’s gross wage base would be taken up by health care alone, before any deductions for taxes or fringe benefits. If the wage base grew by 4 percent, health spending still would absorb about a third of the family gross wage base.
These numbers, which are realistic, suggest that before long the gross wage base earned by American households will become too small a donkey to carry the load of the family’s spending on health care. It will put before Americans an uncomfortable choice.
Either Americans in the higher income strata must step up to the cashier’s window to help subsidize, with higher income taxes, the health care of the most hard-working members of the lower income classes, or the United States will have to evolve toward a noticeable two-tiered or multi-tiered health care system, with bare-bones, low-tech health care for families in the bottom half of the income distribution and increasingly superior, high-tech health care for families in the upper-income strata.
It is one of the several unpleasant trade-offs facing President-elect Barack Obama.
http://economix.blogs.nytimes.com/2008/11/07/the-health-care-challenge-sailing-into-a-perfect-storm/?hp

And…

2008 Milliman Medical Index

The total medical cost in 2008 for a typical family of four is $15,609.
http://www.milliman.com/expertise/healthcare/products-tools/mmi/pdfs/milliman-medical-index-2008.pdf

If we are truly serious about establishing an affordable system that would provide all necessary care for everyone, we have to seriously look at the Milliman Medical Index numbers. We are already spending an average of $15,609 for a family of four, with a typical family income of maybe $60,000. Those numbers no longer compute.
If we include everyone, how should we pay this bill? Should we attempt to continue with an administratively wasteful and inequitable system of private health plans with unaffordable premiums? Or should we adopt an efficient and equitable single payer national health program.
Regardless, if we want everyone to have the health care that they should have, higher income individuals must help pay for the care of those with modest incomes, as Uwe Reinhardt explains.
If we used private health plans, we would have to depend on an unstable and administratively burdensome system of sliding scale subsidies to help pay these high premiums (tax credits, vouchers, employer and/or individual indexed mandates, etc.).
If we established a single payer national health program, it would be simple to finance it with an equitable, stable and administratively efficient system of progressive taxes.
$15,000 means a lot to a great many of us and forces us to make choices that we shouldn’t have to make. For the wealthy, the progressive tax that they would pay would not force them into any difficult choices at all. It would merely be reflected in some numbers that would appear in the forms provided by the accountant. The emotional trauma of being exposed to some numbers on a sheet of paper is not a very big price for them to pay.