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.