PNHP

What’s wrong with nationalized health care?

What’s wrong with nationalized health care?

By Annette Fuentes
USA Today
September 19, 2007

When it comes to protecting our children’s health, where does the federal government’s role end and the responsibility of families begin?

Both houses of Congress want to expand health care coverage of low-income children under the State Children’s Health Insurance Program (SCHIP), which expires at the end of this month. Most members of Congress are concerned that more and more low-income children are falling into the growing pool of the USA’s uninsured, most recently estimated to be 47 million.

But President Bush says expanding the program could encourage families whose children are covered by private health insurance to opt for the government-paid program. Bush says he will veto any bill that would increase the number of children eligible because it would be another step toward a nationalized health care system.

But what’s wrong with such a system?

While the president and his supporters try to scare voters away from the idea of a national health care system, calling it “socialized medicine,” why shouldn’t all ideas be on the table for discussion?

The political skirmish over SCHIP is a microcosm of a larger debate this country needs to have over the direction of national health care reform as we head into the 2008 presidential election.

Put aside politics

Any discussion should begin by acknowledging that the USA already has a national health system: Medicare. The program has been an unqualified success as a government-subsidized and -administered health insurance system.

Ida Hellander, executive director of Physicians for a National Health Program, a non-profit that supports a single-payer approach, notes that Germany was the first to have a national health system early in the 20th century. U.S. conservatives in the post-World War I era attacked proposals for a U.S. national plan by linking it to the former enemy. “The way conservatives scared people off was to call national health ‘the Kaiser’s plan,’ ” Hellander says.

But two “allies” with national health care plans are worth noting:

* Great Britain guarantees all its citizens coverage, paid for by taxes and delivered by doctors employed by the health care system. According to the World Health Organization, the United Kingdom spends 6% of its economy on health care and ranks 18th out of 191 countries in health system performance. The United States spends 16% of its economy on ours, but we rank 37th, a step ahead of Cuba.

* Canada has a single-payer system that guarantees every Canadian coverage. It’s paid for by tax dollars. The government pays all claims, so there is no private insurance industry acting as middleman to administer the system. That’s where the big savings come. In Canada, administrative costs are less than 17% of all health spending, compared with 31% in the USA.

Longer waits

But the Canadian system does have one drawback: Its citizens face somewhat longer waits for some care — such as seeing specialists, receiving MRIs and non-emergency surgeries — than Americans.

In recognition of the high priority Americans place on health care reform, the leading U.S. presidential candidates have at least paid lip service to addressing their concerns, with the Democrats articulating more developed ideas.

On the Democratic side, only long-shot Rep. Dennis Kucinich of Ohio supports a single-payer system. Many use the term “universal health care,” which means that everyone would be covered in some fashion, including through public programs such as Medicare and SCHIP or private insurance plans. John Edwards would require employers to provide coverage or financial assistance, and he would expand public programs such as Medicaid and SCHIP. He also would create regional purchasing pools to make health insurance more affordable. Sen. Barack Obama, D-Ill., calls for a “new national health plan” with guaranteed eligibility and a federal subsidy for those who can’t afford to buy into the new plan. Sen. Hillary Clinton, D-N.Y., proposes a universal health care system that would cover all the uninsured, in part by expanding SCHIP, and that would make health insurance more affordable and protect coverage of those with chronic illness.

Of the Republican candidates, Rudy Giuliani proposes up to $15,000 in tax deductions for families to buy health insurance. Sen. John McCain, R-Ariz., has no plan other than to create “affordable” health insurance without added government spending. And Mitt Romney, who as Massachusetts governor implemented a mandatory universal health insurance plan, now opposes the same approach for the nation. Instead, he supports tax incentives and market reforms to lower costs.

There could be drawbacks to a single-payer system, but there are more good reasons to consider just such a system. We need an open, honest discussion of all possibilities without fearing the bogeyman of nationalized health care. With broad popular support for reform, maybe the debate will yield actual change when a new administration moves into the White House.

Annette Fuentes is an adjunct professor at the Columbia University Graduate School of Journalism and a member of USA TODAY’S board of contributors.

Open Letter to ABC’s John Stossel … from Julie Pierce, American SiCKO

Sptember 14th, 2007 11:03 pm

Dear John,

My name is Julie Pierce. My husband was Tracy Pierce. I am featured in Michael Moore’s documentary ‘SiCKO.’ In the movie, I share my deceased husband’s story — his unsuccessful battle with our insurance company to receive what could have been life-saving treatments for kidney cancer.

I just read your Wall Street Journal article written on Sept. 13, 2007, titled “Sick Sob Stories.” You begin by talking about Tracy’s role in ‘SiCKO,’ and claim the bone marrow transplant denied by our insurer would not have saved him. You also accuse me of “sneering” over our situation.

In your ‘reporting’ of this story, you did not contact me, and you did not contact my husband’s doctors. I cannot believe that a publication like the Wall Street Journal would print such an accusation without talking to anyone involved — especially in such a personal matter, which resulted in the death of my 37-year-old husband and the father of my child.

If you had contacted me, I would have told you that bone marrow transplants became a last option, only after our insurer denied many other treatments again and again and again.

I would have shown you a letter from our doctors at the Blood and Marrow Transplant Program at the University of Kansas Hospital, in which they argued strongly for the bone marrow transplant, citing “strong evidence” supporting the past success of that treatment — they wrote that it could “give him a chance to achieve complete remission.” In fact, they called the bone marrow transplant “his only chance of survival.”

Instead of calling me up and doing real reporting, all you can do is throw around studies from 1999 about the supposed inefficiency of bone marrow transplants for breast cancer patients — even though Tracy didn’t have breasts. He had kidney cancer! I understand that you want to try to prove that private insurance in this country really isn’t that bad. And I can see that you won’t let the facts get in the way.

You go on to claim that Tracy wouldn’t have received his transplant in a country with socialized medicine, either. Where is the evidence? Not only are more bone marrow transplants performed every year in Canada, but they invented the technology! So much for your ridiculous claim that “profit is what has created the amazing scientific innovations that the U.S. offers to the world. If government takes over, innovation slows, health care is rationed.”

You are simply carrying water for the for-profit insurance industry that killed my husband. And then you have the nerve to accuse me of “sneering” about it. My husband has only been dead since January 18th, 2006. It is still fresh to me and my family, and comments like this are inhumane.

I have since tried to contact you via email, but you have not responded. I don’t expect an answer. People like you just write with an agenda, without coming to the source or getting any facts, because your main goal is to try to discredit Michael Moore and universal health care. I understand it’s a game — you did it without thinking about how you would hurt a family who have suffered — and are still suffering — such a tragic loss.

My family is not a “Sick Sob Story.” We are a normal, American family that has had a significant member die from a horrible cancer that ravaged his body due to repeated denials from a health insurance company. We will never know for sure what would have worked because Tracy was never given a fighting chance. Over 18,000 Americans die each year because they don’t have health insurance. I suppose theirs are “sob stories,” too.

I don’t want a hit-piece. I want answers. Why does our wonderful profit-driven system of medicine kill 18,000 Americans each year? Why do we pay far more for our health system than any other country, but have some of the lowest life expectancies and highest infant mortality rates in the Western world? Would you discredit the work of your late colleague Peter Jennings who, while suffering with lung cancer, did an excellent report titled “Breakdown: America’s Health Insurance Crisis”?

I hope you have answers, but I am not optimistic. I pray that you will never have to go through what we went through — if you did, you wouldn’t be so quick to cheerlead the system we were victimized by.

Julie Pierce
Mission, Kansas

Medicare a Better Proposal than Mayo Clinic’s

New York Times
Letters to the Editor

September 19, 2007

To the Editor

Re “Mayo Clinic Proposing a Universal Health Plan” ( Business Day, Sept. 15):

The Mayo Clinic proposal runs aground where most proposals for universal health care do — how to pay for it.

We have many urgent needs: to improve schools, make roads and bridges safe, meet the needs of veterans and their families. So there are no new sources of funding. “Taxes” is a dirty word, and proposals for subsidies and tax breaks would increase governmental deficits. They are nonstarters.

Our sole hope for funding is to make better use of over $2 trillion already being spent by business and governments. Medicare-for-all would save literally hundreds of billions of dollars on nonbenefit charges by simplifying the processing of billions of billings for insurers and health care providers.

Reducing provider conflicts of interest — which lead to enormous outlays determined by self-interest rather than health needs — could save billions more.

Medicare is marvelously efficient. We do not need to re-invent the wheel.

Merton C. Bernstein
St. Louis, Sept. 15, 2007

The writer served as principal consultant to the 1982-83 National Commission on Social Security Reform.

Clinton's Prescription for Another Heath Care Reform Failure

by John Nichols
The Nation
Published on Tuesday, September 18, 2007

Would someone please ask Hillary Clinton to stop coming up with health care “reform” plans that are less attractive than the dysfunctional system she proposes to replace?

The former first lady, who snatched defeat from the jaws of victory in the 1990s by responding to the demand for a sane and humane system to deliver affordable medical care to all Americans with a plan to drown the ailing in a bureaucracy designed to augment the profits of the nation’s largest insurance companies, is back with an equally heavy-handed and unappealing “reform” proposal.

The senator from New York who has emerged as the frontrunner for the Democratic presidential nomination — based, in no small part, on romantic misrecollections of her last foray into the nation’s seemingly-endless health-care debate — wants to solve the crisis of the uninsured and the under-insured by requiring every American to obtain coverage.

Of course, the ridiculous Mitt Romney decries the Clinton campaign proposal as “European-style socialized medicine.”

But Romney knows so little about health care that he cannot even pick a smart site for a press conference on the issue — he derided the Clinton plan in front of St. Vincent’s Hospital in Manhattan, home of the Rudolph W. Giuliani Trauma Center. that is named for his chief rival in the Republican nomination race.

The reality is that the Clinton plan is about as socialistic as a Ronald Reagan corporate tax cut.

The Clinton plan maintains the current system of for-profit, insurance-industry defined health care delivery. The only real change is that, in return for minimal requirements regarding coverage of those with preexisting conditions, the government would pump hundreds of billions in federal dollars into the accounts of some of the country’s wealthiest corporations. The plan’s tax credit scheme would buy some more coverage for low-income families, which is good, but it would do so at a cost so immense that, ultimately, Clinton’s plan will be as tough a sell as the failed 1993 “Hillarycare” proposal.

America is ready for health care reform.

But it is not ready for more bureaucracy, more expense and more revenue for insurance companies.

Despite what Mitt Romney says, Clinton and the Democrats would have a far easier time selling “European-style socialized medicine” that what the senator from New York is peddling. And that does not even take into account the potential appeal of a uniquely American single-payer system that might intelligently combine the necessary efficiency of a publicly-funded and defined payment program for covering costs with the appealing prospect of allowing Americans to choose their own basic plans and doctors.

Clinton could have proposed such a system. Indeed, she could have modeled it on the plan she and other members of Congress now enjoy.

Instead, she chose to propose a scheme defined not by the needs or desires of the American people but by the demands of existing insurance firms and a dysfunctional for-profit health care industry.

If the senator is nominated and elected, and if she advances the initiative she unveiled Monday, there will be no health-care reform. And America’s uninsured and under-insured millions will be doomed to suffer for another decade or so because Hillary Clinton was incapable of extracting herself from the grip of the corporations that have made it so hard for the Americans to get the care they need.

John Nichols’ new book is The Genius of Impeachment: The Founders’ Cure for Royalism. Rolling Stone’s Tim Dickinson hails it as a “nervy, acerbic, passionately argued history-cum-polemic [that] combines a rich examination of the parliamentary roots and past use of the ‘heroic medicine’ that is impeachment with a call for Democratic leaders to ‘reclaim and reuse the most vital tool handed to us by the founders for the defense of our most basic liberties.'”

Clinton’s Prescription for Another Heath Care Reform Failure

by John Nichols
The Nation
Published on Tuesday, September 18, 2007

Would someone please ask Hillary Clinton to stop coming up with health care “reform” plans that are less attractive than the dysfunctional system she proposes to replace?

The former first lady, who snatched defeat from the jaws of victory in the 1990s by responding to the demand for a sane and humane system to deliver affordable medical care to all Americans with a plan to drown the ailing in a bureaucracy designed to augment the profits of the nation’s largest insurance companies, is back with an equally heavy-handed and unappealing “reform” proposal.

The senator from New York who has emerged as the frontrunner for the Democratic presidential nomination — based, in no small part, on romantic misrecollections of her last foray into the nation’s seemingly-endless health-care debate — wants to solve the crisis of the uninsured and the under-insured by requiring every American to obtain coverage.

Of course, the ridiculous Mitt Romney decries the Clinton campaign proposal as “European-style socialized medicine.”

But Romney knows so little about health care that he cannot even pick a smart site for a press conference on the issue — he derided the Clinton plan in front of St. Vincent’s Hospital in Manhattan, home of the Rudolph W. Giuliani Trauma Center. that is named for his chief rival in the Republican nomination race.

The reality is that the Clinton plan is about as socialistic as a Ronald Reagan corporate tax cut.

The Clinton plan maintains the current system of for-profit, insurance-industry defined health care delivery. The only real change is that, in return for minimal requirements regarding coverage of those with preexisting conditions, the government would pump hundreds of billions in federal dollars into the accounts of some of the country’s wealthiest corporations. The plan’s tax credit scheme would buy some more coverage for low-income families, which is good, but it would do so at a cost so immense that, ultimately, Clinton’s plan will be as tough a sell as the failed 1993 “Hillarycare” proposal.

America is ready for health care reform.

But it is not ready for more bureaucracy, more expense and more revenue for insurance companies.

Despite what Mitt Romney says, Clinton and the Democrats would have a far easier time selling “European-style socialized medicine” that what the senator from New York is peddling. And that does not even take into account the potential appeal of a uniquely American single-payer system that might intelligently combine the necessary efficiency of a publicly-funded and defined payment program for covering costs with the appealing prospect of allowing Americans to choose their own basic plans and doctors.

Clinton could have proposed such a system. Indeed, she could have modeled it on the plan she and other members of Congress now enjoy.

Instead, she chose to propose a scheme defined not by the needs or desires of the American people but by the demands of existing insurance firms and a dysfunctional for-profit health care industry.

If the senator is nominated and elected, and if she advances the initiative she unveiled Monday, there will be no health-care reform. And America’s uninsured and under-insured millions will be doomed to suffer for another decade or so because Hillary Clinton was incapable of extracting herself from the grip of the corporations that have made it so hard for the Americans to get the care they need.

John Nichols’ new book is The Genius of Impeachment: The Founders’ Cure for Royalism. Rolling Stone’s Tim Dickinson hails it as a “nervy, acerbic, passionately argued history-cum-polemic [that] combines a rich examination of the parliamentary roots and past use of the ‘heroic medicine’ that is impeachment with a call for Democratic leaders to ‘reclaim and reuse the most vital tool handed to us by the founders for the defense of our most basic liberties.'”

Hillary Clinton's "American Health Choices Plan"

The American Health Choices Plan: Ensuring Affordable, Quality, Health Care for All Americans

Hillary for President
September 17, 2007

Today, Hillary Clinton unveiled the third part of her plan to ensure that all Americans have affordable, quality health insurance. Her American Health Choices Plan covers every American — finally addressing the needs of the 47 million uninsured and the tens of millions of workers with coverage who fear they could be one pink slip away from losing their health coverage.

Providing a Choice of Insurance Plans

The American Health Choices Plan preserves existing health insurance and offers new choices to those with insurance and to the 47 million people in the United States without insurance. It ensures portability so that Americans do not lose coverage when they change or lose their jobs. Americans will have three options:

1) Keep Current Health Care Coverage: Americans who are satisfied with the coverage they have today can keep it.

2) A Choice of Health Plan Options: Businesses, employees, and the uninsured will have the option of buying group insurance through a new Health Choices Menu. This Menu will give all Americans the same set of insurance options that their Member of Congress has. Without creating new bureaucracy, the Menu will be part of the Federal Employee Health Benefit Program (FEHBP), which includes numerous, high-quality private health insurance options.

3) A Choice of a Public Plan Option: In addition to the array of private insurance choices offered, the Health Choices Menu will also provide Americans with a choice of a public plan option, which could be modeled on the traditional Medicare program, but would cover the same benefits as guaranteed in private plan options in the Health Choices Menu without creating a new bureaucracy. The alternative will compete on a level playing field with traditional private insurance plans.

Promoting Shared Responsibility

Hillary Clinton’s American Health Choices Plan is based on the principle of shared responsibility. This plan ensures that all who benefit from the system contribute to its financing and management. Specifically, responsibilities include:

Insurance and drug companies: For insurers, to end discrimination based on pre-existing conditions or expectations of illness and ensure high value for every premium dollar; and for drug companies, to offer fair prices and accurate information;

Individuals: To get and keep insurance in a system where insurance is affordable and accessible;

Providers: To work collaboratively to provide high-quality care;

Employers: To contribute to health coverage, with large firms required to provide health insurance or contribute to the cost of the system, and small businesses offered tax incentives to continue or begin to offer coverage;

Government: To ensure that health insurance is always affordable through investments in tax credits and the safety net so that coverage is never again a crushing financial burden; to improve the quality performance of the system; and to end the upward cost spiral of the system that threatens our health and economy.

Ensuring Affordable Health Coverage for All

1) Ensuring Premium Affordability Through Refundable Tax Credits

2) Limiting Premium Payments to a Percentage of Income

3) Promoting Shared Responsibility for Large Employers

4) Creating Small Business Tax Credit

5) Strengthening Medicaid and the State Children’s Health Insurance Program to Serve All Low-Income Individuals

6) Creating a Retiree Health Legacy Initiative

http://www.hillaryclinton.com/feature/healthcareplan/americanhealthchoicesplan.pdf

Comment:

By Don McCanne, MD

Hillary Clinton’s proposal “preserves existing health insurance,” and includes the responsibility of individuals “to get and keep insurance” through the current private insurance market, or through a “Health Choices Menu” of private FEHBP-type plans, or through a Medicare-type public program.

Thus her proposal is an individual mandate to purchase private insurance that is no longer affordable for average-income individuals, or to purchase a public plan that will be even more expensive because of adverse selection.

To make the plans affordable for individuals, she would use a combination of refundable tax credits and a cap on premiums at a percentage of income. Assuming that the plans would provide adequate benefits and adequate protection against financial hardship, the increased spending through the tax system would be exponentially more than the estimates in her plan. And most of the proposed savings to pay for these increases are largely nebulous, and some of those measures would actually increase costs.

Further, the administrative complexities of refundable tax credits and means-tested premium caps would still leave many without coverage. Coverage will never be universal unless it is truly automatic for everyone.

If we are going to use the tax system to pay for health care anyway then why should we waste funds on the profoundly inefficient system of segregated private health plans? A universal risk pool that is equitably funded through the tax system is the most efficient and least expensive method of ensuring comprehensive coverage for everyone.

Many will try to contrast the differences in the Clinton, Obama and Edwards proposals, but they are all basically the same. In spite of their rhetoric, they have each made the protection and enhancement of the private insurance plans a higher priority than patients.

Health reform failure

By Steffie Woolhandler and David U. Himmelstein
The Boston Globe
September 17, 2007

IN 1966 – just before Medicare and Medicaid were launched – 47 million Americans were uninsured. By 1975, the United States had reached an all time low of 21 million without coverage. Now, according to the Census Bureau’s latest figures, we’re back where we started, with 47 million uninsured in 2006 – up 2.2 million since 2005. But this time, most of the uninsured are neither poor nor elderly.

The middle class is being priced out of healthcare. Virtually all of this year’s increase was among families with incomes above $50,000; in fact, two-thirds of the newly uncovered were in the above-$75,000 group. And full-time workers accounted for 56 percent of the increase, with their children making up much of the rest.

The new Census numbers are particularly disheartening for anyone hoping for a Massachusetts miracle. In the Commonwealth, 651,000 residents are uninsured, 65 percent more than the figure used by state leaders in planning for health reform. Their numbers came from a telephone survey done in English and Spanish. But that misses people who lack a land-line phone – 43.9 percent of phoneless adults are uninsured, according to other studies.

It also skips over the 523,000 non-English speakers in Massachusetts whose native language isn’t Spanish (e.g. Portuguese, Chinese, or Haitian-Creole), another group with a high uninsurance rate. In contrast, the Census Bureau goes door-to-door for its survey and has translators for almost every language. It gets a more complete picture.

In sum, Massachusetts health reform planners have been wishing away a quarter of a million uninsured people. Recent Patrick administration claims that health reform is succeeding are based on cooked books. According to the state’s figures, almost half of the previously uninsured gained coverage under the health reform bill by July 1. But according to the Census Bureau, the new sign-ups amount to less than one-quarter of the uninsured. Moreover, it’s likely that much of that gain has already been wiped out by shrinking job-based coverage – a longstanding and nationwide trend.

Why has progress been so meager? Because most of the promised new coverage is of the “buy it yourself” variety, with scant help offered to the struggling middle class. According to the Census Bureau, only 28 percent of Massachusetts uninsured have incomes low enough to qualify for free coverage. Thirty-four percent more can get partial subsidies – but the premiums and co-payments remain a barrier for many in this near-poor group.

And 244,000 of Massachusetts uninsured get zero assistance – just a stiff fine if they don’t buy coverage. A couple in their late 50s faces a minimum premium of $8,638 annually, for a policy with no drug coverage at all and a $2,000 deductible per person before insurance even kicks in. Such skimpy yet costly coverage is, in many cases, worse than no coverage at all. Illness will still bring crippling medical bills – but the $8,638 annual premium will empty their bank accounts even before the bills start arriving. Little wonder that barely 2 percent of those required to buy such coverage have thus far signed up.

While the middle class sinks, the health reform law has buoyed our state’s wealthiest health institutions. Hospitals like Massachusetts General are reporting record profits and enjoying rate increases tucked into the reform package. Blue Cross and other insurers that lobbied hard for the law stand to gain billions from the reform, which shrinks their contribution to the state’s free care pool and will force hundreds of thousands to purchase their defective products. Meanwhile, new rules for the free care pool will drastically cut funding for the hundreds of thousands who remain uninsured, and for the safety-net hospitals and clinics that care for them. (Disclosure – we’ve practiced for the past 25 years at a public hospital that is currently undergoing massive budget cuts.)

Health reform built on private insurance isn’t working and can’t work; it costs too much and delivers too little. At present, bureaucracy consumes 31 percent of each healthcare dollar. The Connector – the new state agency created to broker coverage under the reform law – is adding another 4.5 percent to the already sky-high overhead charged by private insurers. Administrative costs at Blue Cross are nearly five times higher than Medicare’s and 11 times those in Canada’s single payer system. Single payer reform could save $7.7 billion annually on paperwork and insurance profits in Massachusetts, enough to cover all of the uninsured and to upgrade coverage for the rest of us.

Of course, single payer reform is anathema to the health insurance industry. But breaking their stranglehold on our health system and our politicians is the only way for health reform to get beyond square one.

Dr. Steffie Woolhandler and Dr. David Himmelstein co-founded Physicians for a National Health Program and are primary care doctors at Cambridge Hospital.

A Nunez-Schwarzenegger Compromise or Single Payer for California?

Don McCanne, M.D.
Senior Health Policy Fellow, Physicians for a National Health Program
California Progress Report
September 17, 2007

Last Tuesday’s article from Health Access California, a supporter of AB 8, provides an overview of the legislation and the political activity taking place around it. For those interested, it is worth reading.

In a classic example of political irony, Democrats are abandoning their preferred option, single payer reform, in order to reach a compromise with the Republicans and the private insurance industry. They have crafted a model that they believe does not repeat the mistake of the Massachusetts reform program. California Democrats proudly proclaim that they will not require individuals who cannot afford private insurance to be covered by a program that is being inappropriately characterized as universal.

Not one Republican voted for this compromise, and Blue Cross of California is spending a couple million dollars in an advertising campaign opposing reform. So much for compromise. The Democrats have violated the first rule of negotiation. Before they even seriously sit down with the governor, they have removed from the table the most important polices that would bring comprehensive, affordable, high quality care to everyone.

When you read through AB 8, perhaps the most glaring defect is that the authors craft reform around the private insurance model – a model that served us fairly well in the last century, but one that has now become obsolete. Individual private insurance plans that are reasonably comprehensive and include everyone are no longer affordable for the majority of us. The model for this century is a universal risk pool that is equitably funded.

A report in the current issue of Health Affairs stated that the average annual premium for family coverage is now $12,106. With a median household income of $48,200, those numbers no longer work. Do we provide large government subsidies for a majority of us to purchase administratively-inefficient private plans, or do we reduce the benefits of the plans so that the premiums become affordable? The current anti-tax political environment makes the former highly unlikely.

AB 8 will result in an explosion of the fastest growing problem in health care today: underinsurance. Private plans with affordable premiums but inadequate coverage will create financial hardships for precisely those individuals who should be protected – those who need health care.

Most of us who continue to advocate for a single payer national health insurance program have also supported incremental improvements as temporary measures until we can achieve the reform that we really need. But the line must be drawn with AB 8. We need health care financing reform that enables patients to access the health care system without being exposed to financial hardship.

We need a universal risk pool that is equitably funded and efficiently administered so that funds can be redirected to the health care that we need. What we don’t need is false pride in having protected the private insurance industry at the cost of leaving millions of Californians without adequate coverage.

Physicians for a National Health Program is a single issue organization advocating a universal, comprehensive single-payer national health program. PNHP has more than 14,000 members and chapters across the United States.

Hillary Clinton’s “American Health Choices Plan”

The American Health Choices Plan: Ensuring Affordable, Quality, Health Care for All Americans

Hillary for President
September 17, 2007

Today, Hillary Clinton unveiled the third part of her plan to ensure that all Americans have affordable, quality health insurance. Her American Health Choices Plan covers every American — finally addressing the needs of the 47 million uninsured and the tens of millions of workers with coverage who fear they could be one pink slip away from losing their health coverage.

Providing a Choice of Insurance Plans

The American Health Choices Plan preserves existing health insurance and offers new choices to those with insurance and to the 47 million people in the United States without insurance. It ensures portability so that Americans do not lose coverage when they change or lose their jobs. Americans will have three options:

1) Keep Current Health Care Coverage: Americans who are satisfied with the coverage they have today can keep it.

2) A Choice of Health Plan Options: Businesses, employees, and the uninsured will have the option of buying group insurance through a new Health Choices Menu. This Menu will give all Americans the same set of insurance options that their Member of Congress has. Without creating new bureaucracy, the Menu will be part of the Federal Employee Health Benefit Program (FEHBP), which includes numerous, high-quality private health insurance options.

3) A Choice of a Public Plan Option: In addition to the array of private insurance choices offered, the Health Choices Menu will also provide Americans with a choice of a public plan option, which could be modeled on the traditional Medicare program, but would cover the same benefits as guaranteed in private plan options in the Health Choices Menu without creating a new bureaucracy. The alternative will compete on a level playing field with traditional private insurance plans.

Promoting Shared Responsibility

Hillary Clinton’s American Health Choices Plan is based on the principle of shared responsibility. This plan ensures that all who benefit from the system contribute to its financing and management. Specifically, responsibilities include:

Insurance and drug companies: For insurers, to end discrimination based on pre-existing conditions or expectations of illness and ensure high value for every premium dollar; and for drug companies, to offer fair prices and accurate information;

Individuals: To get and keep insurance in a system where insurance is affordable and accessible;

Providers: To work collaboratively to provide high-quality care;

Employers: To contribute to health coverage, with large firms required to provide health insurance or contribute to the cost of the system, and small businesses offered tax incentives to continue or begin to offer coverage;

Government: To ensure that health insurance is always affordable through investments in tax credits and the safety net so that coverage is never again a crushing financial burden; to improve the quality performance of the system; and to end the upward cost spiral of the system that threatens our health and economy.

Ensuring Affordable Health Coverage for All

1) Ensuring Premium Affordability Through Refundable Tax Credits

2) Limiting Premium Payments to a Percentage of Income

3) Promoting Shared Responsibility for Large Employers

4) Creating Small Business Tax Credit

5) Strengthening Medicaid and the State Children’s Health Insurance Program to Serve All Low-Income Individuals

6) Creating a Retiree Health Legacy Initiative

http://www.hillaryclinton.com/feature/healthcareplan/americanhealthchoicesplan.pdf

Comment:

By Don McCanne, MD

Hillary Clinton’s proposal “preserves existing health insurance,” and includes the responsibility of individuals “to get and keep insurance” through the current private insurance market, or through a “Health Choices Menu” of private FEHBP-type plans, or through a Medicare-type public program.

Thus her proposal is an individual mandate to purchase private insurance that is no longer affordable for average-income individuals, or to purchase a public plan that will be even more expensive because of adverse selection.

To make the plans affordable for individuals, she would use a combination of refundable tax credits and a cap on premiums at a percentage of income. Assuming that the plans would provide adequate benefits and adequate protection against financial hardship, the increased spending through the tax system would be exponentially more than the estimates in her plan. And most of the proposed savings to pay for these increases are largely nebulous, and some of those measures would actually increase costs.

Further, the administrative complexities of refundable tax credits and means-tested premium caps would still leave many without coverage. Coverage will never be universal unless it is truly automatic for everyone.

If we are going to use the tax system to pay for health care anyway then why should we waste funds on the profoundly inefficient system of segregated private health plans? A universal risk pool that is equitably funded through the tax system is the most efficient and least expensive method of ensuring comprehensive coverage for everyone.

Many will try to contrast the differences in the Clinton, Obama and Edwards proposals, but they are all basically the same. In spite of their rhetoric, they have each made the protection and enhancement of the private insurance plans a higher priority than patients.

Is it the prices?

Health Spending In OECD Countries In 2004: An Update

By Gerard F. Anderson, Bianca K. Frogner and Uwe E. Reinhardt
Health Affairs
September/October 2007

In 2004, U.S. health care spending per capita was 2.5 times greater than health spending in the median Organization for Economic Cooperation and Development (OECD) country and much higher than health spending in any other OECD country. The United States had fewer physicians, nurses, hospital beds, doctor visits, and hospital days per capita than the median OECD country. Health care prices and higher per capita incomes continued to be the major reasons for the higher U.S. health spending.

http://content.healthaffairs.org/cgi/content/full/26/5/1481

Comment:

By Don McCanne, MD

(This report is an update of the 2003 Health Affairs article by Anderson, et al, “It’s the Prices, Stupid.”)

So we pay far more for health care, but we are not receiving any more care than is delivered in other nations. In fact, this article states, “the availability of health care resources and the actual use of services in the United States were below those of most industrialized countries.”

So does that mean that we need to quit paying greedy doctors, hospitals and pharmaceutical firms too much for the care and products that they deliver? To answer that, we need to look at what is built into our high prices.

In the United States, we have allowed our primary care infrastructure to deteriorate at a relatively rapid pace. Care provided by family physicians, nurse practitioners and general internists in other countries is often provided by specialists in the United States. Specialists charge higher routine fees and often provide additional high-priced diagnostic and therapeutic services for which they are personally compensated. Thus, without increasing the number of practitioners, but merely increasing the ratio of specialists to generalists, health care prices are increased for clinical problems that are presented to specialists, as opposed to the same problems being cared for by generalists.

Specialists who are offended by this observation will frequently respond with studies such as those that demonstrate that care provided by a cardiologist in a coronary care unit is less expensive than that provided by a generalist, primarily because of more judicious use of diagnostic and therapeutic interventions. But one obvious conclusion of this is that specialists should be utilized when specialized services are clinically warranted.

The advantage of having a strong primary care infrastructure is not only that care for routine problems is delivered more economically (lower prices), but also that the primary care practitioner is trained to identify those problems that are more appropriately managed by a specialist. Thus the over-utilization of higher-priced services is diminished.

Another problem is the maldistribution of high-tech services and facilities. Without changing total capacity and utilization, regional concentration of high-tech services results in excess capacity and over-utilization of specialized services. This comes at a cost of reducing primary care services, especially in rural and low-income urban areas where they are especially needed. Wennberg, Fisher and their colleagues at Dartmouth have demonstrated that this concentration increases spending without improving quality.

The profound administrative waste of our fragmented system of financing health care also adds significantly to prices without increasing health care utilization. This alone is enough to warrant changing to a national health insurance program, though the gain from realigning generalist/specialist incentives would also go a long way toward improving health care pricing.

And that question about greedy providers? Prices correlate strongly with a nation’s GDP. The providers are not paid too much overall, but they are being paid too much for useless administrative services and for high-tech excesses, and they are not being paid enough for primary care services. That’s not their greed. That’s our stupidity for continuing to support this wasteful, illogical system of financing health care.

Sanders' bill would initiate pilot health plan in five states

By Louis Porter
Rutland Herald
September 11, 2007

MONTPELIER — U.S. Sen. Bernard Sanders, I-Vt., has introduced a bill that would give five states money to try out programs providing for universal health care coverage — an experiment he hopes will show that so-called single-payer government insurance is “the cost-effective and moral thing to do.”

If his bill wins passage and becomes law — a feat Sanders acknowledges will be an uphill fight — he hopes Vermont will be one of the five states to apply for money and flexibility from the federal government to enact a pilot program, the senator said by telephone.

“I think, for a variety of reasons, Vermont can be a national leader in moving forward in universal health care,” Sanders said. Under Sanders’ proposal, at least one of the five states would institute a single-payer system.

But Vermont is already in the midst of implementing Catamount Health, a hybrid of private and public insurance systems reached as a compromise between Gov. James Douglas and the Legislature.

If Sanders’ proposal could provide more money for Catamount, it might be a good idea for the state to apply to be in it, said Michael Smith, secretary of administration. But Vermont has already had the debate over single-payer health care and decided against it, Smith said.

“We would welcome the additional money” for Catamount, Smith said. But Vermont should not join a new program that would take it in a different direction, with Catamount expected to begin this fall.

“We are just implementing Catamount,” he said. “This was a consensus piece of legislation, something Washington is incapable of.”

“We are going to stay on course on this,” Smith said.

Sanders said he would personally like to see Vermont’s health care reform effort go farther toward a single-payer system than the Catamount compromise program.

“My own view is, if a state in America — I would hope it would be Vermont, maybe it would be Maine or some other state — would go forward with a single-payer system I think it would show that you could provide every man, woman and child with coverage and do it in a cost-effective way,” Sanders said.

The Vermont Public Interest Research Group, which has lobbied for health care reform in the state, praised Sanders’ proposal.

“This bill could pave the way for states like Vermont to fundamentally change the way we think about health care,” said Stefanie Sidortsova, health care advocate for the organization, said in a statement.

Smith and Sanders agree on one major point, however. Health care innovation will likely come from the states, not the federal government, they said.

“If Washington can’t lead, they need to get out of the way and let states lead,” Smith said.

Given the powerful lobbying interests in Washington from the insurance and drug industries, states will likely provide the path to major health care reform — and eventually a single-payer system — not the feds, Sanders said.

“Let states be the laboratory of democracy,” Sanders said. And such a system might be better administered from the state level anyway, he said.

His legislation would help that along by allowing a handful of states to administer and fund five-year pilot programs.

“Let us give different states in this country the opportunity to experiment, to develop different models, but with the goal of providing universal access to all of their people,” Sanders said. If such an experiment included a single-payer program, it will likely show “that you could provide quality health care to everyone in the state without spending a nickel more than you are currently spending,” Sanders said.

If one or more of the pilot projects was successful other states would take the ideas from it, he said.

“That is what good governors do all the time, they steal the best ideas from other states,” Sanders said.

He is confident a single-payer system — administered by the states — would be the winning version of such a trial objectively measured.

“The United States is the only country in the industrialized world that does not have a national health care program,” Sander said. And, he said, Vermont could be the starting point.

“I think we have the infrastructure to, in fact, lead the nation into a single-payer national health care concept,” he said.

Contact Louis Porter at louis.porter@rutlandherald.com.

Canada's health care system and the sustainability paradox

By Irfan Dhalla, MD
CMAJ
July 3, 2007; 177 (1). doi:10.1503/cmaj.061064.

Click here to download a pdf of this document.

Irfan Dhalla is with the Departments of Medicine at St. Michael’s Hospital and at the University of Toronto, and with Canadian Doctors for Medicare, Toronto, Ont.

Correspondence to: Dr. Irfan Dhalla, Department of Medicine, St. Michael’s Hospital, 30 Bond St., Toronto ON M5B 1W8; irfan.dhalla@utoronto.ca

Physician leaders,1 newspaper columnists,2,3 representatives of the business community4 and even some health policy analysts5 have all expressed concerns that publicly funded health care is unsustainable. The current federal health minister has even gone so far as to say that “both the Prime Minister and I have indicated that the status quo won’t be sustainable in terms of demands on our system.”6

Not everyone holds this view. For example, in his report on health care in Canada,7 Roy Romanow concluded that our health care system was “as sustainable as we want it to be.” Despite this countervailing argument, concerns about unsustainability have provided an impetus for proposed reform.1

In this article, I will argue that Canada faces a sustainability paradox: despite ever-increasing expenditures, both in absolute dollars and as a percentage of the national income, increases in overall spending on health care in Canada are sustainable for the foreseeable future.

Are increases in government spending on health care sustainable?

One view maintains that our publicly funded health care system is unsustainable because health care expenditures are accounting for an ever-increasing share of government spending. In Ontario, for example, health care spending accounted for just over 30% of the provincial government’s expenditures in 1981/82, but 45% in 2004/05. Assuming that current trends will continue, the Ontario government has projected that the share will increase to 55% by 2025.8

One major flaw with this line of reasoning is the assumption that the percentage of government expenses devoted to health care depends primarily on how much governments spend on health. When measured by percentage of government expenses, health spending also depends on 2 other key factors: how much governments spend on non-health-related items (e.g., education, police services, social assistance) and how much governments collect in taxes. If a government reduces its spending on non-health-related items or cuts taxes, the percentage of expenditures devoted to health care will increase automatically.

A closer look at the Ontario data described earlier reveals that other trends are hidden amid the seemingly inexorable rise in health care spending. For example, starting in 1988, the share of Ontario’s expenditures devoted to health care actually decreased for almost 10 years, from 38% to just over 35%. After 1997, the share began to grow, but the increase was due in large part to reductions in spending on non-health-related items, tax cuts and reductions in transfers from the federal government.8

Arguments that our publicly funded health care system is unsustainable because it accounts for an ever-increasing share of government funding often depend on the premise that tax rates must be fixed or continually declining. This assumption, however, is open to challenge. Over the last 20 years, although the share of government tax revenue in Canada as a proportion of our gross domestic product (GDP) has remained essentially constant at 33%, many other economically advanced countries have quietly been increasing taxes. In 1985, members of the Organisation for Economic Co-operation and Development (OECD), a group of 30 countries “committed to democracy and the market economy,” collected taxes at an average rate of 30% of their respective GDPs. By 2004, these countries were collecting taxes at an average rate of 36% of GDP.9 Although some might argue that the overall taxation level in the United States is a more appropriate benchmark for Canada than the OECD average, others would argue that comparing ourselves exclusively to the United States leads to an artificially constricted range of policy options for Canadian decision-makers. Had our taxes increased at even half the rate of those among the OECD countries, the argument that health care expenditures are unsustainable because they account for an ever-increasing share of government spending would be far less viable.

For the reasons I have described, it is problematic to assess sustainability on the basis of health care spending as a share of government expenditures. Would it be better to consider health care spending as a share of GDP instead?

Is the increasing economic burden of health care sustainable?

The prevailing view that health care spending is rising faster than both inflation and the growth of the economy is correct. However, the difference between health care spending and economic growth is smaller than many assume. Health care spending (in both the private and public sectors) accounted for 7% of Canada’s GDP in 1970, and 9.9% in 2004.10 Contrary to popular belief, the larger part of the increase actually occurred over the first half of the last 35 years. Similar increases have occurred in other countries, and in many cases they have been even larger than those in Canada. For example, health care spending in Spain was 3.5% of the GDP in 1970 and 8.1% in 2004; in the United States, the corresponding numbers were 7% and 15.3% (Figure 1).10

Moreover, to measure health care spending as a percentage of GDP obscures an extremely important fact: over the last 35 years, the economy in all economically advanced countries has been growing. This growth has allowed us to spend more, not only on health but on a variety of other goods and services as well. In terms of sustainability, spending on health care itself is unimportant; what matters is how much we have left to spend on our other needs and desires. In other words, growth in health care spending is sustainable provided it does not reduce the average Canadian’s ability to purchase non-health-related goods and services.

Over the last 35 years, despite the phenomenal growth in health care spending, we have still had enough left to spend ever-increasing amounts on non-health-related goods and services. How is this possible? Imagine a country where spending on health care is $1 per capita and the GDP is $100 per capita. If, over 50 years, health care spending increases by 100 times, to $100, and the GDP increases 10 times, to $1000, the amount of money left for non-health-related spending has still increased from $99 to $900. In other words, the citizens of this imaginary country would have seen their health care spending increase from 1% of GDP to 10% of GDP and would still have almost 10 times as much money left for non-health-related spending. Some would call this the miracle of economic growth.

From 1992 to 2004, real per capita spending on health care (i.e., after exclusion of the effects of inflation) in Canada increased at a rate of 2.3% per year.10 During the same period, real per capita economic output (GDP) increased at a rate of 1.7% per year.11 If these growth rates were to continue indefinitely (and these numbers are similar to those forecasted by at least one provincial government8), the amount of money left for non-health-related spending would continue to increase for well over a century (Figure 2).

Conclusions

Is our health care system unsustainable? I have argued that increases in health care spending are sustainable as long as growth in non-health-related spending can still occur. From the evidence I have presented here, one can see that non-health-related spending can continue to increase even if health care expenditures grow at a faster rate than that of the GDP, provided the economy continues to grow over the long term.

Governments might argue that our health care system could still be unsustainable, if it were to crowd out other important government priorities, such as spending on child care or the environment. This argument would be true only if governments were incapable of increasing taxes.

An obvious and important question remains: Should health care spending continue to grow at current rates? To answer this question would require an analysis of whether we are obtaining value for the money we spend. Evidence on this point is limited; however, one recent analysis of health care spending in the United States (where costs are significantly higher than in Canada) concluded that overall increases in spending have provided “reasonable value.”12 Given the limited strength of this evidence, it might be reasonable to argue that society has an interest in limiting further growth in health care expenditures. However, arguments that health care spending cannot grow at current rates are, because of the sustainability paradox, unsound.

Footnotes

This article has been peer reviewed.

Acknowledgements: I thank Tara Kiran, David Naylor, Jeff Kwong and Gordon Guyatt for their thoughtful comments on drafts of this article.

Competing interests: None declared.

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