Frequently asked questions about the AMA proposal for reform

American Medical Association
October 2008
Q: What are the basic principles of the AMA proposal?
A: The American Medical Association (AMA) proposes that individuals and families receive financial assistance to purchase a health plan of their choice, with more generous assistance to those with lower incomes. The financial assistance could take the form of tax credits or vouchers and must be earmarked for health insurance coverage. Health insurance market regulations should be reformed to establish fair “rules of the game” that protect vulnerable individuals, without unduly driving up premiums for the rest of the population.
Q: How is the AMA proposal different or better than a single-payer system?
A: Both the AMA and the single-payer approaches emphasize the same goal of universal coverage, but they differ on how to implement it. The AMA does not believe that full government control is a workable model for the United States. Single-payer systems are plagued with an undersupply of medical personnel, long waiting periods and a lack of patient choice. Alternatively, the AMA proposal seeks to enhance patient choice and encourage patients to be conscious of health insurance costs, while also maintaining innovation in the private sector.
http://www.voicefortheuninsured.org/pdf/08-1103-FAQ-Proposal.pdf

The AMA is trying. During this presidential election season, the AMA has initiated an intensive “Voice for the Uninsured” campaign in support of their model of reform. Unfortunately, the policies behind their version of reform would fall far short of achieving the goal of affordable, comprehensive health care for everyone. Their feeble and deceptive effort to explain why their proposal is better than single payer reveals the fact that that the AMA is still controlled by those ideologically opposed to a national health program.
One of their basic principles is that “insurance market regulations should be reformed to establish fair ‘rules of the game’ that protect vulnerable individuals, without unduly driving up premiums for the rest of the population.” Presumably insurance market regulations that protect vulnerable individuals would mean that plans must prevent financial hardship for those who need health care. Even the average employer-sponsored family plan (at $12,600) may not be adequate because of deductibles and other cost sharing requirements. To be effective in protecting personal finances, these plans must be quite comprehensive and will require very high premiums.
Yet the AMA states that these plans must not unduly drive up premiums for the rest of the population. That is an impossibility. The only way you can keep premiums low is to segregate the healthy in isolated risk pools (but then these pools wouldn’t work for those who end up needing medical care because of the high cost sharing used to keep the premiums low). If you were to isolate those with high medical expenses in pools providing comprehensive coverage, the premiums would be so high that the many who are healthy would have to finance most of the costs.
Of course that is why the AMA has recommended taxpayer financed subsidies to help pay those premiums. But how could you ever make that equitable? Imagine the complexities of setting premiums in a fragmented system of unstable and inequitable risk pools, and then providing tax subsidies (credits or vouchers) that would vary with ever changing income levels. And for that we would continue to accept private insurance plans that burn up hundreds of billions of dollars in administrative waste, while remaining incapable of directing our health care dollars to where they would do the most good. Supporting a model with excess costs and greater inefficiency doesn’t make sense.
Regarding single payer, the AMA labels that as “full government control.” It is hard to know what that means when the health care delivery system remains private. About sixty percent of our health care is already financed through taxes. Single payer systems typically finance about seventy percent (though more would improve efficiency). “Full government control” is merely intended as a pejorative label that has little policy application. That label could backfire on the AMA since many Americans are now concerned that the government has not been doing enough.
The AMA states that single payer systems are “plagued with an undersupply of medical personnel.” Massachusetts has a program not unlike that supported by the AMA. Tell the people of Massachusetts that the primary care physicians that they can’t find are really there in great supply. Tell the patients behind the curtains in the upstairs hallways that we don’t have an undersupply of safety-net beds. Tell the patients on Medicaid or in Community Health Centers that we don’t have an undersupply of willing specialists. Tell the ambulance drivers who are waved past full emergency departments that we don’t have an undersupply of emergency facilities. The fact is that publicly administered programs are more capable of identifying needs and redirecting resources to where they would do the most good.
The AMA says that single payer systems cause long waiting periods. Tell that to the tens of millions of individuals in the United States who are not even allowed a place in the queue. Tell that to insured patients who may have to wait months for an appointment with a specialist. Tell that to the authors of the OECD report which demonstrated that many nations with public systems have been successful in reducing and even preventing excessive queues.
The AMA says that single payer systems cause a lack of patient choice. What does that mean? Most private insurance plans have restricted lists that take away our choice of hospitals, physicians, and other health care professionals. A single payer system gives you this free choice within the health care delivery system. Does the AMA mean a lack of choice of health plans? The only plan that you really want is a plan that allows you to access health care without being assessed a financial penalty for having health problems. Most private health plans do not do that, but a single payer system does.
The AMA states that their proposal, unlike single payer, encourages patients to be “conscious of health insurance costs.” If you look at our individual insurance market where people select their plans based on the amount of the premium, it’s easy to understand what a flawed concept this is. We have had an explosion in innovative underinsurance plans that have left patients with major medical debt, home foreclosures, and even personal bankruptcy. These people are certainly “conscious” of the financial hardship that the private plans exposed them to.
I’m the first to admit that the “Voice for the Uninsured” campaign offers real hope that the AMA has had an epiphany. But that hope will be dashed once again unless the AMA backs up their campaign with sound health policy science.

American Medical Association
October 2008

Q: What are the basic principles of the AMA proposal?

A: The American Medical Association (AMA) proposes that individuals and families receive financial assistance to purchase a health plan of their choice, with more generous assistance to those with lower incomes. The financial assistance could take the form of tax credits or vouchers and must be earmarked for health insurance coverage. Health insurance market regulations should be reformed to establish fair “rules of the game” that protect vulnerable individuals, without unduly driving up premiums for the rest of the population.

Q: How is the AMA proposal different or better than a single-payer system?

A: Both the AMA and the single-payer approaches emphasize the same goal of universal coverage, but they differ on how to implement it. The AMA does not believe that full government control is a workable model for the United States. Single-payer systems are plagued with an undersupply of medical personnel, long waiting periods and a lack of patient choice. Alternatively, the AMA proposal seeks to enhance patient choice and encourage patients to be conscious of health insurance costs, while also maintaining innovation in the private sector.

http://www.voicefortheuninsured.org/pdf/08-1103-FAQ-Proposal.pdf

Comment:

By Don McCanne, MD

The AMA is trying. During this presidential election season, the AMA has initiated an intensive “Voice for the Uninsured” campaign in support of their model of reform. Unfortunately, the policies behind their version of reform would fall far short of achieving the goal of affordable, comprehensive health care for everyone. Their feeble and deceptive effort to explain why their proposal is better than single payer reveals the fact that that the AMA is still controlled by those ideologically opposed to a national health program.

One of their basic principles is that “insurance market regulations should be reformed to establish fair ‘rules of the game’ that protect vulnerable individuals, without unduly driving up premiums for the rest of the population.” Presumably insurance market regulations that protect vulnerable individuals would mean that plans must prevent financial hardship for those who need health care. Even the average employer-sponsored family plan (at $12,600) may not be adequate because of deductibles and other cost sharing requirements. To be effective in protecting personal finances, these plans must be quite comprehensive and will require very high premiums.

Yet the AMA states that these plans must not unduly drive up premiums for the rest of the population. That is an impossibility. The only way you can keep premiums low is to segregate the healthy in isolated risk pools (but then these pools wouldn’t work for those who end up needing medical care because of the high cost sharing used to keep the premiums low). If you were to isolate those with high medical expenses in pools providing comprehensive coverage, the premiums would be so high that the many who are healthy would have to finance most of the costs.

Of course that is why the AMA has recommended taxpayer financed subsidies to help pay those premiums. But how could you ever make that equitable? Imagine the complexities of setting premiums in a fragmented system of unstable and inequitable risk pools, and then providing tax subsidies (credits or vouchers) that would vary with ever changing income levels. And for that we would continue to accept private insurance plans that burn up hundreds of billions of dollars in administrative waste, while remaining incapable of directing our health care dollars to where they would do the most good. Supporting a model with excess costs and greater inefficiency doesn’t make sense.

Regarding single payer, the AMA labels that as “full government control.” It is hard to know what that means when the health care delivery system remains private. About sixty percent of our health care is already financed through taxes. Single payer systems typically finance about seventy percent (though more would improve efficiency). “Full government control” is merely intended as a pejorative label that has little policy application. That label could backfire on the AMA since many Americans are now concerned that the government has not been doing enough.

The AMA states that single payer systems are “plagued with an undersupply of medical personnel.” Massachusetts has a program not unlike that supported by the AMA. Tell the people of Massachusetts that the primary care physicians that they can’t find are really there in great supply. Tell the patients behind the curtains in the upstairs hallways that we don’t have an undersupply of safety-net beds. Tell the patients on Medicaid or in Community Health Centers that we don’t have an undersupply of willing specialists. Tell the ambulance drivers who are waved past full emergency departments that we don’t have an undersupply of emergency facilities. The fact is that publicly administered programs are more capable of identifying needs and redirecting resources to where they would do the most good.

The AMA says that single payer systems cause long waiting periods. Tell that to the tens of millions of individuals in the United States who are not even allowed a place in the queue. Tell that to insured patients who may have to wait months for an appointment with a specialist. Tell that to the authors of the OECD report which demonstrated that many nations with public systems have been successful in reducing and even preventing excessive queues.

The AMA says that single payer systems cause a lack of patient choice. What does that mean? Most private insurance plans have restricted lists that take away our choice of hospitals, physicians, and other health care professionals. A single payer system gives you this free choice within the health care delivery system. Does the AMA mean a lack of choice of health plans? The only plan that you really want is a plan that allows you to access health care without being assessed a financial penalty for having health problems. Most private health plans do not do that, but a single payer system does.

The AMA states that their proposal, unlike single payer, encourages patients to be “conscious of health insurance costs.” If you look at our individual insurance market where people select their plans based on the amount of the premium, it’s easy to understand what a flawed concept this is. We have had an explosion in innovative underinsurance plans that have left patients with major medical debt, home foreclosures, and even personal bankruptcy. These people are certainly “conscious” of the financial hardship that the private plans exposed them to.

I’m the first to admit that the “Voice for the Uninsured” campaign offers real hope that the AMA has had an epiphany. But that hope will be dashed once again unless the AMA backs up their campaign with sound health policy science.