New York Times
Published: February 12, 2007
To the Editor:
Paul Krugman lauds former Senator John Edwards’s health care proposal, claiming that it would trim insurance bureaucracy. But Mr. Edwards’s plan forgoes at least 90 percent of the $350 billion in potential administrative savings available through single-payer reform.
Insurance overhead accounts for only a quarter of the bureaucratic waste. The rest is useless paperwork imposed on hospitals and physicians by insurers trying to avoid payment.
Moreover, marketing costs would not melt away as Mr. Krugman suggests. Medicare pays H.M.O.’s using Mr. Edwards’s proposed community rating system, but H.M.O.’s still market heavily to healthy, profitable seniors.
Finally, Mr. Edwards’s “Health Markets” (middlemen between enrollees and insurers) add bureaucracy. Under Massachusetts’ new reform, our health market imposes a 4 percent surcharge on premiums.
Mr. Edwards assumes that public plans and private insurers will compete on a level playing field. Yet Mr. Krugman has previously shown how H.M.O.’s undermine competition in Medicare, lobbying for and winning huge overpayments.
Absent savings, universal coverage won’t happen.
David U. Himmelstein, M.D.
Steffie Woolhandler, M.D.
Cambridge, Mass., Feb. 9, 2007
The writers are associate professors of medicine at Harvard Medical School and founders of Physicians for a National Health Program.