By Julie Creek
The Journal Gazette
Sun, Mar. 18, 2007
Fears about cost, quality and lack of access have pushed health care reform to center stage in American domestic politics. In the 13 years since the Clinton health care plan went down in flames, the problems that plan was designed to address have become more severe, and reform promises to be a major issue in next year’s presidential race.
Among solutions under discussion is the “single-payer” system, which proponents argue is the best way to provide health insurance and control costs. Here are some questions and answers about it:
1. Why are we hearing more about a single-payer health care system?
It seems almost a misnomer to refer to the existing hodge-podge of private and public health care financing as a system. And it’s becoming increasingly difficult to find anybody familiar with health care who doesn’t believe the “system” is either in crisis already or headed for collapse.
Consider:
* About $2 trillion is spent each year on health care in the United States — 15.2 percent of the country’s gross domestic product in 2003 — twice as much as any other country — and that amount is expected to rise rapidly.
* Roughly 30 percent of what we spend goes to administrative costs alone.
* Even with all the money spent, as a group, Americans aren’t particularly healthy, ranking in the middle among industrialized countries on a list of overall health indicators — including life expectancy and infant mortality.
* Nearly 47 million people — about 15 percent of the population — have no health insurance at all, including about 800,000 Hoosiers. And that number is increasing as American companies, struggling to compete in the global economy, jettison employee health insurance. People with chronic medical conditions who aren’t covered by group insurance often can’t buy health insurance at any price.
* Workers who still have private health insurance have watched their insurance premiums rise 87 percent since 2000.
* Many hospitals — especially not-for-profit hospitals — are struggling to care for uninsured patients who cannot pay for the expensive care they receive in emergency rooms.
The economic and social crisis spawned by the many uninsured prompted several states, led by Massachusetts, to come up with their own plans to provide basic health insurance to all citizens. The Indiana General Assembly is mulling over a plan that would hike the cigarette tax and plow the increased revenue into health insurance coverage for a portion of the state’s uninsured working poor population.
A New York Times/CBS News poll released in early March found that a majority of Americans believe the federal government should guarantee health insurance to every American and say they’re willing to pay more taxes to do so.
2. What — exactly — is a single-payer system? What would it look like?
Single-payer national health insurance is a system in which doctors and hospitals work for themselves but a single public or public-private agency handles the financing. Under the single-payer plan proposed by Physicians for a National Health Program, all Americans would be covered for medically necessary services for life, and patients would have a choice of doctors and hospitals.
Patients would go to their doctor or hospital for treatment. Doctors would bill the national agency and receive payment on a fee-for-service basis. Hospitals would receive lump sums to pay operating expenses. Health facilities — including nursing homes — would be managed by regional planning boards.
Proponents of a single-payer system argue that much of the cost of providing universal coverage could be paid by eliminating the role of private insurance companies and putting wasted administrative dollars back into caring for patients. A health care tax would replace private insurance premiums and out-of-pocket expenses currently paid by individuals and businesses. Costs would be controlled by negotiated fees, global budgeting and bulk purchasing.
The Medicare program for senior citizens — created by Congress in the mid-1960s — is a single-payer system. A federal agency pays all the bills. Doctors and hospitals negotiate fees with the agency, and Medicare spends only about 3 percent of its funds for administrative expenses.
Some proponents of a single-payer system advocate expanding the Medicare program to cover all Americans. Physicians for a National Health Program supports a bill introduced a couple of years ago in Congress by Rep. Dennis Kucinich that would do so.
3. What are the advantages and disadvantages of a single-payer system?
Probably the most obvious advantage is that it would cover everyone from cradle to grave, eliminating the inequities and economic distortion created by the nearly 47 million Americans who have no health insurance at all.
A single-payer system would also streamline an administrative system that sucks up 30 percent of every dollar spent on health care. Many doctors say the bureaucratic tangle has begun to feed on itself, forcing them to hire more workers to handle insurance claims and billing, increasing office overhead expenses.
A single-payer system would eliminate profit-driven insurance companies from the health care system. Because they answer to stockholders, private insurance companies are under enormous pressure to control costs. As the cost of care increases, companies respond by limiting the care they cover and lowering payments to health care providers. On the other hand, taxpayers, especially corporate ones, are likely to exert the same kinds of pressure on the government to hold down costs.
On the disadvantage side, a single-payer system would be a wrenching change and create a huge, faceless bureaucracy. That prospect scares many physicians, even those who dread haggling with insurance companies over treatment for their patients. They also fear the power that would be conferred upon a single payer.
“Who would you rather fight with, the federal government or Anthem?” asked Dr. Mike Schatzlein, an executive with the Lutheran Health Network. “I would probably take my chances with Anthem.”
Health care observers also fear that removing the profit motive from the health care system altogether would stifle investment and innovation in finding new treatments and drugs. If the federal government became the only payer, limiting potential profit, companies would be less likely to invest the huge sums necessary up front to develop new drugs and treatments.
4. Who supports it?
A few health care consumer groups, including Hoosiers for a Commonsense Health Plan, support a single-payer system as the most equitable way to distribute finite health care resources.
As a group, physicians are split.
Physicians for a National Health Program claims 12,000 physician members across the country, but others favor less dramatic reforms.
“Most physicians believe we need universal access,” said Dr. Vidya Kora, president of the Indiana State Medical Association. “But that doesn’t necessarily translate into believing in a single-payer system.”
“Most people believe the solution won’t come from the feds,” he added. “That’s why states are experimenting.”
Many physicians hope states will lead the way to more coherent regional systems — which might include single-payer elements — that will cover everybody.
“I would hope to see individual states or coalitions of states work together to build a state system,” said Dr. Tom Hayhurst, a retired physician and outgoing Fort Wayne City Council member. “Of course they would have to figure out how to pay for it.”
5. Who opposes it?
Insurance companies oppose a single-payer system because it would kick them out of the health care system, which has been a major profit center for them.
Many business groups also oppose a single-payer system because it would place controls on for-profit health care providers.
“A single-payer system would disrupt the marketplace and impede consumer choice,” said Katie Mahoney, director of health care policy for the U.S. Chamber of Commerce.
The U.S. Chamber is backing an incremental plan that would extend the federal Children’s Health Insurance Program to cover all uninsured children, allow states to offer Medicaid coverage to adults based solely on need and create a tax credit to help individuals and families afford private health insurance.
Even as they’re being squeezed by increasing number of uninsured patients and lower reimbursements for treating Medicare and Medicaid patients, hospital officials are generally suspicious of dealing with a bureaucracy that has no competition.
While they agree that everyone should have health insurance, the American public is split — largely along party lines — on whether a national health insurance program is the answer.
6. What has been the experience of other countries that have national health care systems?
The U.S. is one of just a few industrialized countries that don’t have government-sponsored national health-insurance programs, but plans vary widely from country to country. Some countries — including Spain and Great Britain — have “socialized” programs in which doctors and other providers are government employees and receive government salaries.
National health care programs in Canada and Germany use a system in which doctors are self-employed but bill a national health care agency on a fee-for-service basis.
Canada’s program is mentioned most often as a potential model for an American single-payer system, although Canadians often complain that they must wait long periods for non-emergency procedures.
7. Would health care be rationed under a national single-payer system?
Of course. But, remember, it is already rationed in the existing system based on the ability to pay. Generally speaking, those who can afford it get care; those who can’t afford it don’t, unless they’re lucky enough to find a provider who can give them free care or go to a hospital emergency room that is required to provide emergency care. When there is disagreement in cases of privately insured Americans, insurance companies frequently decide what care patients will receive by refusing to pay for procedures or treatments they deem unnecessary.
Single-payer advocates believe that taking insurance companies out of the equation will free up most of the 30 percent of health care dollars spent on administrative costs to provide more care.
Some single-payer advocates support allowing patients to buy supplementary insurance that would cover elective or cosmetic treatments that likely wouldn’t be covered under a national plan. But Dr. Rob Stone, of Hoosiers for a Commonsense Health Plan, believes that supplementary plans would result in some patients being “more equal” than others.
8. Would I be able to choose my doctor?
More than likely. The plan proposed by Physicians for a National Health Program wouldn’t affect the relationship between doctors and their patients. The change would come in the way doctors are paid for their work. Ultimately, it would depend on what kind of plan Congress adopted, but given that Americans feel so strongly about their freedom of choice, it’s hard to imagine Congress creating a single-payer system that didn’t allow patients to choose their doctors.
By the Numbers
The cost of health care:
Amount spent on health care per person in 2003:
Canada — $2,998
Germany — $2,983
Great Britain — $2,317
United States — $5,711
Projected growth of National Health Expenditure in US:
2007: $2.3 trillion
2008: $2.5 trillion
2009: $2.7 trillion
2010: $2.9 trillion
Julie Creek is an editorial writer for The Journal Gazette. She joined the newspaper in 1990 and was an education reporter and assistant metro editor. You can reach her at 260-461-8609 or by email at jcreek@jg.net
