What Can US Single-Payer Supporters Learn From the Swiss Rejection of Single Payer?

By Claudia Chaufan
International Journal of Health Services, 2016, Vol. 46(2) 331–345

Abstract

On September 27, 2014, Swiss voters rejected a proposal to replace their system of about 60 health insurance companies offering mandatory basic health coverage with a single public insurer, the state, which would offer taxpayer-funded coverage of all medically necessary care. The Swiss and the U.S. media, academia, and business sectors, from conservative and liberal camps, interpreted the results to mean a rejection of single payer and a preference for a privately run system, with important implications for health reform in the United States. While on the surface mainstream interpretations appear reasonable, I argue that they have little basis on fact because they rely on assumptions that, while untrue, are repeated as mantras that conveniently justify the continuation of a model of health insurance that is unraveling, less conspicuously in Switzerland, dramatically in the United States. To make my case, I describe the dominant narrative about Swiss health care and mainstream interpretations of the latest referendum on health reform, unpack the problem within these interpretations, and conclude by identifying what lessons the Swiss referendum contains for single payer advocates in the United States in particular and for those who struggle for social and economic rights more generally.

Lessons to be Learned

Why, then, was single payer defeated? What, if anything, can single payer supporters learn from this defeat? First, we must grant that the state of Swiss health care may be of concern for the Swiss (who seem to have lower tolerance for being deprived of health care than Americans), but is still not bad enough. People who experience the greatest barriers to care, in Switzerland as elsewhere, are the most politically disenfranchised—young, poor, women, and immigrants, much like they are in the United States—so the problem has yet to strike the so- called middle classes badly enough.

Yet the Swiss case can help single payer supporters, and other social justice advocates, experience and gauge the extraordinary power of propaganda of the corporate class, in health care matters as in others. The scare tactics against single payer displayed by corporate interests in Switzerland have been extraordinary, in both 2007 and this latest referendum. As the BBC timidly suggested, one reason for the failure “may be the power of the insurance sector and of the big pharmaceutical companies in Switzerland […] Both have strong lobby groups.” And yet, none of the single payer or other relevant referenda indicate that love of private health insurance is increasing. If anything, they lay bare the reality that even in the land of direct democracy, as in Switzerland, the attempt to achieve health care justice through a system of “competing private insurers” is a delusion. They also indicate that more political education is necessary to achieve single payer. This, I believe, is as true for the Swiss as it is for the American people.

The Swiss referendum also teaches activists that corporate propaganda is vicious not only when it comes to portraying the presumed evils of single payer or beauty of private health insurance. It is also vicious when it comes to interpreting, and communicating to the public, voting patterns and preferences in health care matters.

The power of corporate propaganda matters because its self-serving interpretation can operate like a self-fulfilling prophecy. The narrative that “the people” prefer the status quo, and the dubious assumption that the people’s will is the key driver of policy, especially in America, can lead public health care advocates to conclude that those who struggle for greater social justice are more alone than they really are, rather than interpreting the resilience of current power structures as indicating that the corporate class owns, and controls, the means of communication as much or more than it owns and controls the means of production, and is thus able to shape the public debate to suit their interests. As a result of this, advocates may give up the fight too soon, or worse, retreat and accommodate to the boundaries of change as set by this corporate class.

In concluding, I propose that the Swiss referendum teaches us that: 1) We need to sharpen our analytic tools, i.e., to improve our understanding of what the ACA is really about, what the real challenges (and enemies!) are, and what our alternatives could and should be; 2) We must increase our outreach to those sectors of society who do not have a voice, or whose voices are suppressed, or who do not think that their voices make a difference; and finally 3) We must work on improving the political education of those we wish to reach, rather than investing in “improving the message” (as many political “experts” recommend). This is usually a message of sound bites without substance which more often than not leads to attempts to fit social change within the boundaries of the “politically feasible” as defined by that same corporate class.

As Americans celebrate this year the 50th anniversary of Medicare, and many, even insured, continue to forgo needed care, they are being told that “Medicare was enacted in a very different environment than we live today” and that some privatization is inevitable and even desirable. However, the results of the Swiss referendum teach us that we need more, not less — nor more accommodating — struggle for single payer and health care justice, in the words, albeit not in the spirit, of Milton Friedman, until the “politically impossible becomes politically inevitable.”*

* “Only a crisis — actual or perceived — produces real change. When that crisis occurs, the actions that are taken depend on the ideas that are lying around. That, I believe, is our basic function: to develop alternatives to existing policies, to keep them alive and available until the politically impossible becomes the politically inevitable.”
— Milton Friedman

Claudia Chaufan, MD, PhD, is an associate professor at the University of California San Francisco and a member of Physicians for a National Health Program.

http://joh.sagepub.com/content/46/2/331.abstract

OECD/WHO report on the Swiss health system

Comment by Don McCanne, M.D.
Quote of the Day, October 24, 2011

“It is not clear why so many in the U.S. are enamored of the Swiss health insurance system when this OECD/WHO report confirms that it is highly inefficient and fragmented, with profound administrative waste, inequitably funded, with regressive financing and with wide variations in premiums, has the highest out-of-pocket costs, has an increasing prevalence of managed care intrusions, and is controlled by a private insurance industry that has learned how to game risk selection at significant cost to those on the losing end.”

https://www.pnhp.org/news/2011/october/oecdwho-report-on-the-swiss-health-system

***

Comment:

By Don McCanne, M.D.

At a time of renewed interest in single payer reform in the United States, it might be helpful to look again at why the voters of Switzerland rejected single payer reform in September, 2014. Although their financing system is superior to ours, it does have several serious deficiencies that would be addressed by converting to a single payer system. In this article, Claudia Chaufan discusses lessons that we can learn from the Swiss that may help us in our advocacy for reform.

What Can US Single-Payer Supporters Learn From the Swiss Rejection of Single Payer?

By Claudia Chaufan
International Journal of Health Services, 2016, Vol. 46(2) 331–345

Abstract

On September 27, 2014, Swiss voters rejected a proposal to replace their system of about 60 health insurance companies offering mandatory basic health coverage with a single public insurer, the state, which would offer taxpayer-funded coverage of all medically necessary care. The Swiss and the U.S. media, academia, and business sectors, from conservative and liberal camps, interpreted the results to mean a rejection of single payer and a preference for a privately run system, with important implications for health reform in the United States. While on the surface mainstream interpretations appear reasonable, I argue that they have little basis on fact because they rely on assumptions that, while untrue, are repeated as mantras that conveniently justify the continuation of a model of health insurance that is unraveling, less conspicuously in Switzerland, dramatically in the United States. To make my case, I describe the dominant narrative about Swiss health care and mainstream interpretations of the latest referendum on health reform, unpack the problem within these interpretations, and conclude by identifying what lessons the Swiss referendum contains for single payer advocates in the United States in particular and for those who struggle for social and economic rights more generally.

Lessons to be Learned

Why, then, was single payer defeated? What, if anything, can single payer supporters learn from this defeat? First, we must grant that the state of Swiss health care may be of concern for the Swiss (who seem to have lower tolerance for being deprived of health care than Americans), but is still not bad enough. People who experience the greatest barriers to care, in Switzerland as elsewhere, are the most politically disenfranchised—young, poor, women, and immigrants, much like they are in the United States—so the problem has yet to strike the so- called middle classes badly enough.

Yet the Swiss case can help single payer supporters, and other social justice advocates, experience and gauge the extraordinary power of propaganda of the corporate class, in health care matters as in others. The scare tactics against single payer displayed by corporate interests in Switzerland have been extraordinary, in both 2007 and this latest referendum. As the BBC timidly suggested, one reason for the failure “may be the power of the insurance sector and of the big pharmaceutical companies in Switzerland […] Both have strong lobby groups.” And yet, none of the single payer or other relevant referenda indicate that love of private health insurance is increasing. If anything, they lay bare the reality that even in the land of direct democracy, as in Switzerland, the attempt to achieve health care justice through a system of “competing private insurers” is a delusion. They also indicate that more political education is necessary to achieve single payer. This, I believe, is as true for the Swiss as it is for the American people.

The Swiss referendum also teaches activists that corporate propaganda is vicious not only when it comes to portraying the presumed evils of single payer or beauty of private health insurance. It is also vicious when it comes to interpreting, and communicating to the public, voting patterns and preferences in health care matters.

The power of corporate propaganda matters because its self-serving interpretation can operate like a self-fulfilling prophecy. The narrative that “the people” prefer the status quo, and the dubious assumption that the people’s will is the key driver of policy, especially in America, can lead public health care advocates to conclude that those who struggle for greater social justice are more alone than they really are, rather than interpreting the resilience of current power structures as indicating that the corporate class owns, and controls, the means of communication as much or more than it owns and controls the means of production, and is thus able to shape the public debate to suit their interests. As a result of this, advocates may give up the fight too soon, or worse, retreat and accommodate to the boundaries of change as set by this corporate class.

In concluding, I propose that the Swiss referendum teaches us that: 1) We need to sharpen our analytic tools, i.e., to improve our understanding of what the ACA is really about, what the real challenges (and enemies!) are, and what our alternatives could and should be; 2) We must increase our outreach to those sectors of society who do not have a voice, or whose voices are suppressed, or who do not think that their voices make a difference; and finally 3) We must work on improving the political education of those we wish to reach, rather than investing in “improving the message” (as many political “experts” recommend). This is usually a message of sound bites without substance which more often than not leads to attempts to fit social change within the boundaries of the “politically feasible” as defined by that same corporate class.

As Americans celebrate this year the 50th anniversary of Medicare, and many, even insured, continue to forgo needed care, they are being told that “Medicare was enacted in a very different environment than we live today” and that some privatization is inevitable and even desirable. However, the results of the Swiss referendum teach us that we need more, not less — nor more accommodating — struggle for single payer and health care justice, in the words, albeit not in the spirit, of Milton Friedman, until the “politically impossible becomes politically inevitable.”*

* “Only a crisis — actual or perceived — produces real change. When that crisis occurs, the actions that are taken depend on the ideas that are lying around. That, I believe, is our basic function: to develop alternatives to existing policies, to keep them alive and available until the politically impossible becomes the politically inevitable.”
— Milton Friedman

Claudia Chaufan, MD, PhD, is an associate professor at the University of California San Francisco and a member of Physicians for a National Health Program.

http://joh.sagepub.com/content/46/2/331.abstract

OECD/WHO report on the Swiss health system

Comment by Don McCanne, M.D.
Quote of the Day, October 24, 2011

“It is not clear why so many in the U.S. are enamored of the Swiss health insurance system when this OECD/WHO report confirms that it is highly inefficient and fragmented, with profound administrative waste, inequitably funded, with regressive financing and with wide variations in premiums, has the highest out-of-pocket costs, has an increasing prevalence of managed care intrusions, and is controlled by a private insurance industry that has learned how to game risk selection at significant cost to those on the losing end.”

https://pnhp.org/news/2011/october/oecdwho-report-on-the-swiss-health-system

At a time of renewed interest in single payer reform in the United States, it might be helpful to look again at why the voters of Switzerland rejected single payer reform in September, 2014. Although their financing system is superior to ours, it does have several serious deficiencies that would be addressed by converting to a single payer system. In this article, Claudia Chaufan discusses lessons that we can learn from the Swiss that may help us in our advocacy for reform.

Debunking Republican Health Care Myths

By The Editorial Board
The New York Times, April 19, 2016

“Disaster.” “Incredible economic burden.” “The biggest job-killer in this country.”

Central to the presidential campaigns of Donald Trump and Ted Cruz has been the claim that the Affordable Care Act has been a complete failure, and that the only way to save the country from this scourge is to replace it with something they design.

It’s worth examining the big myths they are peddling about the Affordable Care Act and also their ill-conceived plans of what might replace it.

Millions of people have lost their insurance: In January, Mr. Cruz claimed that “millions of Americans” had lost their health insurance because of the health reform law. He even claimed to be one of them, saying “our health care got canceled” because Blue Cross Blue Shield left the individual market in Texas.

Insurers did stop offering some plans after the law took effect, including those that didn’t provide required benefits like maternity care or that charged higher premiums to older or sicker people. But people with those plans had the opportunity to sign up for others. And over all, the law has drastically reduced the number of Americans who lack health insurance. According to the Census Bureau, the number of uninsured Americans dropped by 10 million between 2010, when the law passed, and 2014. While critics said employers might stop offering health insurance because of the law, three million people actually gained coverage through their employers between 2010 and 2014.

Incidentally, Mr. Cruz never lost his health insurance. Blue Cross Blue Shield did cancel his particular plan, but it automatically moved him and his family to a new one. A Cruz spokeswoman said the senator had been misinformed by his insurance broker.

Millions of people have lost their jobs: Mr. Cruz has called the Affordable Care Act “the biggest job-killer in this country” and said “millions of Americans have lost their jobs, have been forced into part-time work” because of it. This is false. The unemployment rate has fallen since the law took effect, PolitiFact notes, as has the number of people working part time when they would rather work full time. A 2015 study using data from the Current Population Survey found that the law “had virtually no adverse effect on labor force participation, employment or usual hours worked per week through 2014.”

Reduce costs by weakening state regulations: Mr. Trump frequently talks about his plan to “get rid of the lines around the states” to foster competition among insurance companies. Customers in states where insurance is heavily regulated, the thinking goes, would be able to save money if they could purchase coverage from insurers based in states with fewer rules. Mr. Cruz, too, supports allowing people to buy insurance across state borders — it’s one of the few proposals he’s offered for replacing the health law if it is repealed.

But the biggest obstacle stopping insurers from setting up in more states is not regulation; it’s the difficulty of establishing a network of providers in a new market. And such a structure would destroy the longstanding ability of states to regulate health insurance for their populations. Some states, for instance, require coverage for infertility treatment and others have chosen not to. Allowing cross-border plans would encourage insurers to base themselves in low-regulation states, and the result might be a proliferation of poor-quality plans.

The Affordable Care Act is not perfect. Premiums for plans on the exchanges rose between 2015 and 2016 and are likely to rise again next year. A few insurers have left the exchange market, raising concerns in some quarters that more companies might follow.

But the law has helped millions of Americans, especially low-wage workers like cashiers, cooks and waiters who previously struggled to pay for coverage. In inventing problems that don’t exist and proposing solutions that won’t help, Donald Trump and Ted Cruz show that they don’t care about helping Americans get health care, which has never been their interest. They want to trash the Affordable Care Act, and they’re willing to mislead the public any way they can.

Reader Comments – NYT Picks:

By Don McCanne, M.D.
San Juan Capistrano, CA

How about debunking the Democratic ACA myths?

ACA is universal, except for 29 million left out.

ACA is affordable, except for the premiums and deductibles.

ACA provides choice, within narrower networks.

ACA replaces quantity with quality, except we haven’t figured out how to do that.

ACA doesn’t force us into a one-size-fits-all plan, though we are relieved when we are finally eligible for Medicare.

In fact, when the Democrats were in control, they rejected the plan that would have worked for all of us – a single payer, improved version of Medicare for all.

http://www.nytimes.com/2016/04/19/opinion/debunking-republican-health-care-myths.html

***

Comment:

By Don McCanne, M.D.

The Republicans keep talking about coming up with a plan to replace the Affordable Care Act (ACA). But as this New York Times editorial explains, their criticisms of ACA are often not fact-based and the proposals they have telegraphed in net would leave us much worse off. Yet, as the Democrats tout the successes of ACA, it is clear that their model falls far short of the high performance system that we deserve.

The health policies that we need are straightforward and are found in a well designed, single payer Medicare for all program. It is the politics that has botched up our health care system.

In a recent Quote of the Day, Jonathan Oberlander’s NEJM article was cited as he explained why the political prospects for single payer are dismal. To change that, we need to listen to and act on his words: “Single-payer supporters have not articulated a convincing strategy for overcoming the formidable obstacles that stand in its way. Nor have they, despite substantial public support for single payer, succeeded in mobilizing a social movement that could potentially break down those barriers.”

The politicians will not lead on single payer; the people must.

Debunking Republican Health Care Myths

By The Editorial Board
The New York Times, April 19, 2016

“Disaster.” “Incredible economic burden.” “The biggest job-killer in this country.”

Central to the presidential campaigns of Donald Trump and Ted Cruz has been the claim that the Affordable Care Act has been a complete failure, and that the only way to save the country from this scourge is to replace it with something they design.

It’s worth examining the big myths they are peddling about the Affordable Care Act and also their ill-conceived plans of what might replace it.

Millions of people have lost their insurance: In January, Mr. Cruz claimed that “millions of Americans” had lost their health insurance because of the health reform law. He even claimed to be one of them, saying “our health care got canceled” because Blue Cross Blue Shield left the individual market in Texas.

Insurers did stop offering some plans after the law took effect, including those that didn’t provide required benefits like maternity care or that charged higher premiums to older or sicker people. But people with those plans had the opportunity to sign up for others. And over all, the law has drastically reduced the number of Americans who lack health insurance. According to the Census Bureau, the number of uninsured Americans dropped by 10 million between 2010, when the law passed, and 2014. While critics said employers might stop offering health insurance because of the law, three million people actually gained coverage through their employers between 2010 and 2014.

Incidentally, Mr. Cruz never lost his health insurance. Blue Cross Blue Shield did cancel his particular plan, but it automatically moved him and his family to a new one. A Cruz spokeswoman said the senator had been misinformed by his insurance broker.

Millions of people have lost their jobs: Mr. Cruz has called the Affordable Care Act “the biggest job-killer in this country” and said “millions of Americans have lost their jobs, have been forced into part-time work” because of it. This is false. The unemployment rate has fallen since the law took effect, PolitiFact notes, as has the number of people working part time when they would rather work full time. A 2015 study using data from the Current Population Survey found that the law “had virtually no adverse effect on labor force participation, employment or usual hours worked per week through 2014.”

Reduce costs by weakening state regulations: Mr. Trump frequently talks about his plan to “get rid of the lines around the states” to foster competition among insurance companies. Customers in states where insurance is heavily regulated, the thinking goes, would be able to save money if they could purchase coverage from insurers based in states with fewer rules. Mr. Cruz, too, supports allowing people to buy insurance across state borders — it’s one of the few proposals he’s offered for replacing the health law if it is repealed.

But the biggest obstacle stopping insurers from setting up in more states is not regulation; it’s the difficulty of establishing a network of providers in a new market. And such a structure would destroy the longstanding ability of states to regulate health insurance for their populations. Some states, for instance, require coverage for infertility treatment and others have chosen not to. Allowing cross-border plans would encourage insurers to base themselves in low-regulation states, and the result might be a proliferation of poor-quality plans.

The Affordable Care Act is not perfect. Premiums for plans on the exchanges rose between 2015 and 2016 and are likely to rise again next year. A few insurers have left the exchange market, raising concerns in some quarters that more companies might follow.

But the law has helped millions of Americans, especially low-wage workers like cashiers, cooks and waiters who previously struggled to pay for coverage. In inventing problems that don’t exist and proposing solutions that won’t help, Donald Trump and Ted Cruz show that they don’t care about helping Americans get health care, which has never been their interest. They want to trash the Affordable Care Act, and they’re willing to mislead the public any way they can.

Reader Comments – NYT Picks:

By Don McCanne, M.D.
San Juan Capistrano, CA

How about debunking the Democratic ACA myths?

ACA is universal, except for 29 million left out.

ACA is affordable, except for the premiums and deductibles.

ACA provides choice, within narrower networks.

ACA replaces quantity with quality, except we haven’t figured out how to do that.

ACA doesn’t force us into a one-size-fits-all plan, though we are relieved when we are finally eligible for Medicare.

In fact, when the Democrats were in control, they rejected the plan that would have worked for all of us – a single payer, improved version of Medicare for all.

http://www.nytimes.com/2016/04/19/opinion/debunking-republican-health-care-myths.html

The Republicans keep talking about coming up with a plan to replace the Affordable Care Act (ACA). But as this New York Times editorial explains, their criticisms of ACA are often not fact-based and the proposals they have telegraphed in net would leave us much worse off. Yet, as the Democrats tout the successes of ACA, it is clear that their model falls far short of the high performance system that we deserve.

The health policies that we need are straightforward and are found in a well designed, single payer Medicare for all program. It is the politics that has botched up our health care system.

In a recent Quote of the Day, Jonathan Oberlander’s NEJM article was cited as he explained why the political prospects for single payer are dismal. To change that, we need to listen to and act on his words: “Single-payer supporters have not articulated a convincing strategy for overcoming the formidable obstacles that stand in its way. Nor have they, despite substantial public support for single payer, succeeded in mobilizing a social movement that could potentially break down those barriers.”

The politicians will not lead on single payer; the people must.

NBER Working Paper No. 22170: The Effect of the Patient Protection and Affordable Care Act Medicaid Expansions on Financial Well-Being

By Luojia Hu, Robert Kaestner, Bhashkar Mazumder, Sarah Miller, and Ashley Wong
National Bureau of Economic Research, April 2016

Abstract

We examine the effect of the Medicaid expansions under the 2010 Patient Protection and Affordable Care Act (ACA) on financial outcomes using credit report data for a large sample of individuals. We employ the synthetic control method (Abadie et al., 2010) to compare individuals living in states that expanded Medicaid to those that did not. We find that the Medicaid expansions significantly reduced the number of unpaid bills and the amount of debt sent to third-party collection agencies among those residing in zip codes with the highest share of low income, uninsured individuals. Our estimates imply a reduction in collection balances of around $600 to $1,000 among those who gain Medicaid coverage due to the ACA. Our findings suggest that the ACA Medicaid expansions had important financial impacts beyond health care use.

From the Introduction

In 2010, President Barack Obama signed the Patient Protection and Affordable Care Act (ACA) into law, which included a provision to expand Medicaid eligibility to low-income adults, many of whom were previously ineligible. A major motivation for this expansion was to provide financial security to individuals if they experience a sudden deterioration in their health and cannot afford to pay for their medical expenses.

Indeed, the financial consequences of not having health insurance can be severe for individuals who become seriously ill or injured. Studies using survey data suggest that the uninsured often have difficulty paying medical expenses, become delinquent on their medical and non-medical bills, and are more likely to be contacted by collection agencies.

Our main finding is that Medicaid expansions that began in 2014 significantly reduced the number of unpaid non-medical bills and the amount of non-medical debt sent to third-party collection agencies among people living in zip codes that are most likely affected by the expansions. Our baseline intention-to-treat (ITT) estimates indicate that the Medicaid expansions are associated with a decrease in the amount of unpaid balances in collections of between $51 and $85. This effect is an average over the entire sample and includes many individuals who did not obtain Medicaid insurance coverage through the expansion. Rescaling this estimate based on the fraction of the target population who were likely to have obtained insurance coverage yields estimates of the effect of treatment on the treated (ToT) of between $600 and $1,000.

From the Conclusion

The financial protection provided by health insurance is arguably its most important function. This is particularly true in the case of Medicaid because of the relatively high prevalence of disease among low-income individuals and the substantial financial burden that illness imposes on those who become seriously ill or injured. Indeed, a major justification for the Patient Protection and Affordable Care Act (ACA) of 2010 was to provide such financial protection.

While these results show that the ACA Medicaid expansions had important financial impacts outside of health care use, they are also consistent with recent work documenting that much of the incidence of these financial effects falls on third parties as much as the uninsured themselves. Given that the ACA Medicaid expansions decreased unpaid bills, the financial benefits of the ACA expansions appear to fall at least partially on third-party creditors. As a result, those individuals who gained coverage through the ACA Medicaid expansions may have better access to credit markets in the future.

http://www.nber.org/papers/w22170.pdf

***

Comment:

By Don McCanne, M.D.

The results of this study are intuitive. Low-income individuals who obtain Medicaid insurance coverage not only are protected from medical bills when they must access health care, they also have a reduction in other unpaid bills and a lower incidence of account referral to collection agencies – a benefit to both the patients and their potential third-party creditors.

The authors state, “The financial protection provided by health insurance is arguably its most important function. This is particularly true in the case of Medicaid because of the relatively high prevalence of disease among low-income individuals and the substantial financial burden that illness imposes on those who become seriously ill or injured.”

Individuals who face large deductibles and other cost sharing in individual plans and employer-sponsored plans or who have inadequate subsidies for cost sharing in the ACA exchange plans are frequently exposed to financial hardship. It is the near absence of cost sharing (deductibles, copayments and coinsurance) in the Medicaid program that has made it so effective in protecting the personal finances of otherwise vulnerable individuals – in sharp contrast to the increasing financial burdens resulting from the inadequacies of the private plans.

Medicaid does have other problems. Too many physicians refuse to accept Medicaid patients because of the very low payment rates, especially specialists, thus access may be impaired. Also many states are shoving patients into Medicaid managed care plans to save even more money, and early experience suggests that there is a further deterioration in patient access and service. Thus merely expanding Medicaid is not a satisfactory solution to filling in our voids in health care today.

The lesson from this study is not that Medicaid should be expanded but rather that health insurance should provide complete financial protection from health care costs. That is proposed as one of the more important improvements in an Improved Medicare for All – a single payer national health program. Everyone could have health care without causing financial hardship for anyone. Costs would be controlled in a more patient-friendly manner by application of other important single payer policies.

NBER Working Paper No. 22170: The Effect of the Patient Protection and Affordable Care Act Medicaid Expansions on Financial Well-Being

By Luojia Hu, Robert Kaestner, Bhashkar Mazumder, Sarah Miller, and Ashley Wong
National Bureau of Economic Research, April 2016

Abstract

We examine the effect of the Medicaid expansions under the 2010 Patient Protection and Affordable Care Act (ACA) on financial outcomes using credit report data for a large sample of individuals. We employ the synthetic control method (Abadie et al., 2010) to compare individuals living in states that expanded Medicaid to those that did not. We find that the Medicaid expansions significantly reduced the number of unpaid bills and the amount of debt sent to third-party collection agencies among those residing in zip codes with the highest share of low income, uninsured individuals. Our estimates imply a reduction in collection balances of around $600 to $1,000 among those who gain Medicaid coverage due to the ACA. Our findings suggest that the ACA Medicaid expansions had important financial impacts beyond health care use.

From the Introduction

In 2010, President Barack Obama signed the Patient Protection and Affordable Care Act (ACA) into law, which included a provision to expand Medicaid eligibility to low-income adults, many of whom were previously ineligible. A major motivation for this expansion was to provide financial security to individuals if they experience a sudden deterioration in their health and cannot afford to pay for their medical expenses.

Indeed, the financial consequences of not having health insurance can be severe for individuals who become seriously ill or injured. Studies using survey data suggest that the uninsured often have difficulty paying medical expenses, become delinquent on their medical and non-medical bills, and are more likely to be contacted by collection agencies.

Our main finding is that Medicaid expansions that began in 2014 significantly reduced the number of unpaid non-medical bills and the amount of non-medical debt sent to third-party collection agencies among people living in zip codes that are most likely affected by the expansions. Our baseline intention-to-treat (ITT) estimates indicate that the Medicaid expansions are associated with a decrease in the amount of unpaid balances in collections of between $51 and $85. This effect is an average over the entire sample and includes many individuals who did not obtain Medicaid insurance coverage through the expansion. Rescaling this estimate based on the fraction of the target population who were likely to have obtained insurance coverage yields estimates of the effect of treatment on the treated (ToT) of between $600 and $1,000.

From the Conclusion

The financial protection provided by health insurance is arguably its most important function. This is particularly true in the case of Medicaid because of the relatively high prevalence of disease among low-income individuals and the substantial financial burden that illness imposes on those who become seriously ill or injured. Indeed, a major justification for the Patient Protection and Affordable Care Act (ACA) of 2010 was to provide such financial protection.

While these results show that the ACA Medicaid expansions had important financial impacts outside of health care use, they are also consistent with recent work documenting that much of the incidence of these financial effects falls on third parties as much as the uninsured themselves. Given that the ACA Medicaid expansions decreased unpaid bills, the financial benefits of the ACA expansions appear to fall at least partially on third-party creditors. As a result, those individuals who gained coverage through the ACA Medicaid expansions may have better access to credit markets in the future.

http://www.nber.org/papers/w22170.pdf

The results of this study are intuitive. Low-income individuals who obtain Medicaid insurance coverage not only are protected from medical bills when they must access health care, they also have a reduction in other unpaid bills and a lower incidence of account referral to collection agencies – a benefit to both the patients and their potential third-party creditors.

The authors state, “The financial protection provided by health insurance is arguably its most important function. This is particularly true in the case of Medicaid because of the relatively high prevalence of disease among low-income individuals and the substantial financial burden that illness imposes on those who become seriously ill or injured.”

Individuals who face large deductibles and other cost sharing in individual plans and employer-sponsored plans or who have inadequate subsidies for cost sharing in the ACA exchange plans are frequently exposed to financial hardship. It is the near absence of cost sharing (deductibles, copayments and coinsurance) in the Medicaid program that has made it so effective in protecting the personal finances of otherwise vulnerable individuals – in sharp contrast to the increasing financial burdens resulting from the inadequacies of the private plans.

Medicaid does have other problems. Too many physicians refuse to accept Medicaid patients because of the very low payment rates, especially specialists, thus access may be impaired. Also many states are shoving patients into Medicaid managed care plans to save even more money, and early experience suggests that there is a further deterioration in patient access and service. Thus merely expanding Medicaid is not a satisfactory solution to filling in our voids in health care today.

The lesson from this study is not that Medicaid should be expanded but rather that health insurance should provide complete financial protection from health care costs. That is proposed as one of the more important improvements in an Improved Medicare for All – a single payer national health program. Everyone could have health care without causing financial hardship for anyone. Costs would be controlled in a more patient-friendly manner by application of other important single payer policies.

Payments for cost sharing increasing rapidly over time

By Gary Claxton, Larry Levitt, Michelle Long
Peterson-Kaiser Health System Tracker, April 12, 2016

Rising cost-sharing for people with health insurance has drawn a good deal of public attention in recent years.  For example, the average deductible for people with employer-provided health coverage rose from $303 to $1,077 between 2006 and 2015.

To look at what workers and their families actually spend out-of-pocket for services covered by their employer-sponsored plan, we analyzed a sample of health benefit claims from the Truven MarketScan Commercial Claims and Encounters Database to calculate the average amounts paid toward deductibles, copayments and coinsurance.

From 2004 to 2014, the average payments by enrollees towards deductibles rose 256% from $99 to $353, and the average payments towards coinsurance rose 107%, from $117 to $242, while average payments for copays fell by 26%, from $206 to $152.  Overall, patient cost-sharing rose by 77%, from an average of $422 in 2004 to $747 in 2014. During that period, average payments by health plans rose 58%, from $2,748 to $4,354. This reflects a modest decline in the average generosity of insurance – large employer plans covered 86.7% of covered medical expenses on average in 2004, decreasing to 85.3% in 2014. Worker’s wages, meanwhile, rose by 32% from 2004 to 2014.

Individuals in the top 15 percent of health spenders (who together account for 74.8% of total health benefit costs for the sample), had substantially higher out-of-pocket costs, averaging $2,679 in 2014, including $1,249 in coinsurance payments, $928 in deductible spending, and $502 in copays.

As of 2014, 5.5% of all enrollees had deductible payments that exceeded $1,500 and 7.8% had overall cost-sharing payments that exceeded $2,500.

A limitation of these data is that they reflect cost sharing incurred under the benefit plan and do not include balance-billing payments that beneficiaries may make to health care providers for out-of-network services or out-of-pocket payments for non-covered services.

While average payments towards deductibles are still relatively low in the context of total household budgets, they have increased quite rapidly. Deductibles are the most visible element of an insurance plan to patients, which may help explain why consumers are showing concern about their out-of-pocket costs for care. Although health insurance coverage continues to pay a large share of the cost of covered benefits, patients in large employer plans are paying a greater share of their medical expenses out-of-pocket. And, while health care spending has been growing at fairly modest rates in recent years, the growth in out-of-pocket costs comes at a time when wages have been largely stagnant.

http://www.healthsystemtracker.org/insight/payments-for-cost-sharing-increasing-rapidly-over-time/

***

Comment:

By Don McCanne, M.D.

This is yet one more study that shows that deductibles and coinsurance are increasing quite rapidly in employer-sponsored health plans – plans that have been protected and encouraged by the Affordable Care Act (ACA) as they are the most common source of health care coverage in the United States. This increase in cost sharing is causing financial hardship, especially for those who have greater health care needs.

Avid supporters of ACA say that all we have to do is build on the system we have. Yet instead coverage is deteriorating, and insurers certainly show no inclination towards filling in the gaps at the cost of driving premiums further up into unaffordable ranges.

It will get worse since insurance innovations are designed to slow spending increases by directly or indirectly shifting more costs to the patients.

Under a well designed single payer system costs can be controlled without resorting to financial penalties for using care. How hot does the cauldron we are in have to get before we’re ready to jump out and go to Medicare for All?

Payments for cost sharing increasing rapidly over time

By Gary Claxton, Larry Levitt, Michelle Long
Peterson-Kaiser Health System Tracker, April 12, 2016

Rising cost-sharing for people with health insurance has drawn a good deal of public attention in recent years.  For example, the average deductible for people with employer-provided health coverage rose from $303 to $1,077 between 2006 and 2015.

To look at what workers and their families actually spend out-of-pocket for services covered by their employer-sponsored plan, we analyzed a sample of health benefit claims from the Truven MarketScan Commercial Claims and Encounters Database to calculate the average amounts paid toward deductibles, copayments and coinsurance.

From 2004 to 2014, the average payments by enrollees towards deductibles rose 256% from $99 to $353, and the average payments towards coinsurance rose 107%, from $117 to $242, while average payments for copays fell by 26%, from $206 to $152.  Overall, patient cost-sharing rose by 77%, from an average of $422 in 2004 to $747 in 2014. During that period, average payments by health plans rose 58%, from $2,748 to $4,354. This reflects a modest decline in the average generosity of insurance – large employer plans covered 86.7% of covered medical expenses on average in 2004, decreasing to 85.3% in 2014. Worker’s wages, meanwhile, rose by 32% from 2004 to 2014.

Individuals in the top 15 percent of health spenders (who together account for 74.8% of total health benefit costs for the sample), had substantially higher out-of-pocket costs, averaging $2,679 in 2014, including $1,249 in coinsurance payments, $928 in deductible spending, and $502 in copays.

As of 2014, 5.5% of all enrollees had deductible payments that exceeded $1,500 and 7.8% had overall cost-sharing payments that exceeded $2,500.

A limitation of these data is that they reflect cost sharing incurred under the benefit plan and do not include balance-billing payments that beneficiaries may make to health care providers for out-of-network services or out-of-pocket payments for non-covered services.

While average payments towards deductibles are still relatively low in the context of total household budgets, they have increased quite rapidly. Deductibles are the most visible element of an insurance plan to patients, which may help explain why consumers are showing concern about their out-of-pocket costs for care. Although health insurance coverage continues to pay a large share of the cost of covered benefits, patients in large employer plans are paying a greater share of their medical expenses out-of-pocket. And, while health care spending has been growing at fairly modest rates in recent years, the growth in out-of-pocket costs comes at a time when wages have been largely stagnant.

http://www.healthsystemtracker.org/insight/payments-for-cost-sharing-increasing-rapidly-over-time/

This is yet one more study that shows that deductibles and coinsurance are increasing quite rapidly in employer-sponsored health plans – plans that have been protected and encouraged by the Affordable Care Act (ACA) as they are the most common source of health care coverage in the United States. This increase in cost sharing is causing financial hardship, especially for those who have greater health care needs.

Avid supporters of ACA say that all we have to do is build on the system we have. Yet instead coverage is deteriorating, and insurers certainly show no inclination towards filling in the gaps at the cost of driving premiums further up into unaffordable ranges.

It will get worse since insurance innovations are designed to slow spending increases by directly or indirectly shifting more costs to the patients.

Under a well designed single payer system costs can be controlled without resorting to financial penalties for using care. How hot does the cauldron we are in have to get before we’re ready to jump out and go to Medicare for All?

The Virtues and Vices of Single-Payer Health Care

By Jonathan Oberlander, Ph.D.
The New England Journal of Medicine, April 14, 2016

The 2016 U.S. presidential campaign has produced many surprises. One unexpected turn is the reemergence of single-payer health insurance on the public agenda. Senator Bernie Sanders has made Medicare for All a centerpiece of his platform. His opponent for the Democratic party’s presidential nomination, former Secretary of State Hillary Clinton, has criticized Sanders’s plan as unrealistic. An old debate has thus reopened. What are the virtues and vices of single-payer reform? Is it a realistic option for the United States or a political impossibility?

First, a note on language. “Single payer” is often used loosely to refer to everything from Canadian national health insurance to the British National Health Service (NHS) and even Obamacare — though depicting the Affordable Care Act (ACA) as a “slippery slope” to single payer is bizarre, given that it relies on private insurance. U.S. observers often mistakenly lump all foreign health systems together under the single-payer label — a classification that grossly oversimplifies the range of models in place elsewhere. In some rich democracies (Germany, the Netherlands, and Switzerland among them) people enroll in multiple insurance plans, which are typically highly regulated and are operated by private companies or nonprofit associations. Alternatively, in the NHS, the government traditionally owned most hospitals and directly employed many physicians.

Most U.S. single-payer advocates instead have in mind emulating Canada, where all legal residents in each province or territory receive coverage from one government insurance plan for medically necessary hospital and physician services. Canadians can obtain private policies for supplemental services not covered by the government plan. The government does not directly employ most doctors, nor does it own most hospitals, though their payments come from the single provincial insurance program. Canadian national health insurance arrangements — and Taiwan has a similar system — resemble traditional U.S. Medicare, with public financing for privately delivered services. Sanders is not the only presidential candidate to find this model appealing. Donald Trump has praised the Canadian program, though recently he suggested it wouldn’t work here.

Proposals for U.S. single-payer reform have a long history. A 1943 bill subsequently endorsed by President Harry Truman in 1945 envisioned national health insurance funded through payroll taxes. That bill and subsequent efforts by the Truman administration to pass universal insurance went nowhere. However, Medicare, conceived in the 1950s and enacted in 1965, embodied the single-payer model. Medicare’s architects saw it as the cornerstone of a national health insurance system. They believed that Medicare would eventually expand — with children perhaps the next group to join the program — to cover the entire population. That aspiration was never realized. Meanwhile, Congress created Medicaid as a separate program for some categories of low-income Americans, including families with dependent children, further fragmenting the insurance pool.

Single payer enjoyed strong support during the early 1970s among liberal Democrats such as Senator Ted Kennedy (D-MA), yet it never came close to passing. Subsequently, its political fortunes faded. Democratic policymakers increasingly pursued incrementalism (primarily through Medicaid expansion) and more conservative models that relied on private insurance (managed competition) as the only feasible reform routes. Medicare itself underwent a transformation as the role of private insurers in the program grew substantially. The 2010 ACA represented both a landmark achievement in expanding access to insurance and the culmination of a turn away from single payer. In 2009, the House of Representatives did pass legislation creating a Medicare-like government insurance program that would be available to the uninsured in competition with private plans. But this “public option” couldn’t clear the Senate. Even with a Democratic president and large Democratic congressional majorities, a narrow remnant of single payer failed to pass.

Nevertheless, the single-payer approach enjoys a dedicated following among groups such as Physicians for a National Health Program, and Sanders’s embrace has generated renewed attention for the idea. Regardless of the outcome of the 2016 election, the single-payer debate will persist. The enduring appeal of Medicare for All is understandable, given the fragmented, inequitable, costly, profit-driven, and wasteful nonsystem that prevails in the United States. The ACA’s shortcomings are sufficiently serious, single-payer adherents argue, that Obamacare has left unsolved many of U.S. medicine’s major problems. For all the ACA’s considerable achievements, health insurance and medical care are still unaffordable for many people. In a country where nearly 30 million persons remain uninsured, where health insurance is increasingly thinned out by rising deductibles and cost sharing, where even insured patients face staggering bills and the prospect of medical bankruptcy, where myriad insurers and payment systems generate astonishing complexity, and where more money is spent on administration than on heart disease and cancer, it’s no surprise to hear calls for sweeping change.

The lessons of Canadian national health insurance are as straightforward as they are neglected. Having a single government-operated insurance plan greatly reduces administrative costs and complexity. It concentrates purchasing power to reduce prices, enables budgetary control over health spending, and guarantees all legal residents, regardless of age, health status, income, or occupation, coverage for core medical services. Canadian Medicare charges patients no copayments or deductibles for hospital or physician services. Controlling medical spending does not, the Canadian experience demonstrates, require cost sharing that deters utilization. The Canadian system is hardly perfect. All countries struggle with tensions among cost, access, and quality; at times, Canada has grappled with fiscal pressures, wait lists for some services, and public dissatisfaction. Yet its problems pale in comparison to those in the United States.

The substantive virtues of single-payer programs are compelling. But so are their political liabilities. Medicare for All, which aims to constrain health care spending, faces intense opposition from insurers, the medical care industry, and much of organized medicine. It would trigger fierce resistance from conservatives and the business community and anxiety in many insured Americans fearful about changing coverage and the specter of rationing. The ACA’s comparatively conservative reform approach inspired false charges of “socialized medicine,” “pulling the plug on grandma,” and “death panels.” It takes only a little imagination — or a look back at the history books — to predict the reactions that an actual single-payer plan would evoke.

Single payer would also require the adoption of large-scale tax increases. Although Americans would save money by not paying premiums to private insurers, the politics of moving immense levels of health care spending visibly into the federal budget are daunting, given the prevailing antitax sentiment. Furthermore, converting our long-established patchwork of payers into a single program would require a substantial overhaul of the status quo, including the ACA. Then there are the familiar institutional barriers to major reform within U.S. government, including the necessity of securing a supermajority of 60 votes in the Senate to overcome a filibuster.

In short, single payer has no realistic path to enactment in the foreseeable future. It remains an aspiration more than a viable reform program. Single-payer supporters have not articulated a convincing strategy for overcoming the formidable obstacles that stand in its way. Nor have they, despite substantial public support for single payer, succeeded in mobilizing a social movement that could potentially break down those barriers. The pressing question is not about whether Medicare for All can be enacted during the next presidential administration — it can’t — but where health care reform goes from here.

It’s possible that some states could, through waivers that begin in 2017, consider adding a public option to their marketplaces or even adopt single-payer systems. Yet Vermont’s recent struggles to make a modified single-payer plan work underscore the challenges to state action. At the federal level, incremental steps toward Medicare for All, such as expanding program eligibility to younger enrollees, are conceivable — though challenging in this political environment. Moreover, the fight over Obamacare is not over. Preserving and strengthening the ACA, as well as Medicare, and addressing underinsurance and affordability of private coverage is a less utopian cause than single payer. I believe it’s also the best way forward now for U.S. medical care.

http://www.nejm.org/doi/full/10.1056/NEJMp1602009#t=article

NEJM Interview with Dr. Jonathan Oberlander

Closing comments:

When we look at the entire patchwork of the American medical care system and our insurance system there’re still so many holes in it, there’s so much redundancy, and it’s so inefficient. And that’s why the single payer idea is going to resonate far beyond whatever the outcome of the 2016 election is. Because when you have a health insurance that leaves tens of millions uninsured, tens of millions underinsured, that is beset by administrative complexity and is governed too often by profit, there’s going to be an appetite for sweeping change. And whatever its political fortunes are, and I don’t think they’re particularly good, single payer is going to continue to speak to those who are disaffected by what’s going on in American medical care and are looking for something different, something better.

(The full 8 minute audio can be accessed for free at the link above.)

***

Comment:

By Don McCanne, M.D.

Although single payer advocates may be disappointed with Professor Oberlander’s conclusion that the best way forward now is to strengthen ACA and Medicare and to address underinsurance and the affordability of private coverage, we need to keep in mind that he has described the clear superiority of the single payer model, and that it still has widespread popular support. His pessimism is based on current political realities, which have been confirmed by over half a century of failure to advance comprehensive, universal single payer legislation.

Since single payer seems to be an imperative, why has it not been enacted? Oberlander writes, “Single-payer supporters have not articulated a convincing strategy for overcoming the formidable obstacles that stand in its way. Nor have they, despite substantial public support for single payer, succeeded in mobilizing a social movement that could potentially break down those barriers.”

He’s right, based purely on results to date. We have a lot of work to do.

News About Obamacare Has Been Bad Lately. How Bad?

By Reed Abelson and Margot Sanger-Katz
The New York Times, April 13, 2016

Ever since passage of the Affordable Care Act, a fierce debate has been waged over whether the law would work as advertised. While advocates promised that the design of new insurance markets would transform the way consumers buy health insurance, critics warned that the new market would never succeed. Reed Abelson and Margot Sanger-Katz have had front-row seats to the debate, and the two reporters took a few minutes to discuss when — and if — the market would stabilize.

Margot Sanger-Katz: Every time I write a story about the health law, I get comments and emails from people just above the income cutoff for subsidies. These are the people who have been most hurt by the health law. Plans on the exchanges are just really expensive for them, and often come with big deductibles, too. And if premiums keep rising, they’ll keep getting squeezed. Analysts from the Urban Institute have done the math and found that some of them are paying more than 25 percent of their income on health care now. Still, it is awfully hard to imagine Congress approving massive new spending to make Obamacare more generous. Hillary Clinton has some proposals about affordability, but they don’t include expanding subsidies.

Reed Abelson: One of the strengths of the law, and its main weakness, is its emphasis on keeping the status quo. While President Obama may have overpromised when he said you can keep your plan if you like it, the insurance isn’t radically different. The only way companies can seem to bring down prices is by narrowing networks of hospitals and doctors or hiking deductibles. While Bernie Sanders seems to be offering the most dramatic change by proposing that everyone switch to a government plan like Medicare, I’m still looking for a market response — some real change in how care is delivered that is much less expensive or at least more effective.

Margot Sanger-Katz: This is the thing I say whenever anyone asks me what I think about the health law. It basically baked in all of the complexity and dysfunction of the pre-existing American health care system.

Reed Abelson: We’re heading into the season when insurers and state regulators start talking about next year. Any thoughts on what we might expect?

Margot Sanger-Katz: I’m expecting them to ask for rate increases! The insurance companies are doing everything they can to broadcast their intentions to charge more. There are reasons we should expect the plans to do so even if the markets were already stable. Some of the early training-wheel programs set up by the law expire, which means the plans have to pay out more claims for really expensive patients.

http://www.nytimes.com/2016/04/14/upshot/news-about-obamacare-has-been-bad-lately-how-bad.html

***

Comment:

By Don McCanne, M.D.

Six years after the Affordable Care Act was signed into law we hear opinions ranging from what a phenomenal success it has been to what a miserable disaster it is. This brief excerpt from a discussion between two respected journalists who have followed the process closely, and who are well versed on the policy issues, provides us with a perspective on where we actually are on reform.

It is somewhat sobering. There have been some tradeoffs such as expanding nominally the numbers insured but with insurance products that further limit provider choice and shift more costs to the patients. Margot Sanger-Katz says that the health law “basically baked in all of the complexity and dysfunction of the pre-existing American health care system.”

Most of the system has remained about the same while the deficiencies introduced offset much of the gains. We are still left with tens of millions uninsured, tens of millions more who are underinsured, and costs that continue to increase in spite of the expansion of blunt financial barriers to beneficial health care services. Even employer-sponsored plans are beginning to deteriorate, especially because of higher deductibles and narrower networks.

Reed Abelson says that she is looking for “a market response — some real change in how care is delivered that is much less expensive or at least more effective.” Yet it has been confirmed over the last half century that markets do not work in controlling health care spending. Nothing in the Affordable Care Act will change that in spite of wishes that feeble policy measures such as ACA exchange competition, ACOs, shared shavings, bundling, wellness programs, meaningless rhetoric of quality over quantity, and other ACA concepts would revolutionize health care. The revolution is not happening.

So claims of phenomenal success or miserable disaster can be ignored since we really have not fundamentally changed the infrastructure of our system. But with that background, we actually have failed: We failed to enact an Improved Medicare for All which would have met our goals for reform. We can still do it, you know.

The Virtues and Vices of Single-Payer Health Care

By Jonathan Oberlander, Ph.D.
The New England Journal of Medicine, April 14, 2016

The 2016 U.S. presidential campaign has produced many surprises. One unexpected turn is the reemergence of single-payer health insurance on the public agenda. Senator Bernie Sanders has made Medicare for All a centerpiece of his platform. His opponent for the Democratic party’s presidential nomination, former Secretary of State Hillary Clinton, has criticized Sanders’s plan as unrealistic. An old debate has thus reopened. What are the virtues and vices of single-payer reform? Is it a realistic option for the United States or a political impossibility?

First, a note on language. “Single payer” is often used loosely to refer to everything from Canadian national health insurance to the British National Health Service (NHS) and even Obamacare — though depicting the Affordable Care Act (ACA) as a “slippery slope” to single payer is bizarre, given that it relies on private insurance. U.S. observers often mistakenly lump all foreign health systems together under the single-payer label — a classification that grossly oversimplifies the range of models in place elsewhere. In some rich democracies (Germany, the Netherlands, and Switzerland among them) people enroll in multiple insurance plans, which are typically highly regulated and are operated by private companies or nonprofit associations. Alternatively, in the NHS, the government traditionally owned most hospitals and directly employed many physicians.

Most U.S. single-payer advocates instead have in mind emulating Canada, where all legal residents in each province or territory receive coverage from one government insurance plan for medically necessary hospital and physician services. Canadians can obtain private policies for supplemental services not covered by the government plan. The government does not directly employ most doctors, nor does it own most hospitals, though their payments come from the single provincial insurance program. Canadian national health insurance arrangements — and Taiwan has a similar system — resemble traditional U.S. Medicare, with public financing for privately delivered services. Sanders is not the only presidential candidate to find this model appealing. Donald Trump has praised the Canadian program, though recently he suggested it wouldn’t work here.

Proposals for U.S. single-payer reform have a long history. A 1943 bill subsequently endorsed by President Harry Truman in 1945 envisioned national health insurance funded through payroll taxes. That bill and subsequent efforts by the Truman administration to pass universal insurance went nowhere. However, Medicare, conceived in the 1950s and enacted in 1965, embodied the single-payer model. Medicare’s architects saw it as the cornerstone of a national health insurance system. They believed that Medicare would eventually expand — with children perhaps the next group to join the program — to cover the entire population. That aspiration was never realized. Meanwhile, Congress created Medicaid as a separate program for some categories of low-income Americans, including families with dependent children, further fragmenting the insurance pool.

Single payer enjoyed strong support during the early 1970s among liberal Democrats such as Senator Ted Kennedy (D-MA), yet it never came close to passing. Subsequently, its political fortunes faded. Democratic policymakers increasingly pursued incrementalism (primarily through Medicaid expansion) and more conservative models that relied on private insurance (managed competition) as the only feasible reform routes. Medicare itself underwent a transformation as the role of private insurers in the program grew substantially. The 2010 ACA represented both a landmark achievement in expanding access to insurance and the culmination of a turn away from single payer. In 2009, the House of Representatives did pass legislation creating a Medicare-like government insurance program that would be available to the uninsured in competition with private plans. But this “public option” couldn’t clear the Senate. Even with a Democratic president and large Democratic congressional majorities, a narrow remnant of single payer failed to pass.

Nevertheless, the single-payer approach enjoys a dedicated following among groups such as Physicians for a National Health Program, and Sanders’s embrace has generated renewed attention for the idea. Regardless of the outcome of the 2016 election, the single-payer debate will persist. The enduring appeal of Medicare for All is understandable, given the fragmented, inequitable, costly, profit-driven, and wasteful nonsystem that prevails in the United States. The ACA’s shortcomings are sufficiently serious, single-payer adherents argue, that Obamacare has left unsolved many of U.S. medicine’s major problems. For all the ACA’s considerable achievements, health insurance and medical care are still unaffordable for many people. In a country where nearly 30 million persons remain uninsured, where health insurance is increasingly thinned out by rising deductibles and cost sharing, where even insured patients face staggering bills and the prospect of medical bankruptcy, where myriad insurers and payment systems generate astonishing complexity, and where more money is spent on administration than on heart disease and cancer, it’s no surprise to hear calls for sweeping change.

The lessons of Canadian national health insurance are as straightforward as they are neglected. Having a single government-operated insurance plan greatly reduces administrative costs and complexity. It concentrates purchasing power to reduce prices, enables budgetary control over health spending, and guarantees all legal residents, regardless of age, health status, income, or occupation, coverage for core medical services. Canadian Medicare charges patients no copayments or deductibles for hospital or physician services. Controlling medical spending does not, the Canadian experience demonstrates, require cost sharing that deters utilization. The Canadian system is hardly perfect. All countries struggle with tensions among cost, access, and quality; at times, Canada has grappled with fiscal pressures, wait lists for some services, and public dissatisfaction. Yet its problems pale in comparison to those in the United States.

The substantive virtues of single-payer programs are compelling. But so are their political liabilities. Medicare for All, which aims to constrain health care spending, faces intense opposition from insurers, the medical care industry, and much of organized medicine. It would trigger fierce resistance from conservatives and the business community and anxiety in many insured Americans fearful about changing coverage and the specter of rationing. The ACA’s comparatively conservative reform approach inspired false charges of “socialized medicine,” “pulling the plug on grandma,” and “death panels.” It takes only a little imagination — or a look back at the history books — to predict the reactions that an actual single-payer plan would evoke.

Single payer would also require the adoption of large-scale tax increases. Although Americans would save money by not paying premiums to private insurers, the politics of moving immense levels of health care spending visibly into the federal budget are daunting, given the prevailing antitax sentiment. Furthermore, converting our long-established patchwork of payers into a single program would require a substantial overhaul of the status quo, including the ACA. Then there are the familiar institutional barriers to major reform within U.S. government, including the necessity of securing a supermajority of 60 votes in the Senate to overcome a filibuster.

In short, single payer has no realistic path to enactment in the foreseeable future. It remains an aspiration more than a viable reform program. Single-payer supporters have not articulated a convincing strategy for overcoming the formidable obstacles that stand in its way. Nor have they, despite substantial public support for single payer, succeeded in mobilizing a social movement that could potentially break down those barriers. The pressing question is not about whether Medicare for All can be enacted during the next presidential administration — it can’t — but where health care reform goes from here.

It’s possible that some states could, through waivers that begin in 2017, consider adding a public option to their marketplaces or even adopt single-payer systems. Yet Vermont’s recent struggles to make a modified single-payer plan work underscore the challenges to state action. At the federal level, incremental steps toward Medicare for All, such as expanding program eligibility to younger enrollees, are conceivable — though challenging in this political environment. Moreover, the fight over Obamacare is not over. Preserving and strengthening the ACA, as well as Medicare, and addressing underinsurance and affordability of private coverage is a less utopian cause than single payer. I believe it’s also the best way forward now for U.S. medical care.

http://www.nejm.org/doi/full/10.1056/NEJMp1602009#t=article

NEJM Interview with Dr. Jonathan Oberlander

Closing comments:

When we look at the entire patchwork of the American medical care system and our insurance system there’re still so many holes in it, there’s so much redundancy, and it’s so inefficient. And that’s why the single payer idea is going to resonate far beyond whatever the outcome of the 2016 election is. Because when you have a health insurance that leaves tens of millions uninsured, tens of millions underinsured, that is beset by administrative complexity and is governed too often by profit, there’s going to be an appetite for sweeping change. And whatever its political fortunes are, and I don’t think they’re particularly good, single payer is going to continue to speak to those who are disaffected by what’s going on in American medical care and are looking for something different, something better.

(The full 8 minute audio can be accessed for free at the link above.)

Although single payer advocates may be disappointed with Professor Oberlander’s conclusion that the best way forward now is to strengthen ACA and Medicare and to address underinsurance and the affordability of private coverage, we need to keep in mind that he has described the clear superiority of the single payer model, and that it still has widespread popular support. His pessimism is based on current political realities, which have been confirmed by over half a century of failure to advance comprehensive, universal single payer legislation.

Since single payer seems to be an imperative, why has it not been enacted? Oberlander writes, “Single-payer supporters have not articulated a convincing strategy for overcoming the formidable obstacles that stand in its way. Nor have they, despite substantial public support for single payer, succeeded in mobilizing a social movement that could potentially break down those barriers.”

He’s right, based purely on results to date. We have a lot of work to do.