home
about
archives
|
CAN THE FREE MARKET RESCUE THE AMERICAN HEALTH CARE SYSTEM?
11/09/2007
PART FIVE: PRESCRIPTION FOR CHANGE: IMPLEMENTING SINGLE PAYER, UNIVERSAL HEALTH INSURANCE
I have a fantasy that a strong and popular Democratic president will soon offer a warning to the pharmaceutical and insurance industries that unless they come up with an acceptable plan to reform the health care system, one that would make insurance affordable for all including those with pre-existing conditions, and one that would cut administrative costs, as well as costs for prescription drugs, he or she as president would present a single player universal coverage plan to the Congress and would work tirelessly to get it enacted into law.
Knowing that they might be facing the end of their dominance of the health care industry, and, in the case of health insurance companies, perhaps even the end of their industry, I suspect they might be willing and able to find some modified market-based solutions that they can't seem to find now.
I can't imagine any democratic president having the guts to take this step anytime soon, which is why this is a fantasy, but I would really like to see just how creative these companies could be if their profits or even their very survival were threatened. The prospect of one's death, as they say, focuses the mind.
Right now, however, the insurance and pharmaceutical companies have the American people over a barrel and lawmakers in their pockets, and they are not about to do something that would take one penny out of their profits. And, realistically, I don't think they can craft a permanent solution. As I showed in my previous article, "Why the free market cannot fix the health care system," the very nature of the "free market" works against reasonably priced, universally accessible health care. So we will have to look for another way to reform the health care system.
In my view, the only realistic long term solution is the implementation of a single-payer universal system of health insurance.
HEALTH CARE GOALS: CONSERVATIVE VS. PROGRESSIVE
We have seen in the last four articles that there are huge problems in the American health care system. Costs are out of control and increasing. Millions have no health insurance, and millions more are underinsured. The employer provided system is falling apart as more companies eliminate health insurance as a benefit. Health insurance companies are increasingly in an adversarial relationship with the consumer. The population is aging and requiring more medical care and the young are becoming less healthy. Patients have little or no bargaining power. Inefficiency and high administrative costs characterize the entire health care system, and conservative "free market" solutions have not only NOT fixed things, they are part of a profit-based system that works against providing coverage to all Americans.
Before we look at some ideas for how to reform the system, let's review what goals we might want in an American health care system.
Here, however, we already run into problems. What your goals are depends a lot on your ideology – and what kind of country you think we should be. Do you believe all people are entitled to adequate health care just as all people are entitled to air, water, food, shelter, police and fire protection? Do you believe that for a nation to be healthy its citizens have to be healthy? Or do you believe health care is like other consumer commodities such as cars, clothing, cosmetics, cookware, and couches, and that access to health care is a privilege rather than a right?
If you embrace a conservative ideology you likely believe access to health care is a privilege that you must earn by making enough money to afford health insurance. (Of course, since most children don't earn money, their access depends on their parents' ability to afford health insurance.) Making health care a right, in your mind, would lead to people becoming lazy and dependent on the state. Furthermore, making health insurance the responsibility of the government takes it out of the private sector where there is money to be made. This, then, is both a moral and an economic issue to you.
If you promote conservative solutions, you likely have three broad goals: protecting the health care industries; covering only as many people as can be covered while still protecting profits of health care industries; and promoting self-sufficiency in the American public.
To achieve those goals you would insist people buy their own insurance policies or work for employers who provide coverage, provide tax incentives to individuals and businesses to purchase insurance policies, put caps on malpractice lawsuit settlements, and rely on the increased use of technology to eliminate waste and cut costs. These are very limited ways to reform a system that has so many problems, and there is no evidence that these changes will fix the problems.
If you embrace a progressive ideology, on the other hand, you believe health care is a right, something that all Americans must be able to access, regardless of ability to pay, and you also see that market solutions are inherently unfair in that they penalize those who, through no fault of their own, have health problems that make policies unaffordable, and who, because of low incomes, cannot afford increasingly expensive insurance premiums. Furthermore, you have determined the fundamental problem with private insurance: the more companies exclude high risk individuals, and the less care they authorize, the more profit they make. Thus, there are financial incentives to exclude people as well as to deny payment. You, too, see health care as a moral issue, though not in the same way conservatives do. To you, the moral issue is not one of laziness vs. self-sufficiency, but one of fairness and equality.
If you promote a progressive solution to the health care situation, as I do in this essay, you will have the following goals for an American health care system: universality, affordability, portability, efficiency, simplicity and fairness. Furthermore, you have many examples of systems in other countries where these goals are successfully met and to which you can turn for ideas to build an American system.
MAKING THE CASE FOR SINGLE PAYER UNIVERSAL HEALTH INSURANCE
1. UNIVERSALITY – Any progressive plan for health care reform would have as its first goal that everyone be covered by insurance and thus everyone have access to health care.
Universality is the most important goal for two reasons: it is the most moral of the goals, insuring equality and fairness, and it is the most practical in terms of savings. With universality there will be no more unfunded mandates, such as expensive emergency room care for those without health insurance.
Universality will also end the adversarial nature of the insurance underwriting practices that exclude high risk patients from coverage, and also reduce the amount of administrative costs that are associated with that underwriting.
The simplest, most efficient, and best way to achieve universal coverage is to convert to a single payer system.
2. AFFORDABILITY
Along with universality, there must be affordability for direct medical care and prescription drug costs. If all private insurance was eliminated, and either the federal or state governments were the single payer, there could be enormous reductions in cost. With no for-profit middlemen, no cost of underwriting to determine whom to cover and whom not to cover, no expensive paper pushers fighting over who pays, no huge advertising budget, no high executive pay, the replacement of expensive emergency room care with less expensive office visits, and with the bargaining power of a large government entity to keep the cost of prescription drugs low, a single payer system could reduce costs significantly – as much as 30%.
The question then becomes how would the federal or state governments afford such a system of covering everyone? There would need to be some sort of tax increase (or simply letting the Bush tax cuts expire), but this would not be as painful as one might think if everyone had good insurance coverage and employers were encouraged to increase the salaries of their employees because of the savings of not having to offer health insurance as a benefit.
3. PORTABILITY
One problem associated with our current system of (mostly) employer provided health insurance is that when one changes jobs, or is laid off or fired, one potentially loses one's health insurance. If one doesn't secure a new job that provides health insurance, or if one remains unemployed, the cost of individually purchased polices becomes extremely expensive. A single payer system would eliminate that all-too-common problem by covering all people, employed and unemployed, throughout their lifetimes.
4. EFFICIENCY
The current system, as we have seen, is enormously inefficient. Each insurance company has huge bureaucracy that is responsible for many costs not associated at all with the cost of health care itself. These include: the costs of screening applicants for risk, the costs of evaluating claims, high executive pay, advertising, other administrative costs, and the importance of remaining profitable, all of which raise the cost of medical care. In California, it is estimated that in the first year alone of a single payer system, about $20 billion in administrative costs would be saved.
Our current hybrid system of private insurance for those who have good benefits or are wealthy enough to purchase individual policies, and public insurance for those who are poor or elderly, still leaves a large gap into which 47 million Americans fall. These Americans must go without care, which ends up costing much more when they become ill, or seek assistance in emergency rooms which are mandated to provide care, but where care is enormously expensive. Since people who cannot afford health insurance most likely cannot afford to pay their emergency room bill, these bills go unpaid and raise the cost of health care, and ultimately health insurance premiums, even more. They also cause the closure of emergency rooms. In California alone, fifteen percent of emergency rooms closed between 1990 and 2003 because of uncompensated medical care. With everyone covered under a universal system, patients would be able to access care through less expensive clinics or doctor's offices rather than through the extremely costly emergency room, and more emergency rooms would remain open.
In addition, a universal system will pay for more preventative care, avoiding the high costs associated with preventable catastrophic diseases, and for earlier, less costly treatment of non-preventable diseases. In today's system, there is little incentive for insurance companies to pay for preventative care as many people change insurance companies over their lifetimes, and thus the company paying for the preventative care would not necessarily reap the rewards. In a single payer system, there would be much to gain in terms of potential savings associated with preventative care.
Finally, a universal system will help out industries that are struggling to survive because of the enormous health insurance premiums they pay for their employees and retirees. The American auto industry is just one example of an industry that may not survive unless some solution to the current crisis in employer funded health care can be found.
5. SIMPLICITY
In order to pass the Medicare prescription drug bill, there was much arm-twisting of reluctant Republicans by their leaders in Congress. This was because, rather than really helping seniors, the Republican leaders (some of whom are now lobbyists for the health care industry) were trying to provide a windfall for pharmaceutical and insurance companies. The bill, rather than using government as the single payer, required patients to sign up with one of many different types of private plans. This resulted in chaos and confusion among seniors who struggled to understand what plan would work best for them and their particular medical situation. Access to health care shouldn't be that complicated. It should be relatively easy to understand and to use.
Today, it isn't just the Medicare prescription drug plan that confuses patients. Just trying to read a private plan and determine what is covered, what isn't covered, what doctors you can see and what doctors you can't see, where you can go for care and where you can't go, are difficult enough. But it isn't just the individual patients who have to navigate through complicated policies. With the yearly increases in premiums, most businesses – especially small businesses – must re-evaluate their benefit plans each year to determine if they can continue with the same company, reduce the level of coverage, or even eliminate coverage. All of this evaluation costs business more in administrative costs.
You shouldn't need an advanced degree to access health care. A universal single-payer plan would be simple to understand and to use and would empower patients. With everyone having the same basic policy, it wouldn't take much time and effort to educate citizens as to how to access care. There would be no underwriting, no complicated application process and no required health exams.
6. QUALITY
There are two components of quality in any health care system. One has to do with maintaining a high quality of actual medical care, the other involves the quality of the system itself – how well the system works in terms of equality of access, maintenance of a healthy society, distribution of resources throughout the population, and respect for the dignity and autonomy of patients.
The World Health Organization measured national health care systems of countries according to the factors listed above and the United States was ranked only 37th. France, Italy, Spain, Germany, and Great Britain were all ranked higher. France received the top rating. What this indicates is that there is vast room for improvement in the quality of American health care. It also proves that nations with single payer universal coverage do much better.
Another argument often made against a single payer universal health plan is that the quality of medical care itself might go down as doctors might be paid less and thus be less motivated. There is no reason for this to be the case.
Unlike the system in Britain, where doctors are direct employees of the government with salaries determined by the government, here in the United States that is not even a remote possibility. (In other European countries doctors are not government employees.) While the government would pay for health care in much the same way private insurance does, doctors and hospitals would still be independent entities and would be paid in much the same way they are paid now by private insurance companies – either as independent contractors, or as salaried employees in group practices or in private, not-for-profit HMOs, like Kaiser. There would likely be less hassle over payment, however, as there would only be one insurance payer, making billing much simpler. There might even be the possibility that with lower administrative costs, doctors would receive more, rather than less compensation.
Additionally, it is rather insulting to imply that doctors might provide substandard care if they were not compensated extremely generously. Most doctors are motivated more by their desire to help patients that by the prospects of becoming wealthy. However, that being said, there is no reason that doctors, nurses and other health professionals cannot be paid well in any system of universal coverage.
7. FAIRNESS
There are two groups that must be treated fairly in any health care system: the patients and the providers. Doctors and other health care providers, who often work long grueling hours, must be compensated well for their services. As mentioned above, there is no reason to think that a universal single payer system cannot do that. With fewer people taking money out of the system, health care providers might actually be paid what they are worth.
Patients, as well, are likely to be treated much more fairly in a single payer system, in that they will not be refused coverage because of pre-existing conditions or risk factors, will not be refused care because of inability to pay, or have to file bankruptcy because of the bills associated with medical emergencies or life-threatening chronic conditions.
It is true that some insurance company employees would lose their jobs, but many of them could find employment in the new single payer system. Others could receive some compensation and retraining. In any case, conservatives who oppose the universal single payer system on the grounds that some workers might be laid off really have no grounds to stand on as they have absolutely no qualms at all about corporations laying off workers as they see fit in the ups and downs of the competitive free market.
As a nation, we must ask ourselves if we are more interested in saving some jobs that maintain the inefficient system we have and make medicine far more expensive than it needs to be, or are we more interested in saving lives?
PROPOSALS OF THE CANDIDATES
Most of the presidential candidates are not proposing single payer universal health insurance. The Republican candidates are proposing continuing the current hybrid system (although, if they could, they would love to eliminate Medicare and Medicaid) with just a few changes, mostly focused on market based proposals and tax incentives to help individuals pay for health insurance. They are all rather short on specifics, however, as most Republicans really do not see a big problem with the current system in spite of the fact that free market has proven itself incapable of providing health care for all. Furthermore, none of the candidates can present any evidence to prove that their plans will improve things. Their plans are, like so many Republican policies, "faith based."
Of the Democratic candidates, only Dennis Kucinich is proposing a single payer universal system. All of the other candidates, including the top three, are proposing a combination of public and private insurance, building on the systems that already exist. Most suggest that employer based coverage be continued, that Medicare and SCHIP be expanded, that there be mandated coverage for all Americans - or at least all children - and that subsidies be provided for those not covered by employers and unable to purchase policies on their own. A combination of other incentives and regulations would be implemented, including tax incentives for employers and individuals purchasing policies, community based premiums, portability of insurance, and implementation of cost saving technologies.
I must say I am somewhat disappointed in the Democratic plans. While most meet the goals of universality, affordability, portability and fairness, it is less certain that they meet the goals of efficiency, simplicity and quality. In fact, the plans are so complicated that it is difficult to understand just how they could be implemented in a timely or successful way.
The Democrats are at least making serious efforts, however, which is more than the Republicans are doing. All the GOP candidates are suggesting are a few cosmetic changes that will really do very little over time, and in fact may make things worse. The Democrats are offering these hybrid proposals because, I suspect, they believe promoting a universal single-payer system would generate so much opposition that they could get nothing done. They are, I presume, offering the best they can achieve for now.
Ultimately, however, these hybrid systems will not work. In time, as that becomes clear, we will have to turn to a single payer system. Fortunately we have some very good examples of successful systems in other countries. So far, the Republicans have managed to keep Americans focused on the drawbacks of single payer universal systems, rather than their successes, so we need to refute their objections.
OBJECTIONS AND REFUTATIONS
Objections to single payer universal health insurance, both historical and current, include ideological, economic, political, moral, and practical. In truth, however, some have been class or race based ones.
IDEOLOGY
By far the strongest opposition to single payer universal insurance comes from ideological conservatives who believe wholeheartedly in the free market, no matter how much evidence is presented to them that the market isn't working. This is almost an irrational belief system, one that they are unwilling to compromise on. In the past, they have always been able to defeat a universal plan by playing the "communist card." Since Truman first asked Congress to enact a universal health care plan, they have insisted such a plan would be "socialized medicine," not unlike what existed in the Soviet Union. In Truman's time, when anti-communist sentiment was extremely high, and the Soviet Union still existed as the great evil in the world, this tactic worked. However, the Soviet Union is gone and people have become more rational regarding single payer insurance.
Furthermore, the "socialized medicine" argument is easily refuted. No one today has proposed "socialized medicine," and the plans that have been developed, such as that of the Physicians for a National Heath Program, do not call for socialized medicine. In all the plans that have been seriously considered, the government is the insurer, not the provider, of medicine. Doctors would not be employers of the state, but private contractors or employees of non-profit corporations, and patients would be free to choose their own doctors. So while it might be more accurate to call it "socialized insurance," a single payer universal plan in the United States could not be called "socialized medicine."
ECONOMICS
Economically, opponents have tried to argue that creating a huge new government bureaucracy would be prohibitively expensive, but as we have shown the current system is what is killing us financially. European countries that have single payer systems provide better medicine at a much lower cost.
POLITICS
Politically, of course, it is understandable that conservatives would not want to see a universal system implemented, as it might actually be successful. An efficient and popular universal system might just put the final nail in the coffin of their privatization ideology. Conservatives have been working diligently since FDR's "New Deal" and LBJ's "Great Society" to dismantle what they call the "welfare state," even though two of the most popular programs in the country, Social Security and Medicare, are the legacy of those two administrations.
It is also understandable that politicians who benefit from the financial contributions of health care industry lobbyists would oppose a universal system as it would negatively impact their contributors. And it makes sense that the health care lobby itself would oppose such a plan as their profits would definitely be curtailed. This is regrettable for them, but it should not stop the people of this country, through their legislators, from implementing a needed reform.
MORALITY
Conservative ideology always contains a moral argument for independence and self-sufficiency and the ideology surrounding healthcare is no different. Conservatives oppose universal single payer because it would make health insurance an entitlement and, in their thinking, people would become soft and lazy and would overuse services. There is no evidence that this has happened in other countries, and no reason it has to happen here. This is where progressives and conservatives differ most, I believe. Progressives see access to doctors and medicine as a right, not a privilege, and in our current system where medicine has become so expensive, they see nothing wrong with guaranteeing that right. In fact, they see it as an obligation of the state to keep its citizens as healthy as possible. To progressives, the moral argument is about equality, and caring for the sick, rather than worrying about whether citizens might become dependent on the government.
There is another moral argument made in the health care debate, and that is that the private market, with its higher premiums for unhealthy or high risk individuals, actually encourages people to take better care of themselves so they can pay lower premiums. There are two problems with this argument. One is that many people who are at risk or who have medical problems are not in that position because they didn't take good care of themselves. They are at risk because of factors completely out of their control. I have known a number of women, for instance, who maintained extremely healthy lifestyles – eating well, exercising, maintaining a good weight, not smoking or drinking – who nonetheless developed breast cancer. And what about all the childhood cancers, and broken bones, and congenital problems? Are we to punish children and penalize their parents for something beyond anyone's control? A big problem I see coming, as we are better able to find genetic markers for inherited tendencies to develop certain diseases, is that individuals who have those markers will be unable to afford health insurance in the private market. This is a problem that can only be addressed by a single payer system in which all are treated the same.
The other problem with the argument, as I see it, is that our society actually makes maintaining a healthy lifestyle very difficult. Even as we encourage people not to smoke, tobacco companies continue to market products that are addictive. We tell people to eat healthier, but build more and more fast food restaurants that sell fat and sugar laden foods. Our work hours are long and our productivity up, but much of that can be attributed to our addiction to caffeine, enabled by the recent arrival of coffeehouses on every corner of the nation. If we really want people to be healthier, we can't just preach to them and refuse them health insurance. We have to demand that our corporations stop selling unhealthy lifestyles.
PRACTICALITY
The Medicare system has proven to be far more efficient and cost effective than the private sector in health care, for reasons already outlined, and it could be the starting point for a universal system. There will obviously be problems in getting such a system started, but one advantage this country has is that it can look at the many single payer models in other countries to help eliminate problems before they begin. There will definitely be an adjustment period, but as we do nothing, things are only getting worse. Eventually there will have to be drastic or fewer and fewer people will be able to access care and the population will become increasingly unhealthy. We could be just one epidemic away from complete disaster.
RACE AND CLASS
Finally, as in so many areas of American life, race and class play a role in the health care debate. Truman's plan for universal health insurance was defeated by several powerful lobbies, including Southern groups opposed to what they feared would mean the forced integration of hospitals. And those in the upper and upper middle classes who have excellent health insurance today are likely to worry about things like rationing, and not getting the special treatment they now enjoy with their expensive policies.
It is probably true that decisions will eventually have to be made about which procedures are covered and which are not, but that will not be an immediate concern. Sometimes when we look closely at examples of rationing cited by opponents of single payer universal health care, we can't help but be amused. One example frequently used is that of hip replacements. In Canada, people must wait for hip replacements, while in the United States, there is only the normal period anyone waits for any non-emergency surgery. But while this comparison is made to prove that private health insurance is better than government insurance, the reality is that most hip replacements in the United States are paid for by Medicare, the government run system for the elderly.
Opponents of single payer most often use the rationing argument with respect to Canada, and insist that citizens of that country are unhappy with their system. They prove this by pointing to the few who do not want to wait for surgery in that country and so cross the border and pay for surgery in the United States. This number, by all accounts, is not a large number, and is obviously limited to those who can afford to pay for their own surgeries. The wealthy will always object to having to wait, because they are used to getting what they want, when they want it. But there are millions of Canadians who are happy with their system. And while the system is not perfect, neither is our market based system, where a lot more people are unhappy with the system than the few who are unhappy in Canada.
The truth is that we have informal rationing now. Those who are denied service are the poor and the uninsured, regardless of how serious their health problems are. And the ability to purchase insurance is based not on how much one needs it, but on how much one doesn't need it. Services are not delivered on the basis of the urgency of one's need for treatment, but on the basis of one's ability to pay. This is irrational rationing.
Those who are healthy and who can pay understandably want to maintain their privileged position, no matter how unfair this is to their fellow citizens. But to say that a single payer universal system would ration health care more than it is being rationed now is simply dishonest.
The final questions, then, are these? Should ideology trump practicality? Should it trump morality? Should it trump equality? Should we continue to put patches on a system that is fundamentally broken, or should we do the hard thing and make big changes? Should we continue to pay the most of any nation for health care and still rank only 37th in terms of the quality of our system? And should we be satisfied with a health care system that is increasingly dividing the haves from the have-nots?
Or should the United States finally do what every other Western industrialized nation has done and guarantee equal access to health care to all of its citizens?
-Ellen Terich
Check out my new blog at http://doctordem.blogspot.com
All content © 2005 outragedcitizen.com
|
