Save lives and money by expanding Medicare to all

FireDogLake

With media attention focused on the debt-ceiling drama in Washington, and with so many Americans rightly preoccupied with the frightening level of joblessness and bleak state of the economy, it might seem strange to urge a national celebration of Medicare’s 46th anniversary this Saturday, July 30.

After all, if we’re to believe top lawmakers, Medicare is part of the problem, right? Aren’t we supposed to be talking about raising the eligibility age from 65 to 67, reducing benefits, increasing seniors’ co-pays and deductibles or, even more dire, abolishing the program altogether and handing seniors vouchers to buy private insurance?

Wrong. Despite its market-obsessed detractors and those who would weaken the program in the name of deficit reduction, Medicare is the solution, not the problem. More precisely, an improved Medicare for all – a single-payer health system – is the right prescription for treating not only our health care woes, but our ailing economy as well.

How so?

The biggest albatross around the neck of our health care system is the private insurance industry, which remains firmly entrenched under the new federal health law.

Thanks to companies like UnitedHealthcare, WellPoint, Aetna, Humana and Cigna, our nation’s patients, businesses, and health providers are chronically tormented by skyrocketing premiums, denials of care, endless paperwork and bureaucracy, and the spectacle of obscene CEO salaries and insurance company profits.

And what does this so-called system get us? Fifty-one million people who have no coverage at all; 45,000 annual deaths linked to lack of coverage; a million personal bankruptcies annually (62 percent of the total) linked to illness or medical debt; and World Health Organization indicators that put us in 37th place globally, even though we spend twice as much per capita as any other nation.

Waste in our system is staggering. Research shows about 31 cents of each U.S. health care dollar is currently spent on administration, over half of which is unnecessary. That translates into $400 billion wasted annually. If we recaptured that money and applied it to clinical care – as we could under a single-payer system – we’d be able to assure everyone comprehensive, first-dollar, high-quality coverage.

So how does this relate to Medicare? As it happens, Medicare is an excellent model for a more rational, single-payer alternative to our present dysfunctional arrangements.

Medicare works. Patients go to the doctor or hospital of their choice. It’s efficient: its overhead is less than 3 percent, less than a quarter of private insurers’. Costs rise more slowly in Medicare than in the private insurance sector.

Medicare isn’t perfect, of course. The program can be empowered to negotiate with drug companies for lower prices. The deductibles and co-pays can be eliminated. Its funding can be augmented from general revenues or a miniscule tweaking of the general payroll tax rate.

But thanks to Medicare, the health and economic security of millions of seniors, the severely disabled, and our nation’s families have dramatically improved. It should not be weakened or destroyed. Those who advocate doing so will reap a whirlwind of popular rage, as GOP Rep. Paul Ryan, an exponent of ending Medicare, has found out.

In such an environment, the obvious approach of President Obama and Congress should be to join the American people in embracing Medicare, not to cut it. But right-wing ideologues, with personal assists from the president himself, have forced a debate on the wrong issue: the debt ceiling, as opposed to enhancing the health status of the American people.

The paradox in this flawed debate is that the solution to our nation’s fiscal problems would be greatly simplified by the creation of a streamlined, efficient and high-quality single-payer Medicare-for-all program. Data suggests that if we had a single-payer system like other industrialized nations, we’d currently have a federal budget surplus.

The 46th anniversary of Medicare should be a time to celebrate its achievements and to strengthen it by expanding it to all.

Quentin D. Young, M.D., is national coordinator of Physicians for a National Health Program (www.pnhp.org) and former chief of internal medicine at Cook County Hospital in Chicago.

Medicare for All: Fair, Frugal, and Inclusive

CommonDreams.org

For 30 years I’ve been teaching young doctors how to practice primary care medicine at a center-city clinic in Toledo. Every day we witness heart-wrenching scenes right out of a Charles Dickens novel -- scenes that illustrate the cruelty, arbitrariness and absurdity of our health care “system.”

Imagine for a moment a 64-year-old, low-income and uninsured man whose condition requires hospitalization and specialty care. Due to the likely cost of his treatment, he and his family could soon be facing bankruptcy. As if the physical suffering were not enough, he’s now grappling with a terrible financial crisis.

Right next to him is another patient with the same condition and of similarly modest means. However, because he’s 65 and enrolled in Medicare, he’s able to get dignified and relatively hassle-free care, without the worry of a financial shipwreck. He can go to the doctor and hospital of his choice, get treated and not face overwhelming medical bills.

Two patients, two very different stories -- all because one person just happened to have been born a year earlier than the other.

Medicare, whose 46th anniversary will be observed July 30, has been a lifesaver for millions of elderly and severely disabled Americans. It’s been a major pillar of financial security for our nation’s families. And yet there are those in Congress today who would weaken or even dismantle it in the name of “fiscal responsibility."

The Medicare program has many virtues. It has created incentives for hospitals and doctors to improve the quality of care. It has produced better cost control than the private sector, despite giving patients freedom to see any doctor and go to any hospital.

The cost of administering the program is in the 1.3 percent to 3 percent range, much less than the 12-14 percent range typical of big employer-based private plans, and the 25-30 percent overhead associated with individual plans.

Given these strengths, Medicare should have been the model for health reform. Instead, in passing the Affordable Care Act, Congress added a third floor to house with a crumbling foundation. That crumbling foundation is our inefficient, wasteful private-insurance-based system of financing health care.

Private insurers make money by screening out the sick, denying claims and raising premiums. They cause us to waste enormous amounts of money on excess paperwork and bureaucracy — their own paperwork and the paperwork they inflict on hospitals, patients and doctors like me. An estimated 31 cents of every health care dollar goes toward administration in U.S. health care, at least half of it unnecessary.

It doesn’t have to be this way. Our nation needs to enact a single-payer national health insurance program, an improved Medicare for all.

Instead of the being saddled with the mean-spirited, wasteful and exclusionary insurance arrangements we have now, an improved Medicare for all program would be fair, frugal and inclusive.

By replacing the private insurers with a single, streamlined, publicly financed system that handled all bills, we’d recapture about $400 billion annually that’s currently spent on unnecessary paperwork -- enough to provide comprehensive coverage to all the uninsured and to improve coverage for the rest of us.

Such a system could negotiate pharmaceutical prices like the Veterans Administration does, lowering drug costs by about 40 percent. The same principle would apply to other supplies and services, helping us rein in costs.

The burden of rising health care costs on businesses would be sharply reduced, thereby enhancing the competitiveness of U.S. products overseas. Lowering out-of-pocket health cost would leave more money for discretionary spending that stimulates the economy.

Alarmingly, the budget deficit is prompting some in Washington to talk about cutting Medicare or delaying eligibility to age 67. That would be exactly the wrong direction in which to go. Medicare is the victim of rising health costs, not its cause.

It’s not too late to do the right thing. We should celebrate Medicare’s birthday by improving it and expanding it to all. The new system will save lives, save money and will place our nation on a path to become one of the best health systems in the world -- something of which we can all be proud.

Johnathon Ross, M.D., M.P.H., is past president of Physicians for a National Health Program and an executive committee member of the Single Payer Action Network in Ohio (www.spanohio.org)

Single-payer system is the only answer

By David Moynahan, M.D.
Letters, Tallahassee Democrat

Re "Progressives have debt-reduction ideas, too" (Eugene Robinson, July 11).

I was heartened to see yet another article in support of single-payer health care. All the railing against "Obamacare" is just a distraction from our currently failing health care system, and "Obamacare" is hardly any better than the old system.

Those advocates of "Leave My Healthcare Alone" aren't admitting to themselves that as "their" plan keeps getting more expensive or offering fewer benefits, they too might get squeezed out. Every day, more employers are opting out of providing health care, adding to the number of uninsured Americans. The uninsured seek only the most expensive health care (emergency room or catastrophic) for which they can't pay, and the hospitals add those losses to their costs for everyone else.

So those with insurance pay for everyone else already. Single-payer systems around the world provide better (yes, better, by every measurable outcome) health care for half the cost. We need to wake up and demand true health care reform. Advocates of the status quo are like a ship's passengers who demand that the captain stay on course and that the band keep playing instead of repairing a bad leak in the sinking USS Health Care.

David Moynahan, M.D., practices family medicine in Crawfordsville, Fla.

Messing With Medicare

New York Times

At the time of writing, President Obama’s hoped-for “Grand Bargain” with Republicans is apparently dead. And I say good riddance. I’m no more eager than other rational people (a category that fails to include many Congressional Republicans) to see what happens if the debt limit isn’t raised. But what the president was offering to the G.O.P., especially on Medicare, was a very bad deal for America.

Specifically, according to many reports, the president offered both means-testing of Medicare benefits and a rise in the age of Medicare eligibility. The first would be bad policy; the second would be terrible policy. And it would almost surely be terrible politics, too.

The crucial thing to remember, when we talk about Medicare, is that our goal isn’t, or at least shouldn’t be, defined in terms of some arbitrary number. Our goal should be, instead, to give Americans the health care they need at a price the country can afford. And throwing Americans in their mid-60s off Medicare moves us away from that goal, not toward it.

For Medicare, with all its flaws, works better than private insurance. It has less bureaucracy and, hence, lower administrative costs than private insurers. It has been more successful in controlling costs. While Medicare expenses per beneficiary have soared over the past 40 years, they’ve risen significantly less than private insurance premiums. And since Medicare-type systems in other advanced countries have much lower costs than the uniquely privatized U.S. system, there’s good reason to believe that Medicare reform can do a lot to control costs in the future.

In that case, you may ask, why didn’t the 2010 health care reform simply extend Medicare to cover everyone? The answer, of course, is political realism. Most health reformers I know would have supported Medicare for all if they had considered it politically feasible. But given the power of the insurance lobby and the knee-jerk opposition of many politicians to any expansion of government, they settled for what they thought they could actually get: near-universal coverage through a system of regulation and subsidies.

It is, however, one thing to accept a second-best system insuring those who currently lack coverage. Throwing millions of Americans off Medicare and pushing them into the arms of private insurers is another story.

Also, did I mention that Republicans are doing all they can to undermine health care reform — they even tried to undermine it as part of the debt negotiations — and may eventually succeed? If they do, many of those losing Medicare coverage would find themselves unable to replace it.

So raising the Medicare age is a terrible idea. Means-testing — reducing benefits for wealthier Americans — isn’t equally bad, but it’s still poor policy.

It’s true that Medicare expenses could be reduced by requiring high-income Americans to pay higher premiums, higher co-payments, etc. But why not simply raise taxes on high incomes instead? This would have the great virtue of not adding another layer of bureaucracy by requiring that Medicare establish financial status before paying medical bills.

But, you may say, raising taxes would reduce incentives to work and create wealth. Well, so would means-testing: As conservative economists love to point out in other contexts — for example, when criticizing programs like food stamps — benefits that fall as your income rises in effect raise your marginal tax rate. It doesn’t matter whether the government raises your taxes by $1,000 when your income rises or cuts your benefits by the same amount; either way, it reduces the fraction of your additional earnings that you get to keep.

So what’s the difference between means-testing Medicare and raising taxes? Well, the truly rich would prefer means-testing, since they would end up sacrificing no more than the merely well-off. But everyone else should prefer a tax-based solution.

So why is the president embracing these bad policy ideas? In a forthcoming article in The New York Review of Books, the veteran journalist Elizabeth Drew suggests that members of the White House political team saw the 2010 election as a referendum on government spending and that they believe that cutting spending is the way to win next year.

If so, I would respectfully suggest that they are out of their minds. Remember death panels? The G.O.P.’s most potent political weapon last year — the weapon that caused a large swing in the votes of older Americans — was the claim that Mr. Obama was cutting Medicare. Why give Republicans a chance to do it all over again?

Of course, it’s possible that the reason the president is offering to undermine Medicare is that he genuinely believes that this would be a good idea. And that possibility, I have to say, is what really scares me.

Medicare proves to be the solution

Letter, Times Union (Albany, NY)

I just returned from Connecticut, where I had a hip replacement without incident, followed by rehabilitation at my son's home.

With Medicare on the cutting table, I fear the results of compromises. Traditional Medicare allows free choice of hospital and physician, not circumscribed by place of treatment. This is not true of Medicare Advantage, a privatized form of Medicare.

Medicare has a proven overhead of less than 4 percent, while private insurance overhead is 10 percent to 30 percent.

Hip surgery and medical care and drugs are costly, but need not be as costly if we had a system in which we could negotiate drug prices, hospital fees and medical fees, in which there was only one bill reimbursed by a single payer. The savings would be enough to insure all the uninsured so that we could have improved traditional Medicare for all.

As we celebrate this month of the outstanding 46 years of Medicare accomplishment, we suggest that Medicare is not the problem; it is the solution.

Richard Propp, M.D.
Capital District Alliance for Universal Healthcare
Albany

The Solution to the Federal Debt: Expand Medicare, Don't Cut It

Huffington Post

With the August 2 deadline for increasing the debt ceiling fast approaching, the beltway media is quick to praise the "courage" of politicians who propose cutting Medicare, whether it's Paul Ryan for proposing to turn Medicare into a voucher program, or President Obama for proposing more modest cuts like increasing the eligibility age from 65 to 67 or "means testing" benefits based on income. But there's nothing courageous about putting more of the burden of medical care onto the backs of seniors who have spent a lifetime paying Medicare taxes in order to guarantee their medical security when they get older.

If our leaders want to show real political courage when it comes to the federal debt, they should try this statement on for size:

"The government doesn't have a long-term debt crisis. It has a long-term health cost crisis. The solution isn't turning Medicare into a voucher program or cutting benefits. The solution is expanding Medicare to cover all Americans."

If America financed healthcare the way other rich capitalist countries do, there would be no federal deficit -- even without other spending cuts or tax increases -- and America could still afford to provide healthcare to all its citizens.

But if America reduced its healthcare costs to the same percentage of GDP as Canada, France, Germany, Holland or the UK, deficits would disappear and would even turn into surpluses.

America's per capita healthcare costs are twice those of other developed countries. In 2008 America's per capita healthcare costs were $7538 compared to $4079 in Canada, $3698 in France, $3737 in Germany, $4063 in Holland and $3129 in the UK. Yet on average, citizens of those countries live two years longer than Americans.

Since the federal government pays approximately half of America's healthcare costs through Medicare, Medicaid, the VA, tax benefits, and other programs, America's supersized healthcare costs are the biggest drivers of long-term government debt.

What's the difference between America and the rest of the developed capitalist world when it comes to healthcare costs? Only America has a system driven by for-profit health insurance. Every other capitalist country has either a form of government-run single payer health insurance (in effect "Medicare for All") or a highly regulated utility.

Approximately 30% of every dollar spent in the US on private health insurance goes to administrative costs, marketing, executive salaries, and profits (as opposed to 2%-3% to administer Medicare) wasting hundreds of billions a year. Moreover, under a system of multiple payers, it's impossible to negotiate substantially lower costs from healthcare providers. In contrast, other advanced countries have a government-administered monopsony (the opposite of a monopoly under which there's one buyer and multiple sellers) so the government can negotiate cost savings, as well as ensure that providers focus their resources where they're needed (e.g on primary care instead of on more profitable specialties.) That's the biggest reason why other advanced countries spend half as much per capita on healthcare and get better results.

So there's nothing politically courageous about proposing to change Medicare from a system of guaranteed care for all elderly Americans to a voucher system in which 65-year-olds would initially have to contribute over $6,000 a year out-of-pocket to private health insurance companies in the first year of the program, as Paul Ryan and House Republicans are advocating. Republicare doesn't lower the per capita cost of American healthcare or extend healthcare to the uninsured -- It simply shifts the cost from the government onto the backs of America's oldest and most vulnerable citizens.

Though slightly less draconian, there's nothing politically courageous about the mainstream Democratic approach either. The Affordable Health Care Act -- "Obamacare" -- subsidizes the private insurance industry while offering little but pilot programs to lower costs. Obama's recent proposals to increase the Medicare eligibility age from 65 to 67 or to "means test" Medicare -- which starts to transform Medicare from a social insurance program to a welfare program -- begins to dismantle Medicare as we know it brick-by-brick, rather than in one fell swoop like the Ryan plan.

Although none of these proposals may be enacted right away, the danger is that if medical inflation continues to escalate the cost of Medicare, Medicare will eat up more and more of the federal budget and a few years down the line, there may be little choice but to either significantly cut Medicare benefits or transform it into a voucher system. Reluctant as I am to admit it, I must give a certain amount of credit to Paul Ryan for telling the inconvenient truth that given the rising cost curve, in the long-term Medicare as we now know it may be not financially sustainable.

Republicans and conservatives have no problem making maximalist right-wing proposals -- like opposing even one penny in tax increases for the rich, proposing a balanced budget Constitutional amendment, or supporting Ryan's plan to turn Medicare into an underfunded voucher program -- even though they know that their proposals will not be enacted in the short-run. But by loudly trumpeting them, they move the political center to the right. Democrats like Obama respond by moving in a rightward direction, showing a willingness in principle to sharply curtail domestic social programs in return for relatively small tax increases in the form of closing loopholes, or proposing to start the process of reducing Medicare, Medicaid and Social Security with an initial series of relatively small cuts that opens the floodgates to bigger cuts.

To move the center back to the left, Democrats and progressives have to "go long," too. And "going long" doesn't mean advocating a "grand bargain" like that proposed by the chairmen of Obama's Deficit Commission which focuses on reducing the deficit instead of creating jobs, advocates 2/3 (or more) in spending cuts to 1/3 (or less) in revenue increases, and begins to cut the key social safety net programs like Social Security, Medicare and Medicaid.

"Going long" for progressives and Democrats should mean making audacious proposals which shift power back from the wealthy to the middle class like meaningful increases in taxes for the wealthy and corporations, serious government-funded programs to create jobs, a more rapid end to the war in Afghanistan, which is draining the national treasury without making America safer, and major cuts to the American defense budget, which equals the defense budget of the rest of the world combined. These type of proposals might not pass this Congress, or even the next one. But they begin to redefine the nature of the political debate and move at back to the left from its dramatic rightward shift in recent years.

When it comes to health care, "going long" means being truthful with the American people and telling them that to protect Medicare in the long-term while controlling the federal debt, America will have to join the rest of the civilized world and enact Medicare For All.

Obama pushing for cuts to Social Security, Medicare

Salon.com

This is at once an extraordinary and completely unsurprising headline:

For months, the standard narrative among progressive commentators was that Republicans were outrageously exploiting the debt ceiling deadline to impose drastic entitlement cuts on a resisting and victimized Democratic President (he's weak in negotiations!), but The Post article makes clear that the driving force behind these cuts is the President himself, who is pushing for even larger spending cuts than the GOP was ready to accept:

President Obama is pressing congressional leaders to consider a far-reaching debt-reduction plan that would force Democrats to accept major changes to Social Security and Medicare in exchange for Republican support for fresh tax revenue. . . . As part of his pitch, Obama is proposing significant reductions in Medicare spending and for the first time is offering to tackle the rising cost of Social Security, according to people in both parties with knowledge of the proposal. The move marks a major shift for the White House and could present a direct challenge to Democratic lawmakers who have vowed to protect health and retirement benefits from the assault on government spending.

This morning's New York Times article similarly makes clear that it is the President who is demanding an even larger "deficit reduction" package than has previously been discussed. Headlined "Obama to Push for Wider Deal With G.O.P. on Deficit Cuts," the article reports that "President Obama has raised his sights and wants to strike a far-reaching agreement on cutting the federal deficit" and that he "wants to move well beyond the $2 trillion in savings sought in earlier negotiations and seek perhaps twice as much over the next decade." This is all in pursuit of "an agreement that ma[kes] substantial spending cuts, including in such social programs as Medicare and Medicaid and Social Security -- programs that had been off the table." The President, as part of the package, is reportedly seeking some elimination of modest tax "loopholes" that benefit wealthy Americans to claim, absurdly, that there is "balanced" sacrifice.

It's true that these articles rely upon anonymous sources, though multiple such sources close to the negotiations -- from both parties -- are cited in consensus about what is taking place, and there are numerous other reports entirely consistent with these. It's been bleedingly obvious for some time that the bipartisan D.C. political class and the economic factions that own it have been intent on massive cuts to Social Security and Medicare, but the combination of deficit hysteria (repeatedly bolstered by Obama) and the manufactured debt ceiling deadline has, by design, created the perfect pretext to enable this now. As one "Democratic official" told the Post: "These moments come along at most once a decade. And it would be a real mistake if we let it pass us by." Naomi Klein's Shock Doctrine is not a GOP-exclusive dynamic.

How many people who voted for Obama in 2008 would have expected a headline like this a short two-and-a-half years later? Many more than should have. As Matt Taibbi explains in trumpeting Frank Rich's superb new New York article detailing Obama's subservience to Wall Street:

Throughout 2008, it was hard to shake the feeling that this was a politician whose legacy could still go either way. There were an awful lot of troubling signs on the horizon in Obama’s campaign, not the least of which being the enthusiastic support he was receiving from Wall Street.

Obama in part ran a very slightly economically populist campaign, but the tens of millions pouring into his campaign coffers from the very rich (and specifically from hedge funds) told all of us that we probably shouldn’t expect those promises to come off. For a piece I wrote that summer, I asked people in Washington why Wall Street would be throwing money at a guy who was out there on the stump pledging to reach into their pockets:

"Sadly, the answer to that question increasingly appears to be that Obama is, well, full of shit. . . . These populist pledges sound good, but many business moguls appear to be betting that the tax policies, like Obama himself, are only that: something that sounds good. 'I think we don't want to make too much of his promises on taxes,' says Robert Pollin, professor of economics at the University of Massachusetts. 'Not all of these things will happen.' Noting the overwhelming amount of Wall Street money pouring into Obama's campaign, even elitist fuckwad David Brooks was recently moved to write, "Once the Republicans are vanquished, I wouldn't hold your breath waiting for that capital-gains tax hike."

Disgustingly, Brooks turned out to be right, and the narrative of the Obama presidency did end up turning sour, on that front anyway.

When I first began writing about politics in late 2005, the standard liberal blogosphere critique -- one I naively believed back then -- was that Democrats were capitulating so continuously to the Bush agenda because they "lacked spine" and were inept political strategists: i.e., they found those policies so very offensive but were simply unwilling or unable to resist them. It became apparent to me that this was little more than a self-soothing conceit: Democrats continuously voted for Bush policies because they were either indifferent to their enactment or actively supported them, and were owned and controlled by the same factions as the GOP.

Now, Democratic commentators -- mostly the President's most hardened loyalists -- continue to invoke this "he's-weak-and-inept" excuse for Obama, but the evidence is far too abundant to sustain it any longer. As Paul Krugman -- long more clear-eyed than most progressives about Obama -- explained this week:

Since Obama keeps talking nonsense about economics, at what point do we stop giving him credit for actually knowing better? Maybe at some point we have to accept that he believes what he’s saying. . . . , here’s an unprofessional speculation: maybe it's personal. Maybe the president just doesn’t like the kind of people who tell him counterintuitive things, who say that the government is not like a family, that it’s not right for the government to tighten its belt when Americans are tightening theirs, that unemployment is not caused by lack of the right skills. Certainly just about all the people who might have tried to make that argument have left the administration or are leaving soon.

And what's left, I’m afraid, are the Very Serious People. It looks as if those are the people the president feels comfortable with. And that, of course, is a tragedy.

I think Krugman's "personal" explanation -- that Obama is far more comfortable with "neo-liberal centrists" (i.e., corporatists) than with actual liberals -- is basically true (Frank Rich put it this way: "For all the lurid fantasies of the birthers, the dirty secret of Obama’s background is that the values of Harvard, not of Kenya or Indonesia or Bill Ayers, have most colored his governing style. He falls hard for the best and the brightest white guys"). But it's also about ideology, conviction, and self-interest: Obama both believes in the corporatist agenda he embraces and assesses it to be in his political interest to be associated with it. If it means "painful" entitlement cuts for ordinary Americans at a time of massive unemployment, economic anxiety and exploding wealth inequality, so be it.

Krugman understandably describes this dynamic in the context of the debt battle because that's the area on which he focuses most, but this is the same exact dynamic that drives the Obama presidency in almost every realm. In the context of foreign policy and civil liberties, the public-private National Security State (the "Fourth Branch" of Government) is his Wall Street; military and intelligence officials and defense contractors are his Geithner/Summers/Dimon; and endless embrace of the Bush/Cheney Terrorism template of militarism and civil liberties assaults is his cutting of Social Security and Medicare. This is who Barack Obama is; it's what drives his presidency in every realm, not just in economic policy.

What's particularly revealing in the Social Security/Medicare assault is the political calculation. The President obviously believes that being able to run by having made his own party angry -- I cut entitlement programs long cherished by liberals -- will increase his appeal to independents and restore his image of trans-partisan conciliator that he so covets. But how could it possibly be politically advantageous for a Democratic President to lead the way in slashing programs that have long been the crown jewels of his party, defense of which is the central litmus test for whether someone is even a Democrat? The answer lies in how lacking in credibility is this statement, from The New York Times:

"Depending on what they decide to recommend, they may not have Democrats," Senator Sheldon Whitehouse, a Rhode Island Democrat, said in an interview. "I think it is a risky thing for the White House to basically take the bet that we can be presented with something at the last minute and we will go for it."

There's nothing "risky" about that. Of course enough Democrats will get in line behind Obama's proposal to pass it once they're told they must. Similarly, those progressive commentators who are first and foremost Democratic loyalists -- who rose up in angry and effective unison (along with actual progressives) to prevent George Bush from privatizing Social Security in 2005 -- will mount no meaningful opposition out of fear of weakening the President's political prospects. White House aides will just utter Michele Bachmann enough times like some magical spell and snap more than enough people into fear-induced compliance. The last thing the White House is worried about -- the last thing -- is its "base."

This was the primary lesson from the health care fight. Obama loyalists who maligned anyone who resisted that bill always misunderstood the point. It was never about the substantive belief in what became the very weak "public option" provision: at least not primarily. Instead, it was about political power.

Congressional Democrats began the health care debate by categorically vowing -- in writing, by the dozens -- never to support any health care bill that did not contain a public option (on the ground that it would be little more than a boon to -- an entrenchment of -- the private health insurance industry). But once they all abandoned that pledge when told that doing so was necessary to be good, loyal Democrats, it was clear from that point forward that they could be ignored. They had no willingness to exercise political power; their partisan loyalty trumped any alleged convictions; their negotiation positions were silly bluffs; and they could always be counted on to snap dutifully into line at the end no matter how much their values were stomped on (and that debate followed the same template as the deficit battle: the White House publicly pretending to advocate for a public option while leading the way in private to ensure it never happened).

Obama knows full well that he can slash Medicare, Medicaid and even Social Security -- just like he could sign an extension of Bush tax cuts, escalate multiple wars, and embrace the Bush/Cheney Terrorism template recently known in Democratic circles as "shredding the Constitution" -- and have most Democrats and progressives continue to support him anyway. Unconditional support ensures political impotence, and rightly so. He's attending to the constituencies that matter: mostly, Wall Street tycoons who funded his 2008 campaign and whom he hopes will fund his re-election bid, and independents whose support is in question. And he's doing that both because it's in his perceived interest and because, to the extent he believes in anything, those are the constituencies with which he feels most comfortable.

Senator John Marty: Advocating universal, single-payer health care in Minnesota

Twin Cities Daily Planet

Senator John Marty contacted the TC Daily Planet after he read our June coverage of health care, specifically a Q&A with Senator Dave Durenberger on his support for federal health care legislation. Senator Marty let us know that he respectfully disagreed with Senator Durenberger’s view of solutions for our health care system. This is to be expected, since he’s the chief author of the MN Health Plan, the only proposal for universal, single-payer coverage in Minnesota.

The TC Daily Planet had conducted a series of community conversations on health care, so we decided to ask Senator Marty questions that participants in our conversations had raised about what a universal, single-payer system would look like.


In a nutshell, what is the MN Health Plan and why do we need it?

The MN Health Plan is a single-payer health plan and it would cover all Minnesotans for all their medical needs. It’s a health care system instead of a health insurance system. The bottom line is if you need to go to the doctor or the dentist or the chiropractor and you get the care you need.

There are some people with the constitutional right to health care right now, like prisoners. But I happen to think that every Minnesota deserves the same health care that inmates might get. So why should some people have health insurance and some people don’t? The Minnesota Health Plan is the only proposal out there, period, that covers everybody and everything.

Why do universal, single-payer advocates think the Affordable Care Act is not good enough?

Federal health care reform takes a huge step in terms of covering more people. But at the end of a decade, if it works the way that proponents hope it’ll work, there will still be 23 million Americans with no health insurance. And there will still be people who have health insurance but they can’t go to the dentist because, oh, dental isn’t included. Or they’ve got a $10,000 deductible and they can’t get the MRI they need because they can’t afford the deductible. So in the long run, all the talk of what we’re going to do with insurance exchanges and the expansion of medical assistance— from a broader scale, all those things look like tinkering because it still leaves so many people in the dust.

If we know all the problems with the health care system, and we see the solutions in other countries, why is it so hard for people to talk about universal, single-payer?

I don’t use the word single-payer very often, though I don’t object to it. It’s just not very helpful. A lot of people love or hate “single-payer.” But the term’s not very descriptive. Yes, the MN Health Plan is a single-payer system, but it’s a universal health care system that provides care to all Minnesotans.

The bottom line is in our campaign finance system, and I really hate to say it, but the reality is money talks. If there’s some interest that has all the money behind it, you’re going to have a perspective that’s going to be heard. There’s no big, well-funded advocacy group doing this. It’s the political difficulty in passing this without money. How do you get the message out there? How do you take on the insurance system?

If we don't have a system of competing insurers, how can we ensure that we keep health care costs down?

When people have a choice of what doctors and clinics and hospitals they go to it will create more competition among providers than the current system. Right now people say, “Oh, I can’t go to that doctor, it’s not in my plan." That's not competition. People should be spending their time looking for the best doctor or chiropractor or nurse or care, not spending their time sifting through insurance plans, which is what people do now.

The current competition between health plans isn’t a logical competition in any way. And it’s simply not keeping costs down. Our system shifts the competition from the insurance companies to the providers.

What would happen to all the people who work in various insurance companies now?

That’s a really good question. And it’s actually a little bit bigger than that, because there are a lot of hospitals that wouldn’t need administrators who deal with all the different insurance companies, too. At some hospitals we have billing departments with hundreds of people. There are plenty of other of things that hospitals could use these people for if they had retraining.

Not to be flippant about it, because the serious thing about this is that any kind of change is tough, and people don’t want to lose their jobs. But the MN Health Plan includes dislocated worker benefits, retraining, and so on for the people who are working in the health insurance industry. And that’s not cheap, but it’s our responsibility and I think you have to take it very seriously and that’s why we included it in the health plan.

One more thing, dislocated workers would have one advantage over people who have lost their jobs in other eras—they would all be covered with health care…every one of them. But, that’s why we’re going to have a major cost study done to look at all the costs of things like this.

Some say, “I like the idea of universal, single-payer, but it'll never pass so why push it?" What’ll it take to push this through?

It’s going to take 45,000 Americans dying every year because of lack of health care. It’s the number one cause of bankruptcy: There are more people who go bankrupt from health care costs even though they already have insurance, than go bankrupt from every other cause in the country…combined! I think 52 percent of bankruptcies of in this country are caused by health care and three-fourths of those people had insurance. And it’s getting worse!

I’m very critical of politicians who say, well this might be the best way we can do this, but it’s never going to pass. Where is your democracy if you never think anything can pass? Why don’t we define what we want, and then move forward with that?

So what’s it going to take? People dying should be enough, and frankly that’s why I’m confident that we’ll be able to pass it; not with this legislature, but hopefully in the next few years.

Throwing Darts: Americans’ Elusive Search for Health Care Cost Control

Journal of Health Politics, Policy and Law

During the 2009 – 2010 health reform debate, secretary of Health and Human Services Kathleen Sebelius contended that “every cost-cutting idea that every health economist has brought to the table is in this bill” (Gregory et al. 2010).

That assertion had considerable merit. The Patient Protection and Affordable Care Act (ACA) contained numerous items on health services researchers’ and health economists’ wish lists, including policies to promote accountable care organizations (ACOs), primary care medical homes, bundled payment, pay for performance (P4P), comparative effectiveness research (CER), and health information technology (HIT). Even economists’ longtime holy grail — limiting the tax exclusion for employer-sponsored insurance — made it, against the political odds, into the ACA. So too did proposals to create an independent Medicare commission and an innovation center, while the Obama administration additionally promised to authorize an Institute of Medicine study on reducing the geographic disparities in Medicare payment made (in)famous by Dartmouth researchers (Wennberg, Fisher, and Skinner 2002).

Not surprisingly, many policy analysts lavished praise on the new law’s promise to “bend the cost curve.”

Is there, then, reason to believe that the ACA will decisively rein in U.S. medical care spending? Alas, probably not. The enthusiasm for the cost-containment provisions in health reform is striking precisely because so many of those provisions are tepid. Put simply, the Affordable Care Act lacks systemwide, reliable cost control. It is in fact a retreat from the cost-control ambitions of the 1993 – 1994 Clinton plan, which had, whatever one thinks of managed competition, a serious theory of how to slow health care spending, and, beyond that, a National Health Board and a budget to enforce expenditure targets. That some analysts believe the new law encompasses all available cost-containment ideas says more about the parochialism of U.S. health policy and its inattention to international experience than it does about the robustness of the ACA’s spending limits.

But slowing federal expenditures on Medicare is not the same as controlling spending in the broader U.S. health care system that encompasses private insurance and other public programs (Marmor and Oberlander 2009). Outside of asserting Medicare’s powers, the ACA has three major policies that purport to control costs. The establishment of health insurance exchanges is expected to generate savings by concentrating purchasing power, reducing administrative costs, and promoting competition among health insurers. Yet the scope of the exchanges, and consequently their likely impact on national health expenditures, is limited: the Congressional Budget Office (CBO 2010) projects 24 million Americans will participate in them by 2019 (though enrollment could expand significantly over time). Moreover, Massachusetts’s experience to date with its Health Connector program provides little ground for believing that the exchanges will slow spending in the broader health system.

The second major cost-control instrument is the 40 percent marginal tax that will be imposed on high-cost insurance plans (policies exceeding $10,200 for individuals and $27,500 for families). The so-called Cadillac tax reflects many economists’ deeply held belief that insulating patients from costs leads to overconsumption of and higher spending on medical care (Vladeck and Rice 2009). That other nations spend much less than the United States on health care despite having comprehensive benefits and, in some cases, no cost sharing has so far not disturbed the view that moral hazard is the root of our high costs. Tax health insurance, advocates believe, and insurers and employers will trim overly generous benefits, patients will consume less medical care, and national health spending will slow.

The final piece of the ACA’s cost-control strategy is delivery system reform. Here the idea is to “modernize” U.S. medical care (Buntin and Cutler 2009) by providing better information and new incentives (CER, HIT), reorganizing how care is delivered (ACOs, medical homes), and changing how it is paid for (bundled payment, P4P). In addition, the law embraces prevention, including a new requirement that insurers must cover recommended preventive services without any cost sharing.

However, little evidence exists that any of these reforms — as politically appealing as their promise to improve health outcomes and health care delivery may be — will generate sizable savings in the short term (Marmor, Oberlander, and White 2009; Tanenbaum 2009). Moreover, in many cases the reforms are initially envisioned only as Medicare pilots and demonstrations, with the hope that they would spread throughout the program and then to the rest of the health system. This strategy for controlling costs is akin to throwing darts. Evidently, the idea is that since we don’t know how well any of these policies will work, we should try them all at once and see which ones actually stick.

There is good reason to be skeptical that delivery system reform will by itself provide reliable cost control. After all, other Organisation for Economic Co-operation and Development nations that spend less on medical care than the United States do so largely through concentrated purchasing, budgeting, and price regulation (Jost, Dawson, and den Exter 2006; Marmor, Oberlander, and White 2009; Vladeck and Rice 2009; White 1995, 2010). The ACA does not move the United States closer to that international standard (White 1995) as much as it maintains the American tradition of searching for technical fixes to the fundamentally political problem of slowing the flow of income to the health care industry (Barer and Evans 1992; Morone 1990; Reinhardt 1990; Vladeck and Rice 2009).

Thus many American policy analysts continue to lament fee-for-service payment and argue for the “necessity” of switching to a “fee-for-value” system if costs are to be controlled — never mind that other nations that pay doctors fee-for-service, including Canada, control costs much better than we do. The American debate has lost sight of a crucial fact: it is not just about how you pay for medical care, but how much you pay for services. Rather than emulating policies that actually work to constrain spending abroad (e.g., global budgets, fee schedules) the United States seems intent on reinventing and reorganizing its way out of the cost crisis. Yesterday’s conviction that capitation and integrated delivery systems held the key to stemming medical costs has been resurrected in the current fad for accountable care organizations and bundling, with scant acknowledgment that we have been down this road before. An ever-increasing list of abbreviations (HMOs, HSAs, HIT, P4P, and so on) bear witness to Americans’ elusive, and now four-decade-long, search for magic bullets.

Proponents of the ACA have attempted to turn the absence of reliable cost control into a strength. The law is, they contend, diverse and flexible. By trying many approaches, “it does not rely on just one policy for effective cost control” (Orszag and Emanuel 2010: 603). Yet combining a series of potentially ineffective reforms does not make them any more effective. Moreover, the rationale for experimenting with an array of delivery systems and payment reforms reflects a sort of policy agnosticism, since, as Jon Gruber argues, “health policy experts can’t really say for sure how governments should best go about slowing cost growth” (Gruber 2010: 189). But international experience suggests that other nations do know how to slow medical spending; the United States is simply unable or unwilling to adopt those policies. Americans are, in other words, determined to try all available cost-control options — except those that actually succeed elsewhere. Ultimately, the insistence that the United States has to try everything because nothing is certain to contain medical costs sounds less like agnosticism or intellectual curiosity and more like ignorance.

Improved Medicare system needed for all

The Coloradoan

Rep. Cory Gardner wants us to have vouchers to pay for our health care. This would end Medicare as we know it and would decrease the quality of medicine for everyone. I propose we do something that would save money, provide health care for everyone and create a more competitive opportunity for all businesses, especially small businesses and those in the manufacturing sector.

An Improved Medicare for All (single-payer system) would create the ability to control national health expenditures with uniform rates and fees. It would have a uniform information technology system. This system would provide a single standard of care for everyone. It would increase choice where patients would choose their health provider freely. Physicians would be able to use their best clinical judgment without the interference from either insurance or government administrators.

A big plus is it will virtually eliminate bankruptcies due to medical debt.

A national single-payer health system would create conditions that will stimulate our economy. In some ways, single payer is a jobs bill.

For small businesses, single payer means relief from the increasing burden of providing health benefits to employees. By controlling rising health-care costs, single payer will allow large businesses to be more competitive in the global market.

Single payer enables those who are staying in jobs until they are eligible for Medicare to retire early, which opens jobs for those who are younger.

Congress could address both our health-care crisis and our federal deficit woes by improving and expanding Medicare to all people in our nation.

Ann Molison
Fort Collins, Colo.

Improve Medicare and Expand It to All

CommonDreams.org

In honor of its 46th birthday this month, here is a brief history of Medicare: of the bitter controversy surrounding its creation, its subsequent achievements, and its current position at the center of congressional budget debates. I believe that once they understand the deep differences between this institution and our country’s more recent attempts at healthcare reform, most reasonable individuals will conclude that a national insurance system like Medicare offers a solution to the healthcare crisis, and that it should be fully funded and extended to cover all Americans from birth.

During the contentious debate that preceded its adoption in 1965, Medicare was attacked by powerful special interests -- among them, the insurance industry and the American Medical Association -- who decried it as "socialized medicine" and warned that it would destroy our healthcare system and even threaten our basic freedoms. It seems difficult today to imagine how such fear-mongering could have been taken seriously. Over the past half-century, by affording hundreds of millions of Americans access to high-quality health care, Medicare has played a major role in increasing life expectancy and overall quality of life in this country. Funded via a progressive tax mechanism that asks incrementally more of our wealthiest neighbors, and boasting better service and far lower administrative costs than the "leanest" private insurance, Medicare has become along with Social Security one of the most popular government programs in history.

In his speech announcing the new plan, then-President Johnson reminded the country that "there is a tradition we share today. It calls upon us never to be indifferent toward despair. It directs us never to ignore or to spurn those who suffer untended...[it] is as old as the day it was first commanded: 'Thou shalt open thine hand wide unto thy brother, to thy poor, to thy needy, in thy land.'"

The current administration's health reform legislation, and our own Massachusetts Health Reform that preceded and inspired it, are part of a very different story. That one begins in 2006 when, largely in response to Bush Administration pressure, then-Governor Mitt Romney signed into law legislation that dismantled our extensive healthcare safety net, partially replacing it with an “ownership culture" that has required hundreds of thousands of low- and middle-income residents to purchase insurance policies sold by private corporations through a state-run exchange.

5 years on now, despite our mainstream media's oddly strained attempts to suggest otherwise, we face overwhelming evidence that the Massachusetts Reform has failed. According to the comprehensive report released this month by Mass Care (masscare.org), Massachusetts reform has certainly forced many more Massachusetts residents to purchase health insurance policies – a boon to insurance companies, whose revenues have increased dramatically. But the difference between having insurance and having adequate access to quality healthcare has grown more oppressive than ever. For most individuals and families except for the very poorest and the wealthiest, out-of-pocket payments and insurance premiums have continued to skyrocket. Wait times for primary care appointments have increased, while ever fewer primary care doctors accept new patients -- they simply cannot cope with the administrative costs and frustrations of a system dominated by private insurance companies, each with its own system of authorizations, denials and appeals. Finally, with state spending continuing to increase at alarming rates, it is now beyond question that the reform is financially unsustainable.

And now that the entire country has adopted legislation largely patterned on the Massachusetts reform, we brace ourselves for similar or worse developments on a national scale: increasingly unaffordable or unavailable medical services, runaway profits for insurance companies, and continued spikes in overall costs. Adding insult to injury, some politicians have proposed balancing these tremendous public losses by cutting Medicare benefits. Fortunately, Americans strongly oppose such measures; recognizing this, one prominent Tea Party leader has dismissed them as a "public policy nightmare.”

Rather than weakening Medicare, we ought to build on its strengths and correct its flaws:

•By replacing the current physician fee schedule with a system of negotiated payments, we can eliminate the critical shortages of skilled primary care providers and encourage the type of integrated practice exemplified by the Mayo Clinic and others;

•By instituting global budgets, we can avoid wasteful duplication of high-cost technology and fully fund the clinical services that we, as patients, want and need;

•By legislating price negotiating authority and bulk purchasing power for pharmaceuticals and medical devices, we can immediately begin saving taxpayers hundreds of billions of dollars annually.

This improved-and-expanded Medicare would simultaneously eliminate "mandates" and corporate profiteering. In consequence, the billions we already spend each year would be more than enough to provide excellent healthcare automatically to everyone who needs it. A sustainable system that actually reduces our anxiety over the healthcare of ourselves and our children: now who wouldn't appreciate a birthday gift like that?

Op-Ed by Jim Recht, MD a psychiatrist living and working in Cambridge, Massachusetts.

Single-payer is the solution to Medicare problems

Cleveland Plain Dealer

In response to Ed Schmith's letter to the editor, "Medicare needs our notice" (June 25), there is a well-known solution to the crises of cost and accessibility to quality health care in America: single-payer health care.

For-profit, private health insurance companies force hospitals and providers to form needless administrative bureaucracies that have nothing to do with providing health care, yet consume 31 percent of all America's health care dollars for overhead, underwriting, sales, billing, marketing and exorbitant executive pay.

Single-payer financing could recapture that wasted money at a rate of $400 billion per year, which would be enough to provide comprehensive health care coverage for every person in the United States without paying more than we already do.

Pete Novakovic, Seven Hills

Kentucky voices: Single-payer plan for state's health and economy

Kentucky Herald-Leader

There is a country where 50 million people wake up every morning fearing that a health problem will take away their lives. Is this a country in Africa or Asia? What is the source of their anxiety? Malaria? Cholera?

The place is the United States of America. The source of people's fear is a lack of health insurance. They fear that if they become ill or injured they might lose their homes, their life savings, and everything they've worked for.

The fearful are not ne'er-do-well parasites on society, or in far away urban slums. They are our friends and neighbors. This was poignantly portrayed by Jacalyn Carafagno ("Frustrated by a health care system tied to jobs," May 22).

It's a national embarrassment and a disgrace for the wealthiest country on the planet.

We spend more on health care per capita than any other major country, but we don't get what we pay for, and not all of us share in the benefits. The 2011 World Health Organization statistics rank the U.S. 34th in life expectancy and 46th in child mortality.

Wait, you say, we have the best specialists and medical technology anywhere. People come here from around the planet for treatment. Yes, we do have the best medical facilities in the world—if one is rich enough to afford them or has great health insurance.

Welcome to the land of the free and the home of the brave. If you are wealthy, you are free to ignore the suffering of others. If you are one of the fifty million without health insurance, you are free to be brave and pray you don't get sick. You are free to spend your child's college fund on medical bills. If you are not wealthy, you are free to pass up an entrepreneurial opportunity and stay at your old job in order to keep your health insurance.

Senator David Williams says that he will get government out of our lives and fight to do away with Obamacare. He would encourage and support the health care status quo, the employer-based for-profit system.

One in four Kentucky adults under the age of 65 has no health insurance (healthy-ky.org).

If Williams gets his way, the 680,000 uninsured Kentuckians might consider moving to Vermont, which is in the process of establishing a single-payer plan. Vermont governor Peter Shumlin says, "We want a system where health care will follow the individual, and not be a requirement of the employer, which we think will be a huge jobs creator. [We want to use] health care dollars to make us healthier, not enrich insurance companies, [promote] inefficiency, waste, and the current fee-for-service system, which bills providers based on how much service they do."

Kentucky has had limited success with economic development. Why not establish a single-payer health care system that would make Kentuckians healthier, make Kentucky a leader in health care, and provide the foundation for the growth of small businesses?

If only we had the political leadership, Kentucky might show the nation how to restore its health, its economy, and its pride.

Universal Health Care: Can We Afford Anything Less?

Dollars and Sense

Why only a single-payer system can solve America’s health-care mess.

America’s broken health-care system suffers from what appear to be two separate problems. From the right, a chorus warns of the dangers of rising costs; we on the left focus on the growing number of people going without health care because they lack adequate insurance. This division of labor allows the right to dismiss attempts to extend coverage while crying crocodile tears for the 40 million uninsured. But the division between problem of cost and the problem of coverage is misguided. It is founded on the assumption, common among neoclassical economists, that the current market system is efficient. Instead, however, the current system is inherently inefficient; it is the very source of the rising cost pressures. In fact, the only way we can control health-care costs and avoid fiscal and economic catastrophe is to establish a single-payer system with universal coverage.

The rising cost of health care threatens the U.S. economy. For decades, the cost of health insurance has been rising at over twice the general rate of inflation; the share of American income going to pay for health care has more than doubled since 1970 from 7% to 17%. By driving up costs for employees, retirees, the needy, the young, and the old, rising health-care costs have become a major problem for governments at every level. Health costs are squeezing public spending needed for education and infrastructure. Rising costs threaten all Americans by squeezing the income available for other activities. Indeed, if current trends continued, the entire economy would be absorbed by health care by the 2050s.

Conservatives argue that providing universal coverage would bring this fiscal Armageddon on even sooner by increasing the number of people receiving care. Following this logic, their policy has been to restrict access to health care by raising insurance deductibles, copayments, and cost sharing and by reducing access to insurance. Even before the Great Recession, growing numbers of American adults were uninsured or underinsured. Between 2003 and 2007, the share of non-elderly adults without adequate health insurance rose from 35% to 42%, reaching 75 million. This number has grown substantially since then, with the recession reducing employment and with the continued decline in employer-provided health insurance. Content to believe that our current health-care system is efficient, conservatives assume that costs would have risen more had these millions not lost access, and likewise believe that extending health-insurance coverage to tens of millions using a plan like the Affordable Care Act would drive up costs even further. Attacks on employee health insurance and on Medicare and Medicaid come from this same logic—the idea that the only way to control health-care costs is to reduce the number of people with access to health care. If we do not find a way to control costs by increasing access, there will be more proposals like that of Rep. Paul Ryan (R-Wisc.) and the Republicans in the House of Representatives to slash Medicaid and abolish Medicare.

The Problem of Cost in a Private, For-Profit Health Insurance System

If health insurance were like other commodities, like shoes or bow ties, then reducing access might lower costs by reducing demands on suppliers for time and materials. But health care is different because so much of the cost of providing it is in the administration of the payment system rather than in the actual work of doctors, nurses, and other providers, and because coordination and cooperation among different providers is essential for effective and efficient health care. It is not cost pressures on providers that are driving up health-care costs; instead, costs are rising because of what economists call transaction costs, the rising cost of administering and coordinating a system that is designed to reduce access.

The health-insurance and health-care markets are different from most other markets because private companies selling insurance do not want to sell to everyone, but only to those unlikely to need care (and, therefore, most likely to drop coverage if prices rise). As much as 70% of the “losses” suffered by health-insurance providers—that is, the money they pay out in claims—goes to as few as 10% of their subscribers. This creates a powerful incentive for companies to screen subscribers, to identify those likely to submit claims, and to harass them so that they will drop their coverage and go elsewhere. The collection of insurance-related information has become a major source of waste in the American economy because it is not organized to improve patient care but to harass and to drive away needy subscribers and their health-care providers. Because driving away the sick is so profitable for health insurers, they are doing it more and more, creating the enormous bureaucratic waste that characterizes the process of billing and insurance handling. Rising by over 10% a year for the past 25 years, health insurers’ administrative costs are among the fastest-growing in the U.S. health-care sector. Doctors in private practice now spend as much as 25% of their revenue on administration, nearly $70,000 per physician for billing and insurance costs.

For-profit health insurance also creates waste by discouraging people from receiving preventive care and by driving the sick into more expensive care settings. Almost a third of Americans with “adequate” health insurance go without care every year due to costs, and the proportion going without care rises to over half of those with “inadequate” insurance and over two-thirds for those without insurance. Nearly half of the uninsured have no regular source of care, and a third did not fill a prescription in the past year because of cost. All of this unutilized care might appear to save the system money. But it doesn’t. Reducing access does not reduce health-care expenditures when it makes people sicker and pushes them into hospitals and emergency rooms, which are the most expensive settings for health care and are often the least efficient because care provided in these settings rarely has continuity or follow-up.

The great waste in our current private insurance system is an opportunity for policy because it makes it possible to economize on spending by replacing our current system with one providing universal access. I have estimated that in Massachusetts, a state with a relatively efficient health-insurance system, it would be possible to lower the cost of providing health care by nearly 16% even after providing coverage to everyone in the state currently without insurance. This could be done largely by reducing the cost of administering the private insurance system, with most of the savings coming within providers’ offices by reducing the costs of billing and processing insurance claims. This is a conservative estimate made for a state with a relatively efficient health-insurance system. In a report prepared for the state of Vermont, William Hsiao of the Harvard School of Public Health and MIT economist Jonathan Gruber estimate that shifting to a single-payer system could lead to savings of around 25% through reduced administrative cost and improved delivery of care. (They have also noted that administrative savings would be even larger if the entire country shifted to a single-payer system because this would save the cost of billing people with private, out-of-state insurance plans.) In Massachusetts, my conservative estimates suggests that as much as $10 billion a year could be saved by shifting to a single-payer system.

Single-Payer Systems Control Costs by Providing Better Care

Adoption of a single-payer health-insurance program with universal coverage could also save money and improve care by allowing better coordination of care among different providers and by providing a continuity of care that is not possible with competing insurance plans. A comparison of health care in the United States with health care in other countries shows how large these cost savings might be. When Canada first adopted its current health-care financing system in 1968, the health-care share of the national gross domestic product in the United States (7.1%) was nearly the same as in Canada (6.9%), and only a little higher than in other advanced economies. Since then, however, health care has become dramatically more expensive in the United States. In the United States, per capita health-care spending since 1971 has risen by over $6,900 compared with an increase of less than $3,600 in Canada and barely $3,200 elsewhere. Physician Steffie Woolhandler and others have shown how much of this discrepancy between the experience of the United States and Canada can be associated with the lower administrative costs of Canada’s single-payer system; she has found that administrative costs are nearly twice as high in the United States as in Canada—31% of costs versus 17%.

The United States is unique among advanced economies both for its reliance on private health insurance and for rapid inflation in health-care costs. Health-care costs have risen faster in the United States than in any other advanced economy: twice as fast as in Canada, France, Germany, Sweden, or the United Kingdom. We might accept higher and rapidly rising costs had Americans experienced better health outcomes. But using life expectancy at birth as a measure of general health, we have gone from a relatively healthy country to a relatively unhealthy one. Our gain in life expectancy since 1971 (5.4 years for women) is impressive except when put beside other advanced economies (where the average increase is 7.3 years).

The relatively slow increase in life expectancy in the United States highlights the gross inefficiency of our private health-care system. Had the United States increased life expectancy at the same dollar cost as in other countries, we would have saved nearly $4,500 per person. Or, put another way, had we increased life expectancy at the same rate as other countries, our spending increase since 1971 would have bought an extra 15 years of life expectancy, 10 years more than we have. The failure of American life expectancy to rise as fast as life expectancy elsewhere can be directly tied to the inequitable provision of health care through our private, for-profit health-insurance system. Increases in life expectancy since 1990 have been largely restricted to relatively affluent Americans with better health insurance. Since 1990, men in the top 50% of the income distribution have had a six-year increase in life expectancy at age 65 compared with an increase of only one year for men earning below the median.

Rising health-care costs reflect in part the greater costs of caring for an aging population with more chronic conditions. As such, the United States looks especially bad because our population is aging less quickly than that of other countries because of high rates of immigration, relatively higher fertility, and the slower increase in life expectancy in the United States. Countries also buy higher life expectancy by spending on health care; rising health expenditures have funded improvements in treatment that have contributed to rising life expectancy throughout the world. Female life expectancy at birth has increased by nearly nine years in Germany since 1971, by over eight years in France, by seven years in Canada and the United Kingdom, and by six years in Sweden. By contrast, the United States, where female life expectancy increased by a little over five years, has done relatively poorly despite increasing health-care expenditures that dwarf those of other countries. In other countries, increasing expenditures by about $500 per person is associated with an extra year of life expectancy. With our privatized health-insurance system, we need spending increases over twice as large to gain an extra year of life.

The international comparison also provides another perspective on any supposed trade-off between containing costs and expanding coverage. In countries other than the United States, almost all of the increase in health-care spending as a share of national income is due to better quality health care as measured by improvements in life expectancy. The problem of rising health-care costs is almost unique to the United States, the only advanced industrialized country without universal coverage and without any effective national health plan.

In short, the question is not whether we can afford a single-payer health-insurance system that would provide adequate health care for all Americans. The real question is: can we afford anything else?