Universal single-payer health care
(Prepared by Anita Wessling)
The United States is the only industrialized nation in the world without a national health care system. The current system’s high costs and widely recognized failures demand that bold steps be taken. The Green Party supports a universal, comprehensive, national single-payer health insurance program as the only solution to the current disastrous for-profit system.
Under a universal national single-payer health care system, the administrative waste of private insurance corporations would be redirected to patient care. If the U.S. were to shift to a system of universal coverage and a single-payer plan, as in Canada, the savings in administrative costs would be more than enough to offset the cost. Expenses for businesses currently providing coverage would be reduced. State and local governments would pay less because they would receive reimbursement for services provided to the previously uninsured, and because public programs would cease to be the “dumping ground” for high-risk patients and those rejected by HMOs when they become disabled and unemployed.
Most importantly, the people of America will gain the peace of mind in knowing that needed health care will always be available to them. No longer will people have to worry about facing financial disaster if they become seriously ill, are laid off their jobs, or are injured in an accident.
What Is Single-Payer?
Single-payer is basically a way some countries use to provide its citizens with health insurance. Its name comes from the fact that doctors and hospitals are paid by one organization: a single payer. By having only one payer, you can simplify the health care system enormously.
Single-payer is not socialized medicine, it’s socialized insurance. What's the difference? Socialized medicine is a system in which doctors and hospitals work for the government and draw salaries from the government. Doctors in the Veterans Administration and the Armed Services are paid this way, and it is the system used in the United Kingdom. Socialized insurance is the system in Canada where the government pays for care that is delivered in the private (mostly not-for-profit) sector. This is similar to how Medicare works in this country. Doctors are in private practice and are paid on a fee-for-service basis from government funds. The government does not own or manage their medical practices or hospitals.
The term socialized medicine is often used to conjure images of government bureaucratic interference in medical care. That does not describe what happens in countries with national health insurance. It does describe the interference by insurance company bureaucrats in our health system.
By having one organization handle all of the bureaucracy and all of the administration of the health care system (mostly consisting of paperwork and payments), paper-pushing greatly decreases in frequency and cost. More of each of our dollars that go toward health care would actually be used to care for people’s health, instead of going toward managers and forms. Single-payer eliminates the bulk of paperwork duplication, and in the process, could potentially save hundreds of BILLIONS of dollars.
As it is right now, American businesses are at an economic disadvantage because their health costs are so much higher than in other countries. The Canadian branches of Ford, GM, and Daimler-Chrysler all publicly support Canada’s health care system because it saves them an enormous amount of money, compared to their counterparts in the U.S.
Single-payer is health care rationing, but it’s a different type of rationing. The U.S. Supreme Court recently established that rationing is fundamental to the way managed care conducts business. Rationing in U.S. health care is based on income: if you can afford care you get it, if you can’t, you don’t. A recent study by the Institute of Medicine found that 18,000 Americans die every year because they don’t have health insurance. That’s two people every hour. That’s rationing. No other industrialized nation rations health care to the degree that the U.S. does. The U.S. also has higher infant mortality levels – more children under 1 year of age die – compared to most other democratic countries.
In a single-payer health system, everyone has health insurance. Babies would be healthier if all pregnant women had access to pre-natal care. Emergency room costs would be reduced and efficiency increased if people could see a primary care doctor when they were sick, instead of only going to an ER after their illness has progressed.
The rationing that takes place in U.S. health care is unnecessary. A number of studies (notably the General Accounting office report in 1991, and the Congressional Budget office report in 1993) show that there is more than enough money in our health care system to serve everyone if it were spent wisely. Administrative costs are far higher in the U.S. than in other countries’ systems. These inflated costs are directly tied to our failure to have a publicly-financed, universal health care system. We spend at least twice as much per person than any other country, and still find it necessary to deny health care.
Single-payer rations care by health care need. There would be no more “pre-existing conditions”, no more hassles to see a doctor.
Patients would have access to all medically necessary care, including doctor visits, hospital care, prescriptions, mental health services, nursing home care, rehab, home care, eye care, and dental care. Alternative care that is proven in clinical trials to be effective would be covered (for example, spinal manipulation for some back conditions). Other treatments would be decided by the health care planning board or other public body. New kinds of treatments would be added to the benefits package over time as they are shown to be effective, including “alternative” treatments. Similarly, ineffective, harmful, or wasteful care would be removed from the benefits package, such as funding for a costly medication that is no better than aspirin for arthritis. Patients would have their complete choice of doctors, cheaper prescription drugs, and no bills for health care. A single-payer system would mean fewer personal bankruptcies due to medical bills.
A new Harvard study of medical bankruptcies highlights the growing number of Americans with dangerously skimpy health insurance coverage and the need to address the problems of the insured as well as the uninsured, according to Physicians for a National Health Program (PNHP). The study, published by the journal Health Affairs, found that half of U.S. bankruptcies, affecting two million people annually, were attributable to illness or medical bills. (Copies of the article can be accessed at http://www.pnhp.org/facts/bankruptcy_study.php.)
The physicians’ group pointed out that three-quarters of those bankrupted by illness were insured when they first got sick. While politicians acknowledge the need to cover the uninsured, they have ignored the worsening plight of those with coverage. Rising health care costs, skimpier policies, and the cancellation of coverage when illness causes job loss have augmented the financial risk for those with insurance. This heightened risk is reflected in the 2200% increase in medical bankruptcies since 1981 found in the Harvard study.
PNHP highlighted two causes of the high rate of medical bankruptcy among the insured. First, many employers are cutting back coverage through larger co-payments, deductibles, and exclusions – often under the euphemism of “consumer-driven health plans”. Second, the current link between coverage and employment means that insurance often evaporates when it is needed the most – when illness is so severe that breadwinners are unable to work. The COBRA law, which allows people to continue their coverage when they lose a job, has failed to address this problem because the premiums for continued coverage are unaffordable.
In most countries with a single-payer system, patients never see a bill. The billing process doesn’t even involve patients.
Single-payer isn’t government bureacracy, it’s actually government efficiency. The United States has the most bureaucratic health care system in the world. Over 24% of every health care dollar goes to paperwork, overhead, executive salaries, profits, and other non-clinical costs. Because the U.S. does not have a system that serves everyone and instead has over 1,500 different insurance plans, each with their own marketing, paperwork, enrollment, premiums, rules, and regulations, our insurance system is both extremely complex and fragmented.
Governments do some things better than others. Medicare is the most efficient health care system in the U.S., with administration costs being about 20% of the average HMO's administration costs. About 4 cents of every dollar goes to administration in Medicare, but it’s anywhere from 10 to 30 cents of every dollar in HMOs. And if you think there’s no such thing as corporate bureaucracy, you've probably never had a problem with your HMO. Ask anyone who has. Any system is going to have some red tape. But it’s a matter of having one system of red tape, or 1500 different ones. And government’s not all bad. Government has provided us with public libraries, the G.I. Bill, Social Security, police and fire protection, the Do-Not-Call list, emergency services, national parks ... there’s bad, sure, but that doesn’t mean you can just ignore the good.
Single-payer isn't free care, but it’s certainly less expensive. Health care coverage is already subsidized heavily by federal, state, and local taxes. In fact, fully 64% of health care spending is from taxes. Employers would pay a small payroll tax, but this tax would be instead of paying health care premiums like most employers pay now. Most employers that currently offer health insurance would actually save money. Small businesses will no longer be at a disadvantage in obtaining good health coverage for their employees and thus competing for the best employees. Most of the money is already in the system – it’s just currently going to HMOs instead of to a single-payer organization. Studies by the Congressional Budget Office, the General Accounting Office (GAO), the Lewin Group, Boston University, and in numerous other reports have done the math and come to the conclusion that single-payer would save enough money to cover the cost of insuring all the 46 million uninsured in the United States today.
It is not necessary to have a huge bureaucracy to decide who gets care and what care they get, if and when everyone is covered and has the same comprehensive benefits. With a universal health care system we would be able to cut our bureaucratic burden in half and save nearly $150 billion per year.
Single-payer financing is the only way to recapture this wasted money.
Virtually all other industrialized, capitalist countries have some sort of large-scale bulk-purchasing program. It’s just like Wal-Mart using its purchasing power to buy in bulk, and provide cheap goods to customers. In fact, the reason many people are buying drugs from Canada is because they’re much cheaper there. Insurance companies do this all the time – buy drugs for all of their members and get cheaper prices, so would it really be that different to have the government buy for everyone? The VA and the Department of Defense already do this, but thanks to the power of the drug manufacturers’ lobbyists, the current Medicare legislation does not allow the government to do so.
Doctors would have less paperwork and fewer health care headaches, but they’d also be given more freedom and choices, too. Because there would be “one form” for doctors to fill out and less time spent figuring out a patient’s insurance status (and therefore more time to spend helping patients), doctors would be able to return to the reason they entered medicine – to help care for patients. Most primary care physician doctors' incomes would stay about the same. (When Canada passed its health care reform, salaries actually went up.) Specialists’ incomes would decrease, but doctors’ own costs would be decreased, too: they could spend less on office staff and employees who work on insurance claims, as well as on the health insurance for those workers. Doctors would most likely see decreases in malpractice insurance premiums as well, since patients are less likely to sue if they feel that they know their doctors well, and if they know they’ll have health insurance if some problem arises later.
Nurses' salaries increased greatly in Canada after passage of its health system reform. More nurses would be trained and hired to work in departments where nurses have been cut to save costs (and to work in nursing, where there is already a shortage). This would decrease stress levels, and give nurses more time to spend caring for each individual patient.
Medical students would graduate with significantly less medical debt, if the single-payer plan mimicked the Canadian system. Many students cite debt (currently averaging around $90,000) as a reason they do not enter the field they truly want to enter.
Researchers would still have their research funded as it currently is – through the National Institutes of Health, the main entity in the United States that provides research grants to professors and non-academic scientists working on science-related research. A great deal of drug research is already funded by the government. Drug companies are invited in when it comes to marketing successful new drugs. AZT for HIV patients is one example: all the expensive clinical trials were conducted with government money, and when it was found to be effective, marketing rights went to the drug company. (This is a controversial practice because it means pharmaceutical companies enjoy significant profits on the back of taxpayer-financed research.)
Medical research does not disappear under universal health care system. Many famous discoveries have been made in countries that have national health care systems. Laparoscopic gallbladder removal was pioneered in Canada. The CT scan was invented in England. The new treatment to cure juvenile diabetics by transplanting pancreatic cells was developed in Canada.
It is also important to note that studies show that the number of clinical research grants declines in areas of high HMO penetration. This suggests that managed care increasingly threatens clinical research. Another study surveyed medical school faculty and found that it was more difficult to do research in areas with high HMO penetration.
Hospitals would all be converted to non-profit status, after a one-time payment to investors. Hospital billing would be virtually eliminated. Instead, hospitals would receive an annual lump-sum payment from the single-payer to cover its expenses – a “global budget.” A separate budget would cover such expenses as hospital expansion, the purchase of technology, marketing, etc. Hospitals would no longer close because of unpaid bills.
Businesses would see the single-payer system decrease their health costs and remove the burden of administering health insurance for their employees. They would gain the competitive advantage that Canada and other countries have from decreased health costs per worker, and wouldn’t need to worry about health care cost increases every year – the single-payer system helps control costs much better than the current system does.
The health insurance industry would be mostly eliminated, but the new system will still need people to administer claims. The focus would shift to those who deliver health care. More health care providers, especially in the field of long-term care and home health care, would be needed, and many insurance clerks would be able to be retrained to enter these fields. Many people now working in the insurance industry are, in fact, already health professionals (e.g., nurses) who would be able to find work in the health care field again. One proposed single-payer bill would provide one percent of funding for retraining displaced insurance workers during its first few years of implementation.
Currently, about 64% of our health care system is financed by public money: federal and state taxes, property taxes, and tax subsidies. These funds pay for Medicare, Medicaid, the VA, and coverage for public employees (including teachers), elected officials, military personnel, etc. There are also hefty tax subsidies to employers to help pay for their employees’ health insurance. About 17% of heath care is financed by all of us individually through out-of-pocket payments, such as co-pays, deductibles, the uninsured paying directly for care, people paying privately for premiums, etc. Private employers only pay 19% of health care costs. In all, it is a very “regressive” way to finance health care, in that the poor pay a much higher percentage of their income for health care than higher-income individuals do.
A universal public system would be financed in this way: The public financing already funneled to Medicare and Medicaid would be retained. The difference, or the gap between current public funding and what we would need for a universal health care system, would be financed by a payroll tax on employers (about 7%) and an income tax on individuals (about 2%). The payroll tax would replace all other employer expenses for employees’ health care. The income tax would take the place of all current insurance premiums, co-pays, deductibles, and any and all other out-of-pocket payments. For the vast majority of people, a 2% income tax is less than what they now pay for insurance premiums and in out-of-pocket payments such as co-pays and deductibles, particularly for anyone who has had a serious illness or who has a family member with a serious illness. It is also a fair and sustainable contribution. Currently, over 46 million people have no insurance and thousands of people with insurance are bankrupted when they have an accident or illness.
Employers who currently offer no health insurance would pay more, but they would receive health insurance for the same low rate as larger firms. Many small employers have to pay 25% or more of payroll now for health insurance – so they end up not having insurance at all. For large employers, a payroll tax in the 7% range would mean they would pay less than they currently do (about 8.5%). No employer, moreover, would hold a competitive advantage over another because his cost of business did not include health care. And health insurance would disappear from the bargaining table between employers and employees.
Another consideration is that everyone would have the same comprehensive health coverage, including all medical, hospital, eye care, dental care, long-term care, and mental health services. Currently, many people and businesses are paying huge premiums for insurance that is almost worthless if they were to have a serious illness.
o. Establishment of a National Health Trust Fund that would channel all current Federal payments for health care programs directly into the Fund, in addition to employees' health premium payments.