Physicians for a National Health Program29 E Madison Suite 602, Chicago, IL 60602

Phone (312) 782-6006 | Fax: (312) 782-6007 email: info@pnhp.org

www.pnhp.org

Health Care Reform Universal Health Care:

The Only SolutionDiljeet K. Singh, MD, DrPH

PERSPECTIVE - PhilosophicalHealth care is…• A Human Right• A social service distributed according to

need• Not a commodity distributed according

to ability to pay• Not a business whose “beneficiaries”

are company executives and investors not patients

• Most Americans believe everyone should have access to good care without financial hardship

PERSPECTIVE - Philosophical• We are the only developed nation that

does not provide comprehensive health care to all its citizens

• 47 million Americans are uninsured • Many are underinsured - lack

comprehensive coverage egs preventive care, long-term care & drug costs

• 45,000 die a year from lack of coverage• Markets are good for many things, but

they are not a good way to distribute health care

PERSPECTIVE- PracticalCurrent system is unsustainable• Burden it places on our

economy/businesses• Private health insurance premiums are

at unsustainable rate of 13%/year – & as much as 25% in some areas of country

• Coverage is shrinking, as more employers decide to cap their contributions to health insurance & workers find they cannot pay their rapidly growing share

• Most expensive health care system in the world

PERSPECTIVE - Practical• Spend twice as much as other developed nations• But we don’t get more care - Canadians, see

their doctors more often & spend more time in hospital

• We don’t get better results - do worse than most other developed countries on usual measures of health such as life expectancy, infant mortality, immunization rates

• & we still don’t cover everyone - 47 million uninsured

• In sum, our health care system is outrageously expensive, yet inadequate.

Why? • There’s something enormously inefficient about

the way we finance & deliver health care

Problem with For-Profit Payers • Investor-owned firms compete not by

quality or costs, but by avoiding unprofitable patients & limiting services

• Creates paradox of a health care system based on avoiding the sick

• It generates huge administrative costs, which, along with profits, divert resources from clinical care to demands of business.

• Doctors & hospitals maintain costly admin staff to deal with bureaucracy

• Adminstration consumes 31% of our health care $

Solution - Single-Payer• Simpler & more efficient than our private health

care system• Health care $ distributed by one entity, so that

health care could be coordinated to eliminate gaps• Conceptual extension of Medicare to entire

population.• Medicare is:

• Government-financed single-payer system embedded within our private, market-based system.

• Most efficient part of our health-care system, with overhead costs of < 3%

• Covers virtually everyone over 65• Most popular part of U S health care system

Solution - Single-Payer• Universal, Comprehensive Coverage • No out-of-pocket payments

Co-payments & deductibles are barriers to access, administratively unwieldy, & ineffective for cost containment

• Single insurance plan in each region, administered by public or quasi-public agency

• Global operating budgets for hospitals, nursing homes, allowed group & staff model HMOs & other providers with separate allocation of capital funds Billing on per-patient basis creates unnecessary administrative complexity & expense. A budget separate from operating expenses will be allowed for capital improvements

Key Features of Single-Payer

• Free Choice of ProvidersPatients should be free to seek care from any licensed health care provider, without financial incentives or penalties

• Public Accountability, Not Corporate DictatesThe public has an absolute right to democratically set overall health policies & priorities, but medical decisions must be made by patients & providers in the region rather than dictated by corporate executives. Market mechanisms principally empower employers & insurance bureaucrats pursuing narrow financial interests

• Ban on For-Profit Health Care ProvidersProfit seeking inevitably distorts care & diverts resources from patients to investors

• Protection of health care & insurance workers

47 Million47 MillionUninsuredUninsured

45,000 Deaths Per Year45,000 Deaths Per Year

But simply helping them buy But simply helping them buy private insurance is private insurance is notnot a a solution.solution.

Meet Thomas Wilkes• Born in 2004 with Severe

Hemophilia A.

• Dad: Senior Engineer at a small high-tech computer firm with good benefits.

• 2005: Develops an inhibitor to his hemophilia treatment.

• $750,000 annual claims.

Private Insurance for Thomas• Company faces 40% to 55% in premiums.• Only insurer that will cover them requires $10,000

out-of-pocket & $1 million cap.• Thomas is projected to reach the $1 million benefit

cap in summer 2009• Options1. Dad can quit job he loves & work for mega-firm that

will take longer to be affected by high claims2. Mom can go to work for a mega-firm.3. Thomas’ father can divorce his mother to leave her

& Thomas legally destitute & eligible for public programs.

Who Are the Uninsured?

»EmployedEmployed»50%50%

»ChildrenChildren»25%25%

»UnemployedUnemployed»5%5%

»**Out of labor Out of labor forceforce»20%20%

“…,people have access to health care in America. After all, you just go to an

emergency room.”-No Longer President Bush

America’s Underinsured

28

60 59

0

10

20

30

40

50

60

70

Insured Insured, Gap in Coverage Uninsured

Proportion of Americans Going Without Care due to Costs, 2005

(skipping doctor visit, specialist appointment, treatment or prescription when needed)

Source: Commonwealth Fund Biennial Health Insurance Survey, 2005

Medical Bankruptcy Illness & Medical Bills Contributed to

1,000,000 Personal Bankruptcies in 2004. (Half of All Bankruptcies)

Source: Himmelstein, Health Affairs 2005 (state estimates provided by author)

24.3%

75.7%

Insurance Status at Onset of Illness

Had Insurance

Uninsured

$0

$2,000

$4,000

$6,000

International Health Spending, 2005U.S. Public Spending is Greater than Other Nations’ U.S. Public Spending is Greater than Other Nations’

Public/Private Spending CombinedPublic/Private Spending Combined

Source: OECD 2007; Japan data are from 2004

The Healthcare Americans Want

• Guaranteed access

• Free choice of doctor

• High quality

• Affordability

• Trust & respect

Other Industrialized Nations

• Have similar demographics

• Availability of expensive technology

• Rising drug costs

• Similar levels of service

Why are their costs

so much lower?

Why are costs lower in other countries?

• Administrative simplicity

• Lower prices

• Higher ratio of primary care to specialists

• Health planning

• Global budgets

0

10

20

30

40

50

60

70

80

10% 10% 10% 10% 10% 10% 10% 10% 10% 10%

Source:Agency for Healthcare Research & QualityMEPS

Percentof health CareCosts

1% 1% 2% 4% 6%

13%

73%

0% 0% 0%

If you were in an insurance CEO, who would you want to insure?

80% uses less than $1000 of care per year

0

10

20

30

40

50

60

70

80

10% 10% 10% 10% 10% 10% 10% 10% 10% 10%

Source:Agency for Healthcare Research & QualityMEPS

Percentof health CareCosts

1% 1% 2% 4% 6%

13%

73%

0% 0% 0%

The Health & Profitable to the “Market,” the Sick & Poor to the Taxpayer

Private Insurers

Government Programs

Rising Costs = Less Benefits = Rising Costs = Less Benefits = Under/UninsuranceUnder/UninsuranceProportion of Americans Covered by Employer Insurance

Source: US Census

60.0%

62.0%

64.0%

66.0%

68.0%

70.0%

1999 2000 2001 2002 2003 2004 2005

79 79

80.3 80.2 80.4

77.8

80.6

U.S. U.K. Germany France Canada Italy Sweden

Life Expectancy, Life Expectancy, 20052005(Data in Years)

5.35

4.7

3.93.6

2.4

6.8

U.S. Canada Australia Italy Germany France Sweden

Infant Mortality, Infant Mortality, 20052005(Deaths in first year of life per 10,000 live (Deaths in first year of life per 10,000 live

births)births)

0%

500%

1000%

1500%

2000%

2500%

3000%

1970 1975 1980 1985 1990 1995 2000

Physicians Administrators

Growth of Physicians & Growth of Physicians & AdministratorsAdministrators 1970-20051970-2005

Source: Bureau of Labor Statistics & NCHS

One-Third of Health Spending is Consumed by

Administration

Administration

All Other

31%

Potential Savings: $350 billion per Potential Savings: $350 billion per yearyear

Enough to Provide Comprehensive Enough to Provide Comprehensive Coverage to EveryoneCoverage to EveryoneSource: Woolhandler, et al, New England Journal of Medicine, August 2003 & Int. Jrnl. Of Hlth. Services,

2004

Costs to Business

• Health care cost General Motors $5.6 billion in 2005 adding $1500 to the price of each car

• Companies that offer coverage often pay 10% or more of payroll on health benefits and are at a disadvantage competing with companies that don’t offer coverage or where there is public coverage

• Toyota located a new plant in Canada and Lifesavers moved a Michigan factory to Ontario

Skyrocketing costs for health care are hurting U.S. business:

GM retiree cost is $60 Billion!

Source: Wall St. Journal, March 11, 2004

Lesson #1: Simply Giving More People Existing Private Insurance

Policies Is Not Solution:•Current Private Insurance Policies Offer Inadequate Protection.

•Any Gains in Coverage Will Be Quickly Offset as Costs Rise & Employers Shed Benefits.Lesson #2: Real Solution to Health

Crisis Must Do 2 Things:

1) Offer Coverage More Comprehensive than that Currently Available on the Private Market.2) Control Costs so that Benefits are Sustainable.

Only Two Paths to Reform

1. Preserve Private Insurance Companies & their Waste

2. Create a National Health Insurance System

Single-Payer Benefits

• Comprehensive Coverage for all medically necessary services (doctor, hospital, long-term care, mental

health, vision, dental, drug, etc.) in a single-tier system.

• Free Choice of doctor & hospital.

• Health Workers Unleashed from corporate dictates over patient care.

• Hospitals guaranteed a secure, regular budget.

MedicareMedicare

MedicaidMedicaid

Payroll TaxPayroll Tax

Income TaxIncome Tax

Single-Payer Single-Payer Health Care Health Care

FundFund

$$$$$$

Financing Single-Payer

Bonus: Negotiated formulary with physicians, global budget for hospitals, primary & preventive care, bulk purchasing of drugs & medical supplies = long term cost control.

Health Savings Accounts

• A bank account in which a limited amount of money may be deposited tax-free for expenditures on health services.

• Must be paired with a “high-deductible” health plan. (e.g., $5,000).

• First few thousand dollars are paid from the HSA, at some point, “catastrophic” coverage kicks in.

• Theory: Patients now using “their own money” = better consumers = lower costs.

0

10

20

30

40

50

60

70

80

10% 10% 10% 10% 10% 10% 10% 10% 10% 10%

Source:Agency for Healthcare Research & QualityMEPS

Percentof health CareCosts

1% 1% 2% 4% 6%

13%

73%

0% 0% 0%

High-Deductibles = No Savings

Health Savings Accounts Won’t

•Provide Meaningful Choice for Patients

•Reduce Administration

•Produce Savings

Health Savings Accounts Will

•Discourage Preventive & Primary Care

•Create Huge New Administrative Waste

•Produce Few Savings (a few sick people cost the most)

“Individual Mandate”

“Let them buy insurance.”

Criminalizing the Uninsured:A Massachusetts Punitive Index

# The Crime The Fine

1 Violation of Child Labor Laws $50

2 Illegal Sale of Firearms, First Offense $500 max.

3 Driving Under the Influence, First Offense

$500 min.

4 Domestic Assault $1000 max.

5 Cruelty to or Malicious Killing of Animals

$1000 max.

6 Communication of a Terrorist Threat $1000 min.

7 Being Uninsured* $1500 min.

*Note: Original version of House Bill would have suspended individuals’ driving licenses for uninsurance as well.

Subsidy & Individual Mandate Schemes

• Substandard Coverage: forces uninsured to buy defective insurance industry products that are already causing families to face bankruptcy & go without needed care.

• Unaffordable: Without savings achievable with single-payer, taxes must raised or funds diverted from other needy programs.

• Micro-coverage, Macro-costs: Preserves wasteful private insurers & adds yet another layer of state administrative waste. Rather than provide care to uninsured through a relatively efficient program like Medicare, the plan launders tax dollars through wasteful private insurers.

• No Realistic Cost Control: Any gains in public coverage will be unsustainable due to rising costs.

“Sounds Great, but it’s not politically feasible”

•2/3rds of population want it

•Most (59 percent) of physicians want it

•Business community is now realizing the need for it.

Single-Payer:Glen BartonFormer CEO, Caterpillar Inc. (Fortune 100)

Past Chairman, Health & Retirement Task Force Business RoundtableRepresents 150 Largest EmployersTotal Assets: $4.0 Trillion

“The quickest & simplest solution… is to go to a single-payer system”

- Written Testimony to AHCTF, Feb. 1 2006

“If done right, health care in America could be dramatically better with true single-payer coverage.”

--Ben Brewer, WSJ, April 18, 2006Ben Brewer, WSJ, April 18, 2006

“[single-payer] is an idea that's so easy to slam politically yet so sensible for business that only Republicans can sell it! …it may take a Republican President to bless the socialization of health spending we need.”

-Matt Miller, Fortune, April 18, 2006

““Think, as a small business, how you could benefit from a single-payer system: you wouldn’t lose potential employees to larger firms that offer more attractive health benefits; health insurance costs would cease to be a line item in your budget. A serious illness befalling you or an employee wouldn’t be a company-wide financial crisis. You might even save money.”

-Joseph Antony, CNBC / MSN Money, Winter 2003

CNBC / MSN MoneyCNBC / MSN Money

Is “The Perfect the Enemy of the Good?”

• The central flaws of the “Obama” plan remain the central flaws of our current system – Uncontrolled Costs– Lack of Universal Coverage

• Without eliminating the overhead of a patchwork for-profit system we will not achieve the system we deserve

Is “The Perfect the Enemy of the Good?”

The Radical & the Republican

“Many of Lincoln’s admirers have painted him as a man who wanted exactly what the abolitionists did but cannily waited for a perfect moment to achieve it. [In fact], radicals like Douglass set an agenda Lincoln gradually adopted as his own. Without abolitionists, there would have been no Lincoln.”

- James Oakes, Historian, UC Berkeley

Single-Payer: “Politically Feasible?”

Abolition of Human Slavery

(1860s)

Women’s Suffrage

Movement(1840-1920)

Civil Rights Act(1964)

Other “Politically Infeasible” Movements