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Democrats Debate Universal Coverage
T he U.S. has entered a new phase in its everlasting debate about how to fix the health care mess. As Drew Altman, president of the fastidiously nonpartisan Kaiser Family Foundation, put it to the Washington Post in March, “We’re at the beginning of the next great debate about health reform.” We are entering this stage not because Americans have changed (they have supported universal health insurance by large majorities since the Depression), but because the nation’s economic and political elite have become much more willing to call for universal health insurance or, as the more timid of them say, “affordable health care.” America has not heard this much chatter about health-care reform from business leaders, labor leaders, the media, and politicians since the years 1992 to 1994 when universal coverage through HMOs was all the rage.
The health insurance industry itself is contributing to the chatter. This industry—which has opposed universal health insurance since its inception in the early 1930s, and which funded the Harry and Louise ads opposing Bill and Hillary Clinton’s Health Security Act of 1993—has come to understand that its survival depends on how state legislatures and Congress respond to the growing number of uninsured. The industry correctly perceives that it will collapse unless government can be persuaded to funnel more dollars to insurance companies to replace the dollars the industry is losing as employers flee the health insur- ance market.
On November 13, 2006, the insurance industry executed what we might call a 150-degree turn when its trade group, America’s Health Insurance Plans (AHIP), released a proposal calling for universal coverage of children within three years and 95 percent coverage of adults within ten years. Not surprisingly, AHIP proposed that the taxpayers subsidize the purchase of insurance from health insurance companies. In January of this year, a coalition, including AHIP and a rogues’ gallery of establishment groups— AARP, the American Hospital Association, the American Medical Association, the Blue Cross and Blue Shield Association, Johnson and Johnson, Pfizer, and the Chamber of Commerce of the United States— called on the U.S. taxpayer to halve the number of uninsured by financing richer tax credits for people who buy health insurance and by expanding Medicaid and the State Children’s Health Insurance Program.
The labor movement is also contributing to the renewed pressure for reform. On March 6, the 47-member executive committee of the AFL-CIO endorsed, at long last, achieving universal coverage by expanding Medicare to cover the entire U.S. population. The AFL-CIO could not bring itself to use the phrase “single payer,” but because a Medicare-for-all program is the equivalent of a single-payer system, the federation’s announcement was an indirect endorsement of single payer. Under a single-payer system, one government agency, not hundreds of insurance companies, reimburses clinics and hospitals and sets limits on what clinics, hospitals, and drug companies can charge. The AFL-CIO’s endorsement of Medicare for all was hailed by single-payer advocates around the country. “We recognize that the AFL-CIO is unlikely to lead the charge for single payer without more grassroots pressure,” said Dr. Ida Hellender, director of Physicians for a National Health Program, one of the leading single-payer organizations in the U.S., “but we feel this endorsement is a very important step for labor and a significant boost for the single-payer movement.”
The Service Employees International Union (SEIU), the largest of the unions to break with the AFL-CIO two years ago, has been much less helpful to the single-payer movement, but it has worked hard to intensify the health-care reform debate. Andy Stern, SEIU’s president, has made it clear he opposes any system that continues to rely on employers fund it, as well as a single-payer system.
Stern made his dislike of single payer obvious at a forum sponsored by the Brookings Institute in June 2006. After blasting the current employer-based system as unsustainable, he criticized “people who say let’s just go to Medicare for all…. There are not going to be single payers…in America,” he told the audience. Then Stern uttered this spectacular non sequitur: “I think the single-payer issue is a stalking horse for I am not sure what because we are going to have a multi-payer system….” In an interview with the Los Angeles Times on March 12, that is, six days after the AFL-CIO endorsed Medicare for all, Stern conceded that “single payer would be the most efficient system,” but then he repeated his claim that “Americans want to have an American solution, not a Canadian solution.” Stern did not explain why a universal system built on Medicare would be “un-American.”
Although it is not clear what solution to the health care crisis Stern supports, it is quite clear he intends to raise holy hell about the crisis. On February 7 he held a news conference with Lee Scott, Wal-Mart’s CEO, to announce yet another coalition for health care reform, this one called the Better Health Care Together Campaign. The statement the coalition released that day did not indicate what proposal, if any, it would support. It was not even clear whether the coalition supports universal health insurance. The word “universal” was conspicuously missing from the press release while the phrase “quality affordable health insurance” appeared repeatedly.
The Candidate Debate
T he rising demand for health care reform from the insurance industry and business and labor leaders is having an effect on politicians. This is most apparent in the debate among presidential contenders. “Every candidate [for president in 2008] is going to have to have a health-care plan, because it is the number one domestic policy issue on the minds of voters,” said Karen Ignagni, president of AHIP. For Democratic presidential candidates having a plan for universal coverage, not just “a health care plan,” is now a requirement.
This was obvious at an unusual candidates forum hosted by SEIU and the Center for American Progress (a think tank headed by former Clinton White House Chief of Staff John Podesta) in Las Vegas on March 24. The forum was unprecedented. It focused solely on health policy; seven Democratic candidates participated (although Republican candidates were invited as well); and it went on for three hours. Each speaker was given 20 minutes alone on the stage—3 minutes to make an opening statement and 17 minutes to answer questions from the moderator and the audience. This unusual forum is worth reviewing in some detail because it illustrated the paradox of the latest phase of the health care reform debate: that public yearning for universal health insurance is now so strong that Democratic candidates feel obliged to support universal coverage, but public pressure is not yet strong enough to force most candidates to offer a plan that will achieve universal coverage.
As Sen. Hillary Rodham Clinton noted when her turn to speak came, all seven Democratic candidates at the forum endorsed universal health insurance. That, unfortunately, is where the good news ends. Only two of the seven—Rep. Dennis Kucinich and former Sen. John Edwards— had detailed proposals to present. Ku- cinich, a single-payer supporter, is not likely to win the nomination and Edwards’s plan may not work. The other five participants (Clinton, Sen. Christopher Dodd, former Alaska Sen. Mike Gravel, Sen. Barrack Obama, and New Mexico Governor Bill Richardson) told horror stories about the current system and outlined vague, sleep-inducing principles upon which their health policy will be based: “all stakeholders must be involved”; “we must fund prevention”; “we [must] make better use of the money we have in the system”; “we must get costs under control”; “we must modernize the way we deliver health care”; etc. Clinton claimed she wanted to hear more ideas from the people before she developed a plan. Obama said he would unveil a plan within a few months. Dodd and Richardson never promised a plan.
Gravel was almost incomprehensible. He began by misusing the phrase “single-payer.” He proposed a “single-payer health care voucher plan” under which Americans could buy health insurance from five or six insurance companies. This is an oxymoron. The essential feature of a single-payer is that one payer reimburses clinics and hospitals directly; it does not reimburse insurance companies. Then he said that “single-payer” means “all Americans pay for it,” which is not accurate. By this definition, any universal plan paid for by taxes would be a single payer, regardless of whether the nation’s 1,500 health insurance companies continue to exist. Then he announced that Congress would never pass his plan and the only way we could get it enacted was with a national initiative process which does not currently exist, but allegedly will if Gravel becomes president.
Because Kucinich has promoted single-payer for years and because he was the only candidate supporting a real universal coverage bill in Congress (HR 676, the single-payer legislation sponsored by Rep. John Conyers), he was more articulate than any of the other candidates with the possible exception of Edwards. He explained clearly why high administrative costs generated by the current multiple-payer system would be reduced under a single-payer system. Kucinich was also the most passionate. Without naming the other six candidates, he lambasted them for assuming that it is impossible to create a health insurance system that does not rely on insurance companies. “It’s time we end the control that insurance companies have over health care and our political system,” he said angrily.
John Edwards, not coincidentally, was the only candidate other than Kucinich who used the phrase “single-payer” correctly. He explained to the moderator that he liked single-payer systems because they are so efficient, but he thought many Americans would resist a single-payer proposal. “It is true that single-payer systems dramatically reduce costs,” he said. “It’s also true that people like the health insurance they have now.” Edwards then explained that his proposal would divide the country into “health care markets” and, within each market, consumers could choose between a Medicare-like single-payer program and health insurance companies. He implied that the Medicare-like programs, with their lower overhead costs, would probably undersell the insurance companies and gradually end up being the only insurer—the one payer left standing—in a given region. “This may gravitate toward a single-payer system,” he con- cluded. “But consumers will decide that.”
Edwards’s statement that Americans “like” the insurance they have was wildly off the mark. According to Harris Polls going back at least a decade, public esteem for the health insurance industry is very low, comparable with tobacco and oil companies. But Edwards’s larger point—that establishing a single-payer system in one piece of legislation is going to be very difficult—is well taken. No single-payer system in the world was installed overnight. (California came close to pulling that off last year. The legislature in that state enacted a single-payer bill last summer, only to see Governor Arnold Schwarzenegger veto it in September.)
The insurance industry and their allies have proven themselves adept at keeping single-payer bills from getting hearings and defeating single-payer initiatives (single-payer initiatives presented to Californians in 1994 and to Oregon residents in 2002 lost by large margins). So the question of whether and how an American single-payer system could be phased in deserves careful thought.
Achieving Single-Payer
T here are several ways to achieve a single-payer health system in the U.S. One could, for example, add all children under 19 to Medicare in year one, add all people age 55 to 64 in year two, and so on. Edwards’s method—letting market forces create a single-payer gradually—might work. (If it did, the irony would be indescribably delicious.) And it might not. The critical questions are whether the Medicare-like programs he has in mind would be true copies of the existing Medicare program, and whether these programs would start off with a large enough enrollee base to withstand “adverse selection,” which means disproportionate enrollment by sick people. It was impossible to tell from Edwards’s brief comments in Las Vegas, and it is impossible to tell from the data he has made available on his website, what the answers to these questions are.
There is no question that the traditional Medicare program is more efficient and more popular than any insurance company. It spends only 2 percent of its expenditures on overhead and spends the other 98 cents on health care while insurance companies spend 20 percent on overhead and 80 percent on health care. In theory, if Medicare were forced to compete with insurance companies, Medicare’s low overhead should give it a 15-to-20 percent price advantage over private insurance companies. Moreover, the traditional Medicare program (the original, single-payer Medi- care program in which 83 percent of Medicare beneficiaries are currently enrolled, as opposed to the HMO arm of the Medicare program in which the other 17 percent are enrolled) is more attractive to patients because it does not attempt to control costs by vetoing doctor-patient decisions. Because it is more efficient and more attractive, a program truly modeled after the traditional Medicare program should beat the pants off insurance companies.
But for some reason Edwards is not proposing to throw open the existing Medicare program, which now insures 43 million seniors and disabled people, to anyone who prefers to be insured by Medicare rather than Blue Cross Blue Shield or Aetna. He is instead proposing that smaller programs that resemble Medicare, but which are separate from it, operate in numerous “health markets” across the country (which he does not define) in competition with insurance companies. Would these Medicare-like programs start out with a sizable enrollment, say half a million to a million people, or would they go through a growth phase in which they are quite small? If they start out small, or never get to be very big, will they have to advertise heavily to attract enrollees (something Medicare does not do now) and, if so, won’t that drive up administrative costs and premiums? If they start out or remain small, won’t they be vulnerable to adverse selection, especially if private insurers deny health care to their sicker enrollees and encourage them to switch to the Medicare-like programs?
These and other problems caused by small size relative to the real Medicare, and by the need to compete with private insurers, could cause programs that bear the name “Medicare” to lose to the bloated insurance industry even though the real Medicare program is far more efficient than any insurance company. In that event, the single-payer movement will have suffered two setbacks. It will not only have failed to build a single-payer system via market forces, but a central premise of the single-payer movement—that Medicare is more efficient than the insurance industry—will have been falsely undermined.
Edwards deserves credit for putting a detailed proposal in front of the public and for being willing to describe single payer as good policy. But he needs to explain why creating numerous mini-Medicare programs for the non-elderly is a better idea than building on the existing Medicare base of 43 million people.
Appeasing Industry
G iven her front-runner status and all the years she has studied health policy, Hillary Clinton’s comments at the Las Vegas forum were the most disappointing. Her remarks were a textbook illustration of the tension between Democrats’ hunger to deliver universal coverage and their fear of antagonizing the insurance industry and the other players that make up the health care industry. Clinton made no mention of single-payer as an option. She did go to great lengths to blister the insurance industry, but then she implied that she intended to leave the industry in control of the health-care system. For example, after telling a story of a woman who was denied medical services by her insurer because her condition was “pre-existing,” Clinton thundered, “We can’t get to universal coverage until we eliminate insurance discrimination once and for all.” This statement implies that Clinton intends to let insurance companies continue to run the system.
In addition to having nothing to say about single payer, Clinton endorsed the claim that “prevention” and electronic medical records (EMRs) will save money when in fact there is little evidence to support those claims. She was not alone; only Kucinich and Gravel resisted mouthing these platitudes. Preventive medicine can improve health, but as counterintuitive as it may sound, there is very little evidence for the claim that making preventive services more available saves money only on the grounds that good preventive medicine improves health. There is no solid evidence that more preventive services inevitably lead to lower costs. They may in fact lead to higher spending. Teaching primary care doctors to identify depression in their patients is a good example of a preventive measure that could very well increase costs as more depressed patients get more therapy sessions and start taking anti-depressants.
The argument for EMRs as a cost-containment method is even weaker. Although the insurance and computer industries have vigorously peddled hype about EMRs for 15 years, the small body of research on EMRs shows mixed results on quality and indicates universal adoption of EMRs will raise total spending on health care by perhaps 2 percent. The evidence that EMRs can actually harm patients includes, for example, a study published in a 2005 edition of Pediatrics that found that mortality rates in a children’s hospital in Pittsburgh doubled after introduction of an EMR.
In stark contrast to the Democrats who attended the Las Vegas forum, none of the Republican candidates supports universal coverage. The candidate who comes closest to endorsing such a position is Mitt Romney. As governor of Massachusetts, he signed a bill on April 12, 2006 that he and the bill’s Democratic supporters in the legislature claimed would reduce the uninsured rate in Massachusetts from 11 percent to 1 percent by 2010 without raising taxes. (Today the law’s supporters say the law will get the rate down to 5 percent.) The law requires Massachusetts residents to buy health insurance beginning July 1, and promises to provide subsidies to residents with incomes under three times the poverty level. Because Romney’s law generates many more customers for insurance companies, it is exactly the sort of law the insurance industry supports.
But the law Romney is so proud of is going to fail because it has no cost containment in it. Romney and other supporters of the Massachusetts law claim that costs will come down due to the provision of more preventive medical services, the spread of EMRs, and the publication of “report cards” on clinics and hospitals by a newly appointed state council using data stored on EMRs. But this fantasy will never come to pass. As a result, Massachusetts will face a choice, probably by no later than 2008, between raising taxes in order to pay for the subsidies necessary for the uninsured to buy insurance, letting insurance policies with shriveled coverage (including enormous deductibles) count as “insurance,” exempting millions from the new mandate to buy insurance, or some com- bination of the above.
Readers should keep an eye on Romney’s law. We are going to see more laws like it between now and the day when politicians find the will to enact a single- payer system. Romney-like laws—laws that seem to insure all or nearly all people but don’t—are likely because of the immense pressure politicians now feel to vote for universal coverage and the immense pressure they feel from the health care industry to do nothing meaningful to bring health care costs down.
We are indeed in a new phase of the American health-care reform debate. The demand for solutions to the health care crisis is louder now than it was even five years ago and much of the new demand is coming from the American elite. But more talk does not signify that Congress and state legislatures will enact effective solutions soon. With few exceptions, the talk is still about goals we can agree on (extending coverage and reducing costs), not effective means to achieve those goals. Until the public and the nation’s leaders start talking in detail about real solutions, we will get, at best, more Romney laws. The single-payer movement still has a lot of work to do.
Z
Kip Sullivan is the author of The Health Care Mess: How We Got Into It and How We’ll Get Out of It (Author House, 2006).
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HAITI - International Action, which brings clean water and chlorinators to Haiti, seeks office space capable of housing up to six people and their office equipment.
Contact: Zach Bremer, Zbrehmer@haitiwater.org; 202-488-0735; http://www.haitiwater.org/.
MEDIA - The Union for Democratic Communications and Project Censored are sponsoring a joint conference on media democracy, media activism and social justice to be held November 1-3 at the University of San Francisco. Proposals for presentations, workshops and panels from activists and critical scholars are invited.
