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Testimony of Douglas N. Robins, M.D. Physicians for a National Health Program (PNHP)

My name is Douglas Robins. I am a practicing physician in Washington, D.C. and I am representing Physicians for a National Health Program, an organization with over 8,000 physicians across the United States representing every specialty. Our primary goal is to promote a universal health care system that would provide health care benefits to all Americans. It would eliminate for-profit health insurance and substitute a single payer system funded through a payroll deduction in place of the health insurance premiums which are now being paid. It would eliminate for-profit managed care and allow free choice of physician and hospital for all. We believe that as a result of the enormous savings that could be realized by eliminating the present insurance system, that with these same health care dollars that we're now spending, we could cover all of the 43 million Americans who now lack health care coverage, and expand benefits for those of us who are already covered. In fact, the GAO estimated a 10 percent administrative savings with a single payer system which would amount to more than 100 billion dollars a year in savings.

We, too, share your concerns about the future of Medicare as it now exists. We feel that it is a good system, although it could be improved by expanding pharmaceutical coverage, mental health benefits and long-term care support. Because it is such an integral part of our health care system, it simply cannot be dealt with in isolation, and the Medicare population would be best served by integrating with the remaining population into a universal single payer system.

I would like to highlight two of the major concerns in our health care system that would be eliminated by our single payer approach. The first concern is the myth that managed care saves money. When managed care first became prevalent a few years ago, it was able to slow down the runaway health care inflation which was occurring at that time by significantly reducing fees to physicians and hospital and by controlling utilization. In recent years managed care has failed to achieve further savings, and health care costs are again on the rise. At the same time, there has been a tremendous public backlash against many of the restrictive practices of managed care, and as the public and the political process tries to reform some of those restrictive practices, it will ultimately raise costs even further. What is often forgotten, however, is the huge administrative costs that managed care generates. In contrast to Medicare, which runs on a 2 percent administrative cost basis, managed care insurance companies routinely take 15% to 20% of health care premiums for their administrative costs and profits. In addition, because of the excessive paperwork requirements in the present system, physicians are often spending 10% or more of their gross incomes on billing costs. It doesn't take an advanced degree in health economics to determine that a health care system that is spending 25% to 30% of its dollars on administrative costs, is an extremely dysfunctional system. A well run single payer system would take the savings which managed care was previously able to achieve, and by eliminating much of the bloated bureaucracy, marketings costs and sales commissions, excessive executive compensation packages and shareholder profits, would be able to function far more economically. Most of the restrictive practices and expensive micro-management of managed care would be eliminated, Instead, quality and utilization control mechanisms would include practice guidelines, outcomes research and practice profiling to identify "outliers."

The second concern is the number of uninsured Americans which now stands about 43 million and is growing at the rate of 1 million a year in spite of a booming economy. Much of the large safety net which once existed in our health care system has now been eliminated because of the financial pressures of managed care, so that these increasing numbers of uninsured have far less access to health care than they had previously. I believe that most Americans feel that access to health care is a basic human right, and they are sympathetic to the plight of the uninsured. However, there is another aspect to this problem which is the significant public health implications, which of course, will affect the insured, as well as the uninsured population. The spread of infectious disease, as well as the closure of vital clinics, emergency rooms, and hospitals are examples of these public health issues; and, of course, the failure to diagnose and treat illness early in its course, rather than late, will ultimately lead to a far more expensive outcome for society as a whole. In spite of the fact that there has been extensive public and political debate on how to solve the uninsured problem, no other viable solution has yet been brought forth, other than using the savings achieved by converting our health care system to single payer and eliminating the insurance companies.

Let me close on an optimistic note. "Free market competition" is the mantra that is repeated so frequently in relation to our current economic prosperity. I would submit to you that when it comes to health care, almost all Americans would prefer not to have that competition between multi-billion dollar conglomerates competing on the basis of stock price and shareholder profits - but instead would rather see their physicians, hospitals, and other health care providers competing on the basis of competence, compassion, and cost-effectiveness. The good news is that we can have that kind of a system, one in which all Americans are included, for a much smaller price than what we are paying for now.