Posted on May 5, 2001

Proposal of the Physicians' Working for Single-Payer Health Insurance


Executive Summary

The United States spends more than twice as much on health care as the average of other developed nations, all of which boast universal coverage. Yet over 42 million Americans have no health insurance whatsoever, and most others are underinsured, in the sense that they lack adequate coverage for all contingencies (e.g., long-term care and prescription drug costs).

Why is the U. S. so different? The short answer is that we alone treat health care as a commodity distributed according to the ability to pay, rather than as a social service to be distributed according to medical need. In our market-driven system, investor-owned firms compete not so much by increasing quality or lowering costs, but by avoiding unprofitable patients and shifting costs back to patients or to other payers. This creates the 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 the demands of business. In addition, burgeoning satellite businesses, such as consulting firms and marketing companies, consume an increasing fraction of the health care dollar.

We endorse a fundamental change in America's health care - the creation of a comprehensive National Health Insurance (NHI) Program. Such a program - which in essence would be an expanded and improved version of Medicare - would cover every American for all necessary medical care. Most hospitals and clinics would remain privately owned and operated, receiving a budget from the NHI to cover all operating costs. Investor-owned facilities would be converted to not-for-profit status, and their former owners compensated for past investments. Physicians could continue to practice on a fee-for-service basis, or receive salaries from group practices, hospitals or clinics.

A National Health Insurance Program would save at least $150 billion annually by eliminating the high overhead and profits of the private, investor-owned insurance industry and reducing spending for marketing and other satellite services. Doctors and hospitals would be freed from the concomitant burdens and expenses of paperwork created by having to deal with multiple insurers with different rules - often rules designed to avoid payment. During the transition to an NHI, the savings on administration and profits would fully offset the costs of expanded and improved coverage. NHI would make it possible to set and enforce overall spending limits for the health care system, slowing cost growth over the long run.

A National Health Insurance Program is the only affordable option for universal, comprehensive coverage. Under the current system, expanding access to health care inevitably means increasing costs, and reducing costs inevitably means limiting access. But an NHI could both expand access and reduce costs. It would squeeze out bureaucratic waste and eliminate the perverse incentives that threaten the quality of care and the ethical foundations of medicine.

Marcia Angell, MD
Past Editor
New England Journal of Medicine

Quentin Young, MD
National Coordinator
Physicians for a National Health Program
Past President
American Public Health Association

Joel Alpert, MD
Past President
American Academy of Pediatrics 

Ron Anderson, MD
President and CEO
Parkland Health & Hospital System

Peter Beilenson, MD, MPH
Department of Health, Baltimore City

Olveen Carrasquillo, MD, MPH
Advisory Committee Member
National Hispanic Medical Association

Christine Cassell, MD
Past President
American College of Physicians

Elinor Christiansen, MD
President Elect
American Medical Women's Association

Gary Dennis, MD
Past President
National Medical Association
Merlin Du Val, MD
Former Assistant Secretary for Health
Department of Health, Education and Welfare

David Himmelstein, MD
Physicians for a National Health Program

Rodney Hood, MD 
National Medical Association

Edith Rasell, MD, PhD
Economic Analysis and Research Network
Economic Policy Institute

Helen Rodriguez-Trias, MD
Past President
American Public Health Association

Sindhu Srinivas, MD
National President
American Medical Student Association

Gerald Thomson, MD
Past President
American College of Physicians

Walter Tsou, MD, MPH
Department of Health, Philadelphia

Steffie Woolhandler, MD, MPH
Center for National Health Program Studies
The Cambridge Hospital/Harvard Medical School

*The participants hold a number of distinguished positions, which are not limited to those listed above. The participants' positions and affiliations listed here are provided for identification purposes only.