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Posted on September 10, 2004

Health Care's Reality (SF Chronicle)

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Friday, September 10, 2004 (SF Chronicle)
Health care’s reality
by David Lazarus

The original article can be found on SFGate.com here:
http://www.sfgate.com/cgi-bin/article.cgi?file=/chronicle/archive/2004/09/10/BUGU58MFDG1.DTL

denial \di-nI-l\noun: a psychological defense mechanism in which confrontation with a personal problem or with reality is avoided by denying the existence of the problem or reality..

Is the U.S. health care system working? Here are the facts:

— The number of Americans lacking health insurance rose last year to a record 45 million from 43.6 million in 2002, according to the latest census figures.

— About 5 million fewer jobs now provide health insurance than just three years ago, according to a newly released Kaiser Family Foundation survey.

— For jobs that do provide coverage, insurance premiums climbed 11.2 percent this year, or five times faster than both inflation and average U.S. workers’ salaries.

— Since 2001, premiums for family coverage have soared by almost 60 percent, compared with a 9.7 percent increase in consumer prices and a 12.3 percent gain in wages.

— More than half of companies with at least 200 workers say it’s very likely they will raise employee contributions to health coverage in the near future.

Yet despite such clear evidence of a health care system in crisis, neither President Bush nor Democratic challenger John Kerry has called for meaningful change in how Americans receive medical treatment.

Instead, both candidates favor keeping the current system intact while using taxpayer funds to expand the reach of the insurance industry.

“To expand a system that’s not working is absolute insanity,” said Don McCanne, a Southern California doctor and former president of Physicians for a National Health Program, a 12,000-strong organization advocating medical coverage for all Americans.

The real solution, McCanne and other health care activists believe, is creation of a so-called single-payer system in the United States.

Under such a system, similar to Canada’s state-backed insurance network, any American would be able to receive treatment from any doctor at any hospital nationwide.

It’s not so far-fetched. Federal and state taxes, along with tax subsidies for businesses, already account for about 60 percent of the nearly $1.8 trillion expected to be spent this year on health care in the United States, primarily through Medicare and Medicaid.

For the remaining 40 percent of health care spending, Physicians for a National Health Program advocates replacing private-sector insurance plans with a government-run program that would allocate funds to medical facilities.

A payroll tax of about 7 percent would replace all other employer expenses for medical costs, and an income tax of about 2 percent would replace employees’ current insurance premiums, co-pays, deductibles and other out-of- pocket expenses.

Such a system not only would work — as has been demonstrated in countries that already have single-payer plans — it would be far cheaper to administer than the existing health care system.

Harvard Medical School researchers determined earlier this year that about a quarter of all health care spending in the United States is now squandered on bureaucratic overhead, such as clerical staff at doctors’ offices to process a vast array of insurance forms.

Under a standardized single-payer system, the researchers estimated, annual administrative costs would be slashed by more than $280 billion. This represents enough money to insure all Americans now lacking coverage and to allow millions of underinsured people to improve their quality of care.

Refinements would be necessary to ensure cost controls and quality. A 2001 study, for example, found that Canadians requiring elective surgery wait an average 16 weeks before reaching an operating table. That would have to be improved upon.

But we’ll never know unless we try.

“It won’t be easy,” observed Kevin Grumbach, chairman of UCSF Medical School’s Department of Family and Community Medicine and a longtime backer of universal health care.

“You’re up against formidable special interests,” he said. “The insurance industry, the pharmaceutical industry — everybody making outrageous profits at the expense of delivering rational care to people.”

It should be noted that Canada didn’t rush into a single-payer plan. It experimented with the system on a province-by-province basis, beginning with Saskatchewan in 1946, before implementing it nationwide 25 years later.

State Sen. Sheila Kuehl, D-Santa Monica, believes California is the ideal proving ground to demonstrate that a single-payer system can work in this country as well.

She’s introduced legislation, SB921, which would insure every Californian under a single-payer plan and save the state about $14 billion in annual administrative costs. The bill was approved by the Assembly Health Committee in June by a vote of 12-5.

However, even if signed into law — which no one expects any time soon — SB921 still would require passage of federal legislation allowing state health authorities to serve as a conduit for Medicare funds.

“That’s going to be difficult under this president and this Congress,” Kuehl acknowledged. “The interests of business take precedence at the moment.”

She thinks this will change. First, though, political leaders will have to stop being in denial about the dysfunctional state of the current health care system.

“We’re often in denial about things we don’t know how to solve,” Kuehl said. “But I’m hopeful. Single-payer is so much more efficient and so much more effective. People will see that.”

When they finally accept reality, that is.

David Lazarus’ column appears Wednesdays, Fridays and Sundays. He also can be seen regularly on KTVU’s “Mornings on 2.” Send tips or feedback to
dlazarus@sfchronicle.com.

Copyright 2004 SF Chronicle