Paul Krugman on single payer
One Nation, Uninsured
By Paul Krugman
The New York Times
June 13, 2005
Harry Truman tried to create a national health insurance system. Public opinion was initially on his side: Jill Quadagno’s book “One Nation, Uninsured” tells us that in 1945, 75 percent of Americans favored national health insurance. If Truman had succeeded, universal coverage for everyone, not just the elderly, would today be an accepted part of the social contract.
But Truman failed. Special interests, especially the American Medical Association and Southern politicians who feared that national insurance would lead to racially integrated hospitals, triumphed.
Sixty years later, the patchwork system that evolved in the absence of national health insurance is unraveling. The cost of health care is exploding, the number of uninsured is growing, and corporations that still provide employee coverage are groaning under the strain.
So the time will soon be ripe for another try at universal coverage. Public opinion is already favorable: a 2003 Pew poll found that 72 percent of Americans favored government-guaranteed health insurance for all.
But special interests will, once again, stand in the way. And the big debate among would-be reformers is how to deal with those interests, especially the insurance companies. These companies played a secondary role in Truman’s failure but have since become a seemingly invincible lobby.
Let’s ignore those who believe that private medical accounts - basically tax shelters for the healthy and wealthy - can solve our health care problems through the magic of the marketplace. The intellectually serious debate is between those who believe that the government should simply provide basic health insurance for everyone and those proposing a more complex, indirect approach that preserves a central role for private health insurance companies.
A system in which the government provides universal health insurance is often referred to as “single payer,” but I like Ted Kennedy’s slogan “Medicare for all.” It reminds voters that America already has a highly successful, popular single-payer program, albeit only for the elderly. It shows that we’re talking about government insurance, not government-provided health care. And it makes it clear that like Medicare (but unlike Canada’s system), a U.S. national health insurance system would allow individuals with the means and inclination to buy their own medical care.
The great advantage of universal, government-provided health insurance is lower costs. Canada’s government-run insurance system has much less bureaucracy and much lower administrative costs than our largely private system. Medicare has much lower administrative costs than private insurance. The reason is that single-payer systems don’t devote large resources to screening out high-risk clients or charging them higher fees. The savings from a single-payer system would probably exceed $200 billion a year, far more than the cost of covering all of those now uninsured.
Nonetheless, most reform proposals out there - even proposals from liberal groups like the Century Foundation and the Center for American Progress - reject a simple single-payer approach. Instead, they call for some combination of mandates and subsidies to help everyone buy insurance from private insurers.
Some people, not all of them right-wingers, fear that a single-payer system would hurt innovation. But the main reason these proposals give private insurers a big role is the belief that the insurers must be appeased.
That belief is rooted in recent history. Bill Clinton’s health care plan failed in large part because of a dishonest but devastating lobbying and advertising campaign financed by the health insurance industry - remember Harry and Louise? And the lesson many people took from that defeat is that any future health care proposal must buy off the insurance lobby.
But I think that’s the wrong lesson. The Clinton plan actually preserved a big role for private insurers; the industry attacked it all the same. And the plan’s complexity, which was largely a result of attempts to placate interest groups, made it hard to sell to the public. So I would argue that good economics is also good politics: reformers will do best with a straightforward single-payer plan, which offers maximum savings and, unlike the Clinton plan, can easily be explained.
We need to do this one right. If reform fails again, we’ll be on the way to a radically unequal society, in which all but the most affluent Americans face the constant risk of financial ruin and even premature death because they can’t pay their medical bills.
http://www.nytimes.com/2005/06/13/opinion/13krugman.html?hp
Comment: Rather than distributing a couple of excerpts from Paul Krugman’s article, I’ve sent it out in its entirety, for a very important reason.
The debate on comprehensive health care reform is somewhat muddled, and that is because there are two debates taking place: one on consumer-directed health care, and the other on universal coverage.
The noisy but counter-productive debate is on consumer-directed health care. The proposals, such as high-deductible health plans, individual health savings accounts, and Spartan plans stripped of benefits, all move away from the concept of health insurance in that they shift the financial responsibility from a common pool in which we all share risk, transferring much of that risk to each individual. Although we hear much about these concepts, this debate is really very unimportant because it can never lead to a rational system of ensuring access to affordable care. In fact, the opposite would occur.
The opponents of egalitarianism and solidarity may have a few victories, such as the insertion of the HSA legislation into the Medicare bill, but it will soon become evident that we will not be able to tolerate the financial vulnerability of precisely those individuals most in need of health care. Even most of the libertarian health policy analysts concede that reform must pool risk in some manner (even if a conglomeration of various tightly and loosely structured pools), and that the government will have to be involved at least to the extent of ensuring coverage for those who cannot possibly fund their own share of their risk pool(s).
It is ironic that the lunatic element of the consumer-directed movement is proposing not only privatization of health care coverage, but they are already engaged in a process that weakens the protection afforded by private health plans. The majority of average-income Americans are already financially vulnerable in the face of significant medical needs because of the deteriorating coverage marketed by the private insurance industry.
Some speak kindly of the advocates of consumer-directed health care, suggesting that they are well motivated even if ill-advised, but I disagree. “Let them eat cake” policies can be conjured up only by the most uncaring, cruel, heartless advocates of class stratification with the few “haves” insulating themselves from any societal responsibility to ensure that the basic needs of the masses of “have nots” are met. (In this paragraph, I find my own rhetoric to be highly offensive, but not nearly as offensive as the attitude of those who don’t give a rat’s a** about their fellow man/woman.)
There is really only one genuine debate on reform. Do we continue to waste resources and perpetuate profound inequities in our health care system by building on our highly flawed, fragmented model of private health plans and public programs, or do we adopt an efficient, equitable, affordable system of funding coverage for everyone? Paul Krugman has provided a concise answer in his article.
You should delete my emotional and ill-advised tirade and then reproduce Krugman’s article and distribute it as widely as possible. It’s time for us to get real about health care reform.
And be sure that the debate is properly framed. In Paul Krugman’s words:
“Let’s ignore those who believe that private medical accounts - basically tax shelters for the healthy and wealthy - can solve our health care problems through the magic of the marketplace. The intellectually serious debate is between those who believe that the government should simply provide basic health insurance for everyone and those proposing a more complex, indirect approach that preserves a central role for private health insurance companies.”