Healthy skepticism
By Dr. Michael Hochman and Dr. Steffie Woolhandler
The Boston Globe
October 28, 2006
MASSACHUSETTS is in the midst of yet another healthcare experiment. By July, all residents will be legally required to have health insurance — a so-called “individual mandate.” The bill’s sponsors believe that the uninsured can buy their way out of their predicament.
As doctors in an urban hospital, we are not optimistic about this proposal. We care for uninsured and underinsured patients who often lack the resources to eat well or find proper child care, much less to buy insurance. The individual mandate is another ill-fated Band-Aid.
Under the new law, Massachusetts residents will continue to be covered by the existing patchy network of insurance groups. The options are complicated, and the costs are steep: a typical group policy in costs about $5,000 annually for an individual and more than $11,000 for a family. Many of the state’s approximately 618,000 uninsured residents will still fall through the cracks.
The answer lies in an alternative proposal: single-payer national health insurance. Australia and Canada already use this approach. Under such a system, a public agency would finance universal healthcare. It would be an improved and expanded version of Medicare.
How would a single-payer system work? According to the proposal by the Physicians for a National Health Program — which holds its annual convention in Cambridge next weekend — all US residents would receive a healthcare card entitling them to all medically necessary services from their choice of doctors and hospitals.
The program would be funded by an increase in taxes. But the tax hike would be fully offset by savings from abolishing insurance premiums and many out-of-pocket healthcare costs.
The private insurance industry, the only major group that would be harmed, has been national health insurance’s most vocal opponent. Industry lobbyists have thus far convinced legislators on Beacon Hill and Capitol Hill that a government-run system would be inefficient.
Yet insurance companies spend several times as much on administrative costs as public programs do. A 2003 study published in the New England Journal of Medicine found that the average overhead of US insurance companies is 11.7 percent, compared with 3.6 percent for Medicare and 1.3 percent for Canada’s national health insurance program. Two studies commissioned by the Massachusetts Medical Society concluded that a single-payer system could save so much on paperwork that it would be more cost-effective than the present system.
Some worry that the quality of healthcare might decline. But there is no reason to suspect this would happen. Healthcare providers and hospitals would continue to have the same incentives they have now to provide high-quality care. For the most part, doctors and hospitals would continue to be paid as they have been, except that rather than submitting their bills to private insurance companies — a difficult and time-intensive process — they would send their bills to the national health insurance program.
And despite fears of long waits for life-saving services, that would be unlikely with appropriate funding. In countries such as Canada, where patients experience long waits, a much lower percentage of GDP is devoted to healthcare than in the United States.
A national insurance program also would not hurt medical research. Most basic research in the United States is publicly funded by grants from the National Institutes of Health (NIH). According to a recent book by a former editor of the New England Journal of Medicine, the vast majority of new classes of medications are discovered using NIH funding.
Single-payer healthcare is the only long-term answer to our ailing healthcare system. No other proposal — including a healthcare mandate — could provide health insurance to all Americans, cut costs, and simplify the healthcare system in one broad stroke.
Others feel this way as well. In a survey of more than 900 Massachusetts physicians published in the Archives of Internal Medicine in 2004, almost two-thirds supported single-payer healthcare.
Over the next few years, the nation will be watching the Massachusetts experiment closely. The silver lining may be that what we learn will move us closer to the universal, comprehensive single-payer system that Americans deserve.
Dr. Michael Hochman is an intern in internal medicine at Cambridge Hospital. Dr. Steffie Woolhandler is a co-founder of Physicians for a National Health Program and an internist at Cambridge Hospital.