Posted on July 16, 2008

Dr. Steffie Woolhandler on the Presidential Candidates & Single-Payer in the 2008 Elections


Dr. Steffie Woolhandler, co-founder of Physicians for National Health Program (PNHP), a group of over 15,000 physicians nationwide who support a single-payer health care system, spoke on June 26 in Chicago at the PNHP offices. She spoke about the presidential candidates’ health plans and single-payer in the 2008 elections. She is an associate professor at Harvard Medical School and an internist at Cambridge Hospital in Cambridge, Mass. The transcript below was prepared by Elizabeth Lalasz of Chicago; it was subsequently edited by Dr. Woolhandler.

I’ve been asked to make some comments on the upcoming Presidential elections and developing a strategy around them. I am an expert in health policy, not on political strategy. But I want to talk a little about where I see us going in the single-payer movement within the broader political context.

I am paradoxically optimistic about the political situation right now. I say paradoxically because if we look at the actual health policy proposals of Obama and McCain, they are not good.

Let’s start with McCain. He has said that he is going to continue most of the proposals of the Bush Administration, and perhaps accelerate the privatization of Medicare. He does not use the word privatization - but he’s been very clear that he is going to push for more “competition” and “choice” within Medicare, euphemisms for privatization.

He’s also very big on consumer-directed health care - bare-bones health plans with big co-payments and deductibles - as a way to save money. He has put forward a fairly desultory proposal about refundable tax credits, after many months during which no concrete proposals for health reform appeared on his web site. His come-lately proposal would offer a refundable tax credit of $2,500 for an individual, $5,000 for a family, far too little to afford adequate coverage.

What he doesn’t say on his web site is how he would fund the tax credit. So we are left wondering. If McCain goes with a Bush-style plan - and many pundits talk as if that is the case - then the tax credits would be funded by caps on, or even eliminating the tax-deductibility of employer-based insurance. This would cause a very sharp contraction in employer-based coverage.

McCain’s proposes what I would call the “voucherization” of health care; families would get a fixed tax credit (or a fixed amount of tax deductibility of an employer-sponsored plan) and above that there would be no further direct or indirect government subsidies for health care. So, it is essentially turning the current open-ended government tax subsidy into a limited government voucher. In essence, this is akin to a switch from a defined benefit system to a defined contribution system.

For those not familiar with this concept, let’s back up a little bit and discuss pensions. Retirees used to get pensions with a defined benefit, say 60 percent of your salary for as long as you lived. But few of us will get such pensions in the future. Nowadays, we get something called a defined contribution, at my institution, the employer puts 6 percent of my salary into a retirement plan. It turns out 6 percent of my salary summed up over 30 working years is a whole lot less money than what you would need to generate 60 percent of my salary for the rest of my life. So, the new pension arrangements, like the Bush/McCain health proposals, are actually a massive cutback disguised as a shift from a defined benefit to a defined contribution.

Needless to say, the concept of switching from defined benefit to defined contribution has been very popular with Republican leaders. There’s been an effort to move Medicare in that direction (under the moniker “premium support”) where the federal government would pay $6,000-$8,000 toward each senior’s coverage, but would not guarantee the full future costs of care. McCain’s plan seems to represent a similar effort within the commercial (non-elderly) health insurance market to push people into defined contribution rather than defined benefit arrangements.

We could spend more time on the many other problems with McCain’s proposals, but to be honest I don’t think it’s worth focusing too much on its details because it doesn’t appear that even McCain is serious about his health plan. He was under pressure to come up with something, and hence his staff produced a plan. Like President Bush, I doubt that McCain has any intention of actually pursuing his tax credit plan.

As for Obama his health proposal is not a universal health care plan; in fact, he doesn’t even claim that it is. He would greatly expand Medicaid and Medicaid-like programs. Medicaid expansion is of course, better than no Medicaid expansion; those of us who work in the public sector know that. But we also know that Medicaid and Medicaid-like expansions have been tried over and over for the last thirty years, and the number of uninsured and underinsured has continued to increase.

Immediately after such Medicaid expansions, we usually see a small, and short-lived drop in the number of uninsured. We are seeing that in Massachusetts right now. As long as we keep pumping money into Medicaid or similar programs, we can push down the number of uninsured a little bit. But that’s not a viable, long-term strategy because it’s not affordable. Obama does propose devoting significant new money to the expansion of Medicaid and S-CHIP (State Children’s Health Insurance Program), but, as in the past, such expansions yield small and temporary improvement.

Obama is also talking about an employer mandate - requiring employers to cover their workers - but has provided few details about exactly what would be required. Even in a wealthy and liberal state like Massachusetts, employers were able to block the implementation of an effective employer mandate (even though a law requiring employers to cover their workers was passed in 1988).

In fact the only mandate Obama is clear about is a mandate that parents be required to buy health insurance for their children. But this would leave tens of millions of American adults uninsured if the Obama plan goes though as he proposes it.

So, my optimism is not based on Obama’s proposal and it’s certainly not based on McCain’s proposal. My optimism is based on something taught to me by a nurse in the Boston-area and a longtime single-payer activist. She used to say, “People say politics is the art of the possible, but they are wrong. Politics is the art of creating the possible. And what is possible is about what people believe is possible.”

I believe the biggest impediment to our work over the last decade has not been the lack of a good program, because we know what a good single-payer program would look like. We have H.R. 676. We can look to Canada and places in northwestern Europe. So we have good models and we have a good program.

The problem is the lack of hope - the lack of a sense of possibility. People hate the health insurance system and they know things need to change. But people don’t believe things can change.

So, what we really need is an infusion of hope. Even if Obama can’t deliver on his proposals, when he raises peoples’ expectation they begin to believe that change is possible, and that’s a real force for change.

In some ways President Kennedy provides an example of this. He was not all that liberal, or effective as a leader of social change. But his election let people think that change was possible, and helped ignite the social movements of the Sixties. It gave new impetus to the Civil Rights movement, and certainly helped ignite the social currents that gave rise to the women’s and anti-war movements. His election raised people’s sense of possibility and that force pushed social change further, and faster John Kennedy envisioned.

I think we’re at a similar moment now. Many people view Obama as someone new and exciting; he brings a sense of possibility and optimism we have not seen in this country’s political culture for a long time.

The question we need to address is what do single-payer advocates do now? How do we use this opportunity to open up a thoroughgoing health reform debate, and pave the way for progress. Now, even more than in periods when reform was not really on the agenda, we need to articulate the single-payer message. As Obama and Congress take up the health reform debate early in the next administration, there must be a clear-eyed vision for reform that can work on the table. We must spread the word that the single-payer alternative has wide support, and a track record of success. While the alternatives are merely replays of failed proposals from the past.