The Single-Payer Alternative
by Ashley Smith
Sept. 30, 2009
The politicians declared one plan for health care reform “off the table” from the beginning: a single-payer system that would cover all Americans and cut out private insurance. But as Dr. Andy Coates explains, it remains the only alternative that can solve the crisis of the health care non-system.
Coates is a member of Physicians for a National Health Program (PNHP), co-chair of Single Payer New York and a steward in the Public Employees Federation in New York.
Ashley Smith: The right wing has mounted a major offensive against Democrats proposals for health care reform, with all sorts of absurd allegations and distortions. What’s your assessment of the right-wing attacks?
Dr. Andy Coates: At one town hall I attended, a guy had a sign that said, incredibly, “Tsars are not for the USA, Tsars are for the USSR.” Nearby, there was quiet bragging that somebody had a gun in his car. So there is nuttiness, but also potential danger as the right wing mobilizes.
At that meeting, I thought that people for single-payer outnumbered the right wing. Those in favor of some kind of reform far outnumber those against, but the “get the government out of health care” group fought for the mike and fought for attention.
Earlier, I was heckled while speaking in favor of single-payer on a panel in Syracuse convened by a Congressman. The interesting thing to me—besides hearing people holler “socialism!” at the top of their lungs—was that the hecklers listened carefully to every word people said. And I noted their applause when I said that mandating the purchase of health insurance wouldn’t solve anything. At that meeting, a clear majority was for single-payer, but that’s not how the press reported it.
So I think that many people, swayed by Republican arguments, will actually think this through for themselves. For example, someone who’s 59 years old, avoiding the doctor, trying to make it a few more years to Medicare, worried that Medicare won’t be there—and rightly so, for the Republicans keep repeating that it’s “bankrupt,” and the President keeps saying that Medicare and Medicaid is breaking the country.
I believe we can win these people over to single-payer. We shouldn’t let the TV coverage of these meetings distort our view. Poll after poll, and our own experience, attests that the majority of people are on the side of real reform—of Medicare-for-all single-payer health care.
AS: Many people find the debate in Washington completely confusing and exasperating. What do you think is going on?
AC: It is confusing. Just think about it—the Republican Party recently came out foursquare in defense of Medicare, after decades of calling for its abolition. Of course, the Republicans want to protect Medicare Part D, a giveaway to the pharmaceutical industry, and they love Medicare Advantage, a privatization of Medicare that has proven lucrative for private insurance companies.
Meanwhile, we have the Pharmaceutical Research and Manufacturers Association of America, led by former Republican congressman Billy Tauzin. Tauzin was quoted in the Los Angeles Times saying that the White House promised not to negotiate with the pharmaceutical industry—promised to preserve Medicare Part D, and also not to allow the import of drugs from Canada or other countries where they would be cheaper than American prices. In exchange, PhRMA is going to spend $150 million advertising in favor of so-called “reform.”
So PhRMA and the White House and the Republicans all appear to be in alignment, defending Medicare Part D from reform. Perhaps Obama was accurate when he said recently that there was 80 percent agreement on the proposals. Yet we hear “government takeover!” as if someone were actually proposing such a thing.
AS: It seems like both the Republicans and the so-called “blue dogs” in the Democratic Party oppose the idea of government involvement in health care. What’s your view of their argument?
AC: We should set the record straight. The government is deeply involved in medical care. Taxpayers fund at least half of all health care spending in the U.S. The number of people covered by Medicare, Medicaid and military health plans is over 87 million. The idea of getting the government out of health care could be called a utopian fantasy.
Medicare has been an enormously successful program for 44 years. The Veterans Administration is a socialized system where the federal government owns the hospitals and clinics, pays the staff directly, and bargains with the pharmaceutical industry for low drug prices. The Veterans Administration delivers the best quality health care in the country—numerous studies attest to it.
AS: Why has the Obama administration made such a mess of its campaign for health care reform?
AC: No one disputes any longer that our system is in grave trouble. We’re spending twice as much as any other nation on health care, and yet we have a mediocre, dysfunctional system.
The Obama administration’s message has been, again and again: “If you like your insurance, you’ll get to keep it.” They needed to find an argument that would help them earn the support of the health insurance industry. So Democratic Party pollsters “discovered” that people love their health insurance. In the name of reform, ironically, they broadcast the idea that people fear change.
This is at odds with everyday experience and the 2008 election returns, on top of many polls that show popular support for single-payer. I think there is great enthusiasm and great expectation in favor of change—dramatic, fundamental change. And people find the hassles of health insurance ridiculous.
AS: What is the nature of the reform that the Democrats are proposing?
AC: The heart of the reform is a mandate that individuals purchase health insurance—to criminalize the uninsured.
In exchange for accepting some new regulation, the insurance industry will get the government to coerce people into buying their product. Because working people don’t make enough money to buy the product, tax money will be used to subsidize the private insurance premiums. The Los Angeles Times called this “a bonanza” for the health insurance industry.
AS: This is exactly what Massachusetts did. What has been the impact there?
AC: Yes, Massachusetts mandated that everyone buy health insurance. And this hasn’t made premiums affordable. To reduce premiums, policies have things like very high deductibles and large co-pays. In the case of a single person making just over $30,000 a year, if you add up the premiums and deductible, she or he will have to shell out over $5,000 before any insurance kicks in. This simply isn’t affordable.
Massachusetts subsidizes insurance premiums for everyone who makes less than 300 percent of the federal poverty line. This guarantees a constant flow of money into private health insurance companies, while it exacerbates the state’s budget deficit.
And to address the deficit, Massachusetts has cut safety net health care! They have taken hundreds of millions of dollars out of programs that would have helped poor and low-income patients—the very people most need the care and whom the reform should have most helped.
In addition, Massachusetts has a feature like what’s in the proposed federal reform—a brokerage house called the Commonwealth Health Insurance Connector. It’s supposed to help people get private health insurance. But it’s yet another layer of bureaucracy!
The Insurance Connector alone employs more people than the province of Ontario has working for its Medicare program. Medicare in Canada costs 1.3 percent of health spending. The Insurance Connector adds 4.5 percent in administrative cost to each policy it brokers. And the province of Ontario has twice as many people as the state of Massachusetts.
The Massachusetts model doesn’t work. It doesn’t lower costs, and it doesn’t cover everyone. It forces people to buy defective, unaffordable insurance. And when you lose your job in Massachusetts, you still lose your health insurance.
AS: Beyond the idea of mandates, the Democrats have also floated the so-called public option. What do you make this idea?
AC: Let’s look back to the early 1960s. When Medicare was gaining momentum and needed to be enacted by Congress, its opponents put forward a proposal intended to be friendly to the health insurance industry. The idea was that seniors should be able to purchase health insurance from private companies, but also have the choice of a public insurance option.
Medicare passed instead, thank goodness. It seems fair to ask whether today we should support a proposal that was objectionable over 45 years ago.
The idea of the public option was again put forward in 2007, in a briefing paper by Professor Jacob Hacker. He envisioned a very large public program, enrolling all of the uninsured and anyone else who voluntarily wanted to purchase health insurance from a public insurer. The public insurance company, in turn, would have the market share, the clout and the low overhead to compete against private health insurance companies.
Many good-hearted people have latched onto this proposal today because they think that the private health insurance industry is simply too powerful to conquer. These people aren’t against single-payer. They simply lack confidence that we can achieve a Medicare-for-all single-payer system in one step. They’re looking for an incremental route.
In PNHP, some of us like to say, “You can’t jump a chasm in two leaps.” In the insurance marketplace, the winning company keeps the healthy and wealthy customers and avoids or jettisons the sick and the poor.
Would a public option really be able to compete? Wouldn’t it simply end up with the sick patients, whose care is costly, and flounder? Wouldn’t it more likely lead to greater disparities, an official two-tiered system? Is there anyone who really believes that the heavily monopolized U.S. insurance market would even reform—let alone abolish—itself simply because people were given the choice of a public plan?
Even so, what seems surprising so far is that we haven’t seen much of a specific proposal for what this public option would look like. We hear the words “public option,” but the details about how it would be launched and funded, who would be enrolled, and how it would, in fact, impact the market remain murky. If you’re looking for an incremental route, some specific steps might be useful.
Because the Democratic leaders didn’t put forward a specific proposal, the public option really seems like little more than a bargaining chip. It’s a feint, not a punch.
The New York Times editorial the day after his September speech advised the president not to surrender the public option—yet. The advice was to try and trade away the public option for Republican votes. Meanwhile the public option, as a posture, has lured progressives and liberals to support a reform that is a huge giveaway of taxpayer money to insurance companies.
So the Democratic Party leadership now finds itself in a bit of a pickle. A significant part of the liberal community finds the public option utterly compelling. They see in the idea a morally defensible alternative to the insurance industry, whose profits are essentially blood money.
Will the Democratic leaders, even so, abandon the public option? We’ll see. In Rolling Stone, Matt Taibbi noted that when Nancy Pelosi was asked if progressives might bring down health care reform over the public option, she laughed out loud and said that there’s no way that progressives would vote against the President, no matter what.
AS: Even if we got the public option, would it deliver the health care reform that we need?
AC: In the best-case scenario, the public option will not cover everyone, improve quality, redress disparities or guarantee the choice of physicians. PNHP founders David Himmelstein and Steffie Woolhandler estimate that the maximum cost savings it would offer would be only 9 percent of what single-payer would offer. It would also add yet another insurance entity to the 1,300 different insurers we have now. And it won’t end the fundamental problem with health care—the profit motive. That’s what lies behind the health care crisis in America.
Let’s be honest—competitive insurance companies successfully shun sick and poor patients, and enroll healthy and wealthy patients instead. Any entity, including a public option, that enters that marketplace, even with the best intentions, has got to compete for the healthy and wealthy patients to survive.
How can a public option get the insurance market to reform itself? It would also require a colossal amount of regulation—active government coercion of the private industry.
Let’s talk about the political feasibility of getting the government to reform the insurance market in a way that all the companies would share the risks, the burden of the sick and poor, with account books open to the public, so everyone can know what resources are going to the care of patients, and see the fairness of the insurance market reform.
That proposal, in my estimation, would actually require much more political organization—a mightier political force—than we need to win single-payer and go ahead and expand and improve Medicare to include everyone. It makes more sense to simply ask the insurance industry, which has failed our country so terribly, to step aside.
AS: How would single-payer solve the health care crisis in the U.S., and how do you respond to those who say it’s unrealistic to challenge the health insurance industry?
AC: I think about the dimensions of health reform as a pentad, with five interrelated points. We need to reign in unaffordable costs, improve the quality of care, lessen disparities, guarantee access and protect the provider-patient relationship. Any proposal for comprehensive reform has got to get at all of these: costs, quality, disparities, access and choice.
When you see it that way, a single-payer program is the most basic foundation that would have the power to deliver comprehensive reform.
It would liberate tremendous resources, hundreds of billions of dollars annually, that are presently squandered in a vast administrative bureaucracy that exists to extract money from the system. This bureaucracy drives health care into a dysfunctional frenzy. Single-payer would not only eliminate that administrative waste but a myriad of perverse monetary incentives.
Under a single-payer system, everyone would have health care—not insurance, but health care. We would be able to build new hospitals and clinics to meet needs in medically underserved communities. This would not only guarantee access, but improve quality and lessen disparities. And this would be also an economic stimulus of gigantic proportions, a very important thing given the current economic crisis.
With everyone in and nobody out, single-payer would guarantee every patient the right to go to any doctor, nurse practitioner or any health care provider they chose. It would be based upon protecting, not eroding, the privacy of the provider and the patient.
As liberating as single-payer can be, without a true people’s movement, we can’t take on the entrenched power of the insurance industry. The insurance companies control hundreds of billions of dollars of health spending through a byzantine, bureaucratic apparatus that exists to extract resources, including profits, from the care of sick people. It has an enormous lobbying apparatus and contributes rivers of money to both Republicans and Democrats. It’s a very, very serious foe.
AS: How can the debate be shifted to put single-payer at the center?
AC: By sticking to the facts. The right likes to say that single-payer can’t happen because we need to have a uniquely American system.
But if we’re going to have an evidence-based debate about the best way to provide a uniquely American system of health care, it would be between the Medicare model, which is socialized health insurance, and the Veterans Administration, a socialized health system in which the federal government owns every hospital and clinic, pays the doctors and nurses directly, bargains with the pharmaceutical industry with bulk purchasing as its leverage, and monitors the quality of care, with excellent results.
The practicality of the single-payer proposal can’t be refuted. The idea is gaining momentum. If we mobilize, it will become unstoppable. If we’re creative and if we don’t back down, we will win this reform.
Remember, Medicare was implemented 45 years ago within one year. The government enrolled and guaranteed benefits for every single person over 65 in an era before personal computers, with typewriters and carbon paper. In the 1990s, the Taiwan government studied health reform and concluded that single-payer, modeled on our Medicare system, was the best way to go. They pushed it through within a few tumultuous months. And the health finance system in Taiwan has been successful and popular ever since.
AS: What should the strategy of single-payer advocates be in the health care debate this fall?
AC: Build the grassroots movement! Look at recent history. Our emerging movement has overcome all sorts of opposition.
Before he was elected, Obama organized living room discussions on health care. PNHP heard from across the country that hundreds of these meetings were actually in favor of single-payer. The Obama campaign’s report, over 100 pages, managed little more than a mention of single-payer. It was dismissive.
When the White House had a meeting on health care that didn’t invite any single-payer advocates, activist doctors threatened a picket line unless Oliver Fein, the president of PNHP, was invited. Within a day, the White House changed course and invited Oliver Fein and John Conyers, who had also been excluded.
Then, the White House held health forums throughout the country, in Michigan and Vermont, Iowa, North Carolina and California. Single-payer people came out in the hundreds to the meetings.
Max Baucus, the chairman of the Senate Finance Committee, declared single-payer off the table early in 2009. So when the Senate Finance Committee heard testimony, at two sessions, activists, including doctors and nurses, stood up to demand that single-payer be put on the table.
That civil disobedience galvanized our movement. Dr. Margaret Flowers was then invited to testify before the Senate Health, Energy, Labor and Pensions Committee. When the House committees took testimony, single-payer was on the table.
Meanwhile, members of Congress have now heard and heard and heard again from single-payer activists. This spring, Nancy Pelosi was quoted as saying, “It’s single-payer, single-payer, single-payer, everywhere we go.”
Because of this nascent mass movement, it looks like single-payer will now get to the floor of the House of Representatives this fall for the first time. New York Rep. Anthony Weiner managed to get Nancy Pelosi to allow a floor vote on HR 676, the single-payer bill.
In the Energy and Commerce Committee, Weiner and six other representatives proposed an amendment that would substitute the text of HR 3200 with the text of HR 676, the single-payer bill. The committee chair, Henry Waxman, interrupted Weiner to say that if he would withdraw the amendment from committee, the speaker would allow a floor debate and vote.
This shows that single-payer really is on the table. This should give our movement confidence.
AS: What do you think of the Rep. Dennis Kucinich’s proposed amendment that would allow states to pursue single-payer plans on their own? What should single-payer activists say about his state-by-state strategy?
AC: Dennis Kucinich has proposed an amendment to HR 3200, the main House health care reform bill, which would allow states to implement state-based single-payer programs. Because it came through committee—in fact, it passed the House health committee with Republican votes—it won’t have a floor vote. Three committee chairs and the House Speaker will decide whether the Kucinich amendment will be included in the final version of HR 3200.
The Kucinich amendment is an expression of the great energy to establish state-based single-payer health insurance programs in California, Vermont, Pennsylvania, New York and elsewhere. Many activists who argue for such a state-by-state strategy point to the precedent in Canada. There, Saskatchewan was the first province to enact a single-payer health care system, which then spread province by province in Canada.
Yet with 50 different states, it’s hard to imagine a similar process unfolding in the U.S. when we consider the wide disparities across states—say, Louisiana compared with Minnesota.
It’s also difficult to imagine how state-based single-payer reform would work practically. Say that we won state-based single-payer in New York state—how would it affect people from northern New Jersey, southern Connecticut and elsewhere, who use the excellent hospitals in Manhattan? If a small state like Vermont passed single-payer, how would the system defend itself against the onslaught of attacks that would inevitably come from the powerful insurance and pharmaceutical industries? The Kucinich amendment, in a way, highlights these challenges.
Even so, I’m completely in favor of fighting for state-based single-payer reform. It is a legitimate demand and great way to educate. However, we must not lose sight of our goal—national health insurance.
AS: Given that we are going to have some version of the Obama proposal likely passed what will that mean for the single-payer movement?
AC: Back in February, in his first appearance before Congress, the president said that health care reform cannot and will not wait another year. But even if a bill gets passed, the main elements—like the insurance mandate, any kind of public option if it survives and the insurance exchange—won’t begin until 2013. Meanwhile, we face a system where the experience of seeking care is often a hassle and humiliating, and is sometimes deadly.
This fall, health care activists should explain that we have workable reform within our grasp—single-payer health insurance. We should use the deliberations that go on in Washington and the points that come out of them to explain why and how single-payer would be better.
In reality, whatever happens in Washington will not change our lives much for the better. But the election of the president and the call for sweeping reform have raised the nation’s expectations sky-high that there will be meaningful change. Under those conditions, I’m enormously optimistic that we can build the kind of grassroots movement that we need to win single-payer national health insurance.
Ashley Smith is a writer and activist from Burlington, Vermont.