Single payer: a powerful tool for better care, better health and reduced costs

By Donald M. Berwick, M.D.

The following is an unofficial transcript of the remarks delivered by Dr. Donald Berwick to the Annual Meeting of Physicians for a National Health Program on Nov. 15, 2014, in New Orleans. Dr. Berwick spoke to the assembly via live video.

Greetings, everyone,

I wish I were there in person, but I’m very grateful you’re letting me join you in this way. Obviously I’m talking to people who have had the vision and leadership and energy on this crucial issue for longer than I have, and I feel flattered you’ve asked me to share my thoughts.

As Gordy [Dr. Gordon Schiff] said, I just ran for the Democratic nomination for governor in Massachusetts. Unfortunately, I did not win the primary election. But in that experience I got much closer, face-to-face, with public policy and social justice issues – not just health care, but more than a dozen other issues – housing, homelessness, education, transportation, environment, energy, support for the arts, criminal justice, and frankly everywhere, poverty and immense debt, disparity, and inequality in our society, including in the state of Massachusetts.

And in the course of that campaign, and partly as a result of speaking to that very wide range of issues, I did take a clear stand – for the first time in my career – in favor of single-payer health care, Medicare for All, in Massachusetts.

I did it openly, I did it as forcefully as I possibly could, and I said it to no matter who I was talking to. And I want to explain in a few minutes why I did that, what I’ve learned from that campaign, and then a few thoughts about what I think is next, although I have to defer to you and your colleagues gathered at your meeting today on the latter.

First: Why did I do this?

I want to frame something first: single-payer health care is important in terms of policy, but it is not, in and of itself, a moral commitment. Social justice and equality, ending poverty and hunger: those would be moral aims. But how we pay for the care we want, and how we get that care, isn’t a matter of morality; it’s just a mechanism.

The test of the value of single payer as a policy isn’t whether or not it is self-evidently or ethically right, but only whether it’s a smart way to achieve quality of care, and I think it is. And I want to tell you why that is.

Drawing on my experience at the Institute for Healthcare Improvement, I’ve seen how powerful the concept of the Triple Aim is: an attempt to designate or help advance health care as an enterprise by starting with what specifically needs to be accomplished on behalf of the communities and the people that we serve. There’s a constellation of such aims in each and every system, and you cannot take them apart.

The Triple Aim includes, first, the aim of better care if you need care, from a check-up to treatment for a heart attack. There is a social need for better care for individuals; that means care that is safe, effective, patient-centered, timely, efficient, and equitable. That’s the first aim: better care for individuals.

The second aim is to help people not get sick in the first place, i.e. better health for populations.

And the third aim is to reduce the per capita cost of health care, so that resources are freed up for worthy alternative public and private endeavors.

So what I began to believe, more and more fully, is that if we consolidate payment into a single pool, a single stream, under public accountability, we’ll be better able to attain the Triple Aim. And that is the key argument for single-payer care.

That would help us achieve the first aim, better care. We have problems in our care. We have care that doesn’t match need, and care that is not safe. The progress toward patient safety in America is nowhere near where it really needs to be in this country, and not, very frankly, in other countries as well. Our care could be far, far more effective. People too often get care they don’t need, and care that is not aligned with science. Nor is care truly patient-centered. There has been some progress, but it’s limited.

I think single-payer care is a strong lever on better care. With it, we could decide to make care safer as a nation, and we could decide to align it with science. We have a lot of trouble doing this with a multi-payer system.

In my Medicaid work at the CMS, I got a report from the Inspector General about overuse of anti-psychotic drugs on Medicaid patients in nursing homes. The report came to my desk, and it showed 300,000 patients in nursing homes getting over-sedated.

So I picked up the phone and called in the head of the nursing home associations, the for-profits, the nonprofits, a dozen people, asking that they meet with me. And they all showed up. I said overmedication in our nursing homes was not OK. “Either you fix it,” I said, “or we will.” Within a few weeks I had reports on my desk, replies from those associations, none perfect, but all showing strong plans to decrease the use of such medications, and those projects are still underway today with good success.

With a single-payer system you have leverage, a voice for improvement. The leverage that you have in the form of payment is powerful.

A single-payer system would also help us achieve more meaningful transparency about the quality of care. Uncoordinated and multiple metrics are driving people in health care crazy right now. We need transparency, we need consolidated metrics that really work.

It would be much easier to achieve meaningful and parsimonious measurement under a single-payer system. It allows us to see how we’re doing. Where did the money go? How is our quality? It’s very hard to get that information, across time and space, in a fragmented, multi-payer system. A single-payer system provides much clearer eyes on the care, to the advantage of patients and the community, like it should be.

Under a single-payer system we can shift resources toward need. A single payer can get a better handle on fee-for-service. We can invest in behavioral health care, as some of you are talking about today, I know. And we would have the kind of community risk pool that we need in order to achieve justice and equality in health care.

And finally, a single payer would be even more effective than Medicare is today. We could do much more under the aegis of a consolidated payment system. It would be a powerful lever for better care.

As for Aim Two, better health, a single-payer system would let us invest upstream, for population health, to address population-based causes of poor health, over space and over time. It would be a powerful force for cross-sectional justice.

I have an illustrative story from New Zealand: I was talking with their Chief Medical Officer several years ago who was proudly telling me that they have an annual budget for health care, and that one year he asked that some of the money originally intended for the Ministry of Health be turned over to the Ministry of Housing. He understood that a lot of the burden of illnesses among children, particularly Maori children, is the result of poor housing conditions. So he actually proposed that money be taken from the health care pot and moved to the housing pot. You can’t do that under a multi-payer system. That won’t work.

So a single-payer system can offer new and powerful levers for prevention.

A single-payer system allows us to track a patient, which is very difficult under a multi-payer system.

Finally, the third leg of the Triple Aim triangle, beyond better care and better health, is lower cost. And here is where single payer stands out.

You know from the studies of David [Himmelstein] and Steffie [Woohandler] about administrative costs. I don’t know the total, I don’t know exactly what it is – something like 12 percent or 15 percent of health care spending is spent on supporting the complexity of our system, not better care. As I pointed out as a candidate for governor, some of that money should be used for building housing, schools, roads. It’s not right for health care to take more than it needs.

A single payer would also give us stronger bargaining power in payment for hospital supplies and more. I oversaw several procurements for durable medical equipment under Medicare, which we put out to bid, and which achieved a 42 percent decline in costs, with higher quality and service, over a several-year period.

Consolidated payment means better metrics and better quality on behalf of the people we serve.

An overarching consideration in this picture is justice. Until health care is less costly per capita, we will be unable to properly address the problems of our schools, poverty, and hunger.

So what I learned, very briefly, is that our current approach – a complex multi-payer system – makes it harder for us to get where we should get: to the Triple Aim.

With respect to health care, I think I discovered a sense of helplessness, a latent anger in the public that was sobering. As I campaigned in working-class communities, many of which may have voted Republican, people are weary. They’re worn down by forces they do not understand.

I remember meeting a carpenter, a soft-spoken guy. He told me about his health insurance problems and debts that have been weighing on him for more than a year and that were driving him over the edge.

That said, I want to stress, people don’t really understand the term single payer. They often lack a clear idea of what the term means or intends.

I would say that maybe a majority of the people I spoke with thought that single payer, Medicare for All, means both a government payer and a government provider or governmentally run delivery system. They thought I was speaking of the English or Scottish health systems or the VA.

That is not actually correct. You can have a single payer as a form of payment, and you can have a unified health care delivery system, but they’re not the same idea. Both can be discussed, but they’re not the same idea. It is quite possible to have a single payer and the same time have a pluralistic, partly public and partly private health care delivery system such as we have today in the U.S.

I believe that I saw that much of the business community, which actually may stand to gain the most, doesn’t understand benefits of single payer. They don’t understand what improvements and cost reductions they could get under a system of consolidated payment.

That said, the number of people was large who pulled me aside at a town meeting, a coffee, or a forum, and said quietly, “I’m almost embarrassed to say it, but I think you’re right.”

Some of the largest resistance, it seems to me, comes from some of the largest corporations. The key pushback from the public was job loss, concern about the loss of jobs at insurance companies. Of course, such losses would be largely offset by the number of jobs created in public sector, but we should not be glib or unfeeling about the dislocation that a single-payer system would cause in the existing funding organizations.

Overall, I’ll tell you this: My takeaway is that given my experience in living rooms, libraries, and town meetings, this [single payer] is possible. This can be done.

What is next? You’re in the best position, perhaps, to judge. I have only a couple of ideas.

First, I like the idea of action at the state level.

Second, I like the idea of trying to forge an alliance of groups, including business, in support of this proposal.

Third, a very big obstacle to progressing this policy is the widespread perception that government is unable to solve problems – that government cannot manage itself well. Indeed, some of the problems we have seen at the federal and state level contribute to this belief. I think there’s a natural need here for single-payer advocates to talk about government and responsible management, to make the case that government can solve problems and manage its business well.

Finally, I think we need to continue making the economic analysis for our case. It can be strong, but it has to be disciplined and intellectually honest.

I think I’ll stop there and be happy to take a few questions. Thank you.

Dr. Donald Berwick, an internationally recognized leader in the field of quality, is president emeritus and senior fellow at the Institute for Healthcare Improvement and former chief administrator of the Centers for Medicare and Medicaid Services.