Policy experts debate viability of Sen. Bernie Sanders’ health care plan

Airtalk with Larry Mantle
Southern California Public Radio, KPCC, Jan. 28, 2016

PNHP note: The following are excerpts from an unofficial transcript of a debate between Dr. Steffie Woolhandler of Physicians for a National Health Program, a practicing primary care physician and professor in the City University of New York School of Public Health at Hunter College, and Avik Roy, senior fellow at the Manhattan Policy Institute and current health care adviser to Marco Rubio. Only the remarks of Dr. Woolhandler, PNHP’s co-founder, have been transcribed here. A link to the full audio of the debate is provided at the end.

Host Larry Mantle (LM): So Bernie Sanders’ claim is that if you take the profit out of American health care on the insurance side that there are huge savings there. If the government can negotiate with a position of great leverage drug manufacturers, you can drive down prescription drug rates. And without Americans having to pay health premiums, that the taxes would essentially even out with the savings that would be provided. We’re going to examine that claim and talk about what impact overall Sanders’ proposal would have on the American health care system.

With us is Dr. Steffie Woolhandler with Physicians for a National Health Program, an organization that advocates universal, comprehensive, single-payer national health care. Dr. Woolhandler, thank you for being with us. We appreciate it.

Steffie Woolhandler (SW): My pleasure.

LM: So first of all, let’s talk about, just real briefly, how a system like this would work. It sounds like he’s saying this would work for everybody the way Medicare works for seniors.

SW: Yes, and actually it would work a little bit better than Medicare works. Canada does have a single-payer program. It covers 100 percent of health care costs, first dollar to last dollar, for doctors’ care, for hospital care. Some provinces have pharma care, some don’t. When you have pharma care then drugs are folded in as well. The reason Canada can do this affordably is because they get such huge administrative cost savings by eliminating private health insurance. Total administrative costs in health care are only about 16 percent of spending in Canada. You have to compare that to 31 percent of total U.S. health spending that goes for overhead and paperwork and administration. So the difference between those percentages is about 14 percent of total health spending that you can save through administrative simplification with a single payer is a huge amount of money, about $400 billion annually that would be freed up to improve care.

LM: Let’s talk about what the federal government, in expense, would have to do ramp up though, because already Medicare fraud is a huge expense to taxpayers. So presumably you’d have to bulk up the federal government’s capacity to investigate fraud considerably, you’d have to build a much larger federal infrastructure for health care. How would that cost compare to what the costs are for the private insurers.

You’re absolutely wrong on that. In fact, if you have a single-payer system it’s potentially easier to identify fraud. So there was, for instance, a doctor in Canada who was billing for $125,000 worth of urinalysis tests, which is a ridiculous number of tests. That’s fraud. It was very easy to detect because all of the bills were sent to the single payer, and you could see what’s going on. So actually you’re in a much better position to identify and eliminate fraud if you have a single payer that sees all of the bills that the doctors and the hospitals send. The other thing I want to say is that we know how much a public bureaucracy costs. We can look at Canada, where the overhead on insurance is about 1 percent. We can look at our Medicare program, our traditional fee-for-service Medicare program. That overhead is about 2 percent. And you have to compare that to the overhead in private insurance firms which averages about 14 percent, but sometimes rises as high as 20 percent. So you get huge insurance overhead savings due to single payer, that’s not theoretical – we know it’s true from the data from our own Medicare program and the Canadian single payer.

LM. OK. Also, on the issue of doctor and hospital reimbursements, because the government wouldn’t employ physicians directly or hospitals, but that’s where the reimbursements would come from. How would the government keep doctors from opting out, at least some of them, in setting up boutique sorts of practices as we’re already seeing with some physicians leaving Medicare?

SW: Well Canada has a rule that if you accept any money from the public Medicare system, you have to be completely in the system, you have to take any patient in the system. There’s a handful of doctors who have opted out of Canada’s single payer, I think less than a dozen, but the overwhelming majority of doctors end up participating in the system because of the rule of 100 percent in, or 100 percent out. Now there are a couple of cosmetic surgeons who do things that aren’t covered by the single payer, but that’s a different story, but for most routine medical care the doctors are pretty much 100 percent participating in Canada.

LM: So the doctors would all – they couldn’t really set their rates. They’d all be paid the same, the great doctors, the mediocre doctors. Everybody gets paid the same under this.

SW: Well, that’s true at some level. Different specialties doing different things get paid slightly different amounts in Canada. What happens in Canada is that doctors’ fees are set by some combination of negotiation and regulation. The provincial medical society, which is like our state medical society, comes up with a fee schedule for the entire set of doctors in the province and they negotiate that with the provincial government. It’s rather contentious, but at the end of the day the Canadian doctors have done extremely well. Canadian primary care doctors are paid just as much as primary care doctors in the United States, and specialty doctors in Canada are paid somewhat more than primary care doctors in Canada, but not the huge kind of salaries that some high-paid specialists can reap in the United States. But the doctors are doing just fine financially; we know that because Canadian doctors can immigrate to the United States, and the net immigration is zero. They’re simply not crossing the border to come to the U.S. at this point.

LM: In Canada, if you’ve got a really expensive city like Vancouver to live in, do doctors there get an extra bump in their reimbursement for their overhead?

SW: The rates are set at the provincial level, and I assume there’s some bump for very high costs – when it’s expensive to run a practice. I’m not sure of that, but it does vary from province to province.

LM: We’re talking with Dr. Steffie Woolhandler of Physicians for a National Health Program. Talking about Sen. Bernie Sanders’ proposed Medicare for all, single-payer health care program. If you have questions about Bernie Sanders’ proposal, I know there’s a lot of you who are pro or con on it, and we are most interested in questions that you may have about it – the economics of it, how it would work, as opposed to just saying yea or nay. If you want to call in and take part, I welcome your questions. …

[At this point Mantle speaks with Avik Roy, who argues, inter alia, that under a single-payer program doctors and hospitals would have to take significant cuts in reimbursements, that Canadians face very long wait times to see a doctor or get treatment, can’t get the care they need and therefore travel to the U.S. to get it.]

LM: Let’s take the first point that doctors and hospitals would have to take significant cuts in reimbursements.

SW: The doctors in Canada are doing just fine. Their incomes are similar to primary care doctors in the United States. The hospitals are doing just fine. They’re not in bankruptcy, they have big modern hospitals that provide care. The insurance companies took a major hit under single payer. They were more or less put out of the health care business. The drug companies took a major hit under single payer. Their prices ended up being cut in half. And the device industry takes a bit hit – their prices are cut in half. So it’s bad for insurers, the drug industry and device manufacturers, but it is not bad for doctors and hospitals, and frankly, it is not bad for patients. I was an attending physician at the Massachusetts General Hospital at Harvard Medical School, a world leader in medical care. We had patients from all over the world come to Mass General to get our services, but we did not see patients from Canada, despite being less than a 4-hour drive from the border. Canadian patients do not come to the United States in droves and that’s not just my anecdotal impression, that’s what’s been found when people have studied it. Avik’s figures about waiting lists are wildly exaggerated. The provinces post their wait times on the Internet; you can go and look at how long it would take, for instance, a prostate surgery. In British Columbia, it’s something like days to weeks. We’re not talking about months and years the way he’s implying. The Canadian public would not tolerate this kind of wait, and it’s a rumor that has been perpetrated by The Wall Street Journal, by conservative analysts like Avik, that everybody’s waiting for care, that they’re streaming across the border to get in the U.S. – it’s simply not the reality on the ground.

LM: Why do people then come to the U.S. for health care? What’s driving them?

SW: OK. There was a giant survey of 18,000 Canadians. Fewer than 100 had received health care in the United States in the past year. And all but 18 of those had been in the United States on vacation or business when they got acutely ill and had to get emergency care. There were only 18 cases of people who come to the United States in order to get medical care, and in many of those cases their own province had given them the money and said, “You can go across the border because you live near the border and the service is available there that you need.” So we’re not talking about a massive number of not being able to get the care that they need, in fact, the overwhelming majority of Canadians do get the care that they need, which is why the overwhelming majority of Canadians support their national single-payer program.

[A medical student in Houston calls in to ask if single payer would reduce reimbursements to doctors, exacerbating the problem of medical student debt because of high tuition rates.]

SW: I am a medical school faculty member, I have two children in medical school and we’re paying tuition, so I’m aware of the problem. Physicians for a National Health Program, the group I work with, put out a proposal and said medical school tuition should be free, because those costs are eventually paid back by the payers, by the single payer. You can pay for the tuition up-front – make med schools free – or you can make the students go into debt and pay it off over time. One way or another it’s going to be paid by the taxpayers under single payer. And we think it’s fair and more efficient and better for everyone if you just make medical school free. I would point out that Sen. Sanders has also advocated free tuition, but I’m not speaking on behalf of Sen. Sanders, I’m speaking on behalf of single payer here today.

PNHP note: Physicians for a National Health Program (PNHP) is a nonprofit, nonpartisan, educational and policy research organization that neither supports nor opposes any candidate for public office nor any political party.