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Himmelstein & Woolhandler, and Hellander respond to The Nation’s Holland on single payer

Medicare-for-All Isn’t the Solution for Universal Health Care

By Joshua Holland
The Nation, August 2, 2017

(Excerpts)

Within the broad Democratic coalition, it’s pretty clear that the discussion of health care has shifted to the left.

But that momentum is tempered by the fact that the activist left, which has a ton of energy at the moment, has for the most part failed to grapple with the difficulties of transitioning to a single-payer system. A common view is that since every other advanced country has a single-payer system, and the advantages of these schemes are pretty clear, the only real obstacles are a lack of imagination, or feckless Democrats and their donors. But the reality is more complicated.

For one thing, a near-consensus has developed around using Medicare to achieve single-payer health care, but Medicare isn’t a single-payer system in the sense that people usually think of it. This year, around a third of all enrollees purchased a private plan under the Medicare Advantage program. Around one-in-four Medicare enrollees also purchase some sort of “Medigap” policy to cover out-of-pocket costs and stuff that the program doesn’t cover, and then there are both public and private prescription drug plans.

But from a policy standpoint, Medicare-for-All is probably the hardest way to get there. In fact, a number of experts who tout the benefits of single-payer systems say that the Medicare-for-All proposals currently on the table may be virtually impossible to enact. The timing alone would cause serious shocks to the system.

Harold Pollack, a University of Chicago public-health researcher and liberal advocate for universal coverage, says, “There has not yet been a detailed single-payer bill that’s laid out the transitional issues about how to get from here to there. We’ve never actually seen that. Even if you believe everything people say about the cost savings that would result, there are still so many detailed questions about how we should finance this, how we can deal with the shock to the system, and so on.”

It’s true that every other developed country has a universal health-care system, and we should too. But make no mistake: Moving the United States to national health care would be unprecedented, simply because we spend more on this sector than any other country ever has.

“Bringing costs down is a lot harder than starting low and keeping them from getting high,” says (Dean) Baker. “We do waste money on [private] insurance, but we also pay basically twice as much for everything. We pay twice as much to doctors. Would single-payer get our doctors to accept half as much in wages? It could, but they won’t go there without a fight.

Rather than making Medicare-for-All a litmus test, we should start from the broader principle that comprehensive health care is a human right that should be guaranteed by the government—make that the litmus test—and then have an open debate about how best to get there. Maybe Medicaid is a better vehicle. Perhaps a long phase-in period to Medicare-for-All might help minimize the inevitable shocks. There are lots of ways to skin this cat.

An obvious alternative to moving everyone into Medicare is to simply open up the program and allow individuals and employers to buy into it.

Yale political scientist Jacob Hacker’s “Health Care for America” proposal… would have left employment-based insurance—and Medicare coverage for the elderly—intact, and created a large new Medicare-like public insurance program that would have been far more robust than anything contemplated during the development of the ACA.

We shouldn’t make promises that we aren’t going to be able to keep. “It’s not going to be easy to do,” Jacob Hacker says, “and anyone who tells you that the most expensive health-care system in the world is going to undergo a sudden shift to highly efficient and low-price medicine has not been studying American medicine.”

https://www.thenation.com...

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Can Medicare for All Succeed?

By Steffie Woolhandler, David U. Himmelstein, Ida Hellander and Joshua Holland
The Nation, August 16, 2017

To the editors:

Joshua Holland’s anti–single payer screed (“Medicare for All Isn’t the Solution for Universal Health Care”) is so riddled with misinformation and outright errors that it makes one wonder whether The Nation has laid off its fact-checkers.

Just one example: In arguing the impossibility of a health-care transformation in a high-spending nation, Holland claims that Switzerland’s health expenditures in 1996 amounted to only 5 percent of GDP. The correct figure is 9.2 percent. [Editor’s Note: This has been corrected in Holland’s article.]

He suggests that cost control under single payer requires halving doctors’ incomes, a serious political problem if it were true. But Canadian doctors make about 80 percent what their US counterparts do, and, taking into account their lower educational debt and post-retirement health expenses (more than $250,000 per couple in the United States), they’re about as well off financially as their US counterparts. Moreover, most US single-payer projections foresee increased spending on physician visits once copayments are abolished, and simplified billing would reduce the bite that office overhead takes out of doctors’ take-home pay.

Holland falsely claims that no one has provided guidance on the transition to single payer. We, and our colleagues in Physicians for a National Program have published in the Journal of the American Medical Association, The American Journal of Public Health, and the New England Journal of Medicine several quite detailed proposals laying out transition plans for acute-care financing, long-term care, and quality monitoring; another, on prescription-drug regulation and financing, is in the works. We’ve analyzed in detail the likely shifts in administrative costs and employment, and the federal single-payer legislative proposals include funding for job retraining and placement and income support to transition the million or so insurance and administrative workers who currently do useless bureaucratic work and whose jobs would be eliminated under single payer. While the transition would be disruptive for some administrative workers, it would be simple for hospitals (they’d stop billing for each patient, Band-Aid, and aspirin tablet and instead be paid lump-sum budgets), and a welcome relief for doctors and nurses, who suffer record high burnout rates in the current medical-industrial complex. That’s why recent polls show that around half of doctors favor single payer (and 21,000 of them have joined Physicians for a National Health Program), and National Nurses United, the leading nurses’ union, is the nation’s strongest single-payer proponent.

Most egregiously, Holland misrepresents the single-payer legislation that’s actually been proposed, citing Medicare’s deficiencies to smear reform proposals. As the title of John Conyers’s bill HR676, the Expanded & Improved Medicare for All Act, makes clear, that legislation would upgrade Medicare coverage, eliminating copayments and deductibles, and fix its other flaws. Holland suggests that, since many Medicare recipients supplement their coverage with private policies, such legislation would boost out-of-pocket costs for millions who currently have employer-paid coverage or Medigap policies. In fact, virtually no one would face increased copayments or deductibles under HR 676 (or Bernie Sanders’s forthcoming legislation, or the many state bills), although wealthy Americans’ taxes would rise. And few people would complain about being freed from insurers’ narrow provider networks; not one of the Medicare Advantage plans, without out-of-pocket benefits, covers care at New York’s Memorial Sloan Kettering Cancer Center. Under single payer patients could, as in Canada, choose any hospital or doctor.

Holland’s scare-mongering about the chaos likely to ensue during a transition to single payer echoes The Wall Street Journal’s dire predictions of “patient pileups” and other disasters at the dawn of Medicare in 1965. It didn’t happen then and wouldn’t happen now. Medicare, sans computers, enrolled 18.9 million seniors (displacing private insurance for many of them) within 11 months of its passage.

The real enemies of single payer aren’t the disgruntled patients or doctors whom Holland features but the insurance and pharmaceutical firms that he barely mentions. That powerful opposition is the real problem we have to overcome, not the imagined chaos of the transition or the phony fear that patients would revolt against better coverage.

David U. Himmelstein, M.D.
Steffie Woolhandler, M.D., M.P.H.

The authors are primary-care physicians, distinguished professors of public health at the City University of New York at Hunter College, and lecturers in Medicine at Harvard. They founded Physicians for a National Health Program and served as health-policy advisers during Bernie Sanders’s presidential campaign.

***

To the editors:

Liberals have created a new single-payer bogeyman to justify their renewed pursuit of failed incremental policies for health reform, as in Joshua Holland’s recent article. It used to be that single payer was not “politically feasible.” Now, according to the likes of Holland, Harold Pollack, and Dean Baker, the problem is that single-payer advocates haven’t worked out a plan to “implement” single payer, or the “brass tacks.”

In fact, implementation is the easy part of health reform. The Canada Health Act is less than 14 pages long, and is only that long because it is also printed in French. Taiwan, which had 40 percent of its population uninsured, installed a universal single-payer system ahead of schedule in less than a year in 1995. The ease of adoption of the American Medicare program also bodes well for single payer, as Holland admits. Indeed, nearly every implementation issue Holland raises is already addressed in the Physicians Proposal for Single Payer National Health Insurance (2015) and Representative John Conyers’s bill, HR 676, the “gold standard” for single-payer legislation.

The “single payer” envisioned in these proposals is not today’s Medicare, of course, but an improved version of Medicare, with more comprehensive benefits, and greater ability to control costs. HR 676 may not specify an exact financing plan, but gives specific enough parameters so that whatever financing plan is adopted (one possible plan is here) it will shift the burden from the sick and poor to the healthy and wealthy, and make care free at the point of delivery. Private employers only pay a paltry 20 percent of the current health care tab, which can be recouped with a small payroll tax or tax on corporate revenues (as recently proposed by Robert Pollin for California). According to a study by David Himmelstein and Steffie Woolhandler in the American Journal of Public Health, taxes already fund over 64 percent of health care in the United States, so moving to a publicly-funded plan is a shift, not a radical change.

Holland asserts that physicians will have to be paid less under single payer, which is false. There are many advantages to a single-payer system, not least of which is the saving of $500 billion annually currently wasted on insurance overhead and excess provider bureaucracy—more than enough money to cover the extra costs of clinical care for the uninsured and underinsured, and to eliminate copays and deductibles for everyone, without cutting physician pay. Having said that, the single payer system will have the ability to shift more funding towards primary care over time, which would help with both access and costs down the road.

Bizarrely, Holland tries to revive Jacob Hacker’s discredited proposal for a “public option” that would compete with private insurers. The premise for Hacker’s proposal is that Americans are “stubbornly attached,” in Hacker’s words, to employer-based insurance and don’t want to give it up, refuted by Kip Sullivan in this blog post. But polls show that over two-thirds of Americans favor Medicare for All. Adding one more insurance company to our fragmented and failing health system will not cover everyone or control costs.

Proposals for incremental reform to “fix” rather than “repeal” the ACA are now on the congressional agenda, but much more fundamental reform is needed. If Congress passed single payer today, we could implement it within a year and save tens of thousands of lives. Time to get to work.

Ida Hellander, M.D.

Ida Hellander, M.D., is a former executive director and director of national health policy (1992–2017) at Physicians for a National Health Program.

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JOSHUA HOLLAND REPLIES

Himmelstein and Woolhandler aren’t alone in accusing me of dishonestly failing to note that Representative John Conyers’s Medicare-for-All bill would “fix” the current program’s “flaws,” including the fact that Medicare is not currently structured as a single-payer program. But I wrote quite clearly that, “if we were to turn Medicare into a single-payer program, as some advocates envision, then we’d also be asking a third of all seniors to give up the heavily subsidized Medicare Advantage plans that they chose to purchase. Consider the political ramifications of that move alone.”

Like other critics, Ida Hellander simply wishes away what I see as the central issue of loss aversion, citing a 2009 blog post by Kip Sullivan which asserts that “two-thirds of Americans support Medicare-for-all.” Sullivan cites a number of conflicting polls conducted in the early 2000s. We have more recent indications of how the American public feels about government involvement in health-care provision now, seven years after the Affordable Care Act was enacted: Pew’s oft-cited poll from June of this year found that, while a record high 60 percent of respondents say that it’s the government’s responsibility to cover everyone, only 33 percent said that should be accomplished through a “single national government program,” and the remainder offered that it should be done through a mix of public and private programs or were unsure.

Loss aversion is a very well documented phenomenon, and it is entirely irrational. In one famous study, one set of participants were given $50 and offered a choice between keeping $30 or taking a 50/50 all-or-nothing bet. Another group were offered the same terms, but this time the choice was phrased as losing $20 or taking the bet. Just changing the wording from “keeping $30” to “losing $20” resulted in a significant increase in those willing to roll the dice—such is our distaste for losing something we have.

Status-quo bias is another very real, and not entirely rational phenomenon—people tend to wary of change, especially sudden or radical change. And of course, the next debate over health-care reform won’t be conducted honestly, as we’ve seen from the opposition to the Affordable Care Act. It’s telling in that arguing that “implementation is the easy part of health reform,” Dr. Hellander cites the experience of Taiwan, which in 1994 was a country of 21 million that was still transitioning from a military dictatorship and spent 5 percent of its GDP on health care.

Unfortunately, these writers and other critics confirm my worry that a single, extremely difficult route to universal coverage is fast becoming a litmus test for progressives. All have attempted to excommunicate me from the left, framing my piece as part of an attack, perhaps a concerted one, on single payer by “liberal” opponents. The reality is that I have long been, and will continue to be, an advocate of establishing a universal health-care system that might be called “single payer.” But I continue to think that rapidly moving much of the population into a single program—without first either creating a model at the state level or delivering some tangible benefits through more modest Medicare expansions—is a recipe for failure.

***

Reader Comment:

By Don McCanne, M.D.
The Nation, August 17, 2017, submitted at 11:13am
 
Since Joshua Holland has had both the first and last word, this addendum is appropriate.

Holland mentions loss aversion and status quo bias and offers the example of some seniors giving up their Medicare Advantage plans, but that would not be all that bad. The proposed Medicare-for-All benefits would be greater, and patients would have free choice of their physicians and hospitals instead of being limited to the provider networks of the insurer. Also, Medicare Advantage plans have been wasting taxpayer dollars through favorable selection (marketing to the lower-cost healthier beneficiaries) and by gaming risk adjustment, not to mention diverting taxpayer funds to passive investors.

Holland seems to dismiss the evidence of a surge in support for single payer by citing the Pew poll reporting that only 33 percent supported “a single national government program.” If he had checked the topline of the Pew poll he would find that only 60 percent were asked this question. The 33 percent was the portion of the total population polled, including those not asked the question, but it was 55 percent of those who were asked - a number closer to other polls on single payer. (Yes, they had filtered out the remaining based on a question about government responsibility for making sure all Americans had coverage, but that is not dissimilar to earlier poll results showing that Americans support the Affordable Care Act but oppose Obamacare. It is a glitch that limits the interpretation of the results.)

But the fundamental problem presented by Holland, Baker, Pollack, Hacker and others is that they support a universal, public health care financing program, regardless of the single payer label, yet they insist on taking at least two steps over the chasm. There is no dispute about policy. Single payer is much more effective, efficient, equitable and affordable than other comprehensive models, except for a national health service. The debate seems to be over negotiating the political barriers to reform.

In supporting various incremental reforms, they would leave in place the most expensive and least efficient model of financing health care - our current fragmented, dysfunctional multi-payer system composed of a multitude of private and public programs.

Once you get down to designing a public option or modifying Medicare for individual purchase, you end up with only one or two more options in our dysfunctional market of private plans. You gain almost none of the efficiencies of a single payer system, and you can be sure that the insurers will be there to see that the design will prevent “unfair competition” by the public insurer (ironic considering that their gaming has given their private Medicare Advantage plans an unfair financial advantage over the traditional Medicare program, at taxpayer expense).

Holland, Pelosi and many others suggest that we enact single payer on a state level first, but that would require comprehensive federal legislation to free up funds to be used by states - simple waivers will not do it since they are very limited by law in what they can accomplish. Also there is risk that conservative state administrations would not provide a program that would adequately serve their residents (think of the refusal to accept federal funds for Medicaid).

The single payer policies are the moral imperative - affordable health care for absolutely everyone. Incremental measures leave the current botched up policies in place. Instead of trying to compromise on policy, we need to fix the politics. Hopefully Holland and the rest will work with us on that.

Don McCanne, M.D. is senior health policy fellow for Physicians for a National Health Program.

https://www.thenation.com...

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Adam Gaffney and Margaret Flowers have also provided excellent responses to Joshua Holland’s article in The Nation:

Adam Gaffney, Jacobin, “Medicare for All Should Be a Litmus Test”:
https://www.jacobinmag.com...

Margaret Flowers, Health Over Profit, “Response to Nation Article on Single Payer: Improved Medicare for All is the Solution”:
http://healthoverprofit.org...

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