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Recent Articles of Interest

The Case for Single-Payer

Posted

By Stephen Kemble, M.D.
Counter Punch, May 22, 2025

Privatization of publicly funded Medicare and Medicaid, managed care, and “value-based payment” (1) have failed to reduce cost or improve population health despite over 30 years of trying, and a new paradigm for health policy is needed. This article summarizes key health policy concepts and the implications of different payment systems and offers recommendations for design of an optimally cost-effective system enabling universal high-quality care at lowest cost.

Key Concepts

1. Should Health Care be Financed as a Public Good or with Market Competition?

Public funding is appropriate for essential public services necessary for everyone—funded by taxes and paid for with budgets based on cost of operations, with no opportunity for profit or loss. Examples include police and fire departments, public schools, the military, roads and bridges, and government services. Health care should be added to this list. Other industrialized countries with far more cost-effective universal systems treat health care as a public good, not a commodity.

Marketplace financing uses competition, market forces, private enterprise, and opportunity for profit and risk of loss. This works well for consumer goods, industry and manufacturing, hotels and restaurants, fuel and food production, and housing (except for those in poverty). These are appropriately subject to market forces, but health care is not.

2. Ethics: Professional vs Commercial Ethics

Professional ethics, traditional in medicine and other professions, put patient or client interests and welfare first, ahead of personal financial interests.

Commercial ethics prioritize financial interests of owner(s) or shareholders. Patients or clients (and taxpayers) are viewed as consumers from whom money can be extracted.

Reliance on professional ethics in health care is not perfect, but it works much better than commercial ethics and there are effective ways to deal with outliers who engage in unethical practices. It would be far less costly to manage outlier practitioners than to try to control mega-corporations that have amassed deep pockets at taxpayer expense.

Profiteering and the corporatization of health care, with substitution of commercial for professional ethics, is the main root cause of excessive cost and dysfunction in U.S. health care.

3. Insurance Risk:

The entity that covers the unpredictable variability in healthcare cost bears insurance risk. Direct payment of providers with fee-for-service means claims received will be variable and somewhat unpredictable, and risk is retained by the payer.

Government programs may contract payment to private fiscal intermediaries with capitation (payment per-member, per-month), as in Medicare Advantage, Medicaid Managed Care, and Medicare Accountable Care Organizations, shifting insurance risk onto the intermediary. A fiscal intermediary contracting to assume risk will always try to over-charge—usually to assure around 90% chance of profit, 10% risk of loss.

4. Excessive Cost of U.S. Health Care:

The managed care paradigm blames excessive cost on fee-for-service with its presumed incentive to provide unnecessary care and over-utilization. The solution offered is “value-based payment” (see below) or up-front funding for care of a defined population with capitation (2). But the U.S. has never had higher utilization compared to other countries that use fee-for-service and whose universal health care costs half as much per person, so fee-for-service cannot be the cause of excessive U.S. healthcare cost (3). The difference between the U.S. and other countries is in administrative cost and pharmaceutical prices, not over-utilization (4). And market financing of U.S. health care means about a third of total cost goes to administration (5,6).

Health Care Payment Systems

1. Fee-for-service (FFS)

Simple FFS is inexpensive to administer, although FFS as implemented in the U.S. is often unnecessarily complex and costly. For doctors, FFS rewards productivity—working harder means more pay. FFS is compatible with “patient first” professional ethics and it is compatible with independent private practice. FFS does not shift insurance risk onto providers of care, so it does not need risk adjustment or linking payment to diagnostic coding, and up-coding is not an issue.

However, FFS can reward unnecessary treatment. FFS is more likely to be abused when billing is separated from direct contact with the patient, allowing substitution of commercial ethics for professional ethics. Abuse of FFS is lowest with doctors in independent practice who bill out of their office, more problematic with doctors employed by a large group practice or hospital, and worst with for-profit ownership of doctors’ practices by an insurance company or private equity (7). Current trends are in the wrong direction.

For government programs, paying doctors and hospitals directly with FFS means government retains insurance risk and must cover the variability in claims received. However, the larger the risk pool the more manageable this unpredictability becomes, and reserve funds and re-insurance can manage budgetary uncertainty without shifting risk to third-party intermediaries.

2. Salaries for doctors

Salaries are inexpensive to administer, do not create incentives to over- or under-treat, and are compatible with “patient first” professional ethics. However, payment with salaries requires an employer, which can be a problem if the employer is profit-seeking and paid with either fee-for-service divorced from contact with the patient or capitation with its incentive for profiteering. Salaried doctors who can control their schedule/workload may be tempted to become less productive, but this can be mitigated with salary plus a small productivity incentive.

3. “Value-based payment” and capitation

“Value-based payment” systems hold doctors and hospitals accountable for quality and cost of care, even when cost and quality outcomes depend largely on patient characteristics that are beyond the control of care providers. “Capitation” is an advanced form of “value-based payment,” defined as up-front payment per-capita, based on the average per-person cost for a defined population of “members.” Value-based payment and capitation shift insurance risk onto care providers.

Capitation is a simple concept, that seemingly should be inexpensive to administer and provide cost control because care delivery must live within a capitated budget. But capitation is not the same as a simple budget, and in a competitive setting introduces inherent perverse incentives, requires added administrative burdens and costs, and does not assure budgetary control.

  • Up-front payment per member requires members, and performance on quality metrics and cost depends heavily on which members are captured.
  • Gaming the risk pool: Competition for members rewards capturing the healthy and avoiding the sick.
  • Capitation requires risk adjustment, which is administratively expensive, can’t be done anywhere near accurately enough to deter risk pool gaming (8), AND…
  • Risk adjustment incentivizes up-coding diagnoses to game the risk-adjustment formula. Up-coding is heavily abused by capitated, risk-adjusted Medicare Advantage (8) and Medicaid Managed Care plans, exploiting government funding.
  • Capitation rewards skimping on care since less care means more of payment can be kept, but capitation deters necessary as well as unnecessary care (9).

These incentives align to raise administrative cost and worsen disparities in care, and they conflict with professional ethics, contributing to physician moral injury.

Government programs (Medicare and Medicaid) may think capitation of fiscal intermediaries is a convenience because per-member payment is fixed for a contract year. However, payer risk due to changes in enrollment remains, and predictable funding is not assured over subsequent contract periods. Capitated fiscal intermediaries can keep unspent funds, inviting profiteering by plans guided by commercial instead of professional ethics. And government contracts with capitated plans means loss of control of the budget year-to-year, because in practice plans can extract whatever raises they want by gaming financial data reported to government (10).

For doctors, payment with capitation is independent of office visits, how often a patient is seen, or even whether a “member” is seen at all. Capitated doctors were protected from loss of income when patients stopped coming to the office during the COVID-19 pandemic. In theory, capitation does not require linking every service to a procedure code, but in practice payers using capitation often require fee-for-service claims for budgeting and benchmarking purposes, precluding administrative savings. And the perverse incentives and administrative costs of capitation listed above all apply.

4. Paying hospitals and other institutional providers

Fee-for-service

Hospital fee-for-service billing is extremely complex and heavily gamed, with chargemaster fee-setting, cost-shifting across different insurance lines of business, unreimbursed care, different in-network and out-of-network fees, and data reporting for value-based payment schemes. Large savings could be realized by paying hospitals with global budgets (see below) instead of fee-for-service.

Capitation

Attributing “members” to a hospital is problematic unless the hospital is part of a closed system with members who signed up for that system (e.g. Kaiser). The perverse incentives inherent to capitation listed above apply to hospitals in capitated systems.

Global budgeting

Simple global budgeting of hospitals (as in Canada) pays hospitals with global operating budgets based on cost of operations, including salaries for employed doctors and other professionals, plus separate budgets for capital improvements based on community need. Simple global budgeting of hospitals does not involve capitation (no “members”) or risk shifting and can’t be easily gamed like fee-for-service or “value-based payment.” Hospital administrative costs per capita in Canada (in US dollars) are less than a quarter of those in U.S. hospitals (11).

Centers for Medicare and Medicaid Services has been promoting the AHEAD model (“Advancing All-Payer Health Equity Approaches and Development”) (12), which includes a version of global hospital budgets applied on top of fee-for-service with rates standardized across all payers, with claims revenue reconciled to the budget at the end of the year, plus partial capitation with attributed “members” and “value-based” add-ons. These include pay-for-performance and incentives to address inequities and social determinants that are largely not under the control of the hospital. This version of hospital budgeting has none of the administrative savings of simple global budgeting, and in fact piles on more administrative burdens and cost.

Recommendations for universal care at lowest cost

1. Health care should be publicly financed by government, and the government payer should retain insurance risk, with no sub-contracting to risk-bearing fiscal intermediaries. Risk is most cost-effectively managed with broadest possible risk pooling plus financial reserves and/or re-insurance.

2. The major focus of reform should be on reducing administrative cost and therefore prices, not “managing” utilization of care.

3. Physicians could be either in independent practice or employed, and hospitals could be either privately or publicly owned, but ownership of doctors’ practices and hospitals by for-profit corporations or private equity and the corporate practice of medicine should be banned by law.

4. “Value-based payment” introduces perverse incentives and high administrative costs that preclude real value and should have no place in health care.

5. Large administrative savings could be achieved with simplified, standardized payment of care providers. Simplified fee-for-service would be appropriate for doctors in independent practice, with all procedures reduced to professional time required and hourly rates based on required training. Fee-for-service based on time and training would be much fairer and less costly to administer than attempting to assign a relative value to each of thousands of procedure codes (13). Payment should be based on the value of the time and expertise of the professional performing a procedure instead of attributing value to the procedure itself.

6. Hospitals, other institutional providers, and community-based health services should be paid with global budgets, with employed doctors paid with salaries.

7. Pharmaceutical prices should be regulated and negotiated by government.

8. Necessary administrative functions and quality assurance may be publicly administered or contracted out to an Administrative Services Only contractor on a non-risk basis.

Healthcare Cost Implications

Savings would come from markedly reducing billing and collections costs for doctors and hospitals, reduced administrative cost for the government single-payer, negotiated pricing for pharmaceuticals and durable medical equipment, and eliminating the high administrative cost of competing private plans. Further savings would result from a much-improved practice environment for primary care that eliminated disincentives for practice in under-served rural and urban areas, expanding access to primary care in the most cost-effective settings and reducing preventable ER visits and hospitalizations.

If all these recommendations were implemented, U.S. per-capita healthcare costs would likely fall into the range of Canada and other countries with universal systems that cost at least 30-40% less than what the U.S. now spends on health care.

Dr. Stephen Kemble is a psychiatrist in Hawaii who has followed health policy for decades and is a proponent of cost-effective universal healthcare.

https://counterpunch.org…

References

  1. Rooke-Ley H, Ryan AM. A New Medicare Agenda—Moving Beyond Value-Based Payment and the Managed Care Paradigm. JAMA 2025; 333(14):1203–1204.
  2. Schroeder SA, Frist W. Phasing Out Fee-for-Service Payment. N Engl J Med 2013; 369:2029-2032.
  3. Himmelstein D, Woolhandler S. Global Amnesia: Embracing Fee-For-Non-Service—Again. J Gen Intern Med 29, 693–695 (2014).
  4. Papanicolas I, Woskie LR, Jha AK. Health Care Spending in the United States and Other High-Income Countries. JAMA 2018; 319(10):1024–1039.
  5. Himmelstein DU, Campbell T, Woolhandler S. Health Care Administrative Costs in the United States and Canada, 2017. Ann Intern Med 2020; 172:134–142.
  6. Downing NL, Bates DW, Longhurst CA, Physician Burnout in the Electronic Health Record Era: Are We Ignoring the Real Cause? Ann Intern Med 2018; 169:50-51.
  7. Harris E. Private Equity Ownership in Health Care Linked to Higher Costs, Worse Quality. JAMA 2023; 330(8):685-686.
  8. Medicare Payment Advisory Commission. Report to the Congress: Medicare payment policy. Washington DC: MedPAC; March 2024.
  9. U.S. Department of Health and Human Services Office of Inspector General, “Some Medicare Advantage Organization Denials of Prior Authorization Requests Raise Concerns About Beneficiary Access to Medically Necessary Care,” April 2022, https://oig.hhs.gov/oei/reports/OEI-09-18-00260.pdf.
  10. Goldsmith J, Mosley D, Jacobs A. Medicaid Managed Care: Lots of Unanswered Questions (Part 2). Health Affairs Blog, May 5, 2018.
  11. Himmelstein DU, Jun M, et al. A Comparison of Hospital Administrative Costs in Eight Nations: US Costs Exceed All Others By Far. Health Affairs 33, No. 9 (2014):1586–1594
  12. States Advancing All-Payer Health Equity Approaches and Development (AHEAD) Model. CMS.gov. 2024.
  13. Kemble SB, Kahn J. Optimizing Physician Payment for a Single-Payer Healthcare System. Int’l J Social Determinants of Health and Health Svcs, May, 2023.

The U.S. Healthcare System in Conversation with Dr. Don McCanne

Posted

By Chloe Crawford
Spero ~ Hope for the Future, May 13, 2025

The US healthcare system lives in two realities.

It is a system home to innovative treatments, leading research, and world-class hospitals, with the highest spending on health per person when compared to similar wealthy nations.1

However, simultaneously, it is a system where millions of Americans face barriers to healthcare. They must navigate complicated insurance rules, and a reality where an unexpected illness or accessing care without insurance can result in bankruptcy and crippling debt.

This leaves many to ask, “Why is access to healthcare in the United States so complicated and so expensive?”

To help answer this question, we spoke with Dr. Don McCanne, a retired physician, longtime health policy advocate, and Senior Health Policy Fellow with Physicians for a National Health Program (PNHP). Dr. McCanne has spent decades treating patients and fighting for reform. We explore how the U.S. got here – and with the help of Dr McCanne –  how it might set out a different path forward.

History of Healthcare in the US

While many similarly wealthy countries began to implement national health insurance plans throughout the 20th century, the US did not.

A brief timeline:

Early 20th Century – Independent physicians and low costs: In the early 1900s, most doctors in the United States worked independently, healthcare costs were relatively modest, and hospitals were often community-run or charitable institutions. There was a lack of country-wide healthcare initiatives or legislation. Most healthcare matters were left to states, who in turn left them to private and voluntary programs.

World War II – Birth of employer-based insurance: During World War II, wage controls prevented employers from raising salaries, so many began offering health insurance as a benefit to attract workers.3 This marked the beginning of America’s widely employer-based model of healthcare, where affordable access to healthcare became tied to one’s employment.

Post-War Era – Rise of for-profit insurance: Private health insurance was initially offered by nonprofit organisations like Blue Cross, which charged flat rates for hospital coverage.4 But after the war, they faced growing competition from for-profit insurers, who introduced risk-based pricing and charged more to groups with a history of higher health costs.5 For example, older or disabled workers faced higher rates. This laid the groundwork for systemic differences in access and affordability of healthcare.

Cold War Impact – National Health Insurance attempts blocked: While several presidents, including Truman and Kennedy, proposed national health insurance, these efforts met fierce resistance.6 Opponents, especially the American Medical Association and private insurers, framed such proposals as “a communist plot,” invoking Cold War fears of communism.7 As other wealthy nations built universal health systems after World War II, the U.S. doubled down on private-sector solutions.

1950s-60s – Tax policy and expansion of private plans: Private insurance continued to expand, partly because employer contributions to health coverage were not included in a worker’s taxable income.8 This tax advantage made it cheaper for employers to offer health benefits, cementing the dominance of private, job-based coverage. Meanwhile, those without employer coverage – especially retirees, the poor, and the unemployed – were often left behind.

1965 – A turning point! The creation of Medicare and Medicaid: President Lyndon B. Johnson signed the first nationwide public health insurance programs into law in 1965.9 Medicare provides federal health coverage for those over 65 and some with disabilities. Medicaid, a joint federal and state program, covers low-income individuals and families, but eligibility varies by state.

1980s-90s – Managed Care and Market Logic: Healthcare costs surged in the 1980s due to the introduction of new and expensive medical technologies, the use of a fee-for-service payment model (doctors and hospitals are paid for each test, procedure, or visit) which incentivised overuse, and minimal price regulation.10 In response, insurers introduced managed care models which restricted users to agreed-upon care providers and often required pre-approval to access certain services.11 While managed care briefly slowed cost growth, it also limited patient choice and created frustration and confusion among both patients and providers.

2010 – The Affordable Care Act: Introduced by President Obama and often referred to as Obamacare, it was aimed at reducing the number of uninsured Americans.12 It expanded Medicaid in many states and created online marketplaces where people could compare insurance plans. However, it preserved the central role of private insurers.

US healthcare is now a patchwork of private insurance plans and employer-sponsored coverage. While programmes like Medicare and Medicaid have helped millions, the system remains fragmented and dependent on private insurers. Dr McCanne and many like him believe these programmes need to go further. His career saw the impact of Medicare’s introduction on his elderly and retired patients, many of whom were living only on a social security check and were “suddenly able to have essentially unlimited healthcare.”

This is an approach he believes could work for everyone. However, over time, healthcare in the US has solidified itself as a for-profit industry, rather than a basic necessity for the benefit of everyone.

The Current US Healthcare System

Today, about half of Americans get insurance through work. Around 9% have no insurance at all, and many more are underinsured.13 The current system is costly, complex to navigate, and corporatised.

Insurance doesn’t always mean affordable – Most plans include:

  • Deductibles: What you pay before insurance kicks in
  • Copays: Fixed fees for services (like $40 to see a doctor)
  • Coinsurance: A percentage of costs you must cover (e.g. 20% of a hospital bill)

This means that many people who are technically insured still incur very high upfront or out-of-pocket costs.14

Insurance networks are restrictive – Most insurance plans use provider networks, approved doctors, and hospitals that have contracts with your insurer. If you go out-of-network, you’ll pay much more (or sometimes everything!) yourself.

Drugs and treatment are expensive! – Drug prices in the U.S. are much higher than in other countries.15 For example, insulin can cost almost 5x more in the US compared to just over the border in Canada.16 A key factor in this difference is that the US doesn’t regulate drug prices when products are launched or when substantial price increases are enacted after launch.17

Covid-19 exposed the underlying issues in the system – The pandemic laid bare some of the key systemic failures of US healthcare. Millions lost their jobs and, as a result, their health insurance. Hospitals were overwhelmed. Essential workers risked their lives with minimal reward.18 The crisis amplified calls for a more resilient, equitable system, not tied to employment nor distorted by profit.

Corporate Consolidation Has Taken Over Care – Healthcare is no longer local or community-based. Now, it’s big business. Through a process known as vertical integration, insurers, hospitals, and clinics have merged into giant corporate systems. For-profit companies now own the vast majority of healthcare facilities and practices, including hospices, nursing homes, and ambulance companies. For example, UnitedHealth, one of the largest insurers in the US, uses its offshoot company Optum to control more than 1500 clinics with 60,000 doctors. McCanne and his colleagues point to this example as evidence that “Increasingly, Americans’ insurer is also their doctor.”19

This corporate consolidation means less competition, fewer independent doctors, and decisions driven by profit for shareholders, no matter the cost to patients.

The result? Medical debt is one of the number 1 causes of bankruptcy in the U.S.20

Even insured patients can end up owing thousands for hospital stays, Emergency Room visits, or medications. Surprise bills, out-of-network charges, and denied claims leave many financially devastated.

Studies show:

  • 41% of US residents carry medical debt.21
  • 60% of uninsured adults delay care due to cost.22
  • Crowdfunding sites like GoFundMe host over 250,000 medical fundraisers every year.23

Another Path Forward

For decades, advocates like Dr. McCanne and organisations like Physicians for a National Health Program (PNHP) have championed Medicare for All – a single-payer national health insurance system that:24

  • Covers every American
  • Is funded publicly through taxes
  • Eliminates private insurance companies
  • Reduces wasteful bureaucracy
  • Gives doctors and patients freedom from insurance and profit-driven decisions

This doesn’t have to come at great cost to the American people. Dr McCane points to the many studies that show that comprehensive care can be provided to everyone at no greater cost than is currently being spent.25

But McCanne and others now recognise that even this bold reform must go further. They want you to ask not just how care is paid for care but who owns and provides it.

As corporate control over care delivery grows, reformers argue that the US needs a National Health Service model – publicly funded and publicly owned. In this model:26

  • Hospitals, clinics, and other vital facilities would be owned by the people, not shareholders.
  • Local communities, not corporate head offices, would control how care is delivered.
  • Federal oversight would ensure quality and equity.
  • The focus would shift from financial return to human well-being.

This approach would put public health back in the hands of the people, where it belongs.

Dr Don McCanne on how to fight for better

Dr. McCanne’s story is one of lifelong commitment. Inspired by his father, a teacher who became a physician later in life, he and his twin brother entered medicine not to get rich, but to serve. They set up and ran a community practice in San Juan Capistrano where they accepted all patients, no matter their citizenship or financial status.27

Now in his late 80s, despite health issues and retirement, he continues to write and advocate for change. He co-authored the long-running “Quote of the Day” column on health policy, now continued as Health Justice Monitor by his colleague, Dr. Jim Kahn. Even in today’s turbulent political climate, he still believes progress is possible:

“The injustice of our healthcare system is becoming harder to ignore. People are waking up.”

When asked what gives him hope, he points to the next generation. “At 87, I know that I won’t see it, but I still have hope for the future.”

Dr McCanne shows us the impact of showing up, dedicating time to your community and not losing hope. He still believes that the US has every potential to live up to its proclamations of being a great country for all those who live in it. Healthcare reform in the United States is not a pipe dream. It is within reach.

Dr McCanne serves as a reminder that change doesn’t start in government; it starts with people who care. Patients, doctors, nurses, and voters must stand together and demand a system that works for everyone. This sentiment rings even more true next to a backdrop of recent cuts to healthcare programmes and research.28

When reflecting on his lifelong fight for more equitable and accessible healthcare in the US Dr McCanne leaves us with this: “I realise that there is so much more work left to do, and it’s going to have to be done by you. I just hope that some of us can provide a modicum of inspiration to help move the process forward. We are so close.”

What You Can Do

Learn more about the solutions being proposed to US healthcare at: PNHP.org, Health Justice Monitor, DoctorsForAmerica.org

If you live in the US, talk to your representatives, share your own experiences and struggles with the system and vote at elections with healthcare in mind!

For those outside the US, take inspiration from Dr McCanne on how to persevere in pursuing a more just world for yourself and others.

Stay tuned at Spero to learn about other healthcare systems around the world!

https://spero-hopeforthefuture.com…

Bibliography

  1. Turner, Ani, George Miller, and Elise Lowry. “High U.S. Health Care Spending: Where Is It All Going?” The Commonwealth Fund, October 4, 2023.
  2. Palmer, Karen S. “A Brief History: Universal Health Care Efforts in the US.” PNHP. Presented at the Spring, 1999 PNHP Meeting, 1999.
  3. Field, Marilyn J, and Harold T Shapiro. Origins and Evolution of Employment-Based Health Benefits. Nih.gov. Washington DC: National Academies Press (US), 1993.
  4. Field, Marilyn, and Shapiro. Origins and Evolution of Employment-Based Health Benefits.
  5. Field, Marilyn, and Shapiro. Origins and Evolution of Employment-Based Health Benefits.
  6. Moseley, George. “The U.S. Health Care Non-System, 1908-2008.” AMA Journal of Ethics 10, no. 5 (May 2008): 324–31.
  7. Moseley, “The U.S. Health Care Non-System, 1908-2008.”
  8. Palmer “A Brief History: Universal Health Care Efforts in the US.”
  9. Valaitis, Karen. “1.1 Historical Background.” In Exploring the U.S. Healthcare System. University of West Florida, Pressbooks, 2023.
  10. Freeland, Mark S, and Carol E Schendler. “Health Spending in the 1980’S: Integration of Clinical Practice Patterns with Management.” Health Care Financing Review 5, no. 3 (1984): 1–64.
  11. Heaton, Joseph, and Prasanna Tadi. Managed Care Organization. PubMed. Treasure Island (FL): StatPearls Publishing, 2023.
  12. Rosenbaum, Sara. “The Patient Protection and Affordable Care Act: Implications for Public Health Policy and Practice.” Public Health Reports 126, no. 1 (January 2011): 130–35.
  13. Collins, Sara, Lauren Haynes, and Relebohile Masitha. “The State of U.S. Health Insurance in 2022.” Commonwealth Fund, September 29, 2022.
  14. Cohen, Joshua. “U.S. Healthcare System Leaves Far Too Many People Underinsured.” Forbes, January 1, 2024.
  15. Damberg, Cheryl L, Andrew W Mulcahy, and Erin Audrey Taylor. “The Expense of Health Care Explained: What Americans Need to Know.” Rand.org. RAND Corporation, October 8, 2024.
  16. Schneider, Tyler, Tara Gomes, Kaleen N. Hayes, Katie J. Suda, and Mina Tadrous. “Comparisons of Insulin Spending and Price between Canada and the United States.” Mayo Clinic Proceedings 97, no. 3 (February 2022).
  17. Raimond, Veronique C., William B. Feldman, Benjamin N. Rome, and Aaron s. Kesselheim. “Why France Spends Less than the United States on Drugs: A Comparative Study of Drug Pricing and Pricing Regulation.” The Milbank Quarterly 99, no. 1 (March 2021): 240–72.
  18. Gaffney, Adam. “Our Failing Healthcare System Costs Us Countless Lives. It’s Time to Adopt Medicare for All – PNHP.” PNHP, February 11, 2021.
  19. Himmelstein, David U., Steffie Woolhandler, Adam Gaffney, Don McCanne, and John Geyman. “Medicare for All Is Not Enough.” The Nation, March 31, 2022.
  20. Fay, Bill. “Bankruptcy Statistics.” Debt.org, April 24, 2024.
  21. Fay, “Bankruptcy Statistics.”
  22. Lopes Lunna, Alex Montero, Marley Presiado, and Liz Hamel. “Americans’ Challenges with Health Care Costs.” Kaiser Family Foundation, March 1, 2024.
  23. Martinez, Gina. “GoFundMe CEO: One-Third of Site’s Donations Are to Cover Medical Costs.” Time, January 30, 2019.
  24. PNHP. “About Single Payer – PNHP.” Physician for a National Health Program, 2010.
  25. PNHP, Preethiya Sekar, and Conor Nath. “Financing a Single-Payer National Health Program.” PNHP, n.d.
  26. Himmelstein, Woolhandler, Gaffney, McCanne, and Geyman. “Medicare for All Is Not Enough.”
  27. Cabrera, Yvette . “Putting Health First : Two South County Doctor Brothers Who Serve Mostly Latinos Aren’t Concerned about clients’ papers or pocketbooks.” Los Angeles Times, February 13, 1995.
  28. Pifer, Rebecca. “Trump Releases 2026 Budget Including Heavy Healthcare Cuts.” Healthcare Dive, May 5, 2025.

Medicare Enrollment Proposals Would Speed Shift to Private Care

Posted

By Tony Pugh
Bloomberg Law, April 29, 2025

Medicare’s shift toward privatization could get a significant boost if the Centers for Medicare & Medicaid Services embraces either of two conservative proposals that could increase enrollment in the program’s bulging managed care option.

Project 2025, the Heritage Foundation’s national policy blueprint, calls for all new Medicare-eligible adults to “opt-in” to the program through a private Medicare Advantage plan rather than the traditional fee-for-service program, the historic landing spot for new enrollees since the program’s inception.

The Paragon Health Institute, a conservative think tank, wants to require newly eligible beneficiaries to “affirmatively choose” one or the other.

With strong Republican support of Medicare Advantage and GOP control of Congress and the White House, “I think the stars are properly aligned for something like this to take place,” said Robert Moffit, senior research fellow at the Heritage Foundation’s Center for Health and Welfare Policy. He said either proposal would be an improvement over the current system.

Fifty-four percent of eligible beneficiaries are already enrolled in Medicare Advantage plans, which are offered by private insurers like UnitedHealth Group, Humana, and CVS Health. The Congressional Budget Office expects that to reach 64% by 2034.

Both sign-up proposals would likely increase or hasten those MA growth projections, said Moffit and David Lipschutz, litigation director at the Center for Medicare Advocacy.

“The thumb is already firmly on the scales in favor of Medicare Advantage enrollment, and implementing either of these policies would just exacerbate that,” Lipschutz said.

But if either proposal is adopted without accompanying changes in the MA payment system, Moffit, Lipschutz, and others said the change could also weaken Medicare’s overall finances just as millions of aging baby boomers are swelling program ranks, and fewer working-age adults will be around to fund the program.

“You’re going to be stuck with a problem,” Moffit said, if the proposals become policy without addressing MA’s “flawed” risk adjustment system, and “broken” payment system, which can inflate plan reimbursements. “And they are going to fester as fiscal problems,” he added later.

Oz and Medicare Advantage

The proposals are receiving fresh attention because CMS Administrator Mehmet Oz is a longtime supporter of the MA program.

Earlier this month, the CMS boosted payments to MA plans by an average of 5% for 2026, even though MA coverage will cost 20% more per enrollee this year than fee-for-service Medicare, the Medicare Payment Advisory Commission estimates.

That’s $84 billion more to care for beneficiaries than if they were in traditional Medicare. The federal government is projected to pay MA plans $538 billion this year, up from $494 billion in 2024.

“Although he hasn’t spoken much, prior to his appointment, about his policy intentions and what he wants to do to improve health care in America, the one thing” Oz has “been very clear about is that the privatization of Medicare is high on his agenda,” said Donald Berwick, senior fellow at the Institute for Healthcare Improvement and a former CMS administrator.

Officials at the Department of Health and Human Services did not respond to questions about either proposal, but said HHS is committed to strengthening Medicare by promoting greater choice, competition, and affordability for American seniors. The agency’s focus remains on advancing reforms that align with President Donald Trump’s vision of improving health outcomes, empowering beneficiaries, and delivering better value across the Medicare program, according to the official.

Constraining Medicare Spending

An influx of aging baby boomers, greater use of medical services, and inflation are expected to drive 7% to 8% annual increases in Medicare spending over the next decade, as program costs nearly double from $1 trillion in 2023 to $1.9 trillion in 2032, the commission estimates.

That means 22% of personal and corporate income taxes will be needed to fund Medicare prescription drug and outpatient benefits in 2030 compared with 17% in 2023. Yet by 2029, only 2.5 workers per beneficiary will fund the program, down from 2.8 in 2023, the commission said. That reality makes constraining Medicare spending a high priority.

In a tradeoff for lower premiums and provider networks, Medicare Advantage provides a cap on catastrophic health-care costs, and offers supplemental benefits such as vision and hearing coverage that FFS doesn’t offer. Unlike traditional Medicare, which pays for each medical service provided, private MA plans receive monthly payments to cover each beneficiary’s cost of care.

The higher costs for MA care result mainly from “favorable selection,” when plan payments exceed predicted medical costs, and “coding intensity,” the inflated diagnosis of patient ailments.

‘Basically an Antique’

Lawmakers and policy makers “should ask themselves why traditional Medicare should be the default” enrollment “option when it’s based on a 1965 Blue Cross Blue Shield model,” said Moffit, a former HHS deputy assistant secretary.

“You’re talking about something that is basically an antique,” he said of traditional Medicare. “Who would buy today, with their eyes open, a health policy that doesn’t have any protection against the financial devastation of a catastrophic illness? We just keep doing it because we’re used to doing it.”

Since managed care has become the dominant form of job-based health coverage, “if you’re becoming eligible for Medicare and you already have a managed care plan from ‘company x,’ a lot of people just say ‘well, I’m not thrilled with it, but I’ll stick with what I know,” and go with Medicare Advantage, Lipschutz said.

But Berwick said “traditional Medicare is a better place for most patients,” because unlike MA, it has no provider network restrictions or pre-authorization requirements.

Both enrollment proposals are “bad policy,” he said. “And if we allow this continued slide into privatization to occur, which appears to be the intention of this administration, a lot of beneficiaries are going to be hurt.”

Any change in the enrollment of new beneficiaries would necessitate enrollee information so people with diverse needs and ailments could decide which MA plan to select, whether to opt out, or whether to go with fee-for service coverage instead, said Carrie Graham, director of the Medicare Policy Initiative at Georgetown University.

The debate offers an opportunity, Graham said, to weigh adding a catastrophic out-of-pocket spending cap to fee-for-service Medicare to help even the playing field with MA coverage.

https://news.bloomberglaw.com…

Recent Members in the news

Dr. Diljeet Singh on More Perfect Union

Posted

This article includes video

PNHP president Dr. Diljeet Singh spoke to More Perfect Union for a video segment that was posted on April 15, 2025.

She talked about the blatant conflicts of interest that should have been a red flag for senators voting on the nomination of Dr. Mehmet Oz to lead the Centers for Medicare and Medicaid Services—especially his enthusiasm for the so-called “Medicare Advantage” program, and his investments in firms like UnitedHealthcare.

“Every single health care dollar should go to health care,” said Dr. Singh, “not profit and not shareholder dividends.”

Dr. Ed Weisbart on CareTalk

Posted

This article includes video

PNHP national board secretary Dr. Ed Weisbart appeared on the CareTalk podcast on February 3, 2025. He discussed the dangerous nomination of Dr. Mehmet Oz to lead the Centers for Medicare and Medicaid Services (CMS), and urged listeners to register for a “shadow hearing” hosted by PNHP alongside allies in the health justice movement.

“[Dr. Oz] wants to hand over Medicare to the for-profit insurance industry,” said Dr. Weisbart. “We know that’s an incredibly bad idea … We can’t let this happen.”

Wendell Potter on MSNBC

Posted

This article includes video

Former Cigna executive and health insurance industry whistleblower Wendell Potter was interviewed by MSNBC for a segment on December 9, 2024. Mr. Potter discussed the jarring outpouring of anger from Americans in the wake of the murder of UnitedHealthcare CEO Brian Thompson.

“Delays and denials are what people encounter these days,” he said. “Whether we’re talking about employers, patients, doctors—just about everybody despises health insurance companies in ways that I’ve never seen before.”

Recent Quote of the Day

John Geyman: The Medical-Industrial Complex…plus exciting changes at qotd

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“America’s Mighty Medical-Industrial Complex: Negative Impacts and Positive Solutions”

By John Geyman

This book has three goals: (1) to bring an historical perspective to how medicine and health care have evolved over the last 100 years, including the transformation of their original ethic of service with a moral purpose and how that ethic has been compromised by corporate greed; (2) to describe where an engulfing medical-industrial complex has brought us in terms of decreasing access to affordable health care, unacceptable quality of care, profiteering and fraud; and (3) to consider whether and how our unsustainable health care system can be brought into line against this deepening crisis in serving the needs of our people.

Copernicus Healthcare: http://www.copernicus-healthcare.org

Amazon: https://www.amazon.com…

Comment:

By Don McCanne, M.D.

Most of us want a health care system that has a mission to maintain and improve our health, yet we have a system that has lost its way in that its mission places a priority on advancing the interests of the medical-industrial complex at the cost of compromising our health care. John Geyman explains how we got there and how detrimental the impact has been. Although the political barriers to reform seem almost insurmountable, he does show us that there is a path to the essential reform that we need to bring health care justice to all. By understanding the source and nature of the dysfunctions, we can find our way out.

Exciting changes at qotd

As some of you may have heard, the interruption in the Quote of the Day messages was due to a TIA/stroke suffered by the author. Fortunately, the recovery has been dramatic, though incomplete. As a result, after two decades of daily commentaries in his retirement years, it is time for a change.

Future messages will be from noted health policy experts within and outside of PNHP. We will be receiving the latest from the best. With this change in format, we will also be changing the name to “Health Justice Monitor.” Launch is planned for next week.

I hope that you are as excited as I am as I become a consumer rather than a producer of the latest in health policy science. The more we understand, the sooner we will have health care justice for all.

Peace,
Don McCanne

Stay informed! Visit www.pnhp.org/qotd to sign up for daily email updates.

Quote of the Day interlude

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By Don McCanne, M.D.

Quote of the Day will take a brief interlude. We are refining our approach to communicating information to educate and advocate for single payer and health care justice for all.

See you soon.

Stay informed! Visit www.pnhp.org/qotd to sign up for daily email updates.

More trouble: Drug industry consolidation

Posted

Over 30 years, dramatic consolidation has meant higher prices, fewer treatment options and less incentive to innovate

By Robin Feldman
The Washington Post, April 6, 2021

In the past few decades, three waves of mergers have substantially increased concentration in the pharmaceutical industry.

All told, between 1995 and 2015, the 60 leading pharmaceutical companies merged to only 10.

As a result, now only a handful of manufacturers are responsible for sourcing the vast majority of prescription drugs: Just four companies, for example, produced more than 50 percent of all generic drugs in 2017.

Drug companies were drawn to merging because of the lure of increased market power, improved synergies, larger economies of scale and more diverse product portfolios.

In the period following merger waves one and two, the industry generated fewer new molecular entities each year compared to pre-merger levels. Merged drug companies also spent proportionally less on research than their non-merged competitors.

Consolidation also enabled drugmakers to directly quell competition through what were known as “killer acquisitions,” in which they acquired innovative peers solely to stop potential competition.

In short, consumers were the losers from the two waves of drug company mergers. They confronted higher prices and fewer choices — and saw companies exploring fewer paths that might produce breakthroughs. To make matters worse, around 2010, another wave of mergers began.

As with the earlier waves, giant drug companies have merged. But in a new twist, in recent years, most consolidation has featured bigger players acquiring smaller start-ups. The difference reflects a dramatic shift in the structure of the pharmaceutical industry. Faced with stagnating research productivity, large drugmakers now rely on outsourcing their new drug research to start-ups and other small pharmaceutical firms.

Increasingly, these smaller players specialize in high-risk research and early drug development, with larger firms then gobbling them up and navigating the FDA’s regulatory process. For example, 63 percent of all new molecular entities in 2018 came from smaller biopharma firms, compared with just 31 percent in 2009.

The end result of now three waves of pharmaceutical consolidation is decreased or diverted new drug innovation, fewer treatment options and higher prices. Consumers have lost as firms fuse together to bolster the bottom line.

Robin Feldman is director of the UC Hastings Center for Innovation.

https://www.washingtonpost.com…

Comment:

By Don McCanne, M.D.

Yesterday we discussed consolidation of UnitedHealth/Optum and how it has become a mega-corporation of the medical-industrial complex. Today’s selection discusses consolidation within the pharmaceutical industry. The article describes how we can expect decreased or diverted drug innovation, fewer treatment options, and above all, higher prices. Works for the industry, but not so well for the people.

We’re just trying to introduce single payer Medicare for All. How much impact can that have on these mega-corporations? Where is our government in all of this? Aren’t they supposed to protect us? Maybe we’re aiming too low by advocating for a social insurance program. Maybe we should be taking over the industry so that we can gear it up to better serve us, the people. International comparisons do rate national health services very high in performance. Maybe if we talk about it a little more we can convince them that Medicare for All is a compromise that they can live with. We think we can too.

Stay informed! Visit www.pnhp.org/qotd to sign up for daily email updates.

Recent State Single Payer News

N.Y. Assembly passes universal health care bill

Posted

By Dan Goldberg
Capital New York, May 27, 2015

The state Assembly on Wednesday voted for a single-payer health bill, the first time in more than two decades the chamber has taken up the measure.

The vote was 89-47, an overwhelming but largely symbolic step toward universal health insurance. The bill now heads to the Republican-controlled Senate where it is not expected to pass.

Assemblyman Richard Gottfried, chair of the health committee, gave an impassioned speech on the floor in support of the New York Health Act, arguing that it was long past time for New Yorkers to rid themselves of the intrusive insurance companies whose goal is to deny claims rather than provide care.

“You do not have to be an Einstein to understand New York Health is the right choice for New York,” Gottfried said.

Gottfried, a Democrat from Manhattan, spent the legislative session barnstorming the state, trying to gain support for his bill, which would be funded through a progressive income tax and payroll assessments. There would be a net savings of $45 billion in health spending by 2019, Gottfried said, based on an analysis from Dr. Gerald Friedman, a professor at the University of Massachusetts at Amherst, though that figure was attacked by Republicans.

The bill, Gottfried said, would lower costs by getting rid of insurance companies. It would lower administrative costs and allow doctors to focus their time on treating patients instead of fighting for reimbursements.

“What will bring down health care costs is taking out of the equation the more than 20 percent we now spend on administrators whose job it is to fight with insurance companies,” he said.

The plan’s benefits, Gottfried said, would be more generous than any plan on the current market, and there would be no co-pays or deductibles. The bill would also require a care coordinator for every member, though that coordinator is not empowered to choose the type of care a patient receives.

For some Republicans, it was all too good to be true.

“This bill promises remarkable things for New York State residents,” said Assemblyman Andy Goodell, a Republican from Chautauqua. “It says providers, ‘you’ll be paid a lot more money,’ and it says to the employees ‘you’ll contribute a lot less money,’ and it says to the patients ‘you’ll have much broader access,’ and to the employers ‘you’ll pay $45 billion less.’ My background is in math and economics and I haven’t been able to figure out how this all works. … There is no free lunch, there is no free health care.”

Leslie Moran, spokeswoman for the New York Health Plan Association, which represents insurers, said the bill “represents an unrealistic, utopian view of a universal health care system where everyone would be covered, everything would be covered and the system would magically pay for it all.”

One problem, pointed out by Republicans, is that the offering, while generous, is the opposite of what public health officials are pushing, including those in the Cuomo administration, who have professed that insurance systems, and high deductibles and co-pays help ensure people use the health system judiciously instead of opting for more, often unnecessary, care.

“There is a role for insurance companies,” state health commissioner Dr. Howard Zucker said Wednesday before the debate.

The last time a universal health care bill was on the Assembly floor was 1992. It passed but the debate was sidelined because of federal efforts to reform health care, which ultimately failed under the Clinton administration.

The passing of the Affordable Care Act, which subsidizes private insurance for people below a certain income level, was a valid effort, Gottfried said, but ultimately served to highlight why the system needs to be entirely scrapped.

“I think the A.C.A. has made it clear to people … there are profound problems in our health care system that cannot be addressed by incremental change in that system,” Gottfried said.

Wiping out an industry — even the insurance industry — was not seen as popular by many Republicans who worried about the loss of jobs and what might happen should this plan fail.

Goodell asked why the state should go down this road when when Medicaid — a government run insurance program for lower-income residents — is expensive, burdensome and not well liked.

“Why would we want to expand that type of approach,” he asked.

Gottfried responded that his bill would improve Medicaid by putting everyone into one pot. He would, he said, eliminate the two-tiered system. There’d be no greater risk of fraud under this law than in the current Medicaid program.

Republicans also pointed out how much was left to be done. The income tax rates have yet to be decided, but would likely cost the highest earners more than they currently pay for health insurance, while subsidizing lower income residents.

The analysis provided by Gottfried estimates no income tax on the first $25,000, an income tax of 9 percent on income between $25,0001 and $50,000, graduating to 16 percent tax for income over $200,000.

The legislation is also not specific on how to deal with residents of New York State who retire to another state.

That would have to be resolved at a later date, Gottfried said.

“Though we have numerous pages on this legislation, we have numerous holes also,” said Al Graf, a Republican from Holbrook. “There is no way I can go back to my constituents and tell them you may have coverage in the future. … This is an exercise in insanity.”

Moran said there is no certainty that providers would accept government set reimbursement, though Gottfried said almost all would receive more for their services than they are currently being paid.

The bill also “completely disregards the economic contribution of health plans — both to the state and to local communities,” Moran said.

Joseph Borelli, a Republican from Staten Island, cited Vermont, which tried and failed to enact a single-payer health system.

Vermont’s collapse has been a cautionary tale for even the most enthusiastic supporters of government sponsored health insurance, but Gottfried was having none of it.

“New York … bears no resemblance to Vermont,” Gottfried said. “The bill bears very little resemblance to Vermont. Their financing system is different. The two have absolutely nothing to do with one another, nothing! Why don’t you ask me whether New York will flood Just like Texas flooded if we enact this plan. The weather in Texas has as much to do with this as Vermont does.”

Read the bill here: http://bit.ly/1JVUg1I

http://www.capitalnewyork.com/article/albany/2015/05/8568890/assembly-pa…

N.Y. Assembly votes for universal health coverage

By Michael Virtanen, Associated Press
Democrat & Chronicle (Rochester, N.Y.), May 27, 2015

ALBANY – The New York Assembly voted 89-47 on Wednesday for legislation to establish publicly funded universal health coverage in a so-called single payer system.

All New Yorkers could enroll. Backers said it would extend coverage to the uninsured and reduce rising costs by taking insurance companies and their costs out of the mix.

With no patient premiums, deductibles or co-payments for hospital and doctor visits, testing, drugs or other care, New York Health would pay providers through collectively negotiated rates. It would be funded through a progressive payroll tax paid 80 percent by employers and 20 percent by employees.

Also, waivers would be sought so federal funds now received for New Yorkers in Medicare, Medicaid and Child Health Plus would apply.

“Employers are shifting more and more health care costs to workers or are dropping it entirely,” said Assemblyman Richard Gottfried, chief sponsor. “The only ones who benefit are the insurance companies.”

The Manhattan Democrat estimated universal care would save New Yorkers more than $45 billion annually, cutting the statewide total cost for health care to about $255 billion in 2019.

Assembly Republicans doubted Gottfried’s estimate and questioned what would happen to everyone now employed by insurance companies.

“All I can say right now I think this is the last think New York state needs as far as an additional cost,” said Assemblywoman Jane Corwin, an Erie County Republican. She said they’re still trying to grapple now with the cost of the federal Affordable Care Act. That extended health care coverage to about 1 million New Yorkers, more than half in Medicaid and the others in private insurance with possible tax subsidies to offset costs.

An identical bill hasn’t advanced in the state Senate and isn’t expected to before the legislative session ends in June. Senate Health Committee Chairman Kemp Hannon said Wednesday that Gottfried’s bill faces two major hurdles, resistance from senior citizens to giving up Medicare for a new state program and obtaining federal waivers to apply Medicaid and Medicare funding to support it.

http://www.democratandchronicle.com/story/news/local/2015/05/27/assembly…

Single-Payer Health-Care Bill to be Introduced in Pa.

Posted

Berks Community Television (Reading, Pa.), Oct. 25, 2015

HARRISBURG, Pa. – A bill to create a single-payer health-care system in Pennsylvania will be introduced in the state Legislature by the end of the month.

The legislation is being introduced by Representative Pamela DeLissio of Philadelphia and was crafted with the assistance of HealthCare 4 ALL PA, a not-for-profit advocacy group. David Steil, past president of that organization, says the bill is simply called the Pennsylvania Health Care Plan.

“What it does is create a health-care system that includes every resident of Pennsylvania, that is publicly funded and privately delivered,” says Steil.

The cost of the program would be covered by increased taxes, which Steil acknowledges may present a significant obstacle to passage by the state Legislature.

The plan would increase the state personal income tax by an additional three percent, substantially less than most pay for private insurance. It would also add a 10 percent payroll tax on businesses which, as Steil points out, is much less than what businesses spend on health insurance now.

“The average cost for health care benefits for companies that provide health care is about 17 percent of payroll,” he says. “So at 10 percent of payroll, the saving is significant.”

Similar legislation has been introduced in each legislative session since 2007.

Most recently it was introduced as Senate Bill S-400. None of the earlier versions have not gotten very far. Raising taxes is a hard sell, especially to conservative lawmakers. But Steil insists they’re asking the wrong question.

“The question each one has to ask is not just ‘look at the taxes’ because there are taxes to it, it’s not free,” he says. “The question is, ‘How much less than you’re currently paying is this plan to you?'”

Steil says the bill would also eliminate health-insurance costs on pension plans and vehicle insurance, making the potential savings even larger.

http://www.bctv.org/special_reports/health/pa-legislature-introduces-sin…

Single-Payer Health-Care Bill to be Introduced in Pa.

Posted

Berks Community Television (Reading, Pa.), Oct. 25, 2015

HARRISBURG, Pa. – A bill to create a single-payer health-care system in Pennsylvania will be introduced in the state Legislature by the end of the month.

The legislation is being introduced by Representative Pamela DeLissio of Philadelphia and was crafted with the assistance of HealthCare 4 ALL PA, a not-for-profit advocacy group. David Steil, past president of that organization, says the bill is simply called the Pennsylvania Health Care Plan.

“What it does is create a health-care system that includes every resident of Pennsylvania, that is publicly funded and privately delivered,” says Steil.

The cost of the program would be covered by increased taxes, which Steil acknowledges may present a significant obstacle to passage by the state Legislature.

The plan would increase the state personal income tax by an additional three percent, substantially less than most pay for private insurance. It would also add a 10 percent payroll tax on businesses which, as Steil points out, is much less than what businesses spend on health insurance now.

“The average cost for health care benefits for companies that provide health care is about 17 percent of payroll,” he says. “So at 10 percent of payroll, the saving is significant.”

Similar legislation has been introduced in each legislative session since 2007.

Most recently it was introduced as Senate Bill S-400. None of the earlier versions have not gotten very far. Raising taxes is a hard sell, especially to conservative lawmakers. But Steil insists they’re asking the wrong question.

“The question each one has to ask is not just ‘look at the taxes’ because there are taxes to it, it’s not free,” he says. “The question is, ‘How much less than you’re currently paying is this plan to you?'”

Steil says the bill would also eliminate health-insurance costs on pension plans and vehicle insurance, making the potential savings even larger.

http://www.bctv.org/special_reports/health/pa-legislature-introduces-single-payer-health-care-bill/article_a41a6da0-7996-11e5-b8a4-2ba3ba19b536.html