Should Uncle Sam Insure Us All?
Should Uncle Sam Insure Us All?
MANAGED CARE May 1999. ©1999 Stezzi Communications
It's an idea that just won't die: Having government pay the medical bills guarantees universal coverage. Is that laughter we hear?
When President Clinton's health plan crashed in 1994, many of the ideas that had been brought to the fore during the debate were lost in the wreckage. Some — such as quality monitoring — limped back, a bit dazed and transformed, but still recognizable.
Very few expected the single-payer concept to make a similar re-emergence. (Comeback would be too strong a word.) Though single payer was not part of Clinton's plan, it was the bulwark of another proposal forwarded at that time. The debate about government's role that Hillary Clinton sparked and the backlash against what the winning spin doctors labeled "government intrusion" left single payer for dead.
A not-so-funny thing happened in the ensuing boom years. Too many of us — 43 million by the latest tally — are uninsured. This begs the all-too-obvious question: What's going to happen if the economy cools? The managed care industry seems unable to answer, even as it braces for premium rate increases of about 10 percent that could force employers to drop coverage for more workers.
Not everyone, however, is at a loss for words; certainly not those who continue to push the single-payer concept.
One of the more famous and eloquent champions of the cause — David Himmelstein, M.D., associate professor of medicine at Harvard Medical School and a spokesman for Physicians for a National Health Program — couldn't disagree more with the many experts who say that the single-payer system stands no chance of ever being implemented in the U.S.
"Unfortunately, it is not a politically dead issue," says Himmelstein, "and the reason I say unfortunately is because the thing that makes it very much alive is the disastrous effects of our present health care system."
Single payer refuses to die because it's tied to another, much more palatable ideal — universal coverage.
"It's true that our political leaders avoid single payer like the plague, but it's also true that a majority of Americans want a system that ensures universal coverage," says Himmelstein.
His vision does not necessarily preclude the use of HMOs but, under a single payer, the companies would function differently then do the for-profit versions currently in operation.
"There would be a place for a traditional type of HMO — a medical organization rather than a financial construct," he says. "Perhaps one along the lines of how Kaiser operates."
John Wallendjack, M.D., vice president for medical affairs at HealthAmerica, a 500,000-member HMO in Western Pennsylvania, Ohio, and West Virginia, doesn't think single payer will ever fly but, if it did, it would mean more of an administrative — as opposed to medical — role for HMOs. "We might become a pass-through administrator," says Wallendjack. "I think there will always be a role for industries that can manage health care."
It should be pointed out that several of the experts we spoke with contend that 43 million is a soft figure and that a sizable portion — 6.3 million in 1996, in one survey — have access to health insurance and choose not to pay for it. According to data compiled by the Agency for Health Care Policy and Research, lower wage earners are more likely to lack access to employer-based coverage and less inclined to take it if offered. (See "Running the Risk of Being Uninsured" below)
Sooner or later — usually sooner — a discussion of single payer heads north toward Canada where universal coverage rules. The state of Canadian health care is much debated these days, with many experts saying that clinically, the U.S. is much better off.
Even if this point can be cleared up definitively, another issue looms: Despite the similarities, can you compare Canada, a country of about 30 million people (spread over about 3.9 million square miles), with the U.S. and its approximately 272 million residents (spread over about 3.6 million square miles)?
Mary Jane Foster, a managed care analyst at consulting company Medical Data International, says U.S.-style single payer is likely to remain in the realm of theory for quite some time.
"You're talking about an industry that spent $1.1 trillion dollars last year," says Foster. "Certainly, we would like to see everyone with access to appropriate health care. But that inevitably brings up the complications: Who's paying and so forth. We would never get enough agreement on how it would work."
To switch would require the sort of national will that very few issues short of war can stir. That's evident even in the relative tinkering that's been attempted in Medicare, says Foster.
Not surprisingly, Himmelstein disagrees.
"Canada's system is organized on a province-by-province basis," he says. "Ontario has 11 million people. That's comparable to some of our bigger states, with the exception of California, and maybe we could split California into two coverage areas. If you look at the differences among the provinces, Quebec is a lot more different from British Columbia than are any two states."
Further, in response to those who point to the "failure" of Canada's single-payer system, Himmelstein cites the fact that Canada pays less per capita for health care.
"No one in Canada is advocating going to a U.S.-style system," says Himmelstein. "The problem there is that they should spend much more on their own system. Canadians get, on average, better health care than Americans. Certainly, many of the things I see in Canada, I'd liked to see copied here."
Martin Gaynor, Ph.D., professor of economics and health policy at the Heinz School, Carnegie Mellon University, says it's nearly impossible to accurately measure cost differences between the system of employer-based coverage now in place and the single-payer entity some dream of.
"We don't know what our health costs would be if we had a vastly different system, like single payer," says Gaynor. "Comparing U.S. and Canadian health care costs does not tell the tale because there is so much else that differs between the two countries other than the method of financing."
That the single-payer concept is starting to make waves again is a view disputed in a variety of fashions, but the weapon of choice seems to be disdain. Many experts tell Managed Care that single payer was never taken seriously, isn't taken seriously now, and will never be taken seriously.
Thomas Morrow, M.D., vice president and medical director at One Health Plan of Georgia, says single payer is much more an issue with disgruntled doctors than it is with patients.
"I don't think the American public will stand for it," says Morrow. "There's no single-payer system in the world that's doing as well in the clinical sector as the American system. I think it's a topic amongst physicians who are frustrated because they want to avoid the chaos thrown at them from a multitude of health plans."
Wallendjack of HealthAmerica scoffs at those who think that a single-payer system will eliminate bureaucracy.
"Let's just look at the single-payer system for Medicare," he says. "Are you telling me there's no bureaucracy in Medicare? There's no way you're going to get away without major bureaucracy. I'm not shaking in my boots about a single-payer system."
Howard Cohen, now with Greenberg Traurig in Washington, D.C., worked for 10 years as the chief health counsel for the House Committee on Commerce. He is somewhat taken aback that we would even do a story on the single-payer system, let alone a cover story, and points to Clinton's most recent State of the Union address as evidence of just how off-the-map the issue is.
"He had proposals for just about everything," says Cohen, "but there was no single proposal in his address for health coverage of any kind. The arguments about a single-payer system are just not really active right now."
Harriet Hankin, president of CGI Consulting Group, asks: "What do you mean, exactly, by single payer?" Told that the most likely payer would be government, she says "Oh, government," as if recalling some unpleasant memory.
"The single-payer system is not feasible because it's not what people want," says Hankin. "It would create a system of haves and have-nots. There would be a black market for health services that offer people choice."
Hankin casts more than just a cool consultant's eye on the topic. All health care is not only local — it's downright personal. Hankin's husband, for instance, several years ago was diagnosed with prostate cancer. He was successfully treated at Johns Hopkins University Hospital.
"We were fortunate enough to have the kind of health care where we could go out of network," says Hankin, who says that demographics point to the installation of plans offering more — not less — choice. "As people get older, they want to have more choice."
To which a devil's advocate might ask: "Why would there be less choice in single payer? There isn't less choice in Medicare, is there?"
Hankin responds: "Choice is greatly reduced when Medicare unilaterally limits treatments of certain services and/or reduces provider payments. The provider market responds by going away."
Despite the dismissive attitude of Hankin and others, single payer is not going away.
Rep. Jim McDermott, Democrat from Washington, was the man who offered what he described as a pure single-payer proposal in answer to Clinton's plan back in 1993. He's submitted the idea five times since, the latest being early last month. What makes this effort different?
Expected premium hikes and the growing number of uninsured pushes many more — even some in the GOP — to the position that the health care system needs to be completely dismantled and rebuilt.
In addition, while the American Medical Association doesn't like the idea, evidence mounts that a growing number of physicians find it attractive.
About 2-1/2 years ago, Douglas Robins, M.D., led the charge that resulted in the Medical Society of the District of Columbia bucking the AMA and coming out for a single-payer system.
"We became the first state medical society to support single payer as an option," says Robins. He cites an article in the March 25 issue of the New England Journal of Medicine that reported the results of a telephone survey in which 57.1 percent of responding students, residents, faculty members, and deans of medical schools called "single payer leading toward universal coverage" the best health care system. "That's not surprising. I think it speaks to the fact that a large percentage of physicians would be in favor of single payer as an option to what we have now."
Perhaps the strongest reason why single payer may step back into the national health care debate concerns the bottom line. The government interference that many believe a single payer invites might occur in an even more unwanted form if the system isn't adopted, some experts believe.
"I think a single-payer system is a possibility because it may be the best method to address the health needs of the uninsured and underinsured," says Paul E. Risner, a health care lawyer for Baker, Donelson, Bearman, and Caldwell, in Memphis, Tenn. "The alternative would require physicians and hospitals to continue to underwrite coverage for this population."
The problem, says Risner, is caused by that portion of the population that can't afford basic health care and can only get it under dire — and very expensive (for those who must eventually foot the bill) — circumstances.
Where 'costs balloon'
"The uninsured and underinsured show up in the emergency rooms and there the costs balloon," says Risner. "As long as hospitals continue to make money, they can affordably use their surplus to offer these services."
The key, Risner thinks, is more government involvement — with single payer being the extreme option. "I can foresee a system that would include, at the top tier, the absolute choice of those who can afford to pay for the health care they select; followed by the vast middle tier, which would rely upon traditional health plans, managed care health plans, and other plans, including a government-funded plan; followed by the bottom tier of the medically indigent that will have, for perhaps the first time, access to adequate health care and the means to pay for it."
This idea alarms Hankin.
"The danger is that the government plan would become a dumping ground for companies that wanted to eliminate the cost of health care," she says. "Companies that continued to provide health care for quality reasons would pay twice."
Although he doesn't use the term, what Risner speaks of is incremental change — a phrase that's a mantra for Cohen, the former chief health counsel for the House Committee on Commerce.
Cohen points to the Children's Health Insurance Program included in the Balanced Budget Act of 1997, designed to cover about 4 to 5 million youngsters who don't qualify for Medicaid. He also mentions Clinton's plan to extend Medicare benefits for people between 62 and 65.
Will the increments insure people at a faster rate than a slowing economy or rising premiums will throw others off the rolls?
"In the next four or five years the question of how you cover these people will be back on the table," says Cohen.
Foster bets that the answer won't be single payer.
"Americans, traditionally, have not enjoyed seeing someone hold a monopoly on anything," she says, even if that "someone" is Uncle Sam. "We all use the U.S. Postal Service for the day-to-day mail, but we like having the option of private carriers to get something there overnight — a choice we would be loathe to relinquish. The FTC regularly looks into hospital and HMO mergers to be sure the populations they serve will have a choice if two companies combine. Again, despite agreement that universal coverage is a good thing, I can't see the American public embracing the federal government as the single source of reimbursements."
Don't be too sure, says Himmelstein. The fact that most of the politicians have abandoned the idea makes it, in a perverse sense, all that more attractive. "The American people have to show the political leadership on this issue."
Robins, one of the physicians leading the charge for single payer, predicts victory in the long run.
"I know it's going to see a resurgence," says Robins. "When I talk to people about this, 90 percent respond immediately. The problem is that we're not as organized and well funded as the insurance companies."
'Medicare isn't analogous'
Mary Jane Foster, a managed care analyst at Medical Data International, isn't swayed by the idea that Uncle Sam could function as a medical director for all of us under a single-payer system just because the government runs Medicare.
Foster offers this perspective: There are about 38 million people in Medicare, or roughly the combined populations of the extended metropolitan areas of New York, Los Angeles, and Chicago. "Throw in Philadelphia and you're over that total," she says. (There are about 236 million nonelderly in the U.S.)
Also, while per-capita medical costs are much higher among the elderly and disabled covered by Medicare, the system spent an estimated $208 billion for care in 1997, according to the Congressional Budget Office.
"That's a small portion of the nation's more than $1.1 trillion annual health care market," says Foster. "Medicare has a bigger budget than most of us ever hope to handle, but it's still a small piece of a huge pie. Also, Medicare does not cover prescriptions, which is becoming a big issue as pharmaceutical costs assume an increasing role in disease management — and a bigger percentage of medical costs."