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How to Reform Our Health Care System
presented by Richard Boettner With current discussions surrounding health care reform, consensus is rapidly moving toward some form of universal health care coverage. There is also an almost a complete understanding that this coverage is not feasible without cost containment, price setting as in other industrialized countries. Given the facts that nearly 50 million people in the U.S. are uninsured with an even greater number of people who are underinsured. It is estimated overall we are talking about onethird of our current population. Currently the percentage of the U.S. Gross Domestic Product (GDP) going toward health care is reaching for 17 percent surpassing this estimate sooner than previously predicted. An increasing number of health care professionals and policy makers are supporting a singlepayer system as being the only rational approach that would contain costs, achieve universal coverage, and maintain or improve quality of care without rationing. They argue that only a single-payer approach can address the economic pressures felt by people who pay the heavies financial burden and on businesses from the rising costs of health care for individuals. This allows us to also be able to expand coverage to everyone. However, these statements are guaranteed to bring forth a series of questions about a single payer system. Here are responses to some common questions that are frequently asked.
1. What is a single-payer health care systems?
Before I go into explaining what that is, let just point out, we already have four forms for universal health care in the U.S.: government employee, Medicare, Medicaid and the Veterans Affairs healthcare system. These four systems are supported by the taxpayer costing all of us billions while covering while only covering a select group of people. Four systems that would be cheaper combined into one Universal Healthcare System which would cost all us less and could cover all the people who are currently without coverage and extend coverage to the underinsured. More on this later on. A "Single payer" system means that there is one payer, one insurer for healthcare, who reimburses health care expenses. This is in contrast to the current system which provides payment through multiple insurance companies. A one payer system has the authority to negotiate limits on what providers, pharmaceutical companies, and medical equipment manufacturers charge, in the same way insurance companies do now. This single payer could be either the state you live in or the federal government. A single system under the federal government would cost substantially less while providing better coverage, equally, to everyone Brought to you by RichardBoettner.com
under the system, far less than 50 systems under the control of each state. Other than in the U.S., every industrialized nation (from Canada, to Europe and some Asian countries) in the world has some form of nationally administered health coverage – Universal Health Care. Medicare is a single-payer system that has been in place in the U.S. since 1966. However, Medicare is a less than an ideal single-payer system because it cannot set budgets for hospitals nor negotiate prices with pharmaceutical companies or on medical equipment.
2) Is single payer socialized medicine?
Yes, kinda. So are all the bailouts happening this year, 2009, and all the welfare, taxpayer money, handed out to corporations every year for well over 30 years now. If we don't want socialism, then corporations need to stop suckling at the taxpayer teat and pay all it back. A single payer is not altogether socialized medicine because hospitals and clinics would still be privately owned, rather than owned or fully controlled by the government, and doctors would still be in private practice, only what the payment they receive for services rendered is controlled under Universal Health Care. Much the way it is in many of the industrialized countries already mentioned. "Single payer" refers who takes in and pays out the health care dollars. It would replace the current multiple-payer system dominated by private insurance companies by a government run one. It would not do away with private health care altogether, but rather offer another option, a more affordable one to millions who either do not have coverage or are underinsured. In many of the industrialized nations they have both systems in place allowing people to opt-into one or the other, a private or government system. Single payer system refers to the mechanism used to pay for health care services not how these services are provided. Many industrialized nations have a single-payer system; some provide services through a form of national health service, while many provide services through physicians in private practice. All of the leading single-payer bills introduced in the U.S. at the federal and state level would leave the health care provider sector in the hands of private practitioners.
3) Doesn't Medicare have problems?
Traditional Medicare has worked very well for patients and they have been happy with it, for the most part. Because the traditional Medicare program spends a lot less money on administrative functions than private-sector insurers, Medicare is the most efficient health insurance program, public or private, in America. However, the partial privatization of Medicare since the 1980s and the recent total privatization of the Medicare drug benefit have raised costs and brought prosperity to many health plans and insurance companies at the expense of the taxpayer. One of the biggest burdens on any system are the administrative costs to the tune of billions of dollars each year that do not go to provided services to those who need it. As the U.S. population ages, namely the baby boomer generation, there will be an increase in demand for Medicare services. This means there will be an increased need for funding to provide an increase demand for services. This is not a crisis but a predictable occurrence which needs to be addressed by policy makers and health care planners, although if they do not act soon, we will Brought to you by RichardBoettner.com
have a crisis. Under Universal Health Care this problem, and future problems, would be eliminated.
4) Is a single payer system affordable especially if it means covering an additional 50 million uninsured people?
Compared to other countries, the United States already pays enough to provide comprehensive coverage for everyone. Nearly 60% of the population is under a government funded healthcare system – government officials, veterans affairs, Medicare and Medicaid. However, coverage for everyone isn't realized because 31 percent of our health care spending goes toward administrative costs, who do not add to the care provided (often nothing more than paper pushers) through the patchwork of private for-profit and not-for-profit insurance companies as well as other health plans. Potential savings from eliminating the administrative waste as well as marketing expenditures of insurance carriers have been estimated to be at least $350 billion per year. That is about one-sixth of national health expenditures, now at 2.5 trillion dollars a year.
5) Will it ration care, create waiting lines with a single payer system?
No, that's a myth created by the current system we have to keep the status quo. Not only that, a poll done in the late 90s showed rationing was worse in the United States than it is in Canada, which has a single-payer system. Twelve percent of Americans said they couldn't get necessary health care in the previous year compared to 8 percent of Canadians. In 2005, the median wait for specialists or elective surgery was four weeks. A 2007 study highlighted the fact that 37 percent of Americans reported being unable to get necessary medical care "because of cost during the past year" versus 12 percent in Canada. Now, there is waiting in every country – if you are to have care that is not urgent, you have to make an appointment and wait while urgent care goes to the front of the line, under all systems of health care, its just in the U.S. they sweep this fact under the rug and point to the wait in other countries. A very notable difference between single-payer system and ours, they don't have people dying for lack of care, and with our system if you can't afford care when needed you are often put off until it can no longer be avoided and even then people may only get minimal care. This is just not true under single-payer systems in other countries. The United States rationed care based on ability to pay and some 18,000 Americans die each year because they lack adequate health insurance. Canadians, as well as Europeans, live longer and are healthier while being more satisfied with their health care than Americans, and they pay half as much per person than we do. If waiting problems in Canada are an issue, it's because the health care system is underfunded rather than because it is a single payer system. No one is suggesting the U.S. reduce care in order to reduce costs, but rather eliminate all the waste and set upper limits on what is paid to pharmaceuticals and healthcare providers, just like other countries do. That's why medicine is so much cheaper in Canada than it is in the U.S.
6) Will our aging population break the bank under a single-payer system?
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Japan and European countries have a higher percentage of elderly citizens, yet they spend much less on health care than we do. Europeans and the Japanese also have a system which incorporates disease prevention, like lots of walking and healthier food choices, to reduce incidences of disease. Universal access to health care will improve the health of the entire population, especially if disease prevention is made the central point of the system. The issue we face is what is the best way to get to Universal Healthcare access in a way that is economically sustainable in this country? A single-payer approach is the most likely approach to achieve that goal. As already mentioned, we have Universal Healthcare systems already, they just are separate, which currently costs taxpayers a more than if they were combined into one system. If we were to bring together under one operating system, the government officials, veterans affairs, Medicare and Medicaid into one Universal Healthcare System and include the remaining uninsured and extend care to the underinsured, it would cut expenses by eliminating administrators and with the creation of price setting for care, the taxpayer could save billions in tax dollars spent with better care. A single-payer system which provides universal access to health would be better be able to address the lifestyle and behavioral issues, like obesity and tobacco and alcohol use, major contributors to health care costs.
7) Why should people change?
Some people may be comfortable with their present insurance coverage, and that's fine. But we need more honesty in what each plan covers and how much a person will be responsible for in a worst case scenario. Also, much of that coverage is unstable and often inadequate when it is most needed. Because our current system is tied to employment, if people change or lose their job, their coverage and care is disrupted. There is the COBRA plan but it is unaffordable by someone who has become unemployed. Others find the coverage they have fails them when they get sick: 75 percent of the one million Americans experiencing medical bankruptcy each year were insured when they got sick. Or, an insurance company will deny benefits or end a plant altogether once someone gets sick, all in the name of profit. Insurance premiums are going up every year, far beyond inflation, for policies which cover less and less leaving people inadequately covered should something happen.
8) How would a single payer system be paid for?
A variety of ways a single-payer system could be financed exist. Right now we have about 60 percent of our health care system publicly funded by our tax dollars. With a national single-payer health system, funding would come from in part through additional tax dollars employers would pay into the system for those they do not cover, namely part-time employees. Also, to provide additional coverage to those sorely underinsured and the current 50 million uninsured, an additional national sales tax could be use, a one-tenth of one percent increase, minor indeed.
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An option proposed would be a payroll tax where employers pay approximately 7 percent and individuals see approximately a 2 percent income tax increase. This payroll tax would replace all other employer expenses for employee health care and this income tax would replace all current insurance premiums, co-pays, deductibles, and any other out-of-pocket payments. For the a majority of employees the 2 percent income tax is less than what they now pay for insurance premiums through their employer including out-of-pocket expenses. This is particularly true for anyone who has had a serious illness or family member with a serious illness. Small employers will also benefit from this payroll tax approach as many of these employers now pay 25 percent or more of their payroll for health insurance as compared to 8.5 percent currently paid by much large employers. While most people and businesses would pay less with a single-payer system as proposed, everyone covered would have more comprehensive coverage. In addition to medical care and drugs being covered, the benefits would also extend to mental health care, dental care, eye care/vision as well as long-term care. To help control and even reduce costs, preventive care would have to become a central focus where people are taught better food choices, better food preparation, more exercise with free or greatly reduced cost to gym memberships, Tai Chi, Yoga and Pilates classes. It could even cover in home care, full-time or part-time, or for elder care facilities, just in time for baby boomers who are due to retire soon.
9) Who would run this single-payer system?
With a national health insurance system it is a myth that the government would be making all the medical decisions. Instead it would only be the administrator of the health care funds. In a publicly financed, universal health care system, medical decisions are left to the patient and doctor. Cost containment measures like negotiating limits on what providers, pharmaceutical companies, and equipment manufacturers could charge would be publicly managed by an elected and appointed body and overseen by non-profit groups and the public to make sure the industry does not get its fangs into these funds and drain it dry. The government, in consultation with medical experts in all fields of medicine, would decide on benefit packages, negotiate doctor fees and hospital budgets, and be responsible for health planning and the distribution of expensive technology. Right now, insurance companies make many health care decisions behind closed doors. This system would bring it out in the open Their primary interest is ever increasing profits, not the health of the people. A price book would be published and made publicly available so there is neither a question of what is covered and how much will be paid for services rendered. With a national health care system there would also be a national database holding every patients records to reduce costs associated with current paper system where every hospital, clinic or doctors office keeps their own set of records and as a person moves around the country their records move with them automatically, electronically. This system would also reduce mismanagement or deaths caused by improper care or medical mistakes. Less paperwork, reduced expenses and more accurate care – overall a complete benefit to the insured patient.
10) Won't there be opposition to a single-payer system?
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Currently we have huge administrative burdens and the hurdles to care created by private insurance companies, most physicians are extremely dissatisfied with the current health care system. Physicians would like to make better medical decisions with their patients, without interference from profit-motivated insurance companies. In addition, when patients are unable to pay because they are uninsured or underinsured, doctors often provide care for which they don't get reimbursed. More and more physician groups, even some hospitals and those in private practice are supporting a single payer system. In 2007, almost 60 percent of physicians supported government legislation to establish National Health Insurance - a 10 percent increase in support since 2002. The noise against this system and comparing it to Canada's system comes mainly from for profit companies who stand to be more regulated and see their exorbitant ways disappear. They will no longer charge outrageous amounts for care, drugs or technology. This level of support is similar to that found among physicians in Minnesota and Massachusetts where two-thirds of physicians support a single payer system. This increase in support for National Health Insurance is distributed across every medical specialty. The largest increase has been seen among physicians who "strongly support" National Health Insurance; now almost twice as many physicians support it as oppose it. It would make their lives better while being able to provide better care. It has been reported that the number of physicians currently supporting National Health Insurance is much larger than the entire membership of the American Medical Association.
11) How would move to a single-payer system?
There are multiple paths to achieving a single-payer system. The most logical would be to develop an expanded and improved "Medicare for all." Bring together the systems already mentioned: government employee coverage, Medicare, Medicaid and the Veterans Affairs into one single payer system. Expensive administrative burdens would be shed, a price book showing prices paid for services and drugs dispensed would be dispensed nationally. And, with that we would have one system, not multiple systems each with their own paperwork and level of care. One system, a single payer system, one database which eliminates the current mountainous paper record keeping everyone uses and streamlines insurance forms into one system makes sense on so many levels, especially economically. Support for single-payer health care is increasing as people learn about its benefits as a solution for current ill-conceived health care system. A healthier and more productive population results in lower absenteeism, disability, and death and therefore a better U.S. economy.
12) How To keep a single payer system honest
The software tracking the medical records would be the first line of defense. Next would be the doctors and patients themselves. Thirdly, auditors would do system wide and focused audits to ensure honesty. And, finally there would be non-profits who would be the public watchdogs. All of these together would be looking over the other's shoulder to make sure the system works and at anyone of these levels there would have to be someone with teeth to go after abuses, even Brought to you by RichardBoettner.com
have prosecuting powers, to not only recover costs but to legally deal with the abuse which would have to include jail time. The cost for this would be minimal when compared to the cost associated with out current system of healthcare.
Three excellent articles: The New Yorker: Getting There From Here The New Yorker: Health Care Spending Disparities Stir a Fight The New Yorker: The Cost Conundrum Healthcare Reform, a short list of recommended books.
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