Another take on mandated universal health insurance
Chris Lowe
By Chris Lowe of Portland, Oregon. Chris describes himself as "an independent historian, public health graduate student, and member of the MoveOn PDX council." [Editor's note: This was originally a guest column.]
It turns out that far from being novel, there is a protracted history of failure for attempts to use mandatory private health insurance as a means of achieving universal health care access and cost control in the U.S. Doctors David Himmelstein and Steffie Woolhandler discuss this history in a December 15 New York Times op-ed titled "I Am Not a Health Reform."
Drs. Himmelstein and Woolhandler, founders of Physicians for a National Health Program, are professors of medicine at Harvard and also maintain practices at Cambridge Hospital, a public institution. Their critique questions the plans of all the Democratic candidates. It also bears on the model plan offered by the Oregon Health Policy Commission last spring that likely will inform implementation of SB 329 in Oregon.
The history in the U.S. begins with Richard Nixon:
In 1971, President Nixon sought to forestall single-payer national health insurance by proposing an alternative. He wanted to combine a mandate, which would require that employers cover their workers, with a Medicaid-like program for poor families, which all Americans would be able to join by paying sliding-scale premiums based on their income.Nixon's plan, though never passed, refuses to stay dead. Now Hillary Clinton, John Edwards and Barack Obama all propose Nixon-like reforms. Their plans resemble measures that were passed and then failed in several states over the past two decades.
The piece goes on to discuss attempts to implement plans that combined employer mandates, self-employed & student mandates, and low-income public insurance. They have been surprisingly numerous: Massachusetts 1988 (Gov. Dukakis), Oregon 1989, Minnesota, Tennessee and Vermont 1992-93, Washington 1993, Massachusetts (again) 2006. Oregon does best on their accounting, in that the number of uninsured persons here stayed steady. In all of the other cases, the numbers of uninsured persons went up substantially, e.g. from 494,000 in 1988 to 657,000 in 2006 in Massachusetts (see link for other states).
In addition to the simple failure to deliver as promised, Drs. Himmelstein and Woolhandler offer other criticisms, focusing particularly on the Mitt Romney-promoted reform in their home state of Massachusetts, because it is this year's model, so to speak:
As governor, Mitt Romney tweaked the Nixon formula in 2006 when he helped devise a second round of Massachusetts health care reform: employers in the state that do not offer health coverage face only paltry fines, but fines on uninsured individuals will escalate to about $2,000 in 2008. On signing the bill, Mr. Romney declared, "Every uninsured citizen in Massachusetts will soon have affordable health insurance." Yet even under threat of fines, only 7 percent of the 244,000 uninsured people in the state who are required to buy unsubsidized coverage had signed up by Dec. 1. Few can afford the sky-high premiums.
Nor, they might have added, the huge deductibles and limited coverages with large exclusions, so that even nominally "insured" persons who can't pay out of pocket still end up using hospital Emergency Departments for primary care.
Why has this approach, attractive in theory to so many, failed so often? Their answer sounds familiar here in Oregon:
Each of these reform efforts promised cost savings, but none included real cost controls. As the cost of health care soared, legislators backed off from enforcing the mandates or from financing new coverage for the poor. Just last month, Massachusetts projected that its costs for subsidized coverage may run $147 million over budget.
What then is to be done? We have a political conundrum, to which they see only one answer:
The "mandate model" for reform rests on impeccable political logic: avoid challenging insurance firms' stranglehold on health care. But it is economic nonsense. The reliance on private insurers makes universal coverage unaffordable. ... [O]nly a single-payer system of national health care can save what we estimate is the $350 billion wasted annually on medical bureaucracy and redirect those funds to expanded coverage. Mrs. Clinton, Mr. Edwards and Mr. Obama tout cost savings through computerization and improved care management, but Congressional Budget Office studies have found no evidence for these claims.
Of course, it commonly is said that a single-payer system is politically impossible in the U.S. at present. Yet in the face of this history of failure of the only remotely promising alternative, which is also the most widely proposed one, the time may have come for progressives to practice "the art of the possible" on universal health care access in a new way.
To what extent is naming political difficulty "impossibility" self-fulfilling? Isn't part of the art of the possible sometimes to ask ourselves not just "what is possible now?," but "how do we make what is not possible now into something that can be possible soon?"
So here's a collective thought experiment: taking off our "can't be done" hats temporarily, if we were planning strategy, what, and who, and in what order, would a single-payer movement need to have, in order to be successful? Would it be a defeatist strategy (in the proper sense of the term, that defeat is good for the cause): i.e. cooperate in creating mandate systems, but be prepared for the track record of past failure to manifest itself again? What did the initiative effort for single-payer in one state in Oregon do wrong in 2002 that could be learned from? Canada built its system province by province. Could something like a West Coast Regional Compact (Oregon, Washington, California, maybe others) be a useful goal offering a large enough risk pool?
(Full disclosure: when working Boston in the 1990s I had to choose a doctor from a huge list for the Harvard-Pilgrim HMO, and chose Dr. Himmelstein because he was the only one I had a clue about. Turns out he's a good doc at the personal level in addition to his other merits. We never talked politics.)
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Dec 27, '07
Authors Donald L. Bartlett and James B. Steele say it best in their book "Critical Condition": "To be sure, the market approach is unbeatable in most segments of the economy. Competition among multiple producers that turn out goods and services leads to innovation, better products and lower prices. The concept works flawlessly when the commodity is cars, furniture, cereal, doughnuts, computers, clothing, gasoline, or any other consumer item.
The glaring exception to the theory is health care. The very core principle of the market system, that companies will compete by selling more products to everyone, is actually the last thing the health care system needs. The goal should be to sell less, not more - that is, fewer doctor visits, fewer diagnostic tests, fewer hospitalizations, fewer consultations with specialists, and fewer prescription drugs."
Folks with perfect health need less doctor visits, diagnostic tests, hospitalizations, consultations with specialists, and prescription drugs. So let's design a system seeking perfect health for everyone - it'll cost less than what we're paying now.
Dec 27, '07
"494,000 in 1988 to 657,000 in 2006" First off, you're conflating in this blog post the two types of MA plans; the never implemented 1988 plan, and the newest plan which only got started in 2007. The actual quote is "[with the 1988 plan] the [partial] mandate was never fully put into effect. In 1988, 494,000 people were uninsured in Massachusetts. The number had increased to 657,000 by 2006." And the population of MA went up in that same time period as well - nominal numbers are meaningless; why don't we look at the % of the population with coverage just before implementation and right after, instead of this meaningless statistic. The 1988 mandate was for students and self-employed, why give whole population statistics when it was only a partial mandate. This whole article only focuses on the increase in numbers of people uninsured, but never explains why any of these plans failed. How did Canada implement their system (which the authors seem to laud)? The article never says. The goal of the op-ed was to discredit the leading Dems' healthcare reform, not to actually advance the debate on how to accomplish the goal of better healthcare.
Plus, the new MA plan's biggest failures were inadequate subsidies budgeting and lack of cost-control measures on the insurance companies. Plus, the plan didn't have a government option for people to choose instead of the for-profit insurance plans. Clinton/Edwards/Obama all have the medicare-for-all option so that people can choose to avoid the for-profit insurance schemes.
State-by-state healthcare reform would be almost impossible because people can move from state to state. The constant movement of people means that without a unified healthcare market for the whole country, any state which tried to cover "everyone" will likely be hit with higher costs than a state which kept the current abominable system of for-profit healthcare. Also, most states have a balanced budget requirement, and less-stable tax-basis than the Feds. Thus a Federal healthcare approach intended to slowly transition away from for-profit insurance and into a single-payer healthcare system seems both workable (it's how Germany's system works after all), and reaches the end goal that we all want.
All of Europe is right now is trying to unify (in a sense) their healthcare systems because the constant movement of people around the continent has created pressure on the countries which provide the best coverage and care. If Europe is unified enough to need a single system of healthcare, what makes you think that a state like Oregon - a single small state which is only 1% of the size of Europe, and only 1.6% of the US population - can afford or manage universal healthcare.
Edwards, Clinton, and Obama all have plans which take us at least in the right direction by putting pressure on the insurance companies to do better, because they will suddenly have real competition in the form of medicare-for-all and they won't be able to discriminate against the sick and needy. Edwards has explicitly said that the intention of the plan is to eventually allow people to choose the government plans over the for-profit companies, thus eventually leading to a single-payer system. I think Obama's plan is slightly weaker than Clinton or Edwards' plans because Obama's doesn't have the necessary mandates for adults, but that's a small issue compared with the silliness of this misleading NYTimes op-ed. Politically practical healthcare reform is coming in 2009, the only real question is will it be a watered-down unworkable system with too much money for the insurance companies and too little coverage (like the 2003 medicare bill), or will it be the beginning of the end of our current unconscionable system of for-profit health insurance. Let's focus on how to get to single-payer, not just complain about how we aren't there already.
11:50 a.m.
Dec 27, '07
Getting from here to single-payer (which I STRONGLY support--I had a post after seeing Sicko where I described it as a moral issue) may be impossible politically. However, there are alternatives that we shouldn't dismiss. One possibility that I've been thinking might work is using a system of private nonprofit providers. Since our infrastructure is already designed around private providers, this would be less of a leap, but it would remove the pernicious (and in my mind immoral) profit motive--which virtually forces insurers to try to root out the very sick.
Dec 27, '07
it would remove the pernicious (and in my mind immoral) profit motive--which virtually forces insurers to try to root out the very sick
Plus as Bartlett & Steele point out above, is just plain a dumb way to apply the market approach.
12:34 p.m.
Dec 27, '07
i agree with Jeff: single-payer is the best, but we don't get there in one swell foop. it's not because of any self-fulfilling prophecy, either; it's the nature of contemporary politics and corporate power.
Robert Reich points out that mandates, which Krugman and others have made such a major issue, would affect "a tiny fraction of the currently uninsured". he is an Obama supporter, but because he sees Obama's policy proposals as superior: "Obama’s [health care proposal] may be marginally better than HRC’s if he’s correct in judging that the most of the currently uninsured couldn’t afford to pay HRC’s mandate anyway."
let's start by getting everyone health care any way we can. speaking as one of the 45 million, i'm not too fussed how it happens. once we set the standard of care for all, we can work on being more sensible about how we pay for it. but for those of us hoping the cough we woke up with isn't something terminal, getting an annual check-up would be nice, mandated or not.
Dec 27, '07
I once heard Dr/Sen. Alan Bates talk in a broadcast interview about an uninusured patient who needed a certain procedure. He asked his staff to find out the price of that procedure locally, but they couldn't get a straight answer. So he tried to find out if there was anyplace in the state where someone could give him a straight answer. As I recall the interview, he kept running into "who is the insurer?".
If the same medical procedure has a different cost dep. on the insurer, the system is badly broken.
Of course, talking about cost controls gets into the original Kitzhaber prioritizing system for the Oregon Health plan (cost vs. effectiveness) which was so controversial. It gets into end of life care. It also has to deal with cases of people who eat right and watch their weight (regardless of Huckabee's politics, he is an inspiration in that regard) don't smoke, rarely if ever drink alcohol. What if such a person were in an accident, got pneumonia, was bitten by a West Nile mosquito while out hiking, etc?
This is one of many areas where soundbites ("let the market work", "we need a health care mandate") get in the way of serious discussion. Perhaps some people want it that way.
Dec 27, '07
How does the political calculus work that makes mandates a step in the right direction?
Single payer is the only moral and reasonable place to end up. In order to do that we have to dump the insurance companies. If, as a first step, we mandate that everyone buys insurance that would make the insurance companies bigger, more profitable and more powerful with more employees to be displaced if we could ever move to single payer.
Jeff, I like non-profits, but non-profits have a profit motive just like for profit companies. The only difference is that their profit is zero. Their revenue still needs to meet costs, but it does not need to exceed costs in order to provide a profit.
Maybe our next step to healthcare for all is publicly financed elections. Is that politically impossible?
Ps. I like the idea of a regional single payer system. If Oregon's population is not adequate to create a big enough risk pool then surely Oregon, California and Washington together could.
Dec 27, '07
Lots of things are politically possible if the people are sufficiently aroused. The French discovered this during their revolution. How many baskets full of heads would be necessary to weaken resistance to single-payer healthcare?
While I am not a fan of government by guillotine, I believe we lose many more lives each year to our expensive but crappy healthcare than it would take to make the will of the people clear to our decision makers.
Dec 27, '07
Going to any form of universal healthcare without changing the factors that are driving up the cost of healthcare is not going to solve anything.
Something in the neighborhood of 30% of Medicare funds are used by 10% of the members in the last year of the lives. What can be done to stop that, or at least change it so the outflow of funds is slowed in this one area?
The average nurse can do 80% of what most doctors do, but because of the laws are not allowed to do so. Would changes in the laws help to cut the cost?
Throughout most the the U.S. it is difficult for midwives to practice excpet for a few state like Oregon and Washington. In some they are still illegal. I believe Alabama is one where that is the case. In Europe midwives deliver about 75% of infants at lower cost and with better survival rates that in the U.S. where about 10% of infants are born using midwives. Would it benefit all to get more midwives involved?
Would repealing the McCarran-Ferguson Act which allows the states individually to regulate insurance help? Some have suggested that the Act balkanizes the insurance industry to their benefit and harms consumers. But when was the last-time you read about this in the press, or even in discussion of medical costs?
MW: just another Progressive Libertarian who is trying to understand how to build a peaceful world using the government's power of coercion. Let me know if you figure it out.
9:15 p.m.
Dec 27, '07
MW, what's the puzzle? while i have trouble envisioning a Progressive Libertarian, i do know that the only secret is citizen participation. that's it. why did Howard Dean stir so much feeling? it wasn't Bush-hatred; it was his message that "You have the power". get involved, keep informed, and bring friends along (get them on the bus). it's not quick, it's not easy, but it's damned effective. like nothing else.
the bonus? we can get past coercion and onto collaboration. it's more than mere possibility; it's a reality that is only as far away as our willingness to make it happen.
Dec 27, '07
Why Progressives Should Forget the Middle Ground Paul Krugman http://www.slate.com/id/2180178
OK, before I get there, a word about terms—specifically, liberal vs. progressive. Everyone seems to have their own definitions; mine involves the distinction between values and action. If you think every American should be guaranteed health insurance, you're a liberal; if you're trying to make universal health care happen, you're a progressive.
Universal Health Insurance (Clinton, Wyden, Merkley, Novick, Bates/Westlund/OHFB/SB-329) = Liberal Universal Health Care (Kucinich/HR-676, Frohnmeyer, ???) = Progressive
The question is, what are we as progressives want to do to influence the current "liberal" SB-329 process that is all about mandating that everyone must buy private health insurance, so that the OHFB must give us a "progressive" solution which actually delivers universal access to health care? (I'll settle for a public health insurance solution like Medicare-for-all which renders the insurance question moot.)
Jeff - You might want to study the difference between "not-for-profit" activities by for profits and "non-profit" status of entities to understand half the story about why this is not the problem in our health care system. Then ask operators, profit and non-profit alike, of not-for-profit providers to explain "excess operating revenues" and watch for the smile on their face. One of the most successful examples of framing to dupe unsuspecting liberals and progressives going today.
7:56 a.m.
Dec 28, '07
Robert G.,
Your quote from Bartlett and Steele might be taken up two ways. Yours apparently is "create a system that reduces the need for such procedures." To which we might add shifting service delivery in at least some of the ways Michael W. suggests and changing the compensation system so that it is less fee-for-service based, which creates incentives to subdivide services and deliver many.
On the other hand, B & S' approach could also be taken up in a "create disincentives to demand or deliver services." Cost-efficiency cannot be the only issue here. We also need to consider health-efficiency.
Jeff,
In addition to what others have said, historically the U.S. health system relied more on non-profit entities than it does now (community hospitals, Blue Cross/Blue Shield insurance plans, older HMOs like Kaiser & a few others). It seems possible that something like Ron Wyden's plan, which has a strong floor on services and a requirement of actuarial equivalence -- i.e. not cherry-picking healthier individuals for risk pool -- for subsidy eligibility by insurers could reverse some of the market forces that have undermined not-for-profit health insurance and health provision in recent decades. The community hospital issue is somewhat separate and has a bearing on the rural healthcare crisis.
LT,
It's not just different prices from different insurers -- it's different prices from different insurers at different providers. I.e. an insurance plan may pay different rates for the same service at different hospitals, and the same hospital may charge different rates to different insurers, or different group plans for the same insureer, for the same services. The common denominator is that the individual insurance holders (non-employer group based) and out of pocket people get charged the highest rates.
Dec 28, '07
We also need to consider health-efficiency.
What's more efficient than perfect health?
Who is hurt by a health care system with that goal?
Dec 28, '07
Dave Odell is correct: "Single payer is the only moral and reasonable place to end up. In order to do that we have to dump the insurance companies."
Dave's contention that mandating the buying of corporate insurance would merely make the corporations more difficult to dislodge in the future is half the argument.
The other matter is the elite consensus around drowning the baby (socially desired and desirable programs) in the bath water by increasing social costs and risks until programs must be abandoned altogether. As Woolhandler and Himmelstein argue effectively, the "middle ground" of competition between corporate health care and Medicare-for-all is a disaster for those of us who are required to bear those costs and risks.
7:13 p.m.
Dec 28, '07
Robert G., I don't disagree with the aim of seeking the best possible health for people. But what Bartlett and Steele say in what you quote is:
"The goal should be to sell less, not more - that is, fewer doctor visits, fewer diagnostic tests, fewer hospitalizations, fewer consultations with specialists, and fewer prescription drugs."
That is not the same as saying the goal is perfect (or as I would prefer, best possible) health for all. One can achieve the goal of "selling less" by providing incentives to refuse necessary services on the list above. This was the practice of too many HMOs in the 1990s, because the issue was defined only in its economic terms.
Many current "affordable" health insurance plans do essentially the same thing by excluding medically necessary items from coverage, in many cases working against prevention or early interventions that could extend lives at higher health levels and lower long-term cost to the system. In such cases fewer services are being bought or sold at one point in time (B & S criterion) but the savings are illusory, if more expensive ones are required later, or bought at the price of earlier mortality and poorer intervening health, or both.
I personally think the problem with markets in healthcare is not in the first place on the "selling too much" side, as on the side of markets that uses price levels to divide who can get things from who can't.
9:39 p.m.
Dec 28, '07
Tim,
An absolute rise from 494,000 to 657,000 is 32%. The population of Massachusetts rose just under 8% from 1988 to 2007, from 5,980,000 to 6,450,000 (1988 census estimate via U.S. Department of Energy 2007 estimate from the U.S. Census Bureau). So the number of uninsured persons rose four times faster than the population. In 1988 about 8.3% of the Massachusetts population was uninsured; in 2007 about 10.2% of the population was uninsured.
I disagree that the absolute numbers don't matter; certainly the relative rates of increase do. Himmelstein and Woolhandler's central argument is that mandated insurance systems fail to achieve their goals because they end up costing too much. That is why the 1988 Massachusetts plan was never implemented. We are familiar with the fate of the Oregon Health Plan in the lean budget biennia preceding the most recent one.
This cost issue would work differently at a national level insofar as the federal government is not constrained legally by balanced budget requirements. Clearly though cost will be an issue in the debate over creating any sort of national system. Edwards in his plan recognizes that a piece of that debate will be over the fact that individual subsidies and tax credits will go to subsidizing insurance company overheads and profits, when he says he would require that 85% of premiums go to paying for actual services.
With due respect I believe you are mistaken in saying that any of the Clinton, Edwards or Obama plans would allow everyone who wanted to opt into a public "medicare for all" type system. All of the plans appear to restrict employees of companies that offer "comparable" plans (apparently meaning comparable in terms of coverage but not necessarily cost to the worker) from opting out of such plans and into a public plan, even if they preferred it, and also to contemplate continuation of both Medicare and Medicaid/SCHIP as separate systems (the latter is particularly puzzling).
It might well be that some or even many employers currently offering health benefits would choose to stop doing so and to pay into the public/ publicly subsidized system instead. Edwards at least also seems to envisage companies purchasing group insurance through a public plan as well as individual purchasers. The extent of such changes does not seem easily predictable. Nor does the reduction (if any) of the Rube Goldberg machine quality of the current system, which contributes so much to administrative costs.
Edwards at least offers an approach to the question of how getting to a full public provision system could come about, saying that competition between publicly provided insurance plans and private plans in his envisioned market regions could lead to that result if the public plans won out. This would be more credible if employees could opt out of company plans. (Ron Wyden's plan, though it has the defect of not offering or even allowing direct public plans for employed persons, has the merit of detaching the choice of insurance plan from any specific employer.) You make an interesting point about population mobility and the value of a national system compared to current geographical fragmentation. However, if there were a national system along the lines of Edwards' or Clintons' or Obama's that created national portability in one way or another there doesn't seem to be any reason why moving in or out of a single-payer state or region would be different from any other sort of interstate move.
<hr/>I really would be interested in hearing ideas either from the "single payer as moral imperative" side or from the "nice idea but not practical now side" about how the politics might be changed.
Also, I am curious if anyone has insight into what happened with the 2002 initiative campaign. It may have been doomed in any case, but it was striking from the outside that the state AFL-CIO came out against it. Does anyone know if any serious efforts were made to get union support ahead of time?
It appears that the politics of union attitudes may be shifting -- the national AFL-CIO as a federation as well as a number of the important manufacturing industry unions have come out in favor of single payer. However, the breakaway Change to Win unions are another story, perhaps most significantly in the opposition of SEIU's president Andy Stern to a single payer system.
BTW, SEIU on December 12 issued a handy overview comparison document of the healthcare reform plans of all of the late 2007 presidential candidates of both parties, as a PDF document.
Dec 29, '07
However, the breakaway Change to Win unions are another story, perhaps most significantly in the opposition of SEIU's president Andy Stern to a single payer system.
Andy's poition quoted to be that successful health reform would depend on "not letting the perfect be the enemy of the good" is not the same as mine. I am a SEIU Local 503 member, and I believe this compromise approach to the situation has historically been the problem, not the solution.
That's why I propose perfect health for all as the goal of a redesigned health care system. How much less than perfect health for all do you want? For one thing perfect health as the goal makes telling how well you're doing extremely easy, the same is not true of best possible, because that yardstick would be different for each person. And as I ask, what does it hurt anyone to use that goal?
It would definitely thwart any HMO-type plans to prevent delivery of health applications.
No, organized labor in Oregon was not behind the last push for universal coverage, because it did not address several concerns of the membership - like how to transition from the current system to the new one. But organized labor in Oregon is all over the place in the face of the current discussion, partly because they are struggling with lots of issues on their plates. Not the least of which is simply to protect the right to organize.
Dec 29, '07
Perfect health for everyone, as a goal for a health care system is when an individual doesn't need medical attention (including for mental health) except for periodic check-ups to ensure the condition persists.
This is a better goal for a health care system than best possible health because the definition of that condition is more variable, the condition itself would vary with the person, and therefore could not be used the same way.
With perfect health for everyone as a goal for a health care system it would be easy to measure how well we are doing on a societal basis, stratifying statistics, and analyzing where and how to make improvements in the system.
Politically, perfect health for everyone helps shift the focus from cost to outcome. Costs are better analyzed using this standard, in fact all aspects of the health care system are better analyzed when the standard is perfect health for everyone.
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