Health Care Can Be Cured: Here's
by Donald L. Barlett and James
Time magazine, October 11, 2004
This is the picture of health care in
America. We spend more money than anyone else in the world-and
yet have less to show for it than other developed countries. That's
one reason we don't live as long. We don't adequately cover half
the population. We encourage hospitals and doctors to perform
unnecessary medical procedures on people who don't need them,
while denying procedures to those who do. We charge the poor far
more for medical services than we do the rich. We force senior
citizens with modest incomes to board buses to Canada to buy drugs
they can't afford in America. We clog our emergency rooms with
patients because they can't get in to see their doctors. We spend
more money treating disease than preventing it. We are victims
of rampant fraud and overbilling. We stand a good chance of dying
from a mistake if we are admitted to a hospital, and we kill more
people with prescription drugs than with street drugs like cocaine
and heroin. We have an endless choice of health-care plans, but
most people have few real choices. We are forced to hold bake
sales, car .washes and pancake breakfasts to 'pay the medical
bills of family members and friends when a catastrophic illness
Americans tend to believe they have the
best health care in the world, but in truth it is a second-rate
system and destined to get a lot worse and much more expensive.
It need not be this way.
The simplest and most cost-effective remedy
is one that is considered untouchable in the U.s. because of the
huge lobbying forces arrayed against it. Indeed, neither presidential
candidate has come close to offering such a comprehensive solution.
The remedy: provide universal coverage and create one agency to
collect medical fees and pay claims. This would eliminate the
staggering overlap, bureaucracy and waste created by thousands
of individual plans. Under a single-payer system, all health-care
providers-doctors, hospitals, clinics-would bill one agency for
their services and would be reimbursed by the same agency. Every
American would receive basic health care, including essential
prescription drugs and rehabilitative care. Anyone who needed
to be treated or hospitalized could receive medical care without
having to wrestle with referrals and without fear of financial
Radical? We already have universal health
care and a singlepayer system for everybody age 65 and over: it's
called Medicare. For years, researchers and health-care professionals
have advocated a similar plan for the rest of the population,
but no plan has ever got far in the legislative process because
of fierce opposition by the health-care industry. To discredit
the single-payer idea, insurers, HMOs, for-profit hospitals and
other private interests play on Americans' long-standing fears
of Big Government. In truth, it is the private market that has
created a massive bureaucracy, one that dwarfs the size and costs
of Medicare, the most efficiently run health insurance program
in the U.S. .in terms of administrative costs. Medicare's overhead
averages about 2% a year. In a 2002 study for the state of Maine,
Mathematica Policy Research Inc. concluded that administrative
costs of private insurers in the state ranged from 12% to more
than 30%. That isn't surprising because unlike Medicare, which
relies on economies of scale and standardized universal coverage,
private insurance is built on bewildering layers of plans and
providers that require a costly bureaucracy to administer, much
of which is geared toward denying claims.
What kind of agency would administer this
Medicare-like plan for the rest of us?
The idea of a single-payer plan run by
the U.S. government carries with it far too much political baggage
to ever get off the ground. What's needed is a fresh approach,
a new organization that is independent and free from politics.
For in addition to covering the basic costs of all Americans,
a new system would need to institute programs to improve America's
overall health that focus on preventing illness and disease as
well as on treatment and do so without breaking the bank. How
does the U.S. come up with such a mechanism?
One possible answer: loosely copy and
then expand on what already exists in another setting-the Federal
Reserve System, which oversees the nation's money and banking
policies. The Fed is one of America's most ingenious creations,
a public agency that is largely independent of politics. The Fed's
board members are appointed to 14-year terms by the President
with the consent of the Senate, meaning that neither the White
House nor Congress can substantively influence the Fed's policies.
Call this independent agency the U.S.
Council on Health Care (USCHC). Like the Fed, the council would
set overall policy for health care and influence its direction
by controlling federal spending-from managing research grants
to providing medical coverage for all citizens. Unlike the Fed,
it would be funded by taxpayers. The money could come from two
taxes: a gross-receipts levy on businesses and a flat tax, as
with Medicare, on all individual income, not just wages.
This would not represent an additional
cost to society but would rather replace existing taxes and write-offs.
It would cut costs for corporations and raise taxes slightly on
individuals at the top of the income ladder. The council's mission:
implement policies that improve health care for everyone, not
just those suffering from certain diseases. In short, make the
unpopular decisions that the market cannot make. The council could
establish regions similar to those of the Fed.
The geographic subdivisions could take
into account cultural and regional differences. That would allow
for health-care delivery to be fine-tuned at the local level and
ensure that regulations take into account the differences between
metropolitan and community hospitals. That is not to suggest that
a single-payer system overseen by a Fed-like independent organization
would instantly correct everything that's wrong with market-driven
health care. What it would do is provide the framework to reach
that goal. For starters, it would:
* Guarantee that all Americans receive
a defined level of basic care, including a fixed number of visits
to doctors, routine lab work, immunizations for children, coverage
for all childhood illnesses and all hospital charges.
* Establish flexible co-pays for basic
care that would vary depending on income as well as usage. Those
people who seldom seek medical attention could have their co-pays
waived. So too could those at the bottom of the income ladder.
* Pay all costs to treat any catastrophic
illness, such as cancer and other devastating diseases.
* Restore freedom of choice by allowing
patients to choose their doctors and their hospitals.
* Redirect health-care spending by allocating
money for disease prevention as well as treatment.
* Provide critically important drug information
to consumers to balance the promotional hype of advertising.
* Concentrate health-care spending on
cost-effective areas, such as stemming the increased prevalence
of diabetes in children.
* Halt the existing practice by which
insurers squeeze doctors through unrealistically low reimbursement
rates. The same for hospitals and nursing homes that squeeze nursing
salaries and staffing levels.
* Reverse the costly but seldom discussed
health-care trend of overdiagnosis and overtreatment-something
no market system will ever do. While many Americans suffer from
a lack of health care, a growing number get too much.
* Once the basic care package is in place,
its scope could be expanded as the system realizes savings derived
from standardization, more efficient computer technology and the
end of market-based health-care management, with its required
profits, stock options and generous executive compensation.
Individuals could supplement their basic
government-supported coverage through private insurance. Wealthier
citizens could continue to get whatever care they wanted and pay
for it. But they would still be required to pay the earmarked
taxes, just as everyone must contribute to Medicare and Social
Security. Similarly, hospitals would be free to accept a certain
percentage of cash-paying patients from outside the USCHC plan.
As for prescription drugs, a good health-care system would strive
to prescribe fewer pills, especially since the effectiveness of
many drugs is questionable. The USCHC could negotiate the best
possible drug prices, something that Medicare is forbidden to
do by Congress.
Many Americans fear that a universal health
plan would cost too much, even though the market system has already
given the U.S. the world's most expensive health care. They fear
the long waits they have heard about in Canada, even though comparable
waiting times for tests and procedures are commonplace in many
parts of the U.S. Lastly, they fear government-decreed rationing,
even though health care is already rationed in the most inequitable
Despite all the fears, change will come,
ultimately from two sources: working Americans who are disenchanted
with ever rising costs and shrinking care, and U.S. corporations,
which are increasingly refusing to pick up the added costs. They
can't afford to, because America's privately funded system puts
U.S. companies at a disadvantage to their competitors in the industrialized
world, where health care is funded by government. GM says the
cost of providing health care to its workers and retirees totals
$1,400 for each vehicle sold in the U.S., more than the cost of
America's health-care system is in critical
condition, and we find ourselves at a turning point. We can continue
to hold bake sales to finance it, or we can do what every other
civilized nation on earth does-take care of our citizens.