Medicare for All: The Only Sound
Solution to Our Healthcare Crisis
by Guy T. Saperstein
We all know that America's healthcare
system is collapsing. Andy Stern has written that America's employer-based
health insurance system is "dead." Auto executives troop
to the White House complaining that they are not competitive with
foreign automakers because they pay $1,500 per car for health
insurance. Some of the biggest laughs in movies come when America's
healthcare system is ridiculed. Politicians, even Republicans,
are offering solutions.
In the Greenberg Quinlin poll of November
2006 voters, 22 percent ranked healthcare as the most important
issue; likewise, MoveOn.org recently polled its members, received
over 100,000 responses, and healthcare ranked as the No. 1 concern.
To add substance to these observations,
consider the following: Not only are 47 million Americans uninsured
(approximately 18.5 percent of the insurable market), 41 percent
of Americans with incomes of $20,000 to $40,000 did not have health
insurance for at least part of 2005, up from 28 percent in 2001;
53 percent with incomes under $20,000 lack health insurance.
The number of people without health insurance
rose 16.6 percent from 2001 to 2005; average health insurance
premiums for a family of four are $10,880, which exceeds the annual
gross income of $10,712 for a full-time, minimum-wage worker;
lack of insurance causes 18,000 excess deaths a year; people without
health insurance have 25 percent higher mortality rates; and,
59 percent of uninsured people with chronic conditions such as
asthma or diabetes skip medicine or go without care.
There are additional costs to the haphazard
U.S. healthcare system: More than 50 percent of the U.S. population
has medical debt problems; between 1981 and 2001, medical-related
bankruptcies increased an astounding 2,200 percent and 55 percent
of personal bankruptcies are now caused by illness or medical
debts, despite the fact that over 75 percent of the bankrupts
had health insurance at the onset of bankruptcy and illness.
Contrary to popular conceptions, the average
medical bankrupt was a 41-year old woman with children, some college
education; over half owned homes and over 80 percent were in the
middle or working classes.
But for the insured, the United States
has the best quality healthcare in the world, right? Wrong.
The World Health Organization ranks healthcare
systems based on objective measures of medical outcomes: The United
States' healthcare system currently ranks 37th in the world, behind
Colombia and Portugal; the United States ranks 44th in the world
in infant mortality, behind many impoverished Latin American countries.
While infant mortality in the United States is skewed toward poor
people, who have rates double the wealthy, the top quintile of
the U.S. population has infant mortality rates higher than Canadians
in the lowest quintile of wealth.
Out of 30 developed nations, life expectancy
in the United States ranks 21st; life expectancy in the United
States is 4.6 years less than Japan, 2.1 years less than France
and 2.6 years less than Canada. The United States has fewer physicians,
nurses and hospital beds than most developed nations. In the United
States, 28 percent say it is "difficult to get care";
in most European countries, Japan, Australia and New Zealand,
15 percent say that. In terms of continuity of care (i.e., five-plus
years with the same doctor), the United States is the worst of
all developed nations. By every objective measure, the United
States has a second-rate healthcare system.
OK, the U.S. healthcare system is not
performing very well, but that must be a funding problem, right?
The United States has the most expensive
healthcare system on the planet. Even including the 47 million
uninsured, the U.S. healthcare system costs almost double per
capita what single-payer systems in Europe, Japan and Canada cost;
in the United States, healthcare costs were $5,635 per person
By contrast, in Japan, with life expectancy
4.6 years more than the United States (presumably a cost-increasing
factor), healthcare costs were $2,139 per person; in the United
Kingdom, $2,232; Sweden (the ultimate "welfare state"),
$2,520; France, $2,903; and, Canada, $3,001.
And, this is not just an individual problem;
this is a national problem. Healthcare system costs in the United
States are 16 percent of GNP (and currently increasing 14 percent
per year); no other country in the world has healthcare costs
which exceed 11 percent of GNP and the average among developed
nations is 9 percent. As noted above, these high costs are making
the U.S. uncompetitive in many areas.
Why is the U.S. healthcare system so expensive?
Administrative costs, marketing and profits account for 22 to
31 percent of the U.S. healthcare dollar (I recently heard Edward
Kennedy say these costs were 33 percent, but I have not seen documentation
of that number). By contrast, overhead costs in single-payer systems
(including Medicare) typically are 3 percent.
In America's for-profit private insurance
healthcare system, medical technicians must contend with hundreds
of different forms, billing procedures, regulations and requirements
from hundreds of insurance companies; U.S. healthcare companies
spend money for advertising and marketing; and, the U.S. healthcare
system is based on profit. Since 1970, the number of medical doctors
in the United States has increased 40 percent, while the number
of medical administrators has increased almost 3,000 percent.
We are paying for a massive, inefficient
bureaucracy. The increasing cost of prescription drugs also is
increasing the healthcare bill, and U.S. drug costs are the highest
in the world; Americans pay 30 percent to 80 percent more for
prescription drugs than citizens of any other country.
You might think that this excess money
goes into developing new drugs, but you would be wrong: Only 13
percent of drug costs go to research and development, and little
of that goes for pioneering new drugs to deal with life-threatening
conditions; 51 percent goes to marketing, administration and profits.
Recently, one of my adult sons went to
a medical office for testing. On completing the tests, he was
handed a bill. The bill had two prices: One was the insurance
price, $969.25, the second was the "cash pay price,"
$678.00 -- exactly 30 percent less than the insurance price. What
more do you need to know about the excessive cost and inefficiency
of the American private health insurance system than that it costs
30 percent more than the underlying medical services are worth?
The public understands this. In the California
Field Poll released on Jan. 3, 2007, California voters were asked
why healthcare costs are increasing: The No. 1 reason given by
voters was "high profits" (65 percent); the number two
reason was "waste, fraud and inefficiencies in the current
system" (60 percent).
The answer to this problem is not simply
"universal health insurance." "Universal healthcare"
that does nothing more than bring more people into the most expensive
and inefficient private insurance-based healthcare system on the
planet would accelerate the total collapse of the system for everyone.
No credible economist thinks America can
sustain healthcare costs exceeding 20 percent of GNP (itself a
gigantic burden and drag on economic growth) and adding 47 million
more people to the current decrepit system would bring the United
States to the 20 percent threshold. Since the costs of our private
insurance system currently are rising at the rate of 14 percent
per year, the system is unsustainable, by any rational economic
Howard Dean recently identified healthcare
as an emerging top-tier political issue and endorsed single-payer,
saying at a Democracy Alliance conference in Miami, "It is
obvious we are going to need to work toward some form of single-payer
system, just like every other industrialized nation. In the next
two years, we should expand Medicare and Medicaid to cover every
uninsured person under 25." Dean is an M.D., by the way.
Surely the healthcare system which every
other industrialized nation in the world relies on, which is both
less expensive and offers improved medical outcomes, and which
many think is the only viable and sustainable healthcare system,
deserves serious consideration by American progressives and the
public, but, to date, single-payer is not being researched and
evaluated in America.
I am not arguing that the perfect must
be the enemy of the good; there may be intermediate steps that
could be taken, rather than proposing that America swallow the
big enchilada in one bite. Clearly, Howard Dean's proposal to
cover everyone under 25 is a step down the incremental path, and,
as he suggested, probably not even a very expensive one.
What is unacceptable would be to have
a political debate which could change healthcare in America for
the next 20-30 years, or more -- in the process helping to decide
elections -- without sound progressive ideas and input and without
serious consideration of single-payer.
The biggest objection to single-payer
I have heard from Democrats is not that single-payer is not a
good system, or even the best system, but that it will be attacked
as socialized medicine and therefore is not politically viable.
Of course, a single-payer system is not socialized medicine.
Medicare is a single-payer system -- a
very popular one, by the way -- and single-payer systems such
as Medicare do not employ any doctors or own any hospitals or
medical facilities, let alone create bureaucracies approximating
the bloated, inefficient bureaucracy the private insurance model
has created in America.
Rather than hundreds of payers (insurance
companies) and thousands of different forms, regulations and procedures,
there would be one payer and one set of forms and procedures.
Single-payer also would offer more choice of medical providers;
unlike the current system, where patients are limited to panels
of providers, in a single-payer system, patients go to any doctor
they want, submit a national health insurance card and the government
pays -- just like Medicare.
Single-payer is the simplest, most efficient,
system of all. While single-payer is a government-paid program,
American taxpayers already pay more than 60 percent of healthcare
costs in America (including tax subsidies). With that much money
invested, can't we demand a system that covers everyone at reasonable
cost and with improved performance? Why should we continue to
allow 22 percent to 31 percent of healthcare costs to be swallowed
by bureaucratic inefficiencies, marketing and profit?
John Garamendi, formerly California's
insurance commissioner and now lieutenant governor, campaigned
in favor of single-payer and said repeatedly on the stump: "Are
you aware that for 40 years, the United States has had a universal
single-payer healthcare system that allows every participant to
choose their own doctor, its administrative cost is one-tenth
the cost of private insurance and people do everything possible
to get into the system (i.e., live to 65). It is Medicare, and
no one calls it socialized medicine."
Of course, the real reason people back
away from a single-payer system is fear of insurance industry
wrath. We all remember the "Harry and Louise" ad campaign
the health insurance industry unleashed on HillaryCare 12 years
ago. So, is anyone not afraid of the insurance industry? Is anyone
willing to challenge insurance industry profits?
The answer, surprisingly, not only is
yes, but the person apparently willing to take on the big ugly
bear is a pro-business Republican -- The Terminator.
On Jan. 8, California Gov. Arnold Schwarzenegger
unveiled his plan to insure all Californians, and while the proposal
itself continues to rely on the private insurance model, it provides
that insurance companies would be required to spend 85 percent
of their revenues on medical services; in other words, insurance
company overhead, marketing, administrative costs and profits,
would be capped at 15 percent -- roughly half of what they currently
Does anyone think the insurance industry
is not going to fight this incursion on its profits with all its
might? Of course it will, and it will fight a halving of its profits
just as vigorously as it will fight a single-payer system.
So, if a Republican, pro-business governor
of a major state is willing to take on the insurance industry,
should progressives be any less courageous in pursuit of real
healthcare reform? In short, a very gifted Republican politician
has made a calculated decision that fighting the insurance industry
not only is not going to hurt him politically, it is going to
get him elected to the United States Senate in 2010. It is good
The other political objection to single-payer
I have heard is that it is simply too big an idea and too big
While this objection is debatable, single-payer
need not be adopted whole in one bite; it can be adopted and implemented
piece-meal, just as Howard Dean suggested when he said in the
next two years we should work to cover the uninsured under age
25 in an expanded Medicare.
There are other inclusions which could
be adopted incrementally, such as expanding Medicare to include
everyone with incomes under $20,000 per year, then increasing
income thresholds until everyone is covered; or, it would be possible
to work in age-based increments by expanding Medicare into ever-younger
categories of Americans. Conservatives understand the power and
effectiveness of "slippery slope" proposals (banning
partial birth abortion is one such "slippery slope").
Let's put the healthcare agenda on the
"slippery slope" to Medicare for all, not work toward
more private insurance and inevitable healthcare system insolvency
-- where most current healthcare proposals (including Democratic)
Before leaving the subject of political
viability, let me briefly address the healthcare proposal put
out by the Center for American Progress, which threatens to become
the Democratic Party proposal. In general, CAP's proposal would
provide coverage for the uninsured through the existing private
insurance system, funded by a national ad valorem (i.e., sales)
tax. I had a long conversation with CAP's CEO, John Podesta, shortly
after it was published, and while John is intellectually honest
enough to recognize the advantages of single-payer, his advocacy
of the CAP plan was more based on political viability than operational
efficiency or effectiveness.
In any case, trying to impose a regressive
national sales tax to fund insurance for 47 million people through
an expensive, inefficient system not only makes no economic sense,
I fail to see how it would be politically attractive, or even
politically possible. It would make Democrats look like your daddy's
Democratic Party -- you already can hear the Republicans, "Here
they go again, another big, costly Democratic welfare program."
By contrast, a single-payer system could
cover everyone, including the 47 million uninsured, at a net cost-savings,
as the savings obtained by cutting overhead from 22-31 percent
down to 3 percent would more than pay for providing coverage for
the 47 million currently uncovered. It makes far more sense to
approach healthcare reform as an issue which affects everyone,
than it does approaching it as an issue that affects only the
poor, to be solved by another welfare program, funded by more
taxes -- in this case, a regressive tax.
America's current healthcare system works
well for no one, and it would be better to seek a genuine progressive
fix on the basis that we're all in this together and need to find
solutions that work for everyone, rather than special pleading
for some at the expense of others. The uninsured have to be covered,
to be sure, but let's do it in the context of solving the real
problems of American healthcare, not exacerbating the structural
problems of the current system.
Healthcare is a $2 trillion industry in
America, and we are fast approaching a "perfect storm,"
where individual consumers, voters, business and the government
are beginning to realize the current healthcare system not only
is not healthy, it is unsustainable. Is the range of discussion
of "serious" healthcare proposals limited to proposals
that offer only variations on the failed private insurance model?
Howard Dean apparently doesn't think so.
If progressives are going to project progressive
solutions and be part of this debate, they will need to do so
quickly because the system is fast-collapsing and decisions are
going to be made with or without us.
Guy T. Saperstein is a Democracy Alliance
partner and past president of the Sierra Club Foundation; previously,
he was one of the National Law Journal's "100 Most Influential
Lawyers in America."