http://www.progressive.org/mpwool072209.html
July 22, 2009 The Progressive
Why Obama's Public Option Is Defective, and Why We Need Single-Payer. By Drs. Steffie Woolhandler and David Himmelstein
Once Congress finishes mandating that we all buy private health
insurance, it can move on to requiring Americans to purchase other
defective products.
A Ford Pinto in every garage?
Lead-painted toys for every child?
Melamine-laced chow for every puppy?
Private health insurance doesn't work.
Even middle-class families with supposedly good coverage are just one
serious illness away from financial ruin.
Illness and medical bills contribute to 62 percent of personal
bankruptcies -- a 50 percent increase since 2001. And three-quarters of
the medically bankrupt had insurance, at least when they first got
sick.
Coverage that families bought in good faith failed to protect them.
Some were bankrupted by co-payments, deductibles, and loopholes. Others
got too sick to work, leaving them unemployed and uninsured.
Now Congress plans to make it a federal offence not to purchase such
faulty insurance.
On top of that, it's threatening to tax workers' health benefits to
meet the costs of simultaneously covering the poor and keeping private
insurers in business.
President Obama's plan would finance reform by draining funds from
hospitals that serve the neediest patients. His other funding plans
aren't harmful, just illusory. He's gotten unenforceable pledges from
hospitals, insurers and the American Medical Association to rein in
costs, a replay of promises they made (and broke) to Presidents Nixon
and Carter. And Obama trumpets savings from computerized medical
records and better care management, savings the Congressional Budget
Office has dismissed as wishful thinking.
The president's health plan can't make universal, comprehensive
coverage affordable.
Only single-payer health reform -- Medicare for All -- can achieve that
goal.
Single-payer national health care could realize about $400 billion in
savings annually -- enough to cover the uninsured and to upgrade
coverage for all Americans. But the vast majority of these savings
aren't available unless we go all the way to single payer.
A public plan option might cut into private insurers' profits. That's
why they hate it. But their profits -- roughly $10 billion annually --
are dwarfed by the money they waste in search of profit. They spend
vast sums for marketing (to attract the healthy); demarketing (to avoid
the sick); billing their ever-shifting roster of enrollees; fighting
with providers over bills; and lobbying politicians. And doctors and
hospitals spend billions more meeting insurers' demands for
documentation.
A single-payer plan would eliminate most insurance overhead, as well as
these other paperwork expenses. Hospitals could be paid like a fire
department, receiving a single monthly check for their entire budget.
Physicians' billing could be similarly simplified.
With a public insurance option, by contrast, hospitals and doctors
would still need elaborate billing and cost-tracking systems. And
overhead for even the most efficient competitive public option would be
far higher than for traditional Medicare, which is efficient precisely
because it doesn't compete. It automatically enrolls seniors at 65 and
deducts their premiums through the social security system, contracts
with any willing provider, and does no marketing.
Health insurers compete by NOT paying for care: by seeking out the
healthy and avoiding the sick; by denying payment and shifting costs
onto patients; and by lobbying for unfair public subsidies (as under
the Medicare HMO program). A kinder, gentler public plan that failed to
emulate these behaviors would soon be saddled with the sickest,
costliest patients and the highest payouts, driving premiums to
uncompetitive levels. To compete successfully, a public plan would have
to copy private plans.
Decades of experience teach that private insurers cannot control costs
or provide families with the coverage they need. And a government-run
clone of private insurers cannot fix these flaws.
Drs. Steffie Woolhandler and David Himmelstein are associate professors
at Harvard Medical School. They co-founded Physicians for a National
Health Program, a nonprofit research and education organization of
16,000 physicians, medical students, and health professionals who
support single-payer national health insurance. For more about the
group, go to www.pnhp.org.