Single-Payer Health Single-Payer Health Insurance UpdateInsurance Update

James Mitchiner, MD, MPHJames Mitchiner, MD, MPHAnn Arbor DemocratsAnn Arbor Democrats

March 12, 2011March 12, 2011

Health Care Reform, 2011Health Care Reform, 2011

Dave Barry on Health Dave Barry on Health Care Reform:Care Reform:

““We have decided two things beyond We have decided two things beyond doubt:doubt:

1. We have the best health care system 1. We have the best health care system in the worldin the world

2. We have to do something about it”2. We have to do something about it”

American Health Care, 2011American Health Care, 2011

2.6 trillion dollars ($8,200 per capita)2.6 trillion dollars ($8,200 per capita)

BUT……BUT……• Access:Access: 50.7 million uninsured; 25 million 50.7 million uninsured; 25 million

underinsuredunderinsured• Quality:Quality: recommended care only 55% of the recommended care only 55% of the

time; up to 98,000 deaths due to errorstime; up to 98,000 deaths due to errors• Outcomes:Outcomes: decreased life spans; higher infant decreased life spans; higher infant

mortality; 44,800 deaths due to being uninsuredmortality; 44,800 deaths due to being uninsured

The “Inconvenient Truth” of The “Inconvenient Truth” of American Health Care:American Health Care:

MUCH OF WHAT WE SPEND ON MUCH OF WHAT WE SPEND ON HEALTH CARE DOES HEALTH CARE DOES NOTNOT GO GO TO IMPROVING HEALTH AND TO IMPROVING HEALTH AND

PREVENTING DISEASEPREVENTING DISEASE

Source: Kaiser Family Foundations projections based on data from Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999-2009.

Health Insurance Premiums Have Health Insurance Premiums Have Risen Dramatically over 10 YearsRisen Dramatically over 10 Years

$4,247

$9,860

$3,515$1,543

1999 2009

Average Cost for Family Coverage

Overall: 131% Increase

Workers:128% Increase

Employers:132% Increase$5,791

$13,375

Source: Kaiser/HRET 2009 Survey of Employer-Sponsored Health Benefits, September, 2009.

Average Family Premium as Percentage Average Family Premium as Percentage of Median Family Income, 1999of Median Family Income, 1999––20202020

11%12%

13%

14%

16%17%

18%18%18% 18%19%19%19%20%20%21%21%

22%22%

23%24%

18%

0%

5%

10%

15%

20%

25%

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

Source: Commonwealth Fund calculations based on Kaiser/HRET, 1999–2008; 2008 MEPS-IC; U.S. Census Bureau, Current Population Survey; Congressional Budget Office.

*

% of Families Spending ≥10% of Annual % of Families Spending ≥10% of Annual Income on OOP Medical Costs, 2001-2007Income on OOP Medical Costs, 2001-2007

21

33

19

30 27

40

0

10

20

30

40

Perc

ent

T o tal In s u red ally ear

U n in s u redd u rin g th e

y ear

2001

2007

Source: Commonwealth Fund Biennial Health Insurance Surveys (2001 and 2007)

Medical BankruptcyMedical Bankruptcy

• 62% of all personal bankruptcies62% of all personal bankruptcies

• 50% increase, 2001-200750% increase, 2001-2007

• Most are middle-classMost are middle-class

• 5,000 families each business day 5,000 families each business day • 78% had health insurance78% had health insurance

What is the Marginal Value of What is the Marginal Value of Private Health Insurance?Private Health Insurance?

Administrative Overhead

16.3%

19.9%

26.5%

3.1%

0%

10%

20%

30%

Medicare Non-Profit Blues

CommercialCarriers

Investor-OwnedBlues

Geyman, John. Myths as Barriers to Health Care Reform in the United States, International Journal of Health Services, 2007; 33(2):315-329

DefinitionsDefinitions

Universal Health CareUniversal Health Care = everyone covered = everyone covered

““Socialized medicine”Socialized medicine” Universal health care, publicly financedUniversal health care, publicly financed Government physician, government hospitalGovernment physician, government hospital

Single-Payer Health InsuranceSingle-Payer Health Insurance Universal health care, publicly financedUniversal health care, publicly financed PrivatePrivate physician, physician, privateprivate hospital hospital

Single-payer would…Single-payer would…

Cover everyoneCover everyoneReduce administrative inefficienciesReduce administrative inefficienciesSever the link between employment and Sever the link between employment and

health insurancehealth insuranceAllow consumer choiceAllow consumer choiceReduce health care disparitiesReduce health care disparities

Single-payer would…Single-payer would…

Cover all reasonable beneficial servicesCover all reasonable beneficial servicesPreserve patient-physician relationshipPreserve patient-physician relationshipReduce (?eliminate) co-pays, deductibles Reduce (?eliminate) co-pays, deductibles Promote global competitiveness of Promote global competitiveness of

American businessAmerican businessReduce fraud and abuseReduce fraud and abuse

Single-payer would meet all 3 Single-payer would meet all 3 goals of health care reform: goals of health care reform:

Expand accessExpand access through universal coverage through universal coverageControl costs Control costs by consolidating by consolidating

administration administration Preserve choicePreserve choice of physician and hospital of physician and hospital

Single-Payer in VermontSingle-Payer in Vermont

Universal coverage for all legal VT residentsUniversal coverage for all legal VT residents

Essential Benefits packageEssential Benefits package

No deductiblesNo deductibles

Cost-sharing for inpatient admissionsCost-sharing for inpatient admissions– Low income individuals (<200% FPL) exemptedLow income individuals (<200% FPL) exempted

Limited benefits for dental, vision; no LTCLimited benefits for dental, vision; no LTC

Medicare & Medicaid maintained Medicare & Medicaid maintained

Financed by tax on individuals (3.1%) & employers Financed by tax on individuals (3.1%) & employers (9.4%) [2016](9.4%) [2016]– Low income individuals exemptedLow income individuals exempted

Single-Payer in VermontSingle-Payer in Vermont

Governance: VT Health Reform BoardGovernance: VT Health Reform Board– Providers, patients, employers, state officialsProviders, patients, employers, state officials– Determine annual updates to benefits package & payment ratesDetermine annual updates to benefits package & payment rates– Insulated from political processInsulated from political process

Administration: Administration: – Publicly financed but privately administered by single insurance Publicly financed but privately administered by single insurance

firm, chosen through competitive biddingfirm, chosen through competitive bidding– Use of private firm for paying claims & provider relations onlyUse of private firm for paying claims & provider relations only

Cost savings = $580 million over 10 yearsCost savings = $580 million over 10 years

Will require federal waiversWill require federal waivers

Anticipated start date: 2015Anticipated start date: 2015

Single-Payer in VermontSingle-Payer in Vermont

Population 621,000 – rural, homogenousPopulation 621,000 – rural, homogenous

7% uninsured (vs. 16.6% for USA)7% uninsured (vs. 16.6% for USA)

Only 3 commercial insurersOnly 3 commercial insurers

Strong grass-roots support for single-payerStrong grass-roots support for single-payer

Democratic governorDemocratic governor

Democratic legislatureDemocratic legislature

US Senators – 1 Democrat, 1 independentUS Senators – 1 Democrat, 1 independent

Democratic congressmanDemocratic congressman

HR 676: HR 676: “Expanded & Improved “Expanded & Improved Medicare For All Act” Medicare For All Act”

Sponsored by Rep. John Conyers, Jr. (D-14Sponsored by Rep. John Conyers, Jr. (D-14 thth), ), with 25 co-sponsors to datewith 25 co-sponsors to date

30 pages (vs. ~2,000 pages for ACA)30 pages (vs. ~2,000 pages for ACA)

Universal coverage for all US citizensUniversal coverage for all US citizens

PortabilityPortability

NO cost-sharingNO cost-sharing

Automatic enrollment: 2-page applicationAutomatic enrollment: 2-page application

HR 676: HR 676: “Expanded & Improved “Expanded & Improved Medicare For All Act” Medicare For All Act”

Full choice of physician and hospitalFull choice of physician and hospital

Covers all medically necessary services:Covers all medically necessary services:– inpatient, outpatient, emergency, prescription drugs, mental inpatient, outpatient, emergency, prescription drugs, mental

health, dental, vision, hearing, nutritional, podiatry, substance health, dental, vision, hearing, nutritional, podiatry, substance abuse, chiropractic, DME, LTC, palliativeabuse, chiropractic, DME, LTC, palliative

Prohibits duplicate coverage by private insurerProhibits duplicate coverage by private insurer

Supplemental insurance coverage allowed (e.g., Supplemental insurance coverage allowed (e.g., for cosmetic surgery)for cosmetic surgery)

HR 676: HR 676: “Expanded & Improved “Expanded & Improved Medicare For All Act” Medicare For All Act”

Budgeting Process – 3 types:Budgeting Process – 3 types:– Operating BudgetOperating Budget– Capital Expenditures BudgetCapital Expenditures Budget– Health Professional Education BudgetHealth Professional Education Budget

Global budget – regional allocation of funds and Global budget – regional allocation of funds and regional negotiationsregional negotiations

Reimbursement:Reimbursement:– Fee-for-service, salaries or capitationFee-for-service, salaries or capitation– Single, uniform electronic billing systemSingle, uniform electronic billing system– Interest paid if not reimbursed within 30 daysInterest paid if not reimbursed within 30 days– Balance billing not allowedBalance billing not allowed

HR 676: HR 676: “Expanded & Improved “Expanded & Improved Medicare For All Act” Medicare For All Act”

FundingFunding– Existing federal revenues for health careExisting federal revenues for health care– Tax on high incomes (top 5%)Tax on high incomes (top 5%)– Progressive tax on payroll & self-employment incomeProgressive tax on payroll & self-employment income– Modest tax on unearned income and stock & bond Modest tax on unearned income and stock & bond

transactionstransactions– Savings over existing system:Savings over existing system:

Reduced paperworkReduced paperwork

Bulk purchases of medicationsBulk purchases of medications

Improved access to preventive careImproved access to preventive care

The 6 Myths of Single-Payer The 6 Myths of Single-Payer Health InsuranceHealth Insurance

Myth #1: “Single-payer is Myth #1: “Single-payer is government-controlled medicine”government-controlled medicine”

• Not “socialized medicine”Not “socialized medicine”• Government-financed, not government controlledGovernment-financed, not government controlled• Medicare = single-payer health insuranceMedicare = single-payer health insurance

universal, portable, non-job-linked, automatic universal, portable, non-job-linked, automatic enrollmentenrollment

Available in all statesAvailable in all states Administrative costs ~3%Administrative costs ~3%

• Analogy: Interstate Highway SystemAnalogy: Interstate Highway System

Myth #2: “Canadian medicine would Myth #2: “Canadian medicine would be bad for America”be bad for America”

• Canada spends half of what we doCanada spends half of what we do

• Canadians live longerCanadians live longer

• Canada has lower infant mortalityCanada has lower infant mortality

• Canadians less likely to have unmet Canadians less likely to have unmet medical needsmedical needs

• Outcomes generally comparable - or betterOutcomes generally comparable - or better

Myth #2: “Canadian medicine would Myth #2: “Canadian medicine would be bad for America”be bad for America”

• NO evidence that Canadians are routinely NO evidence that Canadians are routinely coming to USA for health carecoming to USA for health care

• NO evidence of massive emigration of NO evidence of massive emigration of Canadian physiciansCanadian physicians

• Polls show 80% of Canadians are satisfied Polls show 80% of Canadians are satisfied or very satisfied with their health systemor very satisfied with their health system

Myth #2: “Canadian medicine would Myth #2: “Canadian medicine would be bad for America”be bad for America”

• Over 80% of Canadians get elective Over 80% of Canadians get elective surgeries within 3 monthssurgeries within 3 months

• No evidence of wait-listing for emergenciesNo evidence of wait-listing for emergencies

• We have waits in the USA!We have waits in the USA!

• Canada rations health care by medical Canada rations health care by medical need; USA rations care by income and need; USA rations care by income and insurance statusinsurance status

Myth #3: “Market-based medicine Myth #3: “Market-based medicine trumps single-payer”trumps single-payer”

Courtesy: Nick Anderson & Leonard Fleck, PhD (MSU)

Myth #4: “Single-payer would stop Myth #4: “Single-payer would stop medical innovation”medical innovation”

• No correlation between innovation and No correlation between innovation and health care financinghealth care financing

• Many technologies came from countries Many technologies came from countries with national health insurancewith national health insurance

• Largest single source of funding for medical Largest single source of funding for medical research in USA = NIHresearch in USA = NIH $30.8 billion funding, FY 2009$30.8 billion funding, FY 2009

Myth #5: “Single-payer is impossible Myth #5: “Single-payer is impossible to enact politically”to enact politically”

• Conventional politics is what sustains the Conventional politics is what sustains the mess we have nowmess we have now

• What’s desirable vs. what’s doableWhat’s desirable vs. what’s doable

• That’s what they said about Medicare in That’s what they said about Medicare in 19651965

Myth #5: “Single-payer is impossible Myth #5: “Single-payer is impossible to enact politically”to enact politically”

• 66%66% support, support, CBS-NY Times CBS-NY Times poll, July 28, 2009 poll, July 28, 2009• 64%64% support single-payer, support single-payer, even if higher taxeseven if higher taxes

((CNNCNN, May 2007), May 2007)• 63%63% support, support, even if taxes increasedeven if taxes increased ( (CHCWCHCW, ,

May 2007)May 2007)

Physician Support: Physician Support: 59%59%

Note: Support among Emergency Physicians: 69%Carroll AE, Ackerman RT. Ann Int Med 2008;148:566

Myth #5: “Single-payer is impossible Myth #5: “Single-payer is impossible to enact politically”to enact politically”

Support for Single-Payer:Support for Single-Payer:• Physicians for a National Health Program (17,000)Physicians for a National Health Program (17,000)• American College of Physicians (129,000)American College of Physicians (129,000)• American Medical Students Association (62,000)American Medical Students Association (62,000)• American Medical Women’s Association (3,000)American Medical Women’s Association (3,000)• American Public Health Association (50,000)American Public Health Association (50,000)• California Nurses Association (86,000)California Nurses Association (86,000)• >500 labor unions>500 labor unions• 89 Members of last Congress89 Members of last Congress• 3 Nobel Prize winners3 Nobel Prize winners

Myth #6: “We cannot afford Myth #6: “We cannot afford single-payer”single-payer”

• Taxes would go up, yes, BUT:Taxes would go up, yes, BUT: Health insurance premiums would disappearHealth insurance premiums would disappear Savings from economies of scaleSavings from economies of scale Decreased out-of-pocket paymentsDecreased out-of-pocket payments Elimination of cost-shiftingElimination of cost-shifting

• Estimates of savings under single-payer:Estimates of savings under single-payer: $200 billion (GAO)$200 billion (GAO) $300-400 billion (other sources)$300-400 billion (other sources)

How do we know single-payer How do we know single-payer will work?will work?

People who were uninsured between ages 55-People who were uninsured between ages 55-64 experienced rapid improvement in health 64 experienced rapid improvement in health after reaching Medicare eligibilityafter reaching Medicare eligibilityAfter Oregon cut Medicaid rolls in 2003, there After Oregon cut Medicaid rolls in 2003, there was a 36% increase in ED use was a 36% increase in ED use After introduction of national health insurance in After introduction of national health insurance in Taiwan:Taiwan:– life expectancy increased life expectancy increased – health disparity narrowedhealth disparity narrowed

How do we know single-payer How do we know single-payer will work?will work?

Every other industrialized nation has a healthcare Every other industrialized nation has a healthcare system that assures medical care for allsystem that assures medical care for all

All spend less than we do; most spend less than All spend less than we do; most spend less than halfhalf

Most have lower death rates, more accountability, Most have lower death rates, more accountability, and higher satisfactionand higher satisfaction

Optimism !!!Optimism !!!

““You can always trust the Americans You can always trust the Americans to do the right thing, once they’ve to do the right thing, once they’ve tried all the alternatives.”tried all the alternatives.”

-- Winston Churchill-- Winston Churchill

How you can helpHow you can help

Stay informedStay informed

Websites:Websites:– Physicians for a National Health Pgm: Physicians for a National Health Pgm: www.pnhp.org– Healthcare Now: Healthcare Now: www.healthcare-now.org

Ask your Congressman to support HR 676Ask your Congressman to support HR 676– ““Expanded & Improved Medicare For All Act”Expanded & Improved Medicare For All Act”