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Better than the Public Option
by Mark Camann and Vibeke Mendonca-Lee

We keep hearing about a government takeover of healthcare, in which government bureaucrats might interfere between doctors and patients.  But rest assured, that won't happen under any healthcare reform bill being considered in Congress.  No one is proposing "socialized medicine."  Doctors will still maintain their private practice, and choice of provider will be limited only by private insurers, not by the government.  In reality, the most popular healthcare programs in the country, Medicare and TRICARE, are federally funded and privately administered.

Our healthcare system needs reform.  It is inadequate and too expensive.  Only half of Texans have employer-sponsored insurance; a fourth are uninsured (1).  Americans spent $7,421 per capita on healthcare in 2007 (2), 16% of our GDP (3), with costs rising 6% each year (4).  Most European and Asian countries spend less than half that on healthcare (5), yet forty countries have a longer life expectancy (6).  We pay the most without getting the best results, because other countries have better, more efficient ways to provide healthcare.

President Obama favors a public option to compete with private plans, believing the public option to be an affordable alternative that gives private insurers incentive to control cost.  The details are being worked out, but we need answers to key questions: 
  • Will private insurers still rescind coverage of people who need expensive treatment, such as a Texas woman with breast cancer who didn't tell her HMO that she had once been treated for acne (7)?  
  • Will private insurers still cherry-pick their customers, covering only healthy individuals, while using the public plan as a dumping ground for those who need healthcare the most?
  • Will every American be fully covered, so that injury or illness will not cause economic ruin?
  • How will the plan be funded?
The Congressional Budget Office estimated that the public option would cost an additional $100 billion per year (8).  Senators Kennedy and Dodd announced revisions that trim the added cost to $61 billion per year.  Public-option plans have failed in Oregon, Colorado, and Tennessee.  In June the much-touted Massachusetts program announced $115 million in cuts due to budget overruns (9).

Less expensive than a hybrid private/public option is a single-payer system, based on Medicare, but improved and extended to cover all Americans their entire lives.  Publicly funded and privately delivered, Medicare has worked well for nearly 50 years, though it suffers from inadequate funding.  Unlike private insurance overhead of 31% (10), Medicare spends only 5% of its budget on administration (11).  Single-payer would eliminate the need for private insurers altogether.  No longer would insurance bureaucrats stand between doctors and patients making crucial healthcare decisions. 

Single-payer would not necessarily, as critics claim, lead to rationing of care.  We hear about long wait times in Britain and Canada, where they pay far less than we do.  Here, spending too little for healthcare is not the problem.  Spending wisely is.

A bill in Congress, H.R. 676, outlines a way to pay for single-payer: payroll taxes of only 4.75% on employers and employees, a 0.33% stock transaction tax ($10 out of a $3,000 stock purchase), closing corporate tax loopholes, and introducing a health tax of 5-10% on the 5% with the highest incomes and repealing their Bush tax cuts.  These are things that we can afford, and the administrative cost savings would infuse $317 billion into the economy (12).

Funding healthcare reform is complex. Multiple stakeholders, including taxpayers, have vested interests.  Universal, affordable coverage and long-term cost control must be the objectives.  Compared with hybrid public option plans, single-payer remains the most fiscally conservative, long-term sustainable way to provide healthcare to all Americans.

College instructor Mark Camann and social worker Vibeke Mendonca-Lee are steering committee members of the San Antonio Healthcare-Now Coalition.

References:
1 U.S. Census Bureau, Current Population Survey: Annual Social and Economic Supplements March 2007 and 2008, and Health Insurance Coverage Status and Type of Coverage by State, 2007,
http://www.healthreform.gov/reports/statehealthreform/texas.html
2-4 Centers for Medicare and Medicaid Services, National Health Expenditures:  NHE Summary Including Share of GDP, http://www.cms.hhs.gov/NationalHealthExpendData/02_NationalHealthAccountsHistorical.asp
5 World Health Organization Statistical Information System,
 http://www.globalhealthfacts.org/topic.jsp?i=66#notes
6 Central Intelligence Agency, The World Factbook, https://www.cia.gov/library/publications/the-world-factbook/fields/2102.html
7 CNN, "Cancer Patient Tells of Rips in Health Insurance Safety Net," http://www.cnn.com/2009/POLITICS/06/16/health.care.hearing/index.html
8 David Espo, "Key Senate Democrats Trim Cost of Health Care Bill," http://abcnews.go.com/Politics/wireStory?id=7983609
9 Kay Lazar, "State Cuts its Health Coverage by $115m," Boston Globe, June 24, 2009,
http://www.boston.com/news/local/massachusetts/articles/2009/06/24/state_cuts_its_health_coverage_by_115m/
10 David Himmelstein et al., Administrative Waste in the U.S. Health Care System in 2003, http://www.pnhp.org/news/IJHS_State_Paper.pdf
11 Centers for Medicare and Medicaid Services, National Health Expenditures:  NHE Web Tables, http://www.cms.hhs.gov/NationalHealthExpendData/02_NationalHealthAccountsHistorical.asp
12 Institute for  Health and Socio-Economic Policy, Single Payer/Medicare for All: An Economic Stimulus Plan for the Nation, http://www.calnurses.org/research/pdfs/ihsp_sp_economic_study_2009.pdf