Un-compromising positions
Last week, when we started this conversation, I said I think it’s important to think big – to broaden the playing field and not to preemptively take good ideas off the table. I also said I thought single-payer was such a good idea – maybe the best idea of all. I still believe both propositions.
But precisely because I like single-payer, I think it’s important to be realistic about the politics of it. By that, I don’t mean how it will play in Washington. I mean how it will play beyond Washington. And I think it’s a lot more complicated than it might seem at first. …
One big reason is what I’ve come to call the simplicity fallacy. Advocates of single-payer – myself included – have frequently made the argument that it has the political virtue of simplicity. You can explain it in three words: “Medicare for all.” And those three words have the great virtue of linking universal health insurance with a cherished, highly popular program with which the country is already quite familiar.
That’s all well and good. But as this debate unfolds, people will stop thinking so much about whether they like universal health care as a concept and more about what universal health care means to them personally. And there an awful lot of people out there who are not only insured but also rather like the insurance they have. (In fact, they seem to be majority, according to the polls.)
I think that a lot of these people don’t understand how precarious their current situation is – because they don’t realize how easily they could lose coverage or the extent to which their insurance might not cover their bills. (Indeed, that’s the whole point of my book.) But for now, anyway, that’s what they think. And if you start telling them you’re going to change their health insurance – even for an alternative as well-liked as Medicare – a lot of them will get skittish.
So if at some point – not now, but later on – we have to compromise, what would an acceptable compromise look like? My own minimum requirements would go something like this:
It must cover everybody in a way that is reasonably responsible fiscally. (In other words, it has to be paid for, presumably with taxes.)
It must provide good benefits, something like the level we see in a good commercial plan today (but with a few extra things, most important among them true parity for mental health).
When I say benefits, I also mean protection from financial risk. Cost-sharing is fine – even advisable, in some places. But it shouldn’t be structured in a way that discourages good medical care.
And it shouldn’t be so punitive that people face serious economic hardship because of their medical problems. My favorite motto is one I’ve heard attributed to Hillary Clinton (though I’ve never been able to confirm she actually said it): Health care should never be completely free and it should never be unaffordable.
My one other caveat is that any plan should be designed so that it has at least a good possibility – if not a probability – of evolving into a better plan down the road. The Edwards plan does this, sort of. You could make a similar argument about the Wyden plan.
So far, the best version of this I’ve seen is Jacob’s plan – which looks like an individual mandate (similar in some broad sense to what they’re doing in Massachusetts and California) but has a back-door into single-payer. Jacob has talked about this, as has Roger. (For more on the plan, go here.)
One risk in embracing such a compromise plan is that it will let stand a wasteful, poorly designed system that will keep generating unnecessarily high costs. But I’m not sure that, politically speaking, we can cover everybody and deal with the system’s inefficiencies all at once.
Creating a universal health system, even a poorly designed one, certainly won’t make those problems worse. And it will, at the very least, put us in a position to make those problems better.
So what does this mean for the short-term? Like I said, the time for compromise has not arrived yet. I will continue to tout the virtues of single-payer and hope that others will, too.
But I’m also not about to dismiss plans that, if less than ideal, still have the potential to achieve real universal coverage. When this debate is about to end, if there’s an opportunity to deal with the coverage problem adequately, then I think we have to take advantage of that opportunity even if it’s not a perfect one. As Mark wrote, “it would be foolish and even immoral to hold out for the unattainable ideal, while letting millions of people endure … suffering and inadequate care.”
Comments (26)
The conversation here has attracted enthusiasts who insist The People will fall in line behind the SP bandwagon just because it's good for them. (Resistance, if any, will arise only from coupon-clippers on their yachts.)
Oddly, many of these are medical professionals -- who would find it laughable to hear policy wonks assume that patients at large would take their medicine just because it's good for them. That flies in the face of professional experience.
As Jonathan points out, we're now asking the people to switch policies because it's good for them, when they're very well satisfied with the policy "medicine" they've been taking.
And as I've pointed out, SP pays off best for a small fraction of people at the hyperbolic tail of the utilization curve. For the rest, it's roughly a wash -- and a leap into the unknown.
At any given time only a few hundred thousand Americans live in health care finance hell, versus about 5 million careerists who would be made redundant by effective hcf reform.
The enthusiasts insist these dislocatees will all be absorbed frictionlessly into non-wasteful careers and necessary bureaucratic posts in the new health care sector. Again, this flies in the face of experience with any number of employment dislocations occasioned by improved efficiencies in other sectors.
Finally, it won't be a problem because their favorite vehicle (H.R.676) is phased in over 15 years (though no specific gradualism mechanisms are laid out in the bill). This is what we must have, in place of the dread "incrementalism"?
If that is so, give me a decent incremental vehicle, thank you, and I'll race you to the end point of universal single payer coverage.
The trick is finding increments in policy that mesh with individual increments in attitude and interest, and decrements in opposition, skepticism and risk-aversion.
April 16, 2007 7:37 AM | Reply | Permalink
I think a huge mistake to debate 'the plan' instead of 'the costs'. People know our current system is too expensive but they don't know why. The biggest culprits (insurance, AMA/high doctor salaries, high administration costs, expensive drugs) all have money to burn obfuscating whatever 'the plan' turns out to be.
But if you went car shopping and found...
...you would say 'What a rip-off for the Chevy Impala!' and look on the invoice and laugh at all the comically overpriced features and poor relative performance and choose ANY of the others - even though the others are very different.
Now substitute OECD per capita health care costs (2003).
That's the same price spread the cars. The US has fewer doctors, fewer nurses, fewer hospital beds, higher infant mortality, lower life expectancy, and more uninsured people than Germany, Japan, and Sweden and we spend more than twice as much. Show people where the money is going on the US invoice (admin, drugs, doctor salaries), show them the invoices and performace data for the competitors and then ask them what should be cut. My guess is any reform would look like this..
All of the above can be done with a system like Canada (single payer), France (funded like Social Security), or Japan (employer based). All are different 'plans', all about equal treatment, all about 1/3 the cost of the US system. Or just Xerox the Veterans Hospital system 100X over and run it like Social Security.
Health Care policy gets a little dense and complicated among wonks. But if you convince the American people they are paying $15 for the cheeseburger of health care and while the rest of the modern world is paying $4.95 for a cheeseburger THEN people will exert enough force to break the lobbying efforts of interested parties to get something done.
April 16, 2007 9:12 AM | Reply | Permalink
In theory this makes sense, but Jonathan Cohn's point is that there are still too many people who are perfectly comfortably with their current insurance to care about rising costs. It only becomes real to people when they lose their insurance and are faced with the prospect of being financially ruined if they have high medical costs. While the proportion of people who are dissatisfied with the current system is rising, I am willing to wager that a majority of people are not yet dissatisfied enough to be willing to sacrifice anything for change. You're not going to win support for reform by telling people they should help out the less fortunate if it means giving something up.
It's also way shortsighted to talk about cutting doctor salaries. The medical establishment is a key constituency that needs to be on the side of reform and if you start with the premise that doctors make too much money, then you'll lose them.
Doctor income is not even that significant in the grand scheme of things when it comes to explaining why American medical costs are so out of whack. Much more important are the armies of billing clerks, admin support people and insurance workers whose job is to process the infinitely complex payment mechanisms of the current system.
April 16, 2007 9:36 AM | Reply | Permalink
Looking at the numbers (very rough, and mostly from Wikipedia):
US GDP = 12.5 trillion
15% of US GDP is spent on healthcare, or $1.9 trillion.
Assuming we can get to around European levels of efficiency by switching to single payer, say we get health care spending as a percentage of GDP down to 10% (EU average is 8%), we'd need $1.25 trillion dollars, total, for health care.
Current Federal spending on health care= $700 billion, leaving the government $550 billion to make up via taxes. That works out to an average tax increase of about $4,000 per taxpayer. (assuming the number of taxpayers is 135 million.)
Of course, the assumption is that the increase in efficiency saves us $650 billion, which works out to an average savings of about $5,000 per taxpayer, since no one would be paying health insurance premiums any more. So it's a net savings of about $1,000 per taxpayer. Add this non-economic benefit that one would get from the peace of mind of not having to worry about being uninsured.
Quibble with the numbers I've used (and again, these are back-of-the-envelope calculations), but I think they give a ballpark estimate of the financial consequences of switching to a single-payer system.
Unfortunately, I think for most people the conversation would end with "average tax increase of $4,000." I think the most practical solution is to let individual states experiment with setting up their own single payer systems. There is a problem in that one of the basic benefits of a single payer system is the economy-of-scale effect, but it's much less likely to pass at the state level than at the national level. Also, starting at a lower level will allow us to work out the kinks is this sort of system as we move towards true universal coverage.
April 16, 2007 9:46 AM | Reply | Permalink
From Health Affairs (via Ezra Klein):
A lot of this is do to scarcity of doctors. Part of it is an antiquated medical education system - which exists in part because doctors want scarcity to keep salaries high. I think some doctors are leading the charge for comprehensive health care reform like Physicians for a National Health Program but ask yourself if one doctor really provides 400% of the healthcare value on average of one nurse and you'll have your answer about whether doctors are overpaid or not.
April 16, 2007 9:54 AM | Reply | Permalink
When I say 'cut doctor salaries' above I mostly mean graduate a lot more doctors to increase supply and ease the licensing process. I know capping prices or salaries doesn't work and couldn't work unless we have true socialized medicine with no private insurance which is not going to happen in my lifetime or even desirable.
April 16, 2007 10:49 AM | Reply | Permalink
Jon's point is well taken that many are comfortable with their current coverage. Yet there's a parallel in public attitudes toward the economy that gives courage here.
As much as inequality has grown, as much as debt has grown, and as little as income has kept up, the public pessimism on the economy exceeds some traditional indicators like employment. That's surely in part because the public feels more at risk: you may have a job you like but you are more and more aware of how transient employment is these days.
By the same token, more of those people than he credits may well be aware of how easily their coverage could vanish. We have a real chance to build on that, to communicate that we're not taking their money and handing it to the undeserving poor, but that we're more and more all in this together. Not because we're committed to the socialist ideal or to charity necessarily, but because these days we are. Jon's book itself is all about documenting the fact.
When people feel that way, guaranteeing them a chance to deal with private insurers may actually sound worse politically. It actually feeds fears rather than allaying them as a better plan would.
John
http://www.haberarts.com/
April 16, 2007 10:51 AM | Reply | Permalink
This is probably true. I think the data shows that the number of physicians per capita in the US is quite a bit lower than the OECD average.
Don't get me wrong - I'm not saying doctors deserve every penny they make. I'm just saying that in terms of making a public case for reform, doctor salaries are not necessarily something that makes sense to focus on. I believe that getting the AMA and the medical establishment on board is crucial in building a coalition of interests that can push reform through. Plus most people like their doctor and the last thing you want is for doctors to be appealing to patients to scuttle reform.
Insurance companies are another matter entirely. Nobody - doctors and patients alike - likes them and wants to support them.
April 16, 2007 11:05 AM | Reply | Permalink
Wouldn't the problem you rightly hightlight be reduced, if not solved, is to sever the relationship between employment and health insurance? This would be true regardless of whether a singlepayer system replaces it.
Daniel A. Greenbaum
April 16, 2007 12:51 PM | Reply | Permalink
I guess we have to really start asking people what they mean when they say they're comfortable with their coverage.
I'm comfortable with mine. But, it helps that I'm not sick and that I don't think I'll be leaving my job soon (voluntarily or not).
But, if I got really sick tomorrow, I'd start noticing that high deductible and would be less comfortable.
If I got fired tomorrow, I'd be less comfortable.
If my employer switched to a cheaper plan with an even higher deductible, I'd be less comfortable.
I'm fine now, but tons of things could happen that would change my comfort levels. I think that's what's not being reflected in the polling.
thosethingswesay.blogspot.com
April 16, 2007 1:51 PM | Reply | Permalink
I agree there is a cultural anxiety especially among the huge middle and working class that the economic numbers do not reflect.
Fear of job loss is particularly pervasive.
Also I believe our nation's youth are fearful of not participating in the best of "The American Dream". That the best of that dream is behind us?
This pervasive fear about the future of the nation in these groups is a stimulus for one of the most basic needs of all- a basic level of Health Care. And it needs to be guaranteed by the Federal Government.
Dr. Rick Lippin
Southampton, Pa
http://medicalcrises.blogspot.com
April 16, 2007 1:54 PM | Reply | Permalink
I'll do more than quibble. Your numbers greatly underestimate tax-funded health care expenditures.
Add in government workforce (current and retired) health care benefits, VA benefits, tax expenditures (employer and employee deductions for insurance and/or expenses), state and local public health expenditures (including some of the best providers).
Full accounting of tax-funded h/c gives it the major share of whatever number you choose for the gross share of GDP.
By most analyses, US spends more tax money per capita than Europe spends total purchasing power per capita on health care.
It's less clear how much of our excess we'd successfully get back under a more rational system (the enthusiasts here insist "Not one penny! It all goes back into Health Care!"), but it's an inviting prospect to consider.
April 16, 2007 7:56 PM | Reply | Permalink
I am in health policy and worked on the 1993-94 Clinton reform effort and this makes a lot of sense. Health coverage is both a global issue in that everyone should have it but also very personal in that people who have it and like theirs don't want things changed. That was one of the mistakes of the Clinton plan which upset the apple cart too much.
I believe you are going to have to address universal coverage first and then deal with the structural issues. However, once you have everyone in the system and the govt is picking up a larger tab it maybe easier to start convincing people to make more changes. We'll see.
April 16, 2007 8:02 PM | Reply | Permalink
In Brussels last Sunday with a sick five year old we expected to have to drive to the ER but the concierge handed us a list of doctors. Called the first name, he came in 45 minutes,gave
us the diagnosis and prescription we needed ,charged $80. Not on the Belgian national health scheme of course but , given the service provided by that plan , private health care competes by providing house calls , on Sunday , for 80 bucks.
Perhaps that would make you even more comfortable with your coverage.
The mirror image of the conservative argument that charter schools provide healthy competition for the public schools , is that single payer
health systems provide competition for the private ones.
April 17, 2007 6:12 AM | Reply | Permalink
jmnyc-
Appreciate your comments but 1993/94 is not 2007/2008
Boomer demographics are kicking in and Bush admin set us back severely in many ways
Dr. Rick Lippin
Southampton,Pa
http://medicalcrises.blogspot.com
April 17, 2007 7:42 AM | Reply | Permalink
The OECD arguement is a compelling one, at least to policy wonks, and one that manufacturers who are sensitive to global competition are beginning to pick up on. A large share of that difference is due to the layers of bureaucracy inherent in our fagmented financing system. The administrative overhead required to run a system with hundreds of payers is not just in the 20%-25% admin cost of the insurers (admin, marketing, data processing, utilization review, cob, etc. etc.) but also adds costs at the delivery end. There has to be a significant cost associated with trying to get paid. And of course every cost in health care is revenue to someone.
April 18, 2007 10:12 AM | Reply | Permalink
I am an internist, very interested in health insurance reform. I submitted material to the Hatch-Wyden committee (see below).
I favor Jacob Hacker's plan because I think it is realistic and flexible as well as universal. Although I was not previously in favor of employer participation, I have to agree with Professor Hacker that it is necessary, at least temporarily to allow such participation.
There are some points that I raised (see below)which I believe have not been fully addressed.
There ought to be an equalization fund based on a small percentage of every insurance policy premium (public or private) set aside so that insurance companies would be compensated for extra risk patients. That would make community rating more palatable.
Although the basic and preventive care financial pool should not be drained off by MSA's, MSA's could be a suitable vehicle for catastrophic and long term insurance the proceeds of which will not be necessary to use for everyone. If, at the end of life, unused funds were partly or entirely returned to the system (instead of being available for non-medical purposes), there would be a financial resupply of the insurance pool.
I also refer to mechanisms which might help to make the financial elements more equitable and to facilitate negotiation rather than fiat.
I think that we cannot exclude the private sector, because too many people wish to have private access and they have as much right to reject government insurance as others ought to have to reject private insurance. I also think that patients and providers ought to have access to both systems because we won't be as locked in to what we might consider inappropriate coverage.
RECOMMENDATIONS TO CITIZEN’S HEALTH CARE WORKING GROUP I gave a talk on health insurance at a hospital Grand Rounds and I listed what I considered to be the desirable features in universal access:
1. A federal insurance option in addition to private insurance, open voluntarily to all (open Medicare).
2. Mandatory participation, public or private.
3. Employer does not designate insurance; only administrative role.
3. Community rating; prior illness doesn't exclude individuals.
4. Equalization fund to support premiums of high risk patients (surcharge on all insurance premiums.)
5. Basic and preventive "assured" care fully paid with no deductibles or co-pay.
6. Other deductibles and co-pays funded via Medical Savings Accounts, applied to catastrophic and long term insurance.
7. At the end of life unused medical savings accounts money goes back in part or entirely into insurance funding for general use.
8. Caps on patient expenditures related to income.
9. Single, national provider credentialling forms and single billing forms.
10. Negotiation of proportion of payments to medical and non-medical providers, by resource based relative value scale.
11. Tax credits and subsidies for low income earners adequate to actually buy insurance.
12. No tax deductability of insurance premiums in order to provide government money to fund low earners.
13. Funding of premiums by progressive payroll tax.
14. Build in efforts to decrease wasteful defensive medicine.
15. Central oversight and standardization of insurance "products" by health insurance agency.
16. Participation in health insurance agency by representatives from the public, government, private insurance, pharmaceutical houses, medical suppliers, health-care providers.
17.Eventual elimination of current means tested insurance (Medicaid and Schip); full entry of low income people into mainstream insurance.
18. Insurance premiums must support medical research and education
April 18, 2007 10:31 AM | Reply | Permalink
Jonathan is certainly correct when he states that we must continue to tout the virtues of single payer since the time for compromise has not yet arrived. As we move closer to reform, some will have a tendency to look for the least harmful compromises that will achieve many if not most of our goals.
Compromise is an inherent component of the political process. But that does not mean that everyone should shift into the compromise mode. The participants in the process must remain fully cognizant of the negative impact of any potential tradeoffs. They must have continual reminders that when they agree to less effective or detrimental policies, the health and/or financial security of individuals will be negatively impacted. When compromise equates to lesser health or greater financial burden for patients, the compromise is wrong.
Jonathan says that we should not dismiss plans that are less than ideal, if there is a potential to achieve real universal coverage. But what should be our role? There will be plenty of individuals falling all over each other in an attempt to participate in the compromise process. But some of us have to be there to fight strictly for health care justice. Our role would not be to sabotage an effort that might be an improvement over what we have. Rather our role would be to continue to inform and emphatically advocate for the policies that would provide maximum benefit for the health of each of us. Though others may be willing to compromise, we can't.
April 18, 2007 5:26 PM | Reply | Permalink
What Don says could not be more true nor more important. What his sage words mean for each of us and how they influence our actions -- as individuals and as members of the groups we're a part of -- is crucial to our success.
Here in MA we have had just about wholesale compromise. Sell out is the more apt descriptor.
Almost no one is willing to tell the truth and say "The Emperor has no clothes" re the new MA health reform law.
Huge parts of this new MA law totally suck, to put it bluntly. I am one of the few people saying that publicly -- I use more sophisticated and detailed language :). When I do speak out, ie on the new NPR health blog
http://www.wbur.org/weblogs/commonhealth/?p=72#comments
or at public forums (was on a panel yesterday) most people react in strong agreement and ask "why aren't more people explaining these things the way you do, why don't the newspapers or other media share this info?
How to speak out and advance one vision of reform, such as single payer financing for a more effective and caring delivery system, while at the same time addressing actual ongoing reforms is tricky business. Don's comment carries great wisdom for this work and bears repeating:
"Compromise is an inherent component of the political process. But that does not mean that everyone should shift into the compromise mode....
When compromise equates to lesser health or greater financial burden for patients, the compromise is wrong.
...some of us have to be there to fight strictly for health care justice. Our role would not be to sabotage an effort that might be an improvement over what we have."
Don, what's a person to do when faced with the MA reform plan where the law extended new coverage to 100,000 poor people (now geting state subsidized coverage in 3 HMOs') but rammed through the individual mandate too? And the law totally lacks any serious cost controls.
Our group, the Alliance to Defend Health Care, supported the good pieces of the MA law (helping the poor) but spoke against the bad mandate piece of the law and advocated for single payer financing, but you know what we got in the end.
It's very tricky. How do we deal with these realities?
April 19, 2007 9:30 AM | Reply | Permalink
Are you sure you want to deal with realities?
Elsewhere in this conversation, you claim people will take their (public policy) medicine because it's good for them, in spite of the fact that the whole corpus of your professional experience tells you this is not an realistic model of human behavior.
You claim displaced workers (5 million or so) will happily move on. Where's the reality in that?
Cheerleading has its place, but SP enthusiasts are gearing up to climb the Mt. Everest of US domestic policy without shoes. much less sherpas. If that's the game plan, SP will fail.
Should we proudly insist on principle, though it makes total failure likely?
Should we take the most effective route available, though the best outcome of that course falls short of the ideals that motivate us?
Should we try Door No. 3 (if we can find Door No. 3)?
April 19, 2007 10:22 AM | Reply | Permalink
Yes I'm sure that I want to deal with realities.
Ron, you make some valuable points and ask important questions that I'd like to hear you answer. I think I've read most of your other posts.
Please share your answer and elaborate your thinking on this question you posed:
"Should we take the most effective route available, though the best outcome of that course falls short of the ideals that motivate us?"
thanks.
April 19, 2007 11:07 AM | Reply | Permalink
Me, I'm for Door No. 3.
We don't get anywhere by a straight-line unequipped assault on the summit.
We need not settle for climbing a smaller hill in a different direction.
I suspect we can conquer Mt. SP by plotting a course of switchbacks, base camps, traverses, limited technical climbs, intermediate camps and caches ... and get there sooner than H.R.676 (for instance) would even if it did stand a snowball's chance in hell.
"First do no harm", we must avoid putting more dollars or more people into private sector insurance. Avoid investing more deeply in employer-based models. Take great care in building a hodgepodge of augmented state systems that sag under the weight of adverse selection and generate public-sector failure narratives.
Then take a realistic assessment of gradients, footing, strong points, key passages and prevailing headwinds.
No matter what the plan says, know your limitations and keep an eye on the weather.
As to specifics, I think a clear-eyed understanding of the (political) problem spells out most elements of a feasible solution.
Short on time this wk, more on that later. Thx for asking.
April 19, 2007 12:52 PM | Reply | Permalink
Second, if you're going to climb this mountain, rope yourself to climbing partners on this mountain.
There are other worthy objectives (prevention, quality, electronic records, evidence-based medicine) that have proven remarkably refractory in the face of all best efforts for many decades to date. There may be secondary interactions between these and the current configuration of our h/c finance system, but don't try to sell SP as a miracle cure for these ailments ... or propose to finance SP out of one or more input-output revolutions that are "right around the corner".
So don't lash you climbing team to anybody who is starting their ascent (for the nth time) up a different mountain.
And don't pick fights with the Yeti's. You may have a pet beef with Big Pharma, or corporations in general, or some particular size/shape/color of provider organization, or for-profit providers of all stripes, or some region or demographic group -- people who eat white sugar, or people with yachts, or whatever. Unless it's absolutely central to the task, let it go. You don't need a pissed-off Yeti kicking off an avalanche over a critical segment of your route.
And put away the "no compromise" bravado. Bravado is not going to carry your butt up the mountain. A route that includes any segment your can't master is not a route to the summit.
April 19, 2007 2:09 PM | Reply | Permalink
Third, arrange to have as many people as possible pulling on the same end of the rope.
Arrange your intermediate footholds so that they help others if possible, and failing that, so they don't unnecessarily disturb others.
April 20, 2007 10:08 AM | Reply | Permalink
Fourth, following the methods of George Polya -- restate the problem until the solution becomes obvious.
April 20, 2007 10:10 AM | Reply | Permalink
Fifth, study the mountain you propose to climb.
You notice that it has long expanses of shallow slopes with so little gradient that you could spend weeks plodding around on them them without much gain in elevation ... and at the other extreme there are gradients so steep and slopes so slippery you can't scale at all (or can sustain a vertical climb while going progressively deeper into oxygen debt, with no place to recoup).
And studying all this from the ground -- or stranded and anoxic half way up -- you might imagine helicopters, and dirigibles, and catapults, and winged ponies ... but they will not get you to the summit.
April 20, 2007 8:52 PM | Reply | Permalink