A Single-Payer National Health Program The Only Solution for Labor and Business Nicholas Skala Research Associate Physicians for A National Health Program.

A Single-Payer National A Single-Payer National Health Program Health Program

The The OnlyOnly Solution for Labor and Solution for Labor and BusinessBusiness

Nicholas SkalaNicholas Skala

Research AssociateResearch AssociatePhysicians for A National Health Physicians for A National Health

ProgramProgram

www.pnhp.org |www.pnhp.org |[email protected]@pnhp.org

United States:United States:

48 Million Uninsured48 Million Uninsured

But simply covering them But simply covering them with existing policies is with existing policies is notnot a a solution.solution.

Meet Thomas WilkesMeet Thomas Wilkes Born in 2003 with Born in 2003 with

Severe Hemophilia A.Severe Hemophilia A.

Dad: Senior Engineer at Dad: Senior Engineer at a high-tech computer a high-tech computer firm with good benefits.firm with good benefits.

2004: Develops an 2004: Develops an inhibitor to his inhibitor to his hemophilia treatment.hemophilia treatment.

$750,000 annual claims.$750,000 annual claims.

Private Insurance for Private Insurance for ThomasThomas

Company faces 40% to 55% increase Company faces 40% to 55% increase in premiums.in premiums.

Only insurer that will cover them Only insurer that will cover them requires $10,000 out-of-pocket and a requires $10,000 out-of-pocket and a $1 million cap.$1 million cap.

Thomas is projected to reach the $1 Thomas is projected to reach the $1 million benefit cap in summer 2007million benefit cap in summer 2007

Options for Thomas’ Options for Thomas’ FamilyFamily

1.1. Thomas’ father can quit the job he loves Thomas’ father can quit the job he loves and go to work for a mega-firm that will and go to work for a mega-firm that will take longer to be affected by high claims.take longer to be affected by high claims.

2.2. Thomas’ mother can stop raising the Thomas’ mother can stop raising the children and go to work for a mega-firm.children and go to work for a mega-firm.

3.3. Thomas’ father can divorce his mother to Thomas’ father can divorce his mother to leave her and Thomas legally destitute and leave her and Thomas legally destitute and eligible for public programs.eligible for public programs.

America’s Underinsured

28

60 59

0

10

20

30

40

50

60

70

Insured Insured, Gap in Coverage Uninsured

Proportion of Americans Going Without Care due to Costs, 2005

(skipping doctor visit, specialist appointment, treatment or prescription when needed)

Source: Commonwealth Fund Biennial Health Insurance Survey, 2005

Medical Bankruptcy

• Illness and Medical Bills Contributed to 1 million Personal Bankruptcies in 2004. (Half of All Illinois Bankruptcies)

Source: Himmelstein, Health Affairs 2005 (state estimates provided by author)

24.3%

75.7%

Uninsured Had Insurance

• Of those, more than three-quarters had insurance when they got sick.

Insurance Status at Onset of Illness

Rising Costs = Less Benefits = Under/UninsuranceProportion of Illinoisans Covered by Employer Insurance

Source: US Census

60.0%

62.0%

64.0%

66.0%

68.0%

70.0%

1999 2000 2001 2002 2003 2004 2005

What Does This Mean?What Does This Mean?

Lesson #1: Simply Expanding Existing Private Insurance Lesson #1: Simply Expanding Existing Private Insurance Policies Is Not a Solution.Policies Is Not a Solution.

• Current Private Insurance Policies Offer Inadequate Protection.

•Any Gains in Coverage Will Be Quickly Offset as Costs Rise and Employers Shed Benefits.

An Example: State Children's’ Health Insurance Program (S-An Example: State Children's’ Health Insurance Program (S-CHIP)CHIP)

•Largest Coverage Expansion in a GenerationLargest Coverage Expansion in a Generation

•5 million children added to S-CHIP / Medicaid rolls since 5 million children added to S-CHIP / Medicaid rolls since 1997, but the number of uninsured children has decreased by 1997, but the number of uninsured children has decreased by only 2 million. Government can barely keep up with drops in only 2 million. Government can barely keep up with drops in employer coverage. Now 9 million children uninsured.employer coverage. Now 9 million children uninsured.

•Even those benefits are probably unsustainable.Even those benefits are probably unsustainable.

What Does This Mean?

Lesson #2: Any Real Solution to the Health Crisis Must Do Two Things:

1) Offer Coverage More Comprehensive 1) Offer Coverage More Comprehensive than that Currently Available on the than that Currently Available on the Private Market.Private Market.

2) Control Costs so that Benefits are 2) Control Costs so that Benefits are Sustainable.Sustainable.

78.1 78.4

79.4 79.7 79.9 80.2

77.2

U.S. U.K. Germany France Canada Italy Sweden

Life Expectancy, 2003Life Expectancy, 2003(Data in Years)

5.4

4.84.3 4.2

3.9

3.1

7

0

4

8

U.S. Canada Australia Italy Germany France Sweden

Infant Mortality, 2003Infant Mortality, 2003(Deaths in first year of life per 10,000 live (Deaths in first year of life per 10,000 live

births)births)

$0

$2,000

$4,000

$6,000

Japa

n*U.K

.Ita

ly

Sweden

Fran

ce

Germ

any*

Canad

aU.S

.

International Health SpendingU.S. Public Spending is Greater than Other Nations’ U.S. Public Spending is Greater than Other Nations’

Public/Private Spending CombinedPublic/Private Spending Combined

Per Capita Health Spending, 2004Per Capita Health Spending, 2004

Source: OECD 2004; Japan and Germany data are from 2003

0%

500%

1000%

1500%

2000%

2500%

3000%

1970 1975 1980 1985 1990 1995 2000

Physicians Administrators

Growth of Physicians and Growth of Physicians and Administrators Administrators 1970-20051970-2005

Source: Bureau of Labor Statistics and NCHS

One-Third of Health Spending One-Third of Health Spending is Consumed by Administrationis Consumed by Administration

Administration

All Other

31%

Potential Savings: $350 billion Potential Savings: $350 billion per yearper year

Enough to Provide Comprehensive Coverage Enough to Provide Comprehensive Coverage to Everyoneto Everyone

Source: Woolhandler, et al, New England Journal of Medicine, August 2003 & Int. Jrnl. Of Hlth. Services, 2004

MedicareMedicare

MedicaidMedicaid

Payroll TaxPayroll Tax

Income TaxIncome Tax

Single-Payer Single-Payer Health Care Health Care

FundFund

$$$$$$

Financing Single-PayerFinancing Single-Payer

Bonus: Negotiated formulary with physicians, global budget for Bonus: Negotiated formulary with physicians, global budget for hospitals, increased primary and preventive care, reduction in hospitals, increased primary and preventive care, reduction in unnecessary high-tech interventions, bulk purchasing of drugs and unnecessary high-tech interventions, bulk purchasing of drugs and medical supplies = medical supplies =

long term cost control.long term cost control.

Single-Payer BenefitsSingle-Payer Benefits

Comprehensive CoverageComprehensive Coverage for all medically for all medically necessary services necessary services (doctor, hospital, long-term care, mental (doctor, hospital, long-term care, mental

health, vision, dental, drug, etc.) health, vision, dental, drug, etc.) in a in a single-tier systemsingle-tier system..

Free Choice Free Choice of doctor and hospital.of doctor and hospital.

Health Workers Unleashed Health Workers Unleashed from corporate from corporate dictates over patient care.dictates over patient care.

Hospitals Hospitals guaranteed a secure, regular guaranteed a secure, regular budget.budget.

OnlyOnly Two Paths to Two Paths to ReformReform

1.1. Preserve Private Preserve Private Insurance Insurance Companies and Companies and their Wastetheir Waste

2.2. Create a Create a National Health National Health Insurance Insurance SystemSystem

““Save the Insurance Save the Insurance Companies”Companies”

A A BipartisanBipartisan Consensus ConsensusPrivate Insurance Private Insurance

Tax CreditsTax CreditsNational Health

Program

““Individual Mandate”Individual Mandate”

““Let them Let them buy buy insurance.”insurance.”

Criminalizing the Uninsured:Criminalizing the Uninsured:A Massachusetts Punitive A Massachusetts Punitive

IndexIndex## The CrimeThe Crime The The

FineFine

11 Violation of Child Labor LawsViolation of Child Labor Laws $50$50

22 Illegal Sale of Firearms, First OffenseIllegal Sale of Firearms, First Offense $500 max.$500 max.

33 Driving Under the Influence, First Driving Under the Influence, First OffenseOffense

$500 min.$500 min.

44 Domestic AssaultDomestic Assault $1000 $1000 max.max.

55 Cruelty to or Malicious Killing of Cruelty to or Malicious Killing of AnimalsAnimals

$1000 $1000 max.max.

66 Communication of a Terrorist ThreatCommunication of a Terrorist Threat $1000 $1000 min.min.

77 Being Uninsured*Being Uninsured* $1500 $1500 min.min.

*Note: Original version of House Bill would have suspended individuals’ driving licenses for uninsurance as well.

Subsidy and Individual Mandate Subsidy and Individual Mandate SchemesSchemes

Substandard CoverageSubstandard Coverage: forces the uninsured to buy : forces the uninsured to buy defective insurance industry products that are already defective insurance industry products that are already causing families to face bankruptcy and go without causing families to face bankruptcy and go without needed care.needed care.

UnaffordableUnaffordable:: Without the savings achievable with Without the savings achievable with single-payer, taxes must raised or funds diverted from single-payer, taxes must raised or funds diverted from other needy programs. other needy programs.

Micro-coverage, Macro-costsMicro-coverage, Macro-costs: Preserves wasteful : Preserves wasteful private insurers and adds yet another layer of state private insurers and adds yet another layer of state administrative waste. Rather than provide care to the administrative waste. Rather than provide care to the uninsured through a relatively efficient program like uninsured through a relatively efficient program like Medicare, the plan launders tax dollars through Medicare, the plan launders tax dollars through wasteful private insurers.wasteful private insurers.

No Realistic Cost ControlNo Realistic Cost Control: Any gains in public : Any gains in public coverage will be unsustainable due to rising costs.coverage will be unsustainable due to rising costs.

““Sounds Great, Sounds Great, but it’s not but it’s not politically politically feasible”feasible”2/3rds of population want it2/3rds of population want it

Many (probably most) Many (probably most) physicians want itphysicians want it

Business community is now Business community is now realizing the need for itrealizing the need for it

Single-Payer:Single-Payer:Glen BartonGlen BartonFormer CEO, Caterpillar Inc. (Fortune Former CEO, Caterpillar Inc. (Fortune 100)100)

Past Chairman, Health and Retirement Past Chairman, Health and Retirement Task Force Business RoundtableTask Force Business RoundtableRepresents 150 Largest EmployersRepresents 150 Largest EmployersTotal Assets: $4.0 TrillionTotal Assets: $4.0 Trillion

““The quickest and simplest The quickest and simplest solution… is to go to a single-payer solution… is to go to a single-payer

system”system”

- Written Testimony to AHCTF, Feb. 1 2006- Written Testimony to AHCTF, Feb. 1 2006

““If done right, health care in America could be dramatically better If done right, health care in America could be dramatically better with true single-payer coverage.”with true single-payer coverage.”

--Ben Brewer, WSJ, April 18, 2006Ben Brewer, WSJ, April 18, 2006

““[single-payer] is an idea that's so easy to slam politically yet so [single-payer] is an idea that's so easy to slam politically yet so sensible for business that only Republicans can sell it! …it may take a sensible for business that only Republicans can sell it! …it may take a Republican President to bless the socialization of health spending we Republican President to bless the socialization of health spending we need.”need.”

-Matt Miller, Fortune, April 18, 2006-Matt Miller, Fortune, April 18, 2006

““Think, as a small business, how you could benefit from a single-payer Think, as a small business, how you could benefit from a single-payer system: you wouldn’t lose potential employees to larger firms that system: you wouldn’t lose potential employees to larger firms that offer more attractive health benefits; health insurance costs would offer more attractive health benefits; health insurance costs would cease to be a line item in your budget. A serious illness befalling you cease to be a line item in your budget. A serious illness befalling you or an employee wouldn’t be a company-wide financial crisis. You might or an employee wouldn’t be a company-wide financial crisis. You might even save money.”even save money.”

-Joseph Antony, CNBC / MSN Money, Winter 2003-Joseph Antony, CNBC / MSN Money, Winter 2003

CNBC / MSN MoneyCNBC / MSN Money

Single-Payer: “Politically Single-Payer: “Politically Feasible?”Feasible?”

Abolition of Human Abolition of Human Slavery Slavery (1600s)(1600s)

Women’s Suffrage Women’s Suffrage MovementMovement

(1840-1920)(1840-1920)

Civil Rights ActCivil Rights Act(1964)(1964)

Other “Politically Infeasible” Movements