Universalhealthcarelecture2

Universal Healthcare: Everybody In, Nobody Out

David Green, D.O., F.A.C.N.

• Of all of the forms of inequality, injustice in health care is the most shocking and inhumane.”

• -Dr. Martin Luther King, Jr.

Uninsured Americans

CPS and NHIS Data

Who are the Uninsured?

Employed50%

Out of Labor Force20%

Unemployed5%

Children25%

Current Population Statistics, 1999

• I. The Health Care Crisis– A. Lack of Access

• 1. Forty-seven million people in the U.S. have no health insurance.

• 2. Fifty to seventy million people in the U.S. have inadequate health insurance (i.e., insurance that would leave them bankrupt in the event of a major illness). In fact, catastrophic illness in the number one cause of personal bankruptcy in the U.S. (source : Bob Lebow, Health Care Meltdown, 2002)

• 3. The corporate model for the organization of health care (i.e., Health care is a commodity instead of a public good.) creates barriers to access. Why?– A. Seventy five percent of health care expenditures in

the U.S. are consumed by the 10% of the population with chronic illnesses-Source:Clancy. Himmelstein, and Woodhandler Physician for a National Health Program Newsletter. 11/92

• B. In other words, health insurance companies (whether non-profit or for-profit) have a strong incentive to exclude people with chronic illnesses from their plans. If they are successful in doing so, they can improve their margins while simultaneously offering lower premiums to their healthy customers.

• 4. Health Consequences of Lack of Access– A. 18,000 people die each year due to lack of

health insurance. (Source:Institute of Medicine, “Care without Coverage: Too Little, Too Late,”2002)

– B. In the early 1980’s, California severely curtailed

its Medicaid program (Medical). A study published in the New England Journal of Medicine compared blood pressure and blood sugar control in hypertensive and diabetic patients who were dropped from the Medicaid rolls with a matched control group of patients who retained their Medicaid coverage. Result: The researchers reported a significant deterioration in blood pressure and blood sugar control in the patients who lost their insurance.

• B. Cost– 1. In 2006, the U.S. spent $2 trillion on health

care-16% of the gross domestic product (GDP). The U.S. is the only industrialized nation in the world which spends more than 10% of GDP on health care. This is money that could otherwise be used for education, rebuilding economic infrastructure, research and development.

– 2. Consumers Reports (1992) estimates that ¼ of our annual health care expenditure is wasted. The sources of waste include:

• A. Duplication of Administrative Bureaucracies – 1. There are 1500 private health insurance companies in

this country, each with its own administrative staff and paperwork. The Government Accounting Office (GAO-the investigative arm of Congress) has estimated that if the U.S. were to adopt a single-payer health insurance system, we could save in excess of $200 billion per year-enough to cover all those who are presently uninsured. (Source: Paul Krugman, New York Times, June 13, 2005)

– 2. Administrative overhead consumes more than 20 cents of every dollar collected in health insurance premiums.

Overall Administrative Costs

$0

$200

$400

$600

$800

$1,000

$1,200

$1,400

$1,600

U.S. Canada

$ p

er

cap

ita

NEJM 2003; 349: 769

U.S. Overhead Spending

16.3%

19.9%

26.5%

3.1%

0%

10%

20%

30%

Medicare Non-Profit Blues CommercialCarriers

Investor-OwnedBlues

International Journal of Health Services 2005; 35(1): 64-90

• B. Unnecessary Procedures– 1. A Rand Corporation study found that 14% of

CABGs and 32% of CEAs are unnecessary. (Source;JAMA 260:505 and NEJM 318:721

– 2. One-half of all C-sections and a significant number of upper endoscopies are unnecessary. (Source: Leape, L.L. “Unnecessary Surgery.” Annual Review of Public Health 1992, 13:363-384.

• C. Duplication of Technology– 1. Excessive Number of Mammography

Machines• A. There are now 10,000 mammography machines

in the U.S.

– B. 2000 could meet current demand. 5000 would be needed if all women in the U.S. received all recommended screenings.

– C. Because machines are underutilized, the cost per test is twice as high as necessary.

– D. Quality suffers when mammographers perform too few tests to maintain competence.

– (Source: Annals of Internal Medicine 1990, 113:547.)

• 3. Rising Out-Of Pocket Health Costs for Seniors In 1994, the average senior citizen with Medicare

spent 21% of his or her income on medical bills not covered by Medicare (>2500). That figure is now >25% of income. This represents a >50% increase in the proportion of income spent for medical care since 1977-undermines the whole rationale behind Medicare.

• 4. Cost of Prescription Medication– A. The cost of prescription medications in the

U.S. is almost twice as high as in Canada or most European countries. This is largely due to the ability of the single-payer to negotiate prices with the pharmaceutical industry.

– B. Drug companies justify their high prices on the basis of their expensive research and development programs. However, several facts undermine this argument:• 1. Most of the fundamental drug research in this

country is performed at public universities or at the National Institutes of Health, e.g. , Taxol.

• 2. In 1993, the pharmaceutical industry as a whole spent $1billion more on advertising and marketing than they spent on research and development.-The “Cheerleader Argument” (Source: The New York Times, November 28, 2005.)

• 3. For every 100 new drugs approved by the FDA each year, ½ are “me-too” drugs.

• (Source: The New York Times, 1993.)

• C. Despite the fact that TB claims>2 million lives each year (the most common cause of death due to infectious disease), and drug-resistant TB is becoming increasingly common, pharmaceutical companies are unwilling to invest the money required to bring new TB drugs to market. They claim that because most cases of TB occur in the Third World, they would be unable to recoup in profits what they would have to spend to bring the drugs to market. Once again, the market model of medicine fails both the test of reason and of conscience.

C. Quality– 1. The U.S. ranks 21st in the world in infant

mortality. (Source: OECD, 2004)

Infant Mortality per 1000 Births

5.2 5 4.74.3 4.1

3.1

6.8

0

1

2

3

4

5

6

7

8

U.S. Canada Australia Italy Germany France Japan

OECD, 2004, (2001 Data)

• 2. Life Expectancy– A. The U.S. ranks 17th in the world in male life

expectancy.– B. The U.S. ranks 16th in the world in female

life expectancy.

Life Expectancy

78.1 78.579.4 79.7 79.9

81.5

77.1

70

75

80

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

OECD, 2004, (2001 Data)

II The Single-Payer Solution– A . Essentials of a National Health Program

• 1. Universal, comprehensive coverage• 2. No out-of-pocket payments• 3. A single public payer• 4. Hospitals are paid “lump sum” operating budgets• 5.Separate capital budgets• 6. Public Accountability• 7. No for-profit HMO’s

What would NHI look like?

• Everyone gets a US NHI card

• Complete choice of doctor and hospital

• Doctors and hospitals remain independent– Work with government just as with Medicare

• Government processes and pays bills

– B. Financing• 1. Savings from reduced administrative overhead

• 2. Repeal Bush tax cut for those with highest incomes

• 3. Payroll tax

Some new taxes

• Payroll tax of 3.5% - $230 billion– This will replace employer insurance premiums– Average large employer NOW pays about 8.5%

in insurance benefits

Don’t forget other savings

• No more co-pays

• No more deductibles

• No more premiums

• NO MORE OUT OF POCKET EXPENSES

– C. Building Pubic Support• 1. A recent Washington Post survey corroborated

what previous polls have shown-over 60% of the American public supports the concept of national health insurance.

• 2. It is our colleagues who need convincing.

“…the most deadly challenge ever faced by the medical profession.”

-President of the AMA(in 1961, talking about Medicare)

The Institute of Medicine says:

• Between the health care we have and could have, lies not just a gap but a chasm

• The American health care delivery system in need of a fundamental change

• The challenge is the enormity of the change required

Common Sense: “You cannot cross a chasm in two jumps”

Thoughts on ‘Pay or Play’

• 1. Even with subsidies, individual mandates penalize the poor.

• 2. Keeping 1500 private health insurance companies in the game means that we surrender the $400 billion in annual savings from the elimination of duplicative administrative overhead.

• 3. The premise is wrong—People do not like their present health insurance.