Single Payer Presentation Single Payer Presentation to to

Leadership Greater Leadership Greater ChicagoChicago

Christopher Masi, MD, Ph.D.Christopher Masi, MD, Ph.D.

Assistant Prof. – General Internal Assistant Prof. – General Internal MedicineMedicine

University of ChicagoUniversity of Chicago

Illinois Single-Payer CoalitionIllinois Single-Payer Coalition

ilcoalition.pnhp.orgilcoalition.pnhp.org

Illinois: 1.8 Illinois: 1.8 Million Million UninsuredUninsured

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

Illinois’ 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 in Illinois

Illness and Medical Bills Contributed to 40,000 Illinois 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 in Illinois: Potential Savings in Illinois: $13 billion$13 billion

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 for all medically necessary services medically necessary services (doctor, hospital, (doctor, hospital, long-term care, mental health, vision, dental, drug, etc.)long-term care, mental health, vision, dental, drug, etc.)

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

Doctors Unleashed Doctors Unleashed from corporate from corporate dictates over patient care.dictates over patient care.

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

State Consultant’s State Consultant’s AnalysisAnalysis

Single-PayerSingle-Payer 85.485.4

““Hybrid”Hybrid” 76.376.3

Campaign Better HCCampaign Better HC 75.475.4

Hospital Assoc.Hospital Assoc. 70.070.0

Healthy IllinoisHealthy Illinois 69.469.4

Insurance IndustryInsurance Industry 65.365.3

Employer-Sponsored Employer-Sponsored Health Plan: “Play” Health Plan: “Play” Mandate Mandate

*Required for those with *Required for those with certain # of employeescertain # of employees

Employer AssessmentEmployer Assessment

Individual MandateIndividual Mandate

Standard Package Standard Package or Equivalent or Equivalent Coverage Coverage

Criminalize Criminalize UninsuranceUninsurance

Medicaid / SCHIP Medicaid / SCHIP Expansion Expansion

Parents 185-200% FPL (SCHIP)Parents 185-200% FPL (SCHIP)

Childless adults (Medicaid)Childless adults (Medicaid)

Subsidies up to 400% of poverty Subsidies up to 400% of poverty with special provisions to support with special provisions to support small and low-wage firms.small and low-wage firms.

The Illinois “Hybrid” PlanThe Illinois “Hybrid” Plan

““Pay” Fee for Non-play Pay” Fee for Non-play per Employeeper Employee

Punishment via Punishment via State Income TaxesState Income Taxes

$ State Premium $ State Premium and Deductible and Deductible Subsides to Subsides to IndividualsIndividuals

Standard Benefit Package:Standard Benefit Package:

Comprehensive Coverage for low premiums? Comprehensive Coverage for low premiums?

IHERC – Administrative IHERC – Administrative Body and Oversight Body and Oversight BoardBoard

Manage Standard Benefit Manage Standard Benefit PackagePackage

Serve as clearinghouse for Serve as clearinghouse for coverage options, etccoverage options, etc

Provide information to Provide information to consumers about premium consumers about premium rates of returnrates of return

First, Do No Harm?First, Do No Harm?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.

The Illinois “Hybrid” PlanThe Illinois “Hybrid” Plan 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 Illinois families to face bankruptcy and go causing Illinois families to face bankruptcy and go without needed care.without needed care.

No Funding:No Funding: Of the estimated $3.6 billion cost to the Of the estimated $3.6 billion cost to the state, 77 percent ($2.8 billion) has no identified source state, 77 percent ($2.8 billion) has no identified source of funding.of funding.

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?”

Other “Politically unfeasible” Other “Politically unfeasible” movements:movements:

Abolition of Human Slavery Abolition of Human Slavery

(1600s)(1600s)

Women’s Suffrage MovementWomen’s Suffrage Movement

(1840-1920)(1840-1920)

Civil Rights ActCivil Rights Act

(1964)(1964)