U.S. Health Care Is Less Private, More ‘Socialist’ Than You Might Think

The extent of the government's role in health care has become a key issue in the Democratic presidential primary. Here, candidates Hillary Clinton and Bernie Sanders are seen in a debate on Jan. 17 in Charleston, S.C. (Mic Smith/AP)

The extent of the government’s role in health care has become a key issue in the Democratic presidential primary. Here, candidates Hillary Clinton and Bernie Sanders are seen in a debate on Jan. 17. (Mic Smith/AP)

By Richard Knox

Readers, a pop quiz:

The proportion of U.S. health care paid by tax funds is (a) less than 30 percent, (b) about half or (c) more than 60 percent.

If you picked “more than 60 percent,” you’re right — but you’re also pretty unusual.

“Many perceive that the U.S. health care financing system is predominantly private, in contrast to the universal tax-funded health care systems in nations such as Canada, France or the United Kingdom,” David Himmelstein and Steffie Woolhandler write in a new analysis of U.S. health spending in the American Journal of Public Health.

They find that 64.3 percent of U.S. health expenditures are government-financed. And they project the tax-supported proportion will rise to 67.1 percent over the coming decade as the baby boom generation ages and retires — nearly as high as Canada’s 70 percent.

“We are actually paying for a national health program, we’re just not getting it,” Woolhandler says.

tax dollars for U.S. health spending

Now, Himmelstein and Woolhandler have an agenda. For decades, they’ve been perhaps the leading researchers promoting the kind of single-payer health system that Socialist and Democratic presidential candidate Bernie Sanders has put on the debate agenda. One recent poll suggests more than half of Americans (and 30 percent of Republicans) support the idea.

But even if you disagree with the Himmelstein-Woolhandler ideology, their research is generally regarded as sound, and their method is straightforward.

They added up what federal and state governments spend on health through Medicare, Medicaid, the Veterans Health Administration, government employees’ health care premiums, tax subsidies and other programs. They argue that accounting by government agencies (the Center for Medicare and Medicaid) undercounts the real tax burden because it leaves out major pieces of the pie — such as government employees’ care ($156 billion a year) and tax subsidies for private, employer-sponsored coverage (nearly $300 billion).

And whatever you think about Medicare-for-all, it’s a good idea to see the present U.S. health care system for what it is — an increasingly government-funded financing scheme. Continue reading

Vermont Gov. Won’t Pursue Single Payer Health Care This Year

Gov. Peter Shumlin earlier this year (Wilson Ring/AP)

Gov. Peter Shumlin earlier this year (Wilson Ring/AP)

Gov. Peter Shumlin of Vermont announced on Wednesday that his state would not pursue single payer health care in this coming legislative session.

Shumlin blamed a sluggish economy for his decision. The taxes required for single payer would prove too burdensome for Vermont, a state that has downgraded its revenues twice this year.

The taxes required to implement single payer would include an 11.5 percent increase in payroll taxes and up to a 9.5 percent increase in income taxes for every Vermonter.

Shumlin added: “Making fundamental changes in our health care system — nearly 20 percent of our economy — is a huge undertaking, and one that must be done with care.”

You can read Shumlin’s prepared remarks here.


Surprise In Mass. Primary: 21 Percent For Single-Payer Candidate Berwick

Note to politicians: Backing “Medicare for all” is looking less and less like electoral poison. If, deep in your heart, you believe American health care would be better off with a Canadian-style, single-payer system, you might now consider coming out of the closet. (In Democratic primaries in blue states, at least.)

That’s my suggested takeaway from the striking Massachusetts Democratic primary showing of Dr. Donald Berwick, who rocketed from near-zero name recognition among general voters to 21 percent at the polls. Catch him saying forcefully in the video above: “Let’s take the step in health care that the rest of the country hasn’t had the guts to take: single payer. Medicare for all.”

Now, Vermont not only has a mainstream politician who backed a single-payer system — Gov. Peter Shumlin — it’s actually translating the idea into practice as we speak. But let’s put it this way: This seems to be the first time that a candidate in a mainstream political party in a state that is not a verdant utopian duchy has run on a single-payer platform. And though he did not defeat the longtime familiar faces, he did surprisingly well.

“The term I’ve used, and it’s a bold term, but it’s confiscation.”

– Dr. Donald Berwick

Of course, we knew that Massachusetts voters tend to like the idea of single payer. As recently as 2010, 14 fairly middle-of-the-road districts voted in favor of a non-binding ballot measure calling for “creating a single payer health insurance system like Medicare that is comprehensive, cost effective, and publicly provided to all residents of Massachusetts.”

Analysts projected that the results meant a statewide majority in support of a single-payer system. The single-payer idea had polled well in non-binding ballot measures before, as well. But now we’ve seen that sentiment translated into support for a candidate.

Other politicians, including President Obama, have backed the general idea of a single-payer system, but they always add a “but,” said Dr. Steffi Woolhandler, who helped found Physicians for a National Health Program.

“And the ‘but’ usually has to do with the political situation,” she said. “But it’s actually important to say what’s the right thing to do and to really work toward the right solution, and that’s what Don [Berwick] has been willing to do, to say, ‘We need single payer and skip the ‘but,’ let’s just say we need single payer and that we need to start working toward it.'”

Will Berwick’s strong showing change the playing field for other candidates? Dr. Woolhandler says yes: “Politicians understand votes. Unfortunately, they also understand money. But they do understand votes, and I think other politicians will see that voters are behind the idea of single payer.”

I asked Dr. Berwick about the reaction to his single-payer position in his many campaign-season travels, and he said the biggest surprise was how positive the response had been from voters who would likely not call themselves progressives. They either already agreed with the idea, he said, or responded instantly after one sentence of explanation with, “That sounds right to me. Let me tell you my story.”

“I remember a carpenter in Hingham,” he said. “I don’t think he would have said he was a progressive — he was a somewhat older carpenter struggling to make ends meet, sitting on a sofa at a gathering, a meet-and-greet, and I started talking about this, and I guess — embarrassingly, to me — I was expecting some pushback. But he immediately said, ‘I’ve got to tell you a story.’ And he told me about his struggle to get health insurance.

“He very carefully went through the policy options, he had picked one that had a maximum deductible that was pretty stiff, and he was ready to swallow it. And he did, he signed up for that plan. And then, the problem was that he had three major illnesses the following year. And he discovered — to his dismay — that the deductible did not apply to the year, it applied to each separate episode. So this guy, who’s working with his hands and trying to just get through and have his family’s ends meet, suddenly found himself tens of thousands of dollars in debt, because of the complexity [of health insurance.] And he said, ‘Enough of this!’ He immediately understood and was fully on board, and that kind of experience has been pretty constant for me.”

Overall, Dr. Berwick said, “The response has been extremely positive beyond anything I would have anticipated. Continue reading

Berwick Platform: ‘Seriously’ Explore Single Payer, Review Cost Control

Dr. Donald Berwick (Jesse Costa/WBUR)

Dr. Donald Berwick (Jesse Costa/WBUR)

Granted, a candidate releasing his platform on health care for a race that’s a full year away might not strike you as big breaking news. But what if that candidate is one of the country’s leading health policy thinkers? And what if he’s stepping right into territory that proved highly contentious on the federal level?

That candidate is Dr. Donald Berwick, former chief of Medicare in the Obama administration, and that territory is the idea of a “single-payer” system — a sort of “Medicare for all” that’s common in other developed countries but that faces some strong opposition in the United States. (On the national political scene, Berwick took some major flak from opponents for expressing enthusiasm for Great Britain’s National Health Service.)

Berwick released his official health care platform for Massachusetts this morning, and it includes these two points — Chapter 224 refers to the state’s latest health reform, aimed at controlling costs:

As Governor:

On day one, I will convene a summit of all stakeholders to conduct a top to bottom review of Chapter 224 and develop an action plan to ensure it meets Triple Aim goals of better care, better health, and lower cost. If Chapter 224 results lag behind, within my first 100 days I will work with the Legislature to craft a new wave of stronger legislation to incentivize increased transparency, payment changes, and care reorganization.

It is time to explore seriously the possibility of a single payer system in Massachusetts. The complexity of our health care payment system adds costs, uncertainties, and hassles for everyone – patients, families, clinicians, and employers. I will work with the Legislature assemble a multi-stakeholder Single Payer Advisory Panel to investigate and report back within one year on whether and how Massachusetts should consider a single payer option.

Readers, reactions? Let’s note that neighboring Vermont is already pursuing a statewide single-payer system, so the idea is not all that revolutionary around here. But Massachusetts is a very different state, where health care dominates the economy to a far greater extent than in Vermont. Will the idea fly here? Does it make you more or less likely to vote for him in that distant election? Does it mean that at the very least, the pros and cons of a single-payer system will figure in campaign debates?

Berwick’s full health care platform is here. A couple of other points worth highlighting: Continue reading

Single-Payer Rumblings In Mass. Legislature

The Massachusetts State House (Wikimedia Commons)

The Massachusetts State House

The dominant story about Obamacare right now is the technical debacle of the Website, but you’ll also find an occasional bit of this sub-theme among the punditry: The flaws of Obamacare will push the country further toward a single-payer system like Canada’s. (Exhibit #1 from The Los Angeles Times: Health Law’s Ailments Can Be Cured By Single-Payer System.)

So it’s a particularly interesting moment to see a report by Matt Murphy of the State House News Service that begins like this:


STATE HOUSE, BOSTON, OCT. 22, 2013…. Massachusetts might not be ready to adopt a single-payer health care system but advocates on Tuesday, including a number of progressive lawmakers, suggested it might only be a matter of time.

Sen. Jamie Eldridge, an Acton Democrat, testified before the Joint Committee on Health Care Financing in favor of two bills he has filed this session to implement a universal Medicare plan in Massachusetts (S 515), or to take the more incremental step of creating a public health insurance option (S 514) to give consumers a taste.

“As much as we’ve made great advances here in Massachusetts and covered nearly all people, there are still some deep flaws in our health care system,” Eldridge said. “A single-payer model is a more efficient system, better health care options and something employers prefer because they no longer have to provide health care.”

Asked if he thought either proposal had a chance of winning approval, Eldridge said, “No. I don’t. I think what’s happening now is single-payer advocates are engaging the business community.”

Also: Continue reading

New England Journal Of Medicine: Lessons From Vermont’s Single-Payer Plan

Vermont moves ahead with its unique, publicly-financed insurance program” (“Amy the Nurse/flickr)

We devote a great many pixels to Massachusetts health reform, but of course it’s really Vermont that’s attempting the boldest state-level experiment, with its push toward a single-payer system.

So how’s it going? Very nicely indeed, according to a piece just out in the New England Journal of Medicine titled Lessons from Vermont’s Health Care Reform.

I tend to derive most of my lessons from mistakes I make, but this piece focuses on what Vermont has been doing right, and others may want to emulate as Obamacare takes hold. In brief:

Policymakers and stakeholders in other states can learn some lessons from Vermont regarding ACA reform. First, engaging stakeholders while providing transparency at each stage of reform builds support for transition efforts. Second, the adage “work smarter, not harder” applies to the enormous task of implementing health care reforms: a central board can coordinate all implementation efforts, reduce redundancy and bureaucracy, and improve transparency. Third, the development of a health insurance exchange presents opportunities for state-specific health care innovation. And finally, instead of resisting the inevitable federal reforms in the name of federalism, states may capitalize on federal financing opportunities to build new state health programs and realize cost savings.

Readers, anyone want to question this positive view? In particular, perhaps, Josh Archambault of the Pioneer Institute, considering this 2011 post? It includes this memorable repetition: “There are many, many, many, many, many challenges ahead for VT before successful implementation.”

Study: Canada Points Way To Saving Medicare

CIA map of Canada

CIA map of Canada (Wikimedia Commons)

Plenty of rhetoric this election season has warned that Medicare, the government health coverage for seniors, will go bankrupt in a few years. (CNN does an excellent fact-check of those claims here.)

What is to be done? The candidates propose differing remedies, but a research letter just out in The Archives of Internal Medicine analyzed decades of Medicare data and offers a persuasive case for an alternative solution: Do as the Canadians do.

It estimates that if the United States Medicare system were more like Canada’s, we could have saved more than $2 trillion since 1980. Instead, our Medicare spending on seniors has grown at almost triple the rate of Canada’s.

Drs. Steffie Woolhandler and David Himmelstein

Drs. Steffie Woolhandler and David Himmelstein

The authors, Dr. David U. Himmelstein and Dr. Steffie Woolhandler, are professors at the City University of New York’s School of Public Health and visiting professors at Harvard Medical School. They are also co-founders of Physicians for a National Health Program and prominent advocates for a single-payer system in the United States. From the press release:

After adjusting for inflation, the authors found U.S. Medicare spending per elderly enrollee rose 198.7 percent from 1980 through 2009. In Canada, the comparable figure was 73 percent.

According to the authors, the findings have important implications for the debate on how to save Medicare. “Had U.S. Medicare spending per elderly enrollee increased as slowly as in Canada, the savings from 1980 through 2009 would have totaled $2.156 trillion,” said Himmelstein. “That’s equivalent to more than one-sixth of the U.S. national debt.”

The new findings appear today in the Archives of Internal Medicine, a leading medical journal published by the American Medical Association. The article, which takes the form of a research letter, includes supplementary analyses based on less detailed data showing that the U.S. could have reaped even larger savings – nearly $3 trillion – from 1971 to 2009.

The article cites several reasons for Canada’s better record on cost containment: Less paperwork and administrative bloat throughout their health system (administrative costs account for 16.7 percent of total health spending vs. 31 percent in the U.S.); the use of lump-sum budgets for hospitals; stringent controls on spending for new buildings and expensive new equipment; the use of single-buyer purchasing power to rein in drug and device prices; relatively low litigation and malpractice costs; and an emphasis on primary care. Continue reading

Report: Private Insurers Cost Medicare Billions In Excess Payments

(401(K) 2012/flickr)

The doctors over at Physicians for a National Health Plan, advocates of a single-payer system, sure are prolific researchers, and here’s the headline from their latest report: Private insurers have cost Medicare $282.6 billion in excess payments since 1985

From the group’s news release:

Researchers say privately run Medicare Advantage plans have undermined traditional Medicare’s fiscal health and taken a heavy toll on taxpayers, seniors and the U.S. economy

In the first study of its kind, a group of health policy experts has determined the amount of money that Medicare has overpaid private insurance companies under the Medicare Advantage program and its predecessors over the past 27 years and come up with a startling figure: $282.6 billion in excess payments, most of them over the past eight years.

That’s wasted money that should have been spent on improving patient care, shoring up Medicare’s trust fund or reducing the federal deficit, the researchers say.

The findings appear in a paper by Drs. Ida Hellander, Steffie Woolhandler and David Himmelstein titled “Medicare overpayments to private plans, 1985-2012” which they say is forthcoming in the International Journal of Health Services.

(Hellander is policy director at Physicians for a National Health Program, a nonprofit research and advocacy group. Woolhandler and Himmelstein are professors at the City University of New York School of Public Health, visiting professors at Harvard Medical School and co-founders of PNHP.)

The work is timely because national proposals, notably from vice presidential candidate Paul Ryan (set to debate vice president Joe Biden tonight) rely on great expansions of private Medicare plans. Continue reading

All 100 Million Mexicans Have Health Coverage, While To The North…

(Smooth_O on Wikimedia Commons)

The parallel is unmistakable. Before the reforms that brought in health coverage for all, Mexico had 52 million residents who were not covered. We here in the big rich neighbor to the north have about the same number of people — roughly 48 million in a recent count — who lack health insurance. Mexico has shown over the last decade that it is possible to cover everyone. We — well, you know.

Just out in the medical journal The Lancet is a sweeping look at how Mexico brought in universal coverage, and the health benefits the country reaped, including significant drops in the death rates among babies and children and mothers. A Lancet editorial concludes that Mexico has demonstrated that universal coverage, “as well as being ethically the right thing to do, is the smart thing to do.”

I’m afraid my first question to the Lancet paper’s lead author came out a little plaintive:  Why? Why could Mexico do it, reach universal coverage, while America seemingly can’t? Felicia Knaul is the director of the Harvard Global Equity Initiative and a senior economist for the Mexican Health Foundation. Her reply, by phone from Mexico City:

‘This country chose to believe in the fact that people’s access to health should not be defined by where they work’

“First let me just say, i think the United States is moving forward in the right direction and we just have to keep that forward movement going, in all sorts of senses. I can tell you why Mexico did it; I can’t tell you why the United States didn’t until now.

This country chose to believe in the fact that people’s access to health care should not be defined by where they work but rather by their need for health care. Number two, in addition to this being a right, a social entitlement, it was good for human development, for social development, for economic development, to make sure people were not going bankrupt and suffering impoverishment and catastrophe from trying to figure out how to manage the cost of health care.”

Was it, I asked, a convergence of historical forces? Continue reading

Daily Telegraph: Pivotal Romney Moment? Son’s Cancer Scare In Britain

2006 Romneycare handshake

In this April 12, 2006, file photo, then-Gov. Mitt Romney is seen with lawmakers and staffers after signing the state’s universal health coverage law at Faneuil Hall in Boston. (AP File)

Yes, if British doctors tell you that your son may have colon cancer but will have to wait six weeks for a colonoscopy, I can see how you might develop even more of an antipathy toward government involvement in health care.

The Daily Telegraph has the full yarn here, in advance of Republican presidential candidate Mitt Romney’s trip to England tomorrow.

It has some nice details of the no-frills, moldy-flat life Romney’s third son, Josh, lived in England while he was a Mormon missionary there in 1995. The medical story: A doctor in Sheffield told Josh his stomach problem might be colon cancer. (Though if you read the full story, you might diagnose it as colon blockage caused by eating too much cheap beef.)

Even worse, Mitt Romney later recalled, “the waiting time for a colonoscopy was six weeks – enough time to make an operable, curable cancer become an inoperable terminal condition”.

The family was appalled. “It was scary,” Josh, now a 36-year-old property developer in Utah, told The Daily Telegraph while campaigning with his father in Florida. “I am in favour of you reforming your health care system,” he joked. Continue reading