Health Care Roulette

Photo by K Smokey Cormier

About a month ago I went to see SiCKO and came away thinking that healthcare is such an important issue and that’s where I want to focus some of my energy and activism. It’s such an important issue and affects all of us ... the poor and working class probably most. But it’s an issue that has the potential of uniting most of us ... everyone but the richest in the U.S. And maybe a few of them would join us too.

And I feel like I need to get more educated about it. Then, a while ago Terry Gross, the moderator of the NPR show Fresh Air, talked with Jonathan Oberlander, Associate Professor of Social Medicine and Health Policy and Administrator at University of North Carolina at Chapel Hill. I took notes from that conversation and that’s what this post is. Oberlander is also the author of Political Life of Medicare which I’d like to read soon to continue my education.
If you want to listen to the conversation yourself, click here.

So, here are my notes ...

Terry and Oberlander talk mostly about the various healthcare systems in other countries: England, Canada, Germany, and Australia.


Oberland says he’s most familiar with Canada’s system so they start by talking about it.

Canada’s system is a single payer system. Canadians pay for their healthcare system via taxes. It’s a very equitable system. Everyone must enter a “first come, first serve” queue... even the rich. Yes, the rich have the option of going over the border and paying for special services in the U.S. But, in Canada, they have to wait like everyone else for their turn. Now, we’re talking about special services. A visit to a doctor for your annual checkup is not a big deal. You make your appointment like in the U.S.

Canadian’s have this philosophy that healthcare is a right for everyone. We in U.S. don’t recognize that it’s a right. So that’s a difference between USers and Canadians.

By and large, Canadians are happy with their system. However, there are problems:
There is a budget imposed each year and they have to work within the budget. What this means is that the administrators decide what they will pay doctors and hospitals. There is a limit on equipment. For example, in the Canadian system there aren’t as many MRI machines which creates queues or wait lists.

There are wait lists for some surgeries like hip replacements. But, let’s not fool ourselves. There is a form of rationing in the U.S. too via insurance. If you don’t have insurance, you can’t get certain surgeries. If the HMO or your insurance won’t okay your surgery, you can’t have it paid for.

Queues have gotten longer. The complaints about this have increased in recent years.

Ms. Manitoba’s cousin pointed out another potential problem: if the system is paid by taxpayers, what happens when the number of taxpayers decreases significantly as is beginning to happen now as Baby Boomers are retiring and there are less young workers paying taxes?

According to Oberlander, the Canadian kind of single payer system is almost impossible to convert to here in the U.S. because insurance companies and pharmaceuticals make so much money and have so much power with our legislators. This kind of system is a tough fit for the U.S. Oberlander points out that the way we finance elections also influences how we reform the healthcare system. Our legislators are influenced by these powerful interests. If there were a successful reform of campaign financing ... who knows? [So, we need to reform the healthcare system AND campaign financing. -- ms. manitoba]

Is the AMA (American Medical Association) still a problem? Historically, they too opposed single payer systems. At one time, they were the most organized group against “socialized medicine”. They organized and fought against pre-natal care and national health insurance. However, the AMA doesn’t really speak for the majority of doctors anymore. It’s more involved in fights about malpractice and what medicare is paying doctors. They are certainly not fighting for the wellbeing of people who are uninsured -- if they were, it would really help.

Is there a system used by another country that could work? Well, every country has come up with their own system. If Michael Moore were going to make a sequel to SiCKO, I’d send him to Germany and Australia to take a look at their systems. These countries use private health insurance; however, Germany’s health insurance companies are not for profit. They are heavily regulated by the government and must charge fairly. Even though they are regulated by the government, they are employer based. Employers pay for the insurance. And all insurance companies must play by one set of rules. What if you’ve lost your job or are underemployed? If you are unemployed, part-time, or self-employed, the government pays for your insurance.

And, everyone is covered. An insurance company cannot reject you because you are too sick or whatever.

What happens here in the U.S. ... you know, when you lose your job, you lose your insurance -- that is uniquely American.

A mixture of using public funds and private insurance -- that’s a much more feasible solution for the U.S. This is much more likely to happen than a single payer system.

In Australia too, it is a hybrid system: public and private insurance. If they have enough money, they can buy private insurance which can get them a better room. If the government program is a good one and everyone gets treated well, then Oberland says “I don’t have a problem with some people being able to buy their own private insurance.”

In England people do complain a lot about queueing for treatment.

In these systems in these other countries, administration costs are much lower than here in the U.S. The for-profit health insurance system has very high costs for marketing and medical underwriting. Underwriting is the process they go through to figure out:
-- how sick a patient is
-- if a they should pay for a particular treatment or not
-- how much a particular treatment should cost
-- whether a certain person should be allowed to have insurance or not

That process is costly. And, on top of that, patients often fight about the decisions and resolving these disputes are also costly.

If we had a multipayer system like Germany’s where it’s regulated, everyone plays by the same rules and insurance companies have to accept people no matter how sick they are. Administrative costs would be much lower.

The McKinsey Institute, a high-powered corporation that studied healthcare, investigated why the U.S. system is so costly. It’s not because we have higher quality care. They found that it was because we have very high administration costs and we pay our providers more for treatments.

HMOs started out as a liberal idea in the 1930’s & 40’s. Coverage was prepaid, there was an emphasis on prevention and there was better integrated care. Later, in the 70’s they were reinvented as a cost control system. They changed. Most of them were not for profit. Then for-profit ones started getting established and problems started.

But the problems are not just with the HMOs. Enrollment in HMOs has actually flatlined since the 80’s. Now, more people are in managed care programs called PPOs. But these programs don’t really manage anything. There’s no coordination of treatment, no prevention. All PPOs do is coordinate a discounted rate with doctors and hospitals.

Meanwhile, the employer-based system is unraveling. Employers are finding it very expensive to pay for insurance. They’re either reducing benefits, shifting the costs to the employees, laying people off and hiring contractors and freelancers who don’t get insurance.

Oberland said that the thing that surprised him about SiCKO was the lack of employers’ perspectives. Not long ago, 69% of employers provided insurance. Now it’s 60%. Oberland says he wishes that Michael Moore had talked more about it being an economic issue.

As a result of the economics of the healthcare system, some interesting coalitions are forming. Last year Lee Scott, head of WalMart and Andy Stern, President of the Service Employees International Union, met and announced that they were going to form a coalition to advocate for health care reform.

You might hear of a new movement afoot: “consumer-driven health care.” It’s badly named because it is not consumer driven. It is a program that offers high-deductible insurance policies paired with tax-deferred accounts. Deductibles are $2,000 or $3,000. It’s supposed to be the future of health care. A successor to managed care (PPO). And it’s much worse than managed care. This system is trying to shift the costs more and more to the employees. If you have an ongoing health problem or serious illness, you can be really hurt by this system. If you use a lot of health care, you’ll always use up the amount in your tax-deferred account. Which means that you’ll have to pay the deductible. And, if this is a chronic illness, you’ll be doing this year after year. So, we’re shifting the costs to those who are chronically ill. Some employers who have bought into this think that they will save money. But this new system is already stalling. Satisfaction is down. Enrollment is down. The question is ... what’s next?

Bush is proposing that we change the tax system. The reason is this ... currently the employer-based system is heavily subsidized by the government. Employees get these health benefits and pay no taxes on these benefits. No payroll taxes. The government forgoes about $200 billion/year in taxes that they could be collecting. Bush wants to get rid of this and give everyone a standard deduction for health insurance. $15,000 for a family; $7,500 for an individual. [But what if your health care is more than $7,500/yr? -- ms. manitoba]

Why did the Clinton plan fail? It was too ambitious. They wanted to control costs, wanted universal coverage, employers would have been mandated, they tried to change the delivery system. They alienated people who were already insured: “I don’t want to change doctors.” And ... “I don’t want an HMO.” They threatened the income of the insurance companies and the providers.

Oberland sees real movement at the state level, especially Massachusetts and California. He sees Republicans and Democrats in those states coming together.

Massachusetts is very interesting. They tried it before. This time the reform is a combination that builds on the existing system. It expands Medicaid and provides insurance through a pool. People who can afford it have to buy it. It’s been created by a bipartisan team. It won’t give the citizens of Massachusetts universal coverage though.
---- end of notes ---

So, what to do? I'm still not convinced that single payer can't happen in the U.S. .... gotta learn more.

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