Single-Payer Health Care, A Matter of Survival

Against the Current, No. 44, May/June 1993

Rick Wadsworth

DURING THE LAST few years a considerable movement has sprung up to struggle for a single-payer universal healthcare system in the United States. Beginning with activists in a few unions and a small group of doctors organized as Physicians for a National Health Program (PNHP), the movement has now produced many grassroots and state groups and recently received some attention as a nationwide force, even from some so-called mainstream media, if only for the purpose of being dismissed out of hand as too liberal?

Health care is generally conceived in one of two ways: either as a basic human right, or as a commodity. Nowadays health care is more or less conceded to be a right in all the advanced industrialized countries, except for the United States and South Africa. Of course, regarding health care as a commodity fits nicely into the dominant neoliberal ideology of the bourgeoisie, and the deification of the market. On the other hand, it is more and more clear that this idea is also incompatible with basic human need or economic rationality.

Quite aside from the fact that the market concept of health care puts health care professionals into the impossible ethical bind, which some of them find uncomfortable, of making health care decisions on an economic basis, it has very obvious bad economic effects. For one thing, health care doesn’t act like a commodity for instance, when the supply goes up, the price goes up. If a doctor moves into a town that previously had only one physician, it generally happens that both doctors will start charging more, to make up for the fact that their practices are smaller. The same rule applies to concentrations of hospitals, clinics and so on.

Economists, particularly the kind who win Nobel Prizes, profess outrage and bafflement at this, although the reason is fairly obvious. People in pain and fear of death are not good shoppers, particularly when the salesperson is the only one offering to save life. Getting health care is not like shopping for a car, it’s more like hiring a tow-truck when your car breaks down at night, in the wilderness, in a blizzard.

As a result of this reality, the United States has both the most expensive and about the worst care system in the advanced capitalist world. Both as a percentage of Gross Domestic Product and on a per capita basis the United States spends more on health care than any other country. In 1989 the United States spent 11.8% of GDP on health care; in 1992 the figure was slightly in excess of 14%.

The cost has consistently risen higher than the general rate of inflation, or indeed the cost of just about anything else, and faster than in any other country for which more or less truthful statistics are available. Projected forward in time, the cost of health care becomes frighteningly apparent even to free market freaks.

In exchange for this we get health care that is on average inferior to that of most of the industrialized world. Comparisons of male and female life expectancy places the United States 18th and 15th respectively among twenty-three industrialized countries. In infant mortality (i.e. number of infant deaths in the first year of life per 1,000 births) the U.S. ranks 18th in the same group. Life expectancy and infant mortality are the standard indices of public health.

It is fairly common that the main reason for the poor performance of U.S. health care is the lack of access to treatment caused by the health care insurance system. Canada, compared to the United States, had somewhat poorer life expectancy and infant mortality figures prior to the establishment of their national health plan, a situation now reversed. It is in any case clear that access to care in this country is severely limited.

Given the size of the off-the -books “underground” segment of U.S. employment, it is naturally difficult to estimate the number of residents without health insurance, but estimates for 1990 ranged from 33 to 37 million. Moreover, although health insurance has historically been linked to employment in this country, most of the uninsured (62% as of a 1987 estimate) are full time workers or their dependents. Another 13% (same estimate) are part-timers or their dependents. It is generally agreed that more and more people, and more and more working people who formerly thought of themselves as securely “middle class,” are going without health insurance.

Those who are insured have vastly differing coverage, even when the insurance provider is the same —between, for example, faculty members in the City University of New York and the city’s transit workers. It should probably also be noted that millions of employed people think that they have insurance, but don’t, thanks to the ERISA scam. ERISA is the Employment Retirement Income Security Act, a law Congress passed allegedly to protect pension funds. One of its more interesting provisions allows employers to become self-insurers for their employees’ health care insurance and, when they do so, exempts them from all state insurance regulations. The majority of large corporations (62% of those with more than 1,000 workers) have opted to do this.

Recent Federal Court decisions in several Districts have upheld the employers’ right to change the benefit package more or less whenever they feel like it, without notice and without appeal. All of the cases to date have dealt with WV-positive workers who found that the life-time cap for HIV-related disease had been changed from the “major medical cap,” usually a million dollars, sometimes two million, to a lower figure, in one case $2,000, in another, which went to the U.S. Supreme Court, $5,000.

The press has covered these cases as AIDS related” but the Courts have been very clear that the same rule applies to any treatment expensive enough to cause trouble to the self-insurer, although it apparently wouldn’t be legal to default on paying for cheap treatments. It ain’t insurance if they don’t have to pay.

All of this has led to a considerable state of public discontent A Gallup Poll of 1989, for instance, already indicated an 89% majority in favor of “significant change” in the health care system. Moreover, contrary to the received media wisdom, most polls indicate that most people want the government to fix the problem.

In response to the obviously bad situation, three main proposals were put forward in the 1990s, two phony and one real. The Bush plan, which like the Clinton plan was called “Managed Competition,” was chiefly a device to give middle and upper-income people a tax break to pay for health insurance. The main effect would have been to subsidize people who already had insurance. There was also some talk about “voluntarily” forcing people into managed care plans, about which more will be said later.

The second proposal, put forward by Sen. Jay Rockefeller, the Pepper Commission and the Democratic leadership in the House of Representatives, was called the “pay or play” plan. (I’m not making these names up.) Under this scheme bosses who provide health insurance would pay a tax, which would be used to buy insurance for uninsured workers. In other words, leave the private for-profit insurance industry the way it is, but throw public money at it.

A considerable part of the union bureaucracy backed this plan, particularly those whose unions are heavy into the insurance business, but also including some who seemed to feel that unless the union had health care to negotiate for nobody would pay dues. Pay or play tends to put bosses and bureaucrats in charge of the health care system.

The third proposal was the single payer universal health care plan. Modeled more or less after the plans in force in the Canadian provinces, the single payer proposal establishes health care as a right and guarantees access to care by setting up a publicly funded, tax-based, politically accountable health insurance system in which the government becomes the single payer for all medically necessary care. In other words, abolish the health insurance industry and spend the money allocated for health insurance on health care as opposed to paper pushing and profits.

This proposal was put forward by some of the more progressive unions (AFSCME, CWA, Jobs with Justice, OCAW, UMWA, UE, UAW and a few others), by Physicians for a National Health Progr3m and by some groups of community activists. The single payer set-up tends to put patients and health care providers in charge of health care.

Many U.S. citizens, especially in the northern tier of states, know that Canada has a national health plan and that it works. In addition, because the Canadian system is an insurance system it would not threaten to bureaucratize health care. The Canadian system also has some advantages in principle. Unlike the British system, it does not permit a parallel private health care set-up for rich people for basic health care. It is a one-tier system. Unlike the German system it doesn’t link health care to employment Health care is a basic right Unlike the health care system of the former USSR, it does not suck.

According to Senator Jay Rockefeller, NPR, the Washington Post and most everyone whose opinion is generally held to matter, neither the Bush plan, nor pay or play, nor single payer are “on the table” anymore. The only thing on the table is “Managed Competition” in its new improved Clintonesque incarnation. It’s hard to know just what this means, because to date the administration very carefully ain’t saying. There have, however, been any number of trial balloons floated and the general outline is getting clearer. The way it works in the most commonly leaked version is this:

The government mandates a set of basic benefits. Every time the story gets leaked the benefits get more basic. These will be provided by a managed care HMO-type set up. In other words everyone gets assigned to a doctor or a group of doctors, and there is a “gate-keeper” who decides what treatment is given. Providing the basic benefits is required of every employer. The price of the basic benefits package will be set on a per capita basis (i.e. the insurance company can charge and the HMO can get paid so much per person per year). The government will mandate formation of large purchasing pools to which only a small number of large insurance companies will be able to provide the basic package. This is the “managed” part.

Where the competition comes in is this: the insurance companies compete to see who can provide the basic package the cheapest. Anyone (workers with a strong union for instance) who gets a better benefit package that lets them, for example, pick their own doctor, pays income tax on the difference. In some versions employers also pay tax on the difference. Supposedly, this creates a financial incentive to control costs, provide more appropriate and needed care, promote “wellness” and preventative care and so forth.

Actually, of course, the real financial incentive for both health insurers and health care providers is to take the money, provide no care and move to Switzerland. Presumably only some of the industry will adopt this ideal free market behavior. Others will just maximize profit by providing minimal care on the cheap.

This is the plan of the large health insurance companies (AETNA, Prudential, the Blues et al) who hope by this means to capture the 48% of the market share now held by smaller outfits. Managed care puts the insurance industry in charge of health care. Nevertheless it has also been promoted by some providers, in particular the American Medical Association, presumably because of AMA’s socialized-medicinephobia.

There is every reason to believe that Managed Competition will be a social, economic, financial, medical and political catastrophe. There is, however, good news of sorts about Managed Competition: It won’t work.

Those who have bought into managed competition do so mainly on the ground that it will control costs. There is good reason to believe that the very rapidly increasing cost of U.S. health care is of real concern to some in the ruling class, at least among those still engaged in owning means of production that actually produce something. Health care costs have, in some industries, a very considerable effect on unit cost.

This explains the enthusiasm in some circles for a Canadian style health care global budget. In a single payer set up a global budget works reasonably well, controlling cost increases without any need for draconian price controls on health care providers. In a multiple payer environment, however, a global budget will be a bureaucratic nightmare or a regulatory farce, or both in turn.

The other great hope for cost control is the “Managed Care” side of the plan. Managed care is a model in which each patient has a primary care provider who is supposed to maintain a central set of medical records, make referrals to specialists, and act as a patient advocate within the medical system and so on. In itself there is nothing wrong with this idea of having a health care gate keeper who can, in principle, promote the use of more primary care, reduce patient abuse by greedy quacks, prevent various doctors treating the same patient prescribing contra-indicated combinations of drugs, promote the use of primary care family-type practitioners and so on. Of course, when used ruthlessly as a cost control measure managed care functions as a health care prevention system.

There have been several very large pilot projects (one which contained all the Medicaid patients in Utah, for example), which attempted to combine the managed care for cost control with a reasonably ethical standard of care. Pretty much all of the subsequent evaluations of these projects contain the phrase “contrary to expectations” and go on to say that no money was saved, and that, although the utilization of primary care physicians increased, so was the use of specialists.

In any event the main contributor to the very high cost of U.S. health care is not inappropriate care, patient abuse or any of the other usual scapegoats, but the private, for-profit health industry and the administrative and billing procedures it promotes. (Other key factors, as cited by the New York Times of March 21, are the absence of preventive care, a direct result of the lack of a rational national health plan, resulting in more costly hospitalizations, and the wasteful misuse of medical technology.)

In the United States administrative costs absorb about twenty to twenty-five cents of every dollar allocated for health care. Anecdotal evidence gives some idea of why this is true. A few years ago the Ontario government did a comparative study of a 500-bed hospital in Boston and a similar sized facility in Toronto. Because of the need to deal with a large number of the over 1,700 U.S. health care insurance companies, the need to bill for each aspirin, X-ray, and N needle, the need to dun patients and so forth, the U.S. hospital had a billing and accounting department that was the largest department in the place, with over 350 employees. The Canadian hospital had five.

The U.S. hospital budgeted more for stamps to mail bills than the Canadian hospital did for its whole billing and accounting operation. Similar economies apply to doctors setting up an office. Moreover, under single payer no health care money goes for insurance advertising, agents’ commissions or insurance profits.

At first many activists for a single payer system concentrated almost all their attention on the state level. This was partly because of the Canadian example. The Canadian national health plan began as a provincial program in the poor and small prairie province of Saskatchewan in 1946. Prior to its adoption in 1971 the plan had spread from province to province.

In part this tactic was caused by the gridlock at the national level and the fact that it looked likely for a while that George Bush could be President forever if he wanted. Lately the election of a Democrat has caused many to pay more attention to the possibility of Congressional action, despite Clinton’s apparent enthrallment to the insurance industry.

In the last Congress a national single payer bill was introduced as the Wellstone-Russo Bill. Essentially the same bill has been reintroduced as Wellstone-McDermott-Conyers this year It is co-sponsored as of this writing by four Senators and fifty-four in the House. This is slightly fewer than last year, presumably because of fear by some that it might matter. Unfortunately this fear is probably unfounded.

CWA Jobs with Justice, National Citizen Action, the Universal Health Care Action Network and others are active in organizing support for the bill. Support for this bill can be found in surprising places. For example, in January 7428 signatures to a petition in support were collected in the Leisure World retirement community in Orange County California. In past times, Leisure World was mainly known (to me at least) as a political center for the John Birch Society.

Nevertheless, significant action continues on a state level. According to recent issues of the universal health care newsletter ACTION (1800 Euclid Ave, #318, Cleveland OH 44115, subscription $15 per year) legislation for a single payer system is pending in Florida, Georgia, Texas and Montana. Last year single payer bills were introduced in twenty-two state legislatures. A significant minority report supporting single payer will be part of the report of the Louisiana Health Care Commission.

In West Virginia, a member of the State Senate who is also a member of the Citizens Health Care Reform Coalition has introduced a strong single payer bill. A somewhat weaker single payer bill has also been created by amending the governor’s anti-single-payer health care bill, although this bill is sure to be reamended to its former state A recent speaking tour by two Canadian citizens, Dr Robert James, a physician and Eugene Kostyra, an organizer for the Canadian Union of Public Employees and a former Minister of Finance in Manitoba, has gotten good media and put the single payer system on the mainstream map to a higher degree than previously.

All this has been possible in large part because the Coalition is not just a letterhead organization. It contains some organizations in which there are some everyday people who have been educated on this question and know what they want.

The importance of this has recently been shown by a setback in Ohio. Recently the Coalition for UHIO (Universal Health Care in Ohio) switched its support from single payer to anas yet unwritten “liberal version” of managed care. This was largely a result of a bureaucratic coup by the leadership of AFSCME in whose offices in Columbus the Coalition worked. The reason for this maneuver is unclear, as the Managed Care Bill appears to have no better prospects of passage than the previously supported single payer bill.

The Northeast Ohio Coalition for National Healthcare, which publishes the ACTION newsletter mentioned above, has broken with the state organization, continues to support single payer, and is sponsoring the next national conference of singlepayer activists in Chicago on May 15-16. The Northeast Ohio Coalition was formerly the most important part of the state coalition. Its adherence to principle was possible because it contains real activists.

Revolutionary socialists workin in this movement are confronted with the need to mobilize the masses for independent action in order to win the most elementary of rinkydink social democratic reforms. The German Social Democratic Party (SPD) won universal health care while Bismarck was Chancellor of the Kaiser’s government. All the SPD had to do to win this concession was to exist This is the difference between the 19th Century and life under late monopoly capitalism. This is the downside.

A single payer health care system is obviously necessary, just, egalitarian, cost effective, and a matter of life and death for millions of people. And far more every day. Yet this elementary and necessary reform appears to be incompatible with the free market ideology and financial interests of the U.S. ruling class.

May/June 1993, ATC 44