NATIONAL HEALTH INSURANCE FOR THE U.S.: HAS ITS TIME COME? Presented by Physicians for a National Health Program New York Metro Chapter

PRESENTATION OUTLINE 1. A brief history of health reform in the US 2. Overview of health care economics 3. Failure of for-profit market reform 4. National Health Insurance Principles and possibilities

FIRST PERIOD OF HEALTH INSURANCE REFORM Out-of-pocket payment for medical care Charity hospital care predominates Before 1936:Before Health Insurance

SECOND PERIOD OF HEALTH INSURANCE REFORM Blue Cross is formed in 1936; Blue Shield in 1946 World War II links health benefits to employment National Health Insurance (Truman, Wagner-Murray-Dingell Bill) defeated :Private Employment-based Health Insurance

THIRD PERIOD OF HEALTH INSURANCE REFORM Medicare for those over 65 years Medicaid for the poor U.S. remains the only industrialized nation without National Health Insurance :Limited Government-based Health Insurance

FOURTH PERIOD OF HEALTH INSURANCE REFORM 1990-present For-profit, market-oriented health insurance Experience-rated premiums dominate the market Non-profit Blue Cross plans convert to for-profit companies Expansion of for-profit managed care companies Managed care restricts access and maintains profits

HISTORY OF GOVERNMENT- SPONSORED HEALTH INSURANCE Germany’s Sickness Funds for workers in heavy industry UK’s NHI Act: Funds GPs for employed workers UK’s National Health Service Sweden’s compulsory NHI program Canada’s National Health Act

CONCLUSION #1 Government sponsored Health Insurance is rather young.

WHO PAYS FOR HEALTH CARE? 2004 Billions of dollars % of total

Americans Pay for National Health Insurance but Don’t Receive It Per Capita Health Spending, 1999 OECD and “Paying for National Health Insurance—And Not Getting It” Health Affairs: July / August 2002

CONCLUSION #2 We are more than half way to a government-financed health care system!

FAILURE OF FOR-PROFIT MARKET-BASED REFORM #1 Failure to control costs Costs of premiums to employers went down in early 1990’s as managed care expanded and forced providers to cut fees Premiums started to rise again in late 1990’s Double digit cost increases continue

Private Health Insurance Premium Changes

Profit-Driven Care Begets Fraud

Firms Shift Health Insurance Costs to Workers

COST OF ANNUAL HEALTH INSURANCE PREMIUMS Nation-wide Single Coverage $3,383 Family Coverage $9,950 *Kaiser Family Foundation Survey, 2004

FAILURE OF FOR-PROFIT MARKET-BASED REFORM #2 Failure to increase choice Many employees have no choice Many employers change plans Limited coverage leads to access problems Long waiting times for care

Many with Insurance Lack Choice

Reasons for Changing Health Plans

Waiting Lists in the US

FAILURE OF FOR-PROFIT MARKET-BASED REFORM #3 Failure to increase access 45 million Americans were uninsured in 2003: increasing at 1 million/year since 1990 Why? New low-wage jobs without health insurance; old jobs dropping health insurance

Number of Uninsured Americans (Millions) Source: U.S. Census Bureau

Who Are the Uninsured?

THE MARKET DOESN’T WORK IN HEALTH CARE It treats health care as a commodity by making its goal the selling of more heart bypasses, drugs, etc. It puts money into treatment, not prevention (e.g., flu vaccine) It provides incentives for insurers to avoid covering the sick (risk selection) The market and quality health care are often at odds.

CONCLUSION #3 For-profit, market-based reform has not solved the major problems facing the American health care system: Escalating costs Declining choice Lack of access

MARKET-BASED SOLUTIONS WILL FAIL Vouchers (tax credits) for the purchase of private health insurance Health Savings Accounts High-deductible insurance policies All are more of the same: more spending on employer-based insurance.

CONCLUSION #4 The time has come for a National Health Insurance Program in the United States.

PRINCIPLES OF NATIONAL HEALTH INSURANCE #1 Universal coverage –All citizens –All legal immigrants –Undocumented immigrants –All residents “everybody in, nobody out”

PRINCIPLES OF NATIONAL HEALTH INSURANCE #2 The same coverage for everyone: No means testing; coverage should not depend on your income, employment or age. Coverage that is adequate for everyone, including the poor. Medicaid no longer needed. No private insurance that duplicates public coverage.

PRINCIPLES OF NATIONAL HEALTH INSURANCE #3 Comprehensive coverage –Hospital care –Physician services –Mental health services –Pharmaceutical expenses –Home care –Nursing home care “All medically necessary services”

PRINCIPLES OF NATIONAL HEALTH INSURANCE #4 Progressive financing Premiums are regressive (everyone pays the same) Payroll taxes are flat taxes Income taxes are progressive Taxes earmarked for health care (Trust Fund).

Revenue Sources for a Single Payer Program

PRINCIPLES OF NATIONAL HEALTH INSURANCE #5 Low administrative costs = Single Payer Hundreds of billions in savings in administrative costs by switching from multiple private insurance companies to a single payer.

Private insurers’ High Overhead

Bureaucracy: U.S. vs. Canada, 2003 Money Spent Per Capita on Administrative Costs Source: “Administrative Waste in the U.S. Health Care System,” Woolhandler, Himmelstein & Wolfe Bureaucracy US vs Canada

Hospital Administrative Costs

Physician Office Expenses

Change in Spending in a Single Payer Program

PRINCIPLES OF NATIONAL HEALTH INSURANCE #6 Non-profit delivery system remaining under local, private control. Hospitals not owned by government Doctors practice settings unchanged.

WHAT WOULD A NATIONAL HEALTH PROGRAM LOOK LIKE? Medicare for All Everyone receives a health care card assuring payment for all needed care Complete free choice of doctor and hospital Doctors and hospitals remain independent, negotiate fees and budgets with NHP Local agencies allocate expensive technology Progressive taxes go to Health Care Trust Fund Public agency processes and pays bills

WHY IS NATIONAL HEALTH INSURANCE POSSIBLE IN THE U.S.? Market forces are not addressing the fundamental problems of cost, choice, access and quality. Everyone is affected: the uninsured, the underinsured, and everyone else who is insecurely insured. Employers want to be relieved of the burden of rising health care costs.

How Do We Know It Can Be Done?

Washington Post Poll

PHYSICIANS FOR A NATIONAL HEALTH PROGRAM (PNHP) says: We’ve tried and failed with incremental reforms for 100 years The time has come for single-payer National Health Insurance-an improved Medicare-for- All.

Wouldn’t It Make More Sense To Import Canada’s Health Insurance?

RESOURCES Physicians for a National Health Program (PNHP) PNHP New York Metro Chapter Rekindling Reform HealthCare-NOW NOW.org Citizens Health Care Working Group (US govt)