Speed Up on Single Payer

The United States, the wealthiest nation on the planet, remains the only industrialized country that fails to provide health care for everyone. Our dysfunctional health-care system is bankrupting families and killing people by failing to provide needed care.

Contrary to the headline on J. Peter Nixon’s November 21, 2017, article advising Democrats to “Slow Down on Single Payer,” we ought to be ashamed at the mere tinkering that is being done to our health-care system. Slowing down in our response to the health-care crisis is the worst thing we can do. Nixon correctly points out that a single health plan that covers all Americans has been a goal of progressives since the 1930s, yet he warns about pushing too fast. I share his concern about the strength of the political opposition, but that does not justify inaction when lives are at stake. And lives are at stake. Occasionally these tragedies catch the public eye. But there is virtually no public awareness that, week in and week out, people die from a lack of access to medical care. Preventing those senseless tragedies and making sure everyone has access to health care should be our first concern.

In my thirty years in the Minnesota Senate, I have been fighting Republican efforts to take away access to health care. However, I am also frustrated at Democratic politicians who are unwilling to propose real solutions. Yes, the Affordable Care Act expanded insurance coverage for millions and a “public option” might give better coverage to some. These Democratic proposals are far better than Republican efforts to eviscerate Medicaid or weaken Medicare. But they fail to meet the essential goal of providing care for all. Instead of devoting our energy to dismissing the idea of a more rational health-care system as “extreme and unrealistic,” as Nixon does, let’s begin by examining our goals. Here are some basic principles that any good health-care system must meet:

• Cover everyone.
• Cover all medical needs, including dental, vision, hearing, mental health, prescriptions, long-term care, alcohol and drug treatment.
• Let patients choose their doctors and hospitals.
• Reduce costs by fair pricing and cutting administration, not by denying care.
• Affordable to all (premiums based on income).
• Focus on preventive care to improve health.
• Ensure sufficient providers to avoid waiting lines.
• Maintain our nation’s leadership in medical care, research, and technology.
• Pay providers in a fair and timely manner.
• Simple, understandable funding, and payment system.

Each of these principles is important and must be met. Republican “repeal and replace” attempts fail to meet any of these goals. But neither do Democratic attempts to plug gaps in our broken insurance system. These gaps will not be closed until we replace private health insurance with health care for all. In Minnesota, we have proposed a Minnesota Health Plan to cover everyone. The MHP would be bound to these principles. It is a health plan focused on well-being and public health, not profits or politics. Although I would welcome passage of such legislation at the federal level, the urgency of the crisis calls for a push at both state and federal levels. In Canada, passage of universal health care in Saskatchewan led to universal coverage across the country within a few years.

A commonsense system like the MHP would prevent the problems that Nixon is concerned about, such as waiting lines for care. The comprehensive benefits, along with the elimination of copayments and deductibles, mean that even people with “gold” or “platinum” insurance plans would be better off under MHP. Equally important, it is patient-centered. Patients choose their providers, and medical decisions are made by patients and their doctors, not by government or insurance companies. Payments under our MHP model would be made through a “single-payer” system (roughly analogous to Medicare). Economic analysis of single-payer proposals in the United States and the success of such systems in other countries show that universal coverage is actually less expensive than our current patchwork system. 

Nixon cites a dubious analysis of Senator Bernie Sanders’s health proposal that claims it would cost $32 trillion over ten years. But continuing to pay for that care in the current irrational, bureaucratic manner will cost far more than that. 

Our state proposal—which could be replicated in other states—would be financed from the same sources as our current system:

More than half of all health-care spending is currently paid by the state and federal government, and we would continue to use those dollars.

Individuals and families would continue to pay premiums, but instead of paying them to Blue Cross or some other insurer, they would be paid to the Minnesota Health Plan. Those payments would replace not only current premiums, but also the copays, the deductibles, and out-of-pocket expenses for dental and other care that currently bankrupt many. Also, instead of premiums based on age or medical condition, MHP premiums would be based on ability to pay—most people would pay much less, though some would pay more—and it would be affordable to all.

Instead of an employer mandate, and instead of the annual burden of shopping for an insurance plan, employers would pay a payroll tax. And they wouldn’t have to worry that hiring an older worker will drive up their premiums.

To briefly explain why an efficient universal health-care system is less expensive than our current dysfunctional mess, look at two of the biggest cost drivers in medicine. First, our current system overpays because of completely irrational pricing. As reported in the New York Times, a national comparison of hospitals showed pricing for the simplest form of knee replacement ranged from about $3,400 to about $55,800. Hospitals charging the low-end prices are not undercharging; they set prices sufficient to cover their costs. Those radical price disparities—unrelated to costs or benefits—show that some purchasers of health care are being charged as much as ten to fifteen times what is reasonable. A logical single-payer system negotiates prices, resulting in rational costs.  

Second, our current system is bloated with enormous administrative waste. To understand the significance of the administrative savings under single payer, consider an analogy. If public schools were funded the way we fund hospitals, each teacher would spend time each day calculating the time and resources they devote to each student. The school would allocate janitorial costs, facility costs, and administrative overhead to students. The school would bill each family and their “education insurance plans.” Those insurance plans would pay for different services at different rates, with different copayments. Because education is expensive, employers would offer “school coverage” for their employees’ children. Those without employer coverage would shop for school insurance on the individual market. Because of the high cost of individual policies, the government would step in to subsidize coverage. Even so, not all families would have “education coverage” and many families would struggle to pay. As a result, schools would spend additional resources to collect payments and cost-shift unpaid expenses to other students. Setting aside additional complications such as teachers or schools being “out-of-network,” this would still be a costly, bureaucratic nightmare. It would harm education outcomes by shifting resources from teaching to billing and insurance. Financially, it would cost a fortune to pay for the billing clerks, accountants, and price negotiators for the schools, plus all the operating costs for the “school insurance” companies. Eliminating this billing and insurance bureaucracy from our health-care system would result in huge savings.

Martin Luther King Jr. said that “of all the forms of inequality, injustice in health care is the most shocking and inhumane.” For those who choose to address that moral imperative, Nixon’s alternatives are not acceptable. This is not rocket science. Virtually every other industrialized country provides health care to all their people, and most do it for less than half as much as the United States, usually with better outcomes. Addressing this injustice is not “extreme and unrealistic.” This is a cause worth fighting for, and a cause we will win.