Though opponents work to poison public opinion, single-payer health system would serve the public best
Mark Dayton
Our nation recently celebrated the 233rd anniversary of some of the most important words ever written: "We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness."
Our country's greatness has been embedded in those founding principles, even as its deepest flaws have resided in their contradictions. It has required hard-fought political battles, a horrible Civil War, and hotly debated laws in order to extend those essential human rights to every American citizen.
While great progress has been made, too many violations of those founding principles continue to cause too many injustices. One such critical debate today is occurring over health care. Do all Americans have unalienable rights to good and affordable health care that life, liberty, and pursuit of happiness require? It is very clear to me that all of us do. Yet some, tragically, would deny it. And too many others care most about making money to provide it.
It is not surprising that in a capitalist economy, the health care sector, which makes up 18 percent of annual Gross Domestic Product — more than $2.3 trillion — creates huge financial stakes in the gains and losses from any changes in the status quo.
Payment system is stretched
The financing of Americans' health care developed during past eras of more modest utilizations. There were limits on what even the best medicine could do to prolong life or enhance its quality. That also limited the costs and profits possible in the health care "industry."
As medical and scientific advances accelerated, more and more could be done to save and prolong lives and to enhance the quality of them. Those advances have made wonderful contributions to longer life expectancies, healthier lives and better treatment of diseases. However, they have stretched the old system of paying for people's health care beyond its breaking point. And Congress is showing once again how hard it is to "reform" that system to provide coverage for all Americans.
The hard truth is that health-care profiteering, led by the insurance and drug industries, makes expanding coverage to include everyone through the existing system almost cost-prohibitive. The administration's favored "required insurance" plan would unfortunately require taxpayers to pay for even more excessive profits by the insurance and pharmaceutical robber barons. It would also require the providers of health-care services, such as hospitals, to make drastic cuts that would worsen, not improve, the quality of many Americans' medical care.
Lobbying against 'public option'
While insurance and pharmaceutical companies cry crocodile tears in public over the exorbitant cost of America's health care, they lobby tenaciously behind the scenes in Washington to protect their lucrative domains. Currently, they have lined up most Republican members of Congress (and some Democrats) against the so-called "public option," which would create a public competitor to private health insurance. The private insurers are terrified that a not-for-profit alternative would expose their excessive profits in the plans they currently offer the American people.
Once again, the industry's friends in Congress are promising to prevent any real competition that would curtail profiteering and actually reduce their constituents' health insurance costs. Many of them voted a few years ago to give $10 billion a year in taxpayers' subsidies to private insurers to help them compete against Medicare. And, incredibly, they also voted to prohibit the federal government's Medicare administrators from negotiating lower prescription-drug prices, thus saddling senior citizens and taxpayers with billions of dollars in additional costs.
These hypocrites claim that the private sector is inherently more efficient than government. Yet, they use public policies and taxpayer subsidies to prevent genuine competition.
The public is ambivalent
Meanwhile, recent surveys show that Americans remain deeply ambivalent about the nation's health-care choices. On the one hand, they are deeply distressed that good health care for themselves and their families is ever more expensive and increasingly unaffordable. However, they are also worried by the health-care industry's threats that any real alternative, especially publicly funded universal health care, would be even worse than the status quo.
Thus, public opinion rests on a knife's edge, while policymakers in Washington wield the knife. The danger is that President Barack Obama's preference for the "required insurance" route, combined with Congress protecting the private insurance monopoly, will increase the financial burdens of health care for even more Americans and add to corporate profits at their expense.
Furthermore, opponents will call this costly compromise "government-run health care" and use it to try to poison public opinion against a national "single-payer" solution.
Care for all, at an optimal cost
With a single-payer system, in which government (meaning all of us) pays the costs of providing necessary health care to people but not unnecessary profits to corporations, we could provide health care for all Americans at an optimal cost.
Such a system could provide more, not fewer, options to patients. If there were shortages of doctors, or nurses, or hospitals, or senior-care services in certain regions, we could direct the resources to correct them. By spending 98 cents out every health-care dollar on people's needs, rather than corporate greed, we would know that we are providing everyone with the best health care we can collectively afford. And we would have fulfilled another crucial promise in the founding principles of this great nation.
Mark Dayton, a Democrat, is a former U.S. senator from Minnesota. He was commissioner of the Department of Energy and Economic Development during the Perpich administration and served as Minnesota's state auditor. He is a candidate for governor in 2010.
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I'm sure that the irony of his situation is not lost on Mr. Dayton, a man whose career was made possible by the capitalist economy he so distrusts.
That being said, he has some valid points. Government's exclusive operation of a health care system is not one of them, however, for reasons too numerous to discuss here in detail.
A model that can work is government mandated health care coverage for every individual, with each plan providing specified minimum benefits, much as is done with auto insurance in most states in this country. Additional coverage can be made available, at additional cost, to those who desire or require it. There are a number of ways to pay for it, none of which are painless. Taxing employer-provided benefits is a start. (I say that as someone whose household taxable income will be hit hard by such a move, but TANSTAAFL - there ain't no such thing as a free lunch.)
A competing government plan may have its advantages, including "keeping the insurers honest". But eliminating all competition through a single payer plan, with premiums determined by government, is a route to disaster if and when that plan fails due to political considerations. We need only look at Social Security to know that Washington will never make the hard choices necessary to keep the plan solvent.
"Currently, they have lined up most Republican members of Congress (and some Democrats) against the so-called "public option," which would create a public competitor to private health insurance."
And as we learned with Freddie Mac and Fannie Mae, public competition with private industry works so well.
Actually, Tom, those quasi-public entities failed mostly by enabling private industry ... not likely to happen with health care.
Also, whatever the FMs' sin, the private sector failure was much bigger.
Atta boy, Dave. Stick to the script!
There's some irony there, Tom. Substantive response?
Most of the people running the health care debate know that the problem isn't really the insurance companies, but for political reasons they make good fall guys.
The problem is health care itself. But you can't blame patients for over "consuming" health care. You can't blame the patient for being genetically predisposed to being ill. You can't vilify a cancer patient for wanting to live. And you can't undermine physicians by publicly stating that they're out for the money.
And of course; health care (along with education, defense spending, and housing) has outpaced inflation.
IMO, right now, the wonks have decided that health care is the vehicle to stimulate aggregate demand. Yeah, its sad because single payer or the public option basically puts a floor underneath already-inflated health care costs. But some see it as the only viable option. You can't re-inflate housing, only simply slow its decline. The consumer is over-leveraged financially, and a debt jubilee/cram-down is not politically feasible.
So we make Americans health consumers, and finance it by passing highly progressive taxes. I’m not saying I agree with it, or that it will work; it's just my analysis.
Minnesota Medical insurance facts:
The 3 main providers of medical insurance in MN, BCBS, Medica and HealthPartners are all nonprofit organizations. They cover 75% of our MN citizens. As non-profit health insurance providers,they are governed by the laws of Minnesota,(MN CARE legislation) and cannot engage in "health care profiteering" as alleged by Mr. Dayton. As a matter of law, they must return approximently 83 cents of every dollar in premium collocted back to the medical providers for claim. With added taxes and mandated reserves, the ins companies are left with about 10% to administer the plans. While this is the law, the companies do far better then this.
Per the latest annual reports, the 3 carriers had admin costs of 7.2%, 7.3% and 5.6%. They paid out claims at rate of nearly 92%! They profited about 1.3%.That is the fact.
Furthermore, according to the Congressional Budget Office, (Report 2008) on avg ins companies spend 16+% on admin, AND the govermment spends nearly 29% on admin for it's medical plans. That is a far cry from the 98% you reference. " By spending 98% of every health care dollar on peoples needs, rather then corporate greed"
The problem is not the insurance companies and their admin costs. No matter how we administer any plan there will be costs to do so. The real problems lie with us and our use/demands on the system and the compensation that the medical community receives. As a support fact, in the US an MD makes on avg $228,000/yr. In Canada, they make between 144K and 122K. In France, $63,000, and much the same across Europe.
I am personally aware of a prominent local orthopedic group and know for fact that the compensation is over $900,000 each and there are 27 docs!
Mr. Dayton, I find it unprofessional of you to promote views and opinions that are not representative of the state of Minnesota's health system. You are exhibiting a lack of true understanding of our laws and regulations. As a candidate for office, I would expect better.
Charlie Prokop
Congratulations to Mark Dayton for telling it like it is with our broken health care system. And double congratulations for endorsing single-payer, the solution that most objective, well-researched observers realize would be most effective for us.
That said, it raises a question. If we need a Governor who gets those things, why not go for the candidate walks the walk as well as talking the talking the talk? One candidate has actually written and is working to pass a single payer bill that would provide comprehensive health care to all Minnesotans for less cost than we now are spending on our broken syste. That is Senator John Marty and his Minnesota Health Plan (mnhealthplan.org). Why not the best?
If the medical insurers in Minnesota are officially non-profit, then why have my premiums doubled in the past six years, even though I've raised my deductible from $1000 to $5000?
What do their CEOs make? What do their board members make? How much do they spend on denying claims? How much do they spend on lobbying against reform?
Above all, what value do they add to medical treatment? It could be argued that they subtract value, since doctors have to either hire full-time people to deal with insurance claims or outsource the job to a billing agency.
Charles Prokop weighs in with facts and cites sources that directly refute Dayton's diatribe, and joel clemmer comes back with "Congratulations to Mark Dayton for telling it like it is.."
Gaaaa!
Folks, this is how we end up with laws that return to bite us in the ass. There are way too many people out here that are willing to cut their noses off to spite their faces, and way too many politicians ready to hand them a knife to do it with.
This is one reason I believe so firmly that the best government is the smallest government. We can't trust others with the life altering decisions the framers so rightly preserved unto WE THE PEOPLE.
Democrat, Republican, Communist, Socialist...whatever. In the end they *all* share a lust for power and in the end they *all* fail to remember who is "the boss".
To Karen:
How much does the CEO of BCBS/Medica make in salary?
Not sure, but I can find out, and will report back. I do know that the three main carriers pay over 90% of the premium dollars we give them back to the medical community. The "exorbortiant" salaries come form the 7% they use to cover administration. In 2008, BCBS collected $8.8 billion in revenue and paid out $8.08 in claims. That is 92%! Medica collected $3.2 billion and paid out nearly 3 billion. Health Partners collected $1.63 billion and paid out $1.47 billion in claims, a rate of over 90%. These figures are in the annual reports filed with the State of MN. To complain about the compensation of a CEO of a major employer as some do really is just screaming in the wind. If the CEO makes $2,000,000 a year, that amounts to about $1 per year from each of the covered individuals. 1 measly dollar! If we assume that the goverment can provide us a single payer plan, at NO admin costs, our costs go down about 7%. Is that true reform? Does that truly make health care more affordable?
I am not defending the ins industry. In MN, we are a model for a well run system, but it can be improved. Bashing ins companies will not bring down the cost of the doctor visit, the cost of the knee replacement, the cost of the birthing, the cost of..... Slamming the admin costs will not decrease smoking, cancer, heart attacks, etc.. Nor will it reduce the # of MRI's, or lower drug prices
To make health care affordable, we need to address the cost of health care.
Quick example. I am 54 yrs young. Had the "over 50" colonscopy. The charge? $1,560. The clinic I went to does 80 to 100 of these a week, and they have 4 clinics. Let's do the math. 4 clinics x 90 proceedures x $1,500 x 52 weeks. This group takes in $28 million dollars a year!! They are part of the 92% These kind of prices are what drives your premium up. We keep using all the health care we can get, and the medical community keeps getting paid.
In other countries, the prices are set by the goverment. Are we ready for that? Would the medical community accept a 30%, 40%, 50% cut in pay! You do not hear that from the medical professions, and I don't blame them. I think they should get paid well.
My original posting took Mr. Dayton to task for his inflammatory rhetoric and lack of true facts concerning MN health ins legislation. I still stand by my point.
http://www.pbs.org/moyers/journal/07242009/transcript3.html
BILL MOYERS: But the President's already stepped on booby traps of his own making, and minefields laid by his own party, especially when the Congressional Budget Office reported that his reforms, instead of controlling costs, would send the national debt further into the stratosphere.
Meanwhile, supporters who want to scrap the present system for fundamental change are staring glumly through the fog of war at a battlefield in total disarray. They fear that in the White House's desire to get a bill -- any bill -- passed by Congress, it will have been so compromised, so bent to favor the big interests, that it will be less Waterloo than water down, a steady diluting of what they'd hoped for, or America needs.
The big drug companies are already so pleased with what they've been promised that they've brought back Harry and Louise -- the make-believe TV couple who helped take down the Clinton health care plan.
LOUISE: Because everyday more and more people are finding out that they can't afford healthcare.
BILL MOYERS: But this time they're in favor of reform...
LOUISE: Coverage people can afford. Coverage they can get...
BILL MOYERS: Could it be that Harry and Louise are happier because this time, they're in on the deal?
Bottom Line: Liberal Lapdogs Klobluchar, Franken, Ellison, McCollum will vote for Obamacare, and Harry and Louise will laugh all the the Way to the Bank.
The 50 largest HMO companies control 60% of the managed health-care market. The top five of these, according to Fortune, for 2009, are UnitedHealthGroup ($81 billion in revenue); Wellpoint ($61 billion); Aetna ($31 billion); Humana ($29 billion); and Cigna ($19 billion). Behind these companies stand echelons of the very same financial institutions now stealing tax money through the TARP and other bailout swindles.
"Managing" care, in order to make profits takes vast layers of personnel, time-consuming paperwork, and, of course, mega-salaries for top officials. There has been a sharp increase in the number of administrators in U.S. health care, contrasted with the number of registered nurses, from 1970 to 1995. The conservative estimate is that 30% of private "managed" health-care costs are for administration, and it may be as high as 50%. (Michelle Obama made $312,000 as "Vice President of Community Affairs" for the University of Chicago Medical Center - this is typical of the despicable waste of money in our medical system.)
In contrast, the administrative costs for the Federal Medicare program run at 2%. A 1990s Government Accountability Office study found that the United States could fund a single-payer national health program to cover all uninsured Americans simply with the savings in administrative costs.
In the 1990s, dozens of states passed laws against notorious HMO practices, because Washington refused to protect the public interest. States took rearguard actions to outlaw "drive-by" childbirth, and prohibit HMOs from rewarding doctors for denying expensive treatments, and so forth.
Despite this, Washington consistently gave sweetheart deals to the financial crowd behind the HMOs, including entry into Medicare and Medicaid programs.
Abolish ALL HMO's!
One reason why medical prices are so high is that each insurance company sets its reimbursement at some percentage of "list price." The colonoscopy may cost $1560 cash, but depending no the patient's insurance company, the clinic may receive anywhere from $1200 to $500 for it. That's why the uninsured pay more and that is why medical providers, unike veterinarians and dentists, cannot tell you the cost of something upfront.
Also, even at a 30-40% reduction in income, I doubt that most doctors would be living in homeless camps. This country could defuse some of their sense of entitlement by making medical school tuition free. In the end, it would cost less, because now, doctors excuse their prices by saying that they have to pay hundreds of thousands of dollars in loans.
Here are my comments on the subject, published in the Star Tribune:
http://www.startribune.com/local/south/50504927.html
Mark Dayton is right, but he doesn't fully explain why. The amount of money our government already spends on health care in the United States is greater than the amount spent in all other industrialized nations, most of which provide single payer healthcare. This is because we have 26 times as many administrative professionals in health care as we did in 1970. That's due to waste and profit motives both at the insurance companies and in hospital billing departments.
Also, even though we spend the most on health care, we receive the least in the industrialized world... the WHO ranks our healthcare statistics below even Cuba, which suffered under a Communist economy and blockades.
In about 1966 Medicare was instituted. At that time, we had hospital insurance available. In the early 1970's Group Health was formed, the beginning of the rest. They offered unlimited (esentially) care, usually covered by the employers. I remember then that thre was a big article in a major magazine. The cost for a family to pay for it themselves was as much or more than we were paying for a house payment at the time. Then we were covered for it by my ex-husband's employer.
About forty years later, most people are expecting that type of coverage.
As my mother said, when she was diagnosed with Leukemia in late 1983, (even though she was still totally covered by Medicare though they had just instituted the DRG's,) she said, "I can't afford this." That has stuck with me. She passed away about six weeks later in the hospital, about the same amount of time given her if she had not had the doctor recommended chemo treatments that just made her last weeks miserable.
We have been led to demand and expect health care that is way beyong our individual ability to pay for it. And various medical entities have convinced us we need all these advances in medicine and drugs, that we can not justify at our income levels.
It would seem that the "fat cats" want us to willingly pay with everything we own and then some for this great care, and further mandate that we do. No other advanced nation allows their people to loose everything they own due to outstanding medical bills.
We are paying, four years later and for some time to come for the fact that the deer that broadsided our trike did not own any assets that the powers that be could take from him to pay my bills. So much for Insurance company written "no-fault' insurance.
I think we can all agree that our current system of healthcare and the delivery of same is broken. There are so many fingers pointing at fault that I don't know how we will ever be able to figure out where the actual truth of the matter is. Rather than changing everything we have right now, I would like to propose a suggestion. There are numerous studies available showing what a huge benefit a health care plan and the population it serves receives when the so-called "alternative" or "optional" providers are fully utilized. These providers include the chiropractors (of which I am one), the acupuncturists, the massage therapists, the naturopaths, the homeopaths, etc. The problem with this is that most of the insurance companies don't currently recognize all these providers, won't cover all these providers, and/or want to grossly limit what we are allowed to do or even charge for. The AIM studies from IL and CA are particularly telling. They both demonstrate huge savings in healthcare costs, decreased hospital admissions, decreased numbers of hospital stay days, decreased use of prescription medications. They even found less prescription drugs on the streets in the areas of study. There is often the charge that "big things" will be missed if people start using the alternative doctors as their primary providers. However, the studies also show that this is simply not the case.
So here is my suggestion for reform. For one calender year, cover all the alternative providers. Allow the chiropractors to be the primary care providers that we are trained to be. Turn us loose and let us show you what we can do. If, in 6 months, we have more than proven our point, then we would like to be paid more appropriately for what we do. Which means, I would like to get paid more than the $13.00 a certain insurer in this state currently pays me for an adjustment.
To #17
My past two chiropractors have been my primary care providers - It is where i go first and the most. It is a matter of knowing what the limitations are of who can provide what. Both could tell you, that I talk alot sometimes, when no one else is waiting, and we discuss a wide range of 'healthy living issues, and new things we have learned. I can afford to pay them as I go, and they keep me 'staight with the world'. Although it is much better now, the alternative care providers should have a major place in our system.
3 points
To Karen: #14. $1560 was the discounted price.
To Glenn: # 13 according to the CBO, Congressional Budget Office, the current admin cost of ins companies is 16%, the current admin cost of goverment program is 29%!
To all: #13, The Federal Govt was a funding and supportive participant in the formation of HMO's. Strange but true.
People: Agree on this. There will be some admin costs. 10 to 12% is a good # to start with. At that rate, or even a lower 5%, the major cost is still what the medical profession is paid, and how they get paid. i.e. production vs results. Only when we change this, and rein in our demands for all the care we want will the cost come down. Ins companies or the goverment. it will not matter. The biggest cost buy far is cost of the care.
Answer me this:
Define 'quality, affordable medical care'
Most Americans (77%) are pleased with the care they receive. Our MD's are amoung the best in the world. we have very good care and can access it quite easily.
Affordable? What is "affordable"
So define for me "access to quality, affordable medical care"
Charlie
Charlie Prokop
It takes someone who has enough money of their own to offer up a single payer suggestion in this political age. No surprise Dayton is the person to do so, but as stated, it is ironic.
What will doctors do if they are paid less? Lest we forget- they need to employ multiple people just to haggle with insurance companies at present. Any reduction in revenues under a single payer model would be offset by reduction in "middle men" staffing needs. Also- the cost of malpractice insurance is outrageous at present. Any reform of health insurance should provide an incentive to doctors to practice by managing this expense. If these two expenses were reformed for medical practioners, I have a feeling they would make the same amount in the end.
The fears of people not being covered for their illness under single payer is legit. However, if a means existed to "supplement" one's coverage in a tiered insurance policy structure like we have with auto insurance industry, one could get coverage "above and beyond" that of basic preventative care. We all pay already for the uninsured people. It's built into our premiums. That's why it keeps going up every year. "Administrative Costs" if they included the uninsured, would be much higher than this 5-10% pie in the sky number being bantered about. Policies put in place for Medicare by the Bush administration expressly prohibited cost saving via a large buying pool thus insuring profits for big pharma who in turn pad the pockets of legislators. I find it laughable to listen to people who defend the insurance industry as it functions at present. Quality of care is an afterthought, and the current MO is to deny as much as they can to insure profits. "Non-profitable" people are dumped into the public sector (which at present accounts for 46% of American health insurance versus 70% for Canada's single payer model.) We aren't THAT far away from Canada's plan, except that big industry is battling to insure their profits continue. More money and less coverage is something we've all experienced. Some basic preventative care would go a long way to stop people from avoiding going to the doctor until they show up at the ER with no insurance. If our present system is so "great," why are there 50+ million uninsured in this nation?
Follow the money. Those against the single payer model are those who benefit the most financially at present. -The politicians, the CEO's, the Drug Companies. Board members now decide what is covered based on maximizing profits for shareholders. When you think about that, it is disgusting to place 'ROI' on human lives. Medicare is broken because it was set up to profit big business. HMO's continually give people fewer and fewer choices as to the providers they can see. Single payer would insure that quality of care would no longer be an afterthought behind corporate profits.