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Home > Social Issues
Single-Payer Health Insurance
by Bob Powell, 10/25/09
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Summary: Privatized health insurance without universal coverage doesn't work. Why? First, it's fatally flawed because of adverse selection. Added to that are a bunch of other reasons. When privatized there's less U.S. innovation, higher costs, personal bankruptcy, death, corporations between patients and doctors, obscene CEO pay, and high overhead & profit. Because the new law keeps private insurance companies, it isn't what we need, but it is Constitutional.

Jump to Single-Payer Health Insurance article below


Added 1/7/17

Deaths by medical mistakes hit records By Erin McCann, Healthcare IT News, 7/18/14
The way IT is designed remains part of the problem

It's a chilling reality - one often overlooked in annual mortality statistics: Preventable medical errors persist as the No. 3 killer in the U.S. - third only to heart disease and cancer - claiming the lives of some 400,000 people each year. At a Senate hearing Thursday, patient safety officials put their best ideas forward on how to solve the crisis, with IT often at the center of discussions.

Hearing members, who spoke before the Subcommittee on Primary Health and Aging, not only underscored the devastating loss of human life - more than 1,000 people each day - but also called attention to the fact that these medical errors cost the nation a colossal $1 trillion each year.

"The tragedy that we're talking about here (is) deaths taking place that should not be taking place," said subcommittee Chair Sen. Bernie Sanders, I-Vt., in his opening remarks. ...

"Why is it when a death happens one at time, silently, it warrants less attention than when deaths happen in groups of five or 10?" he asked. "What these numbers say is that every day, a 747, two of them are crashing. Every two months, 9-11 is occurring...we would not tolerate that degree of preventable harm in any other forum." ...

Donald Trump accused Hillary Clinton of wanting to turn America’s health system into a "catastrophic" single-payer one like Canada’s.

"You've noticed," he said, "the Canadians, when they need a big operation, they come into the United States in many cases, because their system is so slow."

This idea is often floated by critics of universal health care on both sides of the border.

But the best-available research shows it’s simply not true. Canadians are not fleeing en masse to the US seeking medical care.

Added 10/15/16

No, Trump, Canadians do not flee en masse for US health care by Julia Belluz, Vox, 10/9/16

... Donald Trump accused Hillary Clinton of wanting to turn America's health system into a "catastrophic" single-payer one like Canada's.

"You've noticed," he said, "the Canadians, when they need a big operation, they come into the United States in many cases, because their system is so slow."

This idea is often floated by critics of universal health care on both sides of the border.

But the best-available research shows it's simply not true. Canadians are not fleeing en masse to the US seeking medical care. ...

So, the Health Affairs researchers found no evidence for the idea that Canadians are fleeing their health system, and concluded that it's a "persistent myth."

One salient reason they offer: Even if Canadians wanted to escape their system, most probably could not afford US medical care. "Prices for U.S. health care services are extraordinarily high, compared with those in all other countries, and this financial barrier is magnified by the extraordinary strength of the U.S. dollar. Private insurance for elective services, being subject to very strong adverse selection, is, not surprisingly, nonexistent."

As the lead author on the paper, University of Michigan's Steven Katz, told Vox, "A hip replacement [in the US] would cost nearly $100,000 out of pocket plus travel and living expenses." Waiting get one for free in Canada is easy compared to that, he added. "Canadians are happier with their system than we are and life expectancy and other health indicators are higher." ...

Added 9/24/16

More than 7,100 deaths likely from states' rejection of Medicaid expansion: Health Affairs BlogPhysicians for a National Health Program, 1/30/14
Harvard and CUNY researchers say death toll from 25-state ‘opt-out' may be as high as 17,100 annually; hundreds of thousands more will be harmed by depression, untreated diabetes, and skipping mammograms and pap smears

Added 7/5/16:

'We need fundamental changes': US doctors call for universal healthcare by Olga Oksman, The Guardian, 5/5/16
More than 2,000 physicians want a single-payer system similar to Canada's and say the Affordable Care Act didn't go far enough

... According to the proposal released Thursday, the Affordable Care Act did not go far enough in removing barriers to healthcare access. The physicians' bold plan calls for implementing a single-payer system similar to Canada's, called the National Health Program, that would guarantee all residents healthcare. ...

Added 5/5/16:

Corporatist Democrats oppose Single Payer, making it clear that the Democratic Party is far from liberal.

Christ driving money-changers from the Temple, Rembrant van Rijn, 1626
Prominent Democratic Consultants Sign Up to Defeat Single Payer in Colorado by Lee Fang, The Intercept, 5/3/16

INFLUENTIAL DEMOCRATIC CONSULTANTS, some of whom work for the Super PACs backing Hillary Clinton, have signed up to fight a bold initiative to create a state-based single-payer system in Colorado, according to a state filing posted Monday.

Coloradans for Coloradans, an ad-hoc group opposing single payer in Colorado, revealed that it raised $1 million over the first five months of this year. The group was formed to defeat Amendment 69, the ballot measure before voters this year that would change the Colorado constitution and permit a system that would automatically cover every state resident’s health care. ...

Added 2/3/16:

OMG, Trump saying what Sanders is saying ... at a time when Hillary Clinton is essentially saying, "No, we can't." That Trump is saying things like this is why she would have a difficult time beating him in the general election.

Donald Trump on Obamacare – ‘Repeal it and Replace it with Government Funded Universal Healthcare’ By Onan Coca 1/22/16

Donald Trump: “Everybody’s got to be covered. This is an un-Republican thing for me to say because a lot of times they say, ‘No, no, the lower 25 percent that can’t afford private.’ But…”

Scott Pelley: “Universal Healthcare?”

Donald Trump:  “I am going to take care of everybody. I don’t care if it costs me votes or not. Everybody’s going to be taken care of much better than they’re taken care of now.”

Scott Pelley: “But who’s going to pay for it?”

Donald Trump: “The government’s gonna pay for it. But we’re going to save so much money on the other side!”


Added 8/26/15: On Medicare overhead vs private insurance overhead

Administrative costs of Medicare by Paul Krugman, 7/6/09

Whenever you encounter “research” from the Heritage Foundation, you always have to bear in mind that Heritage isn’t really a think tank; it’s a propaganda shop. Everything it says is automatically suspect.

Greg Mankiw forgets this rule, and approvingly (yes, it’s obvious he approves -no wiggling out) links to a recent Heritage attempt to explain away Medicare’s low administrative costs:

[see the link]

Well, whaddya know — this is an old argument, and has been thoroughly refuted. Jacob Hacker:

[see the link]

... These administrative spending numbers have been challenged on the grounds that they exclude some aspects of Medicare’s administrative costs, such as the expenses of collecting Medicare premiums and payroll taxes, and because Medicare’s larger average claims because of its older enrollees make its administrative costs look smaller relative to private plan costs than they really are.

However, the Congressional Budget Office (CBO) has found that administrative costs under the public Medicare plan are less than 2 percent of expenditures, compared with approximately 11 percent of spending by private plans under Medicare Advantage. This is a near perfect “apples to apples” comparison of administrative costs, because the public Medicare plan and Medicare Advantage plans are operating under similar rules and treating the same population.

(And even these numbers may unduly favor private plans: A recent General Accounting Office report found that in 2006 Medicare Advantage plans spent 83.3 percent of their revenue on medical expenses, with 10.1 percent going to non-medical expenses and 6.6 percent to profits—a 16.7 percent administrative share.) ...

You should always remember:

1. Don’t believe anything Heritage says.

2. If you find what Heritage is saying plausible, remember rule 1.

What are Medicare’s true administrative costs? 2/19/13

... In his article, Kip Sullivan has finally laid to rest the distortions and obfuscations of those who contend that Medicare’s administrative costs are much higher than commonly cited percentages – 1.4 percent in 2011. Not only has he shown that the other government costs that allegedly were left out are actually included, but he has also shown that the other official measure of Medicare’s administrative costs shows how much more it is costing us to fund the administrative excesses of the private Medicare Advantage and Part D drug programs – an egregiously wasteful use of our Medicare funds.

Setting the record straight on Medicare’s overhead costs 2/20/13

Traditional Medicare’s administrative costs were only 1% in 2010, but if you roll in the private insurers’ Medicare plans, that figure jumps to 6%, says new study

Medicare Is More Efficient Than Private Insurance by Diane Archer 9/20/11

Points documented:


  • Medicare Has Controlled Costs Better Than Private Insurance
  • Medicare Has Lower Administrative Costs Than Private Plans
  • So-called “competition” in the private health care market has driven costs up
  • Medicare Is Publicly Accountable, Private Plans Are Not


Added 3/13/14 Link to Washington Post Fact Check & Video:

Anti-Obamacare Ad From Koch-Backed 'Americans For Prosperity' Attacking Democratic Senate Candidate Rep. Gary Peters (D-MICH.) Gets Downgraded To Three Pinocchios As More Facts Are Checked


My Letter to CSIndy 4/26/10: What century?

On how it's now the 21st century, not Jefferson's 18th. We should all know by now that the adverse selection dynamic means the only way for government to promote the "general Welfare" is to mandate universal coverage and tax for that purpose.


Added 3/9/10: Universal Health Insurance & the Constitution So. Is it constitutional or not? Yes, it is. And here's why.

Related to health insurance, take into account these excerpts from the U.S. Constitution:


We the People of the United States, in Order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defence, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity, do ordain and establish this Constitution for the United States of America.

Article I - The Legislative Branch; Section 8 - Powers of Congress

The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States

Welfare means the "health, happiness, or prosperity; well-being" of "We the People". Given that, because of the "adverse selection" dynamic described below, health insurance that covers everyone is necessary to prevent system failure. Therefore, it's necessary to "provide for the ... general Welfare of the United States".

Note that "Union", "Justice", "Tranquility", & "Welfare" are capitalized to emphasize their importance. But despite the perhaps more obvious need for defense, "defense" was not capitalized.

The current health insurance bill is not even close to a "socialist" bill. It's a bill that's very much like Republicans have proposed AND the blueprint for it was written by a former insurance company executive. So naturally, it still uses private insurers. For it to be "socialist", the government would have to hire all the doctors and own all the hospitals ... as in the "socialist" military and VA.

Beyond that, even a single-payer universal health insurance bill wouldn't be "socialist" except for handling of insurance claims, which would take the profit motive that insurance corporations have to deny coverage & claims out of the system. Universal coverage would be pragmatic, rather than simply socialist, because it prevents system failure, just as our privatized system has been failing because of the "adverse selection" dynamic. All other industrialized countries have recognized this.

Nowhere in the U.S. Constitution does it mention capitalism or socialism, which are economic systems. The Constitution is a document that defines our political system, which is a different thing entirely.

The current bill continues to depend on private insurance corporations was passed by a majority in Congress. This is a problem for Republicans because they have never believed in democracy as noted at The Conservative Mind.


Added 2/15/10:
The Daily Show on the nightmare that is universal health insurance in Hawaii:

The Apparent Trap 2/11/10. Republicans want Hawaiians to know that their 40 years of government-run health care will not work.

"With only 4 decades of testing America simply cannot afford to join this dangerous experiment."

Republicans are leary about attending a televised summit on healthcare reform, thinking it might be an apparent trap. In comments they show their obvious ignorance of the fact that what they fear is the reality of what's been in Hawaii for 40 years.

Added 12/3/09: New study finds 45,000 deaths annually linked to lack of health coverage, 9/17/09, David Cecere, Cambridge Health Alliance
Uninsured, working-age Americans have 40 percent higher death risk than privately insured counterparts

Nearly 45,000 annual deaths are associated with lack of health insurance, according to a new study published online today by the American Journal of Public Health. That figure is about two and a half times higher than an estimate from the Institute of Medicine (IOM) in 2002.

The study, conducted at Harvard Medical School and Cambridge Health Alliance, found that uninsured, working-age Americans have a 40 percent higher risk of death than their privately insured counterparts, up from a 25 percent excess death rate found in 1993. ...

Harvard's study comports with studies that report similar findings. Dying for Coverage: New State Reports from Families USA, March – April  2008.

David Frum, a "conservative", refused to acknowledge the Harvard University study when debating David Sirota on CNN on the Afghanistan occupation and whether continuing it would save as many lives as would all Americans having health insurance. Don't like a result? Ignore it.

Comment 2/14/10: I've been thinking about this and have realized that not implementing single-payer health insurance amounts to mass murder.

Added 10/30/09: What Insurance Companies Love: Money! Money! Money!, Influence!, Bogus Reports!, Employees Who Figure Out New Ways To Deny People Coverage!, Market Domination!

Single-Payer Health Insurance article

Summary: Privatized health insurance without universal coverage doesn't work. Why? First, it's fatally flawed because of adverse selection. Added to that are a bunch of other reasons. When privatized there's less U.S. innovation, higher costs, personal bankruptcy, death, corporations between patients and doctors, obscene CEO pay, and high overhead & profit. Because the new law keeps private insurance companies, it isn't what we need, but it is Constitutional.

Privatized health insurance doesn't work. Why is that?

Adverse Selection Stock & Flow Diagram: The healthiest drop insurance as they judge the cost isn't worth it relative to their income ... they take the risk of bankruptcy. With those less healthy remaining insured, costs rise, which results in continual dropouts, cost increases, and increasing numbers of uninsured. Exactly what's happened. The ACA was designed to rescue the health insurance industry's failed business model. Instead, the parasitic industry should have been eliminated.
First, without universal coverage it's fatally flawed because of adverse selection. Added to that fundamental flaw, it makes our economy less competitive, discourages U.S. innovation, costs the U.S. twice as much per capita, puts low-level corporate bureaucrats between patients and doctors, has obscene CEO pay, misrepresents profits & exorbitant overhead costs, bankrupts Americans, and leads to the deaths of 100,000 persons/year because the U.S. system isn't as good as that of France. See the details below.

A "public option" is a good first step [that was rejected by "conservatives"], but it doesn't go far enough. The only workable approach is a single-payer health insurance system ... a "Medicare for All" system.

Here's an important point for those who have an irrational fear of collective solutions (gasp, socialism). It's not simply socialist to implement a single-payer health insurance system that works and scrap a privatized health insurance system that does not work. It's pragmatic. See Health Care Dynamics.

The California Nurses Association understands it's a useless industry:

"Our legislators should ... stop coddling a useless industry whose sole function is to make enormous profits from the pain and suffering of patients while providing little in return," said DeMoro.
Also see: US Healthcare History: Our Very Own Killing Fields

Top 20 Lobby Expenditures Equals Over 1 Billion Dollars in the Last 2 1/2 Years 8/5/09. Enormous sums have been spent on health reform lobbying to influence legislation to be in their financial favor in order that the public not know why single payer health insurance is necessary. Excerpt:

That’s simply a lot of money. And the phrase “Return on Investment” immediately comes to mind. Presumably there is one, or why would they persist? One of the finer things that one can say about someone is that they “Speak Truth to Power.” Speaking money, however,  seems the preferred means of communication.

From Harpers' Index, Sept 09:
Percentage change since 2002 in average premiums paid to large U.S. health-insurance companies: +87
Percentage change in profits of the top ten insurance companies: +428
Source: Health Care for America Now

Why Single-Payer Health Insurance? Because privatized health insurance without a mandate is dysfunctional. Worse, it does not even work; it cannot! With private insurers, even with a mandate, it's a bloated, inefficient, and parasitic system run for profit by psychopathic corporations that don't give a damn about your health.

It ...

... Does not work because of adverse selection. Akerlof, Spence, & Stiglitz got the 2001 Nobel Prize for understanding the effects of adverse selection on markets with asymmetric information, but the impact of this still hasn't found its way into "conservative" minds or the Republican Party. This is natural law; society and government should take into account natural law (... so-called "conservatives" say this all the time ... but it doesn't apply for them when it does not comport with their ideology or with the interests of their corporate masters).

The Adverse Selection Stock & Flow diagram: Cost per person increases as the the healthiest drop their insurance because they don't think it's worth the cost -- or as they simply can no longer afford it. And then more of the healthiest drop insurance as Cost increases. It's this reinforcing feedback dynamic that's been fundamentally responsible for the increasing number of uninsured (decreasing the number of insured).

... Makes our Economy less competitive: The U.S. competes with countries with single payer, which means their businesses do not bear the cost of health insurance. This makes U.S. companies uncompetitive.

... Discourages innovation: Entrepreneurs are afraid to change or leave their jobs for fear their families won't get insurance or will be denied care for "pre-existing conditions". What? Discourages innovation!? This has got to be a major shock to "conservatives" who believe privatizing always increases innovation.

Hey, it wasn't easy to get paid that much ... lots of people had to suffer and die to make it happen.

... Costs the U.S. twice as much per capita: The U.S. spends twice as much per-capita, but is last in health care system performance among a group of six countries including Australia, Canada, Germany, New Zealand and the United Kingdom.
America's Health Rankings Comparison to Other Countries

... Bankrupts Americans: Harvard Study 2/3/05: "Illness and medical bills caused half of the 1,458,000 personal bankruptcies in 2001 ... Surprisingly, most of those bankrupted by illness had health insurance. More than three-quarters were insured at the start of the bankrupting illness." Article: Illness, medical bills linked to nearly two-thirds of bankruptcies

... Leads to the deaths of people without health insurance: A Harvard study estimated that 45,000 Americans die each year because they lack access to health insurance; uninsured Americans are 40 percent more likely to die than Americans who are insured. Harvard research study
Republican Sen. Kyl Not Sure People Die From Lack of Health Insurance

... Has higher Death Outcomes: The U.S. would have 101,000 fewer deaths if U.S. care were as good as that in France, Japan and Australia ... France, of all places!
France best, US worst in preventable death ranking 1/8/08

... Puts low-level corporate bureaucrats between patients and doctors: They charge high premiums to determine who not to cover, what treatments to not cover, and how to terminate coverage for those who get sick.

... Has Obscene CEO pay: For example, UnitedHealth's William McGuire's $1.6 billion stock options ... how many had to die to pay CEOs such exorbitant amounts?
Examples: UnitedHealth's William McGuire's $1.6 billion stock options, current UnitedHealth CEO Stephen J. Hemsley's $744 million in unexercised stock options by Peter Dreier 10/6/09, more examples at The Health Insurance Mafia Deserves a Good Screwing by Bob Cesca 6/10/09.

... Misrepresents profits & exorbitant overhead costs: America's Health Insurance Plans (AHIP) -- the lobbying arm of the insurance industry -- maintains that "for every dollar spent on health care in America, approximately 1 penny goes to health plans' profits."

This is misleading beyond belief because health insurance provides no care, no research, no medicine; therefore profits should be compared to their revenue only, not total health care spending. In fact, the Health Insurance Industry Fudges Data To Downplay Its Astronomical Profits.

Health insurance companies only transfer money from those who need care to those who provide it ... all the time spending major percentages of revenue, not on health care, but on administrative or marketing expenses, taxes and profits. In fact money spent on health care is deemed to be "medical losses." The Medical loss ratio (MLR) is

... the fraction of revenue from a plan's premiums that goes to pay for medical services. The portion of health plan revenue that does not cover administrative or marketing expenses, taxes and profits.

In other words, spending on the insured is a LOSS to private insurance companies, not an investment in your health.

According to PricewaterhouseCoopers, "In 2007, the MLRs for national publicly traded health plans were estimated to be 81% ..." And a June 2008 report by Families USA found that "insurers in the individual market sometimes maintain medical loss ratios of only 60%, retaining 40% of premium dollars for administration, marketing and profit." That's 19 to 40 percent of insurance dollars NOT going to help pay the medical bills of the insured.

Actual Industry Profits: The top five earning insurance companies averaged profits of $1.56 billion in 2008 ... That year, CEO compensation for these companies ranged from $3 million to $24 million.

In the face of all this, how can we continue an irrational privatized health insurance system and not support a single-payer system? Continuing the current system betrays the nation.

URL: http://www.exponentialimprovement.com/cms/singlepayer.shtml

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