Dr. Steve from the Daily Kos is starting a series of diaries to provide basic information regarding how the health care system works, basic health care economics, and other general background to health care reform, with a single payer focus. The goal is provide a broad background that is NOT driven by specific events, news, or headlines.
Much of the material will come from two books, the quick-to-read pocketsize 10 Excellent Reasons for National Health Care and the somewhat more wonky Do Not Resuscitate: Why the Health Insurance Industry is Dying, and How We Must Replace It.
Those 10 Excellent reasons are:
1. It’s good for our health.
2. It costs less and saves money.
3. It will assure high quality health care for all Americans, rich or poor.
4. It’s the best choice – morally and economically.
5. It may be a matter of life or death.
6. It will let will let doctors and nurses focus on patients, not paperwork.
7. It will reduce health care disparities.
8. It will eliminate medical debet.
9. It will be good for labor and business.
10. It’s what most Americans want – and we can make it happen.
I should mention that although I am friends with some of the chapter contributers, I am not an author and have no financial stake in any of the books mentioned here.
Let’s start with excellent reason number 1:
The chapter I am summarizing here was written by Martha Livingston, PhD, an associate professor of health and society at SUNY:
Most of the time we do not need health care. But all of us sometimes need health care. And part of living healthy is to have an ongoing relationship with a primary care provider, a medical home.
Over a lifetime, primary care is less expensive then emergency rooms or hospital based clinics. But insurance companies know that they usually won’t be covering you in 10 years or 20 or 30 years. Hence they often exclude such care, it is not within what they call your “insured life.”
Indeed, having government-based single payer for the elderly — aka: Medicare for those over 65 — creates a bizarre disincentive for insurance companies to not care what happens to you in the long run.
Also, just as there is no job stability in contemporary America, so there is no stability in health insurance and hence no stability in whether you have coverage or what doctor you can see. Our current system guarantees instability in care.
One part of national health insurance is that it encourages you to choose your own doctor, nurse-practitioner or other caregiver, and to keep that relationship ongoing.
Depending on the study at least 22,000 and up to 100,000 Americans die every year of treatable conditions simply because they were uninsured and could not get timely care.
Even beyond that, think of the major common health problems in the U.S.: heart disease, cancer, diabetes. These are all chronic disease conditions that take time to develop, some can be prevented with good stable primary care, and can be treated to prevent consequences if detected early and managed or treated. For example, there are about 21 million people with diabetes and about half of them do not know it. Many show up for the first time, when they show up with a heart attack or renal failure. The same is true for hypertension. Numerous studies have shown that people with insurance live longer after a cancer diagnosis, and have higher survival rates, then those who are uninsured. Another example is cancer screening. Women die of cervical cancer which is essentially preventable, because they lack access to a Pap smear, because that is considered routine and therefore not covered. Similarly with breast cancer and colon cancer. At the other end of life, the same occurs even with prenatal care, which many women cannot get access to even thought the cost of even one sick premie would pay for prenatal care for hundreds.
We’re Number 37!
That’s the ranking of the U.S. health care system according to the World Health Organization, and the title of T.R. Reid (the correspondent who did the “Sick Around the World” PBS documentary) forthcoming book.
Every other industrialized, developed country in the world provides some form of national health care, where people can get care when they need it without worrying about out of pocket costs or bankruptcy.
Although they are different in how they do it, no other relies on private for profit insurance companies.
No other does not negotiate, as a matter of policy, the cost of drugs and other medical supplies and equipment.
The United States is unlike every other country because it maintains so many separate systems for separate classes of people. All the other countries have settled on one model for everybody. This is much simpler than the U.S. system; it’s fairer and cheaper, too.
How they do it — how it is paid for, what is covered, how the health care workers, hospitals and clinics are paid for – all this differs in different countries. And no, you should not believe all the lies (.pdf) and myths that are told about them.
As TR Reid and PNHP’s own Dr. Ida Hellander describe it, their are four models of health care system world wide:
National Health Insurance/Coverage: This is what we are talking about when we say single-payer. National health insurance system with insurance coverage being national and publicly administered, but the provision and providers of care (e.g., doctors, hospitals) being in competitive private practice. It uses private-sector providers, but payment comes from a government-run insurance program that every citizen pays into. Since there’s no need for marketing, no financial motive to deny claims and no profit, these universal insurance programs tend to be cheaper and much simpler administratively than American-style for-profit insurance. The single payer tends to have considerable market power to negotiate for lower prices (the buyer has a monopoly and the sellers such as drug companies have to compete for their business; the economics term for this is monopsony). Canada’s system, for example, has negotiated such low prices from pharmaceutical companies that Americans have spurned their own drug stores to buy pills north of the border. International example would include Canada, Denmark, Norway and Australia. Interestingly newly industrialized and wealthy countries such as Taiwan and Korea have chosen to adopt this model too. In the U.S., Medicare would be a single payer insurance system if it applied to everyone in the U.S.
National Health Service: This is called by Reid and other the “Beveridge Model” after after William Beveridge who designed Britain’s National Health Service in 1947-48. In this system, health care is provided and financed by the government through tax payments, just like the police force or the public library. Many, but not all, hospitals and clinics are owned by the government; some doctors are government employees, but there are also private doctors who collect their fees from the government. In Britain, you never get a doctor bill. These systems tend to have low costs per capita, because the government, as the sole payer, controls what doctors can do and what they can charge. Countries using the Beveridge plan or variations on it include its birthplace Great Britain, Spain, New Zealand and some Scandinavian countries. Hong Kong still has its own Beveridge-style health care, because the populace simply refused to give it up when the Chinese took over that former British colony in 1997. Cuba represents the extreme application of the Beveridge approach; it is probably the world’s purest example of total government control. It should be noted that Britain represents something of a negative outlier among developed countries having made almost no new investment in the health care system from when it nationalized in 1947 until the 1980s. It took over the mal-distributed and relatively low tech system and just left it in place. While the rest of the developed world went from 4% to 12% of GNP spending on health care, Britain’s went to 5% in that same period. Such extreme cost-control has resulted in longer wait times, though not worse outcomes or quality, then elsewhere. But that is a unique feature of Britain’s specific history and not a general aspect of universal health care coverage. In the U.S., The Department of Veteran’s Affairs would be a U.S. single payer national health service system if it applied to everyone in the U.S.
All-Payer/Multi-Payer: What Reid and others call the “Bismarck Model”, for the Prussian Chancellor Otto von Bismarck, who invented the welfare state as part of the unification of Germany in the 19th century. It uses an insurance system for it original purpose, to spread the risk. The insurers are called “sickness funds” — usually financed jointly by employers and employees through payroll deduction, although in some countries like France funding comes from a hodge-podge of sources. Unlike the U.S. insurance industry, though, Bismarck-type health insurance plans have to cover everybody with similar charges and coverage (guaranteed issue and community rating), and they don’t make a profit, don’t issue stock etc. Again these Sickness or Social Insurance Funds do not operate like insurance companies in the U.S.: they don’t market (you are eligible for the local fund), they don’t cherry pick who gets to join, the premiums or rates paid to providers are pre-set, the benefits are pre-set benefits; they do not earn profits or have investors, etc. In most countries, sickness funds pay physicians and hospitals uniform rates that are negotiated annually. They are like old fashioned quasi-governmental agencies or utilities. The Bismarck model is found in Germany, of course, and France, Belgium, the Netherlands, Japan, Switzerland, and, to a degree, in Latin America. There is no model similar to sickness funds operating in the U.S., although they are often confused with the Federal Employee Health Benefit Program (FEHBP), which is simply an employer (the government) providing employees an option to buy into regular group for-profit private insurance plans with varying benefits, rules, regulations, providers, etc. just as many other large employers.
The Out-of-Pocket Model: Only the developed, industrialized countries — roughly 40 of the world’s 200 or so countries — have established health care systems. Most of the nations on the planet are too poor and too disorganized to provide any kind of mass medical care. The basic rule in such countries is that the rich get medical care; the poor stay sick or die. In rural regions of Africa, India, China and South America, hundreds of millions of people go their whole lives without ever seeing a doctor. They may have access, though, to a village healer using home-brewed remedies that may or not be effective against disease. In the poor world, patients can sometimes scratch together enough money to pay a doctor bill; otherwise, they pay in potatoes or goat’s milk or child care or whatever else they may have to give. If they have nothing, they don’t get medical care.
U.S. vs. the World: Every other developed country has comprehensive universal health coverage, and does it with a non-profit system. No country depends on for-profit, investor-owned insurance companies such as we have in the U.S.
Read the full blog here.