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Affordable Health Care for All

The class divide in health care is not much less visible in America today than it was in pre-war Britain. The public sector in general and all forms of social welfare policy are under the privatizing gun.
 http://dsausa.org/pdf/HealthCareForAll.pdf
Health is an indicator of social class.When the Labor
Government established Britain's long-needed
National Health Service after World War II, the
move had the unanticipated consequence of removing
the most visible distinction separating working men and
women from their upper class betters: bad teeth.As expected,
NHS provision of ready access to virtually free care
drastically increased workers' longevity by sparking a
drop-off in deaths from opportunistic and easy-to-spotand-
treat illnesses. But the real physical distinctions
between the classes - not just the elite myth of a working
class "smell" that George Orwell isolated and satirized -
were also eliminated by positive government intervention
to end a social problem.
The class divide in health care is not much less visible
in America today than it was in pre-war Britain.The
public sector in general and all forms of social welfare
policy are under the privatizing gun. 45 million Americas
go without any health care coverage. Many of the elderly
choose between medicine and food.Malnutrition is prevalent
among new immigrants. The poor are undiagnosed
and primary care doctors are still scarce in rural areas
and inner city neighborhoods. Undetected lead poisoning
harms children's ability to compete for a place even on
the lower rungs of the social ladder.Poor health is still the
mark of Cain.
Unlike Europe, where socialists succeeded in having
health care judged as a human right, core elements of the
U.S. public accept it as a purchasable commodity, and
public discourse revolves around how to pay for it. And
unlike in the Scandinavian countries, whose conservatives
were frustrated in efforts to privatize the system, the
U.S.takes private health care as a fact of life. Only in a few
states such as New York are private for-profit hospitals
even disallowed, though the non-profit university and
other hospitals are frequently operated along market
lines as cash cows for their parent institutions and private
boards.
Nationwide, private chains such as Humana are
growing and research aims at treating the ills of the rich
and the needs of corporations. Only public education is
still prized, and even there, voucher supporters and charter
school advocates are making inroads and attempting
to drain public dollars into private hands.
Instead of government subsidies to private insurers,
DSA supports a single-payer system, similar to the
Canadian model and to legislation introduced more than
10 years ago by the late Senator Paul Wellstone and Rep.
James McDermott. Their initiative—needed more than
ever—would offer continuous coverage funded through
progressive tax levies.With far fewer administrators than
are required by the myriad private plans, with less paperwork
leading to cost containment and with corporate
influence over diagnosis and treatment blunted, hospitals
and doctors could focus on medical delivery. Doctors
would still operate private practices, but lower rates
would be set by the government as the sole purchaser.
Frisof helps demystify and unravel the complex issue
of how health care developed in the United States and
what the prospects are for universal health care today.
Affordable
Health Care
for All
Turning a Dream
into
a Reality
by
Ken Frisof, MD
Published by the
Democratic Socialists of America
P2
Introduction
Imagine the U.S. health care system as a big, complicated
machine, full of nuts and bolts and cogs and wheels
and motors. There are thousands of pieces - an intricate
jumble of law, policy, tradition, technology, bureaucracy,and
practice - transforming what we put into the machine
(money,time,energy) into what comes out:health care.Our
health-care producing machine was assembled slowly over
the last 150 years, pieced together from a variety of laws
and traditions that weren't designed or intended to work
together. Our machine has been patched up a number of
times as we've added new cogs or tightened some screws
and filled in some gaps, and new and changing technologies
have improved some of the machine's parts, but this
machine has never
received a complete
overhaul.
This machine - the
U.S. health care system
- is breaking down. It
still works - very well
for some, so-so for most,
and barely at all for far
too many. The machine
consumes one-seventh
of the national economy,
an input so great
that it will never suffer a
total breakdown. But it
is certainly the least efficient
machine of its
class, consuming far
more and producing
considerably less than
the health care systems
constructed by other
industrialized democracies.
This DSA pamphlet
will:
• Describe the current problems in U.S. health care;
• Provide a brief history of the political economics
of American health care;
• Explore the economic and political roots of the
problems;
• Delineate how to make change happen.
The Current Problems in U.S. Health Care
The central dynamic causing the current crisis in U.S.
health care, leading to the breakdown of our health care
machine, is escalating cost. As costs rise, health care
becomes less and less affordable for more and more people.
The access problems in American health care are a consequence
of the cost problems. Health insurance premiums
are rising, so fewer employers are offering health insurance.
Fewer workers can afford to pay their share of the premium,
so they elect not to carry health insurance.They gamble
that no one in their family will get seriously ill. Others
have insurance policies, but the policies have such high
deductibles and copayments that families delay seeking
care to avoid the expense until they feel absolutely compelled.
They go for care and do not pick up all the prescriptions
written for them, or they pick up prescriptions
for medicines needed every day but take them every other
day to save money.
There is regular public discussion about the problems
of the uninsured.Their number has increased by 5 million
over the past four years, to 45 million in 2003, more than
one in six Americans under the age of 65 (virtually everyone
over 65 has publicly
financed insurance
through Medicare). But
this is not a stable group.
As people lose jobs or get
new ones, they go
through episodes of
health insecurity when
they lose their insurance.
Over the last two years,
nearly one in three
Americans under the age
of 65 was without insurance
for one or more
months.
But uninsurance is
only part of the problem.
Underinsurance, insurance
which leaves such
big financial burdens on
patients as to hinder
their access to care, is
harder to estimate exactly,
but is at least as large a
problem. Conservative
estimates place the number of underinsured in the U.S. at
50-70 million. In fact, underinsurance (i.e., excessive financial
strain as a consequence of costs associated with illness)
is a major contributor to half of the personal bankruptcies
in this country.
Not surprisingly, uninsurance and underinsurance are
almost exclusively problems of low and middle income
workers.
A Brief History of the Political Economy
of Health Care in America
From 1776 through the early twentieth century, the
vast majority of payment for health care came directly from
the pockets of patients - sometimes in cash, sometimes in
goods, sometimes immediately, sometimes later. Doctors
made house calls. For the poor, local governments and reliP3
gious institutions set up charity care in which providers
volunteered their services.
In the early decades of the twentieth century, hospitals
rose in importance and medicine was institutionalized.
Advances in medical technology, hard times during the
Great Depression, the growing influence of organized
labor, and the political recognition of the importance of
security issues led to the initiation of private insurance in
America. Employment-based insurance was an unintentional
side-effect of wage and price controls during World War
II. Employers could compete for scarce labor through benefits
to their workers (e.g., health insurance) but not
through higher wages.
After Medicare and Medicaid were added to the Social
Security Act in 1965,publicly financed health insurance has
become the largest health care payer. Expanded and modified
since their inception, these programs increased the
role of federal and state governments in making health care
accessible for specific populations. Also, they have contributed
to portions of our health care system that facilitate
everyone's care, such as medical education and research.
Cost containment became a hot issue within five years
after the implementation of Medicare and Medicaid. The
Johnson Administration, afraid of strong opposition from
physicians, had devised reimbursement techniques that
included no cost-containment measures.As a consequence,
federal health care spending grew much more rapidly than
anticipated.
In the 1980s, the federal government introduced by
administrative regulation two new methods to control costs.
Hospitals were reimbursed by a "prospective payment"
system through which they receive a flat rate for patients
with similar problems (Diagnosis Related Groups or DRGs).
Physician payment changed to a Resource Based
Relative Value System (RBRVS) in which fees were set by
calculations of complexity, time involved, and training needed.
Under these arrangements, hospitals finally had financial
incentives to be efficient.There was a lever to reduce
grossly excessive historical physician fees.The rate of health
care inflation for the government fell sharply. But the health
industry, always seeking "greener pastures," recouped its
money by raising charges to private payers. This led to
major private sector inflation of the late 1980s and early
1990s and the push for managed care.
What is now known as managed care started as "prepaid
group practice," a progressive reform in the middle of
the twentieth century that offered workers organized, integrated,
comprehensive care with little to no copayments.
Ideologically reluctant to support national health insurance
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HMO Profits 1999-2003
(in billions of dollars)
SOURCE: WEISS RATINGS INC.
$ $ $ $
P4
during the cost crisis of the early 70s, the Nixon
Administration enacted HMO legislation, primarily with an
eye to controlling health care spending. But HMOs did not
really take off until the late 80s, when U.S. corporations
embraced them as a way of containing costs and forced
workers into using them. Starting in the mid 90s, state governments
forced Medicaid patients into managed care,
while the federal government tried to entice seniors into
Medicare HMOs.
In theory, managed care could save money by:
Managing costs: Lowering prices through strong negotiations
with providers and threatening to take business
elsewhere.
Improving care: Providing financial incentives and
bureaucratic mechanisms that promote less wasteful practice
patterns, reducing the quantities of services actually
delivered.
Most analysts agree that in the mid-90s, managed care
reduced health spending, primarily through strong negotiations
that lowered provider prices. But the attempt to
reduce quantities of service led to a backlash that undermined
its political legitimacy. Beginning with political
opposition to particular medical procedures, i.e. state bans
on "drive-through deliveries," the backlash expanded to
patient "bills of rights."Moreover, because they preferentially
recruit healthier patients, HMOs do not reduce overall
spending. Finally, hospitals in many metropolitan areas have
consolidated into for-profit "chains" or not for profit "systems,"
increasing their strength at the bargaining table.
Roots of the Problems in U.S. Health Care
The best way to understand the roots of the problems
in American health care is through comparison with other
long-standing democracies.The World Health Organization's
World Health Report 2000: Health Systems: Improving
Performance is the most widely quoted international comparative
study.
It offered two main quantitative conclusions. First, the
United States ranks first in health care spending.American
health care costs twice the average of other industrialized
nations, and is a third more expensive than the second
nation, Switzerland.
Second, the U.S. ranks 37th in the world in the efficiency
of our health care system. In other words, for the dollars
we spend,we are obtaining much worse results than other
nations. For example, the U.S. ranks 16th in the world in
female life expectancy, 17th in the world in male life
expectancy.We rate 21st in the world in infant mortality.We
have the third lowest rate of childhood vaccination in the
western hemisphere.
0 1000 2000 3000 4000 5000 6000
US
Switzerland
Norway
Japan
Luxembourg
Denmark
Iceland
Germany
Canada
Sweden
2001
1997
Per Capita Spending on Health in US Dollars
(Top 10 countries 2001)
SOURCE: WORLD HEALTH ORGANIZATION, THE WORLD HEALTH REPORT 2004 - CHANGING HISTORY
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Why does the U.S. rank so poorly in
health care outcomes and efficiency?
First and foremost, it is because we don't have a national
commitment to health care for all.
The technical details of health system financing and
delivery in the thirty-six nations that are more efficient than
us vary widely, but all differ from ours in the fact that they
have real systems that include everyone. Unlike the U.S.,
with its steadily growing population of the uninsured and
underinsured, all persons in these nations have affordable
access to comprehensive care.
The Market Fallacy in health care
Other nations understand that health care is a social
good, a public good - a good that benefits all people, like
fire departments, police departments, and clean water.The
United States stands alone in continuing to treat health care
primarily as a market commodity purchased by individuals
for their "personal" use.
While the ideology of the market dominates American
political and economic discussion today, it is particularly
inappropriate in health care. Health care is not a "pure"market
for several reasons:
In classical markets, if one cannot afford a commodity,
he does not get it. In health care, even though we do not
guarantee affordable access to comprehensive health care
to all,we do not want people to die on the streets.There is
a legally enforceable right to emergency room access and
subsequent hospitalization if needed. So it is not that the
uninsured get no health care. In the words of the Institute
of Medicine, the care they get is "too little, too late" - and,
consequently, less effective and more expensive.
In classical markets, rational consumers make thoughtful
decisions on purchases based on price and quality. In
health care, patients are rarely totally rational; they are in
pain, fearful about their symptoms,anxious.Prices are rarely
known. Information on quality is hard to come by.
Entry into the medical field is restricted. No one can
simply hang up a shingle and begin treating patients.
Physicians are not perfect substitutes for each other.
The doctor-patient relationship requires time to cultivate.
In economics, when a particular market deviates from
the characteristics of a "pure" market, attempts to make it
perform according to pure market principles will have
uncertain effects on overall economic efficiency - and may
produce perverse outcomes. This market mentality is the
root cause of the three components of the economic problems
of American health care: high prices,waste, and excessive
fragmentation. But since all economics is fundamentally
political economics, the reason these problems persist is
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US
Switzerland
Norway
Japan
Luxembourg
Denmark
Iceland
Germany
Canada
Sweden
2001
1997
Spending on Health as Percentage of Gross Domestic Product
SOURCE: WORLD HEALTH ORGANIZATION, THE WORLD HEALTH REPORT 2004 - CHANGING HISTORY
P6
the power of vested interests to influence the debate on
how to fix American health care.
Economic Problems in U.S. health care:
High costs and waste
High costs and waste impede reform by making it
seem as though expanding access is prohibitively expensive.
Based on the misconception that overall costs can
only be controlled by reducing use of health care services,
this illusion has long hampered reform efforts.
High costs are caused by more than merely high utilization.
Some causes of high costs include:
• high prices for goods and services, demonstrated
most vividly in drug prices;
• high administrative costs due to the enormous
complexity of American health care financing (fragmentation)
- huge numbers of insurance companies and insurance
products, frequent gaps in coverage and changes in
plans. (A 2000 study in Seattle already showed that 2277
people were covered by 755 different policies linked to
189 different health plans!)
• economic incentives and cultural expectations
that promote clinical practice that excessively utilizes high
cost treatments and inadequately reward prevention,
chronic care, and information sharing.
Fragmentation of health care finance
and delivery
Unlike health care systems in other western democracies
- all of which more or less guarantee comprehensive
health care to all residents - American health care lacks
clear lines of authority and responsibility. It is less a "system"
than an assortment of haphazard arrangements, with thousands
of small players vying for a good spot in the game.
This contributes to the high cost of American health
care by making administration, communication, and coordination
more difficult and more expensive. Effective solutions
will have to "defragment" American health care and
simplify it.
The role of vested interests
Many key players have a vested interest in seeing the
fragmentation that characterizes the status quo continue
indefinitely. In health care, because the services clinicians,
hospitals, pharmaceutical manufacturers, and others provide
are seen as so essential, the balance of power is widely
skewed in their favor. Even seemingly monolithic government-
sponsored insurance is in reality divided into a
number of smaller groups.
This has direct consequences for the politics of policy
change. Many of those comfortable with the status quo are
able to spend a lot of money defending those interests.
While the activities of lobbyists and campaign donors may
not always determine how politicians vote, they certainly
influence how legislation is framed.
Moving forward: making reform happen
In January 2004, the Institute of Medicine of the
National Academy of Sciences issued a report entitled
Insuring America's Health: Principles and
Recommendations that contains five principles to guide
and evaluate reform.The United States needs health insurance
that is:
• Universal
• Continuous
• Affordable to individuals and families
• Affordable and sustainable for society
• Able to enhance health and well-being by promoting
access to high-quality care that is effective, efficient,
safe, timely, patient-centered, and equitable.(IOM: 8-9)
The IOM emphasizes high-quality care because it
would be very easy and completely meaningless to expand
insurance coverage by leaving patients with complex,
expensive, and limited insurance. The ultimate goal of
health care reform is to improve health. Expanding coverage
is merely a means to that end.
However, providing everyone with access to comprehensive
health care has to be undertaken at the same time
as we tackle the political barrier of cost control.
A large number of policy solutions have been
advanced in recent decades to reform health care. These
are best understood as consisting of three broad categories:
Conservative solutions: seeing health care as an individual
responsibility;
Liberal solutions: Expansions of group coverage
through employers or public systems;
Hybrid models.
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US Switzerland Norway Japan Luxembourg Denmark Iceland Germany Canada Sweden
Infant Mortality Rates
(Per 1000 live births)
SOURCE: WORLD HEALTH ORGANIZATION, THE WORLD HEALTH REPORT 2004 - CHANGING HISTORY
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Health Care as an individual responsibility
In this model, individuals are responsible for purchasing
their own health insurance. Called the individual mandate,
it parallels state requirements for motorists to purchase
auto insurance.
Tax credits. For those whose incomes are too low, tax
credits can be made available.Tax credits can go either to
individuals to help them buy private insurance or to companies
with low-wage workers to help them purchase
insurance. In some of the more sweeping versions of the
individual mandate approach, the employer tax deduction
for paying for health insurance is eliminated and the funds
redistributed as tax credits.
Health Savings Accounts. Another approach for holding
individuals responsible for making financial choices as
consumers about how much care they can afford is the
establishment of Health Savings accounts (formerly called
Medical Savings Accounts). Individuals purchase a "high
deductible" form of catastrophic health insurance. If they
stay healthy and don't spend all their deductible, they can
bank it for future use and/or spend it for non-health related
purposes.
Expansions of group coverage:
Employer-based
Since most people who are uninsured are workers,one
approach is to increase the number of companies offering
health insurance.This is known as the employer mandate.
One widely used model is called pay or play. In this
approach,a company may either purchase health insurance
from a private company or pay a payroll tax on its employees
to enroll them in a publicly designed and accountable
insurance plan.
Expansion of public insurance
Two models of expanding public financing arise from
the two major public programs in the U.S. - Medicare and
Medicaid - while a third is based on Canada's system of
public finance.
Medicare. Medicare is social insurance, covering all in
certain categories of age and disability regardless of their
ability to pay. Some proposals build on this social insurance
model, putting everyone under Medicare because of the
administrative efficiencies of this "single-payer model."
Other proposals pick certain age ranges - children or preretirement
adults - for Medicare program insurance expansions.
Medicaid. A second model of expansion of public
financing is targeted to people with low incomes. Enacted
in 1965, Medicaid is a means tested program that covers
low-income individuals of all ages. The State Children's
Health Insurance Program (S-CHIP), passed in 1997, is an
addition that makes children at higher income levels eligible
for publicly supported coverage. Some proposals focus
on increasing the income eligibility for these programs.
Public financing also can be targeted to assist community
health centers to improve access in poor neighborhoods.
Single-payer. Single-payer or "Canadian style" health
care means that the government becomes the exclusive
insurer and financer of health care.All Canadians pay taxes
- some of which are earmarked for health insurance - and
all Canadians are automatically enrolled in the provincially
run insurance programs. Costs in the Canadian system are
lower because of much lower administrative costs, the ability
to bargain for lower prices from providers and suppliers,
organized planning and sharing of major capital expenditures,
and an emphasis on preventive, chronic, and primary
care.
Hybrid models
Recognizing the long-term political deadlock on comprehensive
health reform, some proposals mix reform elements
popular with different constituencies.
Public program expansions and tax credits.
Commonly, hybrid proposals at the federal level include
both public program expansions and tax credits. Medicare,
Medicaid, and possibly S-CHIP would cover more categories
of patients. Tax credits would be offered to businesses
who insured their employees and private individuals
who chose to purchase insurance.
Federalist Model. A second hybrid approach uses
states as "laboratories of democracy."In the federalist model
of comprehensive health care reform, national legislation
offers federal financial support to states implementing universal
health care plans that meet federally established standards
of affordability, comprehensiveness, cost containment
and public accountability. States could choose any
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US Switzerland Norway Japan Luxembourg Denmark Iceland Germany Canada Sweden
Healthy Life Expectancy
(Total Population at birth)
SOURCE: WORLD HEALTH ORGANIZATION, THE WORLD HEALTH REPORT 2004 - CHANGING HISTORY
one of a variety of models consistent with their local political
cultures and institutional structures.
Fixing American Health Care
Fixing American health care is not "rocket science," but
"political science."We may or may not need more money for
health care.We certainly need more health care for our money.
We offer three broad suggestions to make the health
care justice movement more strategic and savvy.
Making change involves recognizing what needs to
change and who needs to be involved. In the U.S., the first
part of the prescription means honestly assessing and planning
for cultural and institutional resistance to change.The
activist should be equipped with arguments for universal,
comprehensive health care that speak to everyone across
the political spectrum.The second part of this prescription,
recognizing who needs to be involved, means that activists
should identify and target key players in the health care
politics game. In particular, this entails appreciating the
power of health care special interests and learning to work
with them or to undermine them at key points.
Fixing health care isn't just a question of "may the best
plan win."There are no plans that are best for everybody.
Instead, there are plans that do a reasonable job of balancing
competing interests, plans that better reflect the financial
interests of interested parties, and plans that better
reflect the health needs of individuals and commu-nities.
There are plans that are focused on providing a bare minimum
or changing as little as possible, plans that aim for
truly comprehensive care, and plans that aim to change as
much as possible. All plans involve some compromises
between competing interests. For us, the best plans will be
those that build effective coalitions that are compatible
with the ideals of justice in health care - comprehensive
care, fair financing, and accessible delivery.
There is a dialectic between the long-term goal of
achieving universal health care and the short-term goal of
improving access and affordability.Many health care justice
activists believe that only a federally funded and regulated
health care system will solve the problems of access, quality,
and cost currently facing us. Others believe that the current
health care system is such a mess that any legislation
improving access or controlling costs is better than the status
quo.The challenge for health care justice advocates is
to strike a balance between working for long-term change
and supporting short-term fixes, between holding fast to
ideals of equality and justice and finding practical paths to
improving access and quality.This task is daunting but not
impossible. Equipped with a basic understanding of the
health care system, a working map of the political system,
and the conviction that health care justice is possible and
worth striving for,we can make change happen.
We need to be loud, constant, and articulate advocates
for including everyone, spreading costs fairly, and using limited
resources in a way that best improves the health of the
largest number of people. While working in broader coalitions
to achieve modest but immediate improvements in
the health care system,we must keep our eyes on the prize:
universal health care.We must remind our fellow citizens
that no nation ever achieved universal health care through
pure market mechanisms.As the United Nations recognized
in its Universal Declaration of Human Rights over 50 years
ago, health care is a human right, not a commodity.
This pamphlet has been adapted from Seeking Justice in
Health Care: A Guide for Advocates, produced by UHCAN,
the Universal Health Care Action Network. Individual or
bulk copies of the Guide can be purchased from UHCAN
by going to www.uhcan.org or by calling 216 241-8422.
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address: address: http://dsausa.org/pdf/HealthCareForAll.pdf

This is too long 29.Nov.2004 21:18

George Bender

A lot more people would read it if it were shorter. Sometimes less is more.

Yes, we need a single-payer medical insurance system in the U.S. We will never get it as long as people insist on voting for Democrats or Republicans. If the politicians are not forced to give us anything, they won't.