The Case for Universal Health Care

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INTRODUCTION

In 2010 the Patient Protection and Affordable Care Act (PPACA) was enacted which expanded access to health care to millions of Americans. Additionally, sections of the legislation provided protections to many Americans who already had health insurance, such as guaranteeing insurance companies cannot refuse to cover people with preexisting medical conditions or a genetic/family history of illness.¹

But even without challenges from those who would like to sink the legislation completely, the PPACA will not fix a myriad of systemic problems in our country’s health care system.

•There is no guarantee marketplace forces, such as competition through the health insurance exchanges created by this legislation, will make health insurance affordable. One counter-indicator: state regulators have approved hikes as high as 30% to 50% for insurance purchased through the exchanges.

•A public option, which would allow individuals access to a Medicare-like insurance plan was proposed, but not included in the final legislation. The assumption was that by having lower administrative costs (Medicare’s administrative costs are about a third of the private sector’s), the private insurance market would also lower its administrative costs and pass the savings on to consumers by lowering the price of insurance premiums.

•About a third of the states, all with Republican majorities in their legislatures, have refused to expand Medicaid, blocking access to the program to millions of Americans. And without legislative authority to negotiate the price of medications, Medicare will continue to lack an effective mechanism to rein in rising drug costs.

The Obama administration originally proposed a comprehensive overhaul of the health care system, replacing it with national health care insurance administered by the private sector. However, its lack of commitment to this ideal along with political barriers resulted in a hodgepodge of fixes. Democrats conceded it was the best they could do at the time, vowing to repair the legislation as problems arose. Republicans vowed to repeal the legislation or cut the legs out from under it.

The United States is facing a tipping point because the spiraling cost of providing health care is unsustainable. These costs have been creeping upward year after year and now account for about 18% of annual GDP ($3.5 trillion in 2017).² Attempts to stem these rising costs, through the PPACA, Medicare regulations, and even efforts by the health insurance industry have at best slowed the increases. Consequently, we may be reaching a point when employers can no longer afford to provide employer-based health insurance (despite financial penalties under the PPACA), when health insurance cannot cover the full cost of treatment (which is happening already), and requiring Medicare to cut back on coverage and raise the age of eligibility in order to remain solvent. Conservative Michael Reagan once noted health care is a privilege; the treatment we receive should be based on what we can pay for; and if we can’t afford it, that’s not society’s problem.³ Without a radical change we appear to be headed toward his conservative vision.

This book proposes a different path starting from this basic premise: health care should be universal, available to everyone in this country, not only citizens, but also individuals working and studying in this country under visas and green cards, foreign visitors here on a passport, and yes, even to undocumented workers. What is proposed here is an entirely different approach to funding health care, which will ensure the system is accessible to all and fiscally stable for current and future generations.

It’s not just a problem of access or cost. America provides some of the best health care in the world. We can save premature babies, cure many forms of cancer, inoculate the entire population against infection, remove a gall bladder or appendix through two tiny incisions, and save a life by transporting someone to an emergency department by helicopter. And yet, care is disorganized and disjointed: we test for illnesses when there is little evidence early diagnoses save lives, and when doctors do have electronic medical records they cannot communicate with providers outside of their computer network. And often it’s downright dangerous: annually tens of thousands of individuals die of hospital borne (nosocomial) infections and medical errors (there are still cases each year of amputations of the wrong limb).

In a series of essays, Donald Berwick, M.D., cofounder of the Institute for Healthcare Improvement, contends:

•at times healthcare is unsafe;

•through overuse, underuse, and misuse healthcare is woefully inefficient;

•it is not always based on scientific evidence, thus lacking in clinical effectiveness; and

•it is not patient-centered.

Berwick advocates for the rethinking and overhaul of the health care delivery process.⁴ To create a responsive and effective health care system, Berwick and his colleagues contend health care must be universal and there must be an organization that exists to integrate the myriad components of the health care system toward the aim of health care that is clinically and financially effective.⁵ Likewise, this book calls for a radical restructuring of our health care system: how we gain access to and deliver services, how we pay for healthcare, how we enhance quality and clinical effectiveness, how we control costs, and how we think about health care for ourselves and as a society.

To fulfill its purpose, this book is divided into three sections. The first provides the reader with a comprehensive description of the organization and function of the existing American health care system. This provides context for how things work now, which can be compared to how things will work under the universal health system being proposed. The second section describes factors that influence the delivery and cost of care as well as examining why, unlike the rest of the world, the U.S. is unique in not providing universal coverage. This section explains why health care is different from other services, why it costs so much to deliver, and why unless we change how we pay for health care, it will become unaffordable for many Americans. The last section presents a plan for universal health care that meets Berwick’s call to improve the quality of care, while making it available to and affordable for all Americans. Finally, as described below, this work is guided by four basic premises:

•Americans are poorly informed about how the health care system works and therefore do not appreciate the benefits universal health care can provide;

•the current insurance/market-based system limits access to care, is costly, and promotes rather than curtails inefficiency;

•the health care that is delivered is not always safe nor evidence-based; and

•there is an ethical, moral, and social imperative to provide health care to all.

Uninformed and Misinformed

Conservative pundit Ann Coulter has stated Americans are reasonably clear that they don’t want national health care.⁶ The numbers tell a decidedly different story. Each year the Gallup organization conducts a survey that asks respondents if it is the responsibility of the federal government to make sure all Americans have health care coverage. Although the numbers vary from year to year, over a sixteen-year period, from 2000 to 2015, the majority of respondents supported a role for government. And the numbers in support of government leadership would probably be higher were it not for an event that influenced the public’s perception.⁷

Between 2008 and 2010 the number of respondents who opposed a role for the federal government jumped from 33% to 50%. This shift in opinion coincides with the debate in Congress over the Patient Protection and Affordable Care Act and the ensuring partisan rhetoric. An analysis of media coverage for this period indicates most reporting did not focus on the substance of the legislation and opponents of the law were more successful getting their negative message across. For example, a study by the Pew Research Center found that anger over the legislation increased after former Republican vice-presidential nominee Sarah Palin posted on her Facebook account that the law would create death panels with the power to decide who was worthy of receiving health care.⁸ The comment, which the website PolitFact dubbed the lie of the year, was often repeated in the conservative media.⁹

Purposeful misrepresentation of the PPACA has continued from the political right as Republicans at both the state and federal level attempt to repeal or cripple the legislation and challenge it in the courts. For example, Fox News’ Sean Hannity interviewed the owner of a small business who claimed the law was causing him to cut back on hiring full time employees and forcing him to reduce work hours. It was subsequently revealed the company only had four employees and was thus exempt from regulations. Hannity also interviewed a couple who said their insurance premiums would rise by more than 50% in response to the legislation. A reporter subsequently contacted the couple and found they had not shopped for insurance on the health exchange and if they had, they could have found comparable insurance for much less. This indicates how, when it comes to health care, Americans are often deceived and woefully misinformed.¹⁰

Aside from being purposely misinformed, most of us are uninformed about how the health care system works. For example, can you explain the difference between coinsurance, copayments, and deductibles? Don’t worry if you can’t, as this question often stumped my students who were majoring in health care administration (I’ll define the terms in Chapter 3). And you’re not alone when it comes to a lack of information: a 2011 survey found only 24% of Americans could explain how our health system works.¹¹

Therefore, along with presenting an alternative approach to delivering and paying for health care, I have tried to provide context for this information by describing the current situation and how we got here. It makes no sense to talk about a single-payer system when most Americans don’t know what this term means or what it actually costs each of us to support the current market-based approach. It is also important to understand how the current health care system is organized to deliver care. As a child of the 1950s, I grew up in an era where the neighborhood doctor still made house calls and the drug store on the corner, with its soda fountain, candy counter, and rack of comic books, was owned and operated by a single pharmacist. Today, the lone physician has been replaced by emergicare centers and multi-practice facilities where physician assistants and nurse practitioners do many of the routine activities doctors once did. We purchase our medications at mega-drug stores such as Walgreens, Rite Aid, or CVS, big box stores such as Walmart and Target, or we can even skip a physical location and order our meds on-line.

Health care is different from many other services we pay for and receive. For example, medical treatment is often provided on an emergent, rather than planned basis. Therefore it is important to describe and explain factors which influence the health care system and the cost of providing services. Some of these factors are external to the health care system, such as life style choices; smoking, diet, and alcohol consumption can result in health problems requiring medical care. However, the health care system has little to no influence on these external factors; your doctor can recommend you stop smoking or cut back on sweets, but he can’t change your behavior.

There are also many issues and challenges within the health care system that influence costs and clinical outcomes—problems which can be better resolved through a national health care program that promotes prevention and ensures access to affordable, quality health services. These problems, such as fragmentation of service delivery and misuse and overuse of treatments result in poor quality outcomes and undue costs. Stakeholders within the health care system have varying amounts of influence on these factors, such as employing utilization review to identify overuse of medications and tests. In these situations, having a national health care program to monitor use can produce substantial savings.

Health Care Economics

Conservatives contend that when consumers shop for healthcare, competition forces both insurers and providers (doctors and hospitals) to vie for market share by lowering prices. As noted above, the need for medical services is often emergent, used only when we are sick or injured. How many of us can say we shopped around to get the best price when we fell and broke a bone, got the flu, or had a gall bladder attack? Want to shop around for the best price for medications? That may not be easy to do because drug patents are issued for 20 years and can be extended when the medication is reformulated and rebranded.

Shopping around is fraught with difficulties and complications, to say nothing of requiring shopping know-how, and the ability to access useful information—which must be there in the first place. The Surgery Center of Oklahoma, a physician-owned corporation, is an example of free market health care economics. The business posts its fees online, which are significantly less than the charge for the same procedure at nearby hospitals, for example, $8,000 for a hysterectomy compared to a hospital charge of $37,174! While this demonstrates hospital charges are more than they need to be, something I’ll examine in more detail in a later chapter, there is more to this than supporters of competition let on. For example, the Surgery Center does not accept Medicare and many traditional health insurance plans. Instead, they require cash payments or they work out deals with employers who are self-insured.¹² This works if you have the cash, but not for the other ninety percent of Americans who depend on traditional insurance or government programs such as Medicare.

Unlike surgery centers, hospitals also deliver a range of services and thus must ensure their income is sufficient to cover services they offer that may not be cost effective but are essential to the community, such as emergency departments. As one of the founders of the Surgery Center acknowledges, What works for surgery centers may not necessarily work for larger hospitals, since surgery centers tend to focus on elective procedures that are a bit more predictable than the range of care needed in an emergency.¹³ Finally, the Surgery Center is profitable because they do so many procedures, which raises the question of overutilization.

Nor has competition been particularly effective for those seeking health insurance. As I write this, Anthem has agreed to purchase competitor Cigna for $54 billion. Together, the two health insurance giants will cover over 53 million Americans, about 17% of the U.S. population, with annual revenues of more than $115 billion. A similar agreement was reached between Aetna and Humana at a cost of $37 billion. If all the mergers are approved, the two consolidated companies, along with United Health Group, will control nearly 70% of the health care insurance market and will likely gobble up the remaining smaller competitors in the near future. The insurance giants argue the mergers are necessary to offset the increased costs of covering individuals with pre-existing conditions who are now eligible for insurance through the insurance exchanges. And while they claim the mergers will result in cost efficiencies (including onetime savings by cutting employees) and more clout in negotiating payments to providers, many analysts believe less competition will ultimately result in higher prices for consumers.¹⁴

At a personal level, when I turned 65, I was bombarded by insurers selling Medigap insurance, the insurance that pays for deductibles and copays not covered by traditional Medicare. However, once I began evaluating coverage, to ensure I was comparing apples to apples, I found virtually no difference in price. It’s like comparing McDonald’s Big Mac to Burger King’s Whopper to Hardee’s Thickburger to Wendy’s Hot ‘N Juicy to Dairy Queen’s Grill Burger: different names but still just a burger with lettuce, tomato, onions and cheese. And all costing essentially the same. So much for competition.

Supporters of market-based health care argue that government programs are inherently inefficient and not cost effective. Here are the facts. When it comes to the cost of medications, countries with national health care either negotiate prices or mandate cost controls leading to the price of medications being 50% to 90% cheaper than in the U.S.¹⁵ Or consider Medicare; its administrative costs run 7% to 8%, which compares favorably to the administrative costs of countries with national health insurance, such as Canada, the UK, and Switzerland. In contrast, for-profit health insurance companies in the U.S. have administrative costs of 12% to 15% or more.

And then there is the reality that the practice of medicine is not complementary to market-based approaches. Assume two women have been diagnosed with breast cancer and both must undergo mastectomies. One is wealthy and has private health care insurance; one is poor and is covered by Medicaid. However, once admitted for treatment both will receive the same level of care, regardless of the source of payment.a The wealthy woman will probably be given a private room (if available) and the Medicaid recipient a semi-private room, but the surgeon, nurses, and support staff will make no distinctions regarding the procedures or quality of care provided.

Consider your worst nightmare. You receive a call late at night. It’s the police. Your nineteen-year-old son has been out partying with friends. They’ve been drinking and there was a car accident. When you arrive at the emergency department, the doctor tells you he will live, but he has multiple broken bones, contusions, and a ruptured spleen. He will be in the hospital for several weeks and then will need months of rehab. Sometime in the next eight hours it is highly likely someone will ask you for your insurance information, but other than that, the focus of the medical staff will be on your son’s injuries, his treatment, and recovery, and not on your ability to pay for treatment that could cost hundreds of thousands of dollars. That same evening another child comes to the emergency department with a life-threatening situation. She is six years old, has a fever of 104 degrees and is convulsing. The emergency room staff immediately admit her and begin treatment. It doesn’t matter her mother is an undocumented worker from Mexico and has no insurance. Here in the emergency department saving lives is the mission; financial issues can be sorted out later.

At its core, the role and function of medicine is to heal, not to make a profit. Doctors want to be well paid and are highly paid, but this is more a function of their years of study, their expertise, and their role in society as a healer, than due to a profit motive. This is not to say there isn’t a place for entrepreneurship in health care. My experience has been as an administrator in public psychiatric hospitals, which is as close as you get to socialized medicine in the U.S. I worked with a number of clinicians, psychiatrists and psychologists who left the system to work in the private sector including setting up their own practices. They did so for autonomy and to see if they could make more money, the American dream of getting ahead through your own efforts and hard work. But underlying those aspirations they still observed the basic principle that as a health care provider you work to help and serve others.

I’m not arguing health providers aren’t or shouldn’t be motivated by profit; rather, I contend that while their years of study and expertise, etc., should find appropriate compensation, profit should be secondary to the primary mission of healing. In fact, the profit motive may work against the goal of assuring everyone has access to affordable, quality health care. Consider that the largest private hospital company in the United States, the Health Care Corporation of America, reported earnings before income taxes of $1.07 billion in 2014, compared to $680 million the previous year and United Health Group, the largest health insurance company (until the merger of Anthem and Cigna) reported a profit of $1.4 billion for the same period.¹⁶ As health care organizations such as HCA raise their charges to maximize profits, insurers respond by placing more and more curbs on what they will pay for and how much they will pay. The consumer/patient is caught in the middle, paying more for insurance or having coverage for a specific procedure denied.

At times, the market actually works against medical care. Journalist T.R. Reid begins his evaluation of countries with national health care systems by telling the story of Nikki White, a young woman who died because she was denied medical treatment. Nikki had a rare but treatable autoimmune disorder. However, without health insurance she did not receive the level of treatment she needed. Eventually, complications from her disease brought her into the hospital, where by law she could not be denied treatment, but by then it was too late and at age thirty-two she died.¹⁷

Sadly, Nikki’s situation is not unique. It is estimated that in the United States, prior to passage of the PPACA, 40 million Americans did not have health insurance, typically because they could not afford it. Even with passage of the PPACA which provides government subsidies for low income earners, Medicaid expansion, access to health insurance exchanges, and financial penalties for not purchasing insurance, the Congressional Budget Office estimates up to 30 million Americans could still be without health insurance.¹⁸ Consequently, the uninsured often wait until they are acutely ill before seeking treatment, typically in the emergency department. If they can’t pay, the cost of providing treatment to the uninsured shifts to those of us with insurance, thereby jacking up costs; in the long run, we pay for uncompensated care one way or the other. Clearly, continuation of the current market-based approach for financing health care or fixing it piecemeal is not the solution.

Issues Surrounding Quality Care

A few years ago, one of my students wanted to do her research paper on the topic of wrong-site surgery, which includes surgery performed on the wrong side or part of the body, performing the wrong surgical procedure for that patient, and surgery performed on the wrong patient. My initial response to her was is this still a problem? Since the Institute of Medicine’s publication To Err is Human in 1999, hospitals and doctors have made a 180 degree turn regarding patient safety. This study indicated that between 40,000 and 90,000 deaths in hospitals each year were avoidable—due to errors or preventable infections. In the wake of the study, the Joint Commission on the Accreditation of Health Care Organizations made patient safety a top priority. Numerous approaches have been developed to prevent wrong-site surgery, including matching the patient’s identification bracelet with her chart and asking the patient to identify herself, using checklists before and during surgery, and physically labeling the site to be operated on with a marker. And yet a decade later, the Joint Commission found the problem continues to occur about 40 times a week nationwide!¹⁹

We cannot consider universal access to care without also examining the quality of care provided as well as the cost and utility of those services. In other words, does greater access to healthcare result in better health? The answer to this question is complex because many factors contribute to health, including family history (our genes), lifestyle choices, our income (individuals with higher incomes tend to have healthier diets and exercise more), place of residence (urban, suburban, rural), and many factors outside of our control, such as accidents leading to physical injury or contact with someone with a communicable illness. Nonetheless, health care providers have a responsibility to do everything they can to ensure that what they do have control over, such as the drugs prescribed and treatments administered, are safe and effective.

Universal health care will rise or fall on our ability to provide quality, clinically effective treatments that are also cost effective. To their credit, the legislators and policy analysts who drafted the PPACA dedicated an entire section (Title III) to Improving the Quality and Efficiency of Health Care. For example, subtitle A of this section, Transforming the Health Delivery System calls for research and strategies to create value-based purchasing of services, to develop systems for data collection and quality measurement, and to address new patient care models for treatment, especially in long-term care.²⁰

America’s healthcare system has also invested heavily in technology, from MRIs and CT scanners, to robotic surgery tools, to prosthetic devices that allow amputees to walk and run and even compete in athletic events. We have developed medications to treat cancer, cardiovascular disease, mental illness, and bacteria-borne infections. And yet evaluation of these technological advances raises questions about their usefulness in enhancing health, as well as the costs associated with these technologies; i.e., are they cost effective and would a universal health care system be financially sustainable given the cost of these advances? Hepatitis C is a blood-borne virus that can cause severe liver damage and is estimated to infect over 3 million Americans. Sovaldi, a breakthrough drug developed by Gilead pharmaceutical company, can cure the majority of Hepatitis C patients. But at $1,000 per pill, about $84,000 for the recommended 12-week treatment, can the healthcare system afford the $2.5 billion to fund treatment?²¹

Many medical interventions have not been proven to be effective at ameliorating or curing illnesses. This can result in underuse, overuse, or misuse of medical interventions at great cost to consumers but also great profits to providers. For example, a recent article described a study that evaluated 2,500 treatments and found thirty-six percent were beneficial or likely to be beneficial; eight percent were as likely to be harmful as beneficial; six percent were unlikely to be beneficial; and four percent were likely to be harmful or ineffective. That left a whopping forty-six percent as unknown in their effectiveness.²²

In the article cited above, the authors note that nearly one in ten medications prescribed in the U.S. is for an antidepressant and while the number of antidepressants prescribed in the U.S. has doubled over the previous ten-year period, the scientific basis on which these drugs are predicated has not been demonstrated. This helps explain why fifty percent of individuals who are diagnosed with depression do not respond to antidepressants.²³ And it helps to further explain why unproven alternative medical treatments and drugs are a $35 billion industry in the U.S.

Finally, any discussion about cost and quality raises the specter of rationing. Sarah Palin’s outrageous comments about death panels hit a nerve with the public, who were led to believe expanding health care to every American would lead to a shortage of doctors, hospital beds, medications, and ultimately of access to care. Market forces already play a central role in the rationing of health care, such as when a health maintenance organization (HMO) provides financial incentives for physicians not to order tests, medications, or treatments. Done in the name of controlling overuse and misuse, this places physicians in the awkward position of making a treatment decision based as much on their income from the HMO as their clinical judgment. Thus, rationing already occurs in our current health care system and will continue to occur under a national health program providing universal coverage. Each year the federal government orders and helps pay for flu vaccines to prevent the wide spread of the influenza virus. While all citizens are encouraged to get a flu shot, the emphasis is on the most vulnerable populations such as very young children with undeveloped immune systems, individuals with compromised immune systems (e.g. individuals undergoing cancer treatment), and the elderly who may have multiple health issues. In this case, rationing is based on a clinical approach—who will benefit the most—rather than a free market-based solution—who is willing to pay.

Health Care as an Ethical, Moral, and Social Imperative

When Jesus raised Lazarus from the dead, there was nothing in the biblical record to suggest he then turned around and presented Lazarus’ family with a bill. This is the refrain I offered students when presenting the concept of universal health care and it forms the fourth premise of this work: health care is a societal responsibility grounded in empathy, sharing, and altruism. It addresses the question what are our values as a nation and what kind of people/society do we want to be? From the very founding of our country, our leaders have debated the role of government and how intrusive government should be in the lives of its citizens. Both conservatives and liberals believe in personal autonomy and appreciate the United States is a land of opportunity where people can succeed, or fail, based on their own determination and effort. However, conservatives consider any attempt to provide equity through social programs as an overreach of government, whereas liberals view it as a moral obligation.

Unfortunately, we have not had a national debate on this topic. At best, when the legislation that was to become the Patient Protection and Affordable Care Act was being deliberated, the media presented it as a contest between the two political parties with the anticipation that, like a sporting event, there would be a winner and a loser. While this makes for compelling drama, it utterly failed to educate the public on the substance and hence the virtues and limitations of the legislation. Worse, there was no effort to discuss health care from the perspective of our values and expectations as a society.

Evangelical minister Jim Wallis sees universal health care as a moral imperative:

Perfect health will never be achieved and physical death on this earth will never be overcome, but the scriptures paint a clear picture that this was God’s intent from the beginning and will be the goal once again in the end. This means that on a personal, national, and global level the physical well-being of all God’s children is close to God’s heart and should be close to ours as well. With an issue like health, deeply personal but of great public concern, I believe that the faith community has a unique and important role to play. That is, to define and raise the moral issues that lay just beneath the policy debate.²⁴

These, then, are the challenges this book addresses: reforming a health care system that doesn’t deliver health care to all, based on market-based principles that don’t fit, that is often inefficient and clinically ineffective, in a nation where, due to being uninformed and often misinformed, the citizenry lacks consensus about its moral and societal commitment to fix the problem.

This book is based on my experience working as a health care administrator and teacher, and on my social values. For over 30 years I worked in state-operated psychiatric facilities as a program manager, administrator of a medical center, and in quality management. This experience taught me there are things government agencies do well, things the private sector does well, and things they do successfully when working in collaboration. For example, NASA plans, coordinates, and leads our nation’s space program, but most of the hardware such as rockets and satellites are manufactured by private industry. I believe government has a similar role to play in health care, which is to create the infrastructure for health care delivery. In this proposal, health care will continue to be delivered by independent hospitals, nursing homes, doctors, and other providers. However, a government agency will administer a national health program to ensure cost effective treatment is available to all.

In addition to working as a health care manager, for twenty-five years I taught courses in health care administration as an adjunct professor at Mary Baldwin University, including a course in health care economics and finance. The themes presented in this book are the same as those I presented to my students, where the focus of the course was to understand how people gain access to the health care system, how we pay for it, and what we can do to enhance quality, improve clinical outcomes, and manage costs.

The challenge lies in not only presenting this plan to those who are open to the concept of national health care but also addressing the concerns of those who seek fiscal responsibility, respect for the dignity of life, and the recognition that one cannot turn one’s back on the sick.

Several years ago, I was presenting a paper at a conference in Scotland. Over dinner with my host, I asked him about the National Health Service, which provides universal health care to citizens of the United Kingdom. My colleague, a health care educator, told me about his teenage daughter, who has a chronic condition that at times necessitates hospitalization and long periods of rehabilitation when at home. He said that when she is in the hospital, he and his wife spend several hours a day with her. At no time do they have to worry about how they would pay for her treatment; their focus is always on her getting better. Some like to disparage the UK’s health program, describing it as a downward spiral to socialized medicine (it’s not). The plan presented in this book is not socialized medicine but it does, I hope, offer a