Why America Needs Universal Healthcare

[Towntalk]

"Third, other industrialized countries insist insurers operate not-for-profit and without managed care. For-profits pay higher salaries than not for profits, and on top of that they currently consume about 13 percent of health care premiums in profit, as well as having additional expenses associated with managing care. Repeated studies have shown the same services delivered by for profit Medicare, for-profit nursing homes, or for-profit hospitals would cost about 19% less if delivered through non-profit means. In addition, unmanaged care has been shown to result in a higher quality of care on all recognized quality of care indicators and to be associated with a lower risk of death, thus improving efficacy."

There are a number of for profit hospitals in the United States just as there are companies that service local hospitals especially in the emergency units. Under this plan would these health providers have to become not-for-profit, and if so what would happen to those people that invested in them?
"Fourth, other industrialized countries minimize the number of insurers. The number of insurers is directly related to administrative costs. Countries with a single, comprehensive insurance plan, so called single payer countries, such as Canada, have the least insurance overhead. Countries with multiple, comprehensive insurer plans, such as France, with three, and Germany, with about two hundred, have higher insurance administrative costs."

What sort of plan does England have? They are currently having to lure in medical professionals from overseas.

[irishbobcat]

by John R. Battista, M.D.
Prepared for Grand Rounds, Department of Medicine, Stamford Hospital, Stamford, CT
October 8, 2008

The United States is the only industrialized country without universal health insurance. The United States consistently ranks in the lower third of industrialized nations in terms of the two universally accepted measures of health care system efficacy: infant mortality and life expectancy. In addition, because the United States spends about twice as much per capita on health care than other industrialized countries it ranks at the very bottom of the industrialized world in terms of health care efficiency, that is efficacy per dollar spent. Furthermore, health care expenses are the leading cause of bankruptcy in the United States, a phenomena which is absent in other industrialized countries. Finally, the US ranks at the very bottom of the industrialized world in preventable deaths and satisfaction with the health care system. When the World Health Organization ranked world health care systems in 2000, the United States ranked 37th, the worst in the industrialized world.

It is generally accepted that universal health care systems improve the efficacy of a health care system by improving access to health care. This is consistent with the finding that the United States health care system provides less outpatient and inpatient care per capita than the health care systems of other industrialized countries.

Thus, our ability to evaluate proposals for US health care reform would be furthered by an understanding of how other industrialized countries succeed in providing universal, comprehensive coverage with more health care and better outcomes at about half our per capita costs. Interestingly, the major factor in understanding this capacity of other industrialized countries relative to the US is not to be found in pay differentials, or the differential use of surgery, lab tests or high tech procedures; but rather, in the nature of the health insurance funded as well as how that insurance is paid for and administered.

First, other industrialized countries guarantee or mandate universal health insurance thereby avoiding both the poorer health care outcomes and the increased health care expenses associated with the uninsured. The uninsured, by avoiding medical care early in the course of illness become more ill than the insured population and die younger. Furthermore, because they seek more emergency care and end up being treated later in the course of an illness, when it is both more difficult and expensive to treat, they end up spending more for health care than the insured. For example, hundreds of thousands of avoidable hospitalizations are incurred each year in the United States due to lack of health insurance.

Second, other industrialized countries insist on comprehensive health insurance covering preventive care, outpatient care, inpatient care, medications, long term care and dental care. By covering all health care expenses they lower the cost of insurance for these expenses by making sure there are no uninsured in any aspect of the health care system. In addition, they lower the cost of insurance for each aspect of the health care system by spreading the expenses across the entire population even when some aspects of health care, such as long term care, are utilized by only a small percent of the population at any given time. Finally, comprehensive insurance saves money by avoiding the additional administrative expenses of having multiple insurance programs to cover the full spectrum of medical care as is characteristic of the United States.

Third, other industrialized countries insist insurers operate not-for-profit and without managed care. For-profits pay higher salaries than not for profits, and on top of that they currently consume about 13 percent of health care premiums in profit, as well as having additional expenses associated with managing care. Repeated studies have shown the same services delivered by for profit Medicare, for-profit nursing homes, or for-profit hospitals would cost about 19% less if delivered through non-profit means. In addition, unmanaged care has been shown to result in a higher quality of care on all recognized quality of care indicators and to be associated with a lower risk of death, thus improving efficacy.

Fourth, other industrialized countries minimize the number of insurers. The number of insurers is directly related to administrative costs. Countries with a single, comprehensive insurance plan, so called single payer countries, such as Canada, have the least insurance overhead. Countries with multiple, comprehensive insurer plans, such as France, with three, and Germany, with about two hundred, have higher insurance administrative costs.

The United States with over 1400 insurance companies and multiple insurance plans within each insurer, almost none of which are comprehensive, and almost all of which operate for-profit, reveals the vast savings power of these first four insurance principles utilized by other industrialized countries. In the United States at least 25% of total health care expenses are consumed by insurance billing costs, about the same percent used to reimburse health care providers. This contrasts with less than 3% in other industrialized nations. Since 1970 billing administrators have increased 2500% relative to physicians in the US while this ratio has not changed significantly in other industrialized countries.

Fifth, other industrialized countries have lowered their cost of health insurance by negotiating the price of prescription drugs and bulk purchasing prescription medications and durable medical equipment, thereby saving about 50%. This approach has been utilized by the VA, Medicaid and HMO sectors of our health care system, but has been prohibited by law from traditional Medicare. Savings of up to 5% of total health care expenditures could result from the full adoption of these practices.

Sixth, some industrialized countries have lowered the cost of health insurance by capitating the expenses of hospitals and physician services, thereby eliminating the cost of billing for these services. This practice runs contrary to the fee for service values of American culture and has little support among American health care reform advocates.

Seventh, other industrialized countries have lowered health insurance costs by funding these costs in relation to income rather than risk. In other industrialized countries the total cost of health care for the entire population is determined and divided among the population so that each person, or employer, pays the same percent of their income, or payroll, for insurance to cover all these expenses. In the United States the private insurance population is fractionated into groups and the cost of the insurance is calculated by assessing the health risk of the group or a particular individual within such a group for the specific medical services the insurance will cover. The factors typically involve age and illness history. As a consequence, health insurance is more expensive the older and sicker you are. Additionally, because the cost is not modified by income, risk based pricing makes health insurance unaffordable to most hourly workers.

This method of making health insurance more affordable is at the heart of the health care reform dilemma for the United States. The only way health insurance can become affordable for a substantial proportion of the uninsured population of the United States is to adopt community financing of insurance and pay for that financing as a percent of income earned. To do so requires financing health insurance through a public tax mechanism rather than a private billing mechanism. Yet, this solution is opposed by a wealthy and powerful minority of people in our country who falsely consider such a solution to be socialism and believe that any socialized health insurance funding mechanism would be inherently inefficient and ineffective, despite consistent evidence to the contrary.


In single payer medical systems the entire population is covered by comprehensive health insurance administered by a single organization. Funding is accomplished through public funds for the unemployed, poor, disabled and retired in combination with an income based health care tax on working families and a payroll tax on employers. These funds go into a health care fund, not general revenue, which is administered by a regional public office in accord with national policy. Rates and coverage are set by regional administrators in negotiation with health care providers. Health care workers are paid fee for service. There is no managed care. There is free choice of health care providers.



This single-payer model is supported by about 60% of the population and physicians, but has limited support among politicians who wish to maintain the private insurance industry.
In summary, although publicly funded health insurance administered through a single payer option is empirically the most cost effective means of lowering the cost of health insurance and improving the efficacy of the American health care system, the two major parties have rejected this approach because of their support for the private insurance system and the pharmaceutical industry, coupled with an irrational belief that for-profit, free market health care reform will solve the problems of our current health care system. In addition, single payer has been grossly misrepresented as a government run, socialized medical system that would cost more and result in waiting lines. The main hope for passage of a publicly funded comprehensive and universal health care system for our country lies in its passage at the state level and having such a system spread to the national level, much as occurred in Canada. In addition, the public funding of elections, the inhibition of politicians from receiving financial benefits from corporations and lobbyists while in office, and the development of multi-party politics in the United States would all benefit the possibility of publicly funded, comprehensive health care reform for the United States. For now, advocates of a single payer health reform can be heartened by its increasing support among physicians and the general population and can take solace in the belief that its passage in the United States is inevitable as other health care reform options, such as individual mandates, are tried and fail, and the health care crisis in this country continues to worsen. The current health care reform situation is very much as Winston Churchill described it: "You can count on Americans to do the right thing- after they've tried everything else."