What's the deal with Universal Healthcare?

Both Sen. Obama and Sen. Clinton have stated that they intend to implement Universal Healthcare, but what exactly does Universal entail?

Universal Healthcare (truly universal) coverage has traditionally been implemented in one of two ways:

The first is a Socialized Healthcare system in which the government controls the delivery of healthcare. In socialized medicine doctors, nurses, and other healthcare providers are employed by the state and the hospitals, clinics, are government run. Socialized healthcare exists in Great Britain and Spain, as well as here in the US by way of the Veteran Health Administration arm of the VA.

The second is a Socialized Financing system, also called Single Payer, or National Health Insurance. This is the system employed by Canada, most of Europe, and Japan. It is not a socialized healthcare delivery system, as the healthcare industry remains private, but is financed by the a single payer- the government. The only presidential candidate to support this system was Kucinich.

In a single payer system all of the expenses which insurance normally would cover are billable to the government health plan. In our current system the government (through our taxes) is still paying for the majority of this country's health care, 60%. The Canadian and Australian governments in contrast pay for 70% of their nations' healthcare. When you factor in the fact that our 60% still leaves 47 million people uninsured in this country, 70% percent to cover the entire population sounds like a pretty good deal.

The thought is that the same amount which our government spends currently, could be used to cover the entire population under a single payer program. Savings would be made in several areas. The primary savings would come through a reduction in overhead. Due to the overwhelmingly complicated nature of insurance claims, fully 31% of our total healthcare expenditures goes to administrative costs compared to less than 17% in Canada. That's really staggering when you think about it. Are the Canadians really TWICE as efficient as we are? Of course not. The insurance companies have become experts over time at gaming the system. That is to say they make it so insanely difficult to file claims that an error on the part of the provider or the patient means that they refuse to reimburse. There are now advanced degrees offered in Insurance Coding- the art of knowing which numbers and boxes to check off on forms to get the insurance companies to reimburse. Seriously, you can get an Associate of Science in Medical Billing and Insurance Coding. I have met people who have these. So as it sits, roughly one third of our total health care expenditures goes towards “administrative costs” which are nothing more than paperwork and insurance company profits.

A second major, and I believe oft overlooked, aspect of single payer is the incentive for preventative medicine. The problem with insurance, as is the case with any middle man operation, is that the higher the costs, the more they prosper. If you take 12-18% off the top of all the money that comes through your office (as it is estimated insurance companies do, plus expenses) would you rather take your cut of inexpensive dietary counseling and smoking cessation aids or 25 years of diabetic supplies and COPD treatments? This this basically gives the insurance companies no incentive to pay for preventive health care. However, with a single payer system there is huge incentive to keep the population healthy with preventative care and counseling. A small investment on the front end would pay off huge health dividends as the aging population develops less heart disease, diabetes, smoking related lung disease and other incurable, expensive to treat, chronic problems.

Another major healthcare expense of course is pharmaceuticals. The US government, by way of Medicare, is the largest purchaser of drugs in world, yet it is not allowed to negotiate drug prices with pharmaceutical companies thanks to our congressmen and their lobbying pals. Canada pays around 50% of what we do for drugs due to their government's negotiations. Again, the same people who argue against the "socialization" of healthcare, continue to repress free market economics and prop up the pharma companies who now spend more on marketing then they do on research & design and have lobbied to the extent that they are more or less allowed to patent research done by the NIH. With a single payer negotiating on our behalf huge savings could be made on drugs, towards which 25% of our total healthcare expenditures currently go. With (record) profits in the billions, I think the pharma companies will have plenty left over to pay their patent lawyers. Plus with 50 million more people gaining insurance under a single payer plan, they will have a entire new market to pitch to.

Obviously there are numerous reasons why this would be an outstanding choice for our country. However, there is one glaring fault. For this to work, the entire health insurance industry would, for the most part, be out of work overnight. While they would still likely be allowed to provide supplemental insurance for those who wished to purchase it, their primary policies would be shut down. They have too much lobbying power and are too ingrained in our society to ever let that happen. And because of this, while both democratic candidates state they are for universal healthcare, they aren't for truly universal healthcare. If they were, the insurance companies would rise up and set loose the four horsemen upon them as they did with HillaryCare.

However, if we can take steps toward a single payer system, the most obvious being to offer a government sponsored health policy, eventually something resembling a guaranteed nationwide health plan provided for all citizens might be possible. Both Sen. Obama and Clinton have proposed a government sponsored health insurance policy as part of their plans for the healthcare system. But the trick lies in how they will implement a government sponsored policy and I can see two ways in which this could go wrong.

One, the government plan simply becomes another Medicare Advantage plan. Brian Biles, MD (a Kansas grad) published a report stating that the cost to the US gov is 12% higher for a person enrolled in a Medicare Advantage plan (www.commonwealthfund.org). So basically, the more people who enroll in these, the more expensive healthcare in the US becomes (see a previous post). Simply enrolling people in a plan like this wouldn't do anything to reduce health care costs and would only further the privatization of public health.

Two, the government plan becomes a lobbyist's candy store, bloated down with Sen. Tankerbell's useless entitilitis therapies and guaranteed thrice weekly aroma therapy sessions courtesy of the Scented Oil Lobby. Ideally, it would develop into a streamlined viable alternative to private plans and help to unhinge the grip the insurance companies have on making your health decisions, but with our congress' recent track record of caving to lobbyists, I wouldn't count on it.

Both Dem candidates are (intentionally) hard to pin down with regards to details of their government sponsored plan. For example Clinton's healthcare reform plan proposed while first lady was an 1800 page tome. Her current plan is 19 pages. Obama's plan is printed on a business card which reads "Yes we can... and without a mandate."

Some people say that a government offered health plan would impede on free market economics at play in the insurance industry. This makes little to no sense but reflects how complacent we have become in allowing insurance companies to dictate how and by what means we manage our bodies and our health. Would anyone in their right mind suggest that government run schools are imposing on the private school industries right to do business? This would only be true if you didn't believe things like opportunities for education and the chance to lead a healthy life were not unalienable rights.

Cliff Notes:

We pay a lot for healthcare and we don't get much.

Single payer could solve this, but zero chance of it happening overnight (sorry dreamers).

A government sponsored health plan in direct competition with private plans could help get us there.

Read more at Physicians for a National Health Program http://www.pnhp.org/

Up next: The Great Debate. We recently had a health issues debate with people representing all three candidates, including real life advisors to Sen. Obama (oh my). Some very interesting stuff, including a discussion of the madness we have created by tying health insurance to employment.