Paul Y. Song, MDPaul Y. Song, MD

Physicians for a National Health ProgramPhysicians for a National Health Program

Healthcare in the US:Healthcare in the US:Why We Still Need A Why We Still Need A

Single Payer System!!!Single Payer System!!!

Hippocratic OathHippocratic Oath

““I will follow that system of regimen, which I will follow that system of regimen, which according to my ability and judgment, I according to my ability and judgment, I consider for the benefit of my patients, and consider for the benefit of my patients, and abstain from whatever is deleterious and abstain from whatever is deleterious and mischievousmischievous””..

The ProblemThe Problem The US spends $2.5 Trillion a year which is 17.3% of our The US spends $2.5 Trillion a year which is 17.3% of our

GDP on healthcare and more than any other GDP on healthcare and more than any other industrialized country in the world by far. industrialized country in the world by far.

The CBO estimates it will grow to 25% of our GDP by The CBO estimates it will grow to 25% of our GDP by 2025.2025.

The average family premium is $14,000 a year.The average family premium is $14,000 a year.

17% of American income now goes to pay for health 17% of American income now goes to pay for health care.care.

75 million Americans are underinsured.75 million Americans are underinsured.

The number of uninsured in the US now exceeds 50.7 The number of uninsured in the US now exceeds 50.7 million and has actually increased since the passage of million and has actually increased since the passage of the healthcare bill.the healthcare bill.

Bad in California TooBad in California Too

From 2003–2010 health insurance premiums From 2003–2010 health insurance premiums increased 52% to an average of $13,819 per family increased 52% to an average of $13,819 per family and to $4,811 for individuals while average salaries and to $4,811 for individuals while average salaries only increased 4%.only increased 4%.

Between 2007 and 2009, the number of uninsured Between 2007 and 2009, the number of uninsured Californians swelled to 28% or over 8.2 million.Californians swelled to 28% or over 8.2 million.

U.S. Health Costs Rising More Steeply, 1970-2008

Broken System??Broken System??

The Commonwealth Fund 6/23/10

51 Million Americans 51 Million Americans Without Insurance TodayWithout Insurance Today

4545

4040

3535

3030

2525

2020

Source: Himmelstein, Woolhandler, Carrasquilo – Tabulation from CPS and NHIS data

Mill

ion

s of

Un

insu

red

Am

eri

can

s

19801980 19851985 19901990 19951995 200020001976 2008

Who are the Uninsured?Who are the Uninsured?

FULL-TIME WORKER 66.5%

PART-TIME WORKER 14%

Urban Institute and Kaiser Commission on Medicaid and the Uninsured estimates based on the Census Bureau's March 2008 and 2009 Current Population Survey (CPS: Annual Social and Economic Supplements).

NON-WORKER19.5%

Of the 50.7 million, over 20 million are fully employed and Of the 50.7 million, over 20 million are fully employed and 70% of all uninsured are from families with one or more full-time 70% of all uninsured are from families with one or more full-time workers.workers.

Uninsured DeathsUninsured Deaths

45,000 annual deaths are 45,000 annual deaths are attributed simply to a lack of attributed simply to a lack of coverage.coverage.

Medical Related BankruptciesMedical Related Bankruptcies

Number of medical related bankruptcies Number of medical related bankruptcies increased 50% during the last 9 years.increased 50% during the last 9 years.

In 2011, there were over 4 million In 2011, there were over 4 million bankruptcies.bankruptcies.

- 2/3 are due to a medical illness.2/3 are due to a medical illness.

Most of the Medically BankruptMost of the Medically BankruptHad Insurance CoverageHad Insurance Coverage

Source: Himmelstein et al. Am J Med, Aug. 2009

Insurance at onset of illness

Hard for Employers Too!Hard for Employers Too!

For every For every $100$100 that US companies spend on that US companies spend on health care, companies in Japan, Germany, health care, companies in Japan, Germany, France, and Canada spend France, and Canada spend 6363 cents which cents which leads to more off-shoring of jobs and less leads to more off-shoring of jobs and less job creation.job creation.

Ford spent $3.2 Billion on health premiums; Ford spent $3.2 Billion on health premiums; Prior to the bailout, GM spent more on Prior to the bailout, GM spent more on health premiums than on steel.health premiums than on steel.

It is estimated that health care costs add It is estimated that health care costs add $1500-2000 to the sticker price of a US $1500-2000 to the sticker price of a US made car.made car.

How did we get here?How did we get here? As far back as Mesopotamia, under the code of As far back as Mesopotamia, under the code of

Hammurabi, it was expected that successful healthcare Hammurabi, it was expected that successful healthcare was a standard service performed in exchange for a fee.was a standard service performed in exchange for a fee.

Individual health insurance became available during the Individual health insurance became available during the Civil War (1861-1865) when accident insurance providing Civil War (1861-1865) when accident insurance providing coverage of injury related to travel by railroad or coverage of injury related to travel by railroad or steamboat was offered. steamboat was offered.

Massachusetts Health Insurance of Boston began to offer Massachusetts Health Insurance of Boston began to offer the first ever group policies with a relatively the first ever group policies with a relatively comprehensive list of benefits as early as 1847.comprehensive list of benefits as early as 1847.

Early coverage was referred to as “sickness insurance” Early coverage was referred to as “sickness insurance” which covered lost wages from illness and not which covered lost wages from illness and not healthcare.healthcare.

History of Health InsuranceHistory of Health Insurance Up to the 1920’s most Americans did not feel health insurance Up to the 1920’s most Americans did not feel health insurance

was necessary and stayed with sickness insurance plans as was necessary and stayed with sickness insurance plans as medical technology and overall costs were still far less than medical technology and overall costs were still far less than wages.wages.

Before 1936, healthcare was less than 1% of the US GDP.Before 1936, healthcare was less than 1% of the US GDP.

Most paid out of pocket or relied on charity care.Most paid out of pocket or relied on charity care.

In 1929, a group of Dallas-based teachers formed a partnership In 1929, a group of Dallas-based teachers formed a partnership with Baylor hospital to provide a set amount of sickness and with Baylor hospital to provide a set amount of sickness and hospitalization days in exchange for a fixed, prepaid monthly fee. hospitalization days in exchange for a fixed, prepaid monthly fee. This was encouraged by the American Hospital Association and This was encouraged by the American Hospital Association and these plans began to grow. these plans began to grow.

Individual hospitals and community care organizations began Individual hospitals and community care organizations began competing with one another for such plans, so to provide better competing with one another for such plans, so to provide better coverage, hospitals joined together under the name of Blue Cross coverage, hospitals joined together under the name of Blue Cross (1936).(1936).

History of Health InsuranceHistory of Health Insurance To maintain some autonomy and a closer physician-patient To maintain some autonomy and a closer physician-patient

relationship, physicians organized their own prepaid plans in relationship, physicians organized their own prepaid plans in the Pacific Northwest and Blue Shield (1939) was developed to the Pacific Northwest and Blue Shield (1939) was developed to not only to compete with Blue Cross, but to offer another not only to compete with Blue Cross, but to offer another choice.choice.

Both BS and BC gave discounted care in exchange for Both BS and BC gave discounted care in exchange for increased volume and prompt payment.increased volume and prompt payment.

Employee Benefit plans proliferated in the 1940s and 1950s as Employee Benefit plans proliferated in the 1940s and 1950s as war-time government imposed wage freezes (1939-1945) war-time government imposed wage freezes (1939-1945) forced employers to offer better benefit packages including forced employers to offer better benefit packages including health insurance coverage as a way to attract workers. health insurance coverage as a way to attract workers.

Strong Unions bargained for tax-free, employer-sponsored Strong Unions bargained for tax-free, employer-sponsored health insurance.health insurance.

Commercial life insurance companies begin selling health Commercial life insurance companies begin selling health insurance to employers.insurance to employers.

US Government Health InsuranceUS Government Health Insurance

Medicare (fully federally funded) established in 1965 Medicare (fully federally funded) established in 1965 when only 56% of adults over 65 years of age were when only 56% of adults over 65 years of age were insured.insured.

Prior to Medicare, 1/3 of all seniors were living in Prior to Medicare, 1/3 of all seniors were living in poverty.poverty.

Medicaid (up to half have funded by states) – Medicaid (up to half have funded by states) – program for poor which is determined by means program for poor which is determined by means testing. Currently over 50 million Americans testing. Currently over 50 million Americans enrolled.enrolled.

US still remains the only major industrialized nations US still remains the only major industrialized nations without universal access to healthcare!without universal access to healthcare!

Government Guarantees of Government Guarantees of Universal Health InsuranceUniversal Health Insurance

1947 – Sweden1947 – Sweden 1945 – Belgium1945 – Belgium 1948 – United Kingdom1948 – United Kingdom 1961 – Japan1961 – Japan 1966 – Canada1966 – Canada 1973 – Denmark1973 – Denmark 1978 – Italy1978 – Italy 1986 – Spain1986 – Spain 1996 – South Africa1996 – South Africa 2002 – Taiwan2002 – Taiwan

History of Health InsuranceHistory of Health Insurance

Today the Blue Cross Blue Shield Association is a Today the Blue Cross Blue Shield Association is a federation of 39 separate health insurance federation of 39 separate health insurance organizations and companies in the US providing organizations and companies in the US providing coverage for over 100 million Americans.coverage for over 100 million Americans.

Prior to the tax reform act of 1986, they were tax Prior to the tax reform act of 1986, they were tax exempt and considered social welfare plans. This status exempt and considered social welfare plans. This status was revoked as they sold commercial type insurance.was revoked as they sold commercial type insurance.

They soon became 501(m) organizations which had They soon became 501(m) organizations which had special “tax benefits” and in 1994 most became “for-special “tax benefits” and in 1994 most became “for-profit” companies.profit” companies.

The 14-state Wellpoint is the largest BC/BS member and The 14-state Wellpoint is the largest BC/BS member and a publicly traded company.a publicly traded company.

The For-Profit Insurance Industry The For-Profit Insurance Industry is Not Your Friend!is Not Your Friend!

Take 31 cents out of every dollar away from actual Take 31 cents out of every dollar away from actual patient care.patient care.

Increase overall health care costs by discouraging Increase overall health care costs by discouraging people from receiving preventative care and by people from receiving preventative care and by driving the sick into more expensive care settingsdriving the sick into more expensive care settings

1/6 of all policies are actually grossly inadequate to 1/6 of all policies are actually grossly inadequate to cover a serious illness.cover a serious illness.

70% of losses (money paid out in claims) goes to 70% of losses (money paid out in claims) goes to cover about 10% of their subscribers creating a cover about 10% of their subscribers creating a powerful incentive to screen subscribers and harass powerful incentive to screen subscribers and harass them to drop their coverage and go elsewhere.them to drop their coverage and go elsewhere.

They encourage higher deductibles and co-pays by They encourage higher deductibles and co-pays by increasing premiums to insure they cover very little.increasing premiums to insure they cover very little.

Administrators Are Growing Administrators Are Growing Faster Than PhysiciansFaster Than Physicians

Source: Bureau of Labor Statistics; NCHS; Himmelstein/Woolhandler analysis of CPS

3,0003,000%%

2,0002,000%%

1,0001,000%%

001970 1980 1990 2000 2009

Physicians

Physicians

Administrators

Administrators

The For-Profit Insurance Industry The For-Profit Insurance Industry is Not Your Friend!is Not Your Friend!

Over the past 9 years:Over the past 9 years:

Only recession proof industry that consistently raises Only recession proof industry that consistently raises prices 10-15% every year regardless of the economy. prices 10-15% every year regardless of the economy. Far outpacing inflation.Far outpacing inflation.

Average premiums have increased nearly 120%Average premiums have increased nearly 120%

– Profits at the 10 largest publicly traded insurance Profits at the 10 largest publicly traded insurance companies have rose 428% (reported).companies have rose 428% (reported).

– Average annual CEO salary at these companies was Average annual CEO salary at these companies was $11.9 Million which is 468 times what the average $11.9 Million which is 468 times what the average US worker makes.US worker makes.

– In CA, the six largest insurers denied over 45.7 In CA, the six largest insurers denied over 45.7 million claims in the last six years.million claims in the last six years.

CEO Salaries (2008)CEO Salaries (2008)

Roy Williams – CEO Aetna - Roy Williams – CEO Aetna - $ 24,300,122$ 24,300,122 H. Edward Hanway – Cigna - H. Edward Hanway – Cigna - $ 12,236740$ 12,236740 Angela Bray – Wellpoint - Angela Bray – Wellpoint - $ 9,844,212$ 9,844,212 Dale Wolf – Coventry Healthcare - Dale Wolf – Coventry Healthcare - $ 9,047,469$ 9,047,469 Michael Niedorff –Centene - Michael Niedorff –Centene - $ 8,744, 483$ 8,744, 483 James Carlson – Amerigroup - James Carlson – Amerigroup - $ 5,292,546$ 5,292,546 Michael McAllister – Humana - Michael McAllister – Humana - $ 4,764,309$ 4,764,309 Jay Gellert – Health Net - Jay Gellert – Health Net - $ 4,425,355$ 4,425,355 Steven Helmsley – United Health Group - Steven Helmsley – United Health Group - $ 3,241,042$ 3,241,042

Billy Tauzin – CEO PhRMA - Billy Tauzin – CEO PhRMA - $2,000,000$2,000,000 Karen Ignani – Amer. Health Insurance Plans - Karen Ignani – Amer. Health Insurance Plans - $ $

1,580,0001,580,000

Anthem Blue Cross proposed 39% rate increases in 2010.

Whenever profits are not enough, patients get crucified!!

Blue Shield of California proposed to raise health insurance rates a whopping 59% for individual policyholders in 2011, saying the increase is “absolutely necessary” to deal with rising health care costs and restrictions in the new health care law.

Insurance Industry EffortsInsurance Industry Efforts

4525 lobbyists for the 535 Congressional 4525 lobbyists for the 535 Congressional members (8:1) – 450 lobbyists are former members (8:1) – 450 lobbyists are former congressional staffers and 12 were former congressional staffers and 12 were former Max Baucus Staffers.Max Baucus Staffers.

$1.4 Million was spent each day!!$1.4 Million was spent each day!!

$260+ Million was spent by the health $260+ Million was spent by the health insurance industry and big Pharma – more insurance industry and big Pharma – more than on the 2004 Bush-Kerry presidential than on the 2004 Bush-Kerry presidential campaign.campaign.

Insurance stocks hit a 52 week high once Insurance stocks hit a 52 week high once there was no public option.there was no public option.

What Happened?!!What Happened?!!

June 17, 2009 – As 22 Senators began hearings and work on healthcare reform, the room was full of registered healthcare Lobbyists.

Easy to Blame the GOP, but…Easy to Blame the GOP, but…

The Democrats had a supermajority for most of The Democrats had a supermajority for most of the debate.the debate.

60%60% of all money went to Democrats. of all money went to Democrats.

Max Baucus (Chairman of the Senate Finance Max Baucus (Chairman of the Senate Finance Committee) received over $2 million.Committee) received over $2 million.

Ben Nelson received more money from the health Ben Nelson received more money from the health insurance industry than any other industry.insurance industry than any other industry.

Joe Lieberman received over $1 million and his Joe Lieberman received over $1 million and his wife was employed by several healthcare and wife was employed by several healthcare and Pharma companies.Pharma companies.

Arguments Against ReformArguments Against Reform

““Will explode the deficit!Will explode the deficit!””

Nixon/Ford: Nixon/Ford: 6.8% per year6.8% per year

Carter: 2.0% per Carter: 2.0% per yearyear

Reagan: -1.3% Reagan: -1.3% per yearper year

Bush 1: 4.0% Bush 1: 4.0% per yearper year

Clinton: 2.5% Clinton: 2.5% per yearper year

Bush Jr: 8.2% Bush Jr: 8.2% per yearper year

Arguments Against ReformArguments Against Reform

““Will explode the deficit!Will explode the deficit!”” ““This is the largest government run This is the largest government run

health care program everhealth care program ever””..

Originally passed in 2004 at a projected cost of

$400B over 10 years, some estimates suggest it will cost over $900 Billion.

Passed by a GOP controlled house and senate led by then Rep. Billy Tauzin (R-

La) who left immediately after its passage to become the head of PhRMA.

Arguments Against ReformArguments Against Reform

““Will explode the deficit!Will explode the deficit!””

““This is the largest government run This is the largest government run health care program everhealth care program ever””..

““Socialized medicineSocialized medicine””

Socialized Medicine was popularized by a public relations firm working for the American Medical Association in 1947 to disparage President Truman's proposal for a national health care system.

It was a label, at the dawn of the cold war, meant to suggest that anybody advocating universal access to health care must be a communist.

And the phrase has retained its political power for six decades.

“If you don’t stop Medicare and I don’t do it, one of These Days, you and I are going to spend our sunset years telling our children, and our children’s children

what it once was like In America when men were free”

- Ronald Regan 1961

The original meaning of “socialized medicine” was confined to systems in which the government owns and operates health care facilities and employs health care professionals, support staff, and all ancillary workers.

England, Germany, Israel, Sweden, Finland, New Zealand, France, Canada, Taiwan, Japan all have “socialized medicine”.

October 22, 2009 - Veterans Health Care Budget Reform And Transparency Act

More than 1400 hospitals, clinics and nursing homes, 14,800 doctors, 61,000 nurses , and 5 million patients.

Rand Corporation found that 67% of veterans received appropriate care compared to 55% for the general public.

University of Michigan study found 83% satisfaction for Veterans compared to 73% for general public.

Let the Free Market Let the Free Market Rule!Rule!

There currently is no free market! Only two There currently is no free market! Only two industries in the US have antitrust exemptions – industries in the US have antitrust exemptions – Major League Baseball and The Health Insurance Major League Baseball and The Health Insurance Industry.Industry.

There has been heavy consolidation and near There has been heavy consolidation and near monopolies established in the past 10 years.monopolies established in the past 10 years.

One or two insurers generally control the top 94 One or two insurers generally control the top 94 metropolitan areas in the US.metropolitan areas in the US.

In some states like Alabama, 90% have Blue Cross.In some states like Alabama, 90% have Blue Cross.

By allowing insurers to sell across state lines, By allowing insurers to sell across state lines, patient protections will be reduced due to variations patient protections will be reduced due to variations between states.between states.

So What Did We End Up With?So What Did We End Up With?

The Patient Protection and Affordable Care The Patient Protection and Affordable Care Act, not Obamacare.Act, not Obamacare.

It is not socialized medicine or a It is not socialized medicine or a government takeover of medicine.government takeover of medicine.

There are no death panels.There are no death panels.

CBO estimates it will cost $940 Billion over CBO estimates it will cost $940 Billion over the first 10 years.the first 10 years.

Majority of the provisions will not begin Majority of the provisions will not begin until 2014.until 2014.

Individual Mandate Model of Individual Mandate Model of ReformReform

Proposed by Proposed by Richard Nixon in Richard Nixon in 1971 to block 1971 to block Edward Kennedy’s Edward Kennedy’s National Health National Health Insurance ProposalInsurance Proposal

The Government Uses its Power to The Government Uses its Power to Make People Buy Private Make People Buy Private

InsuranceInsurance

Expands Medicaid-like Program, Individual Expands Medicaid-like Program, Individual and Employer Mandates, No Real Cost and Employer Mandates, No Real Cost

Controls, Adds Layers of Administrative Controls, Adds Layers of Administrative ComplexityComplexity

WhatWhat’’s Been Implemented?s Been Implemented? $727 Million to upgrade and expand community $727 Million to upgrade and expand community

health centers providing health care to 745,000 health centers providing health care to 745,000 uninsured patients.uninsured patients.

Medicare beneficiaries will receive a $250 rebate to Medicare beneficiaries will receive a $250 rebate to help fill the prescription drug donut.help fill the prescription drug donut.

Primary care doctors will get a 10% raise.Primary care doctors will get a 10% raise.

Insurers can no longer carry out rescissions when Insurers can no longer carry out rescissions when insured use policies, set lifetime benefit limits, set insured use policies, set lifetime benefit limits, set annual benefit limits, deny coverage to children annual benefit limits, deny coverage to children with pre-existing conditions (2014 for everyone).with pre-existing conditions (2014 for everyone).

Insurers must now offer coverage to kids on their Insurers must now offer coverage to kids on their parentparent’’s policies up to the age of 26.s policies up to the age of 26.

WhatWhat’’s Been Implemented?s Been Implemented? Insurers must now cover recommended Insurers must now cover recommended

preventative care and immunizations without preventative care and immunizations without charging cost sharing amounts.charging cost sharing amounts.

Insurers will be forced to spend 85 cents out of Insurers will be forced to spend 85 cents out of every dollar for actual patient care.every dollar for actual patient care.

$350 Million to crack down on Medicare fraud.$350 Million to crack down on Medicare fraud.

Small businesses (< 25 full time employees Small businesses (< 25 full time employees with annual wages less than $50K ($25K in with annual wages less than $50K ($25K in 2014) will get a 35% tax credit to help pay for 2014) will get a 35% tax credit to help pay for premiums.premiums.

A high risk pool will be established for the A high risk pool will be established for the sickest patients who are currently uninsurable.sickest patients who are currently uninsurable.

Impact of Health Reform Impact of Health Reform On the UninsuredOn the Uninsured

Problems With the Reform BillProblems With the Reform Bill $475 Billion subsidy to the insurance $475 Billion subsidy to the insurance

industry that forces 30 Million Americans to industry that forces 30 Million Americans to buy coverage from these companies that do buy coverage from these companies that do not care about patients!not care about patients!

23 Million people will still be uninsured nine 23 Million people will still be uninsured nine years from now.years from now.

Millions of middle income people will be Millions of middle income people will be forced to buy commercial policies costing up forced to buy commercial policies costing up to 9.5% of their income, but covering only to 9.5% of their income, but covering only 70% of their medical expenses, leaving them 70% of their medical expenses, leaving them still very vulnerable to medical related still very vulnerable to medical related bankruptcies due to high deductibles and co-bankruptcies due to high deductibles and co-pays which will still be permitted.pays which will still be permitted.

Fee-For-ServiceFee-For-Service

Problems With the Reform BillProblems With the Reform Bill While Insurers will no longer be able to deny While Insurers will no longer be able to deny

coverage or set maximum caps, they will still be able coverage or set maximum caps, they will still be able to increase co-pays, deductibles, and premiums to increase co-pays, deductibles, and premiums which will only serve to preclude access to which will only serve to preclude access to healthcare.healthcare.

Enforcement of new regulations such as ending Enforcement of new regulations such as ending denials on the basis of pre-existing conditions are denials on the basis of pre-existing conditions are riddled with loopholes and waivers, and there is riddled with loopholes and waivers, and there is nothing to prevent older people or women from nothing to prevent older people or women from being charged more based on age or gender until being charged more based on age or gender until 2017.2017.

– HHS has already scaled back rules on health insurance HHS has already scaled back rules on health insurance appeal denials making the process even more difficult appeal denials making the process even more difficult for patients!for patients!

People with employer based coverage will remain People with employer based coverage will remain locked in their plans and have no choice of providers locked in their plans and have no choice of providers or hospitals. No competition for most of us!or hospitals. No competition for most of us!

Crime and Punishment in Crime and Punishment in MassachusettsMassachusetts

The CrimeThe Crime Violation of Child Labor LawsViolation of Child Labor Laws Employers Failing to Partially Employers Failing to Partially

Subsidize a Poor Health Plan Subsidize a Poor Health Plan for Workersfor Workers

Illegal Sale of Firearms, First Illegal Sale of Firearms, First OffenseOffense

Driving Under the Influence, Driving Under the Influence, First OffenseFirst Offense

Domestic AssaultDomestic Assault Cruelty to or Malicious Killing Cruelty to or Malicious Killing

of Animalsof Animals Communication of a Terrorist Communication of a Terrorist

ThreatThreat Being Uninsured In Being Uninsured In

MassachusettsMassachusetts

The FineThe Fine $50$50 $295$295

$500 Maximum$500 Maximum

$500 Maximum$500 Maximum

$1000 Maximum$1000 Maximum $1000 Maximum$1000 Maximum $1000 Maximum$1000 Maximum

$1212$1212

Medicare – A Single Payer Medicare – A Single Payer System!!System!!

Established in 1965 when only 56% of adults over 65 Established in 1965 when only 56% of adults over 65 years of age were insured.years of age were insured.

Prior to Medicare, 1/3 of all seniors were living in poverty.Prior to Medicare, 1/3 of all seniors were living in poverty.

Commonwealth Fund Study (5/09) – Medicare patients had Commonwealth Fund Study (5/09) – Medicare patients had much greater satisfaction, better access to care, and much greater satisfaction, better access to care, and fewer billing problems than those with employer fewer billing problems than those with employer sponsored plans.sponsored plans.

Kaiser Family foundation study showed greater overall Kaiser Family foundation study showed greater overall satisfaction and much more cost efficiency than private satisfaction and much more cost efficiency than private insurance companies.insurance companies.

Medicare spends approximately 3.6% on administrative Medicare spends approximately 3.6% on administrative costs and 96.4% on actual patient care!costs and 96.4% on actual patient care!

Patients have greater choice and do not need pre-Patients have greater choice and do not need pre-authorizations.authorizations.

Medicare – A Single Payer Medicare – A Single Payer System!!System!!

The government does not tell doctors how to The government does not tell doctors how to practice, what tests to order, which hospitals to go practice, what tests to order, which hospitals to go to, or what medications to prescribe.to, or what medications to prescribe.

It is the private insurance companies that tell It is the private insurance companies that tell patients who to see, where to go, and what doctors patients who to see, where to go, and what doctors can do.can do.

Since 2008, more providers are dropping more Since 2008, more providers are dropping more patients with private non capitated insurance than patients with private non capitated insurance than patients with Medicare.patients with Medicare.

A Few Sick People Drive Most CostsA Few Sick People Drive Most Costs

Decile of privately insured

Percentage of total health spending in 2001

Source: MEPS data, from Thorpe and Reinhart

Top two deciles account for 78.3%

of spending

Top two deciles account for 78.3%

of spending

Current Medicare Has LimitationsCurrent Medicare Has Limitations Medicare doesnMedicare doesn’’t cover everything – 45% of outpatient mental t cover everything – 45% of outpatient mental

health services, no dental coverage.health services, no dental coverage.

Medicare Part B which covers doctorsMedicare Part B which covers doctors’’ services generally pays services generally pays for 80% of all reasonable charges, leaving seniors responsible for 80% of all reasonable charges, leaving seniors responsible for the remaining 20% which can be very expensive when for the remaining 20% which can be very expensive when dealing with a life threatening or serious illness.dealing with a life threatening or serious illness.

Medicare is fully privatized and there is no price negotiations Medicare is fully privatized and there is no price negotiations for bulk purchasing.for bulk purchasing.

Without PPACA, Medicare is forecast to be bankrupt by 2016.Without PPACA, Medicare is forecast to be bankrupt by 2016.

Due to the anticipated savings due to PPACA of more than Due to the anticipated savings due to PPACA of more than $120 Billion, Medicare should now be insolvent in 2024.$120 Billion, Medicare should now be insolvent in 2024.

In 1999, the Bipartisan Commission on the Future of Medicare In 1999, the Bipartisan Commission on the Future of Medicare predicted that Medicare would be bankrupt by 2008. predicted that Medicare would be bankrupt by 2008.

Private insurers waste Private insurers waste 3131 cents cents of every dollar on overhead, of every dollar on overhead, sales and marketing, lobbying, sales and marketing, lobbying, billing, underwriting, and billing, underwriting, and exorbitant executive exorbitant executive compensation.compensation.

This waste is now estimated to This waste is now estimated to be over $400 Billion a year!!be over $400 Billion a year!!

Single Payer SystemSingle Payer System Single payer financing is the only way to recapture this Single payer financing is the only way to recapture this

wasted money and provide comprehensive coverage to wasted money and provide comprehensive coverage to everyone without paying more than we already do.everyone without paying more than we already do.

Would be financed by eliminating private insurance and Would be financed by eliminating private insurance and recapturing their administrative waste. recapturing their administrative waste.

Modest new taxes would replace premiums and costs Modest new taxes would replace premiums and costs would be controlled through negotiated fees, global would be controlled through negotiated fees, global budgeting, and bulk purchasing.budgeting, and bulk purchasing.

Unified risk pool – everybody in, nobody out, continuous Unified risk pool – everybody in, nobody out, continuous which would provide a new financial solvency to Medicare!!which would provide a new financial solvency to Medicare!!

Everybody contributes to fund health care based on ability Everybody contributes to fund health care based on ability to pay.to pay.

Transparency and Accountability to the publicTransparency and Accountability to the public

We can save over $4 Trillion in the next 10 years with a We can save over $4 Trillion in the next 10 years with a Medicare for All program.Medicare for All program.

Covering Everyone and Covering Everyone and Saving MoneySaving Money

Additional costsAdditional costsCovering the uninsured and poorly-insured +7.2%Covering the uninsured and poorly-insured +7.2%Elimination of cost-sharing and co-pays +5.1%Elimination of cost-sharing and co-pays +5.1%

SavingsSavingsBulk purchasing of drugs & equipment -2.8%Bulk purchasing of drugs & equipment -2.8%Reduced hospital administrative costs -1.9%Reduced hospital administrative costs -1.9%Reduced physician office costs - 3.6%Reduced physician office costs - 3.6%Reduced insurance administrative costs -5.3%Reduced insurance administrative costs -5.3%Primary care emphasis & reduce fraud -2.2%Primary care emphasis & reduce fraud -2.2%

Net (Savings)Net (Savings) -4.3% -4.3%

Source: Health Care for All Californians Plan, Lewin Group, 2005

Single Payer SystemSingle Payer System Physicians would still be able to practice medicine the way they Physicians would still be able to practice medicine the way they

think is best, but with far less paperwork and administrative think is best, but with far less paperwork and administrative costs!! costs!!

Average private practice currently spend about 25% on Average private practice currently spend about 25% on administrative costs. This would save about $70,000 a year.administrative costs. This would save about $70,000 a year.

All medically necessary care is covered. Patients would have All medically necessary care is covered. Patients would have choice of physician and treatment. choice of physician and treatment.

Strong emphasis on comprehensive, focused, and preventative Strong emphasis on comprehensive, focused, and preventative care in a timely manner.care in a timely manner.

Would lead to higher wages as employers would not have to pay Would lead to higher wages as employers would not have to pay for healthcare premiums.for healthcare premiums.

Would lead to more capital investments by companies.Would lead to more capital investments by companies.

CA Nurses Association study found it would create 2.6 Million CA Nurses Association study found it would create 2.6 Million new jobs and infuse $317 Billion in new business revenue.new jobs and infuse $317 Billion in new business revenue.

Patients would not feel trapped in their current jobs due to the Patients would not feel trapped in their current jobs due to the fear of losing their health care coverage.fear of losing their health care coverage.

Benefits/Portability Benefits/Portability

preventative carepreventative care primary careprimary care inpatient hospital inpatient hospital

care care outpatient careoutpatient care emergency careemergency care prescription drugsprescription drugs

durable medical equipment durable medical equipment long term carelong term care mental health services mental health services dentistry dentistry eye careeye care substance abuse substance abuse

treatmenttreatment

Patients have unlimited choice of physicians, hospitals, and clinics regardless of location

USNHI will cover all medically necessary servicesUSNHI will cover all medically necessary services, , including:including:

Single Payer SystemSingle Payer System

HR 676 – Expanded and Improved HR 676 – Expanded and Improved Medicare Act for All - Conyers (now Medicare Act for All - Conyers (now with 64 co-sponsors)with 64 co-sponsors)

California SB 810 – Mark LenoCalifornia SB 810 – Mark Leno

SB 810SB 810The California Universal Care ActThe California Universal Care Act

Introduced February 18, 2011Introduced February 18, 2011 Author: State Senator Mark LenoAuthor: State Senator Mark Leno Similar legislation has been passed twice beforeSimilar legislation has been passed twice before Both times vetoed by former GovernorBoth times vetoed by former Governor Requires no new spending.Requires no new spending. CA Federation of Teachers estimates that SB 810 CA Federation of Teachers estimates that SB 810

would save over $300 Million on healthcare costs.would save over $300 Million on healthcare costs. SB 810 would save over $20 Billion in year one on SB 810 would save over $20 Billion in year one on

reduced administrative costs and $29 Billion overallreduced administrative costs and $29 Billion overall

SB 810 SB 810 Legislative DigestLegislative Digest

Establishes California Healthcare SystemEstablishes California Healthcare System Creates California Healthcare AgencyCreates California Healthcare Agency Healthcare Commissioner (appointed by Governor)Healthcare Commissioner (appointed by Governor) Receives all healthcare paymentsReceives all healthcare payments Is the sole payer of healthcare costsIs the sole payer of healthcare costs Duplication of coverage for benefits provided by Duplication of coverage for benefits provided by

CHS is prohibitedCHS is prohibited On 1/31 - Failed in the CA Senate 19-15 (two votes On 1/31 - Failed in the CA Senate 19-15 (two votes

short!) – Six Democrats voted no or abstained!!!short!) – Six Democrats voted no or abstained!!!

Oh Canada!!Oh Canada!!

In 1965, the federal government offered a 50-50 cost In 1965, the federal government offered a 50-50 cost sharing arrangement with the provinces, if they met sharing arrangement with the provinces, if they met four criteria of comprehensiveness, portability, four criteria of comprehensiveness, portability, public administration, and universality.public administration, and universality.

By 1971, all Canadians were guaranteed access to By 1971, all Canadians were guaranteed access to essential medical services regardless of essential medical services regardless of employment, income, or health.employment, income, or health.

Many doctors initially opted out due to low fees and Many doctors initially opted out due to low fees and directly billed patients.directly billed patients.

The Canadian Health Act of 1984 effectively forbid The Canadian Health Act of 1984 effectively forbid private practioners from billing beyond provincially private practioners from billing beyond provincially mandated fee schedules.mandated fee schedules.

This system in funded primarily by tax dollars.This system in funded primarily by tax dollars. Healthcare providers are primarily private and Healthcare providers are primarily private and

hospital systems are largely non-profit.hospital systems are largely non-profit.

Quality of Care Slightly Better in Canada Than U.S.A Meta-Analysis of Patients Treated for Same Illnesses

(U.S. Studies Included Mostly Insured Patients)

Source: Guyatt et al, Open Medicine, April 19, 2007

GOALS OF H.R. 676GOALS OF H.R. 676

To ensure that all people living in the To ensure that all people living in the United State have:United State have:

A single standard of high-quality, A single standard of high-quality, affordable health care guaranteed by affordable health care guaranteed by federal lawfederal law

Access to health care services whenever Access to health care services whenever medical attention is neededmedical attention is needed

Who is Eligible?Who is Eligible?

Every personEvery person living in the United living in the United States is eligible from birth States is eligible from birth throughout lifethroughout life

Every personEvery person living in the United living in the United States and the U.S. Territories would States and the U.S. Territories would receive a United States National receive a United States National Health Insurance Card & ID number Health Insurance Card & ID number once enrolledonce enrolled

Accessing Healthcare Services Accessing Healthcare Services Under H.R. 676Under H.R. 676

All patients are presumed eligible to receive All patients are presumed eligible to receive services, even if not carrying card at time of services, even if not carrying card at time of needneed

Patients will be able to seek treatment from Patients will be able to seek treatment from the physician, clinic or hospital of their choicethe physician, clinic or hospital of their choice

Source: Carroll & Ackerman, Ann Int Med 2008;148:566

Growing Physician Support for NHI

Support NHI, 2007

Generally, 31%

Strongly, 28%

Neutral, 9%

No, 32%

Support NHI, 2002

Generally, 31%

Strongly, 18%

Neutral, 11%

No, 40%

Surveys of Random Samples of U.S. Physicians, 2002 & 2007

We Have What it Takes!

•Excellent hospitals, empty beds

•Well-trained professionals

•Superb research

•Current spending is sufficient