Single payer: an idea whose time has come

One of the many pieces of unfinished business left by New York State representatives this summer recess is Senate Bill 7090. The bill would mandate that all companies with more than 100 employees provide health care to all those employees, regardless of whether they are full-time, part-time or seasonal workers. The Sullivan County Visitors Association has sent an email to its members expressing concern about the bill, which could cripple local tourist businesses with large seasonal payrolls that shrink to almost nothing (together with income) in the off-season.

Although we stand strongly behind the principle that every American should have health care, we believe this legislation approaches this laudable goal in a completely wrong-headed manner. It would do nothing to slow spiraling healthcare costs, pour additional funds into already overflowing health insurers’ coffers and still leave a large number of people uninsured.

Nationwide, many bills to address the healthcare crisis are pending, and they can be divided broadly into two groups. Some, like the healthcare package just passed in Massachusetts, attempt to “solve” the problem of individuals and businesses not being able to afford health insurance by simply forcing them to do so. Senate Bill 7090 belongs to this group, although unlike the Massachusetts law, its mandates apply solely to employers, not individuals.

The only certain result of this approach is to ensure a new flow of income to the health insurance companies, while leaving the rest of us poorer. It could be argued that it would reduce the number of uninsured persons inundating the emergency rooms of public hospitals—but that’s only if the number of people newly covered were greater than the number of people thrown out of work by businesses forced to close by higher costs.

The second approach is exemplified by California’s proposed California Health Insurance Reliability Act (CHIRA): single-payer systems in which the healthcare delivery system remains private and individuals choose their own doctors, but payments are made by government, not the health insurance industry.

Single-payer systems are difficult to implement politically because they face a large and well-financed lobbying empire: the health insurance industry. This empire has sold the American public on the idea that government is always less efficient than the private sector. In fact, in this area the government is far more efficient.

In 2003, Medicare spent less than two percent of its resources on administration, while private insurance companies spent more than 13 percent. This goes a long way toward explaining why the United States spends about 14 percent of its GDP on health care, compared to between five and nine percent in other developed western nations—every one of which provides publicly financed universal health care. (To add insult to injury, we also have worse medical outcomes as measured by infant mortality and life expectancy.)

Costs in a single-payer system would be reduced because of the size advantage the government program would have in bargaining for lower pharmaceutical prices. Medicaid and the Veterans Administration already experience this advantage (but not Medicare D: the Republican majority in Congress defeated an amendment that would have allowed such bargaining).

Another big source of waste in our current healthcare system is health insurers’ profits. This drain of funds would be eliminated in a single-payer system. Current incentives to deny coverage would also be eliminated. Since the primary mission of health insurance companies is to maximize profits, they have a powerful motivation to refuse claims. The California Department of Insurance has launched an inquiry into complaints that Blue Cross has been canceling coverage for individuals, as soon as they file claims, on the basis of trivial or inadvertent omissions in paperwork.

Woodrow Wilson School economist and New York Times columnist Paul Krugman believes that the cost savings of a single-payer system would be so large that we could cover everybody and still spend less on health care than we do now. And by some estimates, CHIRA would result in net savings for California of about $8 billion.

We join the Sullivan County Visitors Association in asking our representatives to ditch S.7090. But we want more. We ask them to propose the single-payer option. Instead of forcing businesses to buy something they can’t afford, it would take a load off their backs, reduce overall healthcare costs and let us finally enjoy the same level of healthcare security enjoyed by the rest of the civilized world.

Also in this issue:

• Shining light on medical care in Sullivan

Dr. Punnybone

A Falling Out