We Need to Create a Publicly Administered, Universal Risk Pool
How can we provide quality health care to all in this country? In our
opinion, the answer lies not in continuing and extending the power and
influence of private, for-profit health insurance companies, but in creating
a publicly administered, universal risk pool.
The United States, as the wealthiest nation on earth, has the greatest
and most technologically advanced health care resources. We have the potential
to provide high quality, comprehensive services for everyone. In spite
of more limited resources, all other industrialized nations include everyone
in their health care systems. We leave 42 million people uninsured, and
tens of millions more with impaired access to care because of inadequate
health care coverage.
Corporate Health Plans Have Not Solved These Problems
Over the past decade, the country turned to private health plans to
control costs and promote higher quality in health care by allowing market
forces of competition to play out. In fact, however, health care costs
have escalated while benefits have often been cut back.
The fundamental flaw with the corporate approach is that corporations
have a mandate to optimize shareholder value, not the health of our nation's
people or the humane allocation of our health care resources. A corporate
board must do its best to increase income and reduce expenses, but maximizing
profit can only increase the burden on our system. Instead, our health
care system should be controlled by an entity that is able to find the
best use of our resources.
* In spite of the aggressive practices of private
health plans, true health care costs have continued to increase at twice
the rate of inflation. These health plans temporarily ratcheted down rates
paid to providers, but this has threatened the solvency of the health care
delivery system since it failed to reduce the actual costs of providing
care.
* The industry has professed to provide choice in
care through choice of plans. In reality, it instead has impaired the
patient's choice of physicians and hospitals.
* The claim that private health plans have improved
quality is
belied by numerous studies confirming
that for-profit models
deliver a lower quality of care than
nonprofit models.
* In the best of economic times, corporate health
plans have been ineffective in reducing the numbers of uninsured. Most
health care economists predict that, with the next major downturn in the
economy, tens of millions more will join the ranks of the uninsured. The
most important function of health insurance has been to pool risk. Health
plans benefit by excluding those with the greatest health care needs. Now,
more and more, for-profit health plans seek to pass risk on to patients
and providers.
* Employer-sponsored health plans are embarking
on a strategy to shift costs to beneficiaries by increasing out-of-pocket
expenses and reducing benefits. Since a large sector of our population
has very limited disposable income, access to care will be further impaired.
How Can We Assure that Our
Resources Are Directed to Health Care?
Since we have more than enough resources for everyone, we must first
assure that everyone is placed in a single, universal risk pool. We need
to fund that pool equitably, so each person pays his or her fair share,
but no person suffers financial hardship due to health care costs.
Current direct and indirect costs of health care include funds presently
paid by employers and individuals, by the government for Medicare, Medicaid,
Child Health Plus and government employees health insurance, worker's compensation,
the medical part of auto and homeowners' insurance, the medical part of
malpractice insurance as reflected in health care costs, local taxes used
to fund public health care facilities, the various sources of funds that
are utilized by community clinics, funds collected by charitable organizations
for various medical conditions, etc. The direct costs are obvious, and
the
indirect costs show up as higher consumer prices reflecting the costs
of employee benefit programs. Half of these funds already pass through
the hands of the government. If you add the tax "subsidy" of employment
provided insurance, then well over half of all health care funds are tax-based.
Yet the public exercises little control over the health care system.
Many other nations have proven that administrative waste can be reduced
by relying on an efficient system of public administration. Resources are
used for patient care rather than to support a private bureaucracy. The
experience of our Medicare system shows this. Traditional Medicare has
an administrative cost of less than 2% compared to private health plan
administrative costs of 9% to 30%.Thus, our universal risk pool should
be publicly administered so that our health care resources are directed
exclusively to patient care.
What Can We Expect from a Universal
System?
* National health insurance would mean social insurance,
but not socialized medicine. Our existing private and public health care
delivery system would continue to deliver the technologically advanced
services that we have come to expect.
* Our health care costs could be controlled on the supply side through
health planning and global budgeting of the universal pool, a much more
humane approach than controlling costs by making care unaffordable to patients.
* Everyone would have access to care, regardless of financial status
or preexisting disorders. Removing means-tested programs would mean that
the poor would not be stigmatized.
* Coverage would automatically be assured, not tied
to the shifting uncertainties of employment. It would be portable, available
in all locations.
* Coverage would be comprehensive, including all
beneficial services.
* Since patients would no longer be subject to restrictions of insurance
contracts, free choice of physicians and hospitals would be assured.
* Public administration would assure efficiency and fair and
equitable distribution of our healthcare resources.
We have the wealth. We have the resources. We have the capacity. We
have the most technologically advanced health care system. We have an excellent
health care delivery system.
We need to make only one basic change. We need to discard the antiquated,
cruel, wasteful, ineffective, corporate model health plans and replace
them with an efficient, publicly administered, universal risk pool. To
those who tell us that the political will to implement it doesn't exist,
we can only reply that creating this political will must be the highest
priority of all who hope to achieve a decent healthcare system in this
country.
By Don McCanne, MD and Steffie Woolhandler, MD, MPH
PNHP Board of Directors
pnhp@aol.com
January 5, 2001
Marcio V. Pinheiro MD
http://pw2.netcom.com/~mvp1/soloproviders1.htm
How can we provide quality health care to all in this country? In our
opinion, the answer lies not in continuing and extending the power and
influence of private, for-profit health insurance companies, but in creating
a publicly administered, universal risk pool.
The United States, as the wealthiest nation on earth, has the greatest
and most technologically advanced health care resources. We have the potential
to provide high quality, comprehensive services for everyone. In spite
of more limited resources, all other industrialized nations include everyone
in their health care systems. We leave 42 million people uninsured, and
tens of millions more with impaired access to care because of inadequate
health care coverage.
Corporate Health Plans Have Not Solved These Problems
Over the past decade, the country turned to private health plans to
control costs and promote higher quality in health care by allowing market
forces of competition to play out. In fact, however, health care costs
have escalated while benefits have often been cut back.
The fundamental flaw with the corporate approach is that corporations
have a mandate to optimize shareholder value, not the health of our nation's
people or the humane allocation of our health care resources. A corporate
board must do its best to increase income and reduce expenses, but maximizing
profit can only increase the burden on our system. Instead, our health
care system should be controlled by an entity that is able to find the
best use of our resources.
* In spite of the aggressive practices of private
health plans, true health care costs have
continued to increase at twice the rate of inflation.
These health plans temporarily ratcheted down
rates paid to providers, but this has threatened
the solvency of the health care delivery system
since it failed to reduce the actual costs of providing
care.
* The industry has professed to provide choice in
care through choice of plans. In reality, it
instead has impaired the patient's choice of physicians
and hospitals.
* The claim that private health plans have improved
quality is belied by numerous studies
confirming that for-profit models deliver a lower
quality of care than nonprofit models.
* In the best of economic times, corporate health
plans have been ineffective in reducing the
numbers of uninsured. Most health care economists
predict that, with the next major downturn in
the economy, tens of millions more will join the
ranks of the uninsured. The most important
function of health insurance has been to pool risk.
Health plans benefit by excluding those with the
greatest health care needs. Now, more and more,
for-profit health plans seek to pass risk on to
patients and providers.
* Employer-sponsored health plans are embarking
on a strategy to shift costs to beneficiaries by
increasing out-of-pocket expenses and reducing benefits.
Since a large sector of our population
has very limited disposable income, access to care
will be further impaired.
How Can We Assure that Our Resources Are Directed to Health Care?
Since we have more than enough resources for everyone, we must first
assure that everyone is placed in a single, universal risk pool. We need
to fund that pool equitably, so each person pays his or her fair share,
but no person suffers financial hardship due to health care costs.
Current direct and indirect costs of health care include funds presently
paid by employers and individuals, by the government for Medicare, Medicaid,
Child Health Plus and government employees health insurance, worker's compensation,
the medical part of auto and homeowners' insurance, the medical part of
malpractice insurance as reflected in health care costs, local taxes used
to fund public health care facilities, the various sources of funds that
are utilized by community clinics, funds collected by charitable organizations
for various medical conditions, etc. The direct costs are obvious, and
the indirect costs show up as higher consumer prices reflecting the costs
of employee benefit programs. Half of these funds already pass through
the hands of the government. If you add the tax "subsidy" of employment
provided insurance, then well over half of all health care funds are tax-based.
Yet the public exercises little control over the health care system.
Many other nations have proven that administrative waste can be reduced
by relying on an efficient system of public administration. Resources are
used for patient care rather than to support a private bureaucracy. The
experience of our Medicare system shows this. Traditional Medicare has
an administrative cost of less than 2% compared to private health plan
administrative costs of 9% to 30%.Thus, our universal risk pool should
be publicly administered so that our health care resources are directed
exclusively to patient care.
What Can We Expect from a Universal System?
* National health insurance would mean social insurance,
but not socialized medicine. Our
existing private and public health care delivery
system would continue to deliver the
technologically advanced services that we have come
to expect.
* Our health care costs could be controlled on the
supply side through health planning and global
budgeting of the universal pool, a much more humane
approach than controlling costs by making
care unaffordable to patients.
* Everyone would have access to care, regardless
of financial status or preexisting disorders.
Removing means-tested programs would mean that the
poor would not be stigmatized.
* Coverage would automatically be assured, not tied
to the shifting uncertainties of employment. It
would be portable, available in all locations.
* Coverage would be comprehensive, including all
beneficial services.
* Since patients would no longer be subject to restrictions of insurance
contracts, free choice of
physicians and hospitals would be assured.
* Public administration would assure efficiency and fair and
equitable distribution of our healthcare
resources.
We have the wealth. We have the resources. We have the capacity. We
have the most technologically advanced health care system. We have an excellent
health care delivery system.
We need to make only one basic change. We need to discard the antiquated,
cruel, wasteful, ineffective, corporate model health plans and replace
them with an efficient, publicly administered, universal risk pool. To
those who tell us that the political will to implement it doesn't exist,
we can only reply that creating this political will must be the highest
priority of all who hope to achieve a decent healthcare system in this
country.
By Don McCanne, MD and Steffie Woolhandler, MD, MPH
PNHP Board of Directors
pnhp@aol.com
January 5, 2001
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