Because we believe that affordable universal access to quality health care is only achievable through a centralized source of funding, standard-setting, allocation of resources, and use of advanced information technology, we propose that Washington State adopt a public tax-funded system to finance health care for every Washington resident. (“Universal coverage” means coverage for everybody, not for everything.) Such a system need not prohibit the private purchase of health services outside the system, but the publicly financed system needs to provide sufficiently comprehensive coverage of medically necessary health services for all residents who choose to use it to avoid the creation of a two-tiered system (a lousy public one for the poor, and a better private one for the rich).

The current non-system in effect in the U.S. cannot provide affordable health care for everyone because of the truly stupendous amount of money wasted in administrative costs incurred by all participants, corporate insurer costs of being in business, and shareholder profits. These costs are inherent in a system with multiple payers, and cannot be changed in any significant way with various cost control strategies, as more than ten years of such efforts have shown. We cannot emphasize strongly enough how badly the current financing mechanisms are failing.

In addition, the failure to use evidence-based standards of care, especially for the management of chronic diseases, results in additional high costs of avoidable acute care, never mind the suffering of the patients involved.

The Commission does not need to invent a publicly financed universal coverage system de novo, as much work has already been done, especially in California, where the legislature just passed SB 840 that will create, if implemented, a single-payer publicly financed system for all Californians (see summary at www.healthcareforall.org/summare840.pdf). Actuarial studies have been done in California and in other states (most recently the Thorpe study in Vermont - see www.leg.state.vt.us/CommissionOnHealthCareReform) that consistently show that adoption of a single-payer health coverage system would provide a comprehensive package of benefits for all residents at a cost below what is currently being spent in those states. The overall savings are usually predicted to be about 5%. Additional ongoing savings can be expected through increased efficiency in the choices made in preventive care, in acute care, and in management of chronic diseases.

Future choices necessary as technology advances can be made on the basis of evidence that shows (or fails to show) efficacy and cost effectiveness in appropriate clinical settings. Experience in other nations with universal coverage systems shows that these choices are difficult as new, expensive treatments or medications are created, but centralized coverage decisions are at least perceived as fair. All centralized systems (even Canada, recently) allow those with means to buy whatever non-covered care they wish outside the publicly financed system.

The remainder of this Proposal, then, will address how to achieve a single-payer universal health coverage system in Washington State.

1. What do you propose be done to realize the vision and goals for Washington State established by the Blue Ribbon Commission on Health Care Costs & Access (BRC)?

The very first step is to stop assuming that a single-payer system (SPS) is “politically not feasible”. There have been several national polls showing that over 60% of Americans favor a government-guaranteed, tax-funded health coverage system that would cover everyone. The most recent of such nation-wide polls (with three different approaches) were conducted by the Citizens’ Health Care Working Group established by the Medicare Modernization Act of 2003. All three polls showed that over 70% of participants favored the “creation of a national health plan, financed by taxpayers, in which all Americans would get their health insurance”. Taking the health insurance portfolio away from the private insurance industry will not be popular with that industry, but a large majority of other Americans will appreciate the resulting affordability of their health care. It is time to listen to public opinion that has not been influenced by deceptive media campaigns by those profiting hugely under the current non-system.

Once the BRC decides to move toward a SPS, we think the first step would be to consolidate all of the health coverage funded by the state into one program. For state employees, this can be accomplished with strong financial incentives. For Medicaid, Labor & Industries, the incarcerated population, etc., this can be done by executive decision. The covered population would be sufficiently large to realize savings rapidly through decreased administrative costs, ability to negotiate favorable prices for drugs and medical devices, ability to negotiate favorable payment rates for providers’ services, and the ability to implement payment schedules based on evidence of efficacy and cost-effectiveness.

While this step is implemented, a continuation of the BRC should be defining the ultimate SPS to be available to any Washington resident within 5 years. California’s SB 840 can be the model, but the hard part is devising a fair mechanism to tax the population specifically to fund the system. We think it can be done with a combination of premiums paid by all residents, payroll taxes on employers (who will no longer need to fund employee health benefits on their own), continuation of state general fund support for those with incomes too low to afford premiums, and continued federal financial support at the current level. Two vital ingredients:

•    Setting up a completely separate fund for health care that cannot be raided for other state expenses

•    Commissioning an actuarial study to determine the specific premiums, payroll taxes, and state general fund commitments needed to give the health care fund an adequate amount of money to work with. (See the Thorpe study in Vermont referenced above.)

A completely universal health coverage system for all residents of Washington State cannot be achieved without the cooperation of the federal government. Medicaid, Medicare, Indian health programs, the ERISA law, the Federal Employees Health Benefits Program, the military, veterans, and the Taft-Hartley trusts all have federal protections that must be dealt with. Forward-thinking members of Congress are thinking about a health partnership approach in which the federal government and state governments cooperate to try reform approaches to decrease the number of uninsured and control costs. The BRC should endorse this concept, which could make a positive impact on the fate of legislation currently pending:

•    S. 2772 “Health Partnership Act” (Sens. Voinovich and Bingeman)

•    S. 3776 “State-Based Health Care Reform Act” ( Sen. Feingold)

•    HR 5864 “Health Partnership Through Creative Federalism Act” (Reps. Baldwin, Price, Tierney, and Beauprez)

2. How will implementation of your proposal enhance, hinder or otherwise impact the achievement of the vision and each of the goals established by the Commission? How do you know?

Establishing a state-wide SPS will definitely “provide every Washingtonian the ability to obtain needed health care at an affordable price.” This can be accomplished by 2012 for everyone. Children could be added into the state-sponsored program earlier, if desired.

Improving the health of the population will take longer than 5 years. Even immediate implementation of coverage for everyone’s health care will not change health-related behaviors or repair already-damaged bodies in that short a time. That said, implementing health coverage for all residents sets the stage for providing consistent, evidence-based care for residents of every background and socioeconomic level. When everyone is covered by the same program, it is MUCH easier to implement programs to:

•    Immunize all children and adults as recommended by medical organizations

•    Set up systems to provide consistent, cost-effective management of chronic diseases

•    Provide educational programs for everyone about preventive care and lifestyle choices related to health

•    Provide support for people who want to make healthy lifestyle changes, but need help doing so

•    Set up specialized programs to work with populations with special needs or ethnic considerations

Implementing these programs, assuming other states do not all do so as well, should lift Washington into the top ten healthiest states in the nation.

Creating a SPS for Washington is the only way to limit health care spending without denying necessary care to some residents. Only by tackling the elephant in the living room - the huge administrative expenses of the private insurance industry that are not paying for anyone’s health care - can health care spending be brought down to the level of inflation (or nearly so). Experience in other nations with national health insurance systems proves that quality health care for all residents can be accomplished at much lower cost than in the U.S. currently.

3. Is your proposal modeled after an existing policy or program within Washington or elsewhere? If so, describe the policy or program and its outcomes.

This Proposal recommends using California’s SB 840 as a model, which we think is the most recent detailed SPS system ready for implementation if it can be funded. (The funding problems do not relate to higher costs of the program, but to political requirements for a supermajority to pass funding legislation.) HCFA-WA drafted a complete system, including a funding mechanism, for Washington State in 2000 as an initiative. A summary of this initiative is appended to this proposal. The monetary amounts surely need to be updated - again, we recommend strongly that any complete plan be studied by a competent actuarial group to determine the adequacy of the proposed funding. No state has implemented a SPS. Three states have passed legislation that is designed to decrease the number of uninsured (Maine, Massachusetts, Vermont). None of these is adequately funded to provide affordable coverage for necessary care for everyone.

However, the U.S. is the only industrialized nation without some kind of national health program that provides decent health coverage for everyone. Pick any one of the systems out there and the U.S. (or Washington State) would be much better off. Ours is the only industrialized nation with 50% of personal bankruptcies caused by medical bills. All of these nations have better population health statistics than the U.S. Even wealthy Americans with health insurance are worse off health-wise than their counterparts in other nations, a fact that counters the popular myth that we have “the best health care in the world”.

A whole paper could be written on this subject, but suffice it to say that treating quality health care as a necessary infrastructure of society and making it available to everyone leads to better health outcomes at lower cost, as demonstrated by the health statistics in all these other nations.

4. Will your proposal impose costs on individuals, businesses or government? Will these costs be time-limited or on-going? Can you estimate how much these costs will be, or suggest how such an estimate could be made? How much, if any, of these costs will be offset by corresponding savings?

Health care is not free anywhere on the planet. The challenge is to require contributions to support the financing of health care in a way that is perceived as fair. In Washington State, the easiest way to do this is with a combination of individual premiums, employer payroll taxes, and government contribution to cover those who cannot afford to contribute. These are roughly the sources of funding for health care currently. Implementing a SPS will involve some transition costs (amount unknown), but then the cost of running the financing system should settle down to 8% or less of total health care spending. Once a specific system is designed, it should be evaluated by an actuarial group to get a better estimate of start-up cost and ongoing cost.

Since the new SPS system ultimately will be less costly than the current mess, there will be savings. These savings will be noticed by providers who will have much reduced administrative costs, employers who no longer have to wrestle with the whole health insurance industry, and individuals who will be able to count on having adequate coverage for a reasonable premium. Payments to providers can take these savings into account, so that the SPS does not become a major income booster for them. Again, past studies of proposals in other states have estimated an overall savings of around 5% as compared with continuation of the present “system”.

5. How does your proposal reflect collaboration among various stakeholders? Which stakeholders have endorsed it?

Implementation of a SPS will require cooperation among government officials in charge of the health care fund, citizens and employers (who need to pay what they are supposed to without major enforcement efforts), and health care providers (who need to negotiate payment rates and participate in coverage decisions).

The concept of a SPS has been endorsed by Physicians for a National Health Plan (representing 14,000 physicians), the National Hispanic Medical Association (representing 36,000 licensed Hispanic physicians in the U.S.), the Washington State Democratic Party, some chapters of the League of Women Voters, Universal Health Care Action Network, Health Care for All (with organizations in many states), the California State Assembly and the State Senate, and many, many labor unions.

6. What are the obstacles to implementing your proposal? Who will object to it and why? How do you suggest these objections be addressed?

Implementing a SPS requires setting up a system that will take virtually all the health insurance business away from the private insurance companies. These companies are profitable (or, in the case of “non-profits”, accumulating large surpluses), have hundreds of employees, and executives earning monumental salaries and other perks.

The pharmaceutical industry will also use all of its money and power to try to block a SPS because a unified system obviously will drive a tough bargain regarding pricing of prescription drugs (as have all the other nations with national health programs), lowering the profitability of the industry. Since this multinational industry has ranked at or near the top in profits as compared to other industries in the U.S., there is room for lower profits without putting them out of business, no matter how much they complain.

Obviously, both these industries are going to fight SPS tooth and nail, and will be willing to pursue any means, fair or foul, to try to block reform. Both industries have already demonstrated this willingness in derailing past efforts at reform.

However, these industries do not own the United States or the State of Washington. Our elected officials must find the fortitude to face them down and unmask the self-serving nature of their objections to a SPS. Our elected officials have sworn to serve the public as a whole, and need to be willing to do without some very large campaign contributions if necessary.

Employers are aware of how unaffordable it is becoming for them to provide decent health insurance for their employees, but they are not well educated about how much of that cost is due to clinging to the multiple private insurer model of financing health care. Dumping employee health care costs on the public, as some employers are doing, is an inappropriate response to this problem. However, many employers have ideological blinders that prevent them from appreciating what their fellow business people (and their employees) in other nations gain from tax-supported national health programs.

Myths about the “excellence” of U.S. health care and the “inferiority” of single payer systems need to be dispelled:

•    “We have the best health care in the world.” We do not have the best health, as measured by standardized population health statistics. We have the most expensive acute care in the world, but we lag far behind other nations in preventive care and management of chronic diseases. We routinely overtreat the well insured (sometimes causing harm by so doing), and undertreat those without insurance (causing untold suffering and impoverishment).

•    “Single payer systems will result in long delays in getting treatment.” Some other nations have or have had problems with underinvestment in the resources needed to provide timely care for their populations. These nations are hard at work trying to correct the problem, but none are even thinking of abandoning the commitment to provide affordable health care for every resident. It is important to note that many nations with national health insurance systems do NOT have any wait lists for procedures. In the U.S. there are so many high tech facilities and providers already in place that there is no danger of wait lists as long as the payment system appropriately reimburses necessary care.

•    “Drug prices have to be so high to cover research and development (R&D) costs.” Most of the pharmaceutical industry is in the form of multinational corporations. They are managing to do quite well despite much lower prices for their drugs in other developed nations. In the U.S., the industry’s costs for advertising drugs directly to consumers as well as to providers are larger than their R&D costs. Much of this advertising is first convincing gullible consumers that they have a disease that needs treatment, and then informing them of the most expensive way possible to treat their non-disease. If the ideal health care system prioritizes prevention, and deals with treatment only when real disease occurs, advertising expensive drugs for non-disease is supremely counterproductive by wasting the time of both the consumer and the provider, driving up costs, and creating misery where none need exist.

•    “Americans want free choice….” This is an essential part of the American character. However, with regard to health care, Americans want the freedom to choose their providers. What they want from their health insurance is coverage for the care decided upon by the patient and the physician working together for the best outcome possible for the patient in a given situation. Currently the health insurance industry places as many obstacles as possible between the patient and the physician on the one hand, and payment for the health care provided on the other hand. Consumers are discovering that all the “choices” offered by the insurers are inferior (or very expensive) - probably the reason behind the poll results showing that over 70% want the government to create a national health plan to cover all Americans.

•    “Market forces should be allowed to fix the health care system.” Competition among health insurers, hospitals, free-standing surgical clinics, drug companies, and others, has failed to control costs or provide affordable health care to many, but rather has added the costs of marketing all these entities to consumers. Market forces are not the appropriate way to handle every need in society. The obvious efficiency and lower cost of providing fire protection by a public fire department, public safety by a public police department, national defense by a public defense department, public roads built by public transportation authorities, and education for everyone by a public education system are clear examples. (Just stop for a moment and imagine the chaos and skyrocketing costs in competing private fire departments or police departments!) The financing of quality health care for everyone should be regarded as the kind of infrastructure needed to improve our nation as a whole, by improving the health (and peace of mind from knowing that care of illnesses will be available when needed) of every citizen.

•    “People should be responsible for their own health.” A common human failing is the inability to make tough choices that require avoiding something comfortable or fun now in order to prevent disease or trouble much later. In a way, most of us remain permanently in the adolescent mindset and ignore the long term consequences of today’s choices. Rather than punishing Americans for bad choices, we need a health care system that encourages good choices AND provides support for making those good choices. Good population-based preventive care and health education can help. We also need to remember that bad things do happen to good people. It is much more compassionate for our society, as well as more cost effective, simply to contribute to the necessary health care of all those who need it and not get side-tracked into arguing about whether the patient “deserved” to get sick.

To quote Gov. Gregoire: “We cannot afford to fail to solve this problem… and by afford I mean the costs to the state and our people.”

Our thanks to the BRC for taking on this tough public policy problem, and for soliciting solutions from any citizen or group of citizens. May you find the strength of purpose to complete your charge.

References

Geyman, John, MD, “Falling Through the Safety Net: Americans Without Health Insurance”, Common Courage Press, 2005.

LeBow, Robert, MD, “Health Care Meltdown: Confronting the Myths and Fixing Our Failing System”, Alan C. Hood & Co., updated edition 2004.

Angell, Marcia, MD, “The Truth About the Drug Companies: How They Deceive Us and What To Do About It”, Random House, 2004.