The healthcare industry doesn’t have a lot of fans among the American public these days. Polling by Gallup last year showed that only 34 percent of respondents have a positive view of it, ranking it near the bottom among industries.
Democratic presidential hopeful Bernie Sanders tapped into that sentiment last week when he tweeted “You’re damn right” in response to a Republican National Committee Research tweet stating – as he did in an accompanying video interview with MSNBC’s Chris Hayes – that he wants to eliminate private health insurance.
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Despite their determination, however, Sanders and other advocates of Medicare for All underestimate the challenges of replacing for-profit health insurance with single-payer. In doing so, they risk overpromising, under-delivering and disappointing.
It’s easy to understand their perspective, of course. Statistics on the state of American healthcare are a national embarrassment.
Nearly 30 million Americans remained uninsured as of 2017, according to the Kaiser Family Foundation. The Commonwealth Fund ranks us dead last among industrialized countries in healthcare-preventable mortality. That’s despite our spending more on healthcare than any other country, $10,739 per capita in 2017, according to the Centers for Medicare and Medicaid Services, equaling $3.5 trillion and 17.9 percent of GDP. And not a day goes by without heartbreaking news of patients and their families forced into medical bankruptcy or having to choose between paying for lifesaving medicines and other basic needs.
In that context, public desire for government solutions and skepticism toward salvation in private enterprise should surprise nobody. Last week, another Kaiser Family Foundation poll showed that support for single-payer among Americans has stayed above 50 percent since February 2016.
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But the polls leave out important caveats. For one, although the US stands alone among developed countries in lacking universal healthcare, fully single-payer systems are rare, mainly limited to Canada, South Korea and a few others. Additional ways of providing universal coverage include regionally devolved systems in the UK and Scandinavia, the non-profit multi-payer insurance-based system of Germany, or Israel’s HMO-based model.
Despite Sanders insisting single-payer is the only worthwhile way forward, all are effective means to the same end: providing cost-effective, equitable healthcare access and protecting patients from what American doctors often call “financial toxicity.” That doesn’t mean universal healthcare systems are perfect, of course. While off-label drug prescribing plays an important role in the US, budgetary constraints on formularies restrict it in countries like Canada. Particularly in Europe, pricing negotiations between manufacturers and national payers mean drugs don’t become widely available for months or even a year or two after regulatory approval, when US doctors have already incorporated them into treatment and grown comfortable with them.
All the same, global experience clearly shows that single-payer is not the only option. That’s important to remember because, given how entrenched even our visibly broken system is, uprooting it will be far more difficult and costly than Sanders and others let on.
Naturally, the biggest challenge to eliminating private health insurance would come from insurance companies: It’s hard to imagine them not waging a very long, very expensive legal battle against a single-payer law that would make their core business illegal. The five biggest health insurers’ – UnitedHealth Group, CVS/Caremark, Cigna, Anthem and Humana – more than $400 billion in combined market capitalization means a lot of shareholder value for angry investors to recoup. Providers and health systems would also likely sue over nullification of their expensively, meticulously drafted and negotiated payer contracts. And maybe the insurers could find a few members angry about losing their plans to boot.
All of that would have to be resolved before the years or even decades of actually building a national single-payer system could begin in earnest. The challenges to implementing Canada’s Medicare system are illustrative. The seeds were sown in 1947 with a universal hospital insurance program that was expanded federally a decade later. In 1962, Saskatchewan created the first provincial-level universal, single-payer system, and another decade later, that too was expanded to the federal level. This all took place in the face of opposition from an insurance industry much less entrenched than ours is today, in a country with a fraction of our population and a political culture already moving to the left. But it still took more than two decades.
To be sure, the US in 2019 isn’t Canada in 1947. But anyone who suggests creating a Canadian-style single-payer system here would be less than a difficult, even Sisyphean task is either clueless or lying. At the same time, anyone who suggests universal healthcare is a bad deal for the US is either heartless or out of touch.
The question becomes, do we want a system whose implementation would be the healthcare equivalent of sending people to Mars in terms of complexity because it fits a particular ideal? Or do we want a system that achieves all the same goals more quickly and easily, even if it doesn’t fit that ideal? The answer should be obvious, but Sanders doesn’t seem to think so.
An alternative plan is Medicare for America, which polling cited by MSNBC’s Hayes indicates is more popular than Medicare for All. It would keep private insurance, but would allow buying into Medicare for greatly limited or even nonexistent cost sharing while lifting the ban on Medicare negotiating drug prices. Sanders rejected the idea, insisting that eliminating private insurance is the only way to achieve cost-effective universal healthcare.
In fact, Medicare for America would create a statutory insurance system akin to Germany, whose multi-payer healthcare system in 2017 spent a very cost-effective $5,728 per person, or 11.3 percent of GDP, according to OECD data. That’s only slightly more than the $4,826 and 10.4 percent of GDP spent by single-payer Canada.
About 90 percent of Germans are covered under statutory health insurance, while 9 percent carry private insurance, as they are entitled to do if their annual income exceeds 59,400 euros. With World Bank data showing Germany has a per capita income of 39,590.22 euros, it’s a reasonable assumption that more than 9 percent of Germans qualify for private insurance, but choose to remain covered by statutory health insurance anyway.
Germany’s experience means that a Medicare buy-in could obviate the need to eliminate private insurance simply by providing better, more affordable coverage and letting competition do the rest.
This isn’t about compromise for its own sake, appeasing the insurance industry or even incrementalism. The ultimate goal should be providing the least tortuous path to our ceasing to be the only developed nation where healthcare is not a basic human right – not sacrificing the good on the altar of the perfect just to punish insurance companies.
The US is so late to the universal healthcare party that it can’t use traffic or even the New York City subway system as an excuse. But now that universal healthcare has become a bigger part of the national conversation than ever, it’s important that advocates not become so wedded to one particular model that they set themselves up for disappointment.
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