Held hostage by the health system

By Dr. Marcia Angell –

The Senate Finance Committee’s hearings on health reform earlier this month did not include testimony from any advocate for single-payer insurance. Physicians for a National Health Program, which represents 16,000 doctors, asked the committee to invite me to testify, but it chose not to. If I had been invited, this is what I would have said:

The reason our health system is in such trouble is that it is set up to generate profits, not to provide care. We rely on hundreds of investor-owned insurance companies that profit by refusing coverage to high-risk patients and limiting services to others. They also cream off about 20 percent of the premiums for profits and overhead.

In addition, we provide much of our medical care in investor-owned health facilities that profit by providing too many services for the well-insured and too few for those who cannot pay. Most physicians are paid fee-for-service, which gives them a similar incentive, particularly specialists who receive very high fees for performing expensive tests and procedures. Nonprofits behave much like for-profits, because they must compete with them. In sum, healthcare is directed toward maximizing income, not maximizing health. In economic terms, it’s a highly successful industry, but it’s a massive drain on the rest of the economy.

The reform proposals advocated by President Obama are meant to increase coverage for the uninsured. That is certainly a worthwhile goal, but the problem is that they leave the present profit-driven and highly inflationary system essentially unchanged, and simply pour more money into it – an unsustainable situation. That is what is happening in Massachusetts, where we have nearly universal health insurance, but costs are growing so rapidly that its long-term prospects are poor without cutting benefits and greatly increasing co-payments. Initiatives such as electronic records, case management, preventive care, and comparative effectiveness studies may improve care, but the Congressional Budget Office and most health economists agree that they are unlikely to save much money. Promises by for-profit insurers and providers to mend their ways voluntarily are not credible.

Nearly every other advanced country has a largely nonprofit national health system that provides universal and comprehensive care. Expenditures are on average about half as much per person, and health outcomes are generally much better. Moreover, these countries offer more basic services, not fewer. They have on average more doctors and nurses, more hospital beds, longer hospital stays, and there are more doctor visits. But they don’t do nearly as many tests and procedures, because there is little financial incentive to do so.

It is often argued that the first order of business should be to expand coverage, and then worry about costs later. But it is essential to deal with both together to stop the drain on the rest of the economy and the further fraying of healthcare. The only way to provide universal and comprehensive coverage and control costs is to adopt a nonprofit single-payer system. Medicare is a single-payer system, with low overhead costs, but it uses the same profit-oriented providers as the private system and also preferentially rewards specialists for tests and procedures. Consequently, its costs are rising almost as rapidly as those in the private sector. Representative John Conyers introduced an excellent bill that calls for extending Medicare to everyone in a nonprofit delivery system. That could be done gradually, by lowering the Medicare age a decade at a time.

A single-payer system is ignored by lawmakers because of the influence of the health industry lobbies. They raise the specter of rationing and long waits for care. There are indeed waits for some elective procedures in some countries with national health systems, such as the United Kingdom. But that’s because they spend far less on healthcare than we do. For them, the problem is not the system; it’s inadequate funding. For us, it’s not the funding; it’s the system. We spend more than enough.

I urge you to consider a nonprofit single-payer system. The economic interests of the health industry should not be permitted to hold the rest of the economy hostage and threaten the health and well-being of the public.

Dr. Marcia Angell is a senior lecturer in social medicine at Harvard Medical School and former editor-in-chief of the New England Journal of Medicine.