QUESTIONS AND ANSWERS
Providing Comprehensive Health Care for All Americans

The following information has been adapted from material provided by Physicians for A National Health Care Program and Vermont Health Care for All 

Introduction: 

1. The current market based approach to medical care has been a dismal failure. Managed care has failed to do as promised: to contain costs and to increase access

2. It's our money - federal and state income taxes, property taxes, insurance premiums, co-pays, deductible payments, direct payments - already finance 80 percent of the health care system; employers pay for the rest. It's enough money to cover comprehensive heal care for every American - if it were spent wisely.

3. We don't need to change medical care to do this.

4. We don't have the best health care system in the world, what we have in VT and the U.S. is not a system at all. Health care systems exist in every other industrialized nation on earth (except for the United States and South Africa) where everyone is assured comprehensive health care benefits (France, Italy, Sweden, Norway, Germany, Canada, New Zealand, Australia, and Japan, for example). All deliver that health care for half if not less than half of what we spend per person). All of these countries' populations live longer than we do in the U.S.

What would we want from a "health care system" if we had one?

1. High quality medical care when we need it.

2. Freedom to choose our own doctor

3. Medical decisions made by the doctor and patient

4. Affordable medical care

5. Confidentiality

In Vermont we have high quality medical care, and for the most part, free choice of doctor.
However:

1. Medical decisions are not always made by the doctor.

2. Health care is not affordable to many.

3. Because the uninsured often delay care for fear of economic hardship, they are sicker and die younger than those with insurance.

4. Those who are insured are having trouble paying premiums, co-pays, deductibles, and other out of pocket expenses.

What do other nations have in common?  What does it take to build a health care system"

1. They include everyone. Ours does not.

2. They cover comprehensive benefits. Ours does not.

3. There's is publicly financed. Ours is not.

4. They all have public control of spending. Ours does not.

5. They are publicly accountable. Ours is not.

The only feature we share in common with most is that doctors are in private practice (except Great Britain and Sweden which have socialized medicine: doctors receive salaries from the government). It should be noted, however, that none of these countries' physicians and patients suffer the intrusion into medical care that we do in the United States under managed care.

Why should we cover everyone and why comprehensive benefits?

1. Besides the obvious moral reasons, there are practical economic reasons why it makes sense to cover everyone.

2. In a nutshell, it's cheaper to cover everyone than it is to exclude them.

3. Obvious reason: They uninsured are more likely to delay care, thus tend to be sicker when they ask for care. It is cheaper to care for them sooner than later.

4. A more subtle reason, but probably one that has more impact on costs: At any one time, 10% of the population is very sick and generates 70% of the health care dollar. If uninsured, they leave enormous debts in hospitals or doctors offices. These costs must be absorbed some how. Providers usually shift the cost to paying patients, those with insurance. This is an example of why premiums are high. In other words, we pay for the very sick in one way or another anyway.

5. This also is a reason why the marketplace will never work in health care. In order for insurance companies to make money (they are businesses), they must avoid the sickest or they would go broke. This is also one of the reasons why insurance companies moved out of Vermont. The state instituted community rating which made it difficult for them to "cherry pick" healthier patients and avoid the sickest.

Examining a health care system - the clearer picture:
We can separate any health care system into 2 parts:

1. The medical care: the treatments you get, the surgery that is performed, etc.

2. The financing mechanism: the way money is collected, and the way we finance health care.

Medical Care is roughly the same in all countries. If you have high blood pressure you get anti hypertensive medication; if you have cancer you get chemotherapy; if you have gallstones, you get your gall bladder removed, etc.

What is different is the financing mechanism, how we pay for health care. Other countries pay for health care through taxes. Most of them pay for health care services directly instead of funneling the money through insurance companies with expensive overhead.

How do we finance our health care system now?
We currently have a fragmented financing scheme in U.S. health care. Fifty percent is collected from our taxes, another 30% comes out of pocket for things that aren't covered (like co-pays, deductibles and uninsured paying for care), and the remaining 20% comes from employers in the form of premiums. This is an unstable way of financing health care. It is also very regressive: the poor and the sick pay a much higher percentage of their income than the wealthy do for health care. We pay for other people's health care through taxes, yet there is no guarantee that our own health care will be paid for.

That's how the money is collected. How do we pay for health care services? We also have a fragmented way of paying the providers of health care. There are government payers (Medicare and Medicaid), insurance companies, HMO's, and people paying out of pocket for services. This fragmentation means that everyone pays a different price for services, and sometimes the bill never gets paid and the provider is forced to shift the cost.

When changes in our health care system are suggested, this does not incur changes in medical care, the way medicine is practiced. There is no need to do what managed care does. It is administratively very expensive to intrude into medical care the way managed care does. It is also not necessary. We need only change the financing. 

As a result, other countries' administration is simpler. Why? When everyone is covered with the same comprehensive benefits, administration is simpler. We know that if we had a one payer system we could save 10" of the health care dollar.

What does that mean?
The money for health care would be collected through taxes: income and payroll taxes. A fund marked for health care is created to receive the money. Everyone in the country would have their health care paid for out of the fund. In other words, instead of putting our money into dozens of health insurance companies who then pay the bills, we would have one fund, a single payer fund that would pay for health care directly.

Let's imagine a different system in America.

1. Everyone will be covered for all necessary medical services.

2. All necessary medical services will be paid for by the health care system.

3. It will be publicly financed.

4. It will be accountable to the public which it serves.

5. There will be a public regulatory mechanism to control spending.
   

In addition to the five basic features, there would be three additional features.

1. Single payer: all money paid from a single fund. It's cheaper to pool the money that is currently spent in health care into one fund that pays hospitals and doctors directly, than to funnel the money through dozens of insurance companies who have expensive overhead.

2. Doctors remain in private practice.

3. Equal benefits for everyone. This increases accountability and maintains a system of high quality for everyone.

How does all this work for the patient?

1. Everyone would receive a universal health care card guaranteeing free choice of doctor and comprehensive benefits

2. Patients visit the doctor, get treated, as they do now, and go home.

3. No bills, no paperwork, no out of pocket payments.

4. Doctors bill the trust fund and get paid directly.

5. Payments to hospitals are made directly from the trust fund.

6. The patient is assured confidentiality.

7. It's portable from job to job.

8. You are covered if you get sick out of state.

9. All family members are covered.

What's covered?

• Acute Care (hospital care)

• Doctor visits

• Prescriptions and medical equipment

• Eye care

• Dental care

• Mental health care

• Preventive care

• Long term care

How are costs controlled?

1. Health care costs are a problem in any health care system, primarily due to increases in high tech treatments available and aging populations.

2. High costs are particularly a problem in this country because we don't have a system, and do cost controls are fragmentary, Consequently costs are at least twice as much as any health care system in the world.

3. Cost controls are necessary. In order to implement they, we must have a system with at least the five features previously mentioned.

4. Remember: Increased costs brought us managed care. Businesses were tired of paying double digit premium increases. They looked to managed care for the answer.

5. Their presence resulted in less health care for the money, more bureaucracy, decline in quality, and disrupted relationships between doctors and patients.

FUNDAMENTAL POINT:

Control of costs must be regulated by a single public source and applied to the entire system. Cost controls applied to only one part of the system don't work. Take the example of Medicaid underpaying doctors and hospitals to save money. This results in a cost-shift paying (privately insured) patients.

How does a single public source control costs?

1. Sets overall budget. The total amount spent on health care must be planned.

2. Global budget hospitals. Hospitals plan their budgets for the year and operate within that amount. This eliminates the need for billing.

3. Set uniform reimbursement to doctors. Negotiate with doctors a fee schedule that is binding. 

4. Resource planning. Expensive technology is put where it is needed to avoid unnecessary duplication.

How would we finance a Universal Health care system?

1. The answer is taxes. Today we spend 14% of our national Gross Domestic Product on our health care. More than any other country in the world. We should not have to spend more than this - we should just collect and use this money differently and better.

2. On June 21, 2000 the World Health Organization issued its year 2000 analysis of health systems in 191 countries. Our United States overall health care performance ranks only 37th. Yet no other country spends as high a percentage of its Gross Domestic Product for health care as the U.S., at 14%.  France, which has the best health care system in the world, only spends 9.7%; Italy, with the second best, spends only 7.6%; the United Kingdom, in 18th place, spends only 7.6%; the United Kingdom, in 18th place, spends only 6.9% and Canada (in 39th place) spends only 9.2% of its GDP on health care.

3. Every other country that spends less than we do on health care uses public taxes (public financing) to pay for a universal health care system.

4. We already finance 50% of our health care system with taxes (Medicare, Medicaid, VA, public employees). 30% more comes out of pocket in the form of co-pays, deductibles, the uninsured, the underinsured, premiums paid in after-tax dollars. 20% comes from employer paid premiums (frequently in lieu of higher wages).

5. So: it's really all our money already!

How much would a Universal Health Care System Cost?

1. No more than is currently being spent on health care.

2. Right now it looks to be impossible to cover everyone for all their medical needs without spending more. This is because we are currently diverting one quarter of every health care dollar to administration, overhead, profit and paperwork.

3. Excluding people is administratively costly. In a system where no one is excluded and we know what is covered and we know how much it costs, administration is much simpler. And cheaper.

4. Studies show that we could save 10% of the health care dollar. That's enough to cover the services for people that are currently not covered (GAO 1991, CBO 1993).

5. We already pay enough in public spending to finance a Canadian, or Swedish, Danish, Canadian, French or Japanese system. But we spend more. Twice as much. That would buy us more medical care if we spend it wisely.

FUNDAMENTAL POINT:  It's cheaper to pool the money that is currently spent in health care into one fund that pays hospitals and doctors directly, than to funnel the money through dozens of insurance companies who have expensive overhead.

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