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James Floyd, M.D.

James Floyd, M.D.

Posted February 11, 2009 | 10:21 AM (EST)

More Than a Band-Aid for Health Care Reform, Single-Payer is the Solution


As the global economic crisis deepens, our broken health care system continues to neglect an increasing number of uninsured Americans, which will top 50 million this year. Tens of millions more who have health insurance still cannot afford the care they need. The resulting illness from inadequate health coverage will lead to missed days of work and lost jobs, making it harder for us to recover from the recession.

Two weeks ago, the House passed President Obama's economic stimulus plan, which includes $127 billion in federal funding to expand Medicaid and subsidize health insurance for the unemployed. Most of this has been retained in the Senate version of the bill as well.

These measures are a prelude to Obama's proposal for comprehensive health care reform, which will likely boil down to increased regulation of the private insurance industry and subsidies for the poor and middle-class to purchase coverage. Some Democrats will fight to include a competing public plan. However, a weak public plan in our current system could easily become a dumping ground for patients with costly and unprofitable illness who are already shunned by private insurers.

There is a better solution that will expand health care access to all Americans and also help our struggling economy: eliminate private health insurance and create a single-payer system that automatically covers everyone under one national health insurance plan. A single-payer system would be funded by progressive income taxation, rather than unaffordable premiums or employer contributions that distort labor markets and leave workers tied to undesirable jobs. It would also address the fundamental problem of costs.

Private health insurers drive up health care spending with unnecessary overhead - high executive salaries, decreased cost-efficiency from smaller insured groups, and profit. They also increase administrative costs for hospitals and physicians who must deal with hundreds of different insurance plans. As a result, Americans spend 31 cents of every health care dollar on administrative costs, by far the highest rate in the world and much higher than the 17 cents spent in Canada.

Further driving up costs is the unrestricted use of expensive and unproven technology and medications. Such waste is best controlled with a centralized system of payment, as has been done successfully by the Veterans Health Administration. A single-payer system would eliminate enough excess spending to provide every American with the same high-quality coverage, without spending more money than we already do.

China recently announced plans to spend $123 billion to provide universal health care for its 1.3 billion citizens. Two decades after free-market reforms dismantled their system of non-profit rural-based care, drugs and visits with physicians are now unaffordable for most of the poor, who often incur crippling debts to pay for care. Chinese economists argue that providing government funding for universal coverage is important for productivity. Also, not having to worry about catastrophic health care costs encourages people to consume rather than save, providing a direct boost to the economy. These same arguments apply to the United States, where half of all personal bankruptcies and home foreclosures are caused by medical bills.

Many politicians agree that a single-payer system is the best way to eliminate wasteful spending and provide health care to every American, but argue that we cannot win a battle with the narrow interests that defend our broken system. To quote President Obama during his inauguration speech: "Stale political arguments that have consumed us for so long no longer apply." The economic recession and hundreds of billions of dollars in corporate bailouts and stimulus spending have changed everything. It is finally time for us to move to a single-payer system.

James Floyd, M.D., is an internist and health researcher with Public
Citizen
.