Why the White House Opposes Single Payer, and What You Can Do About It
If you were puzzled that none other than Secretary of Health and Human Services Kathleen Sebelius made the clearest point thus far that President Obama does not support single payer, you are not alone.
Let us speculate: did Sebelius want to make sure that you had no doubts about it – or maybe make up in case you missed the president’s address to the American Medical Association? In this meeting, as the president faced an audience of conservative doctors (a dwindling, increasingly unrepresentative sample of practicing doctors in America), President Obama reassured them that he would personally guarantee that doctors would continue to have the pleasure of dealing with for-profit private insurers rather than with “government bureaucracies”– European, Canadian or Japanese style, God forbid!
Now, in case you cannot see the president’s point — why you should fear a “government bureaucracy” more than you fear the bureaucracy of your health plan (assuming, that is, that you still haven’t lost your coverage because you lost your job, or that your coverage has not gone up so much that you can no longer afford your share, employer provided or not) — White House Chief of Staff Rahm Emanuel intends to clarify just that. According to Emanuel, the president is against single payer (even if he was for it as a young and idealistic senator) because what matters is “not the means but the objectives”, namely, cost control and universal coverage (yes, he said this with a straight face).
What? You don’t see the relationship between controlling costs and covering everybody, and opposing single payer, i.e., Emanuel’s argument? Again you are not alone; neither do I.
A critique of Emanuel’s answer I found in cyberspace (well worth reading) may provide a hint of what makes our democracy tick. The gist of this critique is that Congress and the White House do not want to hear that single payer health care – a mere change in financing, not in delivering, health care — would save money, cover everybody and set the right system of incentives to improve the quality of care. Which is why the White House and most members of Congress are rather pleased that the Congressional Budget Office is not analyzing it as it did with other proposals (e.g. “public option choice”), and they are even getting in the way of this analysis. (After all, who would want to hear that?)
What the CBO has said about current proposals for reform is consistent with the assertion that none of the “traditional” explanations for our high costs work, really: the Japanese, among many others, have higher utilization rates (visits to doctors, MRIs, etc) than we do, greater percentage of elderly in the population than we do and, to our knowledge, do not eat more broccoli than we do. And yet, they pay 50% of our price tag (per person) when it comes to health care [PDF].
Why? Because they collectively foot their medical bills (“social insurance” in health policy jargon), which enables them to cut costs through reduction of administrative overhead, bulk purchases and cross-subsidization, as I explained in my former posts, and because they take shared responsibility seriously — that is, everybody has to pay into the system, but only a proportion of their income, because the point of the system is precisely that you not go bankrupt, and receive medical care according to need, not ability to pay. So do Germans, Britons, Canadians and so forth.
So, it looks like to achieve health care reform we cannot wait for the winds of Washington to blow favorably in the direction of the American people’s welfare. Rather, the American people will have to make these winds blow all by themselves. And why not dream big, with audacity? (How about “The Audacity of Hope?”)
Thankfully, Americans have some historical precedents; after all, Martin Luther King did not say, “I have a dream, but it is not politically feasible right now, so let us just settle for equal rights for some as a step towards equal rights for all when the time is ripe.” And health care reform is already a matter of civil rights, as well as of economic sanity and survival.
If you wish to join, two loose coalitions of single payer supporters, Single Payer Action and One Payer Now (among many others), invite you to sign up so that they will inform you about health care reform, gather your signature for petitions and organize rallies that you can attend.
My guess is that when enough people lose their jobs and are dumped from those plans that, according to President Obama, “the majority” of Americans “like” and “want to keep,” and find out that they have the “choice” to buy good yet expensive coverage, affordable yet skimpy coverage, pay a fine or request a “hardship waiver,” enough of us will be pissed off and we’ll get single payer.
POSTSCRIPTUM: Nope. David Leonhardt still hasn’t read my third posting. Clearly, he still seems incapable of “imagining” any other way to cut the skyrocketing costs of health care than going after you, the patient, and to a lesser extent against those brave health providers that cater to poor people.
So, be prepared to have your employer benefits taxed (especially if they qualify as the “Cadillac” sort, buy a policy (whether it will actually protect you from medical financial ruin or not) and see major cuts in community clinics serving Medicaid and SCHIP patients.
Wonder why Leonhardt forgot to first eliminate, say, high CEO salaries at for-profit health insurance companies, amounting to $1.75 billion that went to 20 people in the private health insurance sector in 2002, and a total annual compensation of $1,153,864,691 — including stock options — going to the highest paid executives in 2002 [PDF]? Now there are some costs that could be really cut so that the money can buy health care for the American people!
And, if you are puzzled and upset as I am, click here to write your letter to the editor of the New York Times and comment about Leonhardt’s omission. Having your voice heard makes a difference.
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5 Responses to “Why the White House Opposes Single Payer, and What You Can Do About It”
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The author of this post spends a lot of time and effort railing against the President for refusing to support single payer, claiming that it will save money. But nowhere does he give an economically sound argument for WHY it would save money.
It would appear that this is a common practice. I have heard lots of people shouting and stamping their feet insisting it will save money, I have NEVER heard anyone explain how such a blatant violation of the law of supply and demand would actually lower prices.
Give it up. Or finally cough up an economically sound explanation and stop trying to fool us.
Dear Matt J.
For whatever reason, you have overlooked critical points in my posting (such as the link to many multiple writings of mine and of others that provide the economic rationale for single payer — assuming, of course, you are not a for profit insurer, in which case single payer is not the right deal for you).
But, summarized, the economic argument in favor of single payer or Medicare for All lies in:
1) savings in administrative overhead, which comes from dividing people up in pools or plans, underwriting those plans, marketing, profit for shareholders, etc (about 400 billion per year would be saved in America without further changes than a change in the method of pooling finances).
2) extraordinary market leverage, as a cursory examination of the prices we pay vs. what other countries pay will show, and the prices the VA pays vs. the prices everybody else in the U.S. pays demonstrate as well. There are innumerable examples when prices in the US are compared with just about any other social insurance system in Europe, Canada, or Taiwan.
3) last but not least, a single pool spreads risk and allows the system to cross-subsidize, and be financially sustainable.
For profit insurers know this well, which is why they want to convince politicians that the “solution” to the current health care disaster is to implement a legal obligation that forces everybody to buy their defective products. But of course their goal, unlike that of social insurance systems, is to spread risk to while avoiding the sick, because their goal is not to provide a social service but to make a profit, which is reasonable because they are a business after all.
Incidentally, the “law” of supply and demand is not to be confused with laws of nature, such as gravity. Rather, it is a human construction based on a number of assumptions that, as the collapse of global finance has demonstrated, are not to be taken for granted. Adam Smith knew this very well, which is why he specifically argued against leaving national defense to the vagaries of the market.
Finally, as I have written in prior postings, I welcome well reasoned and supported objections to whatever I or other colleagues post, but please refrain from rhetorical screams that substitute for argument. If you are interesting in a constructive dialogue, aggression, including verbal aggression, really does not work.
Thank you.
Anonymous says “my article”, so I assume ‘Anonymous’ is really the author who, for some truly mysterious reason, declines to use his own name.
But this IS a problem. If you are not willing to even use your name, yet say “my article”, just how trustworthy are you?
And yes, trustworthiness is an issue, one you cannot ignore if you are serious about having people take your arguments seriously.
First of all, no, I did not “overlook critical points” in your posting. They were, as you admit, LINKS to other articles. They are NOT part of the article itself.
If you are confused about the difference to links in the article and the article itself, again, this weighs against your credibility.
That said, I am glad you added the summary in a comment. I would have preferred that it be in the article itself, but since it is not, putting it in a comment to the same article is a good thing to do. Thank you.
But I do not and will not thank you for implying that I confuse the “law of supply and demand” with the “laws of nature”. Of course I do not. But among all economic laws, the law of supply and demand is closest to immutable. Even systems of economic thought that are otherwise thoroughly inimcal to each other, still all embrace the law of supply and demand.
This is exactly why any claim to a method of lowering costs (price) must address the implications of the law of supply and demand, which your otherwise excellent summary still does not do.
Finally, while I realize administrative costs are excessive, your summary does NOT even allude to an explanation why a public plan will cut those costs more effectively than stockholder pressure on the insurance companies. I think we can agree that this pressure has not performed well lately, where we will probably disagree is that government can cut it more effectively.
But if that is really the argument you want to make, show us the evidence.
I said ‘finally’, so I will not in this comment pick apart your other weak arguments. One thing at a time.
I know I said ‘finally’, but I also have to point out: contrary to Anonymous’ insinuation, the recent market ‘collapse’ was NOT caused by a failure of the law of supply and demand. On the contrary: it was in perfect accordance with the law of supply and demand. The problem was that demand for those worthless derivatives was too high for years; suddenly, the market realized how worthless they really were, so demand plummeted.
The law of supply and demand then dictated that the price would plummet as well, which then caused so much wealth to disappear. Now the demand is staying down, so the price stays down too.
It seems to me that Anonymous, who appears to be Claudia herself, is badly in need of a review of really basic economics.
Or is it necessary to maintain your ignorance in economics in order to believe that Single Payer is the solution?