What is Single Payer

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What is Single Payer?
Irene Aguilar, M.D. President Health Care for
All Colorado Elinor Christiansen,
MD President Health Care for All Colorado -
Foundation
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History of Health Insurance

• Insurance is a social vehicle for spreading the
  risk of financial loss among a large group of
  people, thus making a loss manageable for any one
  
• person of that group.

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History of Health Insurance

• 1798 Congress establishes seaman sick fund paid
  for by monthly payroll tax
• 1890s Saginaw, Michigan. St. Marys Hospital
  certificates
• 1883 1913 10 European countries adopted some
  form of compulsory health insurance, or risk
  sharing, among their entire population

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History of Health Insurance

• 1912 Presidential Campaign
• Theodore Roosevelt and the Progressive party
  made National
• Health Insurance a platform plank
• 1916 - 1920 compulsory health insurance bills
  were introduced in 15 states
• 1917 The AMA and employers succeeded in defeating
  these efforts WWI shifted priorities

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History of Health Insurance

• 1917 King and Pierce County, WA medical
  societies establish industrial service bureaus
• 1918 Physicians in Grinnell, IA
• 1919 37 states enact workers comp
• 1929 Group hospital plan for school teachers in
  Dallas, Texas
• 1932-1935 California Hospital plans, LA Dept of
  Water plan

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History of Health Insurance

• Mid 1930s FDR drops compulsory NHI from New Deal
  due to opposition of AMA
• 1934 Blue Cross (with AHA support) was
  non-profit, socially oriented
• a form of social insurance under
• non-governmental auspices, not
• merely a form of private insurance
• under non-profit auspices

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History of Health Insurance

• Blue Cross Efforts to spread risk across broad
  pool to cover the sick and keep premiums
  affordable. Given tax exemptions.
• Community rating every subscriber paid same
  monthly amount.
• Guaranteed issue anyone willing to pay this
  uniform fee was given insurance.
• 1939 Blue Shield Covered physician services

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History of Health Insurance

• 1937 American Hospital Association standards for
  approved (BC) insurance plans
• Representation by hospitals, MD, public
• No stockholders or owners
• Free choice of all hospitals at all times
• Guaranteed benefits through service contracts
• Rates sufficient to remunerate hospitals

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History of Health Insurance

• 1937 American Hospital Association standards for
  approved (BC) insurance plans
• Uniform rates for similar services based on costs
• No commissions
• Reimbursed services determined by hospitals and
  physicians
• Plan should not interfere with physician-hospital,
  physician-physician or physician-patient
  relationships

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History of Health Insurance

• After WW II Employer based insurance became the
  norm.
• WW II tight labor markets with government wage
  controls exempted fringe benefits.
• Employers wanted to ensure workers loyalty to
  their company.
• Government allowed money spent by employers on
  health insurance to be free of income tax.

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History of Health Insurance

• 1940s Kaiser Foundation Health Plan
• 1940-1946 Popularity of employer based coverage
  led to for-profit insurers entering the
  marketplace.
• 1950 gt 50 Americans covered
• 1980 Most (gt70) full time workers at large
  companies had health insurance through their
  employers, many through for-profit companies.

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The Business of Health

• The legal duty of a for-profit
• company is to make a profit
• for their shareholders.

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The Business of Health

• To control costs and maintain profits, commercial
  health insurers began the shift from spreading
  risk to avoiding risk
• Onset of Experience Rating
• Insurers increase premiums based upon the claims
  made by enrollees
• Avoid high risk groups (deny coverage)
• Compete for healthy, large employers
• Cherry Picking

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The Business of Health

• These policies led to a decrease in the
  competitiveness of Blue Cross plans
• to the healthy with Adverse Selection.
• Social insurance (guarantee issue) left with
  higher risk enrollees.
• Higher premiums needed to stay solvent.
• Only those at high risk willing to pay premiums.
• 1986 BC loses tax exempt status
• 2005 Half of BC companies for profit

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The Business of Health

• Cherry picking led to populations who could not
  find insurance.
• Medicare was enacted in 1965 because the elderly
  could not find insurers willing to provide
  coverage.
• Medicaid was enacted in 1965 as a targeted
  program for the needy who could not afford to pay
  premiums.

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The Business of Health -Cost Saving Efforts

• Cost Sharing policy requiring the insured party
  to pay a portion of the costs for covered
  services
• Copayment - the amount a plan member has to pay
  each time he or she sees a doctor , fills a
  prescription, or receives other medical services.
• Deductible - A set dollar amount that must be
  paid before insurance coverage begins.

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The Business of Health -Cost Saving Efforts

• Co-Insurance The portion of covered health care
  expenses that must be paid, in addition to the
  deductible, by the health plan members.
• Benefit Cap A dollar or quantity limit placed
  on the assistance that can be provided in a given
  time period, usually one year.

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The Business of Health Cost Saving Efforts

• Prior Authorization Insurer gives approval
  before a particular drug or service is covered
• Utilization Review Review of patient utilization
  or of the appropriateness of health care services
  on a prospective, concurrent, or retrospective
  basis.
• Preferred Drug List Drugs paid for by insurer.
  Non preferred drugs may be available at higher
  copayment, not reimbursed, or only reimbursed if
  patients fail preferred drug first.

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The Business of Health Cost Saving Efforts

• Price Discounts Private insurers negotiate lower
  prices with hospitals. In order to generate more
  income hospitals raise the sticker price for
  services.
• Over time, the gap between charges and insurance
  payments grew.
• By 2003 charges could sometime be 4x higher than
  what insurance companies paid.
• This penalized the uninsured, who would be
  charged the full price for care.

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The Business of Health

• Three Major Insurers in US
• Wellpoint, Inc.
• United Health Group
• Aetna
• Each insurer has different plans
• Each insurer negotiates rates for each procedure
  with each provider
• Each plan has unique payment structure
• Referral Hospital may deal with up to 1500
  insurance plans

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The Business of Health

• Most employers offer a single insurance carrier
  because the insurer incentivizes them to do so or
  has minimum enrollment requirements
• Typical annual turnover rate of patients
  insurance coverage of 20, often requiring change
  of physicians

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TYPES OF HEALTHCARE SYSTEMS

• T. R. Reid in Sick Around the World looked at
  successful systems in the U.K., Germany,
  Switzerland, Japan, and Taiwan.
• WHAT WORKS?

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Health Care Expenditure per Capitaby Source of
Funding in 2005Adjusted for Differences in Cost
of Living
a
b
a2004 b2002
Source OECD Health Data 2007
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INSURANCE BASED SYSTEM

• Germany-1883 (Otto von Bismarck), Switzerland -
  1994
• Non profit-insurers for basic coverage
• Mandate for Universal Coverage
• Not employment dependent - portable

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NATIONAL HEALTH SERVICE NHS SYSTEM

• United Kingdom (Lord Beveridge) 1948
• VA (Veteran's Administration) 1930

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NATIONAL HEALTH SERVICE NHS SYSTEM

• SIMILARITIES
• Government owned hospitals and clinics. Salaried
  physicians.
• Government single negotiator for supplies,
  pharmaceuticals, etc.
• Nationwide electronic medical records.
• Government Health Board (N.I.C.E.) determines
  covered services.

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UK Rationing of CareURBAN LEGEND!

• Kidney International (2004) 66, 24162421
• Acceptance for maintenance dialysis in our unit
  is in accordance with the published
  recommendations and guidelines of the UK Renal
  Association. In particular, there is no specific
  age
• cut-off for access to dialysis.

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NATIONAL HEALTH INSURANCE SINGLE PAYER

• CANADA 1966 passed the Medical Care Act based
  on a Saskatchewan plan expanding like systems to
  all 10 provinces/3 territories, in full force by
  1971
• MEDICARE in the US covers 13-15,
• 9 in CO

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NATIONAL HEALTH INSURANCE SINGLE PAYER

• SIMILARITIES
• Physician and Hospital single price negotiation
• Public Payment, Private Delivery
• Patient choice of public or private hospitals
• Patient choice of physician
• DIFFERENCES
• Government single negotiator for pharmaceuticals,
  devices, supplies in Canada
• Administrative costs of for-profits eliminated

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The Health Care Americans Want

• Free choice of doctor
• Guaranteed access
• High quality
• Affordability
• Trust and Respect

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The Health Care Americans Get

• 1/3 are uninsured or underinsured
• Insurance companies deny care to millions more
  with expensive illnesses
• Death rates higher than other wealthy nations
• Costs exceed France, Germany and Sweden and
  rising faster
• Executives and investors making billions
• Destruction of the doctor/patient relationship

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• How do we achieve the ideal?
• Dramatically reduce overhead costs. How?
• Eliminate for profit entities in delivery of
  healthcare
• Reduce costs of pharmaceuticals
• Allow negotiation of bulk price
• Create a single risk pool of all residents -
  makes health care available and affordable to all

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Percentage of Total Health Care Spending on
Health Insurance Administration in 2005
36
a
a
a
a2004
Note Total health care spending on health
insurance administration includes insurer costs
only.
Source OECD Health Data 2007 (October 2007)
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Congressional Budget Office Estimates of the
Effect on Federal Spending of Selected Health
Care Reforms
Oberlander J. N Engl J Med 20093602045-2048
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Single Payer Health CareHow do we know it can
be done?

• Every other industrialized nation has a
  healthcare system that assures medical care for
  all
• All spend less than we do many spend less than
  half
• Most have lower death rates, more accountability
  and higher satisfaction

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• Lewin Group Analysis of
• Colorado Proposals
• COLORADO HEALTH SERVICES
• SINGLE PAYER PROGRAM
• Everyone insured with comprehensive benefits No
  one without coverage
• 1.4 billion savings annually
• Colorado Blue Ribbon Commission on Health Care
  Reform 1/31/2008

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Colorado GuaranteedHealthcare Act

• Every resident covered
• Publicly funded, privately delivered
• Comprehensive all needed care, including
  dental, mental health, substance abuse
• No deductible, no copayments
• Simplified reimbursement
• Improved health planning
• Focus on wellness, prevention and chronic disease
  management
• Public accountability for quality and cost, with
  minimal bureaucracy

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Colorado Health Care Spending 2007 estimate
30.1 billion

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Potential Financing Mechanisms

• Lewin Analysis Colorado
• 8.1 personal premium (overall ?187 million
• 6 employer premium(overall ? 2.3 billion)
• Alcohol and Tobacco Tax
• Rep John Conyers HR 676
• 3.3 Payroll tax on employers and employees
• Stock Transfer Tax
• Income tax surcharge on the richest 5
• Ezekiel J. Emanuel Healthcare, Guaranteed
• VAT on purchases
• FAIR Tax Progressive national retail sales tax

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• True compassion is more than flinging a coin
  to a beggar
• it comes to see that an edifice
• which produces beggars
• needs restructuring.
• Martin Luther King, Jr.