Published on Tuesday, June 16, 2009 by CommonDreams.org

'Public Option' Pales Next to Single Payer

by Nicholas Skala

The following remarks were delivered to a closed-door meeting the Congressional Progressive Caucus on June 4, 2009:

Today the Congressional Progressive Caucus faces a choice. That choice is whether Members should maintain their unflinching support for single-payer, or to accede to intense political pressure to support the plan currently being developed in Congress under the direction of President Obama: a mandate for Americans to purchase an insurance plan from a massive new regulatory “exchange,” with one plan potentially being a “public option.”

The difference between these choices could not be more stark: single-payer has at its core the elimination of U.S.-style private insurance, using huge administrative savings and inherent cost control mechanisms to provide comprehensive, sustainable universal coverage.

The “public option” preserves all of the systemic defects inherent in reliance on a patchwork of private insurance companies to finance health care, a system which has been a miserable failure both in providing health coverage and controlling costs.

Elimination of U.S.-style private insurance has been a prerequisite to the achievement of universal health care in every other industrialized country in the world. In contrast, public program expansions coupled with mandates have failed everywhere they’ve been tried, both domestically and internationally.

Many progressives accept that the “public option” is inferior to a single-payer system, yet support it because of its perceived political expedience. It is my aim today to convince you that the “public option” program currently being developed is not only bad health policy, but bad health politics.

On two separate occasions last month, physicians and nurses were dragged from the Senate Finance Committee in handcuffs for demanding that single-payer be considered in our nation’s health reform debate. These were American doctors and nurses, people who care for patients, people who want to practice medicine, not protest and disrupt Congress.

But these professionals risked their careers and their freedom. They did this not because they thought that the “public option” was “good” and single-payer “better.” They did it because they are firmly convinced, by well-established health policy science, that the so-called “public option” has no hope of remedying the systemic defects that cause their patients to suffer and die, sometimes before their very eyes.

Millions of dollars have been spent by political advocacy groups to commission polls and statistics “proving” that their health reform is “politically feasible.” Yet political winds do not make good health policy. Careful examination of science and experience do. And it is in the science and experience that we see that single-payer offers the only way to truly comprehensive, universal and sustainable health care, and that “public option” schemes offer only more of the same: tens of millions of uninsured, rapidly deteriorating coverage, an epidemic of medical bankruptcy, and skyrocketing costs that will eventually cripple the system.

First, because the “public option” is built around the retention of private insurance companies, it is unable - in contrast to single-payer - to recapture the $400 billion in administrative waste that private insurers currently generate in their drive to fight claims, issue denials and screen out the sick. A single-payer system would redirect these huge savings back into the system, requiring no net increase in health spending.

In contrast, the “public option” will require huge new sources of revenue, currently estimated at around $1 trillion over the next decade. Rather than cutting this bloat, the public option adds yet another layer of useless and complicated bureaucracy in the form of an “exchange,” which serves no useful function other than to police and broker private insurance companies.

Second, because the “public option” fails to contain the cost control mechanism inherent in single-payer, such as global budgeting, bulk purchasing and planned capital expenditures, any gains in coverage will quickly be erased as costs skyrocket and government is forced to choose between raising revenue and cutting benefits.

Third, because of this inability to control costs or realize administrative savings, the coverage and benefits that can be offered will be of the same type currently offered by private carriers, which cause millions of insured Americans to go without needed care due to costs and have led to an epidemic of medical bankruptcies.

Supporters of incremental reform once again promise us universal coverage without structural reform, but we’ve heard this promise dozens of times before.

Virtually all of the reforms being floated by President Obama and other centrist Democrats have been tried, and have failed repeatedly. Plans that combined mandates to purchase coverage with Medicaid expansions fell apart in Massachusetts (1988), Oregon (1992), and Washington state (1993); the latest iteration (Massachusetts, 2006) is already stumbling, with uninsurance again rising and costs soaring. Tennessee’s experiment with a massive Medicaid expansion and a public plan option worked - for one year, until rising costs sank it.

The Federal Employee Health Benefit Program (the model for a health insurance exchange) leaves hundreds of thousands of federal workers uninsured, and has proven unable to contain costs.

Negative results in a recent series of randomized trials explodes the hope that chronic disease management will cut costs. And the CBO has thrown a wet blanket on the notion that electronic medical records save money.

As Drs. David Himmelstein and Steffie Woolhandler, co-founders of Physicians for a National Health Program, have remarked, a public plan option does not lead toward single-payer, but toward the segregation of patients, with profitable ones in private plans and unprofitable ones in the public plan. A quarter-century of experience with public/private competition in the Medicare program demonstrates that the private plans will not allow a level playing field. Despite strict regulation, private insurers have successfully cherry-picked healthier seniors, and have exploited regional health spending differences to their advantage. They have progressively undermined the public plan - which started as a single-payer system for seniors and have now become a funding mechanism for HMOs - and a place to dump the unprofitably ill.

Progressive supporters of the “public option” readily concede that single-payer is a superior system. Indeed, their response to evidence that their plan won’t work is to commission more charts and graphs emphasizing its political feasibility.

The “public option” is truly the embodiment of health policy designed by sound bytes, cobbled together from snippets of information gathered from focus groups and public opinion polls, and centered around well-polling buzzwords such as “choice” and “shared responsibility.”

Such a plan may be enough to excite the political classes in Washington, who care more about what they think can pass the Congress than what will actually deliver universal, comprehensive health care for all. But doctors and nurses, the people who actually work in the health system, see right through it. They are going to jail because they know that this plan won’t work for their patients.

Nobody is going to jail for the “public option,” because the American people cannot be inspired by band-aids and half-measures it is impossible to believe in.

These doctors and nurses are the manifestation of a social movement, millions strong, that is waiting to be mobilized by the leadership of the Members in this room. Polls consistently show that two-thirds of the American people want single-payer. At a recent hearing in Montana convened by Sen. Max Baucus, only 10 people of three hundred said they were happy with the insurance they have. Sixty percent of physicians support single-payer, as do the U.S. Conference of Mayors and 39 state labor federations and hundreds of local unions across the country.

We’re told that holding out for single-payer is politically unwise, but to compromise and accept a bad plan at precisely the time when popular support and grassroots energy are on the side of true reform is the real political miscalculation.

The history of great social achievement is rife with instances in which the forces of institutionalized power told social movements - as they now tell this one - that what they wanted was too much, or too fast, or too soon. I think, of course, of the abolition of human slavery, the enfranchisement of women, the Civil Rights Movement, Social Security, the minimum wage, an end to child labor. In each of these instances, social movements held fast to their principles and soon discovered that they had been told was “politically unfeasible” one moment was political reality the next.

We currently have a better chance to pass single-payer than Lyndon Johnson had when he passed Medicare. Unlike the public option, single-payer - because it holds the potential to finally realize universal, equitable health care - can be a vehicle to inspire the American people for progressive change.

The voices of doctors and nurses can achieve extraordinary resonance when they speak selflessly in their patients’ interest. But your leadership is crucial to inspire the American people. It is my hope that you’ll see fit to provide it.

Nicholas Skala is a former senior research associate Physicians for a National Health Program. He is currently a Juris Doctor candidate and Harry L. Kinser Scholar for Health Law at Northwestern University School of Law. He can be reached at n-skala@law.northwestern.edu