The Obama administration says its repeal of Bush-era tax cuts for wealthier Americans will help pay for a $634 billion reserve fund for what it calls its top fiscal priority: healthcare reform. But can the US achieve real healthcare reform without adopting single-payer? We host a debate between Dr. David Himmelstein of Physicians for a National Health Program and Len Nichols of the New America Foundation. [includes rush transcript]
JUAN GONZALEZ: President Obama has unveiled a $3.6 trillion budget for the coming fiscal year. Obama said the plan would boost government revenue by repealing Bush administration tax cuts for the wealthiest Americans. The plan estimates the US deficit will grow to $1.75 trillion. Large businesses and wealthy Americans would see tax increases worth nearly $2 trillion over the next ten years. The extra revenues would help pay for a $634 billion reserve fund that Obama says would be used for achieving universal healthcare.
AMY GOODMAN: Today, we host a debate on healthcare. Dr. David Himmelstein is an associate professor of medicine at Harvard University, co-founder of Physicians for a National Health Program, joining us from Watertown outside Boston. Len Nichols is the director of Health Policy Program, New America Foundation. He joins us from Washington, D.C.
We welcome you both to Democracy Now! We want to begin with Len Nichols. What plan do you see as most feasible, most — what are you advocating for at the New America Foundation on healthcare in this country?
LEN NICHOLS: Well, basically, what I want is I think the same thing a lot of members of Congress and the American people want, and certainly the President, and that is for us to commit as a nation to making sure all Americans have access to high-quality care. We think that means they need insurance, but it also is important that we commit, at the same time, to making our health delivery system efficient. We have the most inefficient system in the world. We’ve got to make it better. And both those elements have to be part of reform.
JUAN GONZALEZ: And Dr. David Himmelstein, your concern in terms of how — because obviously the set aside of money now is only the set aside of the money. The actual plan, we will have to wait for in the next few months. But your concern as the Obama administration begins to develop its plan about what is needed?
DR. DAVID HIMMELSTEIN: Well, what we’re hearing is that they’re going to do something like what we have here in Massachusetts, which keeps the private insurance companies right in the middle of the healthcare system, and it can’t work. Basically, you throw away so much money on profit in the bureaucratic waste of the insurance industry and the bureaucratic waste they inflict on doctors and patients in the hospitals that you can’t afford decent care for the American people if you do it that way. And we’re hearing that they’re not really ready to challenge the insurance industry head on. That’s the only way you can make the health system work.
JUAN GONZALEZ: Well, the Massachusetts plan has been held up in recent years as a model. What are the main problems that you see with how the plan has operated there?
DR. DAVID HIMMELSTEIN: Well, I see them day to day. I’m a primary care doctor here in Massachusetts, and my patients still can’t afford the care they need. They’ve given some people insurance, but they’ve actually given them insurance, in most cases, that has such holes in deductibles, co-payments, that people still can’t afford care. And there are still hundreds of thousands uninsured.
And meanwhile, the thing is costing much more than they said it would, and they’re draining the money out of community clinics, public hospitals, mental healthcare for the chronically ill, to keep the system afloat. So, at the public hospital where I work, we’ve had massive budget cuts. We’re closing half of the psychiatric wards. We’re closing the only in-patient substance abuse ward. That’s what the problem is, is that in order to keep the insurance industry in business, they’re actually having to slash care and leave it unaffordable to people who have coverage.
AMY GOODMAN: Len Nichols, are you for preserving private health insurance industry?
LEN NICHOLS: Well, like I said, Ms. Goodman, I’m for getting everybody covered and for enabling that coverage to let us buy high quality care that we can sustain over time.
I think the way to think about what’s being talked about down here is, I think Massachusetts is something of an example, but you want to be careful about how to interpret the implications of it. The first big problem is that Massachusetts tried to cover people without being able to do anything serious about cost growth containment over time, so that, as a nation, we know we have to do both.
But I would also say that while David’s right — there has been an underestimate of how much it would cost in Massachusetts — that was because of, I would say, a technical error over the estimation of the number of people who were uninsured. There were two different surveys that were done. The government, a combination of then-Governor Romney and the legislature, chose to go with the survey that was basically saying there were half as many uninsured as a different survey suggested. The national experts thought the latter was the better. That had the right number of uninsured. The legislature budgeted for the lower number of uninsured, and that’s why they’ve hit a budget constraint.
So, again, I would simply say what you’ve got to do is figure out how to get everyone covered, while you make the system more efficient over time. And that is exactly what President Obama is talking about and I believe our Congress is moving toward.
AMY GOODMAN: Dr. Himmelstein?
DR. DAVID HIMMELSTEIN: Well, first of all, we don’t have everyone covered. In fact, there are lots of uninsured people left in Massachusetts despite this massive spending, and more and more every day. We’ve lost 85,000 jobs in our state in just the last year, and the coverage hasn’t expanded to take those 85,000 people in. So, that’s a myth.
And we told them off — right off the bat it was going to cost more than they said. They refused to believe us. And we’re telling the Obama people that the plan they’re talking about costs much more than what they are saying. The cost containment they’re claiming in their plan, the Congressional Budget Office has told them won’t work. They’re saying computers are going to save massive amounts of money. There’s no evidence for that at all. The Congressional Budget Office says there’s no evidence for that at all.
The efficiencies Mr. Nichols is talking about, we could get those efficiencies, but only if we get the insurance companies out of the system. We do $400 billion each year in useless paperwork in healthcare, and there’s no way of getting rid of that unless you get rid of the private health insurance companies.
AMY GOODMAN: We’re going to take a break, and then we’re going to come right back and get your response, Len Nichols. Len Nichols with us from the New America Foundation. Dr. David Himmelstein, associate professor of medicine at Harvard University, co-founder of Physicians for a National Health Program. Stay with us.
AMY GOODMAN: Len Nichols is with us in Washington with the Health Policy Program at the New America Foundation. And joining us from Boston, Dr. David Himmelstein, co-founder of Physicians for a National Health Program, a professor at Harvard University. Juan?
JUAN GONZALEZ: Yes. Len Nichols, I’d like to ask you — we were talking about the Massachusetts plan. One study shows that about thirty-one cents of every dollar spent on that plan is going to the overhead of the companies that are involved. How would — how can — if these private insurance companies will remain involved in the healthcare — in healthcare insurance in the future, how can those costs be controlled?
LEN NICHOLS: Well, you know, that’s a great question, and I would say this way: what you’ve got to think about is, what is the role of policy versus the role of markets? Policy’s job is to channel self-interest, to change the rules, to change the regulations, so that a company’s self-interest is the same as the social interest. Right now, insurers make money, even in Massachusetts, by selecting risk, by deciding they’re going to cover some people and not others. What Obama is talking about, what the Congress is talking about, is changing the rules so that you have absolute guaranteed issue — everyone can be able to buy health insurance, regardless of cost, regardless of their health condition — and they can’t charge different prices based upon your health condition, so that all that — a lot of that waste that’s going on now, that you’re right to criticize, would go away, because it would no longer be profitable. You would take away that profitable opportunity.
Second, a lot of the administrative costs that David talked about, which is borne by the providers, I agree completely, they’re wasting a lot of energy now satisfying a lot of different kinds of claims forms. You could have a common claims form required by the government. You would get the industry to agree on what it is or tell them you’re going to impose one. They would agree in about an hour. And then you could have very much more efficient ways of billing and collecting, so that the extra costs that we’re spending now could be taken out of the system by rules and regulations that would make their self-interest pursue our social interest.
AMY GOODMAN: Dr. David Himmelstein, you are for single-payer healthcare. Explain what it is and why you think it is achievable now.
DR. DAVID HIMMELSTEIN: Well, it’s simple national health insurance. People pay taxes to government, and the government provides a social insurance program that covers everybody for all medically necessary care and pays the hospitals and doctors and nurses and nursing homes that provide that care. And basically, it’s a program like what they have in Canada, though we spend twice what they do per person in Canada and ought to be able provide much better care than they do in Canada.
It’s possible now, frankly, because the system is such a disaster, not just for the uninsured, but for insured Americans, as well. We have a unanimity of interest that the system needs to be changed. Private insurance isn’t working for 85, 90 percent of us at this point. And I mean, we studied medical bankruptcies. President Obama has been quoting our study. Three-quarters of the medical bankruptcies in this country — I’m sorry, half of the medical bankruptcies in this country are people who were insured, at least when they first got sick. It’s not just the uninsured. If you look at people who have coverage under the Massachusetts plan, more of them say they’re worse off than better off who have gotten coverage under this plan. So the system is not working broadly, and we need to organize for change that’s a broad change.
Just one last thing to say, Len Nichols claims all we need is a common billing form for hospitals. We already have that. It’s called UB82. And we have computerized virtually all hospital billing. It hasn’t saved a nickel. It’s because the insurance companies aren’t actually interested in saving money on administration. That’s where they make their dime. And no amount of government regulation is going to change their behavior, as long as they’re still in the game.
AMY GOODMAN: Len Nichols, we’re talking nationalizing banks. Why not nationalize health insurance? Why not nationalize healthcare in this country?
LEN NICHOLS: You know, it certainly is tempting, and at a certain level, you’re right. The atmosphere is one where it seems like all things are possible. But I would just say the American people, by and large, are not ready for government-run healthcare. Look at the way people can be scared by one-size-fits-all kinds of rhetoric. And I will say, people between — it’s interesting. On the coasts, people are more supportive, but in the middle of the country, they’re very, very nervous about having one government program, because they feel like, in the absence of great information about what’s best for them, they want choice to preserve their chance of finding the best care.
I think we need to improve our system. We’ve written extensively about that. I’d be glad to talk about it at more length. There’s a lot we can do to make our system more efficient, but I think the American people are nowhere near ready to have the government take over their healthcare, because that set of decisions about how you treat your illness, etc., is so private and so emotional. They do want choice. They want to believe in their doctor, and they do, in large part, believe in their individual doctor.
AMY GOODMAN: So, Dr. Himmelstein, respond to that. It’s not practical right now. It’s not achievable.
DR. DAVID HIMMELSTEIN: Well, yeah. I mean, people want choice. They want to be able to choose their doctor, and they want to be able to choose their hospital. They want to choose their care. And that’s what they can’t do at this point. We’re saying every American should be able to go to any doctor, any hospital in the country, and have a completely free choice. And under the private insurance system, they don’t have that.
And, I mean, this thing that people in the middle of the country somehow are idiots, we — some of our strongest chapters in Physicians for a National Health Program are in places like Montana and Colorado and Indiana. And in fact, surveys show, even if you ask Americans, “Would you think that socialized medicine would be a big improvement on the healthcare system?” most Americans say socialized medicine would be better than what we have. Now, we’re not even saying socialized medicine. We’re not proposing that at this point. We’re saying a social insurance program where government pays the bills, but the decisions are still with doctors and patients. And surveys are very clear. Most Americans prefer that; about 62 percent of Americans prefer that. Most doctors prefer that. In fact, doctors want that much more than they want lesser reforms of the kind that Mr. Nichols is talking about. It’s the politicians who are the block; it’s actually not the American people. And if we provide some reasonable leadership for the politicians, then they can get the message. And that’s really the problem, is Washington, not the middle of the country.
LEN NICHOLS: Let me just make it clear, I do not think the people in the middle of the country are idiots. I never said that. What I said is, they’re very reluctant to sign onto a program in which they think their choices are being restricted. In fact, it is their wisdom that leads to their desire for choice.
I would also say the politicians largely reflect the people’s anxieties and the people’s feelings about these matters. I would certainly say there’s a lot of different polling out there that would suggest very different results. And when you use terms like “socialized medicine,” one size fits all.
DR. DAVID HIMMELSTEIN: Well, the politicians reflect their funders. I mean, Max Baucus, who’s the driving force in the Senate at this point, is one of the biggest recipient of HMO dollars in this country. He got $200,000 in donations. The only people who got more are John McCain and Hillary Clinton. And that’s the real problem, is that they’re buying up the politicians. And it’s not that people are scared. They’re only scared when politicians try and make them scared.
We’re talking about increasing their choice. We’re talking about paying their bills in the most efficient and effective way and giving them the care they need without the bureaucracy and interference that they now face. And there’s nothing to be scared of with, and most Americans aren’t scared of that, but politicians are, because it dries up their source of funding.
JUAN GONZALEZ: And Len Nichols, I’d like you to answer that, but I’d also like to throw in a little personal experience that I’ve had recently. I just had a minor shoulder surgery a few weeks ago. And I have to tell you, because I am insured through my company, and I have to tell you the amount of time that I have had to spend on the phone with my employer, with the health insurer, with the hospital, the various bills from both the hospital, the surgeon, the laboratories, the amount of time that I’ve had to spend to try to maneuver through this incredibly complex system — and is it in network or out of network? And I have to imagine that millions and millions of Americans every day are going through the same procedure, even those who have insurance, enormous amounts of time and energy and frustration spent trying to maneuver through the system.
LEN NICHOLS: Sir, I agree. I’ve shared some of that same frustration in my own life, as have we all. And I would agree, our system is a mess.
But what I’m trying to say is, when you have a system where people only have a government solution, you’re going to have a very difficult time achieving any form of bipartisan acceptance of it. And in the short run, in my opinion, that’s the best way we can move forward to ensure all our people have coverage, if you change the rules, you change the regulations, so that the incentive of the insurers is different than it is now. What we’re talking about here is not little tinkering around the edges; what we’re talking about here is changing the business model.
Today, insurers make money by excluding the sick and by making it hard for people to get the carrier talking about it. I agree that’s what they’re doing. It’s about that. But if you change the rules and you say, “Look, we’re going to publish patient satisfaction. We’re going to publish what things cost. We’re going to publish what it would cost to be covered by you,” and make all that very clear, and you make — essentially you give people choices among them, they will compete on the right dimensions, because that’s the way they’ll make money. They’ll have a strong interest in doing that.
AMY GOODMAN: Len Nichols, we started with you. Fifteen seconds, Dr. Himmelstein, we’ll end with you.
DR. DAVID HIMMELSTEIN: Well, we need single-payer national health insurance. If private insurance could solve this problem, I’d be all for it. Unfortunately, it can’t. My patients desperately need it. Our nation desperately needs it. There are things we say are not appropriate for the market, like the fire department and the police department. Medical care ought to be one of those.
AMY GOODMAN: We’ll leave it there. Dr. David Himmelstein, associate professor of medicine at Harvard University, co-founder of Physicians for a National Health Program. And Len Nichols, director of the Health Policy Program at the New America Foundation.