Which Way to Universal Healthcare?

Two leading reformers debate the role of private insurers.

Ezra Klein

Steffie Woolhandler and Richard Kirsch talk it out.

The numbers have never been this grim. Almost 50 million Americans are uninsured. The average annual premium for a family is nearing $13,000, and racing upward at rates that wages can’t hope to match. If nothing changes, by 2050, government healthcare spending will consume 37 percent of the gross domestic product, and private health spending will be far more. There will be little left for education or wages or leisure.

‘The reason healthcare in this country costs so much more than in any other country is because we’re the only country that treats healthcare as a commodity.’

Economists have a dictum they call Stein’s Law, and it is simple: If something cannot go on forever, they say, it won’t.

Our health system cannot go on in this fashion forever. It will break the back of the federal budget and crush individual consumers. But between cannot” and will not” lies an ocean of impediments and questions. 

Some of those barriers seem to be dissolving before the moral force of the issue. For the last eight years, our government lacked either the will or the interest to act on health reform. After Jan. 20, 2009, that will no longer be true. 

President-elect Barack Obama has not only stated his intention to reform healthcare, he has also staffed his administration with eager reformers, notably former Senate Majority Leader Tom Daschle, who has written a book calling for comprehensive healthcare reform and who will serve as the administration’s health czar,” as well as its Health and Human Services secretary. 

But if the incoming administration has the will, few are sure of the way. It’s an old debate, and a consequential one. As the saying goes, the status quo is everyone’s second choice. And when you have reformers squabbling over what they want, and industry uniting to defeat what they don’t want, the outcome is never progressive. 

In an attempt to encourage dialogue in advance of the legislative battles to come, In These Times invited representatives from two leading reform groups – Steffie Woolhandler, co-director of Physicians for a National Health Program, and Richard Kirsch, the national campaign manager for Health Care for America Now (HCAN) – to talk out their differences. An edited transcript of their conversation follows. 

Why don’t we begin with each of you giving us the elevator pitch” of what your groups are advocating for? Steffie? 

Steffie Woolhandler: Our group of more than 15,000 physicians supports single-payer national healthcare insurance. We support that because it’s the only way to affordably cover all Americans. That’s because single-payer allows you to generate huge administrative savings by going to a more simplified payment structure. 

If you don’t go with single-payer and you continue with the current system of multiple-payers and the participation of private insurance, you continue to have tremendous administrative waste. And then the only way to get more coverage is to spend more money, and that quickly becomes economically unfeasible. 

Just so we’re clear on terms, when you say single payer,” how stringent are you being? Are you talking just what Canada and England do, or are you also considering Germany and France, which have nonprofit involvement? Do they count as single-payer? 

SW: Germany clearly would not count as single-payer. They have multiple payers. But there are other nations that have, or have had, some form of single-payer systems, not just Canada or England. For a while, Australia had single-payer, for instance, and Taiwan has a single-payer system. 


Richard Kirsch: Health Care for America Now’s goal is to have a guarantee of quality, affordable healthcare for everyone in the nation. And we’ve come together as a coalition that includes 480 organizations that represent community groups, labor, healthcare providers and faith-based groups, among a whole variety of organizations on a common set of principles: That everyone should be covered. That the coverage should be affordable based on people’s income. That the benefits should meet people’s needs. That the coverage should be affordable to employers. And that, in order to do this, we need to have really strict regulation of the private health insurance industry, so that it can’t continue to have a business model that drops people when they need healthcare. 

We also need to give people a choice of healthcare coverage. So, in addition to keeping their own healthcare coverage, they have the choice of a public health insurance plan. Private insurance isn’t the only choice. The primary goal is to look at healthcare as a public good. 

The reason healthcare in this country costs so much more than in any other country is because we’re the only country that treats healthcare as a commodity. 

Your opening statements demonstrate a congruency in values, but obviously your approaches are different. It seems to me you each balance the politics and the policies of the issue differently. So, let me start with you, Steffie: How does single payer pass the Senate Finance Committee? 

SW: Well, you build a popular movement among the American people, much in the way that Obama was able to succeed by building a popular movement. If you’d asked me five years ago, what was more likely, passing single-payer or electing a black president, I probably would’ve said single-payer and you probably would’ve, too. But the thing that changed was a kind of populist sentiment in this country, and that’s what it’s going to take.

So, Richard, what’s your response? In particular, why do you let corporate insurers remain in your system? 

RK: First of all, our goal is to get all folks covered. A lot of people in America have their healthcare taken care of by private insurers. 

My wife’s a cancer survivor. She got really good care and some not-good care, and none of that had to do with the insurance. The not-good care had to do with a doctor who wasn’t so good, but the insurance covered both the good doctor and the bad doctor.

There are a lot of problems with the health insurance industry and the way it functions, but it can be regulated. It’s not private insurance that makes it impossible to provide access to care to people. We should remember that, even with all the frustrations that people have with it.

SW: These private-public types of plans fail. The TennCare plan [Tennessee’s Medicaid managed care program] in 1992 did include a big public plan, so it’s not correct to say that none of these efforts have included a public plan. 

Similarly, the Massachusetts reform in 1988, the Oregon reform in 1992, and the Washington reform in 1993 all included substantial employer mandates. They were never fully implemented because the economics didn’t work. If you don’t get the administrative costs under control, you can’t get advanced care.

But these proposals fail at the state level because healthcare is a countercyclical cost. States cannot deficit spend. When recessions hit, their revenues drop. But when recessions hit, more people lose their insurance and need subsidies. So at the exact moment revenues go down, costs go up. That’s why the plans unravel. But it’s not necessarily applicable to the federal level.

SW: That’s certainly true about the state level and the inability of states to deficit spend. But what the countercyclical argument doesn’t get to is the explosion of healthcare costs. And that is much more the cause of their failure, and not a specific issue about money flowing into state coffers.

RK: As Steffie may recall, I was a leader of the single-payer movement in the early 90s. I actually co-wrote with Assemblyman Dick Gottfried – who was, and still is, the chair of the Assembly Health Committee in New York – the only fully financed single-payer bill to pass a state legislative body. (Most of the other ones that passed punted on the financing.) 

I did the fiscal analysis that showed the financing. So I understand the arguments against state plans. But there is an enormous difference if we do this at the federal level. You have broad-based taxes, you can deficit spend. The financing is totally different. 

Richard, one of the arguments that Steffie is making about your proposal is that of cost-control. I’m not as concerned about the administrative costs as she is, but single-payer certainly has a very coherent argument about cost-control. It’s essentially that we will use the market share of a single payer to force the system into being more cost-effective. There’s a lot of research backing this up. What is the cost-control theory of the HCAN plan?

RK: There are two things: First, having a public plan that has 100 million people in it will give you a lot of the cost-control.

But what if you don’t have that? That seems to me a very speculative part of your plan. Are there any other aspects of the plan that will control costs?

RK: Well, to say that the public plan is speculative is to say that any of this stuff is speculative, regulating the insurance industry, etc. But there are other things that control costs that might even be bigger lifts than the public plan. 

We need to ask, How do we start doing the other kind of changes in the system that we need, to control costs?” Part of it is, obviously, how do we get everybody in the system with prevention? How do we get better chronic care management? How do you create a system where providers have different incentives? How do you have a system where there’s better value?

So, yes, let’s use the public plan for its ability to have better prices for drug companies, better prices for hospitals, not have medical specialists get paid the outrageous amounts of money that they do get paid in this country – all the things Medicare tries to do. 

But also, let’s start having a public discussion about the really hard decisions about what we pay for. Should we be having doctors perform lots of services that have no value? Should we be paying for drugs that have no value? Those are the hard decisions that the hospitals, the doctors, the drug companies, the medical device manufacturers are going to fight tooth and nail in both a private system and in a public system, and that’s ultimately where the price savings are going to have to come from.

Steffie, let me ask you about what is maybe the most fundamental disagreement between you two. Do you think the American people might be disturbed to lose the private healthcare they currently have and move toward a government system?

SW: Medicare is one of the most popular social programs of all time in the United States. So it’s very easy to talk in terms of Medicare, and to win people over by explaining that what we are proposing is an expanded and improved Medicare for all. Winning people over is not he problem. 

Certainly, if Richard and HCAN went out with rhetoric about Medicare, they’d have no trouble signing up voters who are interested in it. But if they go out there with, Here’s our principle: We have to have private insurance,” that’s not going to move us forward.

Okay, but to follow up: HCAN, for better or for worse, is a response to a long history of failure on the U.S. left to achieve universal healthcare. And that’s been a failure to achieve it on a single-payer basis, which is what Truman was looking at, a failure on a hybrid basis, which is more what Clinton was looking at. I agree that HCAN is a policy compromise that is suboptimal, but it does have a certain political logic behind it. 

SW: Who got Obama elected? That’s obviously not the same coalition that we’d need to build a movement for national health insurance, but it shows what is possible. We’ve had a civil rights movement that completely changed the way we think about race. We’ve had a women’s movement that has won all sorts of victories. We had an antiwar movement that ended the war in Vietnam. So I don’t understand your cynicism here about how there couldn’t be a movement.

I’m not saying that there can’t be one, but I’m wondering why hasn’t there been one? The catalytic figure for the movement of Barack Obama was Barack Obama. What would be the catalytic moment or figure for your movement? Single-payer as an idea has been around for an extremely long time, but the movement hasn’t achieved a sufficient amount of power to pass it. So what has been wrong in the past that will be right in the future? Why can it succeed now when it has failed before?

SW: Right before the Clinton plan, the thing that changed was the election of Sen. Harris Wofford (D-Pa.). He was elected on a single-payer platform almost by accident. It was only one aspect of his plan, and then his opponent, Dick Thornburgh, decided to attack him as being a single-payer supporter, and Wofford was elected to the Senate based on Thornburgh’s attacks.

Now, that I could not have predicted. But in a general way, I can predict that when important elections are won and lost on this issue, then it’ll be like a lightning bolt coming from the sky. The political scene can change very, very rapidly.

RK: But Steffie, what you just said totally makes an HCAN point. Because Barack Obama was elected on a promise to fix healthcare in a certain way. One of his ads showed two extremes – government health insurance at one extreme, all private health insurance at the other extreme – and he said, I’m not at either extreme, I’m in the middle.” What he said in his messaging at every debate was, Under my plan, you can keep your own health insurance or you can have a choice of other health insurance.” He was elected on exactly the kind of mandate Steffie’s talking about. 

That’s what the election was all about. It wasn’t for single-payer. It was for this bold promise to the American public to have a guarantee of quality, affordable healthcare from a choice of either private or public insurance and know that you’re going to get good benefits that are affordable. That’s the mandate we have.

Steffie, is there any intermediate proposal between here and single-payer that would be a step in the right direction?

SW: If you’re going to do something incremental, I would start with single-payer for hospital care. All hospitals would get their budget from a single-payer, and hospitals would no longer send bills or do health accounting to individual patients, but would be budgeted. That at least gets you a substantial amount of administrative savings and increases the fairness of the system. It also allows you to do better health planning. 

There’s not a lot of talk about that as an incremental step, but that’s the one incremental step that makes sense.

Richard, a lot of what you said today has been reliant on the idea of the public plan, but my congressional reporting suggests that one plausible outcome for your plan is that when you try to get to 60 votes in the Senate, the public plan gets bargained away. Is the public plan a bottom line? If the public plan vanishes, but the rest of the plan is structurally similar to your principles, is that a plan that’s beneath the level of acceptability? Is that a plan that therefore merits opposition?

RK: We haven’t as a coalition had a discussion yet about how we look at this whole plan when it passes, and what’s acceptable and what is not. 

We’re a long way policy-wise and politically – although maybe not that long on the calendar, potentially only nine or so months – of seeing something enacted. But we’re not there yet, so we’re just going to fight in every way for the best system that is achievable. 

We’re glad we got President-elect Obama and more than half the newly elected members of Congress to sign our principles. Our goal is to build this movement for the set of principles that are achievable and that the President-elect got a mandate for, and to see that in law in 2009

Ezra Klein is a staff writer at the American Prospect who blogs regularly at www​.ezrak​lein​.com.
Get 10 issues for $19.95

Subscribe to the print magazine.