Satvat Healthcare: The Truth Behind Universal Healthcare
Common Arguments Made Against Universal Health & Rebuttals
Jeff 'KKK Not So Bad' Sessions (R-AL)
1. Universal health care in the U.S. will cost too much and raise my taxes
Rebuttal: You have to ask yourself what the alternatives are to universal health care and how much THOSE alternatives will cost. The fact is, our current system of care is unsustainable, a financial pipe dream, and does not cover almost 50 million people. According to the CBO and the U.S. comptroller, the cost of Medicare is expected to grow from 8.4 percent of GDP to 15.7 percent of GDP in 2030. Medicare’s burden on the economy will quintuple, under the current plan, from 2.7 percent to 13.8 percent of the economy, by 2030. This means that, unchanged, Medicaid and Medicare will go from consuming 11.1 percent of American GDP now to 29.5 percent in 2030. A system facing such a dramatic increase in unfunded costs is not a system that is working. Furthermore, these costs are, depending on which numbers you want to believe, underfunded in the trillions of dollars over the next 30 years.
People can say they don't want their taxes raised. However, this is a short-sighted view based on a misunderstanding of the costs of the current system. Unchanged, the deficits faced by our current health system will cause even larger tax increases. People pay for the systems that exist. They pay in the form of high premiums, lower wages due to the burden of health care costs, and high taxes to support Medicare. If we can create a more efficient system, this will mean decreased taxes in the long haul.
Yes, instituting universal health insurance will not be cheap. Estimates range from $150-300 billion just for implementation, excluding continued program costs. However, compared to trillions of dollars in projected deficits over twenty years for our existing programs, this cost is nothing. These are just upfront costs, however. Most relevant is the long-term consideration of potential cost savings under universal health insurance.
Why would universal health insurance save America money over the next 20 years? There are many reasons.
First, anybody who does not have health insurance under our current system gets coverage, in a sense. That coverage is called the emergency room. Under EMTALA, the Federal Emergency Medical Treatment and Active Labor Act, if a hospital takes a single Medicare patient, the hospital needs to treat any patient who shows up at the emergency room, without exception. This law, a cornerstone of American medical care, will not change. Polling shows almost 0% willingness for legislators to even consider adjustment of this provision and it has been in our laws for many decades. Patients showing up at the emergency room for medical attention gets care, but at what expense?
For just direct costs, a non-acute visit to the emergency room by an uninsured patient costs roughly $2,000, according to several regional and national studies in the New England Journal of Medicine. The indirect costs are almost two times this amount. Thus, covering a patient annually under non-insurance through EMTALA emergency room visits costs the government almost $6,000 a person. However, the costs are hidden and people ignore this expense. Compare this expense to the $4,000 a person that is the average cost of insuring an individual and you can see there is a savings of $2,000 for every patient covered under universal health insurance.
$2,000 savings per person x 50,000,000 uninsured people = $100,000,000,000 per year in direct savings from converting emergency room patients to insured patients. That's $100 billion a year for those of you who don't like zeros.
Second, the above discussion only reflects the direct costs of treating patients. Under universal health insurance, every patient would have a primary care doctor and receive an annual check-up and regular reviews of health status. Quantifying the impact of such changes has not been extensively studied. However, it is logical to assume that frequent-flier patients who keep checking into the emergency room and receive no preventative care would cost the system even less money if they had regular reviews of their health. The alternative is only showing up to hospitals for acute problems in emergency situations. Furthermore, it is well studied that patients who routinely receive care in inpatient, such as hospital, settings are much more likely to get sick and have complications than patients receiving care in outpatient settings. High hospitalization rates are not a good thing and they cost health systems much more money than outpatient care.
More study is needed on preventative care, but many studies do show this is an important area for, at the least, health outcomes improvement and, potentially, also health cost savings.
Third, under our current health system, there is incredible waste because we do not operate under a single-payer model. A single-payer model would create an elimination of multiple insurers and put tremendous pressure on drug and device companies to stop issuing copycat products and to stop wasting money by spending as much on marketing as on research and development, as they do currently.
10-20% of every insurance company's expenses are attributable to an expense called ALR. You can look it up in any insurance companies’ financial statement. What is ALR? ALR stands for Administrative Loss Ratio and basically means how much of the money spent on care really just goes to administrative expenses and office staff and executive compensation. Under a single-payer system, all insurance services would be condensed to one organization: the government. Even with some inefficiencies of government service, which I will grant, conservatively 10% of total healthcare expenses would disappear by having the government handle all insurance claims rather than fifty different insurance companies. Someone would certainly lose, and that someone is the pockets of the insurance companies.
If insurance were a business serving a customer known as the American people, which it should be but is not right now, any reasonable business person would demand single-payer because of overhead savings. This is a classic, no-brainer argument for a merger in finance, However, when it comes to promoting the public good by condensing the duplication of a service by fifty different parties to one, the government, somehow people don't like the idea.
With regards to drug and device companies, single-payer would create a government formulary of what drugs and devices would be paid for. If a drug or device is not on the government list, it would not receive funding. Thus, drug and device companies would be forced to focus only on products that demonstrate significantly improved efficacy. Under the current system, companies market sixty drugs for cardiovascular indications, for example, that all have similar efficacy. They are able to sell these products, and justify this practice, because of highly paid drug representatives and advertising.
I will not include, as part of this argument, the elimination of waste through medical liability and tort reform, although many estimate this to be huge, especially physicians, due to miscalculations of true expenses in econometric studies. Because this is not, in a literal sense, part of a conversion to a single payer system in and of itself, it is best considered as an important addendum to a single-payer system.
Finally, add to all the above changes the benefits of electronic medical records, funded and integrated predominantly by the government, and you will have a single-payer health system that reduces costs in four areas and asks, in return, only a $150-300 billion upfront investment in changing a broken system. I think that's a cost well worth the investment.
2. Universal health care will reduce quality of care
Rebuttal: COUNTLESS studies show that this simply isn't true. In fact, most studies will show that we simply can't get worse because we are last in quality of care amongst industrialized countries.
In 2008, The Commonwealth Fund Commission, an independent think-tank comprised of the best minds in health policy, completed a thorough national scorecard of America's healthcare performance. The results were very disheartening. Before mentioning performance, note that America spends over $6,500 per person on healthcare while socialized countries, on average, spend $2,500 per person. Also, America spends 16% of GDP on healthcare while socialized countries, on average, spend 9%. A list of these countries and the years they enacted universal health care is featured on the website’s page entitled “Countries with Universal Health.”
The Commonwealth Fund study measured the American Health System's performance in six categories: healthy lives, quality, access, efficiency, equity and overall score. All scores are out of 100 points. In these six categories, the American Health System received scores, respectively, of 72, 71, 58, 71 and 65. Amazingly, almost all of these scores were down from the Fund's similar study in 2006, when America scored 75, 72, 67, 52, 70 and 67.
Most depressingly, The Fund completed a study comparing the healthcare of all 19 first-world industrialized countries across 37 different measures of performance, including access to care, quality of care, and health outcomes.
America ranked last amongst all 19 industrialized countries.
3. Universal health care will cause rationing of services and create long lines for patients wanting to see medical providers
Rebuttal: This assertion begins by misdirecting attention to the wrong issue. A single-payer health care system does lead to limitation and rationing of services when they are not cost-effective in order to provide a ceiling on costs that does not exist in the U.S. health care system. This is not a drawback, but rather a selling point.
Two of the biggest problems in the American health care system are the over-provision of unnecessary services and the unwillingness of the government to postpone inessential care when it is reasonable to do so. Americans want every test and procedure and they want it yesterday. Accordingly, the government needs to work with doctors to form guidelines on when care is inappropriate. Some systems use $/QALY (Quality Adjusted Life Year) guidelines to see how many years of life a patient gets for every dollar spent on treatment. Others use clinical guidelines about quality and length of life improvement from potential procedures.
In the United States, 5% of the patient population constitutes 50% of healthcare costs. In socialized countries, the top 5% of the patient population, in cost terms, only constitutes 30-35% of the healthcare expenses. These are large gaps and they occur because services in socialized countries are rationed, but responsibly. If patients weren't ultimately getting the care they needed in the other industrialized countries, measurable metrics of quality of life, life expectancy, child mortality and, most importantly, quality of medical care, wouldn't be lowest in America amongst all industrialized countries. Even with this "rationing", we have the lowest life expectancy of industrialized countries and the highest child mortality.
Citizens in the other industrialized countries recognize that not receiving every possible service when you want it leads to a better health system long-term. Anecdotal examples of "my uncle couldn't get his hip replaced the day he wanted it" are not irrelevant. What is most important is the macro-level data on health outcomes and costs. Using this data, the facts are clear: responsible rationing works.
4. Universal health care In America will give the government too much control over my medical care
Rebuttal: I am sorry to offer the sobering report that the government already has significant control over medical care. If you add together Medicare, Medicaid and all other government programs, Uncle Sam already controls 40-50% of the system. Furthermore, the benefits of government control of healthcare are many and are listed in point one above. For affluent people, as is already true in socialized countries, there will always be private care options available as supplements to a single-payer system. For the 98% of the population who can not afford these options, however, Universal Healthcare improves lives while also reducing total costs to the health system.
5. Universal health insurance won’t work in the U.S. because the U.S. is different from [Country X] because of cultural, population or other differences
Rebuttal: This is a very important area for discussion, and it is addressed separately in the section on this site at our page entitled "Public Health / Health Policy." You can access the page link on the site's main menu.
6. Universal health care stifle innovation
Rebuttal: It is true that America spends three times the amount of any other nation, per-capita, on drug and device development. However, when you normalize this figure for products with differentiable efficacy or performance differences, the gaps are almost negligible. It is important to always normalize innovation based on product quality rather than number of patents or output, because as explained above, many of these products advance science little and sell only because of marketing. Furthermore, France has the world's highest per-capita medical technique and medical process innovation. Thus, arguments that the funding of physician research and innovation is somehow stifled by a single-payer system are just plain silly.
7. Universal health insurance will drive doctors out of practice and drastically decrease physician income
Amir's Rebuttal: Evidence proves these assertions wrong, or at least oversimplifications.
There is no question that physician income will fall under a single-payer system. How much is difficult to predict. The best systems of universal health insurance retain the best doctors, measured by medical error rates and levels of medical innovation, by making efforts to protect physician income and quality of life in outside-the-box ways.
First, most socialized countries heavily cap medical damages from lawsuits. This lowers malpractice fees and, while lowering physician income, also significantly reduces physician expenses.
Second, most socialized countries introduce tiered systems of medical care providers. They are more heavily reliant on providers such as nurse practitioners, midwives and physician assistants. As a result, ratios of specialists to primary care providers shrink significantly. Thus, most of the doctors in America currently working as specialists would likely remain in specialties as a new army of primary care providers emerges. These providers would not have received certain primary care responsibilities or admission to medical school in the past.
Third, The AMA works to keep a monopoly on medical school admission. Numerous independent studies have shown that the number of doctors graduated in America every year is kept irresponsibly low, both with respect to care provider needs of the population and to comparative doctor/population rates in socialized countries. Even with higher graduation rates, however, the best doctors would remain specialists and have the highest incomes. Average losses of income for these specialist physicians would only represent 15-25% of current income, when factoring in savings from malpractice reform.
I realize this is a painful loss of income for doctors. However, physician income is simply unsustainable. It comes from a payment system that guarantees eventual bankruptcy for everybody, including citizens, doctors and the public finances.
Current doctor income is not real. If you are a physician, read that last sentence again. Don't compare potential income under a single-payer system to your current income. It is a false and meaningless comparison. Doctor’s current income has to change otherwise the system will dissolve. This has been proven by the Congressional Budget Office and independent government auditors many, many times.
Fourth, if doctors are going to earn less money, the government should consider offering more relief on the front end of medical school tuition. In part, this will happen automatically because of supply and demand if more medical schools are opened. However, the government should provide a subsidy rate for medical school tuition that is 30-50% higher, bringing tuition remission in-line with socialized countries.
The best doctors can be kept in American medicine under a single-payer system. However, they need certain reasonable incentives, as provided in socialized countries, to keep them in the game. If doctors receive relief from medical damages and the support of other care providers in taking on the primary care load following the establishment of universal health insurance, there are no reasons to worry about significant departures of talented doctors from medicine, significant declines in total perceived physician compensation or significant declines in the quality of health care.
Rebuttal: You have to ask yourself what the alternatives are to universal health care and how much THOSE alternatives will cost. The fact is, our current system of care is unsustainable, a financial pipe dream, and does not cover almost 50 million people. According to the CBO and the U.S. comptroller, the cost of Medicare is expected to grow from 8.4 percent of GDP to 15.7 percent of GDP in 2030. Medicare’s burden on the economy will quintuple, under the current plan, from 2.7 percent to 13.8 percent of the economy, by 2030. This means that, unchanged, Medicaid and Medicare will go from consuming 11.1 percent of American GDP now to 29.5 percent in 2030. A system facing such a dramatic increase in unfunded costs is not a system that is working. Furthermore, these costs are, depending on which numbers you want to believe, underfunded in the trillions of dollars over the next 30 years.
People can say they don't want their taxes raised. However, this is a short-sighted view based on a misunderstanding of the costs of the current system. Unchanged, the deficits faced by our current health system will cause even larger tax increases. People pay for the systems that exist. They pay in the form of high premiums, lower wages due to the burden of health care costs, and high taxes to support Medicare. If we can create a more efficient system, this will mean decreased taxes in the long haul.
Yes, instituting universal health insurance will not be cheap. Estimates range from $150-300 billion just for implementation, excluding continued program costs. However, compared to trillions of dollars in projected deficits over twenty years for our existing programs, this cost is nothing. These are just upfront costs, however. Most relevant is the long-term consideration of potential cost savings under universal health insurance.
Why would universal health insurance save America money over the next 20 years? There are many reasons.
First, anybody who does not have health insurance under our current system gets coverage, in a sense. That coverage is called the emergency room. Under EMTALA, the Federal Emergency Medical Treatment and Active Labor Act, if a hospital takes a single Medicare patient, the hospital needs to treat any patient who shows up at the emergency room, without exception. This law, a cornerstone of American medical care, will not change. Polling shows almost 0% willingness for legislators to even consider adjustment of this provision and it has been in our laws for many decades. Patients showing up at the emergency room for medical attention gets care, but at what expense?
For just direct costs, a non-acute visit to the emergency room by an uninsured patient costs roughly $2,000, according to several regional and national studies in the New England Journal of Medicine. The indirect costs are almost two times this amount. Thus, covering a patient annually under non-insurance through EMTALA emergency room visits costs the government almost $6,000 a person. However, the costs are hidden and people ignore this expense. Compare this expense to the $4,000 a person that is the average cost of insuring an individual and you can see there is a savings of $2,000 for every patient covered under universal health insurance.
$2,000 savings per person x 50,000,000 uninsured people = $100,000,000,000 per year in direct savings from converting emergency room patients to insured patients. That's $100 billion a year for those of you who don't like zeros.
Second, the above discussion only reflects the direct costs of treating patients. Under universal health insurance, every patient would have a primary care doctor and receive an annual check-up and regular reviews of health status. Quantifying the impact of such changes has not been extensively studied. However, it is logical to assume that frequent-flier patients who keep checking into the emergency room and receive no preventative care would cost the system even less money if they had regular reviews of their health. The alternative is only showing up to hospitals for acute problems in emergency situations. Furthermore, it is well studied that patients who routinely receive care in inpatient, such as hospital, settings are much more likely to get sick and have complications than patients receiving care in outpatient settings. High hospitalization rates are not a good thing and they cost health systems much more money than outpatient care.
More study is needed on preventative care, but many studies do show this is an important area for, at the least, health outcomes improvement and, potentially, also health cost savings.
Third, under our current health system, there is incredible waste because we do not operate under a single-payer model. A single-payer model would create an elimination of multiple insurers and put tremendous pressure on drug and device companies to stop issuing copycat products and to stop wasting money by spending as much on marketing as on research and development, as they do currently.
10-20% of every insurance company's expenses are attributable to an expense called ALR. You can look it up in any insurance companies’ financial statement. What is ALR? ALR stands for Administrative Loss Ratio and basically means how much of the money spent on care really just goes to administrative expenses and office staff and executive compensation. Under a single-payer system, all insurance services would be condensed to one organization: the government. Even with some inefficiencies of government service, which I will grant, conservatively 10% of total healthcare expenses would disappear by having the government handle all insurance claims rather than fifty different insurance companies. Someone would certainly lose, and that someone is the pockets of the insurance companies.
If insurance were a business serving a customer known as the American people, which it should be but is not right now, any reasonable business person would demand single-payer because of overhead savings. This is a classic, no-brainer argument for a merger in finance, However, when it comes to promoting the public good by condensing the duplication of a service by fifty different parties to one, the government, somehow people don't like the idea.
With regards to drug and device companies, single-payer would create a government formulary of what drugs and devices would be paid for. If a drug or device is not on the government list, it would not receive funding. Thus, drug and device companies would be forced to focus only on products that demonstrate significantly improved efficacy. Under the current system, companies market sixty drugs for cardiovascular indications, for example, that all have similar efficacy. They are able to sell these products, and justify this practice, because of highly paid drug representatives and advertising.
I will not include, as part of this argument, the elimination of waste through medical liability and tort reform, although many estimate this to be huge, especially physicians, due to miscalculations of true expenses in econometric studies. Because this is not, in a literal sense, part of a conversion to a single payer system in and of itself, it is best considered as an important addendum to a single-payer system.
Finally, add to all the above changes the benefits of electronic medical records, funded and integrated predominantly by the government, and you will have a single-payer health system that reduces costs in four areas and asks, in return, only a $150-300 billion upfront investment in changing a broken system. I think that's a cost well worth the investment.
2. Universal health care will reduce quality of care
Rebuttal: COUNTLESS studies show that this simply isn't true. In fact, most studies will show that we simply can't get worse because we are last in quality of care amongst industrialized countries.
In 2008, The Commonwealth Fund Commission, an independent think-tank comprised of the best minds in health policy, completed a thorough national scorecard of America's healthcare performance. The results were very disheartening. Before mentioning performance, note that America spends over $6,500 per person on healthcare while socialized countries, on average, spend $2,500 per person. Also, America spends 16% of GDP on healthcare while socialized countries, on average, spend 9%. A list of these countries and the years they enacted universal health care is featured on the website’s page entitled “Countries with Universal Health.”
The Commonwealth Fund study measured the American Health System's performance in six categories: healthy lives, quality, access, efficiency, equity and overall score. All scores are out of 100 points. In these six categories, the American Health System received scores, respectively, of 72, 71, 58, 71 and 65. Amazingly, almost all of these scores were down from the Fund's similar study in 2006, when America scored 75, 72, 67, 52, 70 and 67.
Most depressingly, The Fund completed a study comparing the healthcare of all 19 first-world industrialized countries across 37 different measures of performance, including access to care, quality of care, and health outcomes.
America ranked last amongst all 19 industrialized countries.
3. Universal health care will cause rationing of services and create long lines for patients wanting to see medical providers
Rebuttal: This assertion begins by misdirecting attention to the wrong issue. A single-payer health care system does lead to limitation and rationing of services when they are not cost-effective in order to provide a ceiling on costs that does not exist in the U.S. health care system. This is not a drawback, but rather a selling point.
Two of the biggest problems in the American health care system are the over-provision of unnecessary services and the unwillingness of the government to postpone inessential care when it is reasonable to do so. Americans want every test and procedure and they want it yesterday. Accordingly, the government needs to work with doctors to form guidelines on when care is inappropriate. Some systems use $/QALY (Quality Adjusted Life Year) guidelines to see how many years of life a patient gets for every dollar spent on treatment. Others use clinical guidelines about quality and length of life improvement from potential procedures.
In the United States, 5% of the patient population constitutes 50% of healthcare costs. In socialized countries, the top 5% of the patient population, in cost terms, only constitutes 30-35% of the healthcare expenses. These are large gaps and they occur because services in socialized countries are rationed, but responsibly. If patients weren't ultimately getting the care they needed in the other industrialized countries, measurable metrics of quality of life, life expectancy, child mortality and, most importantly, quality of medical care, wouldn't be lowest in America amongst all industrialized countries. Even with this "rationing", we have the lowest life expectancy of industrialized countries and the highest child mortality.
Citizens in the other industrialized countries recognize that not receiving every possible service when you want it leads to a better health system long-term. Anecdotal examples of "my uncle couldn't get his hip replaced the day he wanted it" are not irrelevant. What is most important is the macro-level data on health outcomes and costs. Using this data, the facts are clear: responsible rationing works.
4. Universal health care In America will give the government too much control over my medical care
Rebuttal: I am sorry to offer the sobering report that the government already has significant control over medical care. If you add together Medicare, Medicaid and all other government programs, Uncle Sam already controls 40-50% of the system. Furthermore, the benefits of government control of healthcare are many and are listed in point one above. For affluent people, as is already true in socialized countries, there will always be private care options available as supplements to a single-payer system. For the 98% of the population who can not afford these options, however, Universal Healthcare improves lives while also reducing total costs to the health system.
5. Universal health insurance won’t work in the U.S. because the U.S. is different from [Country X] because of cultural, population or other differences
Rebuttal: This is a very important area for discussion, and it is addressed separately in the section on this site at our page entitled "Public Health / Health Policy." You can access the page link on the site's main menu.
6. Universal health care stifle innovation
Rebuttal: It is true that America spends three times the amount of any other nation, per-capita, on drug and device development. However, when you normalize this figure for products with differentiable efficacy or performance differences, the gaps are almost negligible. It is important to always normalize innovation based on product quality rather than number of patents or output, because as explained above, many of these products advance science little and sell only because of marketing. Furthermore, France has the world's highest per-capita medical technique and medical process innovation. Thus, arguments that the funding of physician research and innovation is somehow stifled by a single-payer system are just plain silly.
7. Universal health insurance will drive doctors out of practice and drastically decrease physician income
Amir's Rebuttal: Evidence proves these assertions wrong, or at least oversimplifications.
There is no question that physician income will fall under a single-payer system. How much is difficult to predict. The best systems of universal health insurance retain the best doctors, measured by medical error rates and levels of medical innovation, by making efforts to protect physician income and quality of life in outside-the-box ways.
First, most socialized countries heavily cap medical damages from lawsuits. This lowers malpractice fees and, while lowering physician income, also significantly reduces physician expenses.
Second, most socialized countries introduce tiered systems of medical care providers. They are more heavily reliant on providers such as nurse practitioners, midwives and physician assistants. As a result, ratios of specialists to primary care providers shrink significantly. Thus, most of the doctors in America currently working as specialists would likely remain in specialties as a new army of primary care providers emerges. These providers would not have received certain primary care responsibilities or admission to medical school in the past.
Third, The AMA works to keep a monopoly on medical school admission. Numerous independent studies have shown that the number of doctors graduated in America every year is kept irresponsibly low, both with respect to care provider needs of the population and to comparative doctor/population rates in socialized countries. Even with higher graduation rates, however, the best doctors would remain specialists and have the highest incomes. Average losses of income for these specialist physicians would only represent 15-25% of current income, when factoring in savings from malpractice reform.
I realize this is a painful loss of income for doctors. However, physician income is simply unsustainable. It comes from a payment system that guarantees eventual bankruptcy for everybody, including citizens, doctors and the public finances.
Current doctor income is not real. If you are a physician, read that last sentence again. Don't compare potential income under a single-payer system to your current income. It is a false and meaningless comparison. Doctor’s current income has to change otherwise the system will dissolve. This has been proven by the Congressional Budget Office and independent government auditors many, many times.
Fourth, if doctors are going to earn less money, the government should consider offering more relief on the front end of medical school tuition. In part, this will happen automatically because of supply and demand if more medical schools are opened. However, the government should provide a subsidy rate for medical school tuition that is 30-50% higher, bringing tuition remission in-line with socialized countries.
The best doctors can be kept in American medicine under a single-payer system. However, they need certain reasonable incentives, as provided in socialized countries, to keep them in the game. If doctors receive relief from medical damages and the support of other care providers in taking on the primary care load following the establishment of universal health insurance, there are no reasons to worry about significant departures of talented doctors from medicine, significant declines in total perceived physician compensation or significant declines in the quality of health care.