Why the U.S. Isn't Ready for Single Payer Yet

Dr. Samuel Metz, an anesthesiologist in Oregon, has a letter in the August 27 New York Times arguing for a single payer system in the U.S. Several responses follow.

I wanted to write about the exchange especially for European friends I spoke with on a recent trip. They were universally puzzled - "how can it be that you in the States don't have health care for all?"

Dr. Metz is obviously correct. No sane society designing a system from scratch would create the cockeyed U.S. non-system. The hodge podge we have is a result of history (making health insurance an employment benefit during World War II) and theology (our faith in free markets even when experience tells us they don't work).

To help explain - to myself and others - why we in the U.S. are so resistant to doing the obvious right thing, here's one of the responses to Metz, with my comments interlaced in bold italics:

Dr. Metz’s call for single-payer national health care imposes costs on taxpayers rather than directly on those being served. Note the assumption that shared responsibility for health care is unjust. Would the writer do away with police, fire depart-ments and public education because they "impose costs on taxpayers" rather than "directly on those being served"? Patients are not charged more for services they value the most or are more costly to provide. If I want more costly clothes or a sports car, it's clear that I should be responsible for financing my own preferences. But if you get cancer, would it be right for me to say "the chemotherapy is costly, and you value it most, so you should pay for it yourself"? Extending the model of optional purchases to chemotherapy for cancer or appendectomy for appendicitis turns health care needs into consumer whims. But needs and whims are not the same! Tax bills simply rise in sync with something else like income, property or sales. Here the writer assumes the single payer is passive and helpless in relation to prices and service patterns. That's actually how our "free market" system behaves! Single payer systems, and other forms of universal coverage, are much more active in managing the cost trend than the invisible hand of the U.S. market is.

It takes no leap of faith to understand how this will affect demand for health care. Anyone who has dined at a fixed-cost food buffet knows the outcome of not directing price with food portions. Comparing medical care to "a fixed-cost food buffet" again shows the writer's underlying framework - health care is like hot dogs, a trivial matter of consumer whim. Patients who don't need chemotherapy or appendectomy don't ask for these services just because they're paid for, even if they do eat an extra hot dog at the buffet. And there's no reason that a single payer system couldn't apply value-based principles, with full coverage of needed services for which there are no alternatives, but partial or no coverage for low value services, or services that have less costly equivalents.

It is tempting to believe that government will fairly and efficiently make these choices for us, but experience suggests otherwise. The writer is flat-out wrong. Citizen satisfaction is significantly higher in countries with publicly financed universal coverage, and health outcomes are as good or better. He's revealing his theology - blind faith that governments are always bad/markets are always good. Dr. Metz appears to anticipate this problem given his suggestion that Congress’s power to tax is indisputable and so government will predictably raise taxes to pay for growing demand for health care.

MICHAEL L. MARLOW

San Luis Obispo, Calif., Aug. 25, 2011
The writer is a professor of economics at California Polytechnic State University, San Luis Obispo.

Professor Marlow is an accomplished scholar. The fact that such a well-informed person subscribes to the political and economic theology his letter evinces shows why the U.S., alas, is not yet ready to give serious consideration to publicly financed, not-for-profit health care. If Vermont's single payer program succeeds, that will chip away at our reflexive anti-government/anti-communitarian approach to the health system.

All kinds of economic interests - the "medical-industrial complex" - favor the status quo, but the faith-based beliefs Professor Marlow's letter exemplifies are the largest impediment to steering our system in the direction virtually every other developed country has taken.

In talking about U.S. health care theology with my European friends I quoted Schopenhauer: "As a serious conviction, it could be found only in a madhouse; as such it would then need not so much a refutation as a cure."

Moving Towards a Single Payer in Vermont

If you're interested in Vermont's plan for a single payer system, you'll want to look at an article in this week's New England Journal of Medicine.

According to Anya Rader Wallack, Ph.D., special assistant for health reform to Governor Shumlin, the Vermont program will include "a global budget for health care expenditures, guaranteed coverage that is not linked to employment, and a single system of provider payments and administrative rules."

The health system will be overseen by a new public entity - the Green Mountain Care Board. Here's how Dr. Wallack describes the powers of the board:

The board can wield traditional tools such as fee-for-service rate setting, controls on the acquisition of technology, and reviews of both health insurers’ rates and hospitals’ budgets. However, the law also provides explicit direction to the board to create a global budget for health care spending and develop new payment models that create incentives for providers to stay within the budget.... The board is charged with implementing payment methods that encourage high quality and efficiency and provide the impetus for fundamental changes in the structure of the delivery system. It will apply these methods across all payers, private and public (we will seek permission from the federal government to include Medicare), and will monitor the effects of payment changes on both cost growth and quality indicators. (emphasis added)

The beleaguered Independent Payment Advisory Board (IPAB), created by the federal health reform law, has much less power than the Green Mountain Care Board, but it's under attack as a socialist monstrosity. It's at best touch and go as to whether the IPAB will ever see the light of day.

Our federal paralysis is why states are the most important laboratories for health reform in the U.S.

Vermont is small (625,000), by U.S. standards has a remarkably civilized form of political debate, is the first state to allow same-sex civil unions, and has the only "out" socialist legislator in Washington - Senator Bernie Sanders. It's hardly typical of the current U.S. mainstream.

But Saskatchewan wasn't typical of Canada in 1946, when it passed the first provincial single payer legislation in Canada. It took 38 years to move from the Saskatchewan Hospitalization Act to the Canadian Health Act in 1984. It's easy to pontificate about ethics and policy, but change on the ground takes a long time, huge amounts of work, an iterative political process, and a public learning curve.

A lot of the future of the U.S. health system is riding on the Vermont experiment. If Vermont succeeds, open-minded conservatives (despite what we're currently seeing in debt limit "debate," they do exist!) will kick the tires of Green Mountain Care and conclude that a single payer system doesn't destroy health and human liberty. Vermont represents only 0.2% of the U.S. population, but it may turn out to be the mouse that roared for health system change!

Ground Rules for the Single Payer Debate in Vermont

The national debate about health reform has been dominated by sloganeering. Polling suggests that the public does not understand the drivers of health care costs or the amount of redundancy, waste and harm in the system. The Obama administration has concluded that it should have done more to educate the public and shape the debate.

The states are the key laboratory for health reform now. I've written about how Vermont is giving serious attention to a single payer proposal (see here). Nationally, that concept has been largely off the table, shot down by slogans about "socialized medicine" and "government takeover of health care."

I was happy to see an editorial in the Burlington Free Press suggesting ground rules for how political debate should proceed (for overseas readers - Burlington, with a population of 40,000, is the largest city in a small state). Here are the key passages:

The most important task before advocates of health care reform is to explain the proposals put forward by the state consultant in a way that ensures the debate remains focused on the facts...Vermonters deserve an informed discussion about the future of health care in our state. As those who pushed through national health care reform discovered, how the Shumlin administration and lawmakers explain the plan will be as important as what is in the plan.

On one extreme are the many people suspicious of an expanded role for government in their lives and have little faith that government can do things better. On the other are those who feel that everyone has a right to adequate health care and that can only be achieved under a government-run system.

There is nothing constructive in an exchange of heated rhetoric designed to stoke fear or that attempts to demonize the other side. There is no point in coming to a conclusion before all sides fully digest the proposed changes and explore the issues.

The drive toward single-payer health care system for the state is, perhaps, the most ambitious and among the most controversial item on Shumlin's agenda. Understanding the proposals and how they will affect Vermonters is the first step to any meaningful discussion. The matter is too important to be left to nasty sound bites and empty slogans that bear little resemblance to the issues on the table.

Newly elected Governor Shumlin is the crucial player in determining whether a serious innovative proposal is given thoughtful attention and a fair chance at being implemented and tested in action. At 620,000, Vermont is approximately 1/500th of the U.S. population. If the state can apply the thoughtful process the Burlington Free Press suggests, it will be doing a disproportionately important job for the entire country!

States are the Hotbed for Medical Ethics

On Tuesday, by voting to repeal the Patient Protection and Affordable Care Act (ACA), all 242 Republicans in the House of Representatives proved the truth of Winston Churchill's famous comment about us Yanks - "Americans can always be counted on to do the right thing...after they have exhausted all other possibilities."

The law is a prototypical legislative sausage - it's the best we could do at the time given the virulent politics of health care. I'm not a political pundit, but I anticipate that Tuesday's piece of Republican theater will backfire on the party in 2012.

But what is clear is that the states are emerging as the crucial laboratories for health system reform. It's symbolic that on the same day that the Republicans voted in favor of marching backwards to our failing status quo, the Vermont legislature received a bold proposal to create a distinctive state-based single payer system.

Here in New England, Massachusetts, New Hampshire and Vermont, are all hotbeds for creative efforts to get a grip on our failing health system. Massachusetts has achieved the highest level of insurance for any state, using an approach that includes a individual mandate. New Hampshire is conducting a vigorous pilot program of accountable care organizations. Vermont is entertaining a single-payer proposal that has been kept off the federal table by two dreaded words - "socialized medicine." And, with luck, "red" states will test out market-based reform ideas in serious ways.

We can't reform the health system without engaging with deep questions of values: what level of our resources should be allocated to health? how do we balance individual responsibility for our own health with communal responsibility for the vulnerable? what level of health services should a civilized society guarantee to its members? These, and many others, are serious ethical questions, and people of intelligence and good will can differ in their responses.

At the state level, especially in states with relatively small populations, it's easier to keep the political debate at a thoughtful, civil level. Nationally, that's been much more difficult, as evidenced by the "death panel" fiasco. I know from leading classes and meetings on ethics topics that it's crucial to create a safe space for gathering facts, identifying key values, explicating conflicts among the values, designing options, and making choices. As a country of 300 million, tremendous diversity, and limited public understanding of health system complexities, we've done poorly. At the state level, we're doing better. That's where the key learning is likely to occur.

(If you're interested in more on Massachusetts, New Hampshire, and Vermont, there are tabs for each of the states on the blog.)

Single Payer Proposal in Vermont

On May 27, 2010 Vermont Act 128 - "An act relating to health care financing and universal access to health care in Vermont" - was signed into law.

Vermont is a no-BS state. The bill doesn't pussyfoot around the problem: "The escalating costs of health care in the United States and in Vermont are not sustainable...Only continued structural reform will provide all Vermonters with access to affordable, high quality health care."

The Assembly specified nine principles that health reform must satisfy:

1. "All Vermonters must have access to comprehensive, quality health care."
   
2. "The state must ensure public participation in the design, implementation, evaluation, and accountability mechanisms in the health care system."
   
3. "Primary care must be preserved and enhanced."
   
4. "Every Vermonter should be able to choose his or her primary care provider, as well as choosing providers of institutional and specialty care."
5. "The health care system will recognize the primacy of the patient-provider relationship, respecting the professional judgment of providers and the informed decisions of patients."
   
6. "Vermont’s health delivery system must model continuous improvement of health care quality and safety and, therefore, the system must be evaluated for improvement in access, quality, and reliability and for a reduction in cost."
   
7. "A system for containing all system costs and eliminating unnecessary expenditures, including by reducing administrative costs; reducing costs that do not contribute to efficient, quality health services; and reducing care that does not improve health outcomes, must be implemented for the health of the Vermont economy."
   
8. "The financing of health care in Vermont must be sufficient, fair, sustainable, and shared equitably."
   
9. "State government must ensure that the health care system satisfies [these] principles."

Act 128 created a Commission charged with proposing three models, one of which had to be a single payer, to the Assembly by the end of the year. The Commission hired Professor William Hsiao, a brilliant economist based at the Harvard School of Public Health to lead the design process. Bill Hsiao has worldwide experience working with governments to reform health systems, most recently in Taiwan, where he developed a well-functioning single payer system.

Professor Hsaio presented his report to the Vermont legislature yesterday. His team guided itself by six design parameters:

1) We must maximize federal funds for Vermont.

2) There must be no increase in overall health spending and therefore all funding for the options must derive from savings.

3) No option could result in an overall increase of the health care cost burden faced by employees or employers.

4) No option could yield a reduction in the overall net income received by physicians, hospitals or other health care providers.

5) The implementation of any option must move Vermont toward an integrated health care delivery system that allows for a transition to global budgets and risk-adjusted capitated payments.

6) No option could entail changes for Medicare beneficiaries in Vermont.

Among the three models he presented, Hsaio recommended a system of single payer insurance administered through a combination of public and private mechanisms, with oversight by a board composed of citizen, provider, employer and government representatives. He envisions the delivery system being configured into accountable care organizations paid largely through risk adjusted capitations.

As a small state with a small population (617,000 in 2009), Vermont has sustained a relatively thoughtful and civilized political climate. It will be able to consider a thoughtfully proposed single payer model without fear that the two magical words Republicans brandish on the national scene ("socialized medicine") will induce terror and bring rational inquiry to a dead stop. Its newly elected governor - Peter Shumlin - favors the single payer concept. And Bernie Sanders, formerly Representative and now Senator from Vermont, identifies himself as a socialist!

U.S. political dialogue about health system reform has been stymied by our refusal to even consider alternatives to the hodge podge of public and private entities we've allowed to grow like Topsy over the decades. The national result is economy-busting costs and mediocre results. Vermont is doing the U.S. a crucial service by putting a true alternative onto the table of political possibility!

(For readers who want more detail on the Vermont process, Bill Hsaio's ten page statement is clear and easy to read.)

Consumer Directed Health Care Can Work!

On Thursday during a break in the cloudy/rainy weather in Vermont, I took the 3/4 mile hike up to Lake Pleiad, a mountain lake that's a favorite swimming spot. The weather was dicey and there was only one other person there, a large man with two large tattoos, who, I learned, had been a bouncer in a bar, but now now worked for a small manufacturing company.

I asked about the health insurance the company provided. Here's my reconstruction of what he said:

It's a health savings account type of thing. I have a $5,000 deductible. It's a good deal because the employer puts some money into the savings account. The deductible is a lot of money, but I'd only have to spend it all if I went into the hospital. I'd rather take that risk and have a lower monthly premium, even though a 'lower premium' is still a lot! Doctor visits and tests don't come to all that much. I don't just take a doctor's word about things - I ask a lot of questions. 'What could this test show? Would the results make us do anything different? How important is it?' Sometimes they give me a good answer, and I'm satisfied, but sometime it seems like they didn't really have a good reason, and I don't do it. You've got to ask questions!"

I asked him if the deductible got him to ask more questions. It did. "When you're laying out the money, you think about things more!"

I told him he'd made my day. He was doing just what the architects of high deductible health plans were hoping for. I said "if more people did what you do it would keep us doctors on our toes! We recommend a lot of things out of habit and they don't really need to be done. Do you encourage friends to ask questions the way you do?"

He did. A woman friend's gynecologist was recommending expensive tests on a regular basis. She didn't know why - "I just do what the doctor tells me I need to do." He said "you've got to ask!" When she did it turned out that the tests were really optional. She thanked him.

In 2009 approximately 23 million Americans had plans like the one my swimming companion had. If five percent asked questions the way he did that would be a million people. If that million persuaded five friends to do the same we'd be up to five million. To paraphrase the late Senator Everett Dirksen - "a million people here, a million people there - pretty soon we're talking real public education."

I spent thirty-five years of my practice life with a not-for-profit HMO. I think a group practice of that kind, in which patients and clinicians collaborate in planning the wisest way to use resources, is ideal. But that model didn't catch on widely, which is one reason consumer directed plans are selling like hotcakes.

I really admired and learned from my swimming companion. He was just a smart guy who thought for himself - not a health policy geek like me. If we had a groundswell of people like him who approached health care like prudent consumers it would be the strongest possible force for health reform!

Single Payer System for Vermont

Vermont is the second smallest state in the U.S. (2009 population - 621,000), but from the perspective of health reform, it's the most interesting!

This year the state passed Act 128 - "An act relating to health care financing and universal access to health care in Vermont." The act is remarkably readable. It's especially worth looking at the sections on "Findings" (1-4), "Principles" (4-6), and "Goals of Health Care Reform" (6-9).

Vermont is a no-BS state. The bill doesn't pussyfoot around the problem: "The escalating costs of health care in the United States and in Vermont are not sustainable...Only continued structural reform will provide all Vermonters with access to affordable, high quality health care."

When Vermont talks about "structural reform" it means something, as in 2000, when it was the first state to legalize same sex civil unions. The Assembly specified nine principles that health reform must satisfy:

1. "All Vermonters must have access to comprehensive, quality health care."
   
2. "The state must ensure public participation in the design, implementation, evaluation, and accountability mechanisms in the health care system."
   
3. "Primary care must be preserved and enhanced."
   
4. "Every Vermonter should be able to choose his or her primary care provider, as well as choosing providers of institutional and specialty care."
5. "The health care system will recognize the primacy of the patient-provider relationship, respecting the professional judgment of providers and the informed decisions of patients."
   
6. "Vermont’s health delivery system must model continuous improvement of health care quality and safety and, therefore, the system must be evaluated for improvement in access, quality, and reliability and for a reduction in cost."
   
7. "A system for containing all system costs and eliminating unnecessary expenditures, including by reducing administrative costs; reducing costs that do not contribute to efficient, quality health services; and reducing care that does not improve health outcomes, must be implemented for the health of the Vermont economy."
   
8. "The financing of health care in Vermont must be sufficient, fair, sustainable, and shared equitably."
   
9. "State government must ensure that the health care system satisfies [these] principles."

Act 128 creates a Commission charged with proposing three models to the Assembly by the end of the year. One is a government run, publicly financed, single payer system. Another involves a state run public option that would compete with private insurance. A third will presumably be some form of "market" system, most likely modelled on Massachusetts.

The Commission has hired Professor William Hsiao, a brilliant economist based at the Harvard School of Public Health to lead the design process. Bill Hsiao has worldwide experience working with governments to reform health systems, most recently in Taiwan. Here's an excerpt from a recent interview:

Q: What’s the most important lesson that Americans can learn from the Taiwanese example?
A: You can have universal coverage and good quality health care while still managing to control costs. But you have to have a single-payer system to do it.

Jonathan Gruber, Professor of Economics at MIT, will work with Dr. Hsiao. Gruber is central to the Massachusetts model of reform, which will most likely be the third design model.

My wife and I have spent most of every summer in Vermont since 1992, when she began teaching at the Breadloaf School of English. We've come to love the state. As a small state with a small population, Vermont has sustained a relatively thoughtful and civilized political climate. It will be able to consider alternative models without fear that the two magical words Republicans brandish on the national scene ("socialized medicine") will induce terror and bring rational inquiry to a dead stop. (Bernie Sanders, formerly Representative and now Senator from Vermont, identifies himself as a socialist!)

Our head-in-the-sand national political process made the single payer concept a non-starter in the recent health reform process. Vermont is perhaps the likeliest segment of the U.S. to give the single payer model serious consideration. And Bill Hsiao has the knowledge and experience to make the concept feasible.

Act 128 envisions legislative debate and decision in 2011 and implementation to start by July 2012.

Stay tuned!

The Ethical Culture of Medicine

I'm in the Green Mountains of Vermont now, where my wife teaches for 7 weeks at Middlebury College's Bread Loaf School of English. (The campus is at the foot of a mountain that looks like a loaf of bread - thus the weird name!) The opening ceremony last night got me thinking about the culture of medicine in the U.S.

The ceremony welcomed the 250 students - mostly high, middle and elementary school teachers themselves - who can get an M.A. in literature in the course of 4-5 summers. The faculty (from colleges & universities in the U.S. and U.K.) has lots of veterans who've taught here for 20 years or more. In the course of the ceremony 7 faculty plus the president of Middlebury College all spoke. Warmth and enthusiasm are expected in a welcome, but what stood out for me was the depth and consistency of the values that shaped each of the talks. They spoke lovingly of the students and the important work the students do. They spoke lovingly about the enterprise of teaching and learning. And the sense of camaraderie among faculty, students and staff was palpable.

For most physicians, nurses and other clinicians there are very few gatherings in which we explore and reaffirm the ideals of our profession. Our meetings focus on administrative problems. Grand rounds can be engaging, but passively listening to a lecture while a powerpoint flashes by doesn't often engage us with the wellsprings of our values.

One of the major delivery system changes being discussed in the reform dialogue is forming "accountable medical groups" - groups of physicians that can take responsibility for the quality and cost of care for a population. Atul Gawande's New Yorker article and a followup interview with Ezra Klein take the concept beyond administrative accountability. Our health care organizations need to reinvigorate the soul of the health professions.

Doctors cherish the deep satisfaction in helping a patient achieve greater health, and, when we can't do that, helping individuals and families make the most of the life they have. But too many doctors lack collegial settings in which they feel allied with others around their most important values. Except for the rare person who is 100% inner directed, the sense of mission and purpose degrade in the absence of group support.

I interrupted writing this post to play tennis with a friend who has taught here for 25 years. When I told him my reaction to the welcoming ceremony he said - "this institution commands my loyalty more than any other I've been part of." We clinicians need more of that experience in our professional lives!

(See this post about the Swami Vivekananda hospital in Saragur, India, for a discussion of how that institution supports its sense of calling.)

A Needed Speech about Health Care Rationing

The October “Election 2008” survey from the invaluable Kaiser Family Foundation election tracking project sent me to my file cabinet.

In January 1998 I spoke to the Vermont Leadership Institute about “Setting Limits: A Health Care System that Plays Fair.” I knew nothing about the Vermont Governor (Howard Dean) at the time, but part of my presentation was a speech I wished he would give. (I sent it to his office but nothing came of it.)

There is a tendency in the health policy community to believe that the U.S. is too individualistic to accept externally imposed health care limits, whether by Medicare or private insurers. This is why we are turning to “consumer directed health care” and the transfer of financial risk to the individual.

I can’t prove it, but my strong hunch has been that with leadership of the kind that John Kitzhaber provided as governor of Oregon we might not turn out to be so hopeless re understanding the need for health care limits and being able to accept limits set by a fair process.

Here is the speech I still believe needs to be given:

My fellow Vermonters. Four years ago your political leaders felt frustrated by our failure to achieve comprehensive health care reform. Now, with hindsight, we see that you, the public, were right to slow us down. The way the Clinton plan crashed and burned shows the wisdom of your counsel!

Part of the problem for health care reform is technical. Health policy is complicated. The dueling experts who advised us about the single payer system and the competitive model all made good arguments. But we Vermonters know you can “prove” almost any conclusion by packaging the numbers cleverly, so we ended up skeptical!

The deeper problem is values. Our nation has been confused about what it can reasonably expect from the health care system. If we ask the system to do anything that has the slightest possibility of extending life for the individual patient, no matter how costly and how uncertain, are we prepared to sacrifice other public goods to make this happen? If we ask the system to seek the greatest benefit for the population within the limits of a budget, can we accept the painful consequences this may entail for the individual patient?

Until we decide where we want the health care system to go, we can’t possibly reform the way in which we get there.

Our Commission on the Public’s Health Care Values and Priorities has given us three pointers for the health care reform roadmap we need:

• First, Vermonters are committed to continuing to provide insurance for the elderly and the poor. Support for Medicare and Medicaid is rock solid.
• Second, we Vermonters are committed to finding a way to insure our 65,000 fellow citizens who are currently uninsured.
  
• Finally, if rationing or other big changes have to happen, Vermonters want to be involved all along the way. No behind-closed-doors planning for us!

Today I want to launch us on the next step in health care reform. We know from states like Oregon and experience elsewhere in the world that providing excellent care to everyone will require us to set priorities. We Vermonters don’t mince words. That means rationing.

I have therefore asked the Commission on the Public’s Health Care Values and Priorities to help us identify the key values that should guide us in setting priorities and rationing. I have directed the Commission to learn from experience elsewhere as part of the process of public reflection, and to give us a full report 12 months from now, in January 1999.

If we can cooperate in addressing these challenging questions, Vermont will be able to start the new millennium with a meaningful package of health care reform that can address our unique circumstances and teach something to our brethren in the flatlands as well. Thank you and Godspeed!