Healthcare in the US: Why We Still Need A Single Payer System!!!

1. Healthcare in the US:Why We Still Need A Single Payer System!!! Paul Y. Song, MD Physicians for a National Health Program

2. Hippocratic Oath • “I will follow that system of regimen, which according to my ability and judgment, I consider for the benefit of my patients, and abstain from whatever is deleterious and mischievous”.

3. The Problem • The US spends $2.5 Trillion a year which is 17.3% of our GDP on healthcare and more than any other industrialized country in the world by far. • The CBO estimates it will grow to 25% of our GDP by 2025. • The average family premium is $14,000 a year. • 17% of American income now goes to pay for health care. • 75 million Americans are underinsured. • The number of uninsured in the US now exceeds 50.7 million and has actually increased since the passage of the healthcare bill.

4. Bad in California Too • From 2003–2010 health insurance premiums increased 52% to an average of $13,819 per family and to $4,811 for individuals while average salaries only increased 4%. • Between 2007 and 2009, the number of uninsured Californians swelled to 28% or over 8.2 million.

7. U.S. Health CostsRising More Steeply, 1970-2008

10. Broken System?? The Commonwealth Fund 6/23/10

11. 51 Million Americans Without Insurance Today Millions of Uninsured Americans 1976 2008 Source: Himmelstein, Woolhandler, Carrasquilo – Tabulation from CPS and NHIS data

12. Who are the Uninsured? NON-WORKER 19.5% PART-TIME WORKER 14% FULL-TIME WORKER 66.5% • Of the 50.7 million, over 20 million are fully employed and • 70% of all uninsured are from families with one or more full-time workers. Urban Institute and Kaiser Commission on Medicaid and the Uninsured estimates based on the Census Bureau's March 2008 and 2009 Current Population Survey (CPS: Annual Social and Economic Supplements).

13. Uninsured Deaths • 45,000 annual deaths are attributed simply to a lack of coverage.

14. Medical Related Bankruptcies • Number of medical related bankruptcies increased 50% during the last 9 years. • In 2011, there were over 4 million bankruptcies. • 2/3 are due to a medical illness.

15. Most of the Medically BankruptHad Insurance Coverage Insurance at onset of illness Source: Himmelstein et al. Am J Med, Aug. 2009

16. Hard for Employers Too! • For every $100 that US companies spend on health care, companies in Japan, Germany, France, and Canada spend 63 cents which leads to more off-shoring of jobs and less job creation. • Ford spent $3.2 Billion on health premiums; Prior to the bailout, GM spent more on health premiums than on steel. • It is estimated that health care costs add $1500-2000 to the sticker price of a US made car.

17. How did we get here? • As far back as Mesopotamia, under the code of Hammurabi, it was expected that successful healthcare was a standard service performed in exchange for a fee. • Individual health insurance became available during the Civil War (1861-1865) when accident insurance providing coverage of injury related to travel by railroad or steamboat was offered. • Massachusetts Health Insurance of Boston began to offer the first ever group policies with a relatively comprehensive list of benefits as early as 1847. • Early coverage was referred to as “sickness insurance” which covered lost wages from illness and not healthcare.

18. History of Health Insurance • Up to the 1920’s most Americans did not feel health insurance was necessary and stayed with sickness insurance plans as medical technology and overall costs were still far less than wages. • Before 1936, healthcare was less than 1% of the US GDP. • Most paid out of pocket or relied on charity care. • In 1929, a group of Dallas-based teachers formed a partnership with Baylor hospital to provide a set amount of sickness and hospitalization days in exchange for a fixed, prepaid monthly fee. This was encouraged by the American Hospital Association and these plans began to grow. • Individual hospitals and community care organizations began competing with one another for such plans, so to provide better coverage, hospitals joined together under the name of Blue Cross (1936).

19. History of Health Insurance • To maintain some autonomy and a closer physician-patient relationship, physicians organized their own prepaid plans in the Pacific Northwest and Blue Shield (1939) was developed to not only to compete with Blue Cross, but to offer another choice. • Both BS and BC gave discounted care in exchange for increased volume and prompt payment. • Employee Benefit plans proliferated in the 1940s and 1950s as war-time government imposed wage freezes (1939-1945) forced employers to offer better benefit packages including health insurance coverage as a way to attract workers. • Strong Unions bargained for tax-free, employer-sponsored health insurance. • Commercial life insurance companies begin selling health insurance to employers.

20. US Government Health Insurance • Medicare (fully federally funded) established in 1965 when only 56% of adults over 65 years of age were insured. • Prior to Medicare, 1/3 of all seniors were living in poverty. • Medicaid (up to half have funded by states) – program for poor which is determined by means testing. Currently over 50 million Americans enrolled. • US still remains the only major industrialized nations without universal access to healthcare!

21. Government Guarantees of Universal Health Insurance • 1947 – Sweden • 1945 – Belgium • 1948 – United Kingdom • 1961 – Japan • 1966 – Canada • 1973 – Denmark • 1978 – Italy • 1986 – Spain • 1996 – South Africa • 2002 – Taiwan

22. History of Health Insurance Today the Blue Cross Blue Shield Association is a federation of 39 separate health insurance organizations and companies in the US providing coverage for over 100 million Americans. Prior to the tax reform act of 1986, they were tax exempt and considered social welfare plans. This status was revoked as they sold commercial type insurance. They soon became 501(m) organizations which had special “tax benefits” and in 1994 most became “for-profit” companies. The 14-state Wellpoint is the largest BC/BS member and a publicly traded company.

23. The For-Profit Insurance Industry is Not Your Friend! • Take 31 cents out of every dollar away from actual patient care. • Increase overall health care costs by discouraging people from receiving preventative care and by driving the sick into more expensive care settings • 1/6 of all policies are actually grossly inadequate to cover a serious illness. • 70% of losses (money paid out in claims) goes to cover about 10% of their subscribers creating a powerful incentive to screen subscribers and harass them to drop their coverage and go elsewhere. • They encourage higher deductibles and co-pays by increasing premiums to insure they cover very little.

24. Administrators Are Growing Faster Than Physicians Administrators Physicians 1970 1980 1990 2000 2009 Source: Bureau of Labor Statistics; NCHS; Himmelstein/Woolhandler analysis of CPS

25. The For-Profit Insurance Industry is Not Your Friend! Over the past 9 years: • Only recession proof industry that consistently raises prices 10-15% every year regardless of the economy. Far outpacing inflation. • Average premiums have increased nearly 120% • Profits at the 10 largest publicly traded insurance companies have rose 428% (reported). • Average annual CEO salary at these companies was $11.9 Million which is 468 times what the average US worker makes. • In CA, the six largest insurers denied over 45.7 million claims in the last six years.

27. CEO Salaries (2008) • Roy Williams – CEO Aetna - $ 24,300,122 • H. Edward Hanway – Cigna - $ 12,236740 • Angela Bray – Wellpoint - $ 9,844,212 • Dale Wolf – Coventry Healthcare - $ 9,047,469 • Michael Niedorff –Centene - $ 8,744, 483 • James Carlson – Amerigroup - $ 5,292,546 • Michael McAllister – Humana - $ 4,764,309 • Jay Gellert – Health Net - $ 4,425,355 • Steven Helmsley – United Health Group - $ 3,241,042 • Billy Tauzin – CEO PhRMA - $2,000,000 • Karen Ignani – Amer. Health Insurance Plans - $ 1,580,000

28. Whenever profits are not enough, patients get crucified!! Anthem Blue Cross proposed 39% rate increases in 2010.

29. Blue Shield of California proposed to raise health insurance rates a whopping 59% for individual policyholders in 2011, saying the increase is “absolutely necessary” to deal with rising health care costs and restrictions in the new health care law.

30. Insurance Industry Efforts • 4525 lobbyists for the 535 Congressional members (8:1) – 450 lobbyists are former congressional staffers and 12 were former Max Baucus Staffers. • $1.4 Million was spent each day!! • $260+ Million was spent by the health insurance industry and big Pharma – more than on the 2004 Bush-Kerry presidential campaign. • Insurance stocks hit a 52 week high once there was no public option.

31. What Happened?!!

33. June 17, 2009 – As 22 Senators began hearings and work on healthcare reform, the room was full of registered healthcare Lobbyists.

34. Easy to Blame the GOP, but… • The Democrats had a supermajority for most of the debate. • 60% of all money went to Democrats. • Max Baucus (Chairman of the Senate Finance Committee) received over $2 million. • Ben Nelson received more money from the health insurance industry than any other industry. • Joe Lieberman received over $1 million and his wife was employed by several healthcare and Pharma companies.

37. Arguments Against Reform • “Will explode the deficit!”

38. Nixon/Ford: 6.8% per year Carter: 2.0% per year Reagan: -1.3% per year Bush 1: 4.0% per year Clinton: 2.5% per year Bush Jr: 8.2% per year

39. Arguments Against Reform • “Will explode the deficit!” • “This is the largest government run health care program ever”.

40. Originally passed in 2004 at a projected cost of $400B over 10 years, some estimates suggest it will cost over $900 Billion. Passed by a GOP controlled house and senate led by then Rep. Billy Tauzin (R-La) who left immediately after its passage to become the head of PhRMA.

41. Arguments Against Reform “Will explode the deficit!” “This is the largest government run health care program ever”. “Socialized medicine”

42. “If you don’t stop Medicare and I don’t do it, one of These Days, you and I are going to spend our sunset years telling our children, and our children’s children what it once was like In America when men were free” - Ronald Regan 1961 Socialized Medicine was popularized by a public relations firm working for the American Medical Association in 1947 to disparage President Truman's proposal for a national health care system. It was a label, at the dawn of the cold war, meant to suggest that anybody advocating universal access to health care must be a communist. And the phrase has retained its political power for six decades.

43. The original meaning of “socialized medicine” was confined to systems in which the government owns and operates health care facilities and employs health care professionals, support staff, and all ancillary workers. England, Germany, Israel, Sweden, Finland, New Zealand, France, Canada, Taiwan, Japan all have “socialized medicine”.

44. October 22, 2009 - Veterans Health Care Budget Reform And Transparency Act More than 1400 hospitals, clinics and nursing homes, 14,800 doctors, 61,000 nurses , and 5 million patients. Rand Corporation found that 67% of veterans received appropriate care compared to 55% for the general public. University of Michigan study found 83% satisfaction for Veterans compared to 73% for general public.

45. Let the Free Market Rule! • There currently is no free market! Only two industries in the US have antitrust exemptions – Major League Baseball and The Health Insurance Industry. • There has been heavy consolidation and near monopolies established in the past 10 years. • One or two insurers generally control the top 94 metropolitan areas in the US. • In some states like Alabama, 90% have Blue Cross. • By allowing insurers to sell across state lines, patient protections will be reduced due to variations between states.

46. So What Did We End Up With? • The Patient Protection and Affordable Care Act, not Obamacare. • It is not socialized medicine or a government takeover of medicine. • There are no death panels. • CBO estimates it will cost $940 Billion over the first 10 years. • Majority of the provisions will not begin until 2014.

47. Individual Mandate Model of Reform Proposed by Richard Nixon in 1971 to block Edward Kennedy’s National Health Insurance Proposal

48. The Government Uses its Power to Make People Buy Private Insurance

49. Expands Medicaid-like Program, Individual and Employer Mandates, No Real Cost Controls, Adds Layers of Administrative Complexity

50. What’s Been Implemented? • $727 Million to upgrade and expand community health centers providing health care to 745,000 uninsured patients. • Medicare beneficiaries will receive a $250 rebate to help fill the prescription drug donut. • Primary care doctors will get a 10% raise. • Insurers can no longer carry out rescissions when insured use policies, set lifetime benefit limits, set annual benefit limits, deny coverage to children with pre-existing conditions (2014 for everyone). • Insurers must now offer coverage to kids on their parent’s policies up to the age of 26.