Myths and misconceptions
1. Would SB 840 create problems like those
Medicare has experienced over time?
Medicare, which is a national single payer health
care system, is a program that brings peace of mind to millions of
elderly Americans. Most believe their coverage will not be taken away
and that doctors will accept Medicare patients.
Historically, Medicare's problematic issues
have been lack of necessary funding and fraud prevention. SB 840 provides
for ample funding of the new system. A recent Lewin Group analysis
finds that the aggregate monies now spent on health care by individuals,
families, employers and state and local government agencies are more
than enough to finance a single payer universal health care system
that can fund comprehensive benefits for all residents.[1]
SB 840 provides for fraud prevention through
the Office of Inspector General. The Inspector General has authority
to inspect public and private business records, a key to detecting
providers and venders who are bent on cheating the system.
In addition, flexibility would be built into
the publicly financed health care system’s decision-making process
so that it could respond to problems in a timely manner. For example,
most decision-making would take place at the regional level where
people actually get their care. Regional decision-making would allow
the public, doctors and others who work within the health care system
to be a part of the decision-making process.
2. Would SB 840 create an inefficient
big government bureaucracy?
The federal government manages the publicly
financed single payer program Medicare more efficiently than the current
market-based insurance system is managed. Medicare has an overhead
of about two percent.[2]
The current health care insurance system now spends nearly 50 percent
of each health care dollar on administrative and clinical waste, excessive
drug prices, and fraud.[3]
Currently, a number of different state programs
involve duplication, overlap and gaps in coverage. SB 840 incorporates
them into one program thereby creating new efficiencies. The public
health care system also replaces other fragmented programs and permits
better coordination. In addition, outsourcing some of the new system's
administrative functions is a possibility. An example is the administration
of Medicare's payments and claims by Blue Cross.
3. How can SB 840 be passed against powerful
insurance and pharmaceutical industry opposition?
SB 840 offers advantages and benefits for many
stakeholders. A Lewin Report on a system similar to SB 840 finds positive
benefits for individuals, businesses, employers, physicians, hospitals
and other providers.[4]
Several recent polls find that Americans are
ready for government action to fix the broken health care system.
It is clear to most that our current approach is not working. A 2007
New York Times/CBS News Poll finds the following:
- There is widespread concern about health care costs, and nearly
half of those with insurance said an employer had cut back on
benefits or required them to pay more for their benefits in recent
years;
- An overwhelming majority said the health care
system needed fundamental change or total reorganization;
- Nearly 8 in 10 thought it was more important
to provide universal access to health insurance than to extend
the tax cuts of recent years;
- Sixty percent across party lines, including
62 percent of independents and 46 percent of Republicans, said
they would be willing to pay more in taxes to provide every American
access to health insurance, and half said they would be willing
to pay as much as $500 a year more;
- Given a choice between the current system and
a national health system that covers everyone, is administered
by the government and financed by taxpayers: forty-seven percent
said they preferred the government-run approach while 38 percent
said they preferred the current system; and
- Sixty-four percent said the government should
guarantee health insurance for all.[5]
The business community is now keenly aware of
the burden that health insurance places on them and the need to reform
the system. American automobile manufacturers wrote a joint letter
in 2006 urging the Canadian government to keep their single payer
health care system.[6]
When enough stakeholders understand the problems
that SB 840 solves, a massive movement to pass universal, single payer
health care can beat down the arguments from vested interests.
4. Would SB 840 cause waiting lists like
those in Canada?
Canada uses waiting lists to manage their limited
resources. The “queues” in Canada can result in delays in non-emergency
care. However, they could be shortened with relatively small increases
in funding.[7]
The United States spends nearly $6,100 per person for health care
annually, compared to Canada's $2,980 per person.[8]
This problem would be unlikely in the United
States. The amount California already spends on health care is more
than enough per capita to avoid waiting lists. SB 840 provides for
an adequate level of health care spending to provide comprehensive
coverage for all residents. It also provides for a mechanism to maintain
an adequate level of funding.
5. Do people refuse to get insurance to
avoid paying for it?
A national survey in 2004 finds that more than
one half of persons under 65 years of age did not have health insurance
because of cost and one fourth did not have coverage because of loss
of a job or a change in employment. Another 14 percent did not have
coverage because their employer did not offer it or an insurance company
refused coverage.[9]
People who don't have insurance most often can't afford it. The average
cost of annual premiums for family coverage is now $10,880 -- more
than the $10,712 in gross earnings a full-time federal minimum wage
worker would make in a year.[10]
Given the need and cost of paying for other necessities, the high
cost for health insurance is both stressful and a burden for most
of the uninsured and underinsured.
6. Is SB 840 such a radical reform that
it will create even more problems?
SB 840 is a major reform that goes to the roots
of the problems causing our health care crisis: inefficient use of
health care dollars that leaves millions uninsured and underinsured,
uncontrolled costs, and a fragmented system of health care delivery.
Every developed country in the world except the United States has
universal health insurance and their governments control health care
prices.
SB 840’s publicly financed health care system
solves the biggest problem—the lack of affordable health insurance
for all residents. Moreover, residents could expect to have better
health. People in most countries with universal health care systems
have better overall health than people in the United States. The US
is ranked ninth in life expectancy and 28th in infant mortality out
of the top 30 developed countries.[11]
Since Medicare was first enacted in 1965, health
care activists have been using the "small-step" approach
to cover different segments of the population. Other important programs
like Medi-Cal and Healthy Families have been enacted. However, this
incremental approach has not addressed the health system's underlying
structural problems as SB 840 does.
The health care sector is interconnected in
great detail. Partial or piecemeal reforms can produce unanticipated
adverse consequences. An example would be a large expansion of access
that was implemented without measures to improve quality and manage
costs.[12]
The Lewin Group analyzed the cost effectiveness
of three types of reforms in California's health care study of 2002.
Both the incremental and employer-employee mandate approaches were
found to be more expensive, to provide fewer benefits, and to cover
fewer people.[13]
The single payer approaches designed to cover everyone were found
to provide comprehensive benefits and to save the state large sums
of money.[14]
When problems in our health care system are
not addressed, they become more difficult and the symptoms of the
crisis become more severe. Staying with the status quo will continue
to hurt more people than it will help.
7. Would access to new drugs be reduced
if pharmaceutical companies curtailed research due to lower drug prices?
The pharmaceutical industry is one of the most
profitable of all industries. Their vast advertising and marketing
expenditures are much greater than their spending on research, which
is a relatively small part of their budgets.[15]
However, much of their research is on "me too" drugs that
are designed to capture market share on profitable drugs or to produce
a new patent on a drug that is expiring. Usually there are no improvements
in the therapeutic value of these drugs. If this research is successful,
it will maintain a high level of revenue for the drug company.[16]
SB 840 provides for prescription drugs for all
California residents. The large increase in pharmaceutical purchases
under SB 840 will offset the decrease in drug prices. Pharmaceutical
companies will have money to fund research. Reducing administrative
and clinical waste will result in more money to spend on providing
health care, including research. Research is expected to flourish
under the cost-effective single payer health care system.
8. Would SB 840 create the same problems
some countries have experienced?
Every developed country in the world except
the United States has universal health care with government price
controls. All of these nations spend less and some spend half as much
per person as the United States spends to provide health care. When
some countries have problems like waiting lists for non-emergency
medical procedures, it is because they do not spend enough money to
meet all the needs of their people. Even so, they provide universal
coverage and many of their health outcomes are better than those in
the United States. The US is ranked ninth in life expectancy and 28th
in infant mortality out of the top 30 developed countries.[17]
Over time, all large health systems most likely
will have problems that would need to be addressed. SB 840 provides
for a governance structure that enables problems to be addressed promptly
and systematically in a holistic rather than a piecemeal manner.
SB 840 solves the major problems caused by the
state’s current multi-payer system. Lack of health insurance will
no longer be a problem. Closed emergency rooms, trauma centers, and
hospitals will no longer be problems. Personal bankruptcy from medical
bills will no longer be a problem. Instead, every California resident
will receive secure comprehensive benefits and be able to choose his
or her own doctor. SB 840 keeps the best parts of California's health
system and changes the basic flaw that causes its current problems--how
health care is financed.
9. Would SB 840 cause rationed health care?
Under the current system, health care is rationed
by one's ability to pay. The questions should be, "What is the
basis for health care rationing?" and "Who makes these decisions?"
Currently, HMOs and insurance and pharmaceutical companies ration
care and medications by excluding those who cannot afford to pay for
them. Insurance companies decide what is covered and what is not.
They deny care to the uninsured, the underinsured and to many insured
because of preexisting conditions. Health care is rationed to secure
profits.
About 50 percent of the money spent on health
care is wasted under the current system.[18]
SB 840 provides for a publicly financed health care system that reorganizes
the allocation of health care dollars, implements improvements in
care quality, uses purchasing power to negotiate for lower prices,
and increases primary and preventive care to minimize the need for
expensive emergency and hospital care. Patients and their doctors--not
insurance companies--make the final decisions about what care is needed
and provided
10. Should government have a role in health
care?
Government already has a significant role in
health care. It licenses providers like doctors, nurses, and hospitals
and regulates drugs and medical devices. The National Institute of
Health and the Center for Disease Control are examples of government
entities that provide critical services. Every county has a public
health department that provides essential services. Government-funded
programs like Medicare, Medi-Cal, and Healthy Families provide health
coverage to large segments of the population.
As individuals, we cannot provide for our common
essential services such as police, fire protection, national defense,
or the highway system. Our resources, in the form of taxes, enable
our government to provide these services for all of us. Health care
is also a critical essential service.
Health insurance companies have no business
motive to provide comprehensive and affordable health care coverage
to residents who are likely to require health care services. This
for-profit industry treats health care as a commodity and focuses
on making profits. Insurance companies maintain their profits in several
ways: increasing premium costs, excluding needed coverage and denying
payment for services. In contrast, SB 840 ensures that health care
financing is equitable and meets the needs of everyone.
11. Would SB 840 create socialized medicine?
SB
840 creates a publicly financed health care system, not so called
“socialized medicine.” In socialized health care systems, the government
employs all the workers and owns all the facilities. Under SB 840,
the state will not employ doctors and nurses nor own hospitals and
other facilities. As now, these providers will continue to deliver
private health care, but will receive payment for their services from
the state’s Universal Healthcare Fund instead of the current for profit
insurance system.
[1]
John
F Shields and Randall A Haught, The Health Care for All Californians Act: Cost and Economic Impacts
Analysis, Executive Summary, Falls Church, VA: The Lewin Group, 2005, ii.
[4]
John
F Shields and Randall A Haught, The Health Care for All Californians Act: Cost and Economic Impacts
Analysis, Executive Summary, Falls Church, VA: The Lewin Group, 2005, ix. Note: two of three consecutive pages each numbered
“ix” are incorrect; this page should be numbered “vii.”
[7]
John
Abramson, Healthcare Code Blue, Los Angeles Times, 2006. Accessed
11/05/06 from http://www.latimes.com/news/opinion/la-oe-ambramson3nov03,0,4576432,print.story/coll…
[8]
Spyros
Andreopoulos, Critical Condition: Health Care for All Californians
Is Good Medicine for All that Ails the State and Its Leadership,
San Francisco Chronicle, 2005.
[10]
Ron
French, “How General Motors and the nation are losing an epic battle
to tame health care beast,” The Detroit News,,2006.
[11]
OECD
Health Data 2006, Paris, France: Organisation for Economic Co-operation
and Development, 2006, 8, 10. Accessed 03/06/07 from http://www.oecd.org/document/16/O,2340,en_2649_37407_2085200_1_1_137407,00.html
[13]
Cost
and Coverage Analysis of Nine Proposals to Expand Health Coverage in California, Final Report,
Falls
Church, VA: The Lewin Group, 2002, vi-vii.
[14]
John
F Shields and Randall A Haught, The Health Care for All Californians Act: Cost and Economic Impacts
Analysis, Executive Summary, Falls Church, VA: The Lewin Group, 2005, ix.
[17]
OECD
Health Data 2006, Paris, France: Organisation for Economic Co-operation
and Development, 2006, 8, 10. Accessed 03/06/07 from http://www.oecd.org/document/16/O,2340,en_2649_37407_2085200_1_1_137407,00.html
