ANALYSIS AND CRITIQUE:

Single Payer Health Insurance Endangered
Maryland Citizens’ Health Initiative (MCHI) appears to have dropped the ball on single payer.

by Bill Harvey
MCHI’s proposal gives the misleading impression that significant reform can be achieved without confronting the profits, privilege, and power of the health industry giants.
       Since the failure of the Clinton Plan in the mid-’90s, comprehensive reform of the health care system has been off-limits in most policy discussions. Instead, there have been countless piecemeal reform proposals (“band-aids,” say the skeptics) of many varieties: a bit more for children here and there, a bit more for old people here and there, umpteen versions of “A Patients’ Bill of Rights,” various attempts to control prescription drug prices, and many others.
       Bending to demands from all quarters to control costs, we have acquiesced to a “managed competition” system whose main goal is to control costs from the top down. This has worked quite well for health industry giants, but service has declined steadily.
       When Clinton took office in January, 1993, single payer bills had over 90 co-sponsors, making it far and away the best-organized position in Washington on the issue. But the Clinton Democrats circumvented this movement.

Single Payer

       In the late 80s, many citizen and activist groups looked north to Canada’s “single payer” system. Single payer’s primary goal is to combine quality and access.
       Here’s how it could work. Most single payer funding proposals build on the current workplace approach. Instead of paying premiums to insurance companies, workers and employers would pay taxes to cover the cost. (Hold in mind that roughly 50% of health care costs are already paid for by tax dollars.) This money would go into a common public fund, the “single payer,” and all health care would be paid for out of that fund.
       A landmark 1991 Government Accounting Office report estimated that savings from reduced administrative costs alone, if put to the provision of medical care, would be enough to cover everyone. Many subsequent studies, including one for the state of Maryland, have been in line with this estimate.
       On the care end, with single payer everyone—everyone—would be admitted to a common insurance pool, would be issued a “Medicare” card (the name for the Canadian system), and would receive any form of treatment—with any appropriate provider. “Everyone in, nobody out,” as noted public health advocate Quentin Young, M.D. puts it.
       Such a structure completely rearranges the incentive arrows in the industry toward the provision of quality care. Everything about the system would encourage early detection of illness and regular monitoring. All the most pressing concerns for most people (costs, access, quality) would be addressed because the massive resources of the system would be put at the service of the people. There would be no insurance industry profit margin to sap resources or dictate policy.
       This is the rough model of the Canadian system. A few years back Harper’s Magazine reported a poll that found more Canadians believe that Elvis is still alive than want the U.S. health care system.
       So what was it about it that so scared the pants off the Clintons? Simply put, it would eliminate the role of private health insurance companies. They’d be out of business. Rushing to the aid of their buddies at the big insurance companies, the Clintons devised a political strategy to end-run the single payer movement. Nothing much in the way of reform ever happened at the national level. At the state level, however, there has been some progress.

Maryland Citizens’ Health Initiative (MCHI)

       Around two years ago the Maryland Citizens’ Health Initiative (MCHI) stepped into the breach with the bold proposition that universal coverage could be achieved in Maryland. MCHI has been lucky to have as president of its board Peter Beilenson, Commissioner of Health for Baltimore City, one of the few prominent public health officials in the country to publically support comprehensive reform. And MCHI’s Executive Director, Vinnie DeMarco, is well known to many as a leading organizer of recent gun control and tobacco tax campaigns.
       MCHI has some muscle. It has raised over a million dollars in foundation money. Its three full-time staff and many allies have now garnered the endorsement of over 1,400 organizations around the state, making those groups members of MCHI’s “Health Care For All” (HCFA) coalition.
       By any measure, this is an impressive operation, which organizers call “the largest grassroots coalition in Maryland history.” MCHI intends to introduce a universal coverage bill in the 2002 state legislative session. They expect it to fail at that point, so they will then work to make health care a key issue in the 2002 elections. In the 2003 session, they hope to get something passed.
       For most of its existence MCHI has run a two-track approach to the achievement of universal coverage, saying it can be achieved through either single payer or a quasi-public fund within the current multi-payer system. (An essential point of reference is “The Lewin Report,” commissioned by MCHI and posted on its website, http://www.healthcareforall.com. See especially the eight page “Executive Summary.”)

Single Payer Dropped

       In November 2000, however, a decision was made to drop single payer as “politically unfeasible.” According to Beilenson, the recent election of a Republican administration in Washington means that the waiver that would be required to fold federal money (Medicare, Medicaid, and other sources) into a Maryland single payer system is unlikely to happen. This potential obstacle, says Beilenson, has two important consequences. First, opposing Annapolis legislators will seize on the point, and thereby block any prospect for passing a Maryland single payer bill. Second, obviously, a state-level single payer system could not be implemented without significant federal monies, which are unlikely to be forthcoming.
       However, the most important factor in the decision, according to Beilenson, is the difficulty of putting together the progressive coalition that could supply the political “oomph” to accomplish a single payer program. MCHI staffers have heard from many individuals and key organizations, including the Maryland State Teachers Association (MSTA), Medical Society of Maryland (MedChi), and Planned Parenthood of Maryland, who are wary of giving up the private insurance system for a publicly funded one. Some consumers fear that publicly funded health insurance and care could turn out to be inferior in quality.

MCHI’s Legislative Proposal

       MCHI’s legislative proposal has not yet been fully formulated. It is presently under study by a group of health policy experts from Johns Hopkins, the University of Maryland, and Georgetown University. The results of their study will be released in July, at which time Maryland organizations will have the opportunity to sign on or to reject it.
       Thus far, only one thing can be said with certainty about MCHI’s forthcoming proposal. Both Vinnie DeMarco and Beilenson emphasize that it will include a quasi-public insurance fund designed to cover currently uninsured Marylanders (just over 800,000) and the underinsured (roughly 500,000-700,000). This fund would operate without direct or immediate effect on the current structure. Since MCHI’s proposal is not single payer, it preserves the multi-payer system wherein hundreds of health insurance companies operate in Maryland.
       Potential funding mechanisms have not yet been decided upon, but Beilenson projects a first-blush increase in spending of around $900 million to $1 billion to implement the plan. The increase could be offset by an increase in the tobacco tax, generating perhaps $200 million a year, according to Beilenson. Other economies would come from such practices as pooled buying of prescription drugs.
       Everything else about MCHI’s proposal is now up for grabs, including, crucially, the nature and extent of coverage for those in the fund. Beilenson envisions the fund will attract employers and individuals who will opt out of the private insurance system in favor of a cheaper and more comprehensive public fund.

Policy Problems Galore

       Many right-minded, good-hearted people will no doubt be attracted to MCHI’s approach. As a dear friend said to me, “Well, I think it’s important to get insurance for people who don’t have it.” And who can disagree with that much? Here are five major problems with MCHI’s compromise position.
  1. A quasi-public fund would not yield the overall savings that single payer would. Indeed, by MCHI’s own Lewin Report estimates, a quasi-public fund would cost $207 million more per year, while single payer would save $345 million, a difference of $552 million. Single payer would fund the care by going to the sources of unnecessary expense: health insurance companies and HMO profits, exorbitant CEO and other executives’ salaries, advertising, and mountains of unnecessary paper shuffling.
  2. Placing currently uninsured and underinsured people in a separate insurance pool makes it less likely that they will get quality care. “Programs for poor people are by definition poor programs,” as health policy expert Gordon Schiff puts it.
  3. The system will remain open to all the abuses inherent to the current multi-payer set-up. Insurers’ “cherry picking” of healthy patients and ditching unhealthy people will remain the rule of the road. We have already seen this with recent attempts to bring Medicare and Medicaid patients into HMOs. The HMOs and insurance companies cooperate only as long as they can make what they regard as a healthy rate of profit. Otherwise, adios. The health industry giants get the profits; the public gets the costs. And employers could use a public medical insurance fund as a dump, an opt-out of providing insurance at all.
  4. There is absolutely nothing in MCHI’s approach that will have a significant impact on working conditions in the health care industry. Nowhere is the connection between poor working conditions and poor service more evident than in the health care industry. As a Canadian doctor said, “Single payer allows me to be a doctor.”
  5. In most important respects, MCHI’s proposal will have little direct effect on currently insured Marylanders. Say you’ve got dizzy spells and the doctor’s got 10 minutes to see you—or less. During that time the doctor must also be calculating whether certain kinds of tests will or will not be approved, whether specialist intervention would clear the insurer’s bean-counters, and whether your policy covers the prescription drugs that might be warranted. MCHI’s proposal would not change this for the roughly 4.2 million currently insured Marylanders.

Political Problems

       In addition to these substantive problems, MCHI’s rejection of single payer has overwhelming, likely fatal, political problems. First, part of the beauty of single payer is that it promises to unite all citizens in a common interest in the quality of the system. Quentin Young’s injunction, “Everybody in, nobody out” is more than a moral imperative in the wealthiest society in human history, and more than a functional necessity. MCHI’s quasi-public fund will merely be seen by many workers as just another tax that they are being forced to pay for poor people’s care. And many legislators will resist MCHI’s quasi-public fund as adamantly as they would single payer.
       Second, the funding question will be key when MCHI reaches Annapolis. A proposal costing several hundred million dollars will have trouble in the State House. Beilenson told me that he doesn’t want to get into the funding aspects of the quasi plan at this time, but this is the first thing to have in place in Annapolis. Politicians always tell us, in explaining why things cannot happen, that “There Is Not Enough To Go Around.” That’s the Big Lie of this society, as in Baltimore’s current recycling and library controversies.
       Third, MCHI’s proposal will give the misleading impression that significant reform can be achieved without confronting the profits, privilege, and power of the health industry giants. Corporate domination of our lives is the single most important issue of our time, and nowhere are its effects more clear than in the health industry. From where I sit, it looks like MCHI has abandoned its post.
       Fourth, it allows politicians to make soppy “I feel your pain” promises with no sound program for effective change. Such “debate” will only serve to further muddy the conceptual waters.
       Fifth, many observers fear that MCHI’s campaign will meet the same fate encountered by the Clinton Plan in the early ’90s, with the ultimate effect of setting back prospects for future reform efforts, a state-level rerun of the national disaster.
       Finally, single payer has the potential to get other reform efforts rolling. Without it, health care reformers have little leverage in the current political atmosphere. In Massachusetts, a recent statewide ballot initiative (widely understood to stand for the single payer position, and defeated by a mere 51-to-49 margin) shook loose reform legislation that had been stalled for three years. [See the interview with David Himmelstein, “Healthcare for All: The Campaign for Single-Payer Health Insurance in Massachusetts and the United States,” Multinational Monitor (December, 2000) at www.essential.org/monitor/ mm2000/00december/interview.html]
       MCHI’s proposal gives the misleading impression that significant reform can be achieved without confronting the profits, privilege, and power of the health industry giants.

Process

       In addition to policy and political problems, MCHI’s own internal process has been flawed, giving rise to objections and unanswered questions from activists who have had high hopes for the initiative.
       Many of the earliest and most active supporters of MCHI believed that single payer was the goal of the coalition. When Bill Barry, Director of Labor Studies at the Community College of Baltimore County, had DeMarco and MCHI Deputy Director Glenn Schneider in to speak at Lobbying and Political Advocacy classes, he says, “It was with the clear understanding beforehand that we were talking about single payer.” Many others give similar testimony.
       MCHI has raised over a million dollars from various foundations. When Beilenson was asked at a December 5 coalition meeting held at MedChi (Medical Society of Maryland) whether some funders had threatened withdrawal of support if the coalition continued to pursue single payer, he answered, “Absolutely,” but refused to elaborate. When I spoke to Beilenson recently, I asked which funders he had referred to. He said, “I forget.”
       It is impossible to resist speculation: Is it possible that, if you have a couple hundred thousand dollars, you too can set the policy direction of this “grassroots coalition”?
       When Beilenson and DeMarco met with the Universal Health Care Action Network-Maryland (UHCAN-MD), a single payer advocacy group, in November, it was clear to those attending that MCHI had already made the decision to drop single payer. At the December 5 meeting, the decision was presented as a done deal. Then, on March 6, Beilenson was asked at a Montgomery County meeting in Wheaton how the decision to abandon single payer was made. He replied, “We reached consensus at a meeting in Baltimore.”
       When I asked Beilenson about this, he said that he was referring to the December 5 meeting. Trouble is, we can find no one who was at that meeting (myself included) who remembers it that way.
       There are also many unanswered questions about the role of MCHI’s board of directors in the decision to drop single payer. Conflicting and incomplete reports from board members and MCHI staff lead me to question whether the board had any hand in the decision.
       Whatever the full story, two things have become clear to me. First, the board had made no decision before the November meeting with UHCAN-MD or the December 5 coalition meeting. Second, there is no written document stating the coalition’s reasons for dropping single payer.
       And don’t bother to check MCHI’s website, as Beilenson repeatedly suggested to me; there is no indication there whatsoever that this controversy has even taken place. If the board ever addressed the question at all, it was after December 5.
       Until they clear this up, it will be difficult for DeMarco and Beilenson to avoid the widespread perception that they made the decision themselves with no formal input or decision from any coalition meeting or from the board of directors, much less the “consensus” of a well-informed and democratically run meeting of coalition members.

Nightmares and Dreams

       Dwelling on these unpleasantnesses will doubtless only distract us from the task of effectively advocating for single payer. The achievement of single payer will require a groundswell of protest and coordinated political action the likes of which have not been seen in our lifetimes. Can we imagine it? Can we get to work on it? Can we make it happen?
       While big questions hang over MCHI, these are the bigger questions that hang over the everyday lives of the people of Maryland.



       Bill Harvey (bharvey@smart.net) works with UHCAN-MD and the Baltimore Green Party. Contact UHCAN in Maryland at 410-235-3504. www.baltimoregreens.org links to several health policy websites.


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This story was published on April 4, 2001.