NO ADVERTISING, GOVERNMENT OR CORPORATE FUNDING
DONATE TODAY


The 200K Spring Challenge!

every dollar pledged will be matched by a generous donor

MICHELLE ALEXANDER

EDDIE CONWAY

CORNEL WEST

What a Single Payer Health Insurance Plan Looks Like


Gerald Friedman: A single-payer plan in Maryland would cover everyone, improve outcomes and make business more competitive -   July 31, 2012
Members don't see ads. If you are a member, and you're seeing this appeal, click here

Audio

Share to Facebook Share to Twitter



I’ve made my way to my current internet haven: The Real News Network (TRNN). - Caroline Lewis
Log in and tell us why you support TRNN

Transcript

What a Single Payer Health Insurance Plan Looks LikePAUL JAY, SENIOR EDITOR, TRNN: Welcome to The Real News Network. I'm Paul Jay in Baltimore.

The debate about health care is continuing. Supreme Court has found what people call Obamacare constitutional. It will come into full force in 2014. But proponents of what's called single-payer health care or government-run health insurance plans are continuing to fight, and the evidence seems to be on their side. Those countries that have government health insurance plans, people live longer and the cost of the health care is less. Now the fight in the United States seems to be moving to the state level, because there doesn't seem to be much that's going to happen at the national level, at least in the foreseeable future. And one of those states is Maryland. And a recent study looks at what would single-payer health care look like in the state of Maryland.

And now joining us is the author of that study, Gerald Friedman. He's a professor of economics at the University of Massachusetts in Amherst, and he did this study for Health Care for All Maryland. Thanks for joining us, Gerald.

GERALD FRIEDMAN, PROF. ECONOMICS, UMASS AMHERST: Thank you for having me.

JAY: So before we dig into some of your research, just sort of give us the bigger picture of why this would make sense for Maryland.

FRIEDMAN: Well, the big picture is that health insurance provided by competing private companies is inherently inefficient and destructive of people's health. I mean, that's a strong statement, but I think it is well founded.

The problem with private health insurance is that it's not like selling shoes. If you're a shoe company, you want to sell more shoes, you want to make a better quality shoe at a better price to attract more business. Health insurers don't want more business. They want to get rid of sick people. Eighty percent of your costs as a health insurer are incurred for about 20 percent of your people. You know, in some places it's 90-10—90 percent of your costs go to 10 percent of the people. If you can find those people, identify those people, and figure out a way to get them to go away, go to a different company, then you will be in a position to lower your prices and increase your profits. That is what health insurers try to do.

JAY: Let me interject for a second. There kind of is that in Maryland, is there not, where the state actually takes people that a lot of the private insurance companies don't want and puts them through this Maryland plan.

FRIEDMAN: Yes, exactly, exactly. One aspect of—the president's law, Obamacare, the Affordable Care Act, has provisions to try to restrict this behavior by companies. Until those provisions, the ban on preexisting conditions, until that kicks in, states have been subsidized from the federal government to set up these care pools for special insurance for people who can't get insurance otherwise.

Overall throughout the United States about 100 million people have some condition that an insurance company would look twice at or three times at before giving you insurance. Certainly if you've ever had cancer, insurance companies don't want you. If you have HIV, insurance companies don't want you. If you have an obsessive-compulsive disorder, a history of chronic depression, if you're overweight, if you have heart disease, if you have high blood pressure—.

JAY: Or if you're pregnant.

FRIEDMAN: Or if you're pregnant, that's right, or if you're pregnant, insurance companies don't want you.

JAY: Unless they already have you. Like, if you haven't been insured—and I happen to know this through personal experience recently—if you haven't been insured, you can't go out and get new insurance if you're pregnant, except through this pool that the state creates. So isn't this some form of indirect subsidy to the insurance companies? Like, we'll take the most serious conditions, publicly finance them one way or the other, and you can keep your pool nice and profitable.

FRIEDMAN: Exactly. Exactly. The high-risk pool is a subsidy to the insurance companies during this interregnum until 2014 when the whole law kicks in, and then they are supposed to take everybody. But in fact they'll still find ways. They'll—the fastest-growing cost center in American health care is administration of the health insurance industry. That has risen in cost eightfold since the 1970s. And that—if you compare the United States and Canada, two-thirds of the extra increase in cost for health care in the United States is accounted for by rising administrative burden in the United States compared to Canada.

JAY: Now, I know in one of the papers you wrote, there's a cartoon, and it's kind of ironic, that one of the arguments against a government insurance plan is it would be too bureaucratic. But the facts don't lead you there, do they?

FRIEDMAN: No, they don't. They don't. Just to give you the raw number, the cost of administering the existing Medicare system, the traditional fee-for-service Medicare, is 2 percent—that is, $0.98 out of every dollar that goes into Medicare goes out to pay for services, health care services. By contrast, the mandate in the Affordable Care Act is that insurance companies get up to 80 percent.

So the health insurance industry admits that it is ten times less efficient than Medicare. They have ten times as high an administrative burden in the private insurance system. And the reason they do that is not because they like to waste money; it's that they use their bureaucratic apparatus to screen out sick people. They make it hard for you, they try to identify you, they try to scare you away from procedures that you need, in the hope that you will leave after a while.

JAY: I'll give it a—I can give a—now let me just explain the parameters of all of this interview we're doing for our viewers. We're going to do a series one after the other where we're going to dig into this proposal for Maryland and talk about this health care issue. So this is part one. And I won't know how many parts it is until we get to the end.

I'll give you one example recently. We've just had two little twins, and they're in the neonatal unit, and the decision to move them from the neonatal unit to a lesser-care facility is essentially going to be made by the insurance companies. The insurance companies have people that are micromanaging these files, and they're looking at exact—studying individual care of people and then deciding what the next step should be. I mean, they won't fight it based on a hospital saying the hospital must keep the kid here, but they've created the criteria when the kid should move, not the hospitals.

FRIEDMAN: Yeah, yeah, as if they have a license to practice medicine. I mean, this is standard practice in America these days, that health insurers are practicing medicine, they're dictating which drugs are approved on their list, so that if your doctor wants to prescribe a different—give you a different prescription, well, sure they can prescribe, but the insurance company won't necessarily cover it. They say, no, you should take this other drug. They want to prescribe how long you're going to stay in the hospital, which second opinion, which specialist opinions are needed, which procedures are appropriate. I mean, this is all done by insurance companies.

JAY: And let me add, 'cause people that watch The Real News know I'm a dual citizen, and I still get health care in Canada as well, and you don't get the micromanaging that—like this in the Ontario health care system, for example. There's very broad parameters that are established by the insurance system, but then all the decisions are really made by doctors after that, not, you know, getting phone calls from the insurance company.

FRIEDMAN: And we see the difference. The United States and Canada had about the same life expectancy in 1971 when Medicare, Canada's health insurance, was enacted. You know, about the same life expectancy, and we were both paying about 7.5 percent of our gross domestic product to pay for health care. So we have very similar situations.

Now, since then, Canada has added 6.5 years of life expectancy, compared to five years of life expectancy added in the United States. So Canadians now live longer than people in United States, a year longer, and Canada's expenses have gone up to 10 percent of gross domestic product while we've gone up to 17 percent.

So we're spending a lot lot more to get less than Canada's doing. The difference is the cost of administering these health insurance companies, all those people supervising the doctors, and all the time that the doctors have to spend dealing with the health insurers.

JAY: So I'm going to jump in. So we're going to pick this up in part two of this series of interviews and we're going to dig into this proposal for Maryland and just see where these cost savings would be and compare what a single-payer plan in Maryland would look like compared to the existing for-profit insurance plans. So join us for the next in this series of interviews with Gerald Friedman on The Real News Network.

End

DISCLAIMER: Please note that transcripts for The Real News Network are typed from a recording of the program. TRNN cannot guarantee their complete accuracy.


Comments

Our automatic spam filter blocks comments with multiple links and multiple users using the same IP address. Please make thoughtful comments with minimal links using only one user name. If you think your comment has been mistakenly removed please email us at contact@therealnews.com

Comments


Latest Stories


A defining moment for The Real News
Cleveland-DOJ Deal Won't Stop Brutality Says Local Activist
Manifestations of Apartheid Israel
As Violence Spikes in Baltimore, Former Investigator Says Police Aren't the Answer
"America Does Bad Things for Good Reasons" - Christian Appy on RAI (2/5)
Fast Track for Whom?
30 Years Later: The Bombing Of MOVE Part 2
"America Does Bad Things for Good Reasons": the Vietnam War and American Exceptionalism - Christian Appy on RAI (1/5)
TRNN DEBATE: Should Bernie Sanders Run as an Independent?
The Cost of War and Lost Job Opportunities
Not a Single House Has Been Rebuilt One Year After Israeli War on Gaza
Advocates Say Black Women Left Out of Freddie Gray Conversation
Assad Has Lost Over Fifty Percent of Syria to ISIS
Portland, Oregon Mayor Charlie Hales Does the Right Thing
30 Years Later: The Bombing Of MOVE Part 1
Kayaktivists Protest Shell's Arctic Rig in Seattle
Default Looms in Greece
The Global African: The State of Black Workers & Violence in Burundi
TRNN Replay: 44 Years in Prison, Still a Revolutionary - Eddie Conway on Reality Asserts Itself (1/10)
Grand Jury Indicts 6 Officers in Death of Freddie Gray
TRNN Debate: Are GMOs Safe to Eat?
NSA Whistleblower: No Real NSA Reforms Being Considered by Senate
Post Conflict Fragile States, Will They Overcome?
Pressure Mounts on Baltimore Police Union as Protests Continue
Five Big Banks Plead Guilty to Rigging Currency Markets and No One Goes to Jail
U.S. Might Support UN Resolution That Leaves Palestine with a "Garbage Dump" - Norman Finkelstein on RAI 2 (3/3)
Baltimore Residents Say Anger Over Freddie Gray Could Affect Mayor's Race
Can the DOJ Reform the Baltimore Police Department?
Warren Pushes Back Against TPP Fast Track
Illinois House Passes Bill to Stop BDS Campaign Against Israel

RealNewsNetwork.com, Real News Network, Real News, Real News For Real People, IWT are trademarks and service marks of IWT.TV inc. "The Real News" is the flagship show of IWT and Real News Network.

All original content on this site is copyright of The Real News Network. Click here for more

Problems with this site? Please let us know

Linux VPS Hosting by Star Dot Hosting