Can Incrementalism Be the Path to Universal Health Care?

Governor Spitzer and state lawmakers seek an evidence-based plan that will bring comprehensive health care to all of the people of New York State, a result that almost everyone would like to see.

Unfortunately, the Spitzer administration, along with many health care reformers, continually assert, without providing any evidence, that the best way to universal health care is a series of incremental steps that build upon existing programs to bring targeted populations of the uninsured into the "health care" system.

Incrementalists argue that the public opinion polls showing overwhelming public support - not just for a comprehensive government universal health care financing system but also for radical reform - are misleading. They contend that if one digs deeper, one finds that those with health insurance ("those who actually vote") would rather keep the shrinking (and often already inadequate) coverage they have than see the entire system changed. They murmur that it is not "politically feasible" for our leaders to stand up to the power of the private health insurance industry and big pharma. They redefine the public's desire for choice in doctors to hospitals to instead be choice among which insurance company to contract with. They confuse access to comprehensive health care with expanding health insurance.

Yet the experience in the various states that have tried a variety of "incremental approaches" objectively shows that it will not work. "Bold, new experiments in moving our state to universal health care" have invariably withered away over time, often in only a few years.

For instance, the media coverage over the new "universal" health care system in Massachusetts generally failed to mention similar pronouncements from Governor Dukasis two decades previously that fell apart in a few years. Because Massachusetts expanded its subsidies for insurance premiums for low-income people, over 160,000 of those eligible signed up this year. But only 7% of the nearly 250,000 who must buy unsubsidized insurance -- or face a fine of $2,000 in 2008 -- purchased private health insurance this year. Thus the plan will end its first year at least $147 million over budget, with Massachusetts preparing to cut payments to doctors and hospitals and ramp up out-of-pocket costs for patients. And nearly 500,000 in Massachusetts remain uninsured. Yet the leading Democratic Presidential contenders now embrace Massachusetts' mandate for individual purchase of health insurance.

Maine's patchwork approach to universal health care - the Dirigo plan - is not working. Nor have the plans in Vermont, Minnesota, Washington and Oregon. Tennessee's noteworthy TennCare program to help the poor and uninsured is in the process of being dismantled. NY has added targeted programs such as Child Health Plus and Family Health Plus yet more than 5 million New Yorkers annually lack health insurance.

This fall Vermont launched "Catamount Health," a plan to cover all Vermonters by subsidizing private health insurance from MVP and Blue Cross Blue Shield with a combination of tobacco tax money, Medicaid money and new taxes on employers who don't offer health insurance. But as the plan takes its first steps, the inadequate insurance for those who have it, with soaring co-pays, huge deductibles and unaffordable prescription drugs has put the crisis in health care back into the legislative agenda for 2008, front and center.

In contrast, the experiences in the rest of the industrial world provide ample evidence that a comprehensive approach to universal health care will succeed. Not only do the other major industrial countries spend far less on health care than we do, they cover everyone with better health outcomes, even though we have among the best medical professionals, infrastructure and equipment in the world.

Incremental approaches evade the fundamental problems that are causing the ongoing crisis in our health care system. Real change requires addressing the entire structure of financing -- in which employer-based private health insurance dominates. Without facing this, the problem of costs cannot be solved. Most of the money spent on health care in New York comes from government (federal and state) spending, yet private health insurance dominates the system. As Governor Spitzer has pointed out, NY's system of health care financing is often not directly tied to the services being provided, its complexity and irrationality a result of the backroom deal making at the State Capitol.

Incremental approaches have done little to nothing to control costs, while adding more people to the system, thus causing more financial strain on both the government and private sectors, especially in bad economic times. The various stakeholders such as hospitals and insurance companies often actually extract more resources as a result of the political negotiations over expanding access to health care (i.e., ok, you can cover more people but we need to extract higher payments in exchange).

Costs increase over time as health care costs in general continue to rise above the rate of inflation and more people utilize the new programs. Thus states find that they simply cannot afford incremental improvement, and so they must manage an incremental retreat. They end up pushing the costs of the health crisis problem back onto individuals by raising premiums, co-pays and deductibles, through roadblocks to limit participation in government programs and by whittling away at health services.

Perhaps the most fundamental difference between the US and the rest of the industrial world is that we allow health care to be treated as a commodity that is bought and sold on the open market, with the profit motive as a major factor. Access to health care is often based on the ability to pay rather than on need. The profit motive propels the US towards a "sick care" system, even though it is more expensive to cure people once they are ill rather than keeping them healthy. Incremental approaches fail to address these basic problems.

By definition, incremental approaches fall far short of universal coverage. The incremental approach also mistakenly often defines "universal" as everyone having access to health insurance, when what we need is a system that offers comprehensive care to all. Having everyone "in" one system provides a variety of ways to save costs, both within and without the health care system (e.g., reduction in costs impacted by health care such as workers' comp and automobile insurance.)

Take for instance computerized medical records, something that everyone agrees we need. In a fragmented for-profit system individual "players" such as HMOs won't make such common-sense investments since the immediate bottom line, not the long-term interests of the patient or society, prevail. In contrast, a true universal health care system will need to build in incentives for the use of computerized records, in order to allow medical providers demonstrate their efforts to keep the population healthy and to systematically address areas of high cost such as chronic illnesses.

The incremental approach often underestimates the number of uninsured and the problems they face. Every one has heard there are 47 million uninsured in America but few realize that the Census Bureau defines that number by those who lack insurance for the entire year. Perhaps twice as many go without health insurance for some time during any one-year. Thus it is impossible for a program that expands subsidies for private insurance to offer true health security to those who unexpectedly find themselves uninsured.

Further, those who are uninsured but live in medically under-served areas may finally find a way to pay for health care, for instance under New York's Family Health Plus, but that fact by itself will not necessarily bring health care facilities or providers any closer to their door. And they may remain unable to find doctors in their communities willing to accept the reimbursement rates provided (e.g., Medicaid for certain services such as dental care.) Then there is the problem of people who have inadequate insurance. A 2003 Commonwealth study estimated that 16 million adults have inadequate insurance. In September 2007 Consumer Reports found that 29 percent of people with health insurance have coverage so meager they often avoid necessary medical care because of costs, that 43 percent of people with insurance feel unprepared to cope with a costly medical emergency, and that 20 percent were so dissatisfied with their HMO or PPO that they hoped to switch plans.

Worse, most people don't realize they have inadequate insurance until they need it. Private insurance companies increase their profits by denying services to those they insure. As a result, high health care bills now account for a majority of bankruptcy filings, yet 3 out of 4 such individuals had health insurance when they become ill.

Thus at least a third of the American population suffers from a lack of adequate health insurance.

Incremental efforts, by definition, fail to offer comprehensive health solutions. We need a plan for health care that will provide all necessary medical care. This means emergency, primary and preventive care, necessary specialty care including prenatal care, acute hospital care, rehabilitative services, home care, nursing home care, dental care, mental health care, eye care. Look at nursing home care. Medicaid is in crisis, entangling our nursing homes and our county governments. Incremental expansions may be much more likely to exacerbate than to alleviate such problems.

Most experts who study health care admit that a single payer Medicare for all Style program does best at achieving the goals of providing quality, affordable health care to all. Single payer means one entity pays all bills but it doesn't run the delivery system ( e.g., doctors, hospitals). Single payer proposals, by eliminating the cost and bureaucracy of private health insurance, manage to bring everyone in while actually saving costs. Single payer has been rated best by every state that has undertaking the comprehensive cost-benefit analyses of universal health care that New York is presently starting. The single payer proposals are almost always the only ones that meet the goal of actually bringing the entire population into the health care system (i.e., universal coverage.)

Yet many elected officials and health care reformers contend that single payer is not politically feasible, largely due to the opposition of special interests starting with the private health insurance companies that would no longer be needed. Many argue that the massive amounts of money spent by the insurance industry to defeat the Clinton health care plan in 1994, highlighted by their Harry and Louise ads, shows that they can't be defeated. This argument however ignores that Clinton explicitly rejected a single payer approach, deciding instead to try to buy the support of the various stakeholders by throwing money at them in her proposal. The result was so complex and convoluted that many single payer advocates agreed that it should be defeated. The lesson arguably is not that a single payer proposal has no chance but rather that half-baked, flawed incremental approaches are doomed to failure.

Proponents of incrementalism tend to avoid the reality that the special interests oppose many of their proposals anyway, since most involve a reduction of their market share and funding. So right from the start incrementalists have weakened the impact of potential reforms without receiving any concessions in return from the major opponents. Incrementalists accommodate rather than resolve the fundamentally negative impact of private health insurance on health care delivery; indeed, the "reforms" that have been enacted have invariably strengthened rather than curtailed private insurance companies. Incrementalism unfortunately also undercuts the momentum for more comprehensive, effective reforms.

Others argue that moving to a single payer system - despite its positive impacts across the board on issues such as cost, coverage, access, choice, etc. - would be too disruptive, starting with the hospitals, doctors and insurance companies.. More "time" is needed to allow everyone to "adjust" to the new reality. However, little evidence has been presented to back up this assertion.

It should be noted that a number of industrial countries do have multipayer systems. What they don't have is our system of private health insurance, where doctors are forced to navigate a maze of companies, many of them for profit, with their own rules and paperwork. As much as a third of every health care dollar touched by private insurance firms goes to pay for their existence, paperwork and profit. In America, despite the fact that more than 60% of health care costs are now paid directly for by the government (e.g., Medicare and Medicaid), we allow private health insurance to dictate much of the terms of the health care system. In all other industrial countries, the health care system is determined through their system of representative democracy. If private insurance is allowed, it plays a minor supplemental role, operating under strict rules determined by the government, with no role for profit.

The chorus of calls for incremental reform has fallen badly out of tune with respect to what the people of New York want for their health care system and hopelessly out of tempo with what people need for their personal health and security. When Governor Spitzer weighs the evidence he will find that only a single payer system can provide affordable, comprehensive health care for all New Yorkers.

Mark Dunlea is Executive Director of the Hunger Action Network of New York State and a long-time advocate of single payer health care.