Improve and Strengthen Medicare by Expanding It to All

The following text is the testimony that Dr. Margaret Flowers presented to the National Commission on Fiscal Responsibility and Reform at its June 30 hearing in Washington. Dr. Flowers is congressional fellow for Physicians for a National Health Program.

I am Dr. Margaret Flowers and I am here today on behalf of Physicians for a National Health Program, the leading physician research, education and advocacy organization in support of a truly universal single-payer health system in the United States. I will speak specifically about the contribution of health care costs to our national deficit and the evidence-based remedy to control these costs.

When compared to health care in other advanced nations, the United States excels in only one area - the amount of money spent per capita per year. Despite our high spending, the U.S. leaves a third of the population either uncovered or underinsured and thus vulnerable to financial ruin.

Medical debt is a leading cause of bankruptcy and foreclosure in our nation despite the fact that most families declaring medical bankruptcy had insurance when they began incurring such debt.

Our health outcomes are relatively poor, placing us 37th in the world, and we rank the highest in preventable deaths, over 100,000 preventable deaths per year, when compared to other advanced nations. It is clear that we are getting poor value in return for our health care dollar.

Health care costs, which are rising 2.5 percent faster than our GDP, are a leading driver of our financial deficit. In fact, if our health care costs were comparable to those in other advanced nations, which provide nearly universal health care with better outcomes, we would currently experience a budget surplus.

The recent health legislation, misleadingly titled the Patient Protection and Affordable Care Act (PPACA), lacks proven cost controls and is predicted to cause U.S. health care costs to rise faster than if there had been no reform at all (Centers for Medicare and Medicaid Services, April 2010) despite continuing to leave tens of millions out.

Given the impact of health care costs, members of this commission may attempt to decrease the deficit by cutting our public health insurance programs, Medicaid and Medicare; however, doing this would be a mistake because it would increase poverty, worsen health outcomes and increase costs.

Since its enactment nearly 45 years ago, Medicare has substantially lowered poverty among the elderly. Studies show that health disparities in the U.S. start decreasing when our population reaches the age of 65. And the cost of health care per beneficiary is rising more slowly for those on Medicare than for those with private health insurance.

Medicaid and Medicare have not caused our rising health care costs but are victims of our fragmented and failed market-based model of health care financing. Shifting the cost of health care from the taxpayer to the patient will not magically make these health care costs disappear or become sustainable.

The solution to our economic crisis is to jettison the costly failed market model of health care and adopt a publicly financed and independently delivered national improved Medicare for All. This is commonly known as "single payer." A national improved Medicare for All system has myriad benefits:

• Administrative savings of approximately $400 billion per year, which is enough to provide comprehensive high quality health care to all who are uninsured and underinsured.

• Ability to negotiate for pharmaceutical prices as a monopsony which would lower costs by about 40 percent and bring our prices in line with those of other advanced nations.

• Inherent cost controls of global budgeting for health facilities, negotiated fees, bulk purchasing and rational, rather than profit-driven, allocation of capital expenditures and health resources.

• Ability to identify outliers and develop quality improvement tools.

• Eliminate the burden of rising employee health care costs on businesses.

• Enhance the competitiveness of U.S. products in international markets.

• Liberate our population to pursue advanced education or entrepreneurial enterprises.

• Allow older workers to retire which would increase job opportunities for our younger workers.

• Stimulate the economy because families would have more money for discretionary spending.

• Improve the health, and therefore the productivity, of our workforce.

• Eliminate bankruptcy and foreclosure due to medical debt.

• Eliminate the spend-down required for those who need long-term care funded by Medicaid.

• Provide true health security to our population so that nobody has to choose between necessary medical care and other necessities such as housing, food, education and clothing.

Given these multiple economic benefits - and I have not begun to describe the ways in which national improved Medicare for All would improve patient choice and quality of health care - it is no surprise that the single payer approach is supported by the majority of those in the U.S. and the majority of American physicians. This was evident once again last Saturday in the town meetings sponsored by America Speaks when participants across the nation demanded single payer as an option to solving the health care crisis and 71 percent voted not to cut Medicaid and Medicare.

Private health insurance is rapidly becoming a thing of the past. There is a steady trend in fewer people being enrolled in employee-sponsored health plans. This is expected to increase under PPACA as businesses have an incentive to drop insurance benefits and pay the lower cost penalty.

There is a steady trend in people choosing high deductible plans which leave them financially vulnerable in their time of need. As people enter the individual market, those with health conditions will find it difficult to afford adequate insurance.

The trends for those who are uninsured and underinsured will continue upward. Under PPACA, billions of public dollars will be used to subsidize rising private insurance premiums for policies that cover fewer and fewer services. The result is a flow of patient and public dollars into the coffers of private insurance corporations with declining return in terms of health care. This trend is not sustainable.

The alternative scenario of a national improved Medicare for All will save lives and save money. National improved Medicare for All will place our nation on the path of becoming one of the best health systems in the world - something of which we can all be proud.

This commission has the ability to recommend creating a financially sustainable universal health system. I urge the members of this commission to recommend addressing the deficit through adopting this most popular approach: national improved Medicare for All. Don't cut Medicare. Protect it, improve it and expand it to cover everyone.