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National Health Insurance!?

Created August 19, 2008 by Lee

A review and interview with the author of Do Not Resuscitate, the controversial book about the current status of America’s health insurance system.

John Geyman, MDby Lee Burnett

A recognized pioneer and leader in family medicine, John Geyman, MD has written a number of articles and books on American healthcare. He has just released his latest book on the health insurance system, Do Not Resuscitate.

Dr. Geyman’s books are known for detailed research and facts. Do Not Resuscitate is a natural follow-up to his earlier texts, deftly tackling the latest and most complex data and concepts and distilling them into a captivating and quick read.

This book could be compared to the writings of Noam Chomsky with Dr. Geyman delivering a searing indictment of today’s health insurance companies and the US Government. This book has a single point: the insurance industry has failed America and it should be replaced with a single-payer nonprofit fund.

The book starts with a fascinating historical review of the development of health insurance and how it evolved from a nonprofit enterprise to a massive for-profit industry. Most interesting is why the United States is the only western country without national universal healthcare. He then analyses industry tactics such as risk avoidance through cherry picking, policy cancellation, denial of coverage, and deceptive and even fraudulent marketing practices.

Dr. Geyman presents compelling data illustrating tactics the insurance companies use to perpetuate the status quo and retain control in the face of increasing calls for comprehensive change. He details how the insurance industry is dying and demonstrates that incremental reforms will not save it. The book concludes by showing how national single-payer health insurance could work for the US.

Being that the topic of healthcare reform is very timely in this campaign year, I would highly recommend Do Not Resuscitate to students going on interviews.

The Student Doctor Network spoke with Dr. Geyman, who lives on San Juan Island near Seattle, Washington.

Why is the U. S. the only western nation without single-payer health care?

For a number of historic, cultural and economic reasons, the U. S. is the “odd man out” among industrialized countries around the world in not having some kind of public financing system for its population.

The idea of national health insurance (NHI), however, is not new. It was first raised by Teddy Roosevelt and the Progressive Party in 1912. After a bitter fight it was finally defeated in 1917 by an alliance between employers and organized medicine.

Since then, American worship of open markets, our culture of individualism, and the political power of private stakeholders in what has become a medical-industrial complex, have successfully opposed publicly financed universal coverage on the basis of claimed American exceptionalism.

Although public opinion for more than 60 years has favored NHI, an ongoing coalition between market stakeholders, an increasingly powerful, largely investor-owned insurance industry, and most of organized medicine continues to oppose NHI.

The AMA fought hard against Medicare and Medicaid during the mid-1960s, It was marginalized politically, however, when the American Hospital Association joined forces with Blue Cross (which as an intermediary would process all claims for hospital services) to assure passage by Congress of these public programs. The AMA then quickly switched to profit from these programs as poor and elderly Americans became consistently paying patients.

Private stakeholders in our deregulated market-based system use their political power and money to preserve open markets against public will on the basis of claimed market “efficiencies”(untrue) and the threat of “socialism” if NHI were to be implemented (also untrue, since NHI is social insurance combined with a private delivery system).

It is claimed that the U. S. has the best health care system in the world. Why would we want to change this for-profit model?

It is pure mythology that we have the best health care system in the world.

Many cross-national studies show the opposite, as these examples show:

  • 42nd in life expectancy, 41st in infant mortality
  • last among 19 OECD countries in mortality from amenable causes (deaths that could be avoided by timely and effective care)
  • 15th out of 25 countries for such indicators as disability-adjusted life expectancy and child survival to five years
  • 11th out of 11 industrialized nations on 11 criteria for performance of its primary care base

We do have the most expensive and bureaucratic system in the world. One that siphons off 31 percent of the health care dollar on administration, overhead and profits.

The profit motive distorts incentives, encouraging many providers to deliver inappropriate and unnecessary services. It is well documented that the more specialists there are in higher reimbursed parts of the country, the more unnecessary care is provided with worse outcomes.

Investor-owned care has been demonstrated to cost more and to be of lower quality, whether hospitals, HMO’s, nursing homes, dialysis centers, or mental health facilities.

With NHI, we can transition to a not-for-profit system which assures universal access to necessary and cost-effective care of higher quality and greater accountability, which still incorporates the strengths of a private delivery system.

What about the for-profit pharmaceutical and medical device companies?

There is not anywhere near as much competition in our health care system as market advocates would have us believe.

The drug and medical device industries, as well as other medically-related industries, have wide latitude to set prices at what the market will bear, and lobby strongly to defend their price-setting prerogatives and avoid price controls.

They claim that any effort by the government to constrain costs by bulk purchasing (as the Veterans Administration does so effectively in gaining discounts on prescription drugs of about 45 percent), would stifle innovation. This is a false argument.

Most current medical research is publicly financed through the National Institutes of Health. The drug industry spends two or three times as much on marketing as it does on R and D. Many new technological advances have been made abroad by countries with national health systems (egs., CT scanning in England, laparoscopic cholecystectomy in Canada).

Manufacturers know that most demand for health care is not price-sensitive. Chemotherapy for cancer gives us a classic example of inelastic demand. Driven by hope, cancer patients will spend enormous amounts of money on chemotherapy drugs (some now costing $50,000 to $100,000 a year), even for those of questionable or marginal clinical benefit.

Many new drugs have no competition until their patents expire. As an example of predatory price-setting, Ovation Pharmaceuticals raised the price of Cosmegen, its drug for Wilms’ tumor in children, by 3,436 percent (not a typo!) in 2006.

What happens to physician income and quality of life if there is a single-payer system?

The growing gap between procedure-based reimbursement and cognitive, time-intensive physician services has led to serious specialty maldistribution of physicians in this country. We now have an oversupply in many procedure-oriented specialties and critical shortages of physicians in primary care, geriatrics, and psychiatry.

NHI can provide a structure for reimbursement reform based on system needs. Physician incomes in family medicine, general internal medicine, general pediatrics, geriatrics, psychiatry and other shortage fields will see increased incomes, while those in surplus specialties are likely to be reduced, especially if providing inappropriate or unnecessary services.

When Canada went to its single-payer system, physician incomes changed little. Today, generalist physicians in England are better paid than their counterparts in the U. S.

Physicians’ quality of life will improve with NHI. With simplified billing through single-payer, their overhead and administrative hassles will be much reduced. Their time will be mostly involved with direct patient care, what they went into medicine for and were trained to do, and they will have more clinical autonomy.

The intrusive bureaucracy of 1,300 private payers, with their different requirements, will be a thing of the past.

Do you hold much hope that single-payer health insurance can be implemented within the current political system?

The current political system is a challenge, but many forces are gathering that give me optimism that single-payer NHI can be finally enacted in this country. Here are some data points that point in that direction:

The present health care system is falling apart – fast. Access is getting worse, costs are becoming unaffordable for much of the middle class, quality of care is spotty, many of the services being provided are either inappropriate or unnecessary (some even harmful), and all incremental attempts to reform system problems have been failing.

Our market-based system is not self-correcting, as its proponents claim. The private insurance industry is on a death march, and has demonstrated its obsolescence in these ways:

  • inefficiencies compared to public financing
  • fragments risk pool by medical underwriting
  • increasing epidemic of underinsurance
  • excessive administrative and overhead costs
  • profiteering – shareholders trump patients
  • pricing itself out of the market
  • unsustainable and resists regulation

So, as things get worse, as they are, the pressure for real reform of health care can only increase. Here are some signs that this is underway:

  • the crisis in health care costs and access now affects at least one half of our population
  • a sizable majority of the public has favored publicly-financed universal coverage for 60 years
  • the electorate is changing, with many across party lines seeing the failures of conservative policies of the last 30 year
  • the mismatch of the business model of health insurance with the public interest is raising concerns of sustainability among industry insiders and some Wall Street analysts
  • with the exception of privatization in recent years, the overall success of Original Medicare since 1965 shows that publicly-financed health care works
  • organized Labor is rapidly getting behind single-payer NHI; employers may not be far behind, as shown by the economic difficulties of many employers (eg., the auto industry) in competing abroad with countries with social insurance
  • there are now 92 co-sponsors of HR 676 in Congress, a bill for NHI as a “hidden solution in plain view” for the failures of our health care system
  • recent studies are now showing that a majority of physicians support NHI (egs., 59 percent of 2,200-plus physicians in a national sample this year; over 60 percent of physicians in Massachusetts and Minnesota)

The 2008 elections are likely to alter the political landscape with probable control by Democrats of Congress and the White House

Although organized medicine, as exemplified by the AMA, has been a reactionary and often marginalized player in the national debate over health care for 90 years, this was not always so. It is of historical interest that the social insurance committee of the AMA passed a resolution in 1917 calling for serious study of various forms of social insurance in order to avoid “ leaving the profession in a position of helplessness as the rising tide of social development sweeps over it.”

The new generation of physicians can play an important role in reversing the reactionary mode of organized medicine and moving it to one of leadership toward a health care system that meets the needs of the country.

Rather than have government create the single-payer system, do you see any other options such as a government-backed for-profit insurance company (along the lines of Fannie Mae and mortgage lending)?

The possible role of a government-backed for-profit insurance company along the lines of Fannie Mae and mortgage lending is discredited by recent events.

The business model doesn’t work as a way to finance health care. Original Medicare operates with an overhead of about 3 percent, while the average overhead for commercial insurers is 18 percent and 26.5 percent for investor-owned Blues. High overhead costs just take money away from direct patient care.

Experience has shown that the health insurance industry cannot be effectively regulated. Although some states (eg., Massachusetts) try to regulate health insurers through such requirements as guaranteed issue and community rating, public not-for-profit financing still offers more value and reliability to enrollees, as demonstrated by Original Medicare.

The insurance industry has successfully avoided regulation for many years. It maintains a very large lobbying presence in state capitols across the country, often with revolving doors and conflicts of interest with state legislatures.

All self-insured employee benefit programs (ie., most large employers) are exempted from state regulations by the Employee Income and Security Act of 1974 (ERISA). If insurers don’t like regulatory policies in one state, they just move to a friendlier state. Another approach being touted by the industry and conservative policymakers involves association health plans (AHP’s), which are exempt in most states from state rate-setting regulations.

Private and institutional shareholders of for-profit insurance companies would not take kindly to the idea of national healthcare. How do you address their concerns?

This is true, but the policy goal should not be to prop up a failing industry through government subsidies. Instead, the goal should be to build a health care system that best meets the needs of our entire population for affordable coverage of necessary health care of good quality.

The NHI program includes a major effort in retraining and job placement for many administrative and insurance worker positions displaced by NHI. There will be new needs for many to become involved in expanded programs in home care, public health, and other areas.

John Geyman, MD is Professor Emeritus of Family Medicine at the University of Washington School of Medicine in Seattle, serving as Chairman of the department from 1976 to 1990. He served as founding editor of the Journal of Family Practice (1973 – 2000) and editor of the Journal of the American Board of Family Practice from 1990 to 2003.

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