On 29 January 2019 we saw the first CNN Town Hall for a candidate for the 2020 US presidential election. Kamala Harris, a Democratic senator from California, is one of the more impressive members of what promises to be a huge field.

CNN is reporting the Town Hall had the highest ever viewership for a Town Hall in the 25-54 category.

On 18 February another of the better candidates, Senator Amy Klobuchar (D) from Minnesota, had her first CNN Town Hall.

Yesterday, it was the turn of Bernie Sanders (I-Vermont). It’s thanks to Bernie’s 2016 campaign that universal healthcare is finally under serious consideration in the US. He has advocated for this his whole career, and when the US finally takes it up, he will deserve much of the credit.

There’s clearly already a lot of interest despite the election being almost two years away.

The 2020 Election

Countries with universal healthcare.One of the main reasons for this interest is the state of the Democratic Party itself. The Overton Window is shifting so that policies that would once never be under consideration are now considered more mainstream.

In my opinion, the most important of these is the question of universal, single-payer healthcare. Universal healthcare is not a radical idea. Every other industrialized nation (and more besides) has universal healthcare. There’s a good reason for that – it makes sense.

So far, Democratic candidates are focusing on the fact that access to healthcare should be a basic human right.  They also frequently note that every other OECD nation else has universal healthcare.

These points are true of course, but I’m not sure they’re arguments that will attract the independent and centre right voters the Democratic Party needs to win the presidency.

Universal healthcare is good for the economy. It will save a country the size of the US trillions, and there are plenty of places that money could do a lot of good. I think they need to talk more about that to attract those independent and centre-right voters.

The 2020 Election and the GOP

The GOP has made the announcement that Donald Trump is such a great president they will not have a primary. The level of delusion in that statement alone shows just how out of touch they are. Trump won because he was able to reach out to many who felt that politicians didn’t care about them. Now that he’s president, his actions are showing he doesn’t care about them either. In fact, he cares even less than the traditional politician.

Whether Trump will win another term is (unbelievably) up in the air at the moment. However, the Republicans are losing the healthcare argument. The Democratic candidate who can come up with the policy proposal that appeals most to voters on universal healthcare is likely to have a strong chance of not only becoming the party’s nominee, but becoming president.

The GOP, Donald Trump, and Healthcare

Donald Trump is a bad messenger for his party on healthcare. In the past he’s given praise to the healthcare systems in both Canada and Scotland. He’s also said he doesn’t want anyone to be without healthcare by using those countries as examples. However, the GOP has done their best to take away healthcare from those who finally got it because of Obamacare.

John McCain casts "no" vote to prevent Obamacare being stoppedTrump went out of his way to insult the late Senator John McCain (R-Arizona), whose vote against his own party means Obamacare still exists in the US despite the best efforts of the Republicans. However, they have significantly weakened it.

Also during the 2016 campaign, an announcement that Obamacare premiums would rise saw a slew of footage of Trump lying about the issue. He was immediately out on the campaign trail bemoaning how his own employees were having a “terrible” time “because of Obamacare.” In reality, his employees were not having a “terrible time” at all. He provides the insurance for at least 90% of his employees so the increases had no effect on them.

Trump’s Base

Trump’s base is made up largely of those who are older and less educated than average. Those are the very people who are also, on average, likely to be in poorer health and less likely to be able to afford insurance. As a result, healthcare is a very important issue for them. They are part of the demographic that says in surveys they want universal healthcare.

Cartoon: GOP elephant, "MY US HEALTH CARE REFORM PRESCRIPTION: TAKE TWO OF THESE AND CALL ME IN THE FALL -PILLS LABELLED "FEAR" AND "LIES"Trump is proving that he doesn’t care about his base in the way they thought he would when he got their vote. A majority still worship him in a cult-like way, but more and more are starting to see reality. When it comes to voting for Trump or universal healthcare, they may just vote in their best interest.

USians Want Universal Healthcare

I wrote about the healthcare issue shortly before the 2016 election (‘America’s Healthcare Problem‘) and again a few months later (‘Americans Want Universal Healthcare‘).

One of the most important statistics from the second article was one from Quinnipiac University. This is what I wrote:

Since Trump’s election, Quinnipiac University has been asking this question in their regular surveys:

How important is it to you that health insurance be affordable for all Americans: very important, somewhat important, not so important, or not important at all?

The results have been consistent – USians, virtually universally, want EVERYONE to be able to have affordable health insurance:

Graph of Quinnipiac survey results on healthcare

More recently, a survey in June/July 2018 by Reuters shows 70% of USians support Medicare for all. Within that, 52% of Republicans want Medicare for all.

Graphic of Reuters survey. Click to go to source.

Cross-hatched lines indicate margin of error. Data are polling of American adults in June and July 2018. Respondents: Medicare for all = 2,989. (Click graphic to go to source.)

 

Democratic Policy Proposals

Senators Kamala Harris and Amy Klobuchar

Senators Kamala Harris (left) and Amy Klobuchar

Senators Kamala Harris and Amy Klobuchar are at opposite ends of the spectrum within the Democratic party when it comes to healthcare. Harris’s policy proposal is Medicare for all and doing away with private insurance altogether. Klobuchar is to extend the current Medicaid system to more people but otherwise retain the status quo.

I found both Senator Harris and Senator Klobuchar very impressive in their respective CNN Town Halls. I agree with most of their policy positions but I consider both are wrong regarding their proposals for healthcare.  In my opinion though, Harris goes too far and Klobuchar doesn’t go far enough.

I agree with Harris on the introduction of Medicare for all in the US (see why below). However, I think abolishing private health insurance altogether is a step too far. That is not actually what most countries with single-payer healthcare do, despite what many on the right in the US assume.

I delayed posting this by a day so I could watch the Bernie Sanders CNN Town Hall in case there was anything new there. As he always has, Sanders proposes Medicare for all. I’m not a fan of The Bern, but I admit he’s much better at explaining the benefits of a universal, single-payer healthcare system. For example, he pointed out that as all doctors are part of the same system, people will, indeed, be able to keep their doctor.

Other candidates will have different proposals. I hope one comes up with one that can appeal to a majority of USians as I think this is the issue this election will be fought on.

Capitalism versus Socialism

Doing away with private insurance altogether is a pure socialist model. I do not consider socialism a valid economic system. It simply doesn’t work because it’s simply not a natural way for humans to live. In those cases where a society has tried to enforce it (communism) it’s been a disaster.

A capitalist system with elements of socialism is the best way to go in my opinion. For example, most of us consider things like a progressive tax system where the wealthy pay a bigger proportion of their income than the poor to be fairer. Again, despite what the GOP thinks, it’s better economically too. Some redistribution of wealth also makes a society healthier in general, and I don’t just mean physically healthier. That makes a society a safer and more pleasant place to be a part of.

It is also better for society as a whole for some things to be under central control for efficiency and cost reasons. Infrastructure, education, law enforcement, courts, and the military are some examples. Most democracies have come to the realization that a single-payer healthcare system is one of the things that works better if it’s managed centrally.

Note that although the US has a socialist system for infrastructure, education, law enforcement etc., that hasn’t meant there are no non-government options. There are still private schools, private security, and privately owned elements of infrastructure, including roads. The same can also be the case with single-payer healthcare, and indeed unless they’re communist, all countries with single-payer healthcare systems also have private healthcare options.

Why Buy Private Health Insurance in a Country with Universal Healthcare?

In a country with universal healthcare, private insurance is significantly cheaper than it is in the US. In New Zealand, those who purchase it do so for four main reasons:

1. They can choose the timing of elective surgery.
2. There are packages that cover items that aren’t covered by the public system e.g. in New Zealand prescription glasses and dental care for adults aren’t part of the public system.
3. They can have their elective surgery in more luxurious surroundings.
4. They can choose which specialist performs their surgery.

 

The Market Doesn’t Work for Healthcare

The main reason proponents of a capitalist system for healthcare give for supporting it is the cost. They say it’s cheaper and more efficient for the market to handle everything. I agree with the market forces model for many things, but there are multiple reasons why it shouldn’t be applied to healthcare.

There is one main one that trumps all the others. The basic fact it that in reality, people have little or no choice when it comes to health provision. They just do what the medical professionals tell them and pay the bill. Oftentimes, they’re in no condition to make a choice anyway. Even if they’re completely lucid, they’re frequently still vulnerable in some way. Fear and lack of knowledge and just two major factors that are at play in almost all cases.

There are many ways a universal healthcare policy can work. All the single-payer systems around the world are different and none is perfect. This gives the US a huge advantage. They have evidence from multiple systems and can make an informed choice about which elements to implement and how, to best effect.

The Cost of US Healthcare

Given the extra attention healthcare is getting in the US media these days, USians are beginning to become aware that, despite what they’ve been told, their healthcare system is neither the cheapest nor the best.

 

Comparison of US Healthcare cost with comparable countries 2014

 

The only system with a comparable cost to the US is Norway, and they provide benefits I can’t imagine the US even considering. The average expenditure of comparable countries shows health costs in the US are way out of kilter with the rest of the OECD. That’s why I said above the US could save trillions on healthcare. And that’s despite covering tens of millions more people.

For their current high expenditure, you’d expect that the health of USians would be better than that of everyone else. But it’s not. Life expectancy in New Zealand, Australia, Canada, Japan, South Korea, France, Germany, the United Kingdom, Sweden, Norway, and elsewhere is significantly higher (at least a year) than in the US.

One of the more shocking statistics is the infant mortality rate in the US. Largely because so many poor people don’t have adequate healthcare, the US has the highest infant mortality rate in the OECD.

(New Zealand’s infant mortality rate in 2016 was 3.58 per 1,000 live births.)

 

Why a Single-Payer System is Better

There are multiple rationales why a universal system is better. They fall into three main categories.

1. It Benefits the Entire Economy

Firstly, universal coverage is better for the whole economy.

Long-Term Government Strategies

(a) A government can focus on long-term prevention strategies. Policy makers can focus on prevention issues which have long-term benefits for the country. One of the things the New Zealand government (whichever party is currently leading it) has been working on for many years is smoking prevention. Long-term, this both improves the health of all and reduces healthcare costs. It’s the sort of thing that can be done when there is a long-term strategy in place. The private sector has no incentive to improve the overall health of the population.

(b) Population education. Some of those that the NZ government has done or is doing include: smoking cessation, mental health illness awareness, family violence reduction, and healthy eating.

Other Advantages

(c) Society as a whole is healthier, which improves the output of the economy, reduces crime*, and increases overall well-being. *E.g. a study showed that 80% of prisoners had literacy difficulties because of childhood hearing issues. This, of course, had an impact on employment. If they had had the very inexpensive intervention of grommets put in as children, they might not have had to turn to crime to survive. That in turn saves all the police, justice, social support costs and more. Instead the person is a healthy, productive, member of society.

(d) As everyone has access to primary healthcare, people do not wait until they are so sick they need to attend the Emergency Room at the hospital. Taking care of problems at an early stage is much cheaper for everyone, and also means people spend more time in work or education.

(e) Employers have access to a healthier pool of workers that they can rely on to stay healthy for longer.

(f) People are less stressed because they don’t have to worry about what will happen to them if something goes wrong. They know quality healthcare is available to them.

(g) A population that is better looked after when it is younger will be healthier when it is older, thereby reducing the inevitable cost of looking after the elderly. This is particularly true because those who can’t afford health insurance are those that are more likely to be less healthy and therefore cost more as they age.

(h) Because they don’t have to worry about affording healthcare, people are more likely to take the risk of starting a new business. Small businesses are the lifeblood of any economy, and making it easier to start a business is a boon to any economy.

2. Separating Healthcare from Employment

Secondly, there’s the issue of separating healthcare provision from employment. This, on it’s own, is one of the major economic benefits of a single-payer system.

(a) An employer is more likely to take on a new employee if they don’t have to worry about the hassle of arranging health insurance and the additional cost of providing that insurance.

(b) The work force as a whole is more dynamic if a person’s healthcare remains consistent whatever their employment status. For example, people are more likely to be in a role that suits them and their talents best rather than one where they can get health insurance.

(c) Smaller and more rural states have a better chance of retaining their people and attracting new ones because healthcare becomes more evenly available. Thus the divide between rural and urban states will reduce.

(d) There is no barrier to increasing an employee’s hours or changing their status to make their employment more secure, thus benefiting both the employer and employee. (In the US these things can make providing health insurance mandatory.)

(e) The cost of health insurance is not a barrier to a business increasing in size, making expansion more likely. (Going over 50 FTEs currently means a requirement to provide health insurance to staff in the US.)

(f) The provision of health insurance doesn’t give large companies an advantage in hiring employees, so smaller employers are on a more equal footing when it comes to attracting the best. Therefore, smaller businesses have a better chance both of growth and success.

Wages Should Rise

(g) It takes a certain amount of power away from employers in employment contract negotiations and they are therefore more fair and balanced.

(h) With health insurance as part of an employment package and insurance costs constantly increasing, wages don’t increase because the cost of providing insurance increases instead. Further, as insurance costs are tax deductible, the employer has an incentive to prefer them over wage increases.

Note that in a universal system, some employers still provide private insurance for their employees. The reasons a person might still have private insurance noted above can also benefit an employer.

3. Increased Efficiency

(a) The cost of healthcare will reduce for all because of the involvement in the whole population in paying for it via their taxes.

(b) At the moment there is little or no incentive for healthcare providers to look at cutting costs or increasing efficiency. (Having said that, there are some who are doing good work in this ares.) Hospitals and other health providers put their costs up, insurance companies pay the extra, and those costs are passed on in the form of increased insurance costs. The cost of healthcare has been consistently and significantly ahead of inflation for decades. Some of this is due to things like technological advances and the availability of new treatments, but much of it is not.

4. Drug Costs

Drug costs are also a major issue in the United States. California tried to do something about that at the last election, but unfortunately they weren’t successful. From Wikipedia:

Proposition 61 was a California ballot proposition that appeared on the November 8, 2016 ballot. It would have prohibited the state of California from buying any prescription drug from a drug manufacturer at price over the lowest price paid for the drug by the United States Department of Veterans Affairs. It would have exempted managed care programs funded through Medi-Cal.[2] According to the fiscal impact statement issued by California Legislative Analyst’s Office, “potential for state savings of an unknown amount depending on (1) how the measure’s implementation challenges are addressed and (2) the responses of drug manufacturers regarding the provision and pricing of their drugs.” [3]

Proposition 61 was rejected by a vote of 47 to 53 percent.[4]

The Department of Veterans’ Affairs (VA) negotiates its drug costs in the same way that Pharmac does in New Zealand. This means that the VA pays by far the lowest cost for drugs in the US. However, drug companies donated over US$100 million (Bernie Sanders says US$131 million) to campaigns in California that oppose Proposition 61. There was also a lot of what looked to me like misinformation to me in relation to this issue. As a result, groups like Veterans of Foreign Wars have come out in strong opposition to the Proposition because they have been convinced that it will increase drug costs for veterans. This is just one example of how those with a stake in maintaining their profits muddy the information water.

Consequences of High Drug Costs

Real people are suffering and dying every day in the United States because of the failure of politicians to address this issue. It’s not going away, and it’s not going to get any easier. Policy makers have the advantage of being able to look at several models around the world and choosing the best bits from each to design an exceptional American system. For the sake of her population, let’s hope they find the courage.

This story from CBS is about a young man (26) who died because he couldn’t afford his insulin. The cost was US$1,300 per month.

 

Universal Coverage Around the World

Insulin is one of the multiple drugs I take and one of the companies in this story makes the insulin I use. Because of the NZ health system, I pay NZ$20 per year for insulin. The most any family pays for drugs is NZ$100 per year. Once they reach that limit, prescription drugs are free for the rest of the year. Those with the lowest income levels, including all children, pay nothing.

Even with the low price of drugs in New Zealand, there are still people who can’t afford their medication. Sometimes it’s simply because they can’t get to the pharmacy to collect it. I imagine the problem of people not getting the medication they need must be huge in the US considering that even with our system there are still people that have issues.

Our system isn’t perfect, and most people in a country with universal healthcare still have complaints. Our governments constantly work to improve things, and in NZ at least, political parties have lost elections because of the way they manage the health system. However, most people generally accept that healthcare is something that a government should provide with our taxes.

As can be seen by the graphic below though, whatever our complaints, those of us with universal healthcare systems prefer them to what the US has.

Views of healthcare systems in multiple countries

 

The Future for the USA

I think there is no doubt that the US will get universal healthcare. It’s only a matter of time. Despite all those who lobby against it, public opinion is now such that the politicians can’t ignore the issue. The people want universal healthcare.

Politicians used to get away with saying it’s too expensive. They’d quote the amount taxes would need to increase without noting that no one would have to pay for private insurance anymore. Also, judging by costs in other countries, the cost is likely to be less than what the US currently pays per capita. Therefore, as well as not paying private insurance, the increase in taxes for most will be less than what they paid for insurance.

The poor shouldn’t have to pay higher taxes either. Increases in the top marginal rates, with the biggest increases on the top five percent, would cover the cost without the poor having to pay any extra. The statistic that the three wealthiest people in the US are worth more than the poorest 50% of the population makes it clear who can and can’t afford higher taxes.

And, despite what many Republicans will say, an increase in taxes for the wealthy will NOT slow economic growth. The opposite, however, would be true if the tax rate of the poor and lower middle class was increased.

Universal healthcare is an investment in the people that will pay the country back in multiple ways. The US can’t afford not to get universal healthcare.


Reference (and highly recommended)

Leonhardt, David. Here’s the Deal (Kindle Single). Byliner Inc.. Kindle Edition.


 

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