[House Hearing, 111 Congress]
[From the U.S. Government Publishing Office]





             EXAMINING THE SINGLE-PAYER HEALTH CARE OPTION

=======================================================================

                                HEARING

                               before the

                        SUBCOMMITTEE ON HEALTH,
                     EMPLOYMENT, LABOR AND PENSIONS

                              COMMITTEE ON
                          EDUCATION AND LABOR

                     U.S. House of Representatives

                     ONE HUNDRED ELEVENTH CONGRESS

                             FIRST SESSION

                               __________

             HEARING HELD IN WASHINGTON, DC, JUNE 10, 2009

                               __________

                           Serial No. 111-26

                               __________

      Printed for the use of the Committee on Education and Labor


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                    COMMITTEE ON EDUCATION AND LABOR

                  GEORGE MILLER, California, Chairman

Dale E. Kildee, Michigan, Vice       Howard P. ``Buck'' McKeon, 
    Chairman                             California,
Donald M. Payne, New Jersey            Senior Republican Member
Robert E. Andrews, New Jersey        Thomas E. Petri, Wisconsin
Robert C. ``Bobby'' Scott, Virginia  Peter Hoekstra, Michigan
Lynn C. Woolsey, California          Michael N. Castle, Delaware
Ruben Hinojosa, Texas                Mark E. Souder, Indiana
Carolyn McCarthy, New York           Vernon J. Ehlers, Michigan
John F. Tierney, Massachusetts       Judy Biggert, Illinois
Dennis J. Kucinich, Ohio             Todd Russell Platts, Pennsylvania
David Wu, Oregon                     Joe Wilson, South Carolina
Rush D. Holt, New Jersey             John Kline, Minnesota
Susan A. Davis, California           Cathy McMorris Rodgers, Washington
Raul M. Grijalva, Arizona            Tom Price, Georgia
Timothy H. Bishop, New York          Rob Bishop, Utah
Joe Sestak, Pennsylvania             Brett Guthrie, Kentucky
David Loebsack, Iowa                 Bill Cassidy, Louisiana
Mazie Hirono, Hawaii                 Tom McClintock, California
Jason Altmire, Pennsylvania          Duncan Hunter, California
Phil Hare, Illinois                  David P. Roe, Tennessee
Yvette D. Clarke, New York           Glenn Thompson, Pennsylvania
Joe Courtney, Connecticut
Carol Shea-Porter, New Hampshire
Marcia L. Fudge, Ohio
Jared Polis, Colorado
Paul Tonko, New York
Pedro R. Pierluisi, Puerto Rico
Gregorio Sablan, Northern Mariana 
    Islands
Dina Titus, Nevada
[Vacant]

                     Mark Zuckerman, Staff Director
                Sally Stroup, Republican Staff Director

         SUBCOMMITTEE ON HEALTH, EMPLOYMENT, LABOR AND PENSIONS

                ROBERT E. ANDREWS, New Jersey, Chairman

David Wu, Oregon                     John Kline, Minnesota,
Phil Hare, Illinois                    Ranking Minority Member
John F. Tierney, Massachusetts       Joe Wilson, South Carolina
Dennis J. Kucinich, Ohio             Cathy McMorris Rodgers, Washington
Marcia L. Fudge, Ohio                Tom Price, Georgia
Dale E. Kildee, Michigan             Brett Guthrie, Kentucky
Carolyn McCarthy, New York           Tom McClintock, California
Rush D. Holt, New Jersey             Duncan Hunter, California
Joe Sestak, Pennsylvania             David P. Roe, Tennessee
David Loebsack, Iowa
Yvette D. Clarke, New York
Joe Courtney, Connecticut











                            C O N T E N T S

                              ----------                              
                                                                   Page

Hearing held on June 10, 2009....................................     1

Statement of Members:
    Andrews, Hon. Robert E., Chairman, Subcommittee on Health, 
      Employment, Labor and Pensions.............................     1
        Questions submitted to Dr. Angell........................    53
        Questions submitted to Ms. Jenkins.......................    55
        Questions submitted to Dr. Tsou..........................    58
    Kline, Hon. John, Senior Republican Member, Subcommittee on 
      Health, Employment, Labor and Pensions.....................     2
        Prepared statement of....................................     4
        Statement of the steering committee of the National 
          Coalition on Benefits (NCB)............................    68
    Price, Hon. Tom, a Representative in Congress from the State 
      of Georgia, ``Medicare Not the Model for Reform''..........    31

Statement of Witnesses:
    Angell, Marcia, M.D., senior lecturer in social medicine, 
      Harvard Medical School, former editor-in-chief, New England 
      Journal of Medicine........................................    21
        Prepared statement of....................................    22
        August 13, 2003, article published in the Journal of the 
          American Medical Association, ``Proposal of the 
          Physicians' Working Group for Single-Payer National 
          Health Insurance''.....................................    41
        Responses to questions submitted.........................    54
    Conyers, Hon. John, Jr., a Representative in Congress from 
      the State of Michigan......................................     5
        Prepared statement of....................................     7
    Gratzer, David, M.D., senior fellow, Manhattan Institute for 
      Policy Research............................................    17
        Prepared statement of....................................    19
    Jenkins, Geri, R.N., co-president, California Nurses 
      Association and National Nurses Organizing Committee.......    10
        Prepared statement of....................................    13
        Responses to questions submitted.........................    56
    Tsou, Dr. Walter, national board advisor, Physicians for a 
      National Health Program....................................    14
        Prepared statement of....................................    16
        Responses to questions submitted.........................    59

 
                       EXAMINING THE SINGLE-PAYER
                           HEALTH CARE OPTION

                              ----------                              


                        Wednesday, June 10, 2009

                     U.S. House of Representatives

         Subcommittee on Health, Employment, Labor and Pensions

                    Committee on Education and Labor

                             Washington, DC

                              ----------                              

    The subcommittee met, pursuant to call, at 10:36 a.m., in 
room 2175, Rayburn House Office Building, Hon. Robert Andrews 
[chairman of the subcommittee] presiding.
    Present: Representatives Andrews, Wu, Hare, Kucinich, 
Fudge, Kildee, McCarthy, Holt, Sestak, Clarke, Courtney, Kline, 
Wilson, Price, Guthrie, Hunter, and Roe.
    Also Present: Woolsey, Miller, Scott, Payne, Stark.
    Staff Present: Aaron Albright, Press Secretary; Tylease 
Alli, Hearing Clerk; Jody Calemine, General Counsel; Carlos 
Fenwick, Policy Advisor, Subcommittee on Health, Employment, 
Labor and Pensions; David Hartzler, Systems Administration; 
Jessica Kahanek, Press Assistant; Therese Leung, Labor Policy 
Advisor; Alex Nock, Deputy Staff Director; Joe Novotny, Chief 
Clerk; Megan O'Reilly, Labor Counsel; Rachel Racusen, 
Communications Director; Meredith Regine, Junior Legislative 
Associate, Labor; James Schroll, Junior Legislative Associate, 
Labor; Michele Varnhagen, Labor Policy Director; Mark 
Zuckerman, Staff Director; Robert Borden, Minority General 
Counsel; Cameron Coursen, Minority Assistant Communications 
Director; Ed Gilroy, Minority Director of Workforce Policy; Rob 
Gregg, Minority Senior Legislative Assistant; Richard Hoar, 
Minority Professional Staff Member; Alexa Marrero, Minority 
Communications Director; Jim Paretti, Minority Workforce Policy 
Counsel; Molly McLaughlin Salmi, Minority Deputy Director of 
Workforce Policy; Ken Serafin, Minority Professional Staff 
Member; Linda Stevens, Minority Chief Clerk/Assistant to the 
General Counsel; and Loren Sweatt, Minority Professional Staff 
Member.
    Chairman Andrews. We would like to welcome our colleagues 
who are present this morning, ladies and gentlemen who will be 
witnesses, and the members of the public and the press. It is 
great to have you with us.
    The United States is spending more of our national wealth, 
more of our business firms' income, more of our family and 
individual income on health care than any of our industrial 
competitors anywhere in the world. And I do think that there is 
an emerging consensus we are not getting what we are paying 
for. We are not getting the quality that everyone wants and 
deserves, and we are certainly not getting the coverage that 
everyone wants and, we believe, deserves. There are too many 
people left out of our system; there is too much money spent 
within our system on things other than providing health care to 
people, spent on what many of us feel are wasted expenditures.
    At the President's urging, the country and the Congress 
have embarked upon a broad national debate about how to fix 
that problem. And I would like to commend Members of both 
parties in both the House and even the Senate--even the 
Senate--for moving beyond a simple recitation of the country's 
problems to a robust debate about the proposed solutions to 
those problems. It is long overdue. We believe that legislating 
on those solutions is long overdue as well.
    This morning our subcommittee will mark an important 
milestone in debate, and one of the more broadly supported and 
interesting solutions to the problem will be considered by the 
subcommittee in the form of the legislation proposed by the 
very distinguished chairman of the Judiciary Committee, Mr. 
Conyers. He will be our first witness--you may applaud if you 
would like. He will be our first witness this morning and will 
summarize and advocate for his legislation, as I am sure he 
will do, forcefully and articulately.
    We will then proceed to a panel of what I guess you might 
call ``lay witnesses.''
    John, I guess that implies that you are a holy person.
    But we will proceed to a panel of lay witnesses. And one 
thing I would ask our colleagues to consider out of courtesy to 
the lay witnesses is that once Chairman Conyers has concluded 
his statement, those who would like to ask him questions, 
obviously, under the rules are permitted to do so; I am not 
going to avail myself of that opportunity, and I believe Mr. 
Kline is not, either.
    And we urge members to consider not questioning Mr. 
Conyers, not because he is beyond being questioned, but because 
the lay witnesses have traveled from far and wide to be here 
today. We would like them to have maximum opportunity to 
interact with the panel so we can hear their views as well.
    So Mr. Conyers has proposed a solution to this problem. He 
argues it with great passion. It is a solution that, unlike 
some in the Senate, I believe belongs on the table for 
consideration and for vigorous and fair consideration. That is 
what the purpose of this hearing is this morning.
    With that, I am going to ask my friend, the ranking member 
of the subcommittee, Mr. Kline, for his opening statement.
    Mr. Kline. Thank you, Mr. Chairman. Good morning to you 
all. Good morning, Mr. Chairman.
    We are here today, as the title of this hearing implies, to 
examine single-payer health care. And we are certainly going to 
hear from Chairman Conyers and from that panel of experts that 
Chairman Andrews mentioned.
    Single-payer is certainly among the most controversial 
approaches to health care reform, and frankly, Mr. Chairman, I 
am a little surprised to see it on this subcommittee's agenda. 
President Obama and Democratic leaders, as I understand it, 
have been very clear and very public in rejecting the notion of 
single-payer; and, frankly, I am glad that they have.
    Creating a new one-size-fits-all health care system modeled 
on Medicare, I believe is a recipe for disaster. It will 
balloon the deficit and add to our mounting debt. It would 
drive up taxes while driving down medical innovation. It would 
ration care while empowering bureaucrats.
    All of my friends on the other side of the aisle have not 
included Republicans in their deliberations. I have been 
following their progress pretty closely in the news. The latest 
reports indicate that they could formally unveil their 
legislation as early as next week.
    While their proposal reportedly does not include a single-
payer scheme, it seems highly likely that we will see a 
government-run option. And I use that word ``option'' with some 
trepidation, because it seems clear to me that any government-
run option is designed to undercut the private sector and 
eventually drive private participants out of the market.
    So perhaps today's hearing is appropriate after all. If the 
Democrats are serious about including a so-called government-
run option in their plan, and if a government-run option is 
designed to crowd out the private sector, then the reality is 
that we are only a few steps away from a single-payer system. 
How else can we explain the urgency with which this hearing was 
scheduled?
    As you know, Mr. Chairman, committee rules require that 
Members be provided at least 7 days' notice before any hearing. 
Often, and thankfully, we used to receive even more. But 
today's hearing was announced last Thursday, just a day less 
than the customary 7 days, and required the schedule to be 
reissued nonetheless and requires this subcommittee to waive 
our longstanding rules to proceed.
    Mr. Chairman, this hastily convened hearing epitomizes 
everything that is wrong with the majority's health care reform 
process. Our health care system is in serious need of reform. 
Republicans and Democrats alike recognize the shortcomings of 
the current system and the need for meaningful change. There is 
a bipartisan commitment to change, and that is why we should 
have a bipartisan reform process.
    Health care reform is far too important to get wrong. It is 
more important that we do it right than simply do it fast. 
Unfortunately, the majority seems to have chosen a different 
path. The Speaker, after a partisan strategy session at the 
White House last month, announced an arbitrary deadline that 
calls for House passage of a comprehensive health care overall 
before the August district work period. Frankly, it is like 
deja vu all over again.
    Just like the so-called economic stimulus package earlier 
this year, we face the prospect of complex and costly 
legislation that is crafted behind closed doors. Members of 
Congress did not even have the opportunity to review the 
stimulus before it was brought to a vote. And judging by the 
announcement made at the White House this week--essentially 
acknowledgement that the stimulus isn't delivering the jobs 
that were promised--a partisan package that doesn't receive a 
thorough review and vetting simply won't work.
    Mr. Chairman, I will say it again: Health care reform is 
far too important to get wrong. I come to this debate in good 
faith, and I stand ready to work with you, but this hearing is 
at the wrong time. It is too fast. Let's slow down and do this 
right. Thank you.
    I yield back.
    [The statement of Mr. Kline follows:]

   Prepared Statement of Hon. John Kline, Senior Republican Member, 
        Subcommittee on Health, Employment, Labor, and Pensions

    Thank you Chairman Andrews, and good morning. We're here today, as 
the hearing title suggests, to examine single payer health care.
    Single payer is certainly among the most controversial approaches 
to health care reform, and frankly, I'm a little surprised to see it on 
this subcommittee's agenda. President Obama and Democratic leaders have 
publicly rejected the notion of single payer. And I'm glad they have.
    Creating a new, one-size-fits-all health care system modeled on 
Medicare is a recipe for disaster. It would balloon the deficit and add 
to our mounting debt. It would drive up taxes while driving down 
medical innovation. It would ration care while empowering bureaucrats.
    Although my friends on the other side of the aisle have not 
included Republicans in their deliberations, I've been following their 
progress closely on the pages of the newspaper. The latest reports 
indicate that they could formally unveil their legislation as early as 
next week.
    While their proposal reportedly does not include a single payer 
scheme, it seems highly likely that we'll see a government-run option. 
And I use that word ``option'' with some trepidation, because it seems 
clear to me that any government-run option is designed to undercut the 
private sector and eventually drive private participants out of the 
market.
    So perhaps today's hearing is appropriate after all. If Democrats 
are serious about including a so-called government-run ``option'' in 
their plan--and if a government-run ``option'' is designed to crowd out 
the private sector--then the reality is that we are only a few steps 
away from a single payer system.
    How else can we explain the urgency with which this hearing was 
scheduled?
    Committee rules require that Members be provided at least seven 
days notice before any hearing. Often, we receive even more notice than 
that.
    In contrast, today's hearing was announced last Thursday--just a 
day less than the customary seven days, but it required the schedule to 
be reissued nonetheless. And it requires this subcommittee to waive our 
longstanding rules to proceed.
    Mr. Chairman, this hastily convened hearing epitomizes everything 
that is wrong with the majority's health care reform process.
    Our health care system is in serious need of reform. Republicans 
and Democrats alike recognize the shortcomings of the current system 
and the need for meaningful change. There is a bipartisan commitment to 
change, and that's why we should have a bipartisan reform process.
    Health care reform is far too important to get wrong. It's more 
important that we do it right than simply do it fast.
    Unfortunately, the majority seems to have chosen a different path. 
The Speaker, after a partisan strategy session at the White House last 
month, announced an arbitrary deadline that calls for House passage of 
a comprehensive health care overhaul before the August work period.
    It's like deja vu all over again. Just like the so-called economic 
stimulus package earlier this year, we face the prospect of complex and 
costly legislation that is crafted behind closed doors. Members of 
Congress did not even have the opportunity to fully review the stimulus 
before it was brought to a vote. And judging by the announcement made 
at the White House this week--essentially, an acknowledgement that the 
stimulus isn't delivering the jobs that were promised--a partisan 
package that doesn't receive a thorough review and vetting simply won't 
work.
    Mr. Chairman, I will say it again: Health care reform is far too 
important to get wrong. I come to this debate in good faith. I stand 
ready to work with you.
    This hearing is the wrong issue at the wrong time, but it's not too 
late. I hope we give health care reform the serious, bipartisan 
consideration it deserves before we go down a path from which we cannot 
return.
    Thank you, and I yield back.
                                 ______
                                 
    Chairman Andrews. I thank the gentleman. I also want to 
take the prerogative and introduce a friend and guest this 
morning, the chairman of the Health Subcommittee on Ways and 
Means; our good friend Pete Stark from California is present. 
My understanding, and we discussed with the minority, Mr. Stark 
will be an observer of the hearing and does not intend to ask 
any questions. And we appreciate your indulgence in having him 
here.
    And I would just say to my friend, who I know approaches 
this in good faith, that Chairman Miller and I intend to meet, 
I think as early as today, with members of the minority caucus 
to talk about health care reform before there has been any 
markup or any bill filed, which we look forward to your 
participation in. And I realize that was scheduled, I think 
just this morning, but I just want to let you know it is 
happening and there will be that discussion.
    Also, just about timing. I sat in this room 15 years ago on 
one of the lower daises, much lower; and there was an attempt 
to get something done about this problem, and it failed. And 
there wasn't a whole lot done after that, which I think was 
another failure.
    So I understand that there are some questions about 
schedule. But I would simply say that I don't think the problem 
is that we have gone too quickly; I think we haven't gone 
quickly enough. So that is just something we might disagree 
about.
    So we are going to turn to our chairman of the Judiciary 
Committee, someone I have always regarded as a model of 
integrity and dignity, who conducts himself in such an 
important way in this House. His jurisdiction touches 
everything from how we pay our credit cards to whether we have 
our rights in a court of law. He has been, I think, a Member's 
Member for a very long time, a person we have tremendous 
respect for.
    And we are very happy to welcome to this subcommittee this 
morning the distinguished chairman of the Judiciary Committee. 
The gentleman from Michigan, Mr. Conyers, is recognized.

 STATEMENT OF THE HON. JOHN CONYERS, JR., A REPRESENTATIVE IN 
              CONGRESS FROM THE STATE OF MICHIGAN

    Mr. Conyers. Thank you, Chairman Andrews, for that 
flattering introduction; Ranking Member Kline, and all of my 
colleagues here. It is so good to see Pete Stark back in the 
saddle again. And I am just so privileged to be here. I want to 
thank you very much.
    The one thing we have to do in this discussion of health 
care and how it is reformed is that we have got to have a 
discussion about it. And so my brief comments, because I am so 
flattered to have with us Dr. Marcia Angell, the former Editor 
of the New England Journal of Medicine; and Dr. Walter Tsou, 
Dr. Stephanie Woolhandler from Harvard Medical School, and 
other witnesses that you have been so kind to bring here.
    I just want to review with us what I think it is that we 
are in, and I want to extend an opportunity for our discussions 
to go far beyond the hearing today. And I want to make myself 
available to all of the Members.
    First of all, we have got to discuss it. And the first 
thing that occurs to me, that there is some--and I concede this 
to my ranking member friend--that there is some notion that 
universal single-payer health care is off the table. Well, that 
raises a very important question. If you take the most popular 
health care reform measure and take it off the table, heaven 
knows what it is, I guess, you think you are left with.
    The one thing I commended the 44th President about when I 
met with him first after his election was, he said something 
that no sitting President in my experience had ever said. He 
said: I want you to keep in touch with me, to keep me advised. 
We want to know about what is happening and what you are 
thinking about. And so I praised him for that.
    He made a lot of other important statements, but the fact 
that he wanted to keep in touch was very important to me.
    And so we have been keeping in touch, and citizens have 
been keeping in touch. I know, because I have been invited 
around the country endlessly. To some people that would like me 
to travel less and stay in my district more, the fact of the 
matter is, we are dealing with--and the polls establish it--I 
have got something here that tells us through two polls that 
this is the most popular system in the minds of most Americans. 
Most Americans. And I am going to put all these things in the 
record. But here are more than 400 local unions, 20 
international unions, 39 State AFL-CIO unions, all resolved 
around this question.
    Now, I wish I could claim some creativity or imagination 
for this, but universal single-payer is not a new idea. As a 
matter of fact, every industrial country on the planet except 
one, us, already has some version of it. What we are doing is 
developing the American version. What we are doing--and we have 
examined all the systems on Earth, we are putting this all 
together, we are studying this, we are not turning this over to 
government. We have got another database of myths about the 
system that I won't try to go into now. But we want to examine 
these. We cannot examine them without a hearing.
    So it is with some sadness that I report that it wasn't 
easy for me to get to that first summit that the President 
called. It was an enormous one. He has taken an enormous step 
here. We have got to help him.
    Here is how I am going to help my President. He is getting 
some misadvice about health care. To think that this sad 
substitute about the Massachusetts Plan--and there are people 
from this State that can expound on it far more greatly than I 
can--is going to move us forward. We are at a point now where 
we are either going to take this opportunity and move forward 
and have everybody in as a matter of constitutional right to 
health care--not health insurance, not policies, but health 
care itself--from the moment they are born to the moment that 
they leave our Earth.
    Now, hear what the essentials are. It is a 37-page bill, 
but we are not going back to the 1994 mistake of 1,200 pages. 
What we are saying is, number one, everybody is afforded health 
insurance. Number two, they would be paying--the rate would be 
about 3.5 percent of your income. It is not government run; it 
is privately administered. No one will be giving up their 
choice or doctor or hospital or how they want their health 
service rendered. It would break the employer connection, and 
it would create one health insurance system, one which would be 
devised. We would come together whether we want combinations of 
existing health insurance groups or whether we want to do 
something differently.
    So I want everybody that is thinking about this to start 
off with number one: This is the most popular form. And it 
would be very unlike the party in the majority now to determine 
that the most popular system would not even be examined. I am 
asking for a hearing in every committee, every committee, and 
if they will let us into the Senate as well. That is very 
important.
    Now, here is the closing, Members. Chairman, this is a 
great bill. Fantastic. I have some saying their father was a 
single-payer, it is wonderful.
    Guess what? It is impossible. So we have got to go to the 
next best thing. What is the next best thing? Well, we are 
working on that. We will be back in touch with you. I have got 
a plan of a plan that we would like you to examine.
    Okay, now let me close with this. This country, this is 
where we are going to test the mettle. And this is not a test, 
because bringing health care to 47 million people and 30 
million that don't have anything--this country was founded on 
the basis that a third of the people wanted to be free, a third 
of them wanted to stay with England, and a third of them didn't 
give a darn what happened. It couldn't be done. It wasn't able 
to happen.
    Nelson Mandela was supposed to be imprisoned for the rest 
of his life, and he ended up the President of the country that 
sentenced him to a life in a penitentiary. It couldn't be done.
    Social Security was supposed to have been the worst thing 
that had ever happened. And I have got some of the debates, and 
you would not believe what some people said in opposition to 
Social Security. It couldn't be done. It wouldn't work.
    And what about Medicare? Medicare was fought tooth and 
nail. I know because I was here.
    And now we have Obama himself. You can't elect--please, 
folks. You can't elect a person of color to the highest, most 
powerful government position on Earth. It is impossible. Get a 
grip.
    Well, it was all possible. It all could be done.
    And I am asking you to consider the political necessity of 
bringing up a bill that they said was off the table. Then they 
say, Well, it couldn't pass. Well, I think the American people 
are watching very closely, and I am saying that now is the 
time.
    And I thank you for allowing me to make this introduction 
and to include the papers that I would like to be part of the 
record as well. Thank you for this opportunity, ladies and 
gentlemen.
    [The statement of Mr. Conyers follows:]

   Prepared Statement of Hon. John Conyers, Jr., a Representative in 
                  Congress From the State of Michigan

    Mr. Chairman, members of the Committee. I am Congressman John 
Conyers, Jr. and I have the distinct pleasure of representing 
Michigan's 14th Congressional District. My testimony here today is the 
culmination of years of work aimed at obtaining a hearing on my bill, 
H.R. 676. ``The United States Health Care Act'' would establish a non-
profit, publicly-financed, privately-delivered health care system that 
would ensure that all Americans have meaningful access to the medical 
provider of their choice.
    This legislation currently enjoys the support of 78 other Members 
of Congress--more than any other universal health care bill. It has 
also been endorsed by a diverse coalition of local governments, labor 
unions, civil rights organizations, medical professional organizations, 
and communities of faith that represent over 20 million people.
    Most importantly, my bill has been endorsed in the court of public 
opinion. An Associated Press/Yahoo News poll conducted in December of 
2007 found that 65% of the American people believe that the ``United 
States should adopt a universal health insurance program in which 
everyone is covered under a program like Medicare that is run by the 
government and financed by the taxpayers.''
    I want to leave plenty of time for the stellar panel of health care 
experts assembled here today to answer the committee's questions, but, 
first, I would like to briefly address some of the myths about single-
payer reform that will surely be addressed by some Members today. It is 
my hope that, with this hearing, we can begin to remove the cloud of 
misinformation and disinformation that has, until recently, resulted in 
universal single-payer reform being ``off the table'' at both ends of 
Pennsylvania Avenue.
    Opponents of single-payer argue that scarcity of care and long 
waiting lines will inevitably occur in universal single-payer systems. 
The facts show otherwise. Waiting lines exist when government invests 
too little in the medical professionals and equipment that make up our 
health care infrastructure. It is true that Canada and the United 
Kingdom have had waits for elective procedures, but that is because 
they spend 60% and 33% less than we do on health care. Waiting lines do 
not exist in countries that adequately fund national health care. As 
long as health care is a priority for our nation, this problem will 
never materialize.
    Another argument utilized by those skeptical of single-payer reform 
is that we cannot afford a single-payer system where we insure every 
man, woman, and child in the United States. In fact, according Dr. 
Steffie Woolhandler of Harvard Medical School, implementing a single-
payer system with non-profit delivery would save approximately $300 
billion dollars per year and contain long-term costs. If we 
deliberately hold down costs with a cohesive and efficient public-
private partnership, we can afford to provide true universal health 
care with the $2.5 trillion we already spend each year.
    The naysayers will also argue that dismantling our employer-based 
health care system is politically and economically untenable. We have 
heard this argument before. This argument was initially raised when 
Medicare was debated in the Congress in the 1960s. Yet, Medicare was 
enacted in 1965 and fully implemented in 1966.
    Additionally, the experience of the nation of Taiwan shows that 
such a transition is feasible. Until 1995, Taiwan had a private health 
insurance market remarkably similar to our own. Over the course of the 
next six years, the country seamlessly transitioned to a single-payer 
national health insurance system. Today, their system boasts a 70 
percent approval rating from doctors and patients, while only spending 
2 percent on administrative costs.
    I would like to caution the committee about the dangers of enacting 
partial reforms that leave some individuals uninsured, grow the ranks 
of the underinsured, and do little to contain the out-of-control growth 
of health expenditures. The best example of such a legislative failure 
is the Massachusetts Health Reform Act, enacted by that state's 
legislature in 2006. The Massachusetts reform effort has failed to 
contain costs and provide universal coverage because it is built around 
our broken for-profit private insurance system.
    Instead of pursuing a reform strategy that has been successful in 
developed nations around the world--namely, improving access to health 
insurance that emphasizes prevention, functions without a profit 
motive, has low administrative costs, has minimal financial barriers to 
care, and maximizes value for patients--lawmakers in Massachusetts 
instead created a government-sanctioned monopoly for an industry that 
has left thousands of state residents without health insurance due to 
escalating premiums, co-pays, and deductibles.
    Not surprisingly, without the cost-containment measures that are 
integral parts of any public insurance plan, health care spending has 
exploded in Massachusetts. In fiscal year 2009, the reform cost 
taxpayers $1.3 billion dollars. As a result, Governor Deval Patrick has 
been forced to cut money from safety-net providers such as public 
hospitals and community clinics. If the goal of reform is to limit 
costs and improve access to care, I would respectfully submit that 
single-payer offers a far better model for reform than the incremental, 
private insurance giveaway pursued in Massachusetts.
    I want to again thank the Chairman for providing this forum for the 
serious consideration of the single-payer concept at this critical 
juncture in our nation's history. We are the richest country in the 
world and our doctors and medical facilities are the envy of our 
neighbors. Yet, our broken private insurance system burdens our 
business community and allows many of our fellow citizens to die and be 
hurt unnecessarily. Two thirds of our nation's personal bankruptcies 
can be attributed directly to an individual's inability to pay medical 
bills. A single payer system will allow us to cover everyone without 
spending any more money than we do now. The sooner we adopt a uniquely 
American single-payer system, the sooner we can start enjoying a 
healthier and more prosperous America.
                                 ______
                                 
    Chairman Andrews. Thank you, Mr. Chairman. As usual, you 
have contributed a great deal of substance and given us an 
awful lot to think about, which we are going to think about 
right now with the witnesses we have coming up.
    I can assure you that the principles you are putting 
forward will be very much a part of this committee's 
deliberations and thoughts. And we view this as the beginning 
of the process and not the end.
    And I do want to acknowledge our colleague, Congresswoman 
Watson is with us in the audience from California. We are happy 
to have her with us as well.
    Again, Mr. Chairman, so we can get to the lay witnesses I 
am going to forgo asking any questions. Is there a member on 
either side that would like to ask the chairman a question?
    That is a very good decision. Thank you very much. We 
appreciate that.
    Thank you, Mr. Conyers, for coming. We are going to get to 
our lay witnesses. Thank you very much. Thank you for being 
here.
    If I can ask the witnesses to come forward. I am going to 
read biographies to save us a little bit of time to get right 
to the testimony.
    There are a series of votes coming up. Do we know when this 
morning?
    Shortly. So we want to get started so we are not 
interrupted.
    Ms. Geri Jenkins is a registered nurse and a member of the 
Council of Presidents of the California Nurses Association/
National Nurses Organizing Committee. She has over 30 years of 
experience as a surgical, ICU, and trauma R.N. with the 
University of California, San Diego Medical Center's Hillcrest 
Campus. She received her B.S.N. from San Diego University.
    Ms. Jenkins, welcome. We are glad you are with us.
    Dr. Walter Tsou is a nationally known consultant on public 
health and health care reform. Currently, he is on the visiting 
faculty of the University of Pennsylvania, after serving as the 
President of the American Public Health Association in 2005, 
and was Health Commissioner of Philadelphia from 2000 to 2002--
under Mayor Rendell, I assume. Correct?
    He received his medical degree from the University of 
Pennsylvania, his M.P.H. from the Johns Hopkins School of 
Hygiene and Public Health, and he has an honorary doctorate in 
medical sciences from Drexel University.
    Welcome, Doctor. It is great to have you with us.
    Dr. David Gratzer, a physician, is a Senior Fellow at the 
Manhattan Institute. His research interests include consumer-
driven health care, Medicare and Medicaid, drug re-importation, 
and FDA reform. His writing has graced the pages of more than a 
dozen newspapers and magazines, including the Wall Street 
Journal, the Washington Post, the Los Angeles Times, and the 
Weekly Standard.
    Dr. Gratzer has recently been cited in the New England 
Journal of Medicine--a well-known publication--New England 
Journal of Medicine, Health Affairs, as well as by major media 
outlets across the United States and Canada.
    Dr. Gratzer holds a B.S. and an M.D. from the University of 
Manitoba.
    And, finally, Dr. Marcia Angell is a Senior Lecturer in the 
Department of Social Medicine at Harvard Medical School. Dr. 
Angell writes frequently in professional journals and the 
popular media on a wide variety of topics, including health 
policy, the interface of medicine and the law, care at the end 
of life, and the relations between industry and academic 
medicine. A graduate of the Boston University School of 
Medicine, she trained in both internal medicine and anatomic 
pathology, and is a board certified pathologist.
    Welcome.
    What a distinguished panel.
    For those of you who have not been here before, in front of 
you is a battery of lights; and the battery of lights will have 
a green light when you begin your testimony. Your written 
testimony is accepted without objection for the written record 
of the hearing, so your written testimony is fully in the 
committee record.
    We would ask you to give us about a 5-minute synopsis of 
the written testimony orally. The reason we limit you to 5 
minutes is so we can maximize time for questions and answers 
with the Members of Congress that are here on the dais.
    A yellow light will appear when you are about a minute away 
from the end of your time period. We would ask you to try to 
wrap up your remarks.
    And when the red light goes on, you will be finished and we 
will move on to the next witness.
    So, Ms. Jenkins, welcome. It is good to have you with us. 
You are on.

STATEMENT OF GERI JENKINS, R.N., MEMBER, COUNCIL OF PRESIDENTS, 
                 CALIFORNIA NURSES ASSOCIATION

    Ms. Jenkins. Thank you, Chairman Andrews and Ranking Member 
Kline, and the distinguished members of the subcommittee. I 
would like to thank you for this opportunity to support single-
payer health care reform on behalf of the 86,000 members of the 
California Nurses Association/National Nurses Organizing 
Committee, the country's largest organization representing 
direct care registered nurses. I am proud to be a Co-President 
of CNA/NNOC, and I especially want to thank Education and Labor 
Committee Chair George Miller, who is a great champion of 
health care reform of R.N.s and of all working people.
    In your consideration of changes to our health care system, 
you should know that registered nurses are the profession most 
trusted by the American public, as shown consistently in 
Gallup's annual poll on this question. Nurses are on the front 
lines of what I can only call a patient care crisis.
    As a critical care nurse at the University of California, 
San Diego Medical Center, I see patients whose conditions are 
much worse because they avoided earlier treatment due to the 
high costs. Though they arrive sicker, they leave quicker than 
they should because their insurance companies won't approve 
medically appropriate care.
    I can tell you from my more than 34 years of experience, 
insurance companies ration care. The current systems ration 
care based on the ability to pay. Some patients, like 17-year-
old Nataline Sarkysian, do not get the lifesaving treatment 
they need.
    In Nataline's case, she needed a liver transplant, but 
CIGNA would not approve it until I and hundreds of others 
protested. During one of the protests, I was with Hilda, 
Nataline's mother, when she got the call that CIGNA had 
approved the transplant. But it was too late. Nataline died an 
hour later.
    It doesn't have to be that way. We agreed with Presidential 
Candidate Obama, who called health care a basic human right; 
and we agree with now-President Obama who says health care 
reform is not a luxury, it is a necessity that cannot wait.
    The same is true of health care itself. Right now, we are 
the only nation on Earth that barters human life for money. We 
need a guaranteed single standard of high-quality health care 
for all.
    To make the change we need, let's have a real policy debate 
on the merits.
    People talk about evidence-based practice. We need 
evidence-based policy. If we were to have a debate on 
containing costs, improving quality and universality, the 
single-payer advantage would be clear. Let's consider the 
principles President Obama has established.
    First, reduced costs. In a survey of eight major 
industrialized countries, the U.S. fared the worst in out-of-
pocket costs and the number of chronically ill adults forgoing 
care because of costs, even though the U.S. spends twice as 
much per capita on health care as the others. Twenty-five 
percent of Americans are skipping doctor visits because of 
cost, and that was before the recession.
    According to another survey in October 2008, 38 percent of 
Americans who are insured delay care because of out-of-pocket 
costs. The reason? Premiums have been rising four times as fast 
as family income in the past decade, and copays, deductibles, 
and other transaction fees the insurance industry imposes that 
can run to thousands of dollars a year on top of premiums. 
That, along with denying claims, is how the for-profit 
insurance companies make money, which ultimately is their job 
for their shareholders, not authorizing care delivery.
    Unless you can stop the insurance industry price gouging, 
we simply cannot make health care affordable, which means you 
either have price controls on the insurance industry or you 
take them out of the equation through a single-payer reform.
    Cost controls are much better addressed under single-payer 
mechanisms like those contained in H.R. 676: global budgets to 
hospitals and clinics based on their patient care operations, 
negotiated reimbursements to providers, bulk purchasing, and 
negotiated prices for prescription drugs, incentives for 
preventive care, and reliance on primary care.
    Second, guaranteed choice. How many Americans under 65 can 
go to any doctor of their choice without incurring additional 
costs, or at all? Very, very few. Certainly not those 94 
percent of U.S. metropolitan areas that are served by one or 
two insurance companies, as shown in the AMA's 2008 study of 
insurance markets. Insurance coverage and companies now control 
patient choice of provider and treatment, often with terrible 
health results.
    I often relay the story of a patient, seriously ill and in 
need of immediate intubation, who turned up in an emergency 
room in my community. He needed to be intubated, which is the 
insertion of a breathing tube, to save his life. Because he was 
so worried about cost, the patient looked up at his nurses and 
doctors caring for him and said, ``Can you wait until next 
week? I will be 65 and have Medicare.''
    Respectfully, that is not the way my patients or their 
providers should be making their health care decisions, nor is 
it the way our Nation should force citizens to evaluate their 
health care decisions. One of the great advantages of single-
payer is that it guarantees patients the ongoing choice of a 
doctor or other provider who will pay for providing treatment 
on the same basis.
    Third, ensuring affordable care for all. Here again, 
single-payer has the advantage from a clinical point of view. 
Taiwan is the most recent country to have adopted single-payer, 
in 1995. The percentage of people with health insurance climbed 
from 57 percent to 97 percent, yet the expanded coverage 
produced little, if any, increase to overall health care 
spending beyond normal growth due to rising population income. 
Taiwan had a system much like ours, multipayer, dysfunctional, 
and broken. They made the switch just a decade ago, though some 
people said it could not be done, with great success for their 
people.
    The U.S. ranks among 19 leading industrialized nations in 
preventable deaths--we rank last among 19 leading industrial 
nations in preventable deaths. We are last out of 19. If the 
U.S. matched the top three--France, Japan, and Australia--in 
timely and effective care, 101,000 fewer Americans would die 
every year.
    In a study released earlier this year by CNA and which is 
included as an exhibit in my written testimony, it has been 
shown that extending Medicare to all would not only provide 
desperately needed medical care to millions, but would also 
result in the creation of 2.6 million new jobs in this Nation.
    The evidence is clear. Single-payer works. It best meets 
the President's principles. And, most important, it best meets 
the needs of my patients for whom I have a professional 
responsibility to advocate.
    Our history proves that with political leadership, any 
reform that benefits the American people as a whole is 
politically viable. Dare we waste this moment with a reform 
that will not adequately control costs, be truly universal, 
improve quality and guarantee choice of doctors and providers, 
or will we leave the American people feeling that the moment 
was wasted and that, once again, they cannot trust their 
government to genuinely act in their interests?
    Let's enact single-payer and let's put patients first. 
Thank you very much.
    Chairman Andrews. Thank you, Ms. Jenkins, very much. And, 
once again, your entire written statement will be made part of 
the record.
    [The statement of Ms. Jenkins follows:]

  Prepared Statement of Geri Jenkins, R.N., Co-President, California 
      Nurses Association and National Nurses Organizing Committee

    Chairman Andrews, Ranking member Kline and distinguished members of 
the Committee, thank you for this opportunity to support single-payer 
healthcare reform on behalf of the 86,000 members of the California 
Nurses Association/National Nurses Organizing Committee, the country's 
largest organization representing direct care Registered Nurses. I am 
proud to be a co-president of CNA/NNOC. I especially want to thank 
Education and Labor Committee chair George Miller, who is a great 
champion of healthcare reform, of R.N.s and all working people.
    In your consideration of changes to our healthcare system, you 
should know that Registered Nurses are the profession most trusted by 
the American public, as shown consistently in Gallup's annual poll on 
this question.
    Nurses are on the front lines of what I can only call a patient 
care crisis. As a critical care nurse at the University of California 
San Diego Medical Center, I see patients whose conditions are much 
worse because they avoided earlier treatment due to the high cost. 
Though they arrive sicker, they leave quicker than they should because 
their insurance company won't approve medically appropriate care.
    I can tell you from my more than 34 years of personal experience, 
insurance companies ration care; the current system rations care based 
on ability to pay.
    Some patients like 17 year old Nataline Sarkysian, do not get the 
life-saving treatment they need. In Nataline's case, she needed a liver 
transplant but CIGNA would not approve it until I and hundreds of 
others protested. During one of the protests, I was with Hilda, 
Nataline's mother, when she got the call of approval. But it was too 
late. Nataline died an hour later.
    It doesn't have to be this way. We agree with Presidential 
Candidate Obama who called healthcare a basic human right and we agree 
with now-President Obama who says, ``Healthcare reform is not a luxury. 
It's a necessity that cannot wait.'' The same is true for healthcare 
itself.
    But right now we are the only nation on earth that barters human 
life for money.
    To make the change we need, let's have a real policy debate on the 
merits. People talk about evidence based practice, we need evidence 
based policy. If we were to have a debate on containing costs, 
improving quality, and universality, the single-payer advantage would 
be clear.
    Let's consider the principles President Obama has established:
     First, Reduce Costs
    In a survey of eight major industrialized countries the US fared 
the worst in out-of-pocket costs and the number of chronically ill 
adults forgoing care because of costs--even though the US spends twice 
as much per capita on healthcare as the other seven (Health Affairs, 
Nov. 13, 2008). 25% of Americans are skipping docotrs visits because of 
costs (and that's before the recession). According to another survey in 
October, 2008, 38% of Americans who are insured delayed care because of 
out-of-pocket costs.
    The reason? Premiums . . . which have been rising four times as 
fast as family incomes the past decade--and co-pays, deductibles, and 
other transaction fees the insurance industry imposes that can run to 
thousands of dollars a year on top of premiums. That, along with 
denying claims, is how the for-profit insurance companies make money, 
which, ultimately is their job for their shareholders, not authorizing 
care delivery. Unless you can stop the insurance industry price 
gouging, we simply cannot make healthcare affordable, which means you 
either have price controls on the insurance industry, or you take them 
out of the equation through single payer reform.
    Costs controls are much better addressed under single-payer 
mechanisms like those contained in HR 676--global budgets to hospitals 
and clinics based on their patient care operations; negotiated 
reimbursements to providers; bulk purchasing and negotiated prices for 
prescription drugs; incentives for preventive care and reliance on 
primary care.
     Second, Guarantee Choice
    How many Americans under 65 can go to any doctor of their choice 
without incurring additional costs, or at all? Very, very few, 
certainly not those in 94% of U.S. metropolitan areas that are served 
by one or two insurance companies, as shown in the AMA's 2008 study of 
insurance markets. Insurance coverage and companies now control patient 
choice of provider and treatment--often with terrible health results.
    I often relay the story of a patient seriously ill and in need of 
immediate intubation--insertion of a breathing tube--to save his life. 
Because he was so worried about costs, the patient looked up at his 
nurses and asked, ``Can't you wait until next week? I'll be 65 and I'll 
have Medicare.''
    Respectfully, that is not the way my patients or their providers 
should be making their healthcare decisions nor is it the way our 
nation should force its citizens to evaluate their healthcare 
decisions.
    One of the great advantages of single-payer is that it guarantees 
patients the on-going choice of a doctor or other provider, who are 
paid for providing treatment on the same basis.
     Third, Ensure Affordable Care for All
    Here again, single-payer has the advantage from a clinical point of 
view. Taiwan is the most recent country to have adopted single-payer, 
in 1995. The percentage of people with health insurance climbed from 
57% to 97% yet the expanded coverage produced little if any increase in 
overall healthcare spending beyond normal growth due to rising 
population and income. Taiwan had a system much like ours, multi-payer, 
dysfunctional, and broken; they made the switch just a decade ago, 
though some people said it could not be done, with great success for 
their people.
    The US ranks last among 19 leading industrialized nations in 
preventable deaths. If the US matched the top three--France, Japan and 
Australia--in timely and effective care, 101,000 fewer Americans would 
die every year.
    In a study released earlier this year by CNA and which is included 
as an exhibit with my written testimony, it has been shown that 
extending Medicare to all would not only provide desperately needed 
medical care to millions but would also result the creation of 2.6 
million new jobs in this nation.
    The evidence is clear: single-payer works, it best meets the 
President's principles, and most important, it best meets the needs of 
my patients, for whom I have a professional responsibility to advocate.
    Our history proves that with political leadership any reform that 
benefits the American people as a whole is politically viable. Dare we 
waste this moment with a reform that will not adequately control costs, 
be truly universal, improve quality, and guarantee choice of doctor and 
provider? Or will we leave the American people feeling the moment has 
been wasted and that once again they can not trust our government to 
genuinely act in their interests?
    Let's enact single-payer. Let's put patients first.
                                 ______
                                 
    Chairman Andrews. Dr. Tsou, welcome to the committee.

STATEMENT OF WALTER TSOU, M.D., M.P.H., NATIONAL BOARD ADVISOR, 
  PHYSICIANS FOR A NATIONAL HEALTH PROGRAM, AND FORMER HEALTH 
                  COMMISSIONER OF PHILADELPHIA

    Dr. Tsou. Thank you. Congressman Andrews, Ranking Member 
Kline, and members of the Health Subcommittee, my name is Dr. 
Walter Tsou. I am a public health physician and former Health 
Commissioner of the City of Philadelphia.
    If you believe that every American has the right to 
quality, affordable health care, then the only affordable means 
to achieve that goal is through a properly financed single-
payer national health insurance program. Attempting to 
reconcile the dual imperatives of universal coverage and cost 
control through alternative methods besides single-payer is an 
exercise in futility. It is clear that cost controls means that 
someone's ox gets gored, either the taxpayers, physicians and 
hospitals or the private health insurance industry.
    When some congressional leaders declare that, quote, 
``Single-payer is off the table,'' they are in effect saying 
that insurers will be protected, leaving the pain to patients, 
taxpayers, and health care providers. Let's examine each of 
these categories.
    For the taxpayers, it is difficult to understand why we 
must endure an additional $1.5 trillion or more over the next 
decade in expenses at a time when our Nation already spends 50 
percent more per capita on health care than any other country 
in the world. For physicians and hospitals, simply cutting 
reimbursements is counterproductive, especially at a time when 
we need to increase reimbursements for primary care and mental 
health services. And for the private insurance industry, well, 
they have dominated health care for the past 50 years, but it 
doesn't work.
    Despite a supposedly competitive marketplace, health care 
costs have skyrocketed, nearly 50 million Americans are 
uninsured, and the quality of care for most Americans is, 
quote, ``suboptimal.'' Choice is a total misnomer. Americans 
want to be able to choose their doctor and hospital, not their 
health plans.
    A humane health care system should reinforce the safety net 
in the face of our Nation's worst recession since the Great 
Depression, but our profit-driven system kicks millions of 
Americans in the gut and leaves them both jobless and 
uninsured. We have saddled our Nation with an inefficient and 
exorbitantly expensive health care system that drives jobs 
overseas, where health benefit costs are low, and discourages 
entrepreneurs from striking out on their own for fear of losing 
their insurance coverage.
    We need a far greater investment in community-based public 
health and preventive medicine, including home visitation for 
newborns and public health nurses doing chronic disease 
management in the community. But where will we get the funds?
    Single-payer is the only reform that can control health 
care costs. It does so by cutting insurance firms' profits, 
streamlining the massive administrative apparatus that adds to 
the costs of hospitals and doctors' offices, using bulk 
purchasing, negotiating fee schedules for physicians, and 
putting hospitals on predictable global budgets.
    The $19 billion that has been set aside for health 
information technology is doomed to fail because it is 
dependent on a complex, fragmented health care financing 
system.
    In contrast, consider Taiwan, as Geri noted, where everyone 
has a smart card. Your smart card carries your medical history 
and can be viewed by any doctor in Taiwan. Their national 
database allows them to identify the few outliers who try to 
abuse the system rather than hassling millions of doctors and 
patients.
    What the Internet had done to transform telecommunications 
across the world is what single-payer will do to transform how 
we deliver health care in America. A national public health 
database would allow us a direct resource to areas of greatest 
need. We can change the incentives of reimbursement to advance 
our national health goals embodied in Healthy People 2020 and 
reward communities that help achieve those goals. This would 
encourage health professionals and hospitals to work together 
with their local health department to advance national health 
objectives.
    President Obama has stated that if he were to start over 
again, he would favor a single-payer system, but argues that 
moving to single-payer is too radical. Well, I come from 
Philadelphia where revolutionary ideas are celebrated, not 
dismissed.
    Our most famous radical document begins with these words, 
``We the People,'' not ``We the Insurers'':
    We the People of the United States, in Order to form a more 
perfect Union, to promote the general Welfare and secure the 
Blessings of Liberty to ourselves and our Posterity do ordain 
and establish this Constitution for the United States of 
America.
    This Nation captured the world's imagination with bold 
ideas that put the people first. It is time for our own 
generation's revolution. Thank you.
    Chairman Andrews. Thank you, Dr. Tsou. Thank you very much.
    [The statement of Dr. Tsou follows:]

    Prepared Statement of Dr. Walter Tsou, National Board Advisor, 
                Physicians for a National Health Program

    Congressman Andrews and members of the HELP subcommittee, my name 
is Dr. Walter Tsou. I am a public health physician and former Health 
Commissioner of Philadelphia.
    If you believe that every American has the right to quality, 
affordable health care, then the only affordable means to achieve that 
goal is through a properly financed, single-payer, national health 
insurance program.
    Attempting to reconcile the dual imperatives of universal coverage 
and cost control through alternative methods besides single payer is an 
exercise in futility. It is clear that cost controls mean that 
someone's ox gets gored, either the taxpayers, physicians and 
hospitals, or the private health insurance industry. When some 
Congressional leaders declare that ``single payer is off the table'', 
they are, in effect, saying that insurers will be protected, leaving 
the pain to patients, taxpayers, and health care providers.
    Let's examine each of these categories:
    For the taxpayers, it is difficult to understand why we must endure 
an additional $1.5 trillion or more\1\ over the next decade in expenses 
at a time when our nation already spends 50% more per capita on health 
care than any other country in the world?
---------------------------------------------------------------------------
    \1\ http://www.washingtontimes.com/news/2009/mar/18/health-care-
reform-likely-15-trillion/
---------------------------------------------------------------------------
    For physicians and hospitals, simply cutting reimbursements is 
counterproductive, especially at a time when we need to increase 
reimbursements for primary care and mental health services.
    For the private insurance industry, they have dominated health care 
for the past fifty years, but it does not work. Despite a supposedly 
competitive marketplace, health care costs have skyrocketed, nearly 50 
million are currently uninsured, and the quality of care for most 
Americans is ``suboptimal.'' \2\ Choice is a total misnomer. Americans 
want to be able to choose their doctor and hospital, not their health 
plans.
---------------------------------------------------------------------------
    \2\ http://www.ahrq.gov/qual/nhqr08/Key.htm
---------------------------------------------------------------------------
    A humane health care system should reinforce the safety net in the 
face of our nation's worst recession since the Great Depression, but 
our profit-driven system kicks millions of Americans in the gut and 
leaves them both jobless and uninsured. We have saddled our nation with 
an inefficient and exhorbitantly expensive health care system that 
drives jobs overseas where health benefit costs are low, and 
discourages entrepreneurs from striking out on their own for fear of 
losing their insurance coverage.
    We need a far greater investment in community based public health 
and preventive medicine, including home visitation for newborns and 
public health nurses doing chronic disease management in the community. 
But where will we get the funds?
    Single-payer is the only reform that can control health care costs. 
It does so by cutting insurance firms' profits, streamlining the 
massive administrative apparatus that adds to the costs of hospital and 
doctors' offices, using bulk purchasing, negotiating fee schedules with 
physicians, and putting hospitals on predictable, global budgets.
    The $19 billion that has been set aside for health information 
technology is doomed to fail because it is dependent on a complex, 
fragmented healthcare financing system. In contrast, consider Taiwan 
where everyone has a smart card. Your smart card carries your medical 
history and can be viewed by any doctor in Taiwan. Their national 
database allows them to identify the few outliers who try to abuse the 
system, rather than hassling millions of doctors and patients.
    What the Internet has done to transform telecommunications across 
the world is what single-payer will do to transform how we deliver 
healthcare in America. A national public health database would allow us 
to direct resources to areas of greatest need. We can change the 
incentives in reimbursement to advance our national health goals 
embodied in Healthy People 2020 and reward communities that help 
achieve those goals. This would encourage health professionals and 
hospitals to work together with local health departments to advance 
national health objectives.
    President Obama has stated that if he were to start over again he 
would favor a single-payer system, but argues that moving to single-
payer is too radical.
    Well, I come from Philadelphia where revolutionary ideas are 
celebrated not dismissed. Our most famous radical document begins with 
the words, ``We the People''. Not ``We the Insurers''. ``We the People 
of the United States, in order to form a more perfect union * * * to 
promote the general Welfare, and secure the Blessings of Liberty to 
ourselves and our Posterity do ordain and establish this Constitution 
for the United States of America.'' This nation captured the world's 
imagination with bold ideas that put the people first. It is time for 
our own generation's revolution.
                                 ______
                                 
    Chairman Andrews. We are privileged to welcome Dr. Gratzer. 
You are on.

  STATEMENT OF DAVID GRATZER, M.D., SENIOR FELLOW, MANHATTAN 
                 INSTITUTE FOR POLICY RESEARCH

    Dr. Gratzer. Thank you, Mr. Chairman, members of the 
committee, Members of Congress.
    Mr. Chairman, I am particularly delighted to have received 
such a warm introduction. Listening to the fawning 
accomplishments you spoke of, I was reminded of a former 
colleague who had commented to me that, on paper, I seem quite 
interesting.
    Mr. Chairman, and members, I have been here for a few 
moments, as have you, and I have had the opportunity to hear 
from a few of your colleagues, a few of my copanelists; and, 
curiously, I have yet to hear the name Claude Castonguay 
mentioned once. I suppose perhaps it is not so surprising, 
given that Mr. Castonguay has been out of elected office for 
three decades. And when he was in elected office, Mr. 
Castonguay, in fact, wasn't even American. He was a Quebecer, a 
Canadian.
    But Mr. Castonguay's name jumps to mind today at these 
hearings because of his thoughts on government and health care; 
and as we move forward and Congress debates something much 
larger in the coming months, Mr. Castonguay, for those of us 
born and raised north of the 49th parallel like myself, is 
somewhat of a heroic figure.
    In the 1960s, he was tasked by the Quebec government to 
consider what would be an appropriate way to organize health 
care. Mr. Castonguay's report called for a single-payer system. 
He is known as the Father of Quebec Medicare, as single-payer 
is known there, because of the report. And then, in an unusual 
twist and turn of career, he was actually elected to office and 
appointed minister of health and implemented his own report. 
Quebecers for decades thereafter referred to the government-
issued health card as a Castonguette, in his honor.
    Last year, he was tasked again by the Quebec government to 
review the system and recommend proposals for reform. Mr. 
Castonguay did not mince his words. He suggested that the 
system is, quote/unquote, ``in crisis,'' that the days of 
simply throwing money into the system and rationing care ought 
to be over, and he argued for a more robust rule for private 
sector health care. He went so far as to advocate not just 
copays or user payments, but to suggest that public hospitals 
actually ought to lease out unused office space in off hours to 
private physicians and thus stoke the fires of 
entrepreneurship. Mr. Castonguay has changed his mind.
    To put that in perspective: When the father of Quebec 
Medicare changes his mind, it is as though--I don't know--John 
Maynard Keynes on his deathbed in 1946 in England suggests that 
maybe there is a problem with socialism.
    Why would this gentleman change his mind on government-run 
health care? Well, let me just outline a couple of things in 
Canadian newspapers over the last couple of weeks--not reports 
I have written or right-wing think thanks or watchdog groups, 
just things that have appeared in the newspapers that I have 
picked. And you can Google this later if you doubt what I am 
suggesting.
    There is a couple in Quebec that are entertaining a lawsuit 
against the government because, you see, at 5:00 in the morning 
in a hospital, in active labor, they buzz the nurse and no one 
came. They ended up delivering their own child without any 
medical assistance. This wasn't in a rural hospital. This is 
one of the largest hospitals in Quebec. I guess that is 
consumer-driven health care, Canadian style.
    One is aware that, according to the Ontario government's 
own guidelines, three-quarters of patients requiring urgent 
cancer surgery don't get it in a timely manner--not according 
to my standards, according to the standards outlined by the 
Ontario government.
    And, of course, there are the issues around value and 
quality where, in Quebec, there is an intense review going 
forward suggesting that maybe one in every four breast cancer 
test results was tainted and thus unreliable. One in four.
    Mr. Castonguay has changed his mind, and certainly I can 
appreciate where he comes from. I was born and raised in Canada 
as well, from a little town smack dab in the middle of the 
prairies, Winnipeg. On a cold winter's day, it can drop to 40 
below on the prairies. That is the same in Celsius as in 
Fahrenheit.
    I guess I am a son of Castonguay. Not literally, but as 
somebody a generation younger than him, I grew up under 
socialized medicine, and I understand why people would believe 
in a single-payer system, why they believe it would be 
compassionate and more equitable than the system of the United 
States. But like Mr. Castonguay, I changed my mind because I 
saw the reality in Canada and in Britain and across Europe.
    We will speak much of anecdote today, but we should also 
speak of statistics. Cancer outcomes are better in the United 
States than they are in Canada. Survival rates are better for 
low-birth-weight children. Even the income inequity health 
gradient is better in the United States than in Canada and in 
Britain.
    I understand the temptation of single-payer because I used 
to believe in it. But as Congress moves forward and we discuss 
this option, but also a government public plan option which 
might swallow up 120 million people from the private insurance 
market, I would suggest to you that answers don't lie north of 
the 49th parallel or in Europe, but the United States needs a 
``Made in the U.S.A.'' solution.
    Thank you, sir.
    Chairman Andrews. Doctor, thank you for your participation.
    [The statement of Dr. Gratzer follows:]

  Prepared Statement of David Gratzer, M.D., Senior Fellow, Manhattan 
                     Institute for Policy Research

    Thank you for the opportunity to testify today as Congress begins 
this critical debate. The decisions legislators may soon make will be 
critical, not only for the future of health care in the United States, 
but also for patients around the world who benefit from American 
innovations in health-care practice and medical technology.
    My concerns about the option under discussion today are drawn from 
practical personal experience--as a physician born and trained in 
Canada, as the author of two books (and the editor of a third) on 
comparative health-care policy, and as a senior fellow at the Manhattan 
Institute. (For the record, the views I present are my own and do not 
necessarily represent those of the Manhattan Institute.)
    The U.S. health-care system needs reform. But in the sincere search 
for a simple solution, many critics mistakenly believe the Canadian 
single-payer model represents a ``magic bullet'' alternative. Others 
believe a so-called ``public plan option'' will provide the benefits of 
a single-payer model without the usual disadvantages, ignoring the 
experience of other jurisdictions that learned that incrementally 
introducing publicly-administered insurance simply produces the same 
challenges at an incremental speed.
    To understand the single-payer system, it is important to realize 
that in the Canadian model ``single-payer'' is really a polite 
euphemism for a government-funded, government-managed system. While 
American observers speak of Canadian medicare as if there is one 
federal insurance plan, in truth, ten balkanized provincial insurance 
systems make different decisions on care and coverage in response to a 
general federal mandate. Insurance is nominally portable between 
provinces, but gaps in coverage have appeared when Canadians moved from 
one province to another.
    Each provincial insurance plan is funded partly by generous federal 
transfers. The White House hopes that health reform will reduce health 
costs without damaging quality, but the story of the Canadian system is 
the story of provincial governments struggling to manage health-care 
costs alongside other budget priorities. When budgets are insufficient, 
the provinces lobby for more federal transfers, go into deficit, and/or 
limit care by managing supply.
    Critics of the American system note that it fails to provide 
universal coverage to its citizens. But Canada's single-payer system 
also denies care; instead of denying insurance coverage, Canada's 
public insurance plans simply limit the supply of costly medications 
and capital-intensive procedures.
    Shortly before Oregon's referendum on a single-payer health-care 
system, a man wrote to his local paper, claiming that under a single-
payer system, ``you just send your doctor's bill to the government and 
they pay it.'' But it is not so simple. Canadian governments all have a 
strong interest in managing cost, and so the gentleman from Oregon 
ignored two problems: first, he would have to get in to see the right 
doctor in the first place. Then, there are limits to what that doctor 
would permitted to bill for.
    Even now, after a decade of joint federal-provincial efforts to 
reduce waiting lists, wait times for some procedures are still rising. 
The Canadian Institute for Health Information is the designated 
reporting agency for health-care wait times, and in several categories 
in 2008, provinces did not even meet the benchmark standard for 
service. To put that in context, the benchmark for ``timely'' service 
for coronary, bypass, hip replacement or knee replacement surgery is 
75% or more of patients receiving treatment within 182 days.
    In Alberta, Canada's wealthiest province, 50% of outpatients in 
2008 had to wait more than 41 days for an MRI scan. In Saskatchewan, 
10% of patients awaiting knee replacement surgery had to wait 616 days 
or more. In Nova Scotia, 50% of patients needing hip replacement 
surgery waited 201 days or longer. These are the government's own 
numbers. Studies by the Fraser Institute and other health-care 
watchdogs often produce a more disturbing picture.
    Timely service is not the only casualty of rationed care. Diabetic 
Canadians have been denied insurance coverage for insulin pumps 
available under HMO plans in the United States. Newer medications or 
orphan drugs available to insured Americans are routinely excluded from 
provincial formularies, often after decisions made in closed-door 
hearings by Canada's Common Drug Review process. Finally, Canadians 
often turn to the United States for life-saving diagnostic exams or 
surgical procedures at private expense, either to outflank waiting 
lists or avoid outright denials of coverage by their provincial 
insurance plans. In one tragic case in the 1990s, fifty Canadians died 
waiting for a basic cardiac test according to the Canadian Medical 
Association Journal in a 2002 article.
    American advocates for a Canadian model repeatedly insist that 
``patients can choose any doctor they like.'' However, there is a 
shortage of doctors to choose from in Canada because governments forced 
medical faculties to reduce the supply of doctors graduating in the 
1990s in an effort to contain costs. In June 2008, Statistics Canada 
reported that 4.1 million Canadians aged 12 and over were without a 
family doctor, rendering the freedom to choose a meaningless benefit.
    Critics of the American system argue that health outcomes are 
unacceptable in part because Canada and other single-payer systems 
perform better on measures of life expectancy. But life expectancy is a 
product of a complex series of inputs, including wellness, fitness, and 
other environmental factors--like America's anomalously high homicide 
rate.
    A better measure of health insurance outcomes is to compare 
outcomes for people who actually need insured care. And in a paper 
entitled Health Status, Health Care and Inequity: Canada versus the 
U.S. (2007), June O'Neill and Dave O'Neill made just such a comparison.
    The O'Neills concluded that, and I quote, ``direct measures of the 
effectiveness of health care show survival rates for individuals 
diagnosed with various types of cancer are higher in the U.S. than in 
Canada, as are infant survival rates of low-birth weight babies.'' 
Their study also found that despite ``free'' public insurance, 
Canadians in at-risk populations were significantly less likely to have 
had key preventative diagnostic procedures. Canadians in target groups 
were over 15% less likely to have ever had a mammogram than American 
patients, 10% less likely to have a PAP smear, 30% less likely to have 
had a PSA test for prostate cancer, and over 20% less likely to have 
ever had a colonoscopy test for colorectal cancers. The Canadian system 
is the best in the world, as long as you are not actually sick.
    The limits of single-payer insurance are a consequence of a common 
political reality: if governments fund it, governments wear it. Once 
the so-called single-payer system is in place, government insurers are 
obliged to manage costs politically, making decisions about capital 
investments, technology, and even the supply of licensed medical 
professionals based on short-term budgetary or political priorities. So 
while Canada's health-care system was once supported by a healthy level 
of private capital investment, in many provinces, the politics of 
protecting the public system from the ``threat'' of competing market 
(e.g. patient) demands has led some governments to literally ban or 
buyout private providers wherever possible. For example, in 2004, the 
Ontario provincial government ``repatriated'' several privately-owned 
MRI clinics, despite the fact that all of them were providing publicly 
insured services. The reason given was ideology: it was unacceptable 
for a private firm to profit from diagnostic tests, even if the tests 
were provided at rates set by the government.
    This cycle explains why Canada evolved from a universal insurance 
system delivered largely by private and non-profit care providers to a 
system that is largely publicly managed or administered in 2009. 
Pursuing a public option plan to provide single-payer service alongside 
private insurers is likely to lead inexorably to the same result as a 
pure single-payer model. The larger the public's share of the insurance 
system, the greater the demand on elected officials to wade in and 
control costs or deliver benefits directly.
    These challenges appear in different forms across the single-payer 
world. Wait times, rationed care and inefficient public management is 
inevitable in single-payer systems because they all face the same 
health-care demands as the American system. No matter how tightly 
managed or rationed, Western health-care systems are all under pressure 
to cope with rising costs from aging, new technology and competition 
for health care professionals.
    Health care's share of the provincial budget is approaching 40% of 
the provincial budget in Manitoba, a Canadian province that already 
prides itself on generous social welfare benefits, college subsidies 
and other social programs. The province of Ontario created a new health 
surtax in 2004--and the total budget for its single-payer health system 
is projected to grow by close to 6% annually in the next three years.
    These are familiar stories in the United Kingdom and other single-
payer systems. In the UK, the existence of a parallel private insurance 
system has not curtailed the explosive growth of the public system, nor 
the management problems that go hand in hand with public delivery. In 
2007, a columnist for the Times of London quipped that ``The [National 
Health Service] generates its own inflation as though it were a country 
in its own right.'' According to the NHS's own data, the Service's 
budget has on average exceeded inflation by 3% annually over the entire 
sixty-year lifetime of the Service. The 2009 NHS budget is over 56% 
larger than it was in the fiscal-year ending 2003, even after a round 
of ``efficiencies'' were built into the 2009 budget plan.
    With all of this investment, the UK's NHS has finally achieved its 
best wait list results since it began tracking wait times in 1948. But 
once again, success is relative; the standard for timely care in the 
NHS is that patient treatment must wait no more than 18 weeks for 
treatment once referred by a general practitioner.
    Many in the United States Congress hope to quickly solve America's 
complex health care challenges either by embracing a single-payer model 
now, or moving incrementally to the Canadian system through the back 
door with a public insurance plan in the private marketplace. But 
experience shows that sooner or later, these alternatives risk 
destroying the best features of the American system in order to remedy 
the worst.
    Congress can instead choose options that will fight cost 
escalation, preserve innovation and protect the high quality of 
American health care. But before these options will ever be properly 
considered, supporters of the single-payer model must honestly face up 
to the realities of the system in Canada and elsewhere. Single-payer 
models are far more complex and inefficient than their American 
supporters believe them to be. They are managed and rationed much more 
aggressively than their supporters believe them to be. And a careful 
review of those challenges, I believe, would convince most observers 
that the single-payer model is not the `magic bullet' that American 
policymakers are hoping for.
                                 ______
                                 
    Chairman Andrews. Dr. Angell, you are our wrap-up witness 
for this morning.

  STATEMENT OF MARCIA ANGELL, M.D., SENIOR LECTURER, HARVARD 
MEDICAL SCHOOL, AND FORMER EDITOR-IN-CHIEF, NEW ENGLAND JOURNAL 
                          OF MEDICINE

    Dr. Angell. Chairman Andrews, members of the subcommittee, 
thank you for inviting me and for your leadership on this 
important issue.
    The reason our health system is in such trouble is that it 
is set up to generate profits, not to provide care. To pay for 
care, we rely on hundreds of investor-owned insurance companies 
that profit by refusing coverage to the sickest patients and 
limiting services to the others. And they cream roughly 20 
percent off the top of the premium dollar for profits and 
overhead.
    Our method of delivering care is no better than our method 
of paying for it. We provide much of the care in investor-owned 
health facilities that profit by providing too many services 
for the well-insured and too few for those who cannot pay. Most 
doctors are paid fee-for-service, which gives them a similar 
incentive to focus on profitable services, particularly 
specialists who receive very high fees for expensive tests and 
procedures. In sum, health care is directed toward maximizing 
income, not maximizing health.
    Most current reform proposals would leave the present 
profit-driven and inflationary system essentially unchanged and 
simply pour money into it, an unsustainable solution. That is 
what is happening in Massachusetts, where we have nearly 
universal health insurance, but costs are growing so rapidly 
that its long-term prospects are bleak unless we drastically 
cut benefits and greatly increase copayments. We are learning 
that health insurance is not the same thing as health care. It 
may be too skimpy or too expensive to actually use.
    Initiatives such as electronic records, disease management, 
preventive care, and comparative effectiveness studies may 
improve care, but experts agree that they are unlikely to save 
much money. Promises by for-profit insurers and providers to 
mend their ways voluntarily are simply not credible. Regulation 
is also unlikely to modify profit-seeking behavior very much 
without a bureaucracy so large that it would create more 
problems than it solves.
    Nearly every other advanced country has a largely nonprofit 
national health system that provides universal comprehensive 
care. Expenditures are, on average, less than half as much per 
person and health outcomes are generally much better.
    Moreover, contrary to popular belief, these countries offer 
more basic services, not fewer, more doctor visits and longer 
hospital stays, more doctors and nurses. But they don't do 
nearly as many tests and procedures, because there is little 
financial incentive to do so.
    It is true that there are waits for some elective 
procedures in some of these countries such as the U.K. and 
Canada, but that is because they spend far less on health care 
than we do. If they were to put the same amount of money into 
their systems as we do into ours, there would be no waits. For 
them, the problem is not the system, it is the money. For us, 
it is not the money, it is the system. We already spend more 
than enough.
    Now, it is often argued that the first order of business 
should be to expand coverage and then worry about costs later. 
But it is essential to deal with both together to stop the 
drain on the rest of the economy and the further erosion of 
health care.
    The only way to provide universal coverage and to control 
costs is to adopt a nonprofit single-payer system like that 
called for in H.R. 676. Anything else will either increase 
costs or decrease coverage inevitably.
    Medicare is a single-payer system with low overhead costs, 
but it uses the same profit-oriented providers as the private 
system, so its costs are rising almost as rapidly. Setting up a 
Medicare-like public program to compete with private insurers, 
as advocated by the President, would have the same problem and, 
also, not realize the administrative savings of a true single-
payer system. I also worry that the insurance industry would 
use its clout to underfund the public program and make it a 
dumping ground for the sickest, costliest patients, creaming 
off the profitable ones for themselves.
    I am aware that phasing out the private insurance industry 
would mean a loss of jobs, but I believe the job loss in that 
sector would be more than offset by job gains in the rest of 
the economy which would no longer be saddled with the 
exorbitant cost of an industry that offers almost nothing of 
value. Thank you very much. And I look forward to your 
questions.
    Chairman Andrews. Well, thank you, Dr. Angell, very much.
    [The statement of Dr. Angell follows:]

 Prepared Statement of Marcia Angell, M.D., Senior Lecturer in Social 
 Medicine, Harvard Medical School, Former Editor-in-Chief, New England 
                          Journal of Medicine

    The American health system is uniquely expensive and inflationary. 
Last year we spent about $2.5 trillion on health care, or some $8,000 
per person, and costs keep growing much faster than the background 
inflation rate. What about comparably wealthy countries? If we look at 
the 30 members of the OECD, we find a startling disparity. In the most 
recent year for which figures are available, we spent two and a half 
times as much per person on health care as the median for the OECD 
countries. The other countries clustered fairly close together, while 
we stood clearly apart, and that gap is growing. Clearly, our health 
system is unsustainable.
    As if that weren't bad enough, we don't get anywhere near our 
money's worth. By all the usual measures of health care--life 
expectancy, infant mortality, immunization rates, preventable 
mortality--we rank near the bottom of the OECD countries. Furthermore, 
contrary to conventional wisdom, we don't provide more basic services. 
On average, we have fewer hospital beds and fewer doctors and nurses 
per capita, we see our doctors less often and have shorter hospital 
stays. Canadians, for example, see their doctors nearly twice as often 
as we do. Worst of all, we're the only wealthy nation that does not 
provide comprehensive health care to all its citizens. Nearly 50 
million Americans are uninsured--disproportionately the sick, the poor, 
and minorities--and many of the rest of us are underinsured, in the 
sense that we're not covered for every contingency. Loss of employment 
often means loss of health insurance, a particularly devastating 
problem in the current recession.
    Our health care system, then, is outrageously expensive, yet 
inadequate and inequitable. How can we account for the paradox of 
spending more and getting less? The only plausible explanation is that 
there's something about the system itself--about the way we finance and 
deliver health care--that's enormously wasteful.
    The underlying problem, I believe, is that we, alone among OECD 
countries, rely on a market-based system for health care. In fact, it's 
not a system at all, but a hodge-podge of different commercial 
arrangements that exist more or less independently from one another. 
The other countries all have national health systems. Some are single-
payer arrangements, which means that all health care funds, whatever 
their source, are funneled through a single public agency, which then 
coordinates the distribution of resources. Some have multiple payers, 
but the system is tightly regulated so that everyone is covered, and 
prices and benefits are uniform.
    Most of our other problems stem from that decision to treat health 
care like a market commodity instead of a social service. Thus, we 
distribute it not according to medical need, but according to the 
ability to pay. But there's a great mismatch between medical need and 
the ability to pay. In fact, those with the greatest need are precisely 
those least able to pay. So while markets are good for many things, 
they're not a good way to distribute health care. People who are well 
insured may get an MRI they don't need (and overuse of tests is a major 
contributor to cost inflation), while people without insurance may not 
get an MRI they do need.
    Furthermore, successful markets expand; they don't contract. 
Businesses aim to increase revenues and maximize profits. Hospitals in 
the U.S., for example, often advertise their services. Like all 
businesses, they want more, not fewer customers. So each element in the 
health market is working to grow, even while the country as a whole 
presumably wants the system to contract.
    Let's look more closely at how the health care market works. Most 
Americans receive tax-exempt health benefits from their employers, who 
pay insurers a portion of the insurance premiums--these days, a smaller 
and smaller portion. But not all employers offer benefits--it's 
strictly voluntary--and when they do, the benefits may not be 
comprehensive. Increasingly, employers cap their contributions, so that 
the burden of increasing costs falls entirely on workers. Workers, in 
turn, often turn down benefits, even when they're offered, because they 
can't afford their growing share.
    The insurers with whom employers contract are mostly investor-
owned, for-profit businesses. They try to keep premiums down and 
profits up by stinting on medical services. In fact, the best way for 
insurers to compete is by not insuring the sickest patients at all; by 
limiting the coverage of those they do insure (for example, by 
excluding expensive services from the benefit package); and by passing 
costs back to patients as deductibles and co-payments and claim 
denials. We're the only nation in the world with a health care system 
based on dodging sick people. These practices add enormously to 
overhead costs because they require a great deal of paperwork. They 
also require creative marketing to attract the affluent and healthy and 
avoid the poor and sick. Not surprisingly, the U.S. has by far the 
highest overhead costs in the world.
    Now let's follow the health care dollar as it wends its way from 
employers toward the doctors and nurses and hospitals that actually 
provide medical services. First, private insurers regularly skim off 
the top a substantial fraction of the premiums--on average about 20 
percent--for their administrative costs, marketing, and profits. The 
remainder is then passed along a veritable gauntlet of satellite 
businesses that have sprung up around the health care industry. These 
include brokers to cut deals, disease-management and utilization review 
companies, drug-management companies, legal services, marketing 
consultants, billing agencies, information management firms, and so on 
and so on. They, too, siphon off some of the premiums, including enough 
for their administrative costs, marketing, and profits. Probably no 
more than 70 cents of the health care dollar actually reaches the 
providers--who themselves have high overhead costs to deal with the 
requirements of multiple insurers often bent on avoiding payment. 
Cutting overhead in half would save the system about 350 billion 
dollars--more than enough to cover the uninsured.
    In the past, there have been many attempts to reform the system 
incrementally. Mainly these have been efforts to counteract the 
harshest effects of the market by subsidizing care to people who would 
otherwise go without and discouraging demand by stratagems such as 
managed care. But all attempts to reform the system piecemeal have run 
into the following dilemma. If we expand coverage, then costs 
inevitably rise. And if costs are lowered, coverage is reduced. If the 
system stays essentially as it is and we tinker around the edges, 
coverage and costs have to move in the same direction. The only way 
both to increase health coverage and reduce costs is to change the 
system entirely.
    With few exceptions, neither the Democrats nor the Republicans have 
advocated changing the system entirely. They have instead embraced 
different horns of the coverage/cost dilemma. Democrats generally favor 
increasing coverage, even though costs would rise still further, and 
Republicans favor controlling costs, even though coverage would surely 
shrink.
    Many policymakers look to the Massachusetts plan, enacted in 2006, 
as a model. Through an individual mandate and subsidies for the poor, 
it has resulted in nearly universal insurance coverage. But it leaves 
the present profit-driven and highly inflationary system essentially 
unchanged, and simply pours more money into it. Already the plan is in 
deep trouble for that reason. The only way to control costs in such a 
system is to shrink the benefit package or increase deductibles and co-
payments or both, and that's what Massachusetts is doing. The result is 
that people may have insurance that is inadequate or too expensive to 
actually use, because of high co-payments. Health insurance is not the 
same thing as health care--not by a long shot. People can have 
insurance that's of little use to them when they're sick. And there is 
no sense in enacting health reform if it will quickly become 
unaffordable.
    I believe the only answer is a nonprofit single-payer system, as 
called for in HR 676. In some ways, this would be tantamount to 
extending Medicare to the entire population. Medicare is, after all, a 
government-financed single-payer program embedded within our private, 
market-based system. It's by far the most efficient part of our system, 
with overhead costs of less than 3 percent, and it covers virtually 
everyone over the age of 65, not just some of them. It also covers 
everyone for the full package of benefits, so it can't be tailored to 
avoid high-risk patients. But Medicare is not perfect, and was weakened 
by the Bush administration, which was hostile to it. Out-of-pocket 
costs are substantial and growing. Doctors' fees are skewed to reward 
highly paid specialists for doing as many expensive procedures as 
possible. Furthermore, because Medicare pays for care in a market-based 
entrepreneurial system, it experiences many of the same inflationary 
forces as the private insurance system. If Medicare were extended to 
everyone, it would have to be in the context of a nonprofit delivery 
system. Otherwise, we would not realize the advantages of a single-
payer, coordinated financing system.
    The main opposition to a single-payer system comes from two 
powerful industries--the private health insurance industry and the 
pharmaceutical industry. They in turn have inordinate influence over 
lawmakers and many economists and health policy experts, as well. These 
special interests propagate a number of myths.
    Myth #1 is that we can't afford a single-payer system. The truth is 
that we can't afford not to have a national health care system. Our 
costs are exorbitant, premiums are rising rapidly, and the number of 
uninsured will undoubtedly swell as more employers drop health benefits 
or cap their contributions, and fewer workers find they can make up the 
difference. A single-payer system would be far more cost-effective, 
since it would eliminate excess overhead, profits, cost-shifting and 
unnecessary duplication. Furthermore, it would permit the establishment 
of an overall budget and the fair and rational distribution of 
resources. We should remember that we now pay for health care in 
multiple ways--through our paychecks, the prices of goods and services, 
taxes at all levels of government, and increasingly out-of-pocket. It 
makes more sense to pay only once. The most progressive way is through 
an earmarked health care tax on income.
    According to Myth #2, innovative technologies would be scarce under 
a single-payer system, we would have long waiting lists, and maybe 
rationing. This misconception is based on the fact that there are 
indeed waits for elective procedures in some countries with national 
health systems, such as the U. K. and Canada. But that's because they 
spend far less on health care than we do. (The U. K. spends about a 
third of what we do per person.) If they were to put the same amount of 
money as we spend into their systems, there would be no waits and all 
their citizens would have immediate access to all the care they need. 
For them, the problem is not the system; it's the money. For us, it's 
not the money; it's the system. There's plenty of money in it.
    Myth #3 is that a single-payer system would subject doctors and 
nurses and other providers to onerous, bureaucratic regulations. But 
nothing could be more onerous both to patients and providers than the 
multiple, intrusive regulations imposed on them by the private 
insurance industry. In fact, recent polls show that about 60 percent of 
doctors would prefer a national system to what we have now.
    Myth #4 says that the government can't do anything right. Some 
Americans like to say that, without thinking of all the ways in which 
government functions fairly well, and without considering the 
alternatives. I had a very conservative uncle who once asked me 
(rhetorically) to name three things the government does well. I said 
the NIH, the National Park Service, and the IRS. I might also have 
added Medicare, which as I've said is far better at funding health care 
than the private sector. We should remember that the government is 
elected by the public and is accountable to the public. In contrast, an 
investor-owned insurance company reports to its owners, not to the 
public.
    According to myth #5, a single-payer system is a good idea, but 
unrealistic. I don't underestimate the special interests that would be 
arrayed against establishing such a system--they would be formidable, 
and it would take concerted pressure from the public and the medical 
profession to defeat them--but the fact remains that a national system 
is the only way to provide universal, comprehensive care, while 
providing a mechanism to contain costs. What is truly unrealistic is 
anything else.
    I want to mention one final and very important reason for enacting 
a nonprofit single-payer health program. We live in a country that 
tolerates enormous and growing disparities in income, material 
possessions, and social privilege. That may be an inevitable 
consequence of a free market economy. But those disparities should not 
extend to denying some of our citizens certain essential services 
because of their income or social status. One of those services is 
health care. Others are education, clean water and air, equal justice, 
and protection from crime, all of which we already acknowledge are 
public responsibilities. We need to acknowledge the same thing for 
health care. Providing these essential services to all Americans, 
regardless of who they are, marks a decent and cohesive society. It 
says that when it comes to vital needs, we are one nation, not 300 
million individuals competing with one another.
                                 ______
                                 
    Chairman Andrews. I think that each of the four of you has 
validated our optimism that you contribute substantially to the 
debate. Thank you. We are going to begin with the questions.
    75 percent of health care costs in the United States are 
attributable to chronic disease and about 80 percent of that 75 
percent is attributable to four chronic conditions and 
diseases: heart attacks and heart disease, cancer, diabetes and 
obesity-related problems, and asthma.
    What I would like to ask the panelists to do is, for the 
single-payer advocates, tell me how we would approach solving 
that problem under single-payer. And then, Dr. Gratzer, for 
whichever system you would support, tell us how you think we 
could address these four very serious chronic disease problems.
    And I want to be sure Dr. Gratzer gets some time. So we 
will ask one of the single-payer folks to go first, then Dr. 
Gratzer. I want to be sure we hear from him on this question. 
Dr. Angell, Dr. Tsou, who would like to?
    Ms. Jenkins, maybe a nurse would be the best person since 
you do primary care.
    Ms. Jenkins. I think inherent in the single-payer system is 
prevention, because if the government is the--if it is 
government funded, privately administered, the government has a 
vested interest in making sure you stay healthy and out of the 
system because it is more cost effective to prevent disease 
than to wait until people are sick and try to treat it.
    So I think inherent in any single-payer system is a huge 
focus on prevention, because it is much more cost effective. So 
I think that is a big plus for single-payer. The whole focus in 
the single-payer system tends to be way more preventive.
    Chairman Andrews. Dr. Gratzer, we will have you go second. 
Then we will go to the other two witnesses.
    Dr. Gratzer. Maybe I should go last.
    Chairman Andrews. No, you can go second.
    Dr. Gratzer. Fair enough.
    Mr. Chairman, you have hit the nail on the head. We are 
talking about rises of cost in American health care. As you 
know, CEA just came out with a report talking about what an 
extraordinary difference it would make to a middle-American 
family of four if we could hold back on the costs between----
    Chairman Andrews. How do we do it?
    Dr. Gratzer. Pardon me?
    Chairman Andrews. How do we do it?
    Dr. Gratzer. You know, I think that is a great question. To 
be totally----
    Chairman Andrews. That is why I asked it.
    Dr. Gratzer. To be totally blunt, I am not sure it has that 
much to do with health care system organization. I think that 
people who would advocate single-payer paint a magical picture 
that prevention is at the forefront, everyone gets to see a 
family doctor, hang out with the family doctor, pontificate on 
the importance of not smoking with their family doctor.
    Look at Canada and Britain and Sweden. One finds actually 
less access to primary care, not more access. There are towns 
in Canada where, if you win the town lottery, you get your 
mortgage paid----
    Chairman Andrews. I understand. But how do we do this? I 
mean, there is some evidence that shows that diabetics that get 
thorough and good nutrition counseling have better outcomes 
than those that don't.
    How do we provide that kind of preventive service if we 
don't do single-payer?
    Dr. Gratzer. I think we need to move money more to the 
individual, give him more control.
    Chairman Andrews. But how can we do that if the insurance 
companies are unwilling to do it?
    Dr. Gratzer. Well, I think we need to look at more 
consumer-driven plans. That doesn't necessarily mean just in 
private insurance.
    In North Carolina they have a plan now that if you smoke or 
you are obese, you pay more financial penalties. I think that 
is part of it. I think part of this falls to public health 
care. I think also part of it falls to individual 
responsibility.
    You know, I don't do primary care. But when I do primary 
care and I meet with a young smoker and I say, You know, 
tobacco is linked to cancer, never once--never once did that 
kid look back to me and say, Holy smokes, no one ever told me 
that before.
    I think to simply say that we have problems in America due 
to obesity and diabetes and so on and that we are going to 
solve this with some sort of government solution is a terrible 
mistake.
    Chairman Andrews. Dr. Tsou, what would your solution be?
    Dr. Tsou. Thank you for the opportunity to address a very 
important and complex issue. People have thought about this. 
There is a guy, Ed Wagner, in Seattle who has thought a lot 
about organizing care. A lot of it comes down to, frankly, as 
Geri said before, setting up prevention.
    There is something that is actually kind of missing in our 
health care system today, which I believe is a lot more 
community-based health care services.
    If I were the king of the world, I would actually try to 
organize within neighborhoods, based on a database that was 
available to us, where we know what the prevalence of diabetes 
or high blood pressure or other major conditions is. We would 
organize neighborhood classes where we would teach people about 
salt restrictions, improving your diet, how to take your 
medicines properly, and we would try to have individuals, like 
public health nurses, who would check in on people who have 
some difficulty with compliance.
    Chairman Andrews. And you think single-payer would 
facilitate that?
    Dr. Tsou. I think the resources would be there, because we 
would actually have enough money to pay for something like 
that.
    Chairman Andrews. I am going to give Dr. Angell a chance to 
answer. Then we will go to Mr. Kline.
    Dr. Angell. Well, first of all, I am skeptical about your 
premise that 70 percent of health costs go to these chronic 
diseases.
    Chairman Andrews. Well, it would be 56 percent. It is 80 
percent of 75 percent.
    Dr. Angell. Well, I know that at least 30 percent go to 
overhead, administrative costs, and profits. So all the rest 
don't go to these chronic diseases.
    But still, to go to your point, we have, as I have said, a 
market-driven system that preferentially rewards specialists 
for doing highly paid tests and procedures. That is why we have 
more specialists than other countries, way too many 
specialists, and why we have too few primary care doctors.
    A single-payer system could take care of that. It could 
change the fee schedule or change the way doctors are paid, so 
that we would have more primary care doctors who would do more 
to help people live with their chronic conditions if they have 
them or prevent them where that is possible.
    So I think, here again, it is a matter of the market 
rewarding people for doing things. And that is exactly what 
they do, tests and procedures, curative procedures.
    Chairman Andrews. Thank you very much.
    We will turn to the ranking member from Minnesota, Mr. 
Kline.
    Mr. Kline. Thank you, Mr. Chairman. And I want to thank all 
of the witnesses. It is indeed a distinguished panel, with 
three medical doctors and a registered nurse. I am always glad 
to see a registered nurse. My wife spent her adult life as a 
registered nurse. She retired, but I feel like we are still 
doing our part. I have a niece who is a registered nurse in the 
field.
    Dr. Gratzer, you were from Canada; I am from Minnesota. I 
know something about minus 40 degrees as well. And I also know 
about movement across that border for medical treatment.
    Why do you think it is? Would you agree with me that there 
is travel from Canada to the United States for medical 
treatment? Minnesota is also sort of a destination State for 
medical care, with Rochester and the Mayo Clinic. Why do you 
suppose it is that there is that travel from Canada to the 
United States?
    Dr. Gratzer. Because, like under the old Soviet system, 
everything is free and nothing is readily available. Canadians 
wait for practically any diagnostic test or specialist consult 
or procedure, and some of them opt out of the system by 
crossing the border. So they do that to the Mayo Clinic, but 
not exclusively so. I mean, if you were in downtown Toronto 
today, you would find an office for M.D. Anderson, you would 
find an office for the Cleveland Clinic. Medical tourism cuts 
across that border.
    Mr. Kline. And so we are sort of--the United States and I 
am thinking in terms of Minnesota right now. We are sort of a 
safety valve. If you can't get it, if the single-payer system 
in Canada doesn't provide the service, you just cross the 
border and get help in Minnesota.
    Dr. Gratzer. If you can afford it, sure.
    Mr. Kline. And the question is, what would happen if we are 
now Canada, we have the Canadian system? Where do they go?
    Dr. Gratzer. Your compassion for Canadians is outstanding.
    Mr. Kline. Well, when they come south for health care, 
medical care, sometimes they stop at the Mall of America, and 
we are always glad to have them for that as well.
    Dr. Gratzer. You know, it is not just that Canadians come 
because of the safety valve. People from all over the world 
come to the United States because there is medical excellence 
here.
    I think as we move forward and have debates in the United 
States about how to reform this system, it is important not 
just to look at the bad, but to remember the good and not to 
lose it. Mayo is an outstanding leader. If you are the King of 
Jordan and you have a health problem, you go there, too.
    But, yes, when Canadians need MRIs, Canada having a third 
of the MRIs per capita as the United States, they cross the 
border. When Canadians need to see an internist, they cross the 
border. Very often when Canadians need a quadruple bypass, they 
cross the border.
    Mr. Kline. So you outlined a system that has some pretty 
serious shortcomings, and we do see that because of the border 
crossing.
    And yet, we have heard here today, and other critics say, 
that the American health care system scores low on measures 
such as life expectancy, and others. And single-payer systems 
do a whole lot better.
    Can you address that issue for me?
    Dr. Gratzer. I would be delighted to, sir.
    Look, when you try to do an international comparison, it is 
very complicated. I think all too often we tend to be overly 
simplistic. We look at crude indicators.
    One example of that would that be life expectancy. Now, 
health care obviously has import on life expectancy or 
influence on life expectancy, but it also reflects a mosaic of 
other factors: genetics, whether a person smokes, whether a 
person exercises, a person's diet.
    In fact--and it pains me to say this as a physician--
probably one of the less important things is health care in 
that overall equation. One finds that Americans smoke too much, 
they drink too much, and they eat too much, especially compared 
to their northern neighbors.
    And America is an unusual place in other ways. Let me just 
give you one example.
    There are eight times more murders per capita in the United 
States than there are in France. If you were to take out 
accidental and intentional death from life expectancies 
statistics--you factor out murders as one example, you factor 
out MVAs--one would discover that Americans live longer than 
people in any other Western nations. So, careful about those 
crude statistics.
    Mr. Kline. Thank you very much.
    We have several medical doctors on the panel who are 
looking forward to their chance to ask questions, so I will 
yield back the balance of my time, Mr. Chairman.
    Chairman Andrews. Thank you very much, Mr. Kline.
    Mr. Wu, the gentleman from Oregon, is recognized for 5 
minutes.
    Mr. Wu. Thank you very much, Mr. Chairman. I just have a 
couple of questions.
    Some of the studies that I have read indicate that 
technologic drive is a significant contributor to cost 
increases, and also the increase in administrative costs; and 
that technologic drive is perhaps 50 percent of cost increases, 
and the majority of the other 50 percent may be administrative 
costs, including marketing expenses. I would just like the 
different witnesses on the panel to address how you all think 
that a single-payer plan would handle those two different types 
of expenses, technologic drive versus administrative costs, 
including marketing costs.
    Dr. Angell, should we begin with you?
    Dr. Angell. If you start with the administrative costs, 
there is no question that a single-payer system would have much 
lower administrative costs. As I mentioned, the administrative 
costs of the biggest insurers average roughly 20 percent--that 
is administrative costs, marketing, profits--compared with 3 
percent in Medicare. So there is no question we would realize 
great savings in administrative costs.
    If you look at the use of technology, it is not the 
technology itself. All advanced countries have the same 
technologies. We have no secrets here; it is how we use the 
technologies. We use them much more widely because it is 
profitable to do so.
    Many of the technological tests and procedures are done in 
freestanding imaging centers, laboratories, outpatient centers, 
and they are paid handsomely for using them. So it is a matter 
of generating income, not targeting medical need.
    In this country if you are well insured, if you can afford 
it, you may get an MRI you don't need. You may get many MRIs 
you don't need because it is profitable for someone to do that. 
But if you aren't well insured, you may go without an MRI you 
really do need. So it is the mismatch between the technology 
and the need for that technology that is so bad in this 
country.
    Dr. Gratzer. An excellent question. I am not as 
technologically phobic as perhaps some of my copanelists are. 
Let me just give you one example: Death by cardiovascular 
disease has fallen by two-thirds in the United States in the 
last 60 years. Part of that is because drugs likes beta 
blockers have changed cardiac care. But part of it is because 
of high-expense medical interventions. I mean, to put things in 
perspective, the revolution that has occurred in health care, 
Robert E. Lee on the battlefield in 1864 had a heart attack, 
and state-of-the-art cardiac care at the time was 2 weeks of 
bed rest. Nearly a century later, 90 years later, when 
President Eisenhower had a heart attack, state-of-the-art 
cardiac care at the time was 6 weeks of bed rest. Today we do a 
hell of a lot more for you than bed rest.
    So we have paid more for technology, and let us not forget 
the incredible advantages that come with it. But I think we 
would all agree that we are not getting value for dollar; that 
too many tests are ordered, and there is a quality difference 
amongst the tests amongst different providers. The question is 
ultimately what are we going to do about that? The 
administration says we ought to set up a committee, and they 
ought to help guide doctors in determining who need tests and 
when to pay for it. I am skeptical of that, but I am open to 
that argument. But I think ultimately we will address this by 
people paying 13 cents on every consumer dollar spent on health 
care, having people more involved in their decisions.
    I also think, though, that we need government to provide us 
with more transparency and more accountability and more 
information. That is the way to move away from the high-
expense, not necessarily high-quality, care that we have.
    Mr. Wu. Thank you.
    Dr. Tsou.
    Dr. Tsou. I think it is ridiculous to think that Mrs. Jones 
down the street can evaluate technology on something as 
complicated as medicine today.
    The truth is we have to have a responsibility in government 
to actually do comparative effectiveness and figure out what 
things work and which don't. And if we don't know what 
technologies are effective, we should do clinical trials to 
determine that. That is one of the potential advantages that 
single-payer has. It creates a large database that allows you 
to look at health outcomes, and you can see which ones actually 
work and which ones don't. So I think single-payer helps 
advance the decisionmaking around whether technology is 
advantageous or not.
    Mr. Wu. My time has expired; but, Ms. Jenkins, would you 
care to comment also?
    Ms. Jenkins. I am not an M.D., and I don't have all of the 
statistics off the top of my head, but anecdotally I know that 
what Dr. Tsou said is very true. I think we need best practices 
and evidence-based practice. And I have been a nurse long 
enough to see things done routinely just because that is what 
we have always done, and new innovations that are more cost-
effective overlooked because of habit.
    So I think he is right. And I think he is right when he 
says that when you have a single-payer system, you have one 
uniform system to evaluate, to look at, and if you see 
deficiencies and you have one system, you can fix it. When you 
have 1,300 different health care providers with 1,300 different 
systems, you run into a problem.
    So I would reiterate what Dr. Tsou said: It is going to be 
much easier with a single-payer system to track efficiencies in 
the system and what works and what doesn't.
    Chairman Andrews. The gentleman's time has expired.
    The bell you just heard go off is a series of floor votes. 
There are three of them, so Members are going to have to leave 
to go vote on the floor. Here is how we are going to proceed. 
We are going to go to Dr. Price's questions, and then we are 
going to adjourn the hearing temporarily. After the three floor 
votes are over, which I would estimate would be in the 12:20 to 
12:30 range, we will reconvene and proceed with Members' 
questions.
    Dr. Price is recognized for 5 minutes.
    Mr. Price. I appreciate you holding this hearing.
    I ask unanimous consent that an article entitled 
``Medicare, Not the Model for Reform'' be included in the 
record.
    Chairman Andrews. Without objection.
    [The information follows:]

                   Medicare Not the Model for Reform

            By Rep. Tom Price (R-Ga.), M.D., April 16, 2008

    ``Nothing in this title shall be construed to authorize any Federal 
officer or employee to exercise any supervision or control over the 
practice of medicine or the manner in which medical services are 
provided * * *''
    Those were the words written into law when Congress established our 
health insurance for seniors program--or Medicare--some 40 years ago. 
As a surgeon for nearly a quarter century, however, I can attest that 
there may be no greater negative impact on the ``manner in which 
medical services are provided'' than the federal government's intrusion 
into health care, primarily through Medicare. Yet, many prominent 
Democrats dangerously see Medicare as the model for national healthcare 
reform.
    Today, we are at a healthcare crossroads. Our broken medical 
delivery structure is in dire need of meaningful reform. There is no 
disagreement that a system with up to 47 million uninsured at some 
point annually requires fundamental change. The great debate will be 
how we achieve full access to quality healthcare in a way that ensures 
patients receive the treatment they believe best for themselves.
    Having spent my career caring for patients and having to work with 
the federal healthcare system, it is clear to me and the vast majority 
of my former medical colleagues that Medicare must not be the model for 
our nation's health system reform. Its fundamentally broken structure 
fails many seniors and requires its own patient-centered improvements, 
not broad expansion. Our focus for positive transformation must be cost 
of care, access to care, and quality of care. And Medicare comes up 
short on all three counts.
    Medicare was surely created with the greatest of intentions--a way 
to ensure that those often with the most challenging needs receive high 
quality healthcare--and that goal remains. The structure of the 
program, however, has led to dwindling access to doctors, a 
deteriorating standard of care and an uncontained cost structure.
    When Medicare was created in 1965, the long-term budget estimate 
for 1990 (the furthest year predicted) was roughly $9 billion. In 
actuality, 1990 spending on Medicare Part A was nearly $67 billion. 
This year, we will spend more than $450 billion on the program, 12.3 
percent of all federal revenue, with that percentage expected to double 
in the next 15 years.
    Skyrocketing costs coupled with onerous regulations have led 
directly to shrinking access to care.
    Patients are often told which doctors they may see and how 
frequently. Doctors, in turn, are told which procedures or tests they 
may--and may not--order or provide. It erodes the ability of patients 
and their doctors to make independent healthcare decisions--some of the 
most personal and important decisions we make. A once-sacrosanct 
institution, the doctor-patient relationship, is being trampled by 
coverage rules, inflexible regulations, one-size-fits-all policies and 
a flawed payment system.
    The constant battle between government insurers and American 
doctors over permissible procedures and reimbursement levels is leading 
to a dangerous shortage of qualified new physicians. Most medical 
practices, including some of the largest and most respected 
institutions in the nation, find it necessary to limit the number of 
Medicare patients they see. This is not a healthy system.
    To paint a responsible face on the damaging effects to care, 
Medicare tracks quality indicators that may have, in fact, nothing to 
do with quality healthcare. A punitive enforcement program creates 
perverse incentives leaving some of our sickest citizens without 
qualified providers. Put simply, federal healthcare policy has lost its 
vision of what quality healthcare means.
    Thankfully, there is a positive alternative that would allow access 
to quality care for all Americans.
    By restoring our focus to those most intimately affected by 
healthcare decisions--patients--we can transition to a financing and 
delivery system which will accomplish insurance coverage for all 
without sacrificing quality and access.
    Using my experience as a physician, I have authored legislation, 
the Comprehensive Health CARE Act, H.R. 2626, to positively and 
fundamentally reform American healthcare. Two pillars are necessary to 
move us in the right direction. First, our tax policy should ensure 
that it makes financial sense for all Americans to be insured. Second, 
that insurance should be owned and controlled by the patient. 
Regardless of who is paying the bill--government, employer or 
individual--patients should be able to decide what coverage and care is 
best suited for their individual or their family's needs.
    Such a system will provide the accountability, responsiveness, and 
flexibility needed to ensure quality care, individual access, and 
contained cost.
    Restoring the power of patients in our health care system is the 
best way to ensure we will have quality care throughout the 21st 
century. It will only occur if we remember and re-establish a process 
that best serves those most affected--patients!
    Prior to being elected to Congress, Price practiced orthopaedic 
surgery for more than 20 years.
                                 ______
                                 
    Mr. Price. I want to thank Congressman Conyers for coming 
and commend him for his commitment to health care reform, and I 
was struck by one of his comments. As a physician, I am a 
strong advocate for appropriate health system reform, what I 
call patient-centered reform. I would suggest candidly that a 
single-payer system is not patient centered. By its very 
definition, it is government centered, and that is the real 
concern that I have.
    The comment you made, and I think it was very enlightening, 
the Chairman said we need too determine whether, quote, ``we 
want a combination of our current system or we want something 
else.'' And the question is: Who is the ``we''? I would suggest 
if the ``we'' is us here in Congress, or within the 
bureaucratic nature of the Federal Government, then we have the 
wrong ``we.'' The ``we'' that we need are the patients, the 
American people. Unless we concentrate on patients, we will not 
get to the right answer, and I believe real reform comes when 
we empower patients.
    I have been struck by the testimony about how awful 
American health care is, just struck by it. The statistics 
don't bear that out at all. In fact, Dr. Tsou, one of your 
quotes was, ``By and large, the quality of care is 
suboptimal.'' That is astounding. I think the American people 
will be astounded to know that the care they receive is 
suboptimal. In fact, if you look at disease-specific criteria, 
what you find is that the care provided in America, across all 
demographic quadrants of our society, is second almost to none. 
Almost to none.
    We have principles that we ought to adhere to in the area 
of health care. Everybody has access, affordability and 
quality. I add three to that: responsiveness, innovation and 
choice. I would suggest to everyone who is listening that none 
of the principles of your health care that you provide are 
improved by the intervention of the Federal Government. None. 
Not access. Access is being limited in the programs that are 
run by the Federal Government. Not affordability. All of the 
cost overruns that occur in the four systems that are run by 
the Federal Government, Medicare, Medicaid, Indian Health 
Service, the veterans health care. Certainly not quality when 
you see the limitation of care that is imposed by the Federal 
Government. Responsiveness and innovation in the same sentence 
as the Federal Government is rarely used, and rightly so. And 
then choices. Choices are always limited by governmental 
intervention.
    And to the end of the cost, which I think is incredibly 
important to address, Dr. Gratzer, would you comment on what is 
included in our estimation of health care costs that may not be 
included in another estimation, other nations' estimations of 
their health care costs?
    Dr. Gratzer. Well, Dr. Price, I fully agree with your 
comments. With regard to what does American medicine do that 
one doesn't find so much elsewhere in the world, research and 
development would be a great example of that. There is more 
spent at one facility in the United States, M.D. Anderson, on 
research and development than there is in the entire country of 
Canada. America is the leader in medical technology and 
development and implementation. When people talk about a new 
drug coming to market, it is almost surely an American drug. 
When people talk about innovations going on in the United 
States, as you know Health Affairs rated the top 10 greatest 
innovations of the 20th century, and 7 of them were invented 
within these borders. More Nobel Prizes go to Americans than 
nationals of other countries combined. This is a country that 
excels in medicine. We shouldn't forget that as we look at 
reform.
    Mr. Price. My understanding is that much of the long-term 
care, the nursing home care and the like, is included in our 
costs for health care in the determination of what we spend on 
health care, and that is not the case in other nations. Do you 
know that to be true?
    Dr. Gratzer. I am not an expert on such comparisons. I know 
for sure that capital costs are not accounted for the same way. 
Canadians spend money less per capita; but I would suggest it 
is not quite the huge gap that American experts might put 
forward.
    Mr. Price. Mr. Chairman, I would suggest that a right to 
health care in other nations that have a single-payer system is 
a right to get in line, and that is the concern that so many of 
us have. The last thing we want is just to simply pass 
something here in Washington that is, under the guise of giving 
people the right to health care, we give them the right to get 
in line for a lesser quality of care than is currently been 
provided.
    There is positive reform that is on the table, and I would 
suggest that we ought to look at that as well as a committee.
    I thank the Chairman.
    Chairman Andrews. The gentleman's time has expired. At this 
time the committee will temporarily adjourn. If you turn 
around, you can see the floor voting schedule. There will be 
three votes. We will come back as soon as we have cast our 
third vote and resume the hearing at that time.
    [Recess.]
    Chairman Andrews. We are going to resume the hearing. The 
gentleman from Illinois Mr. Hare is recognized for 5 minutes.
    Mr. Hare. Thank you, Mr. Chairman. Thank you for holding 
this hearing, which I consider to be extremely important.
    I am amazed at some of the things that I have heard. Dr. 
Gratzer, let me say a couple of things. It is my understanding 
that when the Canadian people were polled, 97 percent of the 
people in Canada said they wouldn't trade their health care 
plan for the United States plan on a bet. So if it is crisis, 
only about 3 percent of your Canadian friends would be in 
agreement with you.
    We have heard a lot about lines, lines for health care, 
having to wait for health care. Here we don't have lines, we 
just get rejected. I have had constituents who have had C-
sections with their insurance companies, and they go in later 
and are told they are denied because of preexisting conditions. 
Here we don't have lines, we have people who, if they lose 
their job because of no fault of their own, that leave and 
don't have portable health care.
    I know of a 31-year-old man who worked part-time jobs, 
temporary jobs, to try to get health care coverage, and they 
found him dead in the shower of a heart attack. And his father 
and mother, who were very hardworking people, said, when the 
press asked them, are you mad that God took your son, he said, 
God did not take my son; He made a special place for my son to 
go. He said, this government took my son because it didn't have 
the courage to pass health care that would cover my son when he 
lost his job.
    I think when you take a look at where we are at today, if 
Mr. Castonguay said it is in crisis, I would like him to come 
take a look at this system. We have a CEO of an insurance 
company making $200,000 a day. You have insurance companies 
giving people a letter in one hand that approves the surgery; 
the person has the surgery, and then they get a denial paper 
after they get home from the hospital from the same wonderful, 
benevolent insurance company.
    Now, I am a card-carrying capitalist here, but I believe in 
the single-payer system. If this system isn't broken, then I 
don't know what the definition of broken is. I will tell you, I 
am a fundamental believer that health care--and I think this 
was mentioned before by the Chairman--health care is a right, 
it is not a privilege in this Nation. Everybody ought to have 
it. We don't pay doctors. I went to my hospitals in my 
districts, we are 243 days late paying health care providers, 
and pharmacists are not getting reimbursed and have gone out of 
business.
    While we may not have the lines, what we have is--and all 
of these statistics that are mentioned here today--these are 
real people with real problems, and I lay this at the foot of 
greedy insurance companies who care more about the bottom line 
of making profits than they do about keeping people well. The 
whole question about the wellness situation is to blame people. 
Yes, we have to take part of the responsibility, but that is 
like saying if your next-door neighbor's house catches on fire 
because he was smoking, we should do nothing about it because 
it was his fault, he was smoking. So we are not going to go put 
the fire out, we are just going to watch it burn.
    I will tell you, to that man that works today repairing 
gasoline motors for lawn mowers at $8 an hour--and, by the way, 
when his wife came in and saw her son dead on the gurney in the 
hospital, she had a heart attack, and he ended up with $200,000 
worth of bills. And he had to borrow $8,000 to bury his own 
son. And I will tell you, that is not what this country is 
about.
    Some people say, why are we having this hearing? We have to 
have this hearing. The vast majority of the American people--
and when are we ever going to get it--they support this system. 
So here we are once again debating whether or not this is 
doable or not doable and who has the best system.
    I know one thing, in my district when I did town hall 
meetings--and, by the way, I had counties that carried not for 
George McGovern, but for George Wallace, so this is not liberal 
land that I come from. And every one of the six town hall 
meetings that I had, the vast majority of the people supported 
single-payer health care. And I didn't even ask them, they 
brought it to my attention.
    So we have to fix this system. We have heard about the 
Medicare system and the government can't do anything right. Ask 
a veteran if they would be willing to give up their VA health 
care. And the government can't do anything right, ask a senior 
citizen if they want to stop receiving a Social Security check. 
Ask somebody on Medicare, since we can't ever do anything 
right, if they don't like the Medicare system.
    I am not saying that they are perfect, but what I am saying 
is that we have an opportunity here to change the way we do 
business. And quite frankly, if you don't have a public option, 
who is going to go in competition with the insurance companies? 
They are competing against themselves. They are not even 
covered under Federal antitrust legislation.
    We need to get real here, from my perspective. And all of 
the statistics that we hear, and the lines of people flooding 
into Minnesota and other States to get health care, I don't 
know about the floods. I am from Illinois, and I know about 
floods on the river, but I do know this, that we have a flood 
of people every single day who are worried to death that their 
children or themselves are going to get sick, and if they lose 
their jobs, they don't have portability of health care. We have 
to fix that. This bill will do it.
    If I sound a little bit agitated, it is because I am.
    Chairman Andrews. The gentleman's time has expired.
    I note that the Chairman of the full committee Mr. Miller 
is here. I do want to obviously welcome him and see if he would 
like to add any remarks at this time.
    Mr. Miller. Thank you, Mr. Chairman. Just quickly, I wanted 
to ask Ms. Jenkins a question.
    We seem to rerun this argument all of the time about how we 
are rationing medicine between Canadians and Americans and what 
have you. What I am witnessing in my congressional district at 
this time, if you have insurance, I think it is something close 
to three out of four people have Kaiser because of the history 
of the program started in the Bay area.
    What I now see in the public institutions is they are 
absolutely being flooded by individuals who have serious 
medical problems, but no longer have insurance because they 
have lost their jobs. If I go to my regional medical center or 
go to the community clinics, we now see this huge inflow of 
people who bring no resources to this medical necessity that 
they have.
    Scheduling times have become far more difficult than in the 
past. I am not familiar with what is happening in the private 
sector in the hospitals, but certainly what we now see in the 
public facilities in the Bay area is that obviously your 
medical condition doesn't know whether you are employed or 
unemployed; you need help or your children or spouse does, 
whatever your situation is with your family.
    This standing in line and postponement of appointments and 
delay times and wait times is happening in the current system 
because of the structure of this system; is that your 
understanding? Correct me if I am wrong, but as I have traveled 
around and visited the facilities, it is stunning.
    Ms. Jenkins. I work in a public facility, the University of 
California, and public facilities are under assault. The public 
health care system in this country has been under assault for a 
long time. And it was pointed out with the swine flu concerns 
we haven't funded public facilities anywhere very well, and 
they have been constantly underfunded.
    Mr. Miller. I understand that, but I am talking about 
people who find themselves in situations where they need 
immediate attention.
    Ms. Jenkins. They come through the emergency room, which is 
the most costly way to access the health care system, so we are 
spending more money to deal with those crises than with a 
single-payer system. The most costly way to access the system 
is through an emergency room, and people have to be seen in an 
ER. So as we see this employment crisis and people losing their 
employee-based health care, you can see a huge flood of people 
who are going to be accessing the most expensive way into the 
system, which is through an emergency room.
    Mr. Miller. When people come from Canada to receive medical 
care here, are they doing that on their own hook?
    Ms. Jenkins. People do come from Canada for care, but a lot 
of those people are sent by the Canadian Government to get care 
here that they can't get or there is an access problem. And the 
Canadian Government also sends a checkbook with them because 
they pay for it. If there is medical necessity that is urgent, 
and the access is not available in Canada, they do send people 
to this country for care, but they pay for it. So it is not 
like these people are here because they don't have any other 
recourse. The Canadian Government looks at it, and if they have 
a situation that they deem is emergent and needs critical care 
that they can't get there, they will send them here, and they 
pay for their care.
    Mr. Miller. We send people to UC San Francisco, but in most 
instances we send them with whatever insurance they have. Or we 
send them to Stanford. That is the usual business practice. And 
I assume that is not interrupted because of national boundaries 
in this case. We are not adversaries.
    Ms. Jenkins. I think that is a misconception.
    Mr. Miller. Thank you.
    Chairman Andrews. Thank you, Mr. Chairman. Obviously as 
Minority Members return, they will reclaim their time.
    The gentleman from Ohio Mr. Kucinich, who has been one of 
the most fierce and articulate advocates of single-payer, is 
recognized for 5 minutes.
    Mr. Kucinich. Gentle, not fierce.
    There has been a lot of talk here, Mr. Chairman, about 
rationing. And during war, people have rations. Imagine if 
during wartime if one out of six Americans who were getting 
rations during a critical period during the war, imagine if one 
out of six were not able to get rations, and they just starved. 
Well, you have one out of six Americans starving for health 
care; 50 million Americans can't get any health care at all.
    Now, Dr. Gratzer, you have tried to make the case that 
rationing in Canada is worse than it is in the U.S. Do you know 
what statistics Canada, the analog to the U.S. census, says the 
median wait time is across Canada for elective surgery?
    Dr. Gratzer. Why don't you inform us, sir?
    Mr. Kucinich. It is 4 weeks.
    Dr. Gratzer. What did they----
    Mr. Kucinich. And what does Canada say the median wait time 
for diagnostic imaging, like MRIs, is?
    Dr. Gratzer. I can tell you that the Ontario government 
recently looked at that for answers, was 6 months.
    Mr. Kucinich. It is 3 weeks.
    How many uninsured are there in Canada?
    Dr. Gratzer. Probably relatively few.
    Mr. Kucinich. That is right. None or very few.
    How many medical bankruptcies are there in Canada?
    Dr. Gratzer. It depends how you define a medical----
    Mr. Kucinich. None or very few.
    How many insured Americans go without needed care due to 
the high cost of health care which is due to health insurance 
companies?
    Dr. Gratzer. Am I allowed to answer, or are you just going 
to continue to----
    Mr. Kucinich. Well, if you have an answer, you can answer. 
But if you don't, I will answer it.
    Dr. Gratzer. Go for it, sir.
    Mr. Kucinich. What is your answer?
    Dr. Gratzer. Why don't you answer your question, sir?
    Mr. Kucinich. What is your answer? How many insured 
Americans go without needed care due to the high cost of health 
care which is due to health insurance companies?
    The witness isn't responding.
    Dr. Gratzer. The witness is delighted to speak further on 
those statistics and other statistics, but you keep cutting me 
off, sir.
    Mr. Kucinich. You respond if you have an answer. You didn't 
give an answer.
    Dr. Gratzer. I am not going to be led down a garden path. 
If you would like to ask me a question, I would be delighted to 
answer.
    Mr. Kucinich. You have showed a garden here to members of 
this committee and to the audience. There is another side of 
the picture that you don't seem to be aware of, even though you 
want to be an expert on Canada. Can you provide us with an 
answer on this one about America?
    Dr. Gratzer. But my position is respectable, and I dislike 
your comments, sir.
    Mr. Kucinich. Do you have an answer? How many insured 
Americans, insured, go without needed care due to high cost of 
health care which is due to health insurance companies?
    He has no answer. The answer is that it is one out of every 
four.
    So we are trying to make a case here that somehow Canada is 
in a mess, but we are not focusing on the fact that in the 
United States there are people who aren't getting needed care. 
And this gentleman has expected us to believe that rationing is 
worse in Canada. I don't know how we can buy that. Now, if 
single-payer is so bad, maybe the gentleman, the doctor, can 
explain to us why 60 percent of U.S. doctors want it, according 
to the peer-reviewed Annals of Internal Medicine of 2008.
    Mr. Price. Are you going to let him answer this one?
    Mr. Kucinich. He can answer it if he can answer it.
    Dr. Gratzer. I would suggest that many physicians in the 
United States are unsatisfied with the system, and rightly so. 
I would suggest that many physicians are looking for reform, 
and rightly so. But I would suggest that many physicians are 
unaware of what really goes on in single-payer systems, perhaps 
illustrated well by some of the comments that you have already 
made.
    It is easy for an American audience to look north, but I 
would ask you then: What do you make of studies like the 
O'Neill paper, published by the National Bureau of Economic 
Research, that showed that Americans have better access in 
terms of chronic care management, that cancer outcomes are 
better south of the 49th parallel, that low-income baby 
mortality rates are lower in the United States?
    I would not suggest to you for a moment that the United 
States is a perfect system. Goodness, I have written an entire 
book on the problems south of the 49th parallel, but I would 
suggest to you that looking to a government-rationed system and 
a government-managed system, because inevitably those two 
things are the same, would be a mistake for Members of 
Congress.
    Thank you.
    Mr. Kucinich. And I am glad that we have other witnesses 
here.
    Ms. Jenkins, the California nurses found that a single-
payer system would act as an economic stimulus not only by 
eliminating the underinsurance problem, but also by several 
other means, including the creation of 2.6 million new jobs. 
Could you please describe how you think a single-payer health 
care system would act as a stimulus?
    Ms. Jenkins. Well, we would be insuring another 47 million 
people, so there would be an economic stimulus there in the 
creation of jobs. We did an econometric study where you look at 
the ripple effect of what is spent in health care and how it 
translates into other areas of the economy, the wages workers 
make, how they spend them and how that stimulates the economy, 
and we not only found that a single-payer system would create a 
net gain of 2.6 million jobs, it would increase business and 
public revenues by $317 billion. Additional employee 
compensation with those new jobs would be $100 billion, which 
would generate $44 billion in more tax revenues, and these 
people would go out and spend that money in the economy. So 
there is huge economic stimulus in doing this, besides the 
obvious ethical and moral issue of actually providing care for 
everyone in this country.
    Chairman Andrews. The gentleman's time has expired.
    The Chair recognizes the gentlelady from New York Mrs. 
McCarthy for 5 minutes.
    Mrs. McCarthy. Thank you, Mr. Chairman.
    Ms. Jenkins, before I came to Congress, I was a nurse for 
over 32 years. A lot of things that we have been able to do on 
this committee, especially on the higher education bill that we 
got passed, was basically trying to help nurses get more nurses 
into the system. We have plenty of people that want to be 
nurses. Unfortunately, we don't have the faculties that want to 
hire professors to be able to teach nursing. The good news is 
nurses are getting good pay now. Back in the 1960s, we 
certainly got terrible pay.
    No matter which way we go--and I believe we have a good 
health care system. Our problem is we have too many people that 
are not receiving health care. That is what we are trying to 
fix. And I think it is important for everyone to know that. But 
we are not going to be able to do that unless we have enough 
primary care doctors out there, and we need a whole ton of 
nurses out there because we also have to look to the future. We 
are not preparing ourselves at all for the baby boomers because 
they are not going to go to a nursing home, I can tell you that 
right now. They are going to want to have care in their house. 
They want to stay in their home, as the majority of patients 
do.
    So whatever we do, whether it is single-payer, whether it 
is going to be a public--however we come up with something, 
nursing and physicians have to be a part of that. And hopefully 
the physicians will get paid a better price. I have Blue Cross/
Blue Shield, and I go and have my tests done, and I see what 
the doctors get. It is nowhere near what it should be. I think 
it is embarrassing the pay we give them.
    You have worked many nights. You are the one who calls the 
doctor at 2 or 3 o'clock in the morning, as I did. People 
forget that. People think that they roll in and just take care 
of people. What do you think we need to do even more so to make 
sure that we have more nurses coming into the system?
    Ms. Jenkins. Well, we do have to fund nursing education to 
create more slots for people. I know in California, all of the 
nursing programs have huge waiting lists waiting for slots. I 
think there needs to be education investment to train nurses. 
Senator Boxer has put forth a bill that invests in nursing 
education.
    And we have to look at the working conditions. Nurses have 
one of the highest incidence of musculoskeletal injuries of any 
work group because of the kind of work that they do.
    Part of her bill would be safe patient handling. We need to 
create safe work environments for patients as well as nurses. 
It is very frustrating as a nurse to go home and worry about 
what you missed because you didn't have the time to give the 
care you need. So we do have to make an investment in creating 
staffing standards, better working conditions.
    Most of us didn't go into nursing to make a million bucks, 
we went into nursing to take care of people. I think it is 
important to understand as nurses, we take very seriously our 
role of being the advocate for the patient. We are the last 
line of defense for the patient at the bedside. We need to 
invest in nursing education, as you say.
    Mrs. McCarthy. Hopefully we will be doing that.
    One more thing I will say is unfortunately across the 
country, we have seen a high incidence of infections in our 
hospitals, which cause sometimes death to a lot of patients. I 
happen to believe strongly that if we had more nurses and a 
better nursing ratio on the floors, that we would not see the 
kind of infections that are out there mainly because they would 
have the time to actually do the work that they need to do.
    We used to have--back in the 1960s, we might have 1 nurse 
to every 10 patients, but I have to say about 4 of them would 
be self care, and the others would be a lot more care being 
given. We didn't have the infections then. We basically were 
fairly well staffed. But when nurses were starting to be called 
in on mandatory overtime, they left the profession. My sister 
left the profession, unfortunately. We need to address those 
things.
    Ms. Jenkins. We absolutely do. You are right, there has 
been a huge speed-up on the delivery of care in hospitals, and 
a lot of it is driven by this profit motive that says let us 
save some money, and let us cut some staff. I think that drives 
some of that. That does lead to an incidence of increased 
infections in hospitals. There are other factors, too, but that 
is a big one. You have to have the time to provide safe care, 
which means you have to have some realistic staffing ratio of 
nurses to patients in hospitals.
    Mrs. McCarthy. I agree with you. I hope through this 
committee, because that is what we will be working on, I will 
be working on the nursing issue on this committee as we debate 
what else we are going to do for health care. I thank you.
    Chairman Andrews. We thank the gentlelady for her 
contributions. She talks about nursing, and she is a very 
valuable Member for that reason.
    The gentleman from New Jersey Mr. Holt is recognized for 5 
minutes.
    Mr. Holt. Mr. Chairman, thank you, and I thank the 
witnesses for coming.
    Let me begin with Dr. Angell. You have outlined a number of 
the advantages of a single-payer system. I was impressed by an 
article that I read earlier this year by Dr. Atul Gawande in 
the New Yorker where he looked at other countries and how they 
got to their universal coverage. For example, Britain created 
the National Health Service based on the wartime health system; 
and France created a system based on a prewar, independent 
local insurance program.
    Single-payer systems have some advantages. Have you thought 
about how we could get to that, if you see that as the ideal, 
from our fragmented system of today?
    Dr. Angell. Yes, I have. In fact, I was on the writing 
committee that published an article in the Journal of the 
American Medical Association, August 13, 2003, that goes 
through how we would convert in considerable detail. There is 
no time to do that here, obviously.
    Mr. Holt. Could I ask that you provide that to the 
committee and that it be made part of the record?
    Chairman Andrews. Without objection.
    [The article follows:]

                        [JAMA. 2003;290:798-805]

             Proposal of the Physicians' Working Group for
                 Single-Payer National Health Insurance

    The Physicians' Working Group for Single-Payer National Health 
                               Insurance*

                                abstract
    The United States spends more than twice as much on health care as 
the average of other developed nations, all of which boast universal 
coverage. Yet more than 41 million Americans have no health insurance. 
Many more are underinsured. Confronted by the rising costs and 
capabilities of modern medicine, other nations have chosen national 
health insurance (NHI). The United States alone treats health care as a 
commodity distributed according to the ability to pay, rather than as a 
social service to be distributed according to medical need. In this 
market-driven system, insurers and providers compete not so much by 
increasing quality or lowering costs, but by avoiding unprofitable 
patients and shifting costs back to patients or to other payers. This 
creates the paradox of a health care system based on avoiding the sick. 
It generates huge administrative costs that, along with profits, divert 
resources from clinical care to the demands of business. In addition, 
burgeoning satellite businesses, such as consulting firms and marketing 
companies, consume an increasing fraction of the health care dollar. We 
endorse a fundamental change in US health care--the creation of an NHI 
program. Such a program, which in essence would be an expanded and 
improved version of traditional Medicare, would cover every American 
for all necessary medical care. An NHI program would save at least $200 
billion annually (more than enough to cover all of the uninsured) by 
eliminating the high overhead and profits of the private, investor-
owned insurance industry and reducing spending for marketing and other 
satellite services. Physicians and hospitals would be freed from the 
concomitant burdens and expenses of paperwork created by having to deal 
with multiple insurers with different rules, often designed to avoid 
payment. National health insurance would make it possible to set and 
enforce overall spending limits for the health care system, slowing 
cost growth over the long run. An NHI program is the only affordable 
option for universal, comprehensive coverage.
---------------------------------------------------------------------------
    * Authors: The writing committee for the Physicians' Working Group 
for Single-Payer National Health Insurance included Steffie 
Woolhandler, M.D., M.P.H. (Department of Medicine, Cambridge Hospital/
Harvard Medical School, Cambridge, Mass), David U. Himmelstein, M.D. 
(Department of Medicine, Cambridge Hospital/Harvard Medical School, 
Cambridge, Mass), Marcia Angell, M.D. (Department of Social Medicine, 
Harvard Medical School, Boston, Mass), and Quentin D. Young, M.D. 
(Physicians for a National Health Program, Chicago, Ill).
---------------------------------------------------------------------------
                              introduction
    The US health care system is rich in resources. Hospitals and 
sophisticated equipment abound, with even many rural areas boasting 
well-equipped facilities. Most physicians and nurses are superbly 
trained, and dedication to patients is the norm. Our research output is 
prodigious, and we fund health care far more generously than any other 
nation.
    Yet despite medical abundance, health care is too often meager 
because of the irrationality of the current health care system. More 
than 41 million Americans have no health insurance, including 33% of 
all Hispanics, 19% of African Americans and Asians, and 10% of non-
Hispanic whites.\1\ Many more, perhaps most of us, are underinsured. 
The world's richest health care system is unable to ensure basics like 
prenatal care and immunizations, and we trail most of the developed 
world on such indicators as infant mortality and life expectancy. Even 
the well-insured may find care compromised when health maintenance 
organizations (HMOs) deny expensive medications and therapies. Fear of 
financial ruin often amplifies the misfortune of illness for patients.
    For physicians, the gratifications of healing give way to anger and 
alienation in a system that treats sick people as commodities and 
physicians as investors' tools. In private practice we waste countless 
hours on billing and bureaucracy. For the uninsured, we avoid 
procedures, consultations, and costly medications. In HMOs we walk a 
tightrope between thrift and penuriousness, under the surveillance of 
bureaucrats who prod us to abdicate allegiance to patients and to avoid 
the sickest who may be unprofitable. In academia, we watch as the 
scholarly traditions of openness and collaboration give way to secrecy 
and assertions of private ownership of vital ideas--the search for 
knowledge displaced by a search for intellectual property.
    For 9 decades, opponents have blocked proposals for national health 
insurance (NHI), touting private sector solutions. Reforms over the 
past quarter century have emphasized market mechanisms, endorsed the 
central role of private insurers, and nourished investor ownership of 
care. But promises of greater efficiency, cost control, and 
responsiveness to consumers are unfulfilled; meanwhile, the ranks of 
the uninsured have swelled. Health maintenance organizations, launched 
as health care's bright hope, have raised Medicare costs by billions 
\2\ and fallen substantially in public esteem. Investor-owned hospital 
chains, born of the promise of efficiency, have been wracked by 
scandal, their costs high and their quality low.\3-12\ Drug firms, 
which have secured the highest profits and lowest taxes of any 
industry, price drugs out of reach of many who need them most.
    Many in today's political climate propose pushing on with the 
marketization of health care. They would shift more public money to 
private insurers; funnel Medicare through private managed care; and 
further fray the threadbare safety net of Medicaid, public hospitals, 
and community clinics. These steps would fortify investors' control of 
care, squander additional billions of dollars on useless paperwork, and 
raise barriers to care still higher. Instead, we propose a fundamental 
change in US health care--a comprehensive NHI program.
    Four principles shape this vision of reform:
    1. Access to comprehensive health care is a human right. It is the 
responsibility of society, through its government, to ensure this 
right. Coverage should not be tied to employment.
    2. The right to choose and change one's physician is fundamental to 
patient autonomy. Patients should be free to seek care from any 
licensed health care professional.
    3. Pursuit of corporate profit and personal fortune have no place 
in caregiving. They create enormous waste and too often warp clinical 
decision making.
    4. In a democracy, the public should set health policies and 
budgets. Personal medical decisions must be made by patients with their 
caregivers, not by corporate or government bureaucrats.
    We envision an NHI program that builds on the strengths and 
rectifies the deficiencies of the current Medicare system. Coverage 
would be extended to all age groups and expanded to include 
prescription medications and long-term care. Payment mechanisms would 
be structured to improve efficiency and ensure prompt, fair 
reimbursement, while reducing bureaucracy and cost shifting. Health 
planning would be enhanced to improve the availability of resources and 
minimize wasteful duplication. Finally, investor-owned facilities would 
be phased out. These reforms would shift resources from bureaucracy to 
the bedside, allowing universal coverage without increasing the total 
costs of health care.
    Key features of the proposal [in italics] followed by the rationale 
for our approach are presented below.
                        eligibility and coverage
    A single public plan would cover every American for all medically 
necessary services, including long-term care, mental health and dental 
services, and prescription drugs and supplies. Unnecessary or 
ineffective services, as determined by boards of experts and community 
representatives, would be excluded from coverage. As in the Medicare 
program, private insurance duplicating the public coverage would be 
proscribed. Patient co-payments and deductibles would also be 
eliminated.
    Abolishing financial barriers to health care is the sine qua non of 
reform. Only a single comprehensive program, covering rich and poor 
alike, can end disparities based on race, ethnicity, social class, and 
geographic region that compromise the health care of the American 
people. A single-payer program is also key to minimizing the complexity 
and expense of billing and administration.
    Private insurance that duplicates the NHI coverage would undermine 
the public system in several ways. First, the market for private 
coverage would disappear if the public coverage were fully adequate. 
Hence, private insurers would continually lobby for underfunding of the 
public system. Second, if the wealthy could turn to private coverage, 
their support for adequate funding of NHI would also wane. Why pay 
taxes for coverage they don't use? Third, private coverage would 
encourage physicians and hospitals to provide 2 classes of care. 
Fourth, a fractured payment system, preserving the chaos of multiple 
claims databases, would subvert quality improvement efforts, eg, the 
monitoring of surgical death rates and other patterns of care. Fifth, 
eliminating multiple payers is essential to cost containment. Public 
administration of insurance funds would save tens of billions of 
dollars each year.
    Private health insurers and HMOs now consume 12% of premiums for 
overhead,\13\ while both the Medicare program and Canadian NHI have 
overhead costs below 3.2%.\14\
    Our multiplicity of insurers forces US hospitals to spend more than 
twice as much as Canadian hospitals on billing and administration; 
forces US physicians to spend vast amounts on billing; and nourishes a 
panoply of business consultants, coding software vendors, and other 
satellite businesses.\14-15\ Only a true single-payer system would 
realize large administrative savings. Perpetuating multiple payers 
would force hospitals to maintain expensive cost-accounting systems to 
attribute costs and charges to individual patients and payers. In the 
United Kingdom, market-based reforms that fractured hospital payment 
have swollen administrative costs.\16-17\
    Co-payments and deductibles discourage preventive care, decrease 
the use of essential care, are expensive to administer, and especially 
endanger the most vulnerable patients--the poor and those with chronic 
illnesses.\18\ Many nations with NHI have effectively contained costs 
without resorting to such charges.
    Coverage decisions would doubtless be difficult and sometimes hotly 
contested. Even the fairest and best-informed board would confront 
costly choices where evidence was sparse and passions abundant. Yet we 
are encouraged by Medicare's generally open and reasoned approach. 
Moreover, in both Medicare and NHI, the inclusion of the affluent in 
the same program with others creates a powerful lobby for maintaining 
adequate coverage. For these reasons, we believe NHI provides a 
framework for replacing the confused and often unjust dictates of 
insurance companies with rational, evidence-based decision making.
                            hospital payment
    The NHI program would pay each hospital a monthly lump sum to cover 
all operating expenses. The hospital and the regional NHI office would 
negotiate the amount of this payment annually based on past budgets, 
clinical performance, projected changes in demand for services and 
input costs, and proposed new programs. Hospitals would not bill for 
services covered by NHI.
    Hospitals could not use any of their operating budgets for 
expansion, profit, excessive executives' incomes, marketing, or major 
capital purchases or leases. Major capital expenditures would come from 
the NHI fund and would be appropriated separately based on community 
needs. Investor-owned hospitals would be converted to not-for-profit 
status and their owners compensated for past investment.
    Global budgeting would simplify hospital administration by 
virtually eliminating billing, thus freeing up resources for enhanced 
clinical care. Prohibiting the transfer of operating funds to capital 
projects or shareholders would eliminate the main financial incentive 
for both excessive interventions (under fee-for-service payment) and 
skimping on care (under capitated or diagnosis related group systems), 
since neither inflating revenues nor limiting care could result in 
institutional gain. Separate and explicit appropriation of capital 
funds would facilitate rational health care planning. These methods of 
hospital payment would shift the focus of hospital administration away 
from lucrative services that enhance the bottom line and toward 
providing optimal clinical services according to patients' needs.
               payment for physicians and outpatient care
    Physicians and other practitioners could choose from 3 payment 
options: fee-for-service, salaried practice in institutions receiving 
global budgets, and salaried practice in group practices or HMOs 
receiving capitation payments. Investor-owned HMOs and group practices 
would be converted to not-for-profit status. Only institutions that 
actually deliver care could receive NHI payments, excluding most 
current HMOs and some practice management firms that contract for 
services but don't own or operate clinical facilities.
    (1) Fee-for-service: The NHI and organizations representing fee-
for-service practitioners (eg, medical associations) would negotiate a 
simple, binding fee schedule. As in Canada, physicians would submit 
bills on a simple form or via computer and would receive interest for 
bills not paid within 30 days. Physicians accepting payment from the 
NHI program could not bill patients for covered services, but they 
could bill for excluded procedures such as cosmetic surgery.
    (2) Salaries within institutions receiving global budgets: 
Hospitals, group practices, clinics, home care agencies, and the like 
could elect to be paid a global budget, which could include funding for 
items such as education, community prevention programs, and patient 
care. Regulations regarding capital payment would be similar to those 
for inpatient hospital services, as would the budget setting process.
    (3) Salaries within capitated groups: Group practices and nonprofit 
HMOs could opt to receive capitation payments to cover all physicians 
and other outpatient care. Regulation of payment for capital would be 
similar to that for hospitals. The capitation payment would not cover 
most inpatient services, which would be included in hospital global 
budgets. However, a capitated group could elect to provide and be 
compensated for physician services to inpatients. Enrollment would be 
open to any patient, and efforts to selectively enroll those at low 
risk would be prohibited. Patients could disenroll with appropriate 
notice. Health maintenance organizations would pay physicians a salary, 
and bonuses based on the utilization or expense of care would be 
prohibited.
    The proposed pluralistic approach to health care delivery would 
avoid unnecessary disruption of current practice arrangements. All 3 
proposed options would eliminate profiteering and uncouple capital from 
operating costs, features essential to cost containment and health 
planning.
    The fee-for-service option would greatly reduce physicians' office 
overhead by simplifying billing. Canada and several European nations 
have developed successful mechanisms for controlling the inflationary 
potential of fee-for-service practice.\19\ These include limiting the 
supply of physicians, monitoring for extreme practice patterns, and 
setting overall limits on regional spending for physicians' services 
(thus requiring the profession to monitor itself). Because of the 
administrative advantages of single-source funding, these regulatory 
options have been implemented without extensive bureaucracy. Similar 
cost-constraint mechanisms might be needed in the United States. We 
also recommend capping expenditures for the regulatory and 
reimbursement apparatus; the Canadian experience suggests that 2% to 3% 
of total costs should suffice.\14\
    Global budgets would allow institutions to virtually eliminate 
billing, while assuring them a predictable revenue stream. Such funding 
could also stimulate the development of community prevention programs 
whose costs cannot be attributed (or billed) to individual patients.
                             long-term care
    The NHI program would cover disabled Americans of all ages for all 
necessary home and nursing home care. Persons unable to perform 
activities of daily living would be eligible for services. A local 
public agency in each community would determine eligibility and 
coordinate care. Each agency would receive a single budgetary allotment 
to cover the full array of long-term care services in its district. The 
agency would contract with long-term care providers for the full range 
of needed services, eliminating the perverse incentives in the current 
system that often pays for expensive institutional care but not the 
home-based services that most patients would prefer.
    The NHI program would pay long-term care facilities and home care 
agencies a lump sum budget to cover all operating expenses. For-profit 
nursing homes and home care agencies would be converted to not-for-
profit status. Physicians, nurses, therapists, and other individual 
long-term care providers would be paid on either a fee-for-service or 
salaried basis.
    Since most disabled and elderly people would prefer to remain in 
their homes, the program would encourage home- and community-based 
services. The 7 million unpaid caregivers, the family and friends who 
currently provide 70% of all long-term care,\20\ would be assisted 
through training, respite services, and in some cases, financial 
support. Nurses, social workers, and an expanded cadre of trained 
geriatric physicians would assume leadership of the system.
    Few Americans have private coverage for long-term care. For the 
rest, only virtual bankruptcy brings entitlement to public coverage 
under Medicaid. Universal coverage must be combined with local 
flexibility to match services to needs.
    Our proposal borrows features from successful long-term care 
programs in some Canadian provinces \21\ and in Germany. The German 
program, in particular, demonstrates the fiscal and human advantages of 
encouraging rather than displacing family caregivers, offering them 
recompense, training, and other supports.\22\
             capital spending, health planning, and profit
    The NHI budget would fund the construction of health facilities and 
the purchase of expensive equipment. Regional health planning boards 
would allocate these capital funds. These boards would also oversee 
capital projects funded from private donations when they entailed any 
increase in future publicly supported operating costs.
    The NHI program would compensate owners of investor-owned 
hospitals, HMOs, nursing homes, and clinics for the loss of their 
clinical facilities, as well as any computers and administrative 
facilities needed to manage NHI. They would not be reimbursed for loss 
of business opportunities or for administrative capacity not used by 
NHI.
    Capital spending drives operating costs and determines the 
geographic distribution of resources. Capital funds must go to 
excellent and efficient projects in areas of greatest need. When 
operating and capital payments are combined, as they are currently, 
prosperous hospitals can expand and modernize while impoverished ones 
cannot, regardless of need or quality. National health insurance would 
replace implicit mechanisms of capital allocation with explicit ones. 
Insulating these crucial decisions from lobbying and other distorting 
influences would be difficult and require rigorous evaluation, needs 
assessment, and active participation by providers and the public. The 
consistently poor performance of investor-owned facilities precludes 
their participation in NHI.
    Investor ownership has been shown to compromise quality of care in 
hospitals,3-5 nursing homes,\23\ dialysis facilities,\24\ and HMOs;\25\ 
for-profit hospitals are particularly costly.6-12 A wide array of 
investor-owned firms have defrauded Medicare and been implicated in 
other illegal activities.\26\ Investor-owned providers would be 
converted to nonprofit status. The NHI program would issue long-term 
bonds to amortize the one-time costs of compensating investors for the 
appraised value of their facilities. These conversion costs would be 
offset by reductions in payments for capital that are currently folded 
into Medicare and other reimbursements.
                        medications and supplies
    The NHI program would pay for all medically necessary prescription 
drugs and medical supplies, based on a national formulary. An expert 
panel would establish and regularly update the formulary. The NHI 
program would negotiate drug and equipment prices with manufacturers 
based on their costs, excluding marketing or lobbying. Where 
therapeutically equivalent drugs are available, the formulary would 
specify use of the lowest-cost medication, with exceptions available in 
specific cases. Outpatient suppliers would bill the NHI program 
directly for the negotiated wholesale price, plus a reasonable 
dispensing fee, for any item in the formulary that is prescribed by a 
licensed practitioner.
    National health insurance could simultaneously address 2 pressing 
needs: providing all Americans with full drug coverage and containing 
drug costs. As a single purchaser with a disproportionate influence on 
the market, the NHI program could exert substantial pressure on 
pharmaceutical companies to lower prices. Similar programs in the 
United States and other nations have resulted in substantial drug price 
reductions.\27-29\
    Additional reforms are needed to improve prescribing practices, 
minimize medication errors, upgrade monitoring of drug safety, curtail 
pharmaceutical marketing, ensure that the fruits of publicly funded 
drug research are not appropriated for private profit, and stimulate 
real innovation while ameliorating current incentives to develop ``me-
too'' drugs that add little to the therapeutic armamentarium.\30\
                                funding
    The NHI program would pay for virtually all medically necessary 
health services, with total expenditures set at approximately the same 
proportion of the gross domestic product as in the year preceding the 
establishment of NHI.
    While it is critical that the vast majority of funds flow out to 
providers from a single payer in each region, the mix of taxes used to 
raise these funds is a matter of tax policy, largely separate from the 
organization of health care per se.
    Single-source payment is the sine qua non of administrative 
simplification and the cornerstone of cost containment and health 
planning. Government expenditures, including payments for public 
employees' private health coverage and tax subsidies to private 
insurance, already account for about 60% of total health spending in 
the United States.\31\ This would increase under NHI, to perhaps 80% of 
health costs with the remainder used for such items as nonprescription 
drugs, cosmetic surgery, and other excluded services. The public money 
now routed through private insurers would be used to fund public 
coverage. The additional funds could be raised in a number of ways, 
including earmarked income taxes, payroll taxes, or required employer 
contributions. During a transition period, it seems reasonable to 
require that employers transfer money earmarked for health benefits 
under existing labor pacts to the NHI program. In the long run, we 
believe that funding based on income or other progressive taxes is 
fairest. Federal funding would attenuate inequalities among the states 
in financial and medical resources. The increase in government funding 
would be offset by reductions in premiums and out-of-pocket costs. The 
total costs of the NHI program would be no greater (and eventually 
less) than those of the current fragmented system.
                                comment
    Under an NHI program, the financial threat of illness to patients 
would be eliminated, as would current restrictions on choice of 
physicians and hospitals. Taxes would increase, but except for the very 
wealthy, would be fully offset by the elimination of insurance premiums 
and out-of-pocket costs. Most important, NHI would establish a right to 
health care.
    Clinical decisions would be driven by science and compassion, not 
the patient's insurance status or bureaucratic dictum. National health 
insurance would offer physicians a choice of payment options and 
practice settings. Nurses and other personnel would also benefit from 
the reduction in paperwork and a more humane clinical milieu.
    National health insurance would curtail the entrepreneurial aspects 
of medicine, including both the problems and the possibilities. All 
patients would be insured, with a uniform fee schedule. Physicians who 
work harder would make more. Billing would be simplified, saving each 
practitioner thousands of dollars annually in office expense. Based on 
experience in Canada, NHI would have little impact on physicians' 
average incomes, although differences among specialties might be 
attenuated.
    National health insurance would contain costs by enforcing overall 
budgets and eliminating profit incentives and not by detailed 
administrative oversight of utilization. Since hospitals and HMOs could 
not transfer monies for patient care to shareholders or divert them to 
institutional expansion, pressure to skimp on care would be minimized.
    National health insurance would eliminate many administrative and 
insurance worker positions, necessitating a major effort at job 
placement and retraining. Many of these displaced workers might be 
deployed as support personnel to free up nurses for clinical tasks; 
others might be retrained to staff expanded programs in public health, 
home care, and the like.
    Clinical departments would see only modest changes, eg, the 
elimination of billing-related work. However, hospitals' and nursing 
homes' administrative departments would shrink, and their financial 
incentives would change. Responsiveness to community needs, quality of 
care, and efficiency would replace financial performance as the bottom 
line. Operating revenues would become stable and predictable; capital 
requests would be weighed against other priorities for health care 
investment. Facilities would not grow or shrink based on their 
financial performance, although rational health planning would mandate 
that some expand and others close. Investor-owned providers would be 
converted to not-for-profit status.
    The insurance/HMO industry's role would be virtually eliminated. 
Most of the funds to expand care under NHI would come from eliminating 
insurance company overhead and profits, as well as the administrative 
expense they impose on health professionals and hospitals.
    Private employers now fund 19% of health spending.\31\ Even if new 
NHI taxes on employers fully replaced this spending, firms would 
achieve savings on their employee benefits departments, which currently 
cost billions of dollars to administer. Hence, for the average 
business, reform would likely yield at least modest short-term savings. 
Over the longer term, enhanced cost containment under NHI would spare 
firms from rapid and erratic health care cost growth. Many firms would 
undoubtedly choose to continue current wellness programs and workplace 
safety initiatives.
    Covering the uninsured would save thousands of lives annually.\32\ 
Upgrading coverage for those who are currently insured (eg, by adding 
full prescription drug benefits) would yield additional health 
benefits.
    Independent estimates by several government agencies and private 
sector experts indicate that NHI would not increase total health care 
costs.\33-37\ Savings on administration and billing, which would drop 
from the current 30% of total health spending to perhaps 15%, would 
approximately offset the costs of expanded services. Over the long run, 
improvements in health planning and cost containment made possible by 
single-source payment would slow health care cost escalation.
    This article presents a framework for the urgently needed reform of 
our health care payment system. We do not pretend to address the full 
range of health care problems or even to provide the detailed 
transition plan that will be needed to minimize dislocations during 
reform of the financing system. The need for quality improvement would 
remain urgent. National health insurance would not, in itself, 
encourage healthy lifestyles or upgrade environmental and public health 
services. Nonfinancial barriers to care--racial, linguistic, and 
geographic--would persist. Many issues in medical education would 
remain, including medical students' debt burden that skews specialty 
choices and discourages low-income applicants, the underrepresentation 
of minorities, and the appropriate role for commercial firms in 
supporting research and education. Some patients would still seek 
unnecessary services, and some physicians would still yield to 
financial temptation to provide them. The malpractice crisis would be 
partially ameliorated--the 25% of jury awards designated as 
compensation for future medical costs would be eliminated. However, our 
society would probably remain litigious, and legal and insurance fees 
would still consume about three fifths of malpractice premiums.\38\ The 
aging of our population and the development of costly new technologies 
would present a continuing challenge to affordability.
    Finally, while we propose a central role for government in 
financing care, we hold no illusions about government's shortcomings. 
Many of us disagree with government policies and priorities and are 
concerned by the influence of powerful special interests. Yet only a 
public NHI program can streamline our system and garner the savings 
needed to make universal coverage affordable. Ultimately, we prefer the 
democratic process, however flawed, to the boardroom decision making of 
private insurance firms.
                          alternatives to nhi
    The mounting crisis in health care has called forth a variety of 
incremental reform proposals discussed below. All share one critical 
liability: because they would retain the role of private insurers, they 
would perpetuate administrative waste, making universal coverage 
unaffordable. Most would augment bureaucracy. Proponents' assertions 
that private insurers would achieve large savings through computerized 
bill processing are not credible; most claims processing is already 
automated.
``Defined Contribution Schemes'' and Other Mechanisms to Increase 
        Patients' Price Sensitivity
    These plans cap employers' premium contributions at a fixed amount, 
pressuring employees to choose lower-cost insurance options. Many cite 
the Federal Employees Health Benefit Program as a model for such 
reform, even though premiums in this program are rising faster than in 
Medicare or for private employers.\39\ Hence, such programs are more 
likely to shift costs from firms to employees than to slow overall cost 
growth. Moreover, defined contribution schemes ensure a multitiered 
insurance system, with lower-income workers forced into skimpy plans, 
and the uninsured remaining uncovered.
Tax Subsidies and Vouchers for Coverage for the Uninsured
    These proposals would offer tax credits to low-income families who 
purchase private coverage. While promises of new government funding to 
expand coverage are attractive, the proposed subsidies (eg, $3000 per 
family under President Bush's proposal) fall far short of the cost of 
adequate insurance, requiring low-income families to pay thousands of 
dollars out of their own pockets. Hence, few of the uninsured would 
actually purchase coverage, even with the subsidy. Instead, most of the 
tax credits would subsidize premiums for low-income people who already 
have coverage. As a result, large outlays for tax subsidies would buy 
little new coverage. For instance, outlays of $13 billion annually 
would cover only 4 million of the uninsured.\40\
Expansion of Medicaid, State Children's Health Insurance Program 
        (SCHIP), and Other Public Programs
    Some proposals would expand Medicaid eligibility. Others would 
allow states to buy stripped-down HMO coverage for Medicaid recipients, 
with the savings ostensibly used to enroll more beneficiaries. Several 
problems bedevil these strategies. First, Medicaid already offers 
second-class coverage. Such programs that segregate the poor virtually 
ensure poor care and are more vulnerable to funding cuts than public 
programs that also serve affluent constituencies. In most states, 
Medicaid payment rates are so low that many physicians resist caring 
for Medicaid patients. As a result, access to care for Medicaid 
enrollees is often little better than for the uninsured.\41-42\ Further 
cuts to benefits, as envisioned in some Medicaid HMO schemes, would 
leave Medicaid recipients with coverage in name only. Moreover, the 
disempowered Medicaid population is particularly vulnerable to 
exploitation by profit-seeking HMOs, as evidenced by past scandals in 
California, Florida, Tennessee, and other states.\43-45\ Promises (eg, 
in Oregon \46-47\ and Tennessee \48\) that savings from Medicaid 
coverage cuts would lead to universal coverage have proven empty.
    Second, even large Medicaid expansions in the past have failed to 
keep pace with the erosion of private coverage.\49\ Moreover, Medicaid 
funding is most endangered when it is most needed; any economic 
downturn depletes states' tax revenues, reducing funds for Medicaid 
just as rising unemployment rates deprive many of private coverage.
    While few can argue with proposals to cover more of the poor and 
near-poor, Medicaid expansion without systemwide reform is a stopgap 
measure unlikely to stem future increases in the number of uninsured. 
It does not lead to universal coverage.
Employer Mandates
    This approach would require most employers to offer private 
coverage for their workers, with employees paying part of the premiums. 
The proposed mandates are usually coupled with a plan to expand 
Medicaid-like public programs. Some versions would offer employers the 
option of paying into a public program rather than providing the 
coverage themselves. Such programs can only add coverage by adding 
cost, leaving premiums unaffordable to many. In states where such plans 
have been passed, they have achieved neither universal coverage nor 
cost control.\1,50-53\ Hawaii's program has left many uncovered because 
of loopholes in the law, and costs in that state have continued to 
spiral upward. A 1988 Massachusetts employer mandate law was passed but 
later abandoned when costs soared.\51\
The Medicare HMO Program and Medicare Voucher Schemes
    Under Medicare's HMO program, private HMOs have already enrolled 
millions of senior citizens. Prominent proposals would expand 
Medicare's use of private insurers by offering seniors a voucher to 
purchase private coverage in lieu of traditional Medicare. These 
strategies assume that private plans are more efficient than Medicare, 
that seniors can make informed choices among health plan options, and 
that private insurers' risk avoidance can be thwarted. All 3 
assumptions are ill-founded. Traditional Medicare is more efficient 
than commercial insurers; costs per beneficiary have risen more slowly 
and overhead is far lower.
    An American Association of Retired Persons survey of seniors found 
that few had adequate knowledge to make informed choices among 
plans.\54\ Despite regulations prohibiting risk selection in the 
current Medicare HMO program, plans have successfully recruited 
healthier than average seniors. Hence HMOs have collected high premiums 
for patients who would have cost Medicare little had they remained in 
fee-for-service Medicare. Moreover, HMOs have evicted millions of 
seniors in counties where profits are low, while continuing to enroll 
Medicare patients in profitable areas.\55\ As a result, HMOs have 
increased Medicare costs by $2 billion to $3 billion each year2 and 
disrupted the continuity of care for many patients.
    A voucher program for Medicare would also push low-income seniors 
into skimpy plans similar to the defined contribution approach to 
employee coverage discussed above. Moreover, Congress is unlikely to 
increase the value of the voucher to keep pace with the rising costs of 
private plans. Over time, seniors' out-of-pocket costs for coverage 
would likely rise.
                               conclusion
    Health care reform is again near the top of the political agenda. 
Health care costs have turned sharply upward. The number of Americans 
without insurance or with inadequate coverage rose even in the boom 
years of the 1990s. Medicare and Medicaid are threatened by ill-
conceived reform schemes, and middle-class voters are very concerned 
about the abuses of managed care. Other wealthy countries manage to 
provide universal health care at half the cost we pay. Their problems 
stem mainly from inadequate funding, not the structure of their 
systems. In contrast, the problems in the United States are systemic. 
Incremental changes cannot solve them; further reliance on market-based 
strategies will exacerbate them. What needs to be changed is the system 
itself.
                           author information
Corresponding Author and Reprints: David U. Himmelstein, M.D., 
        Cambridge Hospital/Harvard Medical School, 1493 Cambridge St, 
        Cambridge, MA 02139 (e-mail: [email protected]).
Author Contributions: Article concept and design: Woolhandler, 
        Himmelstein, Angell, Young.
Acquisition of data: Woolhandler, Himmelstein, Young.
Analysis and interpretation of data: Woolhandler, Himmelstein, Angell.
Drafting of the manuscript: Woolhandler, Himmelstein, Angell, Young.
Critical revision of the manuscript for important intellectual content: 
        Woolhandler, Himmelstein, Angell, Young.
Administrative, technical, or material support: Woolhandler, 
        Himmelstein, Young.
Study supervision: Woolhandler, Himmelstein, Young.

    This article has been endorsed by 7784 additional physicians and 
medical students (names available at http://www.pnhp.org/signers/).
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    \53\ Martin A, Whittle L, Levit K. Trends in State Health Care 
Expenditures and Funding: 1980-1998. Available at: http://cms.hhs.gov/
statistics/nhe/state-trends/. Accessed July 14, 2003.
    \54\ Hibbard JH, Jewett JJ, Engelmann S, Tusler M. Can Medicare 
beneficiaries make informed choices? Health Aff (Millwood). 
1998;17:181-193. ABSTRACT
    \55\ Charatan F. Health maintenance organisations drop Medicare 
beneficiaries. BMJ. 2001;323:772. PUBMED
                                 ______
                                 
    Dr. Angell. While I have the floor here, I wonder if it 
would be possible for me to comment on three issues raised 
earlier, and maybe the fourth issue, the nursing situation.
    Mr. Holt. Yes, you may. You may use my time for that.
    Dr. Angell. The nursing problem, the staffing problem in 
general, is something that can only be handled in a single-
payer system because then you would have the ability to 
coordinate and distribute resources and make manpower decisions 
that you can't do in a fragmented system or nonsystem. We 
really don't have a system; it is a nonsystem. So you need some 
kind of a system to make these kinds of decisions. That is 
another reason for doing it, and that would include manpower 
decisions.
    The other comments I would like to make, earlier it was 
suggested that somehow a government-administered system would 
be less responsive to patients' needs and desires. I would like 
to explore that by comparing Medicare, our Medicare, which is a 
government-administered, publicly financed system, with our 
employment-based private system that relies on investor-owned 
insurance companies.
    Medicare insures almost everyone over the age of 65 whether 
they have preexisting conditions or not, all of them, and it 
insures them for the full benefit package. It can't tailor that 
package according to whether someone actually needs care or 
not, and recipients of Medicare have free choice of doctors, 
completely free choice. Compare that with the insurance system, 
the private insurance system, where you may not get insurance 
if you have a preexisting condition. If you do get the 
insurance, you may have certain things covered, but other 
things not covered.
    Mr. Holt. I have a close, in fact, the closest possible, 
relationship with the medical profession.
    Chairman Andrews. He is married to a physician, that is 
what he means.
    Mr. Holt. And indeed if most doctors had to choose between 
Medicare's rules and restrictions and that of any number of 
private insurance companies, it would be Medicare hands down.
    Dr. Angell. And most patients, too.
    It is the most popular part of our health care system.
    Something was said earlier about cancer outcomes being 
better in this country than in some other countries. Cancer is 
a disease of older people, and I suspect what we are seeing is 
the success of the Medicare part of our system and not the 
private employment-based part.
    So I think the notion that somehow a government-
administered system is less responsive to patients is quite the 
opposite of the case in this country.
    Second, the flight from Canada. First of all, I am not 
aware of droves of people coming, but we have now about 50 
million.
    Mr. Holt. I should warn you, our time is running out.
    Dr. Angell. I will be fast. We have 50 million Americans 
with no insurance at all. They would love to go to Canada for 
health care if they could afford it. That would be droves going 
in the other direction.
    If the King of Jordan can come here and get health care, 
that is a sad commentary on both of our countries; that he 
can't get health care in his country that is adequate, and that 
he can jump the queue, and 50 million people here don't have 
health insurance, but he can buy his way in.
    Chairman Andrews. The gentleman's time has expired.
    I want to add a word of appreciation and thanks to the 
witnesses and also make a request of them. The appreciation is 
obvious. You prepared thoroughly for this morning. You have 
endured the delay in the middle of the hearing, for which I 
apologize, when we had the floor votes, and we very much 
appreciate the very substantive contribution that you have 
made.
    The committee and the Congress are at the onset of our 
deliberations on passing a bill that we hope will address the 
problems that you very articulately have identified today. To 
summarize them, I think it includes the fact that we pay too 
much and get too little, the fact that there is too much 
interference with the relationship between a patient and a 
provider, and the fact that the problems seem to be escalating 
rather than being resolved.
    I would ask each of the four witnesses to continue to have 
dialogue with the committee as the process goes forward, and I 
would invite you to do that. We are accessible through all the 
different modes of communication, and we would like to hear 
from each one of you.
    I would like to ask if the substitute Ranking Member has 
any comments before we conclude.
    Mr. Price. I would like to echo our appreciation for the 
witnesses, and especially for Chairman Conyers, who has labored 
long in an effort to try to reform the system.
    I think a couple of points that I would like to make. One 
is that those of us on our side of the aisle do not believe 
that the status quo is acceptable. Reform is absolutely 
imperative for all of the reasons that all of us have grave 
concerns about the situation that we find ourselves in, whether 
it is on the provider side as physicians and hospitals and 
nurses and others who are working as diligently as possible to 
care for patients, or whether it is on the patient side where 
they are having difficulty gaining access.
    I would respectfully suggest that an honest and sober 
reflection of what has gone on before in other systems would be 
appropriate, and in our system. If one is a new Medicare 
patient in this Nation, access to care is markedly limited 
because it is difficult to find a physician who is taking new 
Medicare patients. The Mayo Clinic is limiting the number of 
Medicare patients that it is taking in Jacksonville. That is a 
frightening, frightening statement about--an indictment of our 
current system.
    The limitation of care under our Medicare system I know 
very well and firsthand as a physician practicing under that 
system, and Medicare limits the ability of physicians to care 
for patients in a remarkable number of ways.
    So I would join the Chairman in hoping that we would have a 
very thoughtful, sober, reflective, honest debate and 
discussion. If we do that, I have great faith we will come up 
with a system that will reflect the ideals of Americans.
    Chairman Andrews. I thank the gentleman.
    I would just conclude with this comment. An American 
President stood up and said that the country needed a law to be 
sure that every person had access to quality health care and 
health insurance, and he said that if we did not take steps to 
achieve that objective, that the economy of the country would 
suffer greatly, and, more importantly, individuals and families 
would suffer greatly. That President was Harry Truman, and his 
words were repeated by various other Presidents since then.
    In 1971, Richard Nixon proposed a system of universal 
health care through an employer mandate. I see Chairman Conyers 
shaking his head. He remembers that. Mr. Chairman, I was in 
high school then, but I do remember the proposal. Obviously 
there have been attempts, most recently in 1994, and in other 
iterations since then.
    There is one common thread I hope is running through 
Members of both parties and through both Houses. I know it 
exists in the White House. This time there is going to be a 
law, not a discussion. We are going to do our very best to make 
sure that it is a law that works and can pass. I think today's 
discussions have been very fruitful and constructive in helping 
us get to that point. As I said to the Chairman at the outset, 
we hope this is the beginning of our interaction with you, not 
the end.
    With that, I thank the Members.
    Without objection, Members will have 14 days to submit 
additional materials or questions for the hearing record.
    [Questions for the record and their responses follow:]

                                       [Via Email],
                                             U.S. Congress,
                                     Washington, DC, June 16, 2009.
Dr. Marcia Angell, Senior Lecturer in Social Medicine,
Harvard Medical School, FXB Building, 6th floor, 651 Huntington Avenue, 
        Boston, MA 02115.
    Dear Dr. Angell: Thank you for testifying at the June 10, 2009, 
Committee on Education and Labor Subcommittee on Health, Employment, 
Labor, and Pensions Hearing on ``Examining the Single Payer Health Care 
Option.''
    Committee Members had additional questions for which they would 
like written responses from you for the hearing record.
    Congressman Kucinich asks the following questions:
    1. I asked a question of Dr. David Himmelstein when he gave 
testimony a number of weeks ago in this subcommittee and I'll ask it of 
you too. In the event that a national single payer plan is not brought 
to a vote by this Congress, what would be your top legislative health 
care priority that would get us closer to a system that would control 
costs, grant health care as a right, and improve quality?
    2. We know single payer will eliminate a lot of excessive costs at 
the outset by getting rid of the unnecessary middleman, the health 
insurance companies. But the real cost problem is that costs are rising 
every year faster than inflation. How will single payer control the 
rate of cost growth? What evidence do we have for that?
    3. Why is the Massachusetts health care plan failing?
    4. We have heard over and over that polls show that people want to 
keep the health care they have. And yet polls show people have 
extremely low approval ratings for the health insurance industry. How 
would you reconcile those two polls?
    5. Why does it make a difference if the system is for-profit or 
not-for-profit? What is the difference in cost, quality and access?
    6. Why is FEHBP, the health plan for federal employees, including 
Members of Congress, not a good model for health care reform?
    7. I believe that health care is a human right, that it is just as 
important as water, food, education, housing or any other human right. 
Can you please describe the range of health care finance options that 
would make health care a human right?
    Please send your written response to Subcommittee staff by COB on 
Wednesday, June 24, 2009--the date on which the hearing record will 
close. If you have any questions, please contact the Subcommittee. Once 
again, we greatly appreciate your testimony at this hearing.
            Sincerely,
                                  Robert Andrews, Chairman,
           Subcommittee on Health, Employment, Labor, and Pensions.
                                 ______
                                 

             Dr. Angell's Responses to Questions Submitted

    Dear Chairman Andrews: Thank you for your letter of June 16 and for 
sending me the additional questions posed by Congressman Kucinich. 
Before answering them, I would like to make two general observations, 
as background for my specific responses.
    First, nearly everyone agrees that the central problem in our 
health system is runaway costs. Yet we've chosen to leave the system 
largely in the hands of for-profit businesses whose primary goal is to 
grow. Even on the face of it, that makes no sense.
    Second, it's important to distinguish the insurance system from the 
delivery system, which consists of the facilities and providers who 
deliver the care. To control costs, reform needs to address both.
    Now I'll address Congressman Kucinich's perceptive questions as you 
numbered them in your letter. I would also refer him to the written 
testimony I submitted for the record at the June 10th hearing.
    1. Question: In the event that a national single-payer plan is not 
brought to a vote by this Congress, what would be your top legislative 
health care priority that would get us closer to a system that would 
control costs, grant health care as a right, and improve quality?
    Answer: There are two possible incremental approaches that would be 
helpful. We could allow individual states to institute single-payer 
systems within their borders (I assume they would need federal waivers 
to include Medicare and Medicaid recipients.) Unless health facilities 
and providers became nonprofit, however, savings would be limited. But 
it would be a start and give us some experience with single-payer 
health care. The second incremental approach would be to lower the 
Medicare age nationally a decade at a time. Here, too, savings would be 
limited if we retained our profit-driven delivery system. Moreover, 
unlike a true single-payer system within a state, there would still be 
hundreds of private insurers driving up administrative costs. So I 
would prefer a state-by-state approach.
    2. Q. How will single-payer control the rate of cost growth? What 
evidence do we have for that?
    A. I agree that runaway cost is the central problem. Converting to 
a single-payer system would help enormously. Since overhead is one of 
the fastest growing parts of the system, cutting it in half would be 
more than a one-time saving; savings would carry over year after year. 
In addition, a single-payer system permits the rational distribution of 
resources according to medical need. But costs would still rise too 
rapidly, because of the for-profit delivery system. Most specialty 
hospitals and many general hospitals are for-profit, as are most 
nursing homes, home health care agencies, dialysis units, psychiatric 
facilities, and freestanding imaging and testing centers. The more they 
do, the more they are paid; costs to the system are their profits. 
Another reason costs would continue to rise is that most physicians are 
paid fee-for-service, and the fees are badly skewed to reward 
specialists extravagantly for doing high-technology tests and 
procedures. As for evidence, I would refer you to Atul Gawande's recent 
article in the New Yorker and to an excellent book by Shannon Brownlee, 
titled Overtreated: Why Too Much Medicine is Making Us Sicker and 
Poorer, published in 2007 by Bloomsbury Press.
    To realize the full savings of a single-payer system, we would need 
a three-pronged reform: (1) a single-payer insurance system, (2) a 
nonprofit delivery system, and (3) putting physicians on salaries, or 
adjusting fees to reward primary care physicians much more and 
specialists less. You might want to refer to an article I wrote for the 
Canadian Medical Association Journal, October 21, 2008, comparing the 
Canadian system with ours since they adopted their system in 1972.
    3. Q. Why is the Massachusetts health care plan failing?
    A. It is simply unaffordable for the state and for individuals. It 
requires residents to buy, or the state to subsidize, private insurance 
at whatever price the industry wants to charge. Handing private 
companies a captive market was a recipe for steep price increases. 
About a quarter of those required to purchase insurance out-of-pocket 
have been granted waivers because they can't afford it, and the 
required benefit package has been stripped down (for example, the 
requirement for prescription drug coverage was dropped). Even so, it's 
doubtful whether the program can limp along much longer. Deductibles 
and co-payments will have to increase, and required benefits will 
probably be reduced still further. Massachusetts is learning that 
health insurance is not the same thing as health care.
    4. Q. We have heard over and over that polls show that people want 
to keep the health care they have. And yet polls show people have 
extremely low approval ratings for the health insurance industry. How 
would you reconcile those two polls?
    A. Everything would depend on the wording of the questions in the 
polls. I think people are worried that they may lose what they have, as 
inadequate as that may be, and so they may be reluctant to advocate 
scrapping the system altogether. They don't want to end up with even 
less than they have now. But I've never met anyone who had a kind word 
for the practices of the insurance companies, or who thought it was OK 
for people to lose their health care if they lost their jobs.
    5. Q. Why does it make a difference if the system is for-profit or 
not-for-profit? What is the difference in cost, quality and access?
    A. The purpose of investor-owned businesses is to increase the 
value of their shareholders' stock by maximizing profits. Health care 
is distributed like a market commodity according to the ability to pay, 
not according to medical need. In economic terms, this is a highly 
successful industry--profitable and growing--but it's a huge drain on 
the rest of the economy and a staggeringly inefficient way to deliver 
health care. If we want to reduce the nation's health costs, why would 
we leave the job to an industry that by its nature seeks to expand? 
Comparisons of for-profit with nonprofit facilities and providers have 
clearly shown that for-profits almost always cost more than comparable 
nonprofits, and usually deliver poorer quality care. For a full review 
of this subject, please see Chapter 2 (The Consequences of 
Commercialized Care) of Arnold S. Relman's book, A Second Opinion: 
Rescuing America's Health Care, published in 2007 by Public Affairs.
    6. Q. Why is FEHBP, the health plan for federal employees, 
including Members of Congress, not a good model for health care reform?
    A. Costs of the FEHBP are rising extremely rapidly, because there 
is no mechanism for controlling them. As in the case of the 
Massachusetts model, it doesn't make sense to enact health reform if it 
will quickly become unaffordable.
    7. Q. I believe that health care is a human right, that it is just 
as important as water, food, education, housing or any other human 
right. Can you please describe the range of health care finance options 
that would make health care a human right?
    A. I certainly agree with you. Health care is a vital need, like 
fire and police protection, clean water and air, equal justice, and 
education. There is no reason to single it out to be left to the 
vagaries of the market. Imagine if a 5th grader were turned away from 
school because his parents hadn't purchased education insurance! The 
fairest way to finance health care is through an earmarked tax on 
income. Income taxes would increase somewhat, but the savings in 
premiums and out-of-pocket costs in a more efficient system would more 
than offset the increase in taxes.
    Thank you for giving me the opportunity to respond to these 
questions.
                                 ______
                                 
                                       [Via Email],
                                             U.S. Congress,
                                     Washington, DC, June 16, 2009.
Ms. Geri Jenkins, R.N., Co-President,
California Nurses Association/National Nurses Organizing Committee, 
        2000 Franklin Street, Oakland, CA 94612.
    Dear Ms. Jenkins: Thank you for testifying at the June 10, 2009, 
Committee on Education and Labor Subcommittee on Health, Employment, 
Labor, and Pensions Hearing on ``Examining the Single Payer Health Care 
Option.''
    Committee Members had additional questions for which they would 
like written responses from you for the hearing record.
    Congressman Kucinich asks the following questions:
    1. A number of states have commissioned health care experts from 
the Lewin Group and other expert organizations to produce studies 
comparing the cost effectiveness of different ways of delivering health 
care to their citizens, including single payer. What did those studies 
find?
    2. I asked a question of Dr. David Himmelstein when he gave 
testimony a number of weeks ago in this subcommittee and I'll ask it of 
you too. In the event that a national single payer plan is not brought 
to a vote by this Congress, what would be your top legislative health 
care priority that would get us closer to a system that would control 
costs, grant health care as a right, and improve quality?
    3. We know single payer will eliminate a lot of excessive costs at 
the outset by getting rid of the unnecessary middleman, the health 
insurance companies. But the real cost problem is that costs are rising 
every year faster than inflation. How will single payer control the 
rate of cost growth? What evidence do we have for that?
    4. Why is the Massachusetts health care plan failing?
    5. We have heard over and over that polls show that people want to 
keep the health care they have. And yet polls show people have 
extremely low approval ratings for the health insurance industry. How 
would you reconcile those two polls?
    6. Why does it make a difference if the system is for-profit or 
not-for-profit? What is the difference in cost, quality and access?
    7. Why is FEHBP, the health plan for federal employees, including 
Members of Congress, not a good model for health care reform?
    8. I believe that health care is a human right, that it is just as 
important as water, food, education, housing or any other human right. 
Can you please describe the range of health care finance options that 
would make health care a human right?
    Please send your written response to Subcommittee staff by COB on 
Wednesday, June 24, 2009--the date on which the hearing record will 
close. If you have any questions, please contact the Subcommittee. Once 
again, we greatly appreciate your testimony at this hearing.
            Sincerely,
                                  Robert Andrews, Chairman,
           Subcommittee on Health, Employment, Labor, and Pensions.
                                 ______
                                 

             Ms. Jenkins' Responses to Questions Submitted

    Dear Congressman Andrews: Thank you for allowing me the opportunity 
to testify at the subcommittee on Health, Employment, Labor, and 
Pensions Hearing on ``Examining the Single Payer Health Care Option.''
    I have enclosed my responses to Congressman Kucinich's questions 
along with a study prepared by the Institute for Health & Socio-
Economic Policy titled ``Single Payer/Medicare for All: An Economic 
Stimulus Plan for the Nation.''
    Thank you again for the opportunity and I will gladly answer any 
questions you may have.
            Sincerely,
                          Geri Jenkins, R.N., Co-President,
California Nurses Association/National Nurses Organizing Committee.
Responses to Congressman Kucinich's questions
    1. A number of states have commissioned health care experts from 
the Lewin Group and other expert organizations to produce studies 
comparing the cost effectiveness of different ways of delivering health 
care to their citizens, including single payer. What did those studies 
find?
    Response: Over the last 15 years, 13 states have used expert 
consulting firms to look at various options for the provision of health 
care for their residents. The states which commissioned the studies and 
the advantages demonstrated by single payer are:


------------------------------------------------------------------------
                                           Annual single payer
               State/firm                        savings           Year
------------------------------------------------------------------------
New Mexico/Lewin.......................             $151,800,000    1994
Delaware/Sol.for Prog..................              229,000,000    1995
Minnesota/Lewin........................              718,000,000    1995
Mass./Lewin/SFP/BUSPH..................            1,800,000,000    1998
                                                   3,600,000,000
Maryland/Lewin.........................              345,000,000    2000
Vermont/Lewin..........................              118,000,000    2001
California/Lewin.......................            7,500,000,000    2002
Maine/Mathmentica Policy...............                        0    2002
Rhode Island/SFP/BUSPH.................              270,000,000    2002
Missouri/MFH...........................            1,700,000,000    2003
Georgia/Lewin..........................              716,000,000    2004
California/Lewin.......................            8,000,000,000    2005
Colorado/Lewin.........................            1,400,000,000    2007
Kansas/Lewin...........................              869,000,000    2007
------------------------------------------------------------------------

    Twelve of the thirteen states showed very significant savings in 
health care costs while at the same time eliminating all the uninsured. 
Maine was the exception, showing no increase/decrease in state health 
spending under single payer but providing health care to an additional 
150,000 residents. More information on these reports is available at 
[email protected]
    All of the firms used very conservative estimates of how much money 
would be saved by using a single payer system versus multiple payers.
    2. I asked a question of Dr. David Himmelstein when he gave 
testimony a number of weeks ago in this subcommittee and I'll ask it of 
you too. In the event that a national single payer plan is not brought 
to a vote by this Congress, what would be your top legislative health 
care priority that would get us closer to a system that would control 
costs, grant health care as a right, and improve quality?
    Response: Elimination of the Medicare Advantage Program, increasing 
the level of Medicare benefits and lowering the age at which people are 
eligible for Medicare would mark important steps in meeting the goals 
of controlling costs, granting health care as a right, and increasing 
quality. Absent a national single payer plan, enabling the states to 
enact their own single payer plans without any federal barriers and to 
receive any and all moneys they would have otherwise receive from the 
federal government is a top priority for CNA/NNOC.
    3. We know single payer will eliminate a lot of excessive costs at 
the outset by getting rid of the unnecessary middleman, the health 
insurance companies. But the real cost problem is that costs are rising 
every year faster than inflation. How will single payer control the 
rate of cost growth? What evidence do we have for that?
    Response: Primarily by applying a national health care budget, 
negotiating prices with providers and pharmaceutical companies, and 
changing the government's compensation for health care from fee for 
service to payment based on patient wellness and outcomes. Several 
decades ago health care in the U.S. and Canada consumed about the same 
percentage of the GDP in both countries. Today, we are spending 50% 
more of our GDP than does our northern neighbor. The difference of 
course is that Canada adopted single payer 40 years ago.
    4. Why is the Massachusetts health care plan failing?
    Response: The Massachusetts Plan individual mandate, costs continue 
to escalate far more than initially projected, private insurance plans 
are costly for many who are not subsidized, community health clinics 
and hospitals are severely disadvantaged. Without continuing federal 
largess, it is economically unsustainable as has proven to be the case 
with other state reforms.
    5. We have heard over and over that polls show that people want to 
keep the health care they have. And yet polls show people have 
extremely low approval ratings for the health insurance industry. How 
would you reconcile those two polls?
    Response: By and large people want to keep their doctors and other 
health care providers. The large majority of people understand that 
health insurance companies do not provide health care. In many 
instances these companies limit a person's choice of doctors, change 
the doctor they already have, and deny or modify the care their doctor 
prescribes, thus the very negative ratings for such companies.
    If the statement, ``People should have the right to go to the 
physician of their choice, just like people on traditional Medicare do, 
and no insurance company has a right to interfere with the decisions me 
and my doctor make about my health care'' were polled, we believe the 
results would show a very large majority in support.
    6. Why does it make a difference if the system is for-profit or 
not-for-profit? What is the difference in cost, quality and access?
    Response: In a for-profit system, too much focus is directed and 
too many resources are directed toward the primary objective: making a 
profit for the insurance, pharmaceutical, healthcare equipment and 
large provider corporations and all the entities up and down the line 
that may build in some way to make money off the system. Measures of 
quality are often obscured or non-existent as individual profit centers 
measure their success by the impact on the bottom line and not of the 
health and well-being of patients or communities.
    Beginning with a non-profit focus allows far better motivation for 
public health outcomes and helps control costs currently swelled by 
profits to shareholders and CEOs alike. In addition to the obvious 
costs built into the current system for the profit margins, all the 
activities that support the maximization of profit--underwriting, 
policy rescissions, large billing operations and administrative waste 
all funnel money away from the delivery of healthcare. Under a non-
profit system, a far higher percentage of our healthcare dollars would 
actually be used for healthcare services.
    Under the current multi-payer, for-profit system, access issues 
have forced more than 47 million people to go without health insurance 
of any kind and millions of others to make critical healthcare 
decisions based on access limited by financial concerns. The cost of 
those access issues has been 22,000 American lives lost every year due 
to a lack of access to care and a much higher number of preventable 
deaths which are at least in part attributable to access issues.
    7. Why is FEHBP, the health plan for federal employees, including 
Members of Congress, not a good model for health care reform?
    Response: The Federal Employee Health Benefit Pool is a large 
``connector'' for the purchase of for-profit health insurance plans. As 
such, it offers not greater health or financial security to federal 
employees than any other large employer group benefit package. Members 
of Congress--and high ranking federal employees--do have access to 
higher level plans with better coverage than do the lower ranking staff 
members and many employees of other federal agencies. So even within 
the FEHBP there are wide disparities in access and quality of care 
available for these individuals and their families. The FEHBP is simply 
a large health insurance marketplace. Some are able to afford great 
coverage while others cannot.
    8. I believe that health care is a human right, that it is just as 
important as water, food, education, housing or any other human right. 
Can you please describe the range of health care finance options that 
would make health care a human right?
    Response: Health care as a human right can be financed by 
increasing the payroll tax as proposed in H.R. 676. Or, as proposed in 
H.R. 1200 by a combination of a small income tax increase with an 
increase in the employers' payroll tax. Some countries finance a 
substantial amount of their national health care from a value added 
tax. The progressive income tax can be part of the financing as well.
    Other nations finance their systems at least in part from their 
general revenue.
    Presumably, when Congress voted to financially bail out Wall Street 
and the big banks and AIG by adding $trillions to the liabilities of 
the country's taxpayers it anticipated that the costs would be paid 
from the Treasury. Should not financing the health care of the American 
people receive the same consideration?
                                 ______
                                 
    [To access the study, ``Single Payer/Medicare for All: An 
Economic Stimulus Plan for the Nation,'' use the following 
Internet address:]

   http://www.calnurses.org/research/pdfs/ihsp--sp--economic--study--
                                2009.pdf

                                ------                                

                                       [Via Email],
                                             U.S. Congress,
                                     Washington, DC, June 16, 2009.
Dr. Walter Tsou, M.D., M.P.H., National Board Advisor,
Physicians for a National Health Program, 325 E. Durham Street, 
        Philadelphia, PA 19119.
    Dear Dr. Tsou: Thank you for testifying at the June 10, 2009, 
Committee on Education and Labor Subcommittee on Health, Employment, 
Labor, and Pensions Hearing on ``Examining the Single Payer Health Care 
Option.''
    Committee Members had additional questions for which they would 
like written responses from you for the hearing record.
    Congressman Kucinich asks the following questions:
    1. I asked a question of Dr. David Himmelstein when he gave 
testimony a number of weeks ago in this subcommittee and I'll ask it of 
you too. In the event that a national single payer plan is not brought 
to a vote by this Congress, what would be your top legislative health 
care priority that would get us closer to a system that would control 
costs, grant health care as a right, and improve quality?
    2. We know single payer will eliminate a lot of excessive costs at 
the outset by getting rid of the unnecessary middleman, the health 
insurance companies. But the real cost problem is that costs are rising 
every year faster than inflation. How will single payer control the 
rate of cost growth? What evidence do we have for that?
    3. Why is the Massachusetts health care plan failing?
    4. We have heard over and over that polls show that people want to 
keep the health care they have. And yet polls show people have 
extremely low approval ratings for the health insurance industry. How 
would you reconcile those two polls?
    5. Why does it make a difference if the system is for-profit or 
not-for-profit? What is the difference in cost, quality and access?
    6. Why is FEHBP, the health plan for federal employees, including 
Members of Congress, not a good model for health care reform?
    7. I believe that health care is a human right, that it is just as 
important as water, food, education, housing or any other human right. 
Can you please describe the range of health care finance options that 
would make health care a human right?
    Please send your written response to Subcommittee staff by COB on 
Wednesday, June 24, 2009--the date on which the hearing record will 
close. If you have any questions, please contact the Subcommittee. Once 
again, we greatly appreciate your testimony at this hearing.
            Sincerely,
                                  Robert Andrews, Chairman,
           Subcommittee on Health, Employment, Labor, and Pensions.
                                 ______
                                 

              Dr. Tsou's Responses to Questions Submitted

    Thank you so much for the opportunity to speak to your subcommittee 
on June 10 on the subject, ``Examining the Single Payer Health Care 
Option.'' You have kindly sent me seven additional questions which I 
have answered below. I am happy to answer any further questions which 
you or your committee members may have.
            Yours truly,
                                  Walter Tsou, M.D., M.P.H.

    1. In the event that a national single-payer plan is not brought to 
a vote by this Congress, what would be your top legislative health-care 
priority that would get us closer to a system that would control costs, 
grant health care is a right, and improve quality?
    A. J. Muste (1885-1967), the well-known peace activist, once 
stated, ``there is no way to peace, peace is the way.'' So it probably 
is not surprising that I believe that there is no way to quality 
affordable health care that makes health care a right except for a 
properly financed, single-payer, national health insurance program. 
Hence, I believe that the current national aversion by members of 
Congress to single-payer is totally misguided. For example, instead of 
trying to reassure people that a robust public option is not a slippery 
slope to single-payer, we should be upfront and say that our national 
goal is to move toward a single-payer plan and that we intend to take a 
series of steps that move us toward that goal. As I stated in my 
testimony and illustrated by this past week's CBO estimate of the 
Senate HELP committee's draft reform legislation, trying to find the 
funds in order to expand access to health care for all Americans while 
keeping the private health-insurance industry intact is an exercise in 
futility. The New York Times poll published on June 20 showed that 72% 
of Americans support a government administered health insurance plan. 
Equally striking is that 85% of Americans believe that our healthcare 
system needs either fundamental changes or should be completely 
rebuilt. Americans want major health care reform and they want 
government to assume the lead role. I believe there is a major 
disconnect between what Americans outside of the Beltway want and what 
politicians within the Beltway are discussing. Again, the June 20 NY 
Times poll notes that two of the major design issues being discussed:
    a. mandating that employers provide insurance or that all Americans 
must purchase insurance (good idea only 26%)
    b. taxing employer benefits (good idea only 20%)
    There is wisdom in what Americans are asking for and Congress would 
be wise to change course and listen.
    Medicare was passed in 1964 and implemented in 1965. The original 
authors, Wilbur Cohen, Nelson Cruikshank and others, intended to have a 
single payer national health insurance program, but were stymied by 
special interest groups. They were met with the same warnings that you 
can't change the health care system so dramatically. Now 44 years 
later, Medicare and Medicaid remain robust and dramatic examples of the 
essential role of a government funded insurance plan that has served 
tens of millions of Americans. The unfinished dream of the Medicare 
authors remains unmet. It is time to help realize that dream.
    Not passing single payer means that you will waste hundreds of 
billions of dollars in order to pursue a woefully inefficient system of 
insurance. As noted above, Medicare and Medicaid were implemented 
within a year, because for most Americans, they care about picking 
their doctor or hospital and not as much about who pays their bill.
    If you don't do single payer, several steps could be taken to move 
us toward a single payer plan. For example, we could put all hospitals 
on global budgets based on their previous year's expenditures, new 
capital expenses, new community initiatives that advance our nation's 
health objectives and adjusted by the rate of inflation.
    Another initial step would be to insure all residents within a 
given age range such as all children under age 18 or all early retirees 
between ages 50-65. The younger age cohort could be cheaper to insure 
and offer significant advantages which will pay off for our nation in 
the future. The older early retiree cohort is more expensive to fund, 
but is likely to address a huge problem for businesses and local 
governments--the problem of retiree health care costs which is rapidly 
disappearing in America (witness the auto industry). A major problem is 
that insuring cohorts still maintains the duplicative billing systems 
and administrative waste in our system, so it does not have the savings 
needed to cover all Americans. However, it would be an acknowledged 
step toward true universal coverage and would be a first step toward 
single payer.
    2. We know single-payer will eliminate a lot of excessive costs at 
the outset by getting rid of the unnecessary middleman, the health 
insurance companies. But the real cost problem is that costs are rising 
every year faster than inflation. How will a single-payer control the 
rate of cost growth? What evidence do we have for that?
    If you squeeze a balloon, one end always expands while the squeezed 
end contracts. This is very similar to what happens in our health care 
system where we've tried a variety of price controls and other methods 
to control health care costs only to find that other areas grow 
exponentially.
    The beauty of single-payer is that it offers the greatest variety 
of choices for controlling health care costs and because it is the 
dominant payer of health services, squeezing the balloon can 
effectively control costs. In fact, it is the only method that can 
work. Believing that 1,300 private health insurers in a competitive 
marketplace can control costs belies what fifty years of experience 
tells us. They cannot do it.
    Our proposals for funding single-payer health care begins with 
spending what we will spend as a nation on health care in 2010, namely 
$2.7 trillion. We create our budget estimates within the confines of 
this dollar amount that we adjust annually based on the rate of 
inflation.
    Kaiser Family Foundation has recently reviewed HR 676, the US 
National Health Care Act (USNHC) which would implement a single payer 
plan across this nation. They identified the following methods of cost 
containment in the bill:
    1. Establish annual budgets for health care professional staffing, 
capital expenditures, reimbursement for providers, and health 
professional education
    2. Pay institutional providers, including hospitals, nursing homes, 
community or migrant health centers, home care agencies, and other 
institutional and prepaid group practices, a monthly lump sum to cover 
operating expenses
    3. Pay physicians and other non-institutional providers based on a 
simplified fee scheduled or as a salaried employee in an institution 
receiving a global budget or in a group practice or HMO receiving 
capitation payments. (The fee schedule should be negotiated by the 
government with the various specialty societies since the specialty 
societies know best what the respective services are ``worth''. As new 
procedures are introduced, new fee schedules can be negotiated.)
    4. Establish a uniform electronic billing system and create an 
electronic patient record system. (The uniformity of a single payer 
system allows us to pick one robust system using ``smart card'' 
technology which can be read by any health professional across America. 
Currently, only the VA has such capability. The information technology 
would allow us to create a sophisticated database as well as complete 
state, local, and even neighborhood database which could be used to 
most properly identify areas of need and the most judicious placement 
of resources.)
    5. Allow only public or not-for-profit institutions to participate 
in USNHC. Private physicians, clinics, and other participating 
providers may not be investor owned (see answer to question #5)
    6. Require USNHC program to negotiate annually prices for drugs, 
medical supplies, and assistive equipment
    7. Establish a prescription drug formulary that encourages best 
practices in prescribing and promotes use of generics and other lower 
cost alternatives.
    A single-payer financing system would generate hundreds of billions 
of dollars of savings in duplicative, wasteful administrative spending 
which is now simply used to determine eligibility or prior 
authorization requirements.
    Finally, a single payer system is only obligated to pay the best 
price for a quality service. The great advantage that a single payer 
database could create is not only to better match resources with needs 
at the local and neighborhood level, but to negotiate the best price 
for services rendered on behalf of the American patient. In other 
words, I support the ``Republican'' perspective that we need price 
competition, but the competition comes at the delivery end of health 
care, not the financing end. (see answer to Question #4). This is a 
longer discussion which I would be happy to discuss if of interest to 
the committee.
    How do we know that such single-payer systems can work? Perhaps the 
best evidence can be found in other countries that have adopted single-
payer financing. Taiwan has the lowest administrative costs in the 
world--1.6%! Taiwan spends only 6% of their GDP on health care. Compare 
that to the 17%, soon to be 20% that we spend here in America. Canada 
has managed to balance its federal budget because of their single-payer 
health plan for the past decade--something that we can only dream 
about. And finally consider this story: I gave a lecture to the 
students at Penn medical school and in the front row were some hospital 
executives. After my lecture they told me that their health system had 
approximately 650 people who did nothing else except work in billing. 
Another way of looking at this, is that this hospital did not hire 
doctors, nurses, or social workers or purchase new equipment, but 
rather were forced to hire hundreds of billing personnel to cope with 
the complex health-care financing system we have created in America. 
This is a monstrosity. Multiply that by all the other competitive 
hospitals in Philadelphia and you realize that there are literally 
hundreds of thousands of people who do nothing else except push paper 
around--and for what reason? Toronto General Hospital in Canada has a 
billing department of approximately 6 people who do nothing except to 
process the bills of Americans who happen to have the misfortune of 
getting sick in Canada.
    We have a desperate need for people who can work in direct patient 
care. It is also one of the most rewarding things we can do in our 
society. We should be hiring more doctors, nurses, social workers and 
other health professionals and we need a single-payer financing system 
to help support them. HR 676 offers a two year retraining plan for 
displaced workers so that they can be put to use helping with direct 
patient care or public health.
    3. Why is the Massachusetts health care plan failing?
    The Massachusetts health plan was created by a Democratic 
legislature and signed by a Republican governor. It carries both the 
best and worst aspects of this bipartisan agreement. It reminds me of 
the saying that a camel is a horse created by a committee.
    While Massachusetts has been successful in reducing the number of 
uninsured largely through subsidies for low-income individuals enrolled 
in Commonwealth Care (their version of Medicaid), the costs of these 
subsidies is bankrupting the state. Without a mechanism for cost-
containment, the Massachusetts plan is unsustainable.
    In addition, Massachusetts residents are increasingly finding that 
the insurance premiums offered through the Connector are unaffordable 
and still leave them with somewhere between $2-$4000 in deductibles. 
Those unable to afford the premiums must pay a fine when they file 
their state taxes which this year will exceed $1000--and they remain 
uninsured. In addition, some 70,000 individuals have been exempted from 
the individual mandate to purchase health insurance because they have 
been deemed uninsurable by the Connector. Those individuals are 
probably the ones who most need insurance, yet they remain uninsured 
under the Massachusetts plan.
    While the Massachusetts plan has been discussed as a model for 
national health reform, it is little more than an expensive transfer of 
public dollars into the hands of private insurers who skim off 15-25% 
for their own administrative costs and return the reduced amount to pay 
for medical bills.
    The Massachusetts Connector adds approximately 4% to the cost of 
health care in the state and is faced with the impossible task of 
continuously means testing Massachusetts residents to see if they 
qualify for subsidies or if they should have their subsidies removed. 
The sheer cost of means testing every Massachusetts residents is an 
administrative disaster and would be unnecessary under a single-payer 
system.
    In summary, the Massachusetts plan has high costs that are 
unsustainable, and transfers public dollars into a wasteful private 
health insurance model, leaves the most vulnerable still uninsured, and 
is increasingly unaffordable for its residents. It should not be the 
model for health care reform for this country.
    4. We've heard over and over that polls show that people want to 
keep the health care they have. And yet polls show people have 
extremely low approval ratings for the health insurance industry. How 
would you reconcile these two polls?
    The confusion about people's perception of healthcare is related to 
the duel use of the word healthcare in our lexicon. Healthcare can mean 
both how we deliver medical services and how we finance medical 
services. Americans, by and large, love and appreciate their doctors 
and nurses and want to make sure that the trusting relationship that 
they have built with them continues in any health-care reform. This 
deals with how we deliver our medical and prevention services.
    Americans, however, fundamentally hate the bureaucracy and 
discriminatory nature of the private health insurance model. It is why 
the June 20 New York Times poll shows that 85% of the American people 
want a fundamental or complete change in how we finance healthcare in 
this country.
    Because of the confusion of the dual use of the word healthcare, 
political leaders need to be clear in distinguishing the delivery of 
healthcare from the financing of health care. And we should be 
educating the American people that while we strongly support the 
private delivery of healthcare in America as one of the crown jewels of 
our health care system, our efforts at health-care reform deal directly 
and only with how we finance healthcare. Because of that, single-payer 
health care can be implemented much easier than most politicians 
believe. As long as Americans can continue to see their private doctors 
and nurses, who pays their bills is of less concern to almost all 
Americans. Single payer means public financing and private delivery 
marries what the polling data suggests what Americans want. The great 
fear of politicians is the reaction of the insurance and pharmaceutical 
industry, but that should not obscure doing the ``right'' thing for 
Americans.
    5. Why does it make a difference if the system is for-profit or 
not-for-profit? What is the difference in cost, quality and access?
    I do not object to profit in a health care system as long as 
everyone is in the system and is offered decent health care.
    What I object to is having 50 million Americans without health 
insurance while others literally make billions of dollars in profit 
within the same system. That is morally and socially corrupt.
    How has the for-profit system corrupted our values? Private health 
insurance companies actively practiced adverse risk selection by 
shunning the sake and ensuring only the healthy. They regularly deny 
insurance because of pre-existing conditions. They've even gone as far 
as practicing ``recission'' where investigators are given expensive 
patients and asked to comb through their medical records to see if 
there are potentially even trivial health conditions which were not 
claimed on the application form as an excuse for canceling their 
policies. Insurers who unfortunately are stuck with expensive patients 
can create numerous bureaucratic roadblocks in order to make such 
patients want to leave their insurance plan which of course means that 
they become someone else's problem.
    For-profit private insurance companies are simply not allowed in 
virtually all other countries except the Netherlands and our own. And 
in the Netherlands, the insurance companies are highly regulated. We 
can begin a health-care reform by insisting that for-profit private 
health insurance companies must convert to nonprofit status.
    The great sadness is that the ``profit'' motive in health care has 
permeated and contaminated the entire health care system so that even 
``not for profit'' systems are increasingly behaving and acting as 
``for profit'' institutions. So the conversion to nonprofit status is 
not sufficient alone.
    Private insurance companies under a single-payer system would be 
allowed to cover benefits (e.g., cosmetic surgery) if it's not covered 
by the national program. These companies actually do very well in 
countries like Canada because of their limited scope of benefits are 
predictable and profitable. But we should eliminate most of the private 
insurance companies in our country and replace them with a single-
payer, national health insurance program because of the great potential 
advantages for giving every American quality, affordable health care as 
noted in question #2.
    6. Why is FEHBP, the health plan for federal employees, including 
members of Congress, not a good model for health care reform?
    Federal employees under FEHBP, still have all of the flaws of 
private health insurance including high co-pays and deductibles, 
medical underwriting, and complex paperwork.
    Members of Congress actually receive benefits closer to what a 
single-payer plan would offer including comprehensive benefits, no co-
pays or deductibles, and free choice of the best medical facilities in 
the country. Congress also has something though that most Americans do 
not have, namely a House physician. It is doubtful that members of 
Congress have the same problems of seeking referrals, waiting weeks to 
see a primary care doctor, or shopping around for the cheapest office 
or procedure which many federal employees must endure under HSAs under 
FEHBP.
    If we were to have all Americans into the FEHBP program, it would 
dramatically raise the pricing of insurance premiums until there was 
better underwriting experience. It would do nothing about reducing the 
enormous administrative bureaucracy inherent in our current system. It 
would not have the ability to do bulk purchasing in order to reduce the 
costs of medicines and supplies. Data gathered by the private insurance 
companies would become proprietary and would deprive the country of the 
advantages of a national database similar to Medicare which is the 
basis for the Dartmouth Atlas on health care costs and the US Renal 
Data System.
    In short, forcing Americans into the private health insurance FEHBP 
program offers no advantages and continues the current bureaucratic and 
wasteful system, except on a larger, national scale.
    7. I believe that health care is a human right, that it is just as 
important as water, food, education, housing or any other human rights. 
Can you please describe the range of healthcare finance options that 
would make health care a human right?
    I posed this question with Dr. Anja Rudiger, who is the Human 
Rights to Health Program Director.
    I copy her response to me below:
    I suggest you draw on three publications, which I attach:
    NESRI/NHeLP's Human Rights Principles for Financing Health Care;
    NESRI/NHeLP's Human Rights Assessment of Single Payer Plans;
    and Amnesty International USA's statement of principles (and 
petition) on the human right to health care. Of course you're welcome 
to circulate all documents to the committee if you like.
    The NESRI/NHeLP financing principles are based on an interpretation 
of the relevant international treaties and human rights law, and 
include references to those documents in the footnotes.
    If you think the questioner is open to international perspectives, 
you could refer to the International Covenant on Economic and Social 
Rights, because it also mentions all the other rights listed in the 
question, in addition to the right to health. The Covenant doesn't set 
out specific financing principles, however--this is mostly done by 
another UN Committee tasked with providing a detailed interpretation of 
the treaty (this is also quoted in our footnotes).
    To summarize our arguments in the financing principles document 
(see intro):
    ``A society disposed to protect both bodily and financial health 
requires the collective provision of health care on a guaranteed and 
sustainable basis. In such a society, health care is treated as a 
public good, rather than as a commodity sold in a marketplace dominated 
by private interests. The following ten principles for financing health 
care emerge from human rights standards recognized in the United States 
and around the world. They are intended to guide the design of a 
sustainable, cost-effective system that secures comprehensive health 
care for all.''
    The 10 financing principles are based on the basic human rights 
principle that everyone must be able to get the health care they need, 
regardless of their ability to pay. And while the international legal 
framework does not mandate whether healthcare financing should be 
private, public or a combination of both, it makes very clear that 
governments have an obligation to respect, protect and fulfill the 
right to health, and to step in if the private sector fails to provide 
comprehensive (not just emergency) health care to everyone, on an equal 
basis, based on needs. From this we conclude that health care financing 
in the U.S. has to be public--given the private sectors' widely 
documented failures to meet this human rights obligation.
    You will see this conclusion also reflected in the statement from 
Amnesty International USA. Here's an abbreviation of Amnesty's 
argument:
    The human right to health care requires universality, i.e. that 
every person has access to comprehensive, quality health care. It 
requires equity in financing and access, which means that benefits and 
contributions should be shared fairly to create a system that works for 
everyone. Health care is a public good, not a commodity. Publicly 
financed and administered health care should be expanded as the 
strongest vehicle for making health care accessible and accountable. 
Human rights require the government to be ultimately responsible for 
ensuring that both public agencies and private companies make health 
care decisions based on health needs, not on profit margins or other 
factors.
    Finally, you'll see in the attached single payer analysis that 
we've taken those ten human rights financing principles and measured 
single payer bills, notably HR 676 and S 703, against them. The 
detailed results are on pages 7 and 8, and they show that single payer 
plans are well-placed to meet human rights principles for financing 
health care. And because we've previously prepared human rights 
analyses of market-based plans, we can compare those and conclude that 
single payer plans are vastly superior to market-based plans in meeting 
human rights principles.
    I hope this helps. Please let me know if you'd like more 
information or clarifications.
            Best,
        Anja Rudiger, Ph.D., Human Right to Health Program 
                                                  Director,
National Economic and Social Rights Initiative/National Health Law 
                                                           Program.

    The Human Right to Health Program, run jointly by NESRI and NHeLP, 
is developing human rights tools to support community organizations and 
coalitions across the U.S. in their efforts to achieve rights-based 
health is acare reform at the local, state, and federal level.
    Subscribe to the Human Right to Health listserv:
    https://lists.mayfirst.org/cgi-bin/mailman/listinfo/human--right--
to--health
    If you are interested in this area of health and human rights, I 
have permission from Dr. Rudiger to contact her directly for her input. 
I attach her articles to this letter.



                                 ______
                                 

    We believe . . . health care is a human right, not a commodity!

    In October 2008, President Obama affirmed that health care should 
be a right, not a privilege. In so doing, he echoed the values of the 
Universal Declaration of Human Rights, which holds that every human 
being has the right to health care.
    Elected officials in the United States--especially President Obama, 
his administration, and the current Congress, but also policymakers at 
the state and local levels--have a historic opportunity to make good on 
the president's affirmation by recognizing and treating health care as 
a right, and not a commodity.
    We believe that health care is a right, not a privilege or a 
commodity. To fulfill the human right to health care, the U.S. health 
care system must meet these principles:
    1. Universality: This means that everyone in the United States has 
the human right to health care. Reform measures should ensure that 
every person has access to comprehensive, quality health care. No one 
should be discriminated against on the basis of income, health status, 
gender, race, age, immigration status or other factors.
    2. Equity: This means that benefits and contributions should be 
shared fairly to create a system that works for everyone. Health care 
is a public good, not a commodity. Gaps in the health care system 
should be eliminated so that all communities, rich and poor, have 
access to comprehensive, quality treatment and services. Publicly 
financed and administered health care should be expanded as the 
strongest vehicle for making health care accessible and accountable.
    3. Accountability: This means that the U.S. government has a 
responsibility to ensure that care comes first. All players in the 
health care system, whether public or private, have human rights 
obligations, and must be accountable to the people. The U.S. government 
is ultimately responsible for ensuring that both public agencies and 
private companies make health care decisions based on health needs, not 
on profit margins or other factors.
    Bring human rights to the health care debate!
    Sign the petition at amnestyusa.org/healthcare
                                 ______
                                 
    [Addition submission of Mr. Kline follows:]

          Prepared Statement of the Steering Committee of the
                  National Coalition on Benefits (NCB)

    Dear Madam Speaker, Senator Reid, Senator McConnell and 
Representative Boehner: The National Coalition on Benefits (NCB) is 
comprised of over 185 employers, associations and other organizations 
representing employers that offer health benefits to their employees 
and other beneficiaries. Voluntarily providing health care to more than 
170 million Americans, employers are leading the way in helping to 
improve our health care system. While firmly committed to helping 
workers and their families meet their health care needs, employers are 
also struggling with health care costs, especially in this economically 
challenging time. The NCB supports health care reform that improves 
health care quality and reduces costs. We believe that individuals 
should have the responsibility to obtain health insurance and the 
health care delivery system should be improved through measures such as 
value purchasing, wellness and prevention, health information 
technology, and comparative effectiveness research that does not result 
in rationed care. Healthcare reform must have at its foundation an 
effective a strategy to control costs. As President Obama has said, 
``Soaring health care costs make our current course unsustainable. ``We 
completely agree. Unfortunately, we are concerned that emerging 
legislative proposals do not provide meaningful cost savings for the 
overall health care system, especially in the near term. In a well 
intentioned effort to expand coverage, cost containment has not 
received the priority it demands. Over the course of the past two 
years, employers have worked to make clear the five fundamental issues 
that health care reform must properly address to preserve the 
employment-based system and lead to our support. To date, we have not 
seen legislative proposals where each of these core issues has been 
adequately resolved.
    As Congress moves closer to formal consideration of legislation, we 
want to continue to work with all Members of Congress to enact reforms 
that not only allow Americans to keep the coverage they have today if 
they like it--and for most Americans, that means their employer-based 
coverage--but makes it possible for them to count on it being there 
tomorrow when they need it. ERISA We continue to strongly support the 
flexibility that ERISA provides in the offering of employer-sponsored 
health insurance coverage. If the objective is to build upon the 
employer-based system that successfully covers more than 170 million 
Americans, then employers must have the ability to determine how best 
to meet the needs of their employees and retirees. Additionally, 
allowing states or localities to require employers to comply with 
various mandates would further raise employer costs, stifle innovation 
in employer-sponsored coverage and result in unequal benefits for 
employees. But simply retaining the federal framework is not sufficient 
if onerous or impractical requirements are added to ERISA itself. Since 
a fundamental tenet of health care reform is to allow Americans to keep 
the coverage with which they are satisfied, legislation should not 
include changes to ERISA or other laws that would risk hurting those 
who are highly satisfied with the health care coverage that they 
currently receive. Employer Mandate We are gravely concerned about 
proposals that would limit the flexibility of employers at a time when 
our country needs employers to create jobs and invest in future growth. 
Employer mandates of any kind, including requirements to ``pay or 
play'' are not the answer to the healthcare problem because they 
undermine our ability to address two key goals of health reform: 
coverage and affordability. In fact, mandates limit the flexibility and 
innovation that serves as the foundation of voluntary employer provided 
health care. This voluntary and flexible system has worked for over six 
decades and today provides the backbone of the coverage model for over 
170 million Americans. Weakening this system would undermine the very 
goal we are trying to accomplish--making insurance more accessible and 
affordable for those who do not have health insurance. Most 
significantly to employers--mandates fail to address the shared problem 
facing all employers--the soaring cost of health care Mandated Minimum 
Benefit Any minimum standards for benefits need to be affordable for 
individuals and taxpayers. Individuals should be able to determine the 
level of benefits they need and can afford for their family. Employers 
must also be able to continue to design the benefit plans that make 
sense for their workforce and consider the full range of health plan 
options available in a reformed health care market.
    The Public Plan A public plan, particularly combined with the 
impact of Medicare, Medicaid, and other public plans, cannot operate on 
a level playing field and compete fairly if it acts as both a payer and 
a regulator. The public plan's unfair competitive position, both by its 
size and regulatory authority, will merely shift additional costs to 
the private sector and employees covered by private plans. A public 
plan that would use government mandated prices would directly result in 
a cost-shift to other payers and thus would do nothing to address the 
underlying problems that make health coverage unaffordable for many. 
Improving the cost, quality and the efficiency of health delivery are 
key imperatives for reform. We already experience that cost-shift today 
as Medicare, the largest payer in the United States, consistently 
underpays providers. Employers and our covered employees and families 
also see higher price tags in their medical plans because Medicare and 
Medicaid payment rates are set by law and are comparatively lower than 
rates for employer-sponsored group health plans. It is no secret that 
providers receive much higher payments from private insurance plans 
than from public plans. Tax Exclusion Changes to the taxation of 
employer-provided health care are also not the answer to health care 
reform. These policies would increase employer and employee costs and 
could have a chilling impact on the part of our health care system that 
provides coverage to all-comers at a community rated premium 
irrespective of health risk or preexisting conditions. Moreover, it is 
important to recognize that employers and employees are already paying 
the largest share of health care costs in this country. As a result, we 
believe that savings achieved lowering health care costs and improving 
quality should continue to be the first and foremost sources of 
financing for health care reform. In summary, we remain concerned about 
any provisions that would make health care more costly for employers 
and employees, destabilize our employer-based system of health 
coverage, or restrict the flexibility of employers to provide 
innovative health plans that meet the needs of their employees. We look 
forward to working with you to advance health care reform this year.
                                 ______
                                 
    Chairman Andrews. Without objection, the hearing is 
adjourned.
    [Whereupon, at 1 p.m., the subcommittee was adjourned.]