The movement for universal health insurance splits

by Kip Sullivan

It’s official.  We have two wings to the universal health insurance movement in Minnesota. We have the single-payer wing, which supports insuring everyone through a single-payer system, and the multiple-payer wing, which supports insuring everyone by sending tax dollars to some or all of the 300 insurance companies that sell health insurance in Minnesota. During the week of Jan. 5, the two wings held separate events at the Capitol.

On Jan. 5, 250 single-payer supporters from around the state attended a rally
sponsored by the Greater Minnesota Health Care Coalition, the Minnesota Universal Health Care Coalition, and Citizens for the Minnesota Health Plan. On Jan. 8, eight groups, led by Take Action Minnesota and the Children’s Defense Fund, held a news conference to announce their support for legislation that will cover all children by funneling tax dollars to HMOs. There was no overlap between the sponsoring groups.

The crowd and the speakers at the Jan. 5 rally hailed the Minnesota Health Act, a single-payer bill authored by Sen. John Marty (DFL-Roseville)
and Rep. David Bly (DFL-Northfield). Sen. Linda Berglin (DFL-Mpls) is a co-author. That bill would create the Minnesota Health Plan, a single insurance plan for all Minnesotans. It would cover all health care services for all people without co-payments or deductibles. It would be run by a 15-person board. This board would bypass insurance companies and reimburse doctors and hospitals directly (as the traditional Medicare program does now), thereby saving billions of dollars.

The speakers at the Jan. 8 press conference, organized by the multiple-payer wing, called for an entirely different approach. They announced their support for a bill called the Minnesota Health Security Act (MHSA), which would cover all children under age 19 but only if their parents were willing to enroll them in one of the HMOs that now administer the three state health insurance programs (MinnesotaCare, Medical Assistance, and General Assistance Medical Care). Sources within the Take Action coalition say the MHSA would require taxpayers to send $500 million a year to Medica and HealthPartners and the other HMOs in order to finance coverage for all kids.

Single-payer groups criticize the MHSA proposal for two reasons. First, they object to the waste of money that is inevitable whenever tax dollars are funneled through insurance companies rather than being paid directly to the doctors and hospitals. The typical insurance company keeps 20 percent of every dollar it receives and passes on only 80 percent to doctors and hospitals (often referred to as “providers”).

Government-financed single-payer systems allocate much lower percentages of their income or expenditures to administrative costs. The nation’s Medicare program devotes less than 2 percent to administrative costs and passes on the other 98 percent to providers. Minnesota’s Depart-ment of Human Services (the agency that administers the state’s three health insurance programs) allocated only 4 or 5 percent of its tax dollars to administrative costs in the days before the state programs were turned over to HMOs. At a time when tax dollars are scarce and demands upon them are great, single-payer supporters object strongly to wasting tax dollars on excessive insurance company overhead (such as marketing, underwriting, profit, lobbying, telling doctors how to practice medicine, and expensive salaries and perks for management).

The second objection single-payer groups have to bills like the MHSA is that they strengthen the insurance industry, the most powerful and most aggressive opponent of single-payer legislation. If taxpayers are not forced to bail out the health insurance industry, the industry will lose power as more and more employers flee the insurance market. That will be a good thing for the single-payer movement and ultimately for all Minnesotans. Handing the insurance industry $500 million a year is the equivalent of feeding a tumor that would wither if it were left alone. It is no accident the insurance industry supported the 2007-2008 predecessor of the MHSA, the Children’s Health Security Act, a bill that, like the MHSA, would have turned the state’s children over to HMOs.

The most fundamental issue that divides the single-payer groups from the Take Action coalition is the question of whose approach is more likely to succeed politically. Single-payer advocates recognize that defeating the insurance industry will not be easy, but they believe it will be easier to do that than to achieve universal health insurance at the high price we’ll have to pay if we leave the bloated insurance industry in the middle of our system. The Take Action coalition takes a different position. They take the position that because single-payer can’t be enacted in the next year or two, progressives should put little or no energy into it and should instead support incremental proposals that expand coverage by giving tax dollars to the insurance industry. This is an excellent illustration of the self-fulfilling prophecy.

A second source of controversy between single-payer advocates and the Take Action coalition is the question of whether methods recommended by the insurance industry can lower health care costs. The insurance industry and their allies in the Legislature, Congress and academia claim that U.S. health care costs are high because patients, with encouragement from doctors, overuse the health care system, and that this problem can be solved by applying these methods:

*more preventive services and more services referred to collectively as “disease management”
* report cards on clinics and hospitals
* switching from paper records to electronic medical records (EMRs)
* pushing more people into HMOs (insurance companies that exert maximum control over doctors and patients)

Although the scientific literature on these proposals indicates they cannot save money and may even raise costs, and although the scientific literature says underuse of health care is a worse problem than overuse, powerful voices (including those of the insurance and computer industries) persist in promoting the overuse diagnosis and the prevention-disease-management-report-cards-EMR-HMO prescription for high costs (see my article in the December 2008 Southside Pride for evidence on EMRs, and my articles in the August and October 2008 editions on report cards). In the 2008 session of the Legislature, most of the Take Action coalition lobbied for legislation that endorsed the hype that the insurance industry’s recommended methods can cut costs. It is reasonable to infer, therefore, that the Take Action coalition has been deeply influenced by the claim that these methods can cut costs.

Single-payer advocates support some of these ideas on the ground that they improve quality of care (prevention is an example), but they put no stock in the claim that these methods will cut costs. It would be unfair to the Take Action coalition to imply that their members formally oppose single-payer legislation. They do not. Most of the eight members of that coalition have endorsed single-payer legislation as the ideal. Take Action, Minnesota Nurses Association, SEIU, AFSCME, and the AFL-CIO, all members of the coalition, have endorsed single-payer.  A representative of MNA and the director of Take Action spoke favorably about the Minnesota Health Plan at the single-payer rally on Jan. 5. But judging from the Take Action coalition’s behavior—the failure to mention single-payer or the Minnesota Health Plan on their websites, their unwillingness to plan joint events with single-payer groups, and their endorsement of legislation that enriches the insurance industry—it is clear the coalition’s support for single-payer is lukewarm at best.

If we are going to achieve universal health insurance, we are going to have to cut costs in ways that do not harm patients. The only way to do that is with a single-payer system, and the only proposal in the Legislature right now to do that is the Minnesota Health Act. We will pass the Minnesota Health Act sooner rather than later if the two wings of the universal coverage movement close ranks behind the Minnesota Health Act and against the Minnesota Health Security Act in its current form.

Kip Sullivan is a member of the steering committee of the Minnesota chapter of Physicians for a National Health Program. He writes frequently about health care reform.