INTRODUCTION

How a Single-Payer Healthcare System Helped Stop COVID-19

Healthcare systems can also be national security systems. Just ask anyone from Taiwan.

On January 20, 2020, the United States recorded its first known case of COVID-19 infection. The following day, Taiwan got their first, too.

By the end of April, over a million Americans were infected with the virus,¹ but Taiwan had recorded only 388 infections and their last case of local transmission on April 12. (A few had arrived on aircraft from other countries; all were contained by quarantine.)²

As of this writing in September 2020, there hadn’t been a single new case or a single death in Taiwan since April. The economy never shut down and, at this writing, was projected to have grown nearly 2 percent in 2020; business, restaurants, theaters, and sports events were all open. Life was back to normal (albeit a mask-wearing normal).

And it was made possible by their national single-payer healthcare system and their citizens’ willingness to do their bit for the collective good.

Back in the 1980s, Taiwan was on the edge of moving toward a democracy (after a military coup in the 1960s), and about 40 percent of Taiwanese people didn’t have health insurance. If somebody in a family got sick, the cost of care often wiped out the family, and demands for reform were loud across the nation.

Uwe Reinhardt was a German-born healthcare economist married to a Taiwanese woman, and he attended a conference on healthcare in Taipei in 1989. His presentation impressed representatives of the government in attendance, and while he was still in town for the conference, they asked him for his best suggestion for a national healthcare system.

He and his wife went back to their hotel and discussed the issue in depth, finally deciding that a single-payer national system would be the most cost-effective, efficient, and comprehensive program possible. He shared his thoughts with the government representatives, and the next day he left Taiwan to go back to Princeton, where he was an economics professor.

Six months later, a representative of Taiwan’s government called him to say that they were going to take up his suggestion and asked him to help them craft their program. He enthusiastically assented, and by 1995 Taiwan had instituted one of the world’s best systems.³

Today, everybody in Taiwan is fully covered for doctor and hospital services. Everybody has a driver’s-license-like healthcare card, which accesses their entire medical history. They can book a doctor’s appointment on any computer terminal in the country, and the entire cost of the system is a bit more than 6 percent of Taiwan’s GDP (in the United States, healthcare consumes 24 percent of our GDP) because there are no insurance company intermediaries sucking profits off the system.

When COVID-19 hit, Taiwan chose not to use the blunt-force technique of shutting down their economy and locking people in. Instead, they took on the coronavirus with an aggressive, nationwide test-and-contact-trace program tied in to the national health service database. Every infected person was identified and put into a comfortable quarantine, and every person he or she had come into contact with—even very marginal contacts—was also tested and their contacts traced.

By April, just a bit more than two months after their first case surfaced, the country had the coronavirus isolated and completely under control. By quarantining inbound visitors to the island nation of 23 million, they were able (as of this writing) to keep it that way.

Maintaining public health is one of the most important functions of any nation’s healthcare system. Because America’s is so fragmented, it’s inconceivable that our nation could respond to an epidemic, a pandemic, or another public health disaster with the speed and elegance of Taiwan or any of the world’s other nations with single-payer Medicare for All types of systems.

Medicare for All—Why?

“It’s like Stockholm Syndrome,” a friend who’s a psychotherapist said, describing the way that Americans have clung, for more than five generations, to for-profit health insurance while the rest of the world figured out how to provide healthcare to all citizens at a much lower price. “People know it and have become familiar with it,” she added. “They can’t imagine anything else.”

It’s probably the largest con job ever perpetrated on the American people, one that has cost trillions of dollars and millions of lives. It’s been going on since the 1940s.

If it were a scientific experiment, it would have been shut down by the ethics review panels generations ago. This experiment in providing healthcare via a for-profit insurance system has led to the deaths of more Americans than we lost in World War II.⁴

Every year, over a half million Americans go bankrupt—often losing pretty much everything they’ve worked their entire lives for—because someone in their family got sick. That’s a half million families a year, every year, for the past few decades.⁵ And the coronavirus has only made things worse.

Perhaps most galling, this massive rip-off is costing our entire nation—and each of us individually—a fortune.

Insurance premiums right now make up 22 percent of all taxable payroll, well above what the cost of Medicare for All would be, at around 14 percent when first put into place, dropping to around 10 percent within a few years as previously uninsured people get their health needs up to date.

As the health insurance, drug, and hospital parasites pushed their suckers deeper and deeper into our body politic, spending on healthcare by Americans went up 25 percent between 2007 and 2014 at the same time that spending on housing, food, and clothing fell by 6, 8, and 19 percent, respectively.⁶

In 2018 alone, the United States wasted $256 billion on “administrative expenses” associated with for-profit health insurance, including multimillion-dollar salaries and armies of bean counters who scour claims looking for reasons to reject payment of hospital, doctor, and pharmaceutical bills.⁷

American doctors and hospitals employ eight times as many people as doctors and hospitals in Canada for administration, with US doctors spending 12 percent of their total billings just on the hassle of getting reimbursed.⁸

My physician, when we lived in Washington, DC, told me about a colleague of hers who specializes in liver disease. Because the new hepatitis C drugs cost tens of thousands of dollars and the for-profit health insurance companies fight paying for them, he has two full-time nurses on staff whose only job is to constantly rebill and fight with the insurance companies so that his patients can get the therapy.

And because big drug companies charge Americans, on average, about twice what they charge Canadians or citizens of any other developed country, we pay them another roughly $200 billion a year that all goes to executive salaries and into the pockets of the investor class.

Lawrence O’Donnell told author Kurt Andersen about how, when he was an aide to Senator Daniel Patrick Moynihan back in the last century, the storied senator asked him, “Why don’t we just delete the words ‘age 65’ from the Medicare statute?”

This question, O’Donnell told Andersen, followed “twenty-four hearings studying every detail of healthcare policy.” O’Donnell noted that Moynihan “hated unnecessary government complexity.”⁹

The United States has been engaged in a 70-year-long experiment to determine whether it’s ever possible for healthcare to be provided purely on a for-profit basis in a way that maximizes efficiency, fairness, and optimal outcomes.

We’ve proved that it’s not possible. And the experiment has been disastrous for Americans—particularly Americans of color—in terms of cost, lives lost, and overall quality of life.

If the goal of a healthcare system is to extend life and improve the quality of health, we have totally failed. Citizens of every other developed democracy have a longer life span and better health outcomes than we do, and none of them spend even half as much per person on healthcare as we do.

The only area where we’ve done well is with people over 65, and that is entirely because of our government-administered program, Medicare.

People on Medicare live as long as in other countries with national healthcare systems, while younger Americans relying on the for-profit insurance system are more likely to die.

But to the insurance industry it’s all just math and numbers; it’s as if the lives of Americans are irrelevant.

For example, the medical loss ratio (MLR) is the percentage of an insurance company’s income from premiums that’s paid out for actual care. In the US insurance system it’s around 80 percent, with the remaining 20 percent of its trillions in annual revenues going to profits and huge executive salaries.

With Medicare in the United States and similar systems in pretty much every other developed country in the world, the MLR is between 95 and 98 percent, depending on how you calculate overhead costs. Nothing goes to profits, and overhead is minimal (on both the insurance side and the hospital/doctor side) because there’s only one single payer to keep track of.

Health insurance companies use two systems to keep the MLR as low as possible to keep profits as high as possible: cherry picking and lemon dropping.

Cherry picking refers to offering policies that appeal to young, healthy people (with perks like gym memberships and with high deductibles and low costs); lemon dropping describes ways to discourage or outright reject people who may be expensive—mostly people who are obese, smokers, diabetics, and older adults—through configuring plans and coverage to avoid insuring such folks.

While every insurance company and most for-profit hospitals in America run these schemes every day, they don’t exist in other developed nations.

But here in America, an estimated $500 billion to over $1 trillion a year is skimmed off the top of our healthcare system by for-profit hospitals, Big Pharma, for-profit insurance companies, and all the various benefits managers and other leeches on the back of our system.

Even the supposedly nonprofit segments of the US healthcare system are massively corrupt. A 2019 Forbes article appropriately titled “Top US ‘Non-Profit’ Hospitals & CEOs Are Racking Up Huge Profits” reported, “Collectively, $297.5 million in cash compensation flowed to the top paid executive at each of the [nation’s largest] 82 [nonprofit] hospitals. We found payouts as high as $10 million, $18 million and even $21.6 million per CEO or other top-paid employee.”¹⁰

The average American is paying as much as $3,000 a year more than Canadians or Europeans just in healthcare expenses, as this cash is transferred from mostly working-class Americans to the billionaires and multimillionaires who run and/or own stock in our for-profit system.¹¹

Medicare for All—How?

When Robert Ball worked with President Lyndon Johnson to develop our modern Medicare system, he explicitly did so in a way that would allow it to be quickly transformed from a program for the elderly into a universal healthcare system. All that would be necessary, he said of his initial design, would be to do away with the “over 65” age requirement and add in new funding measures (or just pull more from the general fund).

GUT THE GAP

That plan got somewhat blown up when Republicans and Southern Democrats insisted that people must have “skin in the game” to avoid “abuse” of the system and, when Medicare was passed in 1965, inserted a 20 percent gap in coverage that people would have to fill out of their own pockets.

Although the record of debate on the issue is shockingly thin, there are two obvious reasons why this coalition would favor the “gap” in Medicare coverage.

For the Republicans and “conservative” (corporate-owned) Democrats, that gap represented a multibillion-dollar profit opportunity for insurance companies to expand into; and expand they did, with Medigap policies now covering over 14 million Americans. Tragically, that’s only a bit more than a third of all Medicare beneficiaries; most elderly people can’t afford the additional $150–$500 a month for a Medigap policy and thus can end up on the hook for 20 percent of an unlimited expense if they get seriously ill.¹²

For the Southern Democrats, there was another benefit to the gap. The GOP was then in the early stages of what came to be called Nixon’s “Southern Strategy” of picking up the white racist vote from Democrats following LBJ’s signing of the Civil Rights and Voting Rights Acts in 1964–1965, and white racism was the most potent force that kept these politicians in power in the South. Imposing a 20 percent copay on Medicare expenses pretty much guaranteed that poor Black people would avoid medical care for anything except a life-or-death emergency.

There was one major addition to Medicare, in 1972, when the program was expanded during the Nixon administration to include Social Security Disability Insurance (SSDI), which covers medical costs for disabled people under 65, but it keeps the gap, so even younger disabled people must buy Medigap insurance if they can afford it.¹³

For a Medicare for All program to truly work as it does in most other developed countries, we must get rid of the gap.

BUILD A ROBUST SYSTEM

A study by Johns Hopkins found that the United States has 19 percent fewer doctors, 26 percent fewer acute care hospital beds, and 25 percent fewer nurses than the average for developed countries across the world.

“Similarly,” they said, “the U.S. in 2015 had only 7.5 new medical school graduates per 100,000 population, compared to the OECD median of 12.1, and just 2.5 acute care hospital beds per 1,000 population compared to the OECD median of 3.4.”¹⁴

A JAMA study found that “[t]he U.S. remains an outlier in terms of per capita healthcare spending, which was $9,892 in 2016,” and that was “about 25 percent higher than second-place Switzerland’s $7,919.”

Switzerland, though, has the most expensive healthcare system in the world (it’s not a single-payer system—everybody must buy insurance, although all the systems are nonprofit). Looking at the rest of the world, JAMA pointed out that our $9,892 per person “was also 108 percent higher than Canada’s $4,753, and 145 percent higher than the Organization for Economic Cooperation and Development (OECD) median of $4,033.”¹⁵

In the face of all this, fully one out of every 10 Americans has no health insurance coverage of any sort—government, private, or otherwise—and this is almost a decade after full implementation of the Affordable Care Act and its attendant expansion of Medicaid.¹⁶

The JAMA study looked at 10 countries (United Kingdom, Canada, Germany, Australia, Japan, Sweden, France, the Netherlands, Switzerland, and Denmark) in addition to the United States. For every 1,000 babies born in America, 5.8 die in infancy; the average for the rest of these countries (including the United States) is 3.6.

The same 2016 study showed that the average life expectancy in the rest of the countries ranged from 80.7 years to 83.9 years, but here in the United States, with a clunky healthcare system and a collection of parasitic health insurance companies attached to our backs, people only lived to an average age of 78.8.¹⁷ The US life expectancy fell by an additional entire year to 77.8 in 2020 because of the disastrous way the Trump administration handed the COVID-19 pandemic.¹⁸

We’re also the least healthy in the developed world. The JAMA study found that while obesity and “severe overweight” rates ranged from 23.8 to 63.4 percent of the other 10 nations’ populations, it’s 70.1 percent here.

In those countries where everybody pays into a single system, there are both government and socially based incentives to encourage healthy eating and other practices to save taxpayers money. In our nation, huge profits in the food industry, which constitutes around 5 percent of GDP, drive advertising and consumption, while there are no government campaigns to either rein in or actively discourage consumption of obesity- causing food products.¹⁹

It’s truly extraordinary how rapidly America’s health has deteriorated, and big money and politics are at the root of much of it.