NEJM editor repeats call for single-payer
Source Dave Anderson
Date 00/06/07/01:09

Marcia Angell, the editor of the New England Journal of Medicine, calls
for a Canadian-style single payer health care system (once again) and
talks about the inadequacies of other reforms..


The New England Journal of Medicine -- June 1, 2000 -- Vol. 342, No. 22

Patients' Rights Bills and Other Futile Gestures


Health care reform is once more at the top of the political agenda, after
some six years of neglect in the wake of the failure of the Clinton plan.
During those six years, the issue was generally considered one of the third
rails of American politics -- not to be touched. What is causing the
turnabout? There are three reasons. First, after a period of stagnation
during the mid-1990s, inflation in health care costs is again sharply on
the increase. Second, the number of Americans without any health care
insurance at all, or with inadequate coverage, continues to rise. And third
-- and most important politically -- middle-class voters are getting fed up
with the abuses of managed care. They are frustrated by shorter hospital
stays, restricted choices of doctors, arbitrary denials of coverage,
increasing deductibles and copayments, and all the other methods by which
the industry resists actually providing services to sick people.

Since the demise of the Clinton plan in 1994, it has been generally agreed
that reform of the health care system cannot be full-scale. Conventional
wisdom holds that the Clinton attempt failed in large part because it was
too sweeping. According to this view, reform needs to be incremental to
succeed. Thus, what few reforms we have seen since 1994 have merely nibbled
at the edges of the access problem. For example, the Kennedy-Kassebaum
statute, which permits employees who leave their jobs to continue their
health insurance (if they can afford to pay for it), and the expansion of
insurance coverage for children are quite modest in their scope and
effects. Similarly, attempts to deal with the abuses of managed care have
been piecemeal -- for example, legislation to require 24-hour hospital
stays after childbirth.

It is in this spirit that a number of "patients' rights" bills are being
offered, both in the U.S. Congress and in state legislatures. The proposals
differ from one another in some respects, most notably in the population to
which they would apply and the extent to which patients would be permitted
to sue their managed-care companies. However, all have in common efforts to
restore to patients and their doctors control over medical decisions --
control that has increasingly been assumed by third-party payers and
managed-care plans. For example, the bills provide for appeals mechanisms
when services are denied, for treatment in hospital emergency departments
when patients plausibly believe it is warranted, and for decisions about
referrals to be made by doctors and patients, not by health plans and

I very much agree with the aims of patients' rights bills. But I also
believe these bills will not achieve their ends. Rather, I am afraid they
will have effects opposite from those intended. Patients' rights bills will
simply swell the ranks of the uninsured. Why such a perverse effect? The
reason is that employers are not required by law to offer any health care
benefits at all, and they will not do so if they believe the disadvantages
to them outweigh the advantages. Patients' rights bills will tend to tip
that balance. Insofar as they have teeth, they will inevitably increase the
costs of managed-care companies, which will simply pass their increased
costs along to employers. Employers may then decide to drop health care
coverage altogether, or to limit it sharply through stratagems such as
"defined contributions," rather than pay the higher premiums for standard
benefits. Workers, for their part, may elect not to accept health care
insurance, because of the growing direct costs to them. Thus, patients'
rights legislation will very probably increase the number of uninsured and
underinsured people. The tougher the regulations, the more likely this
outcome. The fundamental problem is that it is impossible to regulate
health care in an employment-based system if employers can opt out.

The threat that patients' rights legislation will increase the number of
the uninsured and underinsured may not be fully realized in our present
economy, when we have nearly full employment and many employers have a
strong incentive to offer good benefits to attract workers. However, we
need to remember that even in this booming economy, the ranks of the
uninsured and underinsured are steadily increasing. Most of the newcomers
to these ranks are employed. With a downturn in the job market, bargaining
power would probably begin to shift from employees to employers. In that
case, a very large number of employers might be quite willing to drop or
reduce health care benefits, especially if premiums were rapidly increasing.

That is exactly what the managed-care industry and many of its allies in
Congress argue in opposition to patients' rights bills. I believe they are
correct about the probable effects of such bills on the number of the
uninsured and underinsured, but they are wrong in concluding that the
present managed-care insurance system is essentially sound. (The only
change the industry advocates from time to time is an expansion of coverage
by managed care, but with premiums, of course, set by the private market
and subsidized by government.) What we should instead conclude is that the
private managed-care market has been a miserable failure at delivering
health care. It has creamed off ever larger percentages of health care
premiums in bloated administrative and marketing costs and profits, it has
rewarded health plans that cherry-pick the healthy and avoid the sick, and
it has resisted at every turn providing adequate services to those
unfortunate enough to need them.

There is no question that patients' rights -- and doctors' rights -- are
essential in any decent health care system. But they cannot be legislated
in isolation in a system whose every incentive works against these rights
and where the provision of health care insurance is purely voluntary. What
needs to be changed is the system itself. Contrary to conventional wisdom,
incremental changes, such as patients' rights legislation, will not work.
In a competitive private market, they simply provoke reactions that nullify
the social objectives of the legislation.

This is not the place to present in detail a plan to overhaul our health
care system. But there are three major changes that would address the
difficulties in ensuring patients' rights that I have discussed here.

First, employers should get out of the health care business altogether.
There is no reason to believe they are good proxies for their workers when
it comes to health care decisions. Indeed, they have a clear conflict of
interest, since they have a strong incentive to keep premiums as low as

Second, just as employers are not good proxies for their workers, so
investor-owned managed-care companies are not good proxies for doctors.
They, too, have a conflict of interest. They have obligations to their
investors as well as to their enrollees. That the former often take
precedence is evident from all the ways in which the industry limits
medical services even while maintaining high profits and executive
salaries. In my view, there is no place for these businesses in a good
health care system.

Finally, health care insurance should not be optional, as it is in our
employment-based system. Just as everyone over the age of 65 is covered by
Medicare, so should everyone under that age be covered. In a 1993 editorial
in these pages, I called for a universal, single-payer system and suggested
that we could attain that goal by extending Medicare to all Americans. The
need is even greater now. Those who worry that such a reform would increase
taxes should remember that we all pay for health care anyway -- through our
paychecks, deductibles and copayments, and the prices of goods and services
-- and that Medicare is far more efficient than the market-based part of
our health care system.

Election year 2000 is the time to look again at our health care system in
its entirety, not just in bits and pieces. The insurance industry will once
again mount a campaign to prevent that from happening. Harry and Louise
will be back, perhaps with aliases. But can they convince the American
public once again that government is the bogeyman and that the private
sector will take care of their health care needs? I doubt it. We've had six
years of hard experience, and we know better.

Marcia Angell, M.D.

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