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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 

( 

Available on the Internet: 

http://www.gpoaccess.gov/congress/house/education/index.html 
(II) 

COMMITTEE ON EDUCATION AND LABOR 

GEORGE MILLER, California, Chairman 

Dale E. Kildee, Michigan, Vice Chairman 

Donald M. Payne, New Jersey 

Robert E. Andrews, New Jersey 

Robert C. ‘‘Bobby’’ Scott, Virginia 

Lynn C. Woolsey, California 

Rube ́n Hinojosa, Texas 

Carolyn McCarthy, New York 

John F. Tierney, Massachusetts 

Dennis J. Kucinich, Ohio 

David Wu, Oregon 

Rush D. Holt, New Jersey 

Susan A. Davis, California 

Rau ́l M. Grijalva, Arizona 

Timothy H. Bishop, New York 

Joe Sestak, Pennsylvania 

David Loebsack, Iowa 

Mazie Hirono, Hawaii 

Jason Altmire, Pennsylvania 

Phil Hare, Illinois 

Yvette D. Clarke, New York 

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] 

Howard P. ‘‘Buck’’ McKeon, California, 

Senior Republican Member 

Thomas E. Petri, Wisconsin 

Peter Hoekstra, Michigan 

Michael N. Castle, Delaware 

Mark E. Souder, Indiana 

Vernon J. Ehlers, Michigan 

Judy Biggert, Illinois 

Todd Russell Platts, Pennsylvania 

Joe Wilson, South Carolina 

John Kline, Minnesota 

Cathy McMorris Rodgers, Washington 

Tom Price, Georgia 

Rob Bishop, Utah 

Brett Guthrie, Kentucky 

Bill Cassidy, Louisiana 

Tom McClintock, California 

Duncan Hunter, California 

David P. Roe, Tennessee 

Glenn Thompson, Pennsylvania 

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 

Phil Hare, Illinois 

John F. Tierney, Massachusetts 

Dennis J. Kucinich, Ohio 

Marcia L. Fudge, Ohio 

Dale E. Kildee, Michigan 

Carolyn McCarthy, New York 

Rush D. Holt, New Jersey 

Joe Sestak, Pennsylvania 

David Loebsack, Iowa 

Yvette D. Clarke, New York 

Joe Courtney, Connecticut 

John Kline, Minnesota, 

Ranking Minority Member 

Joe Wilson, South Carolina 

Cathy McMorris Rodgers, Washington 

Tom Price, Georgia 

Brett Guthrie, Kentucky 

Tom McClintock, California 

Duncan Hunter, California 

David P. Roe, Tennessee 
(III) 

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 

(1) 

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 con-
2 

sensus 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 
3 

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. 
4 

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 governmentrun ‘‘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. 
5 

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 singlepayer health care is off the table. Well, that raises a very impor-
6 

tant 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 to-
7 

gether 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 
8 

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 un-
9 

necessarily. 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. 
10 

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 
11 

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 evidencebased 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 compa-
12 

nies, 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:] 
13 

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 singlepayer 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 outof-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 outof-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.’’ 
14 

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 ongoing 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, 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 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, ‘‘Singlepayer 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 reim-
15 

bursements 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. 
16 

1http://www.washingtontimes.com/news/2009/mar/18/health-care-reform-likely-15-trillion/ 

2http://www.ahrq.gov/qual/nhqr08/Key.htm 

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 more1 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? 

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. 

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 
17 

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 
18 

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. 
19 

[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, 
20 

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 singlepayer 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 
21 

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. Singlepayer 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 

EDITORØINØCHIEF, 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 profitdriven 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 
22 

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. 
23 

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 
24 

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 costeffective, 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 singlepayer 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 
25 

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 singlepayer 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. 
26 

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 singlepayer 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 consumerdriven 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. 
27 

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 marketdriven 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. 
28 

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, 
29 

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. 
30 

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 twothirds 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 evidencebased 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 sys-
31 

tem 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 patientcentered 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 
32 

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 
33 

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 
34 

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 nextdoor neighbor’s house catches on fire because he was smoking, we 

should do nothing about it because it was his fault, he was smok-
35 

ing. 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. 
36 

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 singlepayer 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 employeebased 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. 
37 

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. 
38 

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 
39 

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 
40 

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? 
41 

* 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). 

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. 

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 
42 

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 
43 

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-forservice, 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 pay-
44 

ment 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
45 

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 
46 

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 shortterm 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. 
47 

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. 
48 

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 (email: Dhimmelstein@challiance.org). 
49 

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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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 dis-
51 

tribute 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 employmentbased 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 
52 

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. 
53 

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. 
54 

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 singlepayer 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 threepronged 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? 
55 

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? 
56 

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: 

State/firm Annual single payer 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 

3,600,000,000 

1998 

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 info@pnhp.org 
57 

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. 
58 

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? 
59 

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 initia-
60 

tives 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. 
61 

(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. 
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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 singlepayer, 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 
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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. 
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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. 
65 
66 
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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 
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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 
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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 costshift 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 employersponsored 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.] 

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