The American College of Physicians' Endorsement of Single-Payer Reform: A Sea Change for the Medical Profession
Authors: Steffie Woolhandler, David U. Himmelstein
Journal: Annals of Internal Medicine (2020)

Supplement: Vision for U.S. Health Care21 January 2020The American College of Physicians' Endorsement of Single-Payer Reform: A Sea Change for the Medical ProfessionFREESteffie Woolhandler, MD, MPH and David U. Himmelstein, MDSteffie Woolhandler, MD, MPHCity University of New York at Hunter College, New York, New York (S.W., D.U.H.)Search for more papers by this author and David U. Himmelstein, MDCity University of New York at Hunter College, New York, New York (S.W., D.U.H.)Search for more papers by this authorAuthor, Article, and Disclosure Informationhttps://doi.org/10.7326/M19-3775 SectionsAboutVisual AbstractPDF ToolsAdd to favoritesDownload CitationsTrack CitationsPermissions ShareFacebookTwitterLinkedInRedditEmail For a century, most U.S. medical organizations opposed national health insurance. The endorsement by the American College of Physicians (ACP) of single-payer reform marks a sea change from this unfortunate tradition (1, 2).Like their U.S. counterparts in an earlier era, many Canadian physicians feared, and fiercely opposed, single-payer reform. “We were afraid it would destroy the profession . . . that our integrity would be destroyed . . . that the government would intrude on the private doctor–patient relationship,” said E.W. Barootes, who as President of Saskatchewan's medical association led a 3-week doctors' strike in 1962 against that province's new single-payer program (3).Yet despite a rocky start, most Canadians now embrace their single-payer system. Everyone is covered, and all doctors and hospitals are “in-network.” Health costs, almost identical to U.S. levels in the 1960s, are now about 40% lower, with savings on administration accounting for half the difference (4). Although funding for some aspects of care has, in our view, been squeezed too tightly in Canada, physicians' incomes have not; Canadian internists' take-home pay averages about CAD$300 000. Canada's health outcomes surpass those of the United States, including for such conditions as cystic fibrosis, end-stage renal disease, and type 1 diabetes, whose outcomes reflect quality of care (5–7).Canada's generally positive experience is among the strands of evidence underpinning the ACP's endorsement. A single-payer reform that reduced insurance overhead to 2% (the level for Canada and traditional Medicare) could save more than $200 billion annually. In addition, our multipayer system imposes complexity and expense on providers; the Cleveland Clinic has 210 000 000 different prices (8). Single-source payment could streamline reimbursement—for example, by replacing per patient hospital payment with global budgets and establishing uniform billing and documentation requirements. Hospitals and doctors could save billions on billing-related costs and repurpose those savings to expand care, making universal, first-dollar coverage affordable.Achieving universal coverage would be costlier under the “public choice” model the ACP co-endorses along with single payer. Multipayer systems incorporating for-profit insurers have not gleaned large administrative savings. For-profit insurers' overhead is high everywhere (9), and the persistence of multiple payers would hinder efforts to streamline providers' billing-related work.Moreover, real-world experience with 2 public choice models—Medicare's Advantage program and the Consumer Oriented and Operated Plans (CO-OPs) under the Patient Protection and Affordable Care Act (ACA)—warns that in health insurance competition, public option good guys finish last.Twenty-three CO-OPs offering plans on the ACA exchanges received $2.4 billion in federal start-up loans. Only 4, covering 150 000 enrollees, survive. New York's defunct CO-OP, like many others, attracted many expensively ill patients, in part because its network—unlike that of other exchange plans—included Memorial Sloan Kettering Cancer Center. Iowa's CO-OP, which offered lower cost sharing for antiretrovirals than its competitors, reportedly enrolled 98% of all patients with HIV covered by Iowa's exchange plans. Although the ACA included special funding to compensate CO-OPs for high-risk enrollees, the losses far exceeded what Congress was willing to appropriate.Small start-ups, such as the CO-OPs, often succumb to deep-pocketed competitors. However, the traditional Medicare program—a large, well-established public option—also is losing out in competition with private (Medicare Advantage) plans, despite their 6-fold higher overhead and 6% higher total costs (after accounting for “cherry picking” and upcoding) (10).Medicare Advantage plans have flourished, because chicanery trumps efficiency. The Centers for Medicare & Medicaid Services uses patients' diagnoses to risk adjust its payments to Medicare Advantage plans and minimize incentives for cherry picking. However, insurers game the risk-adjustment formulas by labeling enrollees with new (often clinically insignificant) diagnoses and recruiting lower-cost patients within a diagnostic category, such as minimally symptomatic patients carrying such diagnoses as osteoarthritis, asthma, or congestive heart failure.Plans also profit by “lemon dropping”—pushing out unprofitably ill enrollees. Imposing high copayments for chemotherapy agents and excluding specialized cancer providers from networks encourages oncology patients to disenroll. Seniors requiring nursing home stays or treatment for new-onset end-stage renal disease have transferred in droves from Medicare Advantage to traditional Medicare (11, 12). Moreover, Medicare Advantage plans that accumulate unprofitably ill seniors can, and do, pull out of entire counties, an option unavailable to their public option competitor.Private insurers have turned traditional Medicare (like the ACA's CO-OPs) into a de facto high-risk pool, despite regulations banning cherry picking and lemon dropping. Enforcement of those regulations, already overmatched by insurers' stratagems, will surely become harder. Google, part owner of Oscar, an insurance start-up, knows who's playing tennis and who's buying plus-size dresses and can micro-target marketing accordingly. As some suggest, insurers, like casinos, are profitable because they know the odds of every bet they place and can eject people who are beating the house (13).Despite drawbacks, public choice reform offers 2 apparent advantages: It avoids confrontation with private insurers and allows individuals to retain their current coverage.Unfortunately, achieving universal, affordable coverage through public choice would, like single payer, impose painful sacrifices on private insurers. In Germany, an oft-cited example of a universal multipayer system, insurers offering the mandatory coverage are nothing like ours. By law, Germany's “statutory” insurers must be nonprofit, pay the same fees, charge the same premiums, and contract with every hospital and every doctor. Insurers with low-risk patients must cross-subsidize others, effectively creating a single risk pool. In sum, Germany's statutory insurers (like Switzerland's and Holland's) “are not as a matter of public policy conceived of . . . [or] allowed to function as private businesses” (14); they are more akin to the fiscal intermediaries that process traditional Medicare claims. U.S. insurers would surely fight tooth and nail against such transformation.Public choice's second purported advantage may also be illusory. Although surveys indicate that voters value choice, it's choice of doctor and hospital—not insurer—that they care about.Although no reform achieves perfection, evidence indicates that a well-structured single-payer reform might resolve our nation's coverage and affordability problems, preserve the choices patients value, and allow doctors to focus on what matters most: caring for our patients.Three decades after leading the Saskatchewan strike, Dr. Barootes had changed his view: “Today I support the universal healthcare program . . . . There has been no interference in the decision making between a doctor and his [sic] patient . . . . A politician is more likely to get away with canceling Christmas than he is with canceling Canada's health insurance program” (15).References1. Doherty R, Cooney TG, Mire RD, et al; Health and Public Policy Committee and Medical Practice and Quality Committee of the American College of Physicians. Envisioning a better U.S. health care system for all: a call to action by the American College of Physicians. Ann Intern Med. 2020;172:S3-S6. doi:10.7326/M19-2411 LinkGoogle Scholar2. Crowley R, Daniel H, Cooney TG, et al; Health and Public Policy Committee of the American College of Physicians. Envisioning a better U.S. health care system for all: coverage and cost of care. Ann Intern Med. 2020;172:S7-S32. doi:10.7326/M19-2415 LinkGoogle Scholar3. Nagle P. Tragedy marked Medicare's first day. Toronto Star. 19 June 1992:A1 and A24. Google Scholar4. Himmelstein DU, Campbell T, Woolhandler S. Health care administrative costs in the US and Canada, 2017. Ann Intern Med. 2020;172:134-42. doi:10.7326/M19-2818 LinkGoogle Scholar5. Stephenson AL, Sykes J, Stanojevic S, et al. Survival comparison of patients with cystic fibrosis in Canada and the United States: a population-based cohort study. Ann Intern Med. 2017;166:537-546. [PMID: 28288488]. doi:10.7326/M16-0858 LinkGoogle Scholar6. Guyatt GH, Devereaux P, Lexchin J, et al. A systematic review of studies comparing health outcomes in Canada and the United States. Open Med. 2007;1:e27-36. [PMID: 20101287] MedlineGoogle Scholar7. Gaffney A, Christopher A, Katz A, et al. The incidence of diabetic ketoacidosis during “emerging adulthood” in the USA and Canada: a population-based study. J Gen Intern Med. 2019;34:1244-50. [PMID: 31065950] doi:10.1007/s11606-019-05006-6 CrossrefMedlineGoogle Scholar8. Cleveland Clinic letter to CMS. Quoted in: Livingston S. Hospitals, insurers urge CMS to abandon plan to force negotiated price disclosure. Modern Healthcare. 30 September 2019. Accessed at www.modernhealthcare.com/hospitals/hospitals-insurers-urge-cms-abandon-plan-force-negotiated-price-disclosure on 26 November 2019. Google Scholar9. Hagenaars LL, Klazinga NS, Mueller M, et al. How and why do countries differ in their governance and financing-related administrative expenditure in health care? An analysis of OECD countries by health care system typology. Int J Health Plann Manage. 2018;33:e263-e278. [PMID: 29024036] doi:10.1002/hpm.2458 CrossrefMedlineGoogle Scholar10. Curto V, Einav L, Finkelstein A, et al. Health care spending and utilization in public and private Medicare. Am Econ J Appl Econ. 2019;11:302-32. [PMID: 31131073] doi:10.1257/app.20170295 CrossrefMedlineGoogle Scholar11. Rahman M, Keohane L, Trivedi AN, et al. High-cost patients had substantial rates of leaving Medicare Advantage and joining traditional Medicare. Health Aff (Millwood). 2015;34:1675-81. [PMID: 26438743] doi:10.1377/hlthaff.2015.0272 CrossrefMedlineGoogle Scholar12. Li Q, Trivedi AN, Galarraga O, et al. Medicare Advantage ratings and voluntary disenrollment among patients with end-stage renal disease. Health Aff (Millwood). 2018;37:70-7. [PMID: 29309223] doi:10.1377/hlthaff.2017.0974 CrossrefMedlineGoogle Scholar13. Ames S. Letter to the editor. New York Times. 1 August 2019:A26. Google Scholar14. Jost TS. The experience of Switzerland and the Netherlands with individual health insurance mandates: a model for the United States? Accessed at http://law2.wlu.edu/deptimages/Faculty/Jost%20The%20Experience%20of%20Switzerland%20and%20the%20Netherlands.pdf on 22 November 2019. Google Scholar15. Lyons SA. The 1962 battle over Canadian health care: Labor pains. Whole Earth Rev. 1995(Winter):74-81. Google Scholar Comments0 CommentsSign In to Submit A Comment Richard M Fleming, PhD, MD, JD; Tapan K. Chaudhuri, MDFHHI-OI-Camelot; Eastern Virginia Medical School7 February 2020 CMS is primary reasons healthcare costs have increased for everyone. We appreciate the enthusiasm of Drs. Himmelstein and Woolhandler’s response, keystrokes and information regarding Justin Kimball’s development of health care in Texas. We appreciate your comments, and should specifically state, that it was in the 1960s that the Federal Government partnered with BCBS, producing today’s BCBS of TX. Doctors – including us – do not actually do the billing for office and hospital visits, testing, drugs, et cetera. We suspect you do not either. Simply filling out a billing sheet does not mean this is what the billing department will turn in to CMS, private insurers or the patients. Fortunately the hard working people in the billing department correct – as is their job – any incorrect boxes we check on the billing sheet. CMS does not pay for all doctors and hospitals, tests and prescription medications. Few patients elect to undergo testing if they have to pay for the test and fewer still will pay for the medications prescribed if CMS has determined a different drug can be used in its place. Harvard participates with CMS, but like everyone and every place else, it does so by increasing the costs of the same office and hospital physician visits, hospital costs, testing and drugs, to other private insurers and those who are uninsured. This is the reason an aspirin can cost – as one patient remarked the other day - $60. It is this increase in charges which others pay to compensate for the lower payments made by CMS resulting in many being unable to afford healthcare in the first place. As more people are covered under CMS, the burden of these costs will shift to fewer and fewer individuals, thereby complicating the problem and making more Americans uninsured. This produces a scenario where Government must cover more people. To be clear, CMS is merely shifting the burden away from itself onto others. This does not solve the problem – it produces it. Further removing patient choice of physician, hospitals, testing and prescription drugs and as Medicare-for-All has shown us in the current Presidential debates, it will do so at a cost the country and patients cannot afford. Having a government lawyer run healthcare system for all is meaningless if the choice and quality is compromised. Then we will be left with a system where only the wealthy can truly receive quality choice healthcare. David U. Himmelstein, M.D., FACP, Steffie Woolhandler, M.D., M.P.H., FACPCity University of New York at Hunter College and Harvard Medical School7 February 2020 Response to Drs. Fleming and Chaudhuri Blue Cross and Blue Shield of Texas started life in 1929 (not in the mid 1960s) as the Baylor plan for teachers, and became the fiscal intermediary that administered Medicare coverage when that program started up in 1966.Like Drs. Flrming and Chaudhur, we abhor Pharma's price gauging, and the complex billing schemes inflicted on doctors and hospitals by insurers as well as CMS. But in our experience, Medicare, unlike private insurers, has not restricted patients' choices of doctors and hospitals, or the tests they may receive. Without health insurance, few could afford the care they need, and no nation has reached universal coverage - or anything close - without government playing the central role. Despite important flaws, Medicare has improved access to care and health outcomes for tens of millions of patients. Its flaws should be fixed, and the program expanded, not abandoned. Richard M Fleming, PhD, MD, JD; Tapan K. Chaudhuri, MDFHHI-OI-Camelot; Eastern Virginia Medical School5 February 2020 Medicare-for-All isn’t Quality-Medical-Care-for-All. Medical billing changed in the mid-1960s when CMS and the Texas State Teachers insurance – later known as BCBS of Tx - began. While the concept of a one-provider method of payment may on the surface seem like a good idea, there is a considerable difference between Government run healthcare and freedom-of-choice quality medical care. The introduction of CPT, DRG and ICD codes may have helped insurance companies and CMS; but it has not helped physicians, patients, hospitals or other healthcare providers. While CMS and insurance companies have the motivation to reduce payments - treating medicine like a business, and telling patients which doctors they may see, what tests patients may receive, what medicines will be covered and which hospitals they may be admitted to – doctors and patients are focused on improving the quality of healthcare. Two diametrically opposed forces.When patients worry about healthcare costs, what they are not told is that it is the involvement of CMS and the insurance industry, which have distorted the billing and payment of costs over the last several decades. When patients worry about prescription drug costs, they are not told that BigPharma has two lobbyists for each member of Congress and that lobbying power has been fine-tuned to control drug prices. In some instances BigPharma has even misrepresented their drugs to the FDA and doctors, increasing sales and profits at the expense of patients who have to choose between drugs and food. When politicians tell voters nothing will change under Medicare-for-All, we should all worry, because the system that exists now has failed and the solution being offered – by those running for election – is cheaper care, but not quality care. Medicare-for-All, or any medical care directed by lawyers in Washington, D.C., or in your State capitals, isn’t better medical care for all; it’s remnant medical care for all. We would encourage the ACP and any other medical group to not repeat the mistakes of the 1960’s, which started us down this pathway. We encourage physicians and other healthcare providers to take back control of medicine - where it belongs – returning it to patients and those of us who went to Medical School, Internship, Residency and Fellowship, and took our Medical Oath on behalf of our patients - an Oath which precedes the origins of the U.S.A. and BigPharma.More government involvement and control is not the answer – it’s the problem. Author, Article, and Disclosure InformationAffiliations: City University of New York at Hunter College, New York, New York (S.W., D.U.H.)Disclosures: Disclosures can be viewed at www.acponline.org/authors/icmje/ConflictOfInterestForms.do?msNum=M19-3775.Corresponding Author: Steffie Woolhandler, MD, MPH, City University of New York at Hunter College, 2180 Third Avenue, New York, NY 10035; e-mail, [email protected]cuny.edu.Current Author Addresses: Drs. Woolhandler and Himmelstein: City University of New York at Hunter College, 2180 Third Avenue, New York, NY 10035.This article is part of the Annals supplement “Better Is Possible: The American College of Physicians' Vision for the U.S. Health Care System.” The American College of Physicians was the sole funder for this supplement. 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