For the moment, Republican efforts to repeal the Affordable Care Act (ACA) appear to have failed. But whatever the outcome of this partisan knife fight, it’s not too soon for Democrats to get to work on health care. This issue will be a centerpiece of the 2020 (and probably 2018) election fight.
If—as seems likely—Republicans’ health-care effort ultimately collapses, Democrats can fill the vacuum they will have left behind. Democrats will need to mend aspects of the ACA and our broader health-care system that badly need repair. If Republicans somehow succeed, Democrats will have an even greater need to address the human and systemic disaster Republicans bequeath. Whatever the ultimate fate of Republicans’ Better Care Reconciliation Act, Democrats require some care and reconciliation within their own ranks, given the spirit of recrimination that proved so costly to them last year.
Two broad camps dominate Democratic health politics. One camp, identified with Hillary Clinton and the main institutional structures of the Democratic Party, is dominated by conventional liberals and center-left folk. They support the broad vision behind the ACA, which is to expand care and coverage through meaningful, hard-fought but fundamentally incremental reforms to our current system. The other camp, further left and typically identified with Bernie Sanders, supports some version of single-payer health care under the moniker Medicare for All.
Each camp lives with its own internal compromises and divides. Some incrementalists are political moderates uncomfortable with Sanders’s social-democratic perspective. Others embrace single payer as a long-term aspiration but believe incremental steps are the best way to get there, or simply that now is not the time for this uphill fight. The single-payer camp includes proud ACA defenders who believe the law was an important albeit insufficient advance. Other single-payer advocates view ACA as a debacle, and its proponents as sellouts.
Last year, the health policy community went heavily for Clinton, in part because she was the likely winner, in part because her plans reflected granular mastery of policy detail, and in part because single payer is a heavy political lift that frightens millions of Americans who are happy with their current coverage.
Yet Sanders’s enthusiasts brought something to the argument that Clinton’s didn’t: a clear and compelling vision that moves millions of Americans, including surprising numbers of Trump voters who support expanded coverage (40 percent, according to one April poll). Single payer also commands the allegiance of progressive activists, particularly among the young who are the future of the Democratic Party. These activists demand something big—ideally single payer, but at the very least something ambitious and transformative that goes beyond tinkering with the ACA. Single-payer advocates can play another high card, too: Medicare for All genuinely would be more humane, logical, and economical than our current health system.
I should mention my own location in these fights. I identify as liberal rather than as a man of the left. I have written critically about the huge transitional challenges facing a single-payer plan—which, after all, would be enacted through the same dysfunctional political economy and legislative structures that perpetuate our current health-care problems. Yet like other wonky liberals, I have taken on a harder edge since 2009. Watching ACA’s implementation challenges, I am less optimistic than I once was that solely market-based reforms can adequately stabilize the nongroup insurance market. Watching die-hard Republicans’ resistance and sabotage of the ACA, and the awful repeal effort, I am certainly less optimistic that Republicans in Washington can be constructive partners in health policy.
Much of the original acrimony between these two broad progressive camps originated in last year’s primary fight.
On one side, Chelsea Clinton landed a hard blow in January 2016, claiming: “Senator Sanders wants to dismantle Obamacare, dismantle the CHIP program, dismantle Medicare, and dismantle private insurance.” Paul Krugman suggested that the “Sanders health plan looks a little bit like a standard Republican tax-cut plan,” with the use of magic-asterisk assumptions “to make the numbers supposedly add up.” Vox’s Ezra Klein concluded: “Bernie Sanders’s single-payer plan isn’t a plan at all.”
Single-payer advocates were no less emphatic or more genteel. They subjected Clinton advisor Neera Tanden to bruising personal attacks on social media, in part for her political hesitance regarding single payer. Many on the left depict the ACA as a begrudging half-measure. Writing in Jacobin, Enrique Diaz Alvarez condemned the “fundamental conservatism of the Obama White House, and its unwillingness to take on the health insurers, pharmaceutical companies, or any interest group willing and able to spend millions lobbying…” Some single-payer supporters talk up primary challenges against Democratic moderates who don’t support Senator Sanders’s Medicare for All plan. It’s unclear that Sanders himself would support such challenges, though the prospect has alarmed Democratic Party professionals seeking to compete in conservative and moderate states and congressional districts.
There are bruised feelings on both sides. Incrementalists resent insinuations that they—we—are less concerned or committed to helping low-income Americans than are our left political allies. Our left colleagues similarly resent insinuations that they are less sophisticated about policy.
Given the ill-will and recrimination, it’s easy to forget that this is a fight among friends and allies about how best to pursue shared goals and values. Much of the internal Democratic Party debate confuses instrumental operational questions with questions of core principle. By which I mean, to put it more simply: Single payer is not, in itself, a principle. It is one way to organize health-care financing. A regulated patchwork of private insurers undergirded by public subsidies and the individual mandate is another. In other words, these arrangements are means to an end, not ends themselves. After all, most American progressives would be thrilled to see the Dutch or German health-care systems enacted here, though neither of these is actually single payer in the sense that Medicare is.
The end—the core principle at stake—is universality. A wealthy and humane democracy must provide decent health coverage to everyone—coverage that actually works to prevent and treat serious illness, injury, and disability. On this principle, progressives are in total agreement. We’re no longer debating the goal of universal coverage. We’re debating how to get there. And it’s important to remember that.
The immediate priority is to defeat Republican efforts to slash Medicaid, take away insurance from millions of people, and undo key patient protections of the ACA. As Brian Beutler observes, it’s incredibly heartening that Democrats and progressives across the board, from Senators Joe Manchin and Bernie Sanders, from the Center for American Progress to the National Nurses United, have collaborated very effectively to defend the ACA.
Democrats must build upon the bracing clarity of the current fight. We need to craft a health policy vision that is administratively and politically feasible, clear to the public, and legitimate in the eyes of our own coalition and most committed constituencies.
This moment in some ways resembles 2006. Then, as now, Democrats had a good inkling that they might win the presidency, and maybe then some, the next election cycle. Key players in health policy began meeting and negotiating, staffing advocacy organizations, pressuring presidential candidates. They wrestled with real questions and compromises in defining the framework that became the ACA. A different roll of the die, and the basic product we now call Obamacare could easily be known as Hillarycare or Edwardscare.
In like fashion, every Democratic constituency must again be at the table today, bringing its own passion and substance to the conversation. This conversation must acknowledge, but also see past, the acrimony with which Sanders and Clinton supporters fought last year.
For all these disagreements, progressives across the spectrum agree on more than we disagree. Therefore, the below five goals should unite us all. If we can avoid turning on each other, we can advance each one.
1. Universal coverage is the touchstone of Democratic health policy.
The ACA moved us closer to that universality, though with 28 million uninsured as of early 2017, we have farther to go. Universal coverage, under our current system, requires strong regulatory protections and subsidies, alongside an essential health benefit package to ensure that coverage works when people need it. It requires other things, too, such as raising Medicaid’s reimbursement rate to provide genuine health-care access. Universal coverage also requires mechanisms such as increased taxes and some form of individual mandate to ensure that healthier and more affluent citizens do their part.
2. Single payer provides one path to universal coverage. There are many others.
Virtually every other wealthy democracy provides universal coverage, achieves good population health, and spends much less on health care than the United States does. These are embarrassing realities, familiar to nearly everyone who follows health policy. Less familiar is another reality: Wealthy democracies have pursued surprisingly diverse paths to accomplish these goals.
In May, the Commonwealth Fund released its encyclopedic compendium: International Profiles of Health Care Systems, which summarizes the main health system features in 19 major economies. These case studies make clear that there’s no single route to universal coverage. Each society follows its own path, reflecting its own unique history, institutions, and political and economic constraints. A true single-payer system provides one approach. But that is not the only or even the most common path. The United States can, and should, learn from these histories, as we make our own decisions about how to build on our existing systems of care.
Canada’s path to single payer began in the provinces, with Saskatchewan’s enactment of a universal government medical care plan in the early 1960s that later went nationwide. Britain and many other European nations enacted their health systems 70 years ago, spurred by both the national catastrophe and national mobilization of the Second World War—and in Britain’s case, to fulfill the promise of the wartime Beveridge Report, which outlined the scope of the post-war welfare state.
Single-payer systems vary widely in the role of for-profit health-care providers, public regulations, local or regional governments, and public-supplied or directly government-paid care. In Britain, the National Health Service directly provides most medical services. In Canada, private and nonprofit providers deliver most medical care, with government reimbursement. Other systems in Continental Europe might appear—through American eyes—to be single-payer systems because they achieve universality and have strong progressive subsidies and government oversight. Yet these systems actually rely on a tapestry of payers that don’t match the single-payer model. Some, such as Switzerland and the Netherlands, in fact heavily rely on private (typically nonprofit) insurers, which charge community-rated premiums. Germany employs both private and public sickness funds financed through tax revenue.
In other words, even among systems commonly described as single payer, not all of them look like England or Canada. And viewed close up, even strong single-payer systems don’t match pervasive stereotypes that seem frozen in black-and-white images of the British NHS of 60 years ago. In fact, the NHS has pursued many innovations that seek to increase hospital competition and to give general practitioners greater market incentives to improve health and to reduce costs. As in the United States, these innovations bring varying results and unintended consequences. They have also raised knotty questions about how to truly measure quality of care and health outcomes.
Almost every country continues to tinker, to improve incentives for care coordination and cost-effective care, to manage the political and programmatic tradeoffs in allowing supplemental coverage that allows the affluent to receive optional services or to jump the queue for elective surgeries.
Care isn’t entirely free within most single-payer or universal care systems either. While England takes pride in providing many services that are basically free at the point of service, not all such systems take the same approach. The French government finances three-quarters of medical care, making the French system a bit of a hybrid between a single-payer and multi-payer organization. France still imposes co-insurance as high as 20 percent for inpatient care and 30 percent for dental care and doctors’ visits, with cost-sharing requirements waived for patients diagnosed with costly chronic conditions. Long-term care is covered, but families are expected to cover other important costs such as housing expenses when a loved-one is in hospice.
I should note, however, that single-payer and hybrid health-care finance systems institute many protections to shield vulnerable people from medical charges and co-payments. Low-income people receive free or discounted care analogues to American Medi-Gap plans. Individuals with chronic illnesses are typically exempted from punishing cost-sharing, as well.
If you follow the politics of Medicare, you will recognize many features and challenges of our own mini-single-payer system with its more universal counterparts in France and elsewhere. For example, most wealthy democracies implement pay-for-performance (P4P) systems that try to compensate physicians on the basis of evidence-based medical practices and patient health outcomes rather than volume. Consistent with American innovations such as value-based insurance design, France imposes lower copayments on highly effective medications.
While many nations evidently have better health-care systems than we do, none has fully cracked the code of cost-effectiveness, quality, and improved health outcomes. For example, most nations find useful but rather modest improvements in medical practice through P4P and related financial incentives provided to primary care practitioners. Every nation continues to experiment. Every nation finds ways that the mechanics of its health-care financing system creates unintended incentives. Every nation imposes some mix of policies designed to discourage patients and providers from initiating low-value care. Every nation experiences its own interest-group politics that nudges and constrains such efforts.
Social democracies such as Germany, Switzerland, and (in particular) the Netherlands employ competitive systems that look surprisingly similar to America’s ACA marketplaces. At least they look similar to what the ACA marketplaces would look like if these were implemented with the same gusto, generous and reliable funding, and solid bipartisan backing.
These above-mentioned countries also have their own equivalent of a tough individual mandate. Residents are either required to purchase coverage or else contribute payroll taxes that are used to finance universal coverage. Markets are closely regulated to ensure that healthy and affluent consumers subsidize the care of others. Low-income people and those with chronic illnesses receive substantial subsidies, though patients’ out of pocket expenses differ markedly across countries. Indeed when all sources of public and private payment are considered, patients in the Netherlands experience lower average out-of-pocket spending than is experienced by patients in Canada or the United Kingdom.
German health coverage is predominantly provided by nonprofit “sickness funds,” which are supported through payroll taxes and compete for business within an insurance exchange. Patients’ out of pocket spending is about 60 percent of the average in the United States and are capped as a percentage of patients’ incomes. Such cost-sharing imposes less of a financial burden than Americans experience, but it doesn’t live up to the image of basically free care that some Americans might imagine.
Switzerland, in contrast, heavily relies upon competition among regulated nonprofit private insurers, which places significant financial incentives on patients to reduce marginal expenditures. Since 1994, Switzerland has implemented a system of universal coverage, but one much more congenial to American conservatives than most other European models. Patients’ average out-of-pocket expenses are much higher. Switzerland’s share of GDP spent on health care is about 25 percent below the United States’s. Yet Switzerland’s average out-of-pocket costs are about 80 percent higher than those in the United States, and are more than five times the average of France or the Netherlands. Almost one-third of Swiss medical spending comes in the form of patient copayments, deductibles, or coinsurance.
I believe conservatives like Avik Roy are right to cite Switzerland as a successful role model for a market-oriented coverage system. It’s worth noting, though, that this ideal conservative health-care system requires a solidly egalitarian polity. The Swiss market model works pretty well because there is strong commitment to universal coverage, and rigorous oversight of nonprofit insurers who must charge community-rated premiums. The Swiss display social solidarity that makes this whole system possible.
Switzerland also has a more functional political system within a wealthy country whose population size roughly matches greater Chicago’s. There is no equivalent among Swiss cantons to our own deep-red states, which out of sheer partisan spite deprived millions of their poorest residents Medicaid coverage. Indeed, the major dilemma facing Swiss health care arises in the coverage of documented and undocumented immigrants—precisely the groups that challenge the Swiss sense of collective solidarity.
3. Expanded public coverage is essential to any Democratic plan.
Medicare for All might or might not, ultimately, be the right policy for the United States. But by any reasonable progressive reckoning, Medicare Available to All would be a huge step in the right direction. Some form of this demand unites the broad left, from moderate policy wonks to radical street protesters. It is popular even among Trump voters, many of whom rely on Medicare or (less vocally) Medicaid.
Many existing proposals would allow older workers to join traditional Medicare or Medicare Advantage plans. Hillary Clinton and Bernie Sanders both proposed versions of the public option that would have allowed 55- to 64-year-olds to opt in. Paul Starr has proposed what he calls “Midlife Medicare,” which starts at age 50. This would be partly financed by taxes to provide basic coverage, which people could enhance by paying income-related premiums as seniors currently do. Starr would also use Midlife Medicare to cover workers who become eligible for Social Security Disability Insurance (SSDI) but are now stuck in Medicare’s two-year waiting period.
Midlife Medicare could help millions of people, particularly those who live in areas where ACA marketplaces for private coverage have functioned poorly. Such policies might also help younger marketplace participants, by removing some of the most expensive patients from their private insurance pool.
Such proposals are quite popular, not least because of Medicare’s familiarity and simplicity. More than 70 percent of Americans somewhat or strongly favor allowing 55- to 64-year-olds to buy into Medicare if they have no other coverage. Not surprisingly, 50 percent of Democrats strongly favor such a buy-in, with another 28 percent somewhat favoring it. More surprising, 32 percent of Republicans strongly favor, and 38 percent somewhat favor such a plan.
A complementary idea is to allow Americans of any age to buy into Medicaid. Although Medicaid is the bête noir of conservative politicians and policy wonks, it is quite popular among both recipients and the general public, with levels of patient satisfaction that rival private insurance and employer-based coverage.
It turns out that low- and modest-income Americans often prefer Medicaid to the private coverage currently available to them, even when that private coverage is subsidized through the ACA. (I share these sentiments. Since 2004, my wife and I have been guardians of her brother Vincent, who is an intellectually disabled Medicaid recipient. We would never enroll him in any private insurance plan.) Indeed, as Sarah Kliff emphasizes at Vox, many privately insured low-income workers resent poor nonworkers on Medicaid, who appear to have better insurance.
Unfortunately, Medicaid produces more access barriers than private insurance because Medicaid so often under-pays providers. That is a fixable problem. And Medicaid’s benefit package is more comprehensive, with fewer administrative and billing hassles. Private insurance would look even worse if anything like the current Republican repeal bills ever pass, as any one of them would impose higher premiums and cost-sharing on older low-income Americans.
Unlike Medicare, with its golden brand name, particularly among older Americans, Medicaid is less popular among the general public. Still, it has other advantages. It covers the age spectrum and is more economical. It’s already wired into the systems of state and local government, and it has 50 years of experience serving medically fragile children and other vulnerable populations. State Medicaid programs include diverse managed-care options that draw upon the genuine skills of private insurers. Contrary to popular belief, it is a surprisingly innovative and robust program.
Medicare and Medicaid control costs by one of the only mechanisms proven to work across wealthy democracies: leveraging government’s market power to limit medical prices. For that very reason, expanding these programs will be loudly or quietly resisted by much of the medical care economy. That was an important factor in the defeat of a public option in 2010. But given the health sector’s failure to aggressively defend itself and its patients against Republican repeal efforts, Democrats can’t allow that interest-group opposition to be decisive once again. Democrats do, however, need to address valid concerns a public option might occasion, such as its impact on low-margin rural hospitals.
An expanded public option would address the reality that American private health insurance has largely failed in the nongroup market, particularly in hard-to-serve rural areas and areas of high provider concentration. This market’s pathologies provided much of the ACA’s original motivation. Before 2010, insurers’ most prominent business model was to chase away, overcharge, or under-insure consumers with costly illnesses, disabilities, and preexisting conditions. The ACA largely ended these abuses, making life better and more secure for millions of people.
Where fully implemented, the ACA serves poor people well. The combination of Medicaid expansion and the marketplaces works especially well for low- and modest-income people who live in Medicaid expansion states. Accounting for subsidies, individuals with incomes below $30,000 generally pay less than $100 in monthly premiums and receive substantial help with out-of-pocket spending. The same basic story holds true for families of three with incomes less than about $50,000, about 250 percent of the federal poverty line.
Yet the ACA didn’t finish the job; and Democrats would be wise to acknowledge that. As incomes rise much above that 250 percent threshold, people’s experience of the ACA marketplaces looks much worse. Premiums are high and rising in many markets, particularly in rural areas. Deductibles and copayments are too large. The penalties enacted to enforce the individual mandate are large enough to enrage many people, yet not so large as to fully protect the risk pool, particularly in states that grandfathered a large proportion of healthy consumers into skimpier plans, and where opposition to everything Obama colors the political and policy reaction to everything ACA-related.
It’s been infuriating for liberals and those on the left to watch Republicans profit from these difficulties when it was Republicans’ own sabotage of the marketplaces that made things worse. As we saw with this year’s House and Senate repeal bills, Republicans have neither an effective plan nor even the honest intention to address these problems. Their proposed policies would specifically do the opposite: steeply increase insurance premiums and out-of-pocket costs for exactly the group of the older low-income Americans who put Donald Trump in the White House.
However justified Democrats are to call out Republican dishonesty, there’s no avoiding the fact that the guiding vision of managed competition on ACA marketplaces is often insufficient. We can, and should, improve the marketplaces through useful tweaks. But the problems run deeper. Marketplaces are fragile, vulnerable to implementation failures and to political sabotage. They lack the policy tools to control medical care costs.
Congressional Republicans’ proud sabotage of these marketplaces does, however, offer an important political lesson. Although the marketplaces are market-based and ideologically moderate, they command little bipartisan support. Only one politician is really accountable for them, and Barack Obama isn’t President anymore. Without real Republican buy-in, or at least some sense of political accountability, I fear, as do many others, that these complex and institutionally fragile marketplaces will always be troubled.
Meanwhile, Republicans at the state level turn out to like Medicaid, particularly when its already been implemented. Whatever Medicaid’s ideological foundations and partisan origins, it provides resources that transactional politicians value to solve their problems. Since the ACA’s passage, Republican governors have built upon and defended Medicaid, trying to make them work to support struggling hospitals and to address public health emergencies such as the opioid epidemic. These governors know that they are the political home address when Medicaid works well or poorly.
Giving Republican governors ownership over the ACA’s Medicaid expansion certainly looked smarter after November 8, 2016. At this writing, anyway, it appears that determined opposition from Republican governors such as Brian Sandoval and John Kasich were central to defeating the ACA repeal effort. Medicaid has become the ironic home of bipartisan health policy.
Which brings me to my next point.
4. Republicans in Washington have demolished the possibility of bipartisan bargaining. So Democrats should be ambitious with the reconciliation process.
In 2009, Republicans negotiated with Democrats, in bad faith, in order to drag out, for as long as they could, the negotiations that eventually led to the ACA. Their post-enactment sabotage of the bill, deep-red states’ rejection of Medicaid expansion, and the Republican effort to ram through an ideologically extreme repeal without proper committee hearings speak for themselves.
That’s not how Democrats hoped Republicans would behave. But now we know better.
In the run-up to the ACA, Democrats made a basic strategic decision to push what Paul Starr has labelled “minimally invasive reform.” President Obama wasn’t wholly correct when he said: “If you like your insurance, you can keep it.” Yet he did accurately convey what Democrats were trying to accomplish, both in its human impact and the strategic doctrine that underpinned health reform.
Yes, the ACA was a liberal bill that expanded coverage and raised taxes on rich people. But the ACA was also fiscally and ideologically moderate. Democrats constructed the bill this way to hold onto their own most conservative legislators, now largely out of office. Building on Romneycare and the Heritage Foundation’s individual mandate, Democrats also hoped their plan’s considerable Republican DNA would gain some Republican support, or at least calm the white-hot partisan opposition President Clinton encountered 15 years before.
In some ways, that strategy worked, as the ACA was miraculously enacted. And, ironically, part of the reason Republicans encounter such difficulty articulating their own replacement is that President Obama and the Democrats de facto included the best Republican market-based approaches to repairing American health care.
Some of these ideas are working—and so would be foolish to repeal. In the counties where most Americans actually live, the ACA created functional marketplaces in which insurers aggressively compete on price rather than by cherry-picking the healthiest consumers. The ACA’s Cadillac tax, though unpopular, addresses an issue Republican policy analysts have complained about for decades: the favorable tax treatment of employer-sponsored health coverage.
Other ideas haven’t worked out so well. ACA marketplaces aren’t so great at controlling costs. But the reason for this failure is that the ACA didn’t go far enough in controlling medical prices, rather than Democrats’ failure to adopt some valuable Republican proposal that could have done this better. It turns out that demand-side competition among insurers is an inherently weak tool to control medical care costs.
That strategy brought other heavy costs, too. The restrained budget and the search for ideological moderation produced an institutionally complex bill that was less generous, more fragile, and more unpopular than it needed to be. ACA subsidies are too small. There is no public option (though it’s far from obvious Democrats had the votes in 2009/10 to get one). Both the state and the federal marketplaces are complicated, not particularly well-liked or well-functioning.
And Democrats got zero credit or buy-in for their ideological moderation. Individual Republicans were happy to include their amendments in Senate committee markups. But once that was done, Republicans implacably opposed the ACA with the same ferocity and rhetoric they would have thrown at a truly radical bill.
Things will be done differently next time Democrats are in charge. I’m not overjoyed about this; American health policy would be smarter and more durable if it were pursued in a spirit of bipartisan problem-solving. There’s no reason that both parties couldn’t cooperate to support ACA marketplaces and make these a success. Thus far, anyway, Republicans haven’t wanted to do that, though there may be some window of opportunity in the wake of Republicans’ failed repeal efforts. And that’s where we are.
No Democrat from Chuck Schumer to Bernie Sanders believes Republicans would negotiate in good faith if Democrats attain a majority. So Democrats would be wise to pursue something more boldly progressive, more amply funded, and simpler, even if the resulting product is more ideologically radical. Allowing near-retirees to buy into Medicare would be administratively feasible. So would increasing the subsidies on ACA marketplaces and establishing more generous caps on out-of-pocket payments among low-income Americans and those with costly illnesses.
Such policies would also be easier to explain to a jaded public. Unlike Republicans regarding the Better Care Reconciliation Act, Democrats won’t be lying to voters or stakeholders about their plans. Because they won’t be lying, they can spend the next three years developing a good product, engaging stakeholders, pursuing a professional policy development process, and communicating a positive and realistic policy platform in the next presidential race to be enacted by a simple majority through the reconciliation process. If Democrats have a good year in 2020, this might also mean that the Democrats could afford to lose the votes of a couple of their most conservative senators, too.
5. More aggressive government bargaining power is essential to control costs.
As a percentage of GDP, America spends half again more on health care than any other wealthy democracy. That’s an achievement when you consider that we’re also the only one with millions of uninsured people, commensurate problems of medical bankruptcy, and generally poor population health outcomes. Judging by cross-national surveys, citizens of every other industrial democracy are vastly more satisfied with their national health-care systems than Americans are, too.
The expenditure differences are especially striking because the practice of American medicine is no more profligate than is found in Japan, Germany, France, and other nations. Many of our peer countries have more acute-care hospital beds than we do, more physicians and doctor visits per-capita. Many have markedly older populations as well.
Two intertwined failures help to explain America’s poor performance. The first is beyond Democrats’ control: deep failures of our political institutions that are both exemplified and worsened by the Trump presidency. American health policy is broken because American health politics is broken. I don’t know how to fix that, though I do know that health policies should to be as simple and robust as possible for some shot at success within the political mess.
The second failure is more straightforward. America has the highest health-care bill because we pay the highest prices in the industrialized world on everything from EpiPens to cancer care. Straight-up price comparisons are complicated, but the overall picture is embarrassingly clear. One of many statistics in that fat Commonwealth Fund report: American hospital stays average 5.4 days, compared with 5.8 days in France, and 7.6 days in Germany. Yet our average hospital spending per discharge is $21,063, more than twice the French average of $10,591, and well over three times the German average of $5,900.
This is most obvious in the cases of France, Canada, Great Britain, and other single-payer or hybrid systems. It’s happening in most other wealthy democracies, too.
Consider Germany’s experience. Olga Khazan notes in The Atlantic that nearly everyone in Germany obtains coverage from one of about 160 nonprofit sickness funds, which cover almost everyone through either employer-based or individual coverage. There is a strong individual mandate. Sickness funds charge income-adjusted premiums. They are banned from discriminating on the basis of preexisting conditions, and offer the equivalent of an essential health benefit.
So German health care looks an awful lot like the ACA exchanges. But there is one key difference. In each German state, sickness funds collectively negotiate a common fee schedule with medical providers.
In principle, American for-profit insurers face even greater economic incentives to squeeze providers than the German sickness funds do. In practice, American private insurers can’t do that. They are too fragmented and they lack the public legitimacy to really discipline pharmaceutical companies, academic medical centers, and other providers. Sickness funds in Frankfurt thus obtain much lower prices than their counterpart insurance companies in Chicago. A common fee schedule has other benefits, too. German patients generally avoid the thicket of impenetrable insurance paperwork and billing hassles American patients have come to expect.
Democrats should commit to aggressive bargaining of drug prices, and a strong public option that leverages Medicare’s fee schedules. They should also explore all-payer mechanisms that allow private insurers to bargain in the basis of the Medicare fee schedule. Maryland provides one useful model for such efforts.
In supporting a public option, Democrats across the spectrum can honor the tremendous work that has gone into the ACA, and honor the importance of further incremental changes to improve people’s lives. Indeed such tweaks would be necessary and difficult even if single payer or universal coverage became a reality. But we still need something more.
A public option might eventually lead to a single-payer health system in workable American form. Some progressives hope that it does. Others hope not, and would prefer a different form. We don’t have to resolve that right now. What’s non-negotiable is our commitment to universal coverage and to a hard-nosed, realistic, and transparent strategy to pursue that goal.
We must take care of each other. That’s the core principle which both liberals and those further left should always keep in mind. We have our differences on policy and political strategy. But we all accept this basic principle, and right now, we need each other to get anything accomplished in the tangled domain of American politics.
Those who identify with single payer should keep this in mind. Of course they should emphatically support their vision of just health policy. Yet in doing so, they should seek common ground with conventional liberals who support valuable incremental moves toward expanded coverage, although they may differ in terms of their longer term goal.
Likewise, those who embrace universality but are skeptical of single payer should remember this, too. Of course they should ask the hard questions about how single payer would actually work. In doing so, they should remember that single-payer advocates have moved the needle to achieve broader consensus on the need for universality. Moreover, single payer isn’t some crazy and impractical left-wing idea. Real-life single-payer systems around the world operate every day with much greater economy and humanity than the American health-care system does.
Liberals and progressives believe in activist government that takes positive action, that uses all the tools at its disposal to cover everyone, to protect sick and low-income Americans from the casual brutalities of our current private insurance market.
The differences in basic principles that distinguish liberals and progressives from Mitch McConnell, Paul Ryan, and Donald Trump are so much deeper and more important than the differences on specific policies and tactics that divide Democrats in a primary fight. Democrats across the board were reminded of that reality when they united to defend the ACA. They need to stay united on what’s important to avoid confusing healthy disagreements on tactics with deeper disagreements on fundamental principles.
Single payer isn’t a core principle or even (yet) a fully articulated policy proposal. Universal coverage is the better metric. Supporting or opposing any specific approach to universality does not reveal who is most committed to social justice, or, for that matter, who is most sophisticated about policy. Progressives must not turn our absolutist guns on each other given what’s at stake. We learned that lesson the hard way in 2016.