My View: Gov. Richardson's plan builds on failed system

Laurence S. Jacobs |

11/17/2007 -

Thanks for publishing "Canada's system a cure for U.S.?" (Nov. 14), comparing the U.S. and Canadian health care systems. I'd like to point out that the figure on the accompanying graph quantifying out government's share of health care spending at 45.1 percent is too low. A number of studies have shown that it is actually more than 60 percent, thus the allocation of health care costs to government is thus fairly similar in the two countries.

One possibility for the misleading figure is that the number given might not include the costs to local, state and federal governments of the health insurance costs for their employees. These costs need to be included, along with the costs of the Veterans Administration health system, Medicare and Medicaid. Roughly 20 percent each of our total health care costs are funded through private health insurance and out-of-pocket expenses.

Nearly one-third of what we spend on health care goes to overhead, made up of marketing, profit, paperwork nightmares and obscene CEO salaries, instead of patient care. In addition, the incredibly complex systems of deductibles, co-pays, pre-approvals and denials impose a huge administrative burden on physicians and hospitals. The overhead cost of Medicare is around 2.5 percent to 3 percent. Since 1970, the number of physicians in the U.S. has doubled; the number of administrative employees in health care has increased 20-fold!

Moving to a single-payer, Medicare-for-all system would save about $350 billion per year, enough to fund high quality comprehensive care for our 47 million uninsured and our roughly 60 million underinsured citizens. Remember that the total yearly costs of health care in this country are slightly more than $2 trillion, representing about 15 percent of our GDP!

We cannot afford to perpetuate our present system, which, despite our profligate spending on it, doesn't work for about one-third of our population. The Institute of Medicine of the National Academy of Sciences has estimated that just over 18,000 of our citizens die unnecessarily each year because they have no insurance or are underinsured. Our infant mortality and life expectancy figures are not only worse than Canada's, but worse than those of all other industrialized nations.

Our system is failing because it's based on a private insurance model, in which the main objective is not the provision of health care but the making of profit. This "industry" perversely increases its operating margins when it denies care. What other business makes more money when it provides less product?

The health care systems in Canada, in Europe and elsewhere in the world all are primarily single-payer systems, and in nearly all of theses, free choice of physician and health care facility is preserved. We are the only industrialized country on the face of the Earth that doesn't provide comprehensive health insurance for all its citizens, and this is a disgrace. The presidential candidates (except for Dennis Kucinich) have proposed plans that build on our failed system, instead of planning to eradicate it and supplant it with a single-payer system. Note that this would be a system for the centralization of payment only, not a system for the provision of care; free choice of providers would be maintained.

The problems with overly long waits for elective surgeries and specialist appointments in Canada are very real, though improving slowly. These problems are because of inadequate funding, and have nothing to do with the structure of the system itself. Our governor is dead wrong when he insists on preserving a role for the private insurance industry in health care; that industry is the problem, not the solution!

Laurence S. Jacobs, M.D., is a professor emeritus of medicine and member of Physicians for a National Health Program. He lives in Santa Fe.