Sizable Group of Democrats Pushing ‘Single-Payer’ Health Plan

Although universal coverage and other basic principles of President Clinton’s health care plan have been widely applauded on Capitol Hill, a brigade of congressional Democrats is fighting for a dark-horse alternative: a government-financed system modeled after Canada’s.

Already backed by a third of the House’s Democratic majority, the alternative is known as “single-payer” because the government would pay virtually all the medical bills now footed by the tangle of insurance companies, businesses, workers, governments and individuals.

Proponents--led by Rep. Jim McDermott (D-Wash.), a former psychiatrist--assert that the single-payer proposal not only covers everybody simpler and faster than Clinton’s complex “managed competition” scheme but also holds down costs better, provides more choice for patients and doctors and assures quality care.

“Variations of single-payer have been road-tested in Canada, Germany and Australia, and they work. On the other hand, managed competition is a theory that has never been tried anywhere on the face of the Earth,” McDermott said.

Opponents of single-payer focus on the politically explosive point that it would require huge tax increases. Sponsors contend that the new revenues merely would replace the insurance premiums and excessive administrative costs now being paid.

“We are talking in the nature of $300 billion to $400 billion of new taxes, as I understand it,” House Speaker Thomas S. Foley (D-Wash.) said. “If you think that the political climate would support that kind of tax increase, you maybe have a different opinion than I do.”

The single-payer proposal also is vulnerable to many Americans’ distrust of government. Government entities not only would control financing and benefits but also would negotiate health care budgets and fees with doctors and hospitals. Revenue would be generated through taxes and distributed by the federal government to the states, which would in turn make payments to health care providers.

The government-run Medicare and Medicaid programs would be rolled into the new apparatus.

Clinton is carefully courting single-payer fans, hoping they still might come to his side and even provide the winning votes for his plan. Eighty-three of the House’s 258 Democrats and one independent support McDermott’s American Health Security Act. A companion bill by Sen. Paul Wellstone (D-Minn.) is sponsored by five of the Senate’s 56 Democrats. No Republicans have signed on in either body.

The President has soft-pedaled his criticism of single-payer legislation, saying simply, “I don’t think that is going to happen.” At the same time, First Lady Hillary Rodham Clinton, who headed efforts to assemble the President’s health care package, has met regularly with McDermott and his allies.

But McDermott believes that the Clinton plan is unworkable. And he thinks that lawmakers and their constituents eventually will come around to single-payer as the best way to tackle the nation’s health care crisis.

“There will be six to nine months of very intense analysis of all the different plans,” McDermott said. “As that process occurs, there is the real possibility that a large number of people will say, ‘You know, single-payer is so much simpler and provides quality care with better cost containment and freedom of choice. Why not just go with it?’ ”

Willis Gradison, a former GOP congressman who now lobbies for a group of small insurance companies, believes that Clinton and a key ally, Foley, made two moves recently that might buy off a large number of single-payer advocates. The President added to his plan a provision that lets states create single-payer programs if they wish. And the Speaker pledged to allow a stand-alone vote in the House on McDermott’s single-payer bill.

McDermott scoffs at the notion that the moves will drain supporters from his plan. “It is pretty superficial to think we would throw ourselves into the arms of the President in exchange for an opportunity to have a symbolic vote on our proposal,” he said.

In June, a Harvard study of public attitudes found that Americans were not willing to support major sacrifices--such as big tax increases--to achieve health reform and were suspicious of a big expansion of government. Both of those findings work against the single-payer approach.

Conventional wisdom around Washington also hurts the idea. News reports and editorials on the various Democratic and Republican plans frequently dismiss single-payer as a left-wing concept with no future.

Proponents of single-payer argue that it is a simple and straightforward proposition. Patients would be free to choose any doctor, clinic or hospital in the country, and extensive care would be covered without co-payments or deductibles. Doctors would not have to sign up with a provider network, as required by the Clinton plan.

“Since Canadians started their program 25 years ago, their life expectancy has soared. It is nearly two years higher than that of Americans,” said Dr. Steffie Woolhandler, a Harvard medical professor who founded Physicians for a National Health Program. “And the beauty of the system is it cuts costs by slashing bureaucracy, not care.”

McDermott claims that his single-payer plan would cut administrative costs by $70 billion a year while Clinton’s plan would save only $7 billion. Actually, savings estimates for single-payer vary widely, from $95 billion in a Harvard study to $24 billion in a report by the Congressional Budget Office.

It is estimated that McDermott, who is working on a financing package for the bill, will have to come up with at least $274 billion in new taxes to replace insurance premiums now paid by companies and individuals. But aide Barry Piatt said it was important to understand that “90% to 95% of the people will pay no more in new taxes than they already pay in premiums. This would be a conversion, a shift, a recapture of premiums.”

Advocates of single-payer praise the efficiency of Canada’s system, but critics assert that the claimed savings are exaggerated.

“Health care costs are increasing in Canada at just the rate ours are, so it (single-payer) is not a panacea,” said Sen. John H. Chafee (R-R.I.), chief sponsor of one of several Republican plans.

Actually, since 1985, Canada’s costs have been rising slightly less quickly than the United States’--7% vs. 9%. In terms of total per capita costs, the United States was 38% higher than Canada in 1985 but soared to 50% higher in 1991, the last year for which figures are available.

With most insurance companies likely to collapse if single-payer is enacted, the bill provides $9 billion to retrain displaced workers. But the fear of widespread job loss remains a serious political liability for the proposal.

Groups supporting single-payer public insurance include many consumer organizations (Consumers Union, Public Citizen), some provider organizations (the National Assn. of Social Workers) and such unions as the American Federation of State, County and Municipal Employees and the Oil, Chemical and Atomic Workers Union.

While some top business executives have expressed private support for single-payer, organized corporate and small business interests are opposed. They include the U.S. Chamber of Commerce, the National Assn. of Manufacturers and the National Federation of Independent Businesses.

Also opposed are most provider groups--including the American Medical Assn., the American Hospital Assn., the Pharmaceutical Manufacturers Assn.--and the insurance industry.