Health Care Can Be Cured: Here's How

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s is the picture of health care in America. We spend more money than anyone else in the world — and yet have less to show for it than other developed countries. That's one reason we don't live as long. We don't adequately cover half the population. We encourage hospitals and doctors to perform unnecessary medical procedures on people who don't need them, while denying procedures to those who do. We charge the poor far more for medical services than we do the rich. We force senior citizens with modest incomes to board buses to Canada to buy drugs they can't afford in America. We clog our emergency rooms with patients because they can't get in to see their doctors. We spend more money treating disease than preventing it. We are victims of rampant fraud and overbilling. We stand a good chance of dying from a mistake if we are admitted to a hospital, and we kill more people with prescription drugs than with street drugs like cocaine and heroin. We have an endless choice of health-care plans, but most people have few real choices. We are forced to hold bake sales, car washes and pancake breakfasts to pay the medical bills of family members and friends when a catastrophic illness strikes.

Americans tend to believe they have the best health care in the world, but in truth it is a second-rate system and destined to get a lot worse and much more expensive.

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It need not be this way.

The simplest and most cost-effective remedy is one that is considered untouchable in the U.S. because of the huge lobbying forces arrayed against it. Indeed, neither presidential candidate has come close to offering such a comprehensive solution. The remedy: provide universal coverage and create one agency to collect medical fees and pay claims. This would eliminate the staggering overlap, bureaucracy and waste created by thousands of individual plans. Under a single-payer system, all health-care providers — doctors, hospitals, clinics — would bill one agency for their services and would be reimbursed by the same agency. Every American would receive basic health care, including essential prescription drugs and rehabilitative care. Anyone who needed to be treated or hospitalized could receive medical care without having to wrestle with referrals and without fear of financial ruin.

Radical? We already have universal health care and a single-payer system for everybody age 65 and over: it's called Medicare. For years, researchers and health-care professionals have advocated a similar plan for the rest of the population, but no plan has ever got far in the legislative process because of fierce opposition by the health-care industry. To discredit the single-payer idea, insurers, HMOs, for-profit hospitals and other private interests play on Americans' long-standing fears of Big Government. In truth, it is the private market that has created a massive bureaucracy, one that dwarfs the size and costs of Medicare, the most efficiently run health-insurance program in the U.S. in terms of administrative costs. Medicare's overhead averages about 2% a year. In a 2002 study for the state of Maine, Mathematica Policy Research Inc. concluded that administrative costs of private insurers in the state ranged from 12% to more than 30%. That isn't surprising because unlike Medicare, which relies on economies of scale and standardized universal coverage, private insurance is built on bewildering layers of plans and providers that require a costly bureaucracy to administer, much of which is geared toward denying claims.