An Alternative to Managed Care

Backers of `single-payer' plan hope that a compromise will emerge from Hillary Clinton's health-care task force

WHILE much of Washington is buzzing about President Clinton's forthcoming health-care reform plan, another idea, called a single-payer plan, is sneaking into second place. Also known as the Canadian-style plan, it already has enough support in Congress, and wide grass-roots appeal, to be a major player once the national debate over health-care reform gets under way in earnest this summer.

The single-payer system, in which private insurance mostly would be eliminated and the government would pay for everybody's care through higher taxes, is favored by 74 Democrats in the House of Representatives and five in the Senate, and interest in it is growing.

Rep. Jim McDermott (D) of Washington introduced a single-payer bill in the House even though President Clinton asked members of Congress to delay doing so until after his plan is released, probably in June. "There is an enormous groundswell of support out there" for a single-payer system, Representative McDermott says.

Single-payer proponents from the grass roots let the White House know of their views recently by sending a million "pro-single-payer" postcards to 1600 Pennsylvania Avenue. "Our strategy is to build as big a force as possible," while the president is still hashing out the details of his plan, says Edwin Rothschild of the consumer advocacy group Citizen Action, a leader behind the push.

Besides Citizen Action, the single-payer system is backed by many large unions - including the Teamsters, the United Auto Workers, and the International Ladies' Garment Workers' Union - and some senior citizens' organizations.

Proponents of the single-payer plan say that it would save money, simplify billing, and expand coverage to all Americans. Opponents - including many Republicans, the American Medical Association, and the insurance industry - say it would put many people out of work, would encourage people to overuse the system because it would be "free," and is at odds with the United States' free-market traditions.

Many opponents of the single-payer plan favor the president's managed competition system. But the president's plan was dealt a major blow last week when the Congressional Budget Office (CBO) reported that it was unable to determine how much money managed competition would save. By contrast, the CBO reported earlier that the single-payer system would slow rising costs and possibly save $14 billion, while increasing benefits and coverage.

The CBO report opened the door for a proponent of the single-payer plan, Rep. Fortney (Pete) Stark (D) of California, a key player in the health debate as chairman of the Ways and Means health subcommittee. He attacked managed competition as a "Unicorn" - or mythical creature - that would not work and would not pass Congress. Rep. Dan Rostenkowski (D) of Illinois, the powerful chairman of the full Ways and Means Committee, also has indicated he does not like managed competition.

But, although it may face a fight, managed competition is still the favored solution among most Capitol Hill Democrats. Under this plan, Americans would enroll in regional co-ops that would negotiate with comprehensive health-care providers, such as HMOs, for the cheapest and best quality health care.

Republicans also have an alternative plan, which would use tax incentives to encourage consumers to make better health-care choices.

Single-payer supporters report that Mrs. Clinton, who has met with them, appears interested in folding aspects of the single-payer system into the president's plan, in an effort to woo liberal interest groups. The administration is said to be leaning toward an overall cap on health-care spending and the use of a single "health security card," both aspects of a single-payer plan.

McDermott and Sen. Paul Wellstone (D) of Minnesota, who introduced the Senate single-payer bill, say they are willing to compromise with the president and Mrs. Clinton. Senator Wellstone insists, however, that the eventual plan include an overall cap on health-care spending, comprehensive benefits for everyone, and long-term care, an aide says.

In another possible compromise, administration officials have indicated a willingness to grant states waivers to pursue their own single-payer options instead of the national health plan. Vermont is leaning heavily in this direction and other states, particularly those on the Canadian border, also appear interested.

But the obstacles facing the single-payer plan at the national level are formidable. Passing the Canadian alternative "is a question of neutralizing the influence of the lobbyists, especially the insurance industry," Senator Wellstone's aide says.

Dr. David Himmelstein, a leading lobbyist on behalf of a single-payer plan, adds that Hillary Clinton told him in a meeting that her health-reform plan includes a large role for insurers, in part because of the political power of the industry.

Dr. Himmelstein and his wife, Dr. Steffie Woolhandler, both physicians at Harvard Medical School and Cambridge Hospital, are the founders of Physicians for a National Health Program, a 6,000-member group that has advocated the Canadian health plan for the past decade.

Many of the problems of the current system stem from the practices of the insurance industry, Dr. Himmelstein argues. "In the old days, not many people had insurance and doctors had to obtain payment from their patients. As more people got insurance, a blank check was written" and the industry remained largely unregulated, he says.

As a result, he adds, "We spend $40 billion more in premiums than we get in benefits."

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