Henry Blodgett (3:30)

So this show's about solutions. You have some very specific solutions which I definitely want to get into. Before we do that though, I'd love to just talk more about, like how we got here. Richest country in the world. There have been frustrations about our healthcare system for as long as I have been alive, which is a long time at this point. So how did we get here and what are the root causes of the problems?

Dr. Stephanie Woolhandler (3:54)

Okay, well, really the root cause of the problem is profit seeking in health care. And most other nations got rid of profit seeking in healthcare around the end of World War II or in the first few years afterward and went to some form of national health insurance or National Health service funded system that covered everyone. The United States actually looked like it might be moving in that direction in the 1960s when we adopted the Medicare program, the federal program that covers the elderly, and the Medicaid program, the joint federal program that covers some poor people. And we were improving, we were covering more and more people. Our health statistics were improving. And by about 1980, the health of the American people looked very similar to the health health of people in Europe and Canada. The spending in the United States was similar and people were kind of optimistic that we might be moving to a really Universal system. Then 1980 hit and things changed dramatically. Reagan was elected. Margaret Thatcher was elected in the uk but in the US Reagan was elected. That signaled a real switch away from the civil rights values and the civil rights era policies toward a market oriented approach in healthcare and in other parts of the society. But we're talking about healthcare today. The decision by Reagan to shrink government role, to expand the private sector, to impose market competition and efficiency. And he and his supporters were egged on by the emergence of this new field called health economics that said, oh, what we really need to do is put more profit making into healthcare, run it more like a business. And in fact we started to do that. Medicare was increasingly contracted out to private insurance companies under a program that's now known as the Medicare Advantage Plan. Hospitals were encouraged to compete for profit. Medicine entered and we saw our first for profit hospitals of the modern era in the 1980s. But over time we've become more and more oriented toward profit making. And what's happened is we have fallen so far behind the rest of the developed world.

Henry Blodgett (6:22)

And why doesn't for profit work?

Dr. Stephanie Woolhandler (6:25)

Well, you know, health is not the same as TV sets. You need the amount of healthcare that you need. You don't need more than what you need and you don't need less. And that's really different from other consumer products. So if you want a system that gives people just the amount that they need and no more, and just the mix of care they need, but not expensive things they don't need, then you need to run it as a nonprofit system. And I think in the United States we're at a point where we really have to focus on a publicly controlled and community controlled system to get back to a situation where people get the healthcare they need and they can afford it. And it's really universal, really a right of being alive, a right of living in this country the way it is in the rest of the developed world.

Henry Blodgett (7:18)

And some specific points about for profit that you've talked about that really frustrate people and create a lot of rage, including I think the one leading to the assassination of one of the big healthcare company CEOs last year, which horrifically in my view, a lot of people support it. They said enough is enough. Let's start to change something is the idea of rationing and approvals and so forth. And what you've talked a lot about in your work is the immense amount of cost that that creates in the system for by insurance companies policing everything and the administrative costs and the profit costs. A lot of these companies have enormous profits. So is that the issue? Just there's a much bigger cost piece?

Dr. Stephanie Woolhandler (8:02)

Yeah. Well, I think people are, we're very angry at the health insurance industry because they charge a lot of money. People purchase health insurance in good faith and then when they need care, they try to get it and the insurance company denies it. I agree with you that murder is not the way solve this problem. Reform of the healthcare system is. And some of the ways that profit seeking drives up healthcare costs, first the profits themselves are a giant chunk of change. $2.6 trillion has been removed from the healthcare system in the last 17 years and transferred to shareholders. Even in healthcare, 2.6 trillion is a lot of money to be moving away from patient care and toward profits for shareholders. But even bigger than the 2.6 trillion in shareholder payouts has been the huge administrative apparatus that has been constructed to create those profits. So these giant Insurance bureaucracies, these giant sales bureaucracy, all those TV ads, all the people sitting around doing the prior approvals and saying no to, people trying to figure out where to locate to make the most money. Those bureaucracies are extremely expensive. And in work that we've done over the years, we found that the cost of administering the US healthcare system is more than twice the cost on a per capita basis of administering the simple single payer system that they have in Canada. Sort of a universal Medicare for all. That amount of money turns out to be almost $800 billion a year, nearly a trillion dollars a year in excess administrative costs in the US system relative to what it would be with a simple single payer system that covered everyone. So that's the insurance bureaucracy, the hospital bureaucracy, the bureaucracy that I as a physician have had to work with in order to get paid, the bureaucracy that really frustrates patients when they're trying to get the care they need. So there's the profits that wastes a lot of money. There's the bureaucracy that allows them to create profits. And the third thing is the way that healthcare ends up getting warped away from what's most needed by the American people and towards what's most profitable. So for instance, I'm a primary care doctor and we know from studies that good primary care saves lives, that it's the key element of a healthful healthcare system is people having access when they need it, right away, to a knowledgeable person who can help them either solve their problem or give them entry into the rest of the healthcare system. And yet primary care is totally underdeveloped in the United States. It's shrinking. And the hospitals want to close their primary care facilities because you don't make money off of primary care. You make a lot more money off of elective procedures like hip replacements or expensive high tech services like cancer care. So we underfund primary care, the stuff that is the core and the centerpiece, because it's inexpensive, because it's cheaper. We underfund primary care and then we over fund and over concentrate on, on the expensive stuff. And you know, there's a hospital in Boston where I used to work and they are shutting down primary care, right? They're shrinking primary care. They've got a waiting list of 15,000 people who need a primary care doctor and can't get one. And they get on a waiting list, 15,000 people waiting for primary care. Meanwhile, they are building a high tech cancer center to their hospital, literally next door to an existing high tech cancer center that's owned by a competing hospital. So we're going to have two cancer centers, very wasteful and redundant, while 15,000 people are waiting for a primary care appointment. So I'm not an opponent in high tech care, but it's great when you need it, but it is overused, overbuilt adds to the cost of health care while we neglect the cost effective solutions like good primary care, good mental, mental health services and that harms health. People live longer in systems with good primary care. We know that. So it's not just the cancer care and the orthopedic surgery. You may need that, but you need that good primary care when you need it to have a cost effective healthcare system.

Henry Blodgett (12:51)

So another question about insurance before we get to the solutions is that I think it's frustrating to a lot of people is the fact that it's employer based. If you work for a big healthy organization, you have good healthcare. Maybe it's not great, but it's fine. God forbid you quit your job or you try to freelance or build your own company as a sole proprietor. You can't get into the systems. Obamacare is getting sort of chiseled away and getting more and more expensive. How did we get to an employer based insurance system?

Dr. Stephanie Woolhandler (13:24)

Well, the story that's usually told about that is that During World War II there was a labor shortage because so many men were off overseas. So employers were not allowed to raise wages because there were wartime wage and price controls, but they were allowed to raise benefits and offer special benefits. So employers trying to recruit workers during the war would offer these health benefits to entice people to work for them. Okay. But that continued after the war and the federal government said if you give these benefits to workers, we don't tax the workers on it as income and we don't tax you as the business on it for providing it. So it became very tax efficient for workers and for employers to have job based coverage. And during this times when jobs were growing and people were getting more affluent and salaries were going up in the post war period again, it seemed to be working pretty well and people thought, well we'll just add some tweaks, Medicare and Medicaid and it'll all work. But it really has stopped working and the number of people with private insurance has really stagnated over the past few decades. Employers don't have to offer you insurance to get workers these days. There's a lot of gig workers, there's a lot of low skilled workers who don't get employer sponsored coverage or they get it, but it's so skimpy that they still can't afford to use it when they get sick. And many people are coming in and out of the workforce these days. So even if you have a high paid job and you're between jobs, you may find yourself without coverage.

Henry Blodgett (15:10)

It's tough. It's tough. And to stand up for employers for just a second, it's also painful for employers because you go year to year and suddenly your health care costs go up 25% as a company and you have to manage that by reducing benefits or raising deductibles. And everybody is very frustrated about that, obviously. And yet it's being laid on the employer. So lots of frustration all around.

Dr. Stephanie Woolhandler (15:34)

No, I mean, I appreciate that. And this year health care costs are soaring. This you haven't heard, but you know, employer costs are going to go up at least 9% now. They're already paying $27,000 for family policy for workers. If you have a family, you got a family policy, 27,000, which you and your employer split. But 9% increase of $27,000 in one year is a very big deal. But of course, people with employer sponsored coverage are facing these big increases. But the increases are even higher for a lot of other people, like folks who are getting their insurance through the Affordable Care act exchanges, which is about 24 million people, 20 million of them get subsidies and those subsidies are shrinking way down so that the cost of the ACA plans for those 20 million people is going to more than double. Okay. And again, costs are also going to be going up for people with Medicare because of the Medicaid cuts actually affect the cost of their drugs. Medicaid actually subsidizes drugs in Medicare in sort of a confusing and complex system. And of course, many people with Medicaid are going to be losing their coverage when the one big beautiful bill kicks in. Because there's these, what are called work requirements, but they're really paperwork requirements where in order to continue in Medicaid, you have to continually prove the number of hours you're working, your employment, what you're earning or not earning, that you're looking for jobs. And we seen in the past when these have been applied in places like Georgia and Arkansas, enrollees just can't get past the paperwork requirements. So a lot of people are going to see healthcare get a lot less affordable this year.

Henry Blodgett (17:19)

And so that brings me to one of the things that I've always understood as being a big impediment to why this system hasn't changed and going back when I was really aware of the change was during the Clinton administration where trying to get to universal health care didn't even get a bill to Congress. There was so much pushback. And definitely, please tell us, like, why, what's going on there? But my understanding is that the reason there hasn't been a lot of change is that for the most part, most Americans are okay with the system. They don't love their insurance, but they do work for big companies and it seems fine. And change is scary and you might lose your doctor or what have you. But, but from what you're saying, it sounds like that might be about to change, that in fact, the costs are going up so much and the insurance is getting the coverage that maybe frustration will actually become the dominant view.

Dr. Stephanie Woolhandler (18:11)

Well, okay, first, do people with good private insurance, is that really okay? Is everything okay with them? I just want to remind you that if you get your insurance through your employer, and I don't know if you do it, I don't know if you're individual or family, but, but that $27,000 is not a gift from your employer. That's your compensation. And when employers have to keep paying more and more and more, that means they're going to be paying you less in terms of other types of compensation. That's not just my theory. That's what labor economists think.

Henry Blodgett (18:48)

Speaking as a former CEO, it is true.

Dr. Stephanie Woolhandler (18:50)

Yeah, yeah.

Henry Blodgett (18:51)

It's real money.

Dr. Stephanie Woolhandler (18:53)

We get it. Yeah. So from the horse's mouth here, it's true. And so, yeah, maybe it's okay that you got, you know, you have coverage, $27,000 worth of coverage for employer only. It's really not. And then often you get that coverage and you still have co payments and deductibles, you know, and things that are completely uncovered. And they'll cover you at one hospital, but not the cancer hospital that specializes in the cancer you unfortunately have. So we still have a lot of restrictions and we need to be moving toward that single payer system like they have in Canada. You can go to any doctor, any hospital. There's no out of pocket cost for covered services. You enter the system on the day you're born and you leave it, you know, when you move away or die. And that's the kind of security that they have in Canada. They have excellent medical care. It's the kind of security we need in the United States. Now I did say that to Hillary Clinton. She invited me to the White House very early in the process and I explained to her how a Single payer system works. And she's actually a very smart woman. You've probably met with her.

Henry Blodgett (20:07)

Yes, she is.

Dr. Stephanie Woolhandler (20:08)

And she got it. But that wasn't what they were going to do. What they were going to do was try to make a deal with business in the insurance industry saying will let the private insurance industry continue with this kind of managed competition, hybrid model. You're going to let us have universal health care and in exchange we're going to let the private insurance industry continue to make money. And that was the deal she tried to broker and it looked like it was going to go through. And in the end the private insurance industry said, we're out of here, you know, forget the deal, we don't need you. We're doing well as it can. We're doing very well the way things are and we're not going to make this compromise. And that's really what happened is the private insurance industry walked out of the deal and the whole thing fell through after a lot of time and effort was put into developing this, I think kind of jury rigged plan to get to universal health care with continuation of private health insurance. The idea of single payer was discussed again during the Obamacare debate. Again it was like, no, we need to do something. We're gonna extend coverage to many more of the poor people, which was great, that was good about Obamacare. But we're gonna buy a lot of that coverage through the private insurance industry. So they did manage to pull off that deal, but we never did get to universal healthcare with Obamacare. You know, we have 26 million uninsured today, so. And we're about to head the other direction. So none of those work the way single payer does.

Henry Blodgett (21:44)

So tell us more about single payer. And what I wanna stress is you're not adv or a system in which all doctors work for the government, all hospitals or government organizations, so forth. You're advocating for a major change in insurance, which you're describing as single payer. So what is that? Is that Medicare for all?

Dr. Stephanie Woolhandler (22:03)

Yes, that. I mean, I always use the term single payer for it. I think Bernie Sanders really popularized the term single payer, Medicare for all. And I get it, because Medicare for all is a whole lot easier for the general public to understand. The traditional Medicare program, which was like a single payer program, traditional Medicare program, you just paid taxes, you know, and it was a government program. And when you got it, which wasn't until age 65 for most people, it was kind of automatic. And the government paid the doctors and hospitals directly. So that's Medicare for all. You pay for healthcare through your taxes and then a government or maybe a state based agency pays the bills to the doctors and hospitals. It's more efficient because you save on a lot of administrative costs. There's a single binding fee schedule for physicians in the area and it's often a negotiated fee schedule in Canada, but it is binding once it's negotiated and the hospitals are paid. Lump sum budget, the way we'd fund a fire department. You make a decision about what the hospital, hospital's budget is going to be again as a big negotiation. And then 1/12 of that budget is deposited in the hospital's bank account every month. And that means hospitals don't need these big bureaucracies and they also don't need to be checking your insurance the moment you roll through the door and figuring out your co payment because it's just all paid for. So that's the way a single payer system operates. The beauty of it is you get so much simplification of administration and bureaucracy that you save $800 billion a year. In the US we would save just on that. That's the money we could use to improve care for everyone, get rid of co payments, get rid of deductibles, make sure all medically necessary services are covered. And that's the system I've advocated for decades. I founded a group called Physicians for a National Health Program that advocates for single payer Medicare for all. I work with Public Citizen Health Research Group, they're advocating for it. But the best known adv have been the politicians, specifically Bernie Sanders. And I actually worked for Bernie Sanders way back when, when he was first elected to Congress. He was a freshman congressman from Vermont and I was in Washington on a fellowship. I was a Harvard professor at that time and Harvard was administering this fellowship in Washington. And I was, as part of the fellowship I was supposed to work with a congressional leader and I, I chose to work with Bernie. And the people at Harvard thought I had lost my mind. And the person who recommended me took me aside and told me he was never going to recommend me again. What was I doing? This crazy thing. But I spent a lot of time with Sanders who was also a very smart guy and talking about single payer. I mean he was a supporter but didn't know the detail and working with him to develop single payer proposals and ideas. Then I went back to Harvard and have continued to work with him obviously in a very informal unpaid basis off and on for years. But he developed the idea and popularized it and it almost carried him into the White House. You know, it got pretty close to carrying him into the White House. So I think with what we are facing right now that Americans are seeing huge cost increases which they really cannot afford. I think it's time to like resurface the idea of single payer Medicare for all and use the solution that other nations have used to make healthcare high quality, affordable and, you know, equally available to everyone who needs it.

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Henry Blodgett (26:40)

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Dr. Stephanie Woolhandler (27:21)

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Henry Blodgett (27:28)

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Dr. Stephanie Woolhandler (27:30)

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Henry Blodgett (27:35)

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Dr. Stephanie Woolhandler (27:39)

Simple question, what do you see? Great ideas start on Mac. Find out more on apple.com Mac so.

Henry Blodgett (27:52)

When you propose single payer, what you hear back immediately is, oh, rationing, we're going to have crappier doctors. You're not going to have the choice. Lots of people have these wonderful plans. Doctors are going to make less because the private insurance companies pay more. They're all this pushback. So just one clarifying question. In the single payer solution that you're recommending, can there also be private insurance companies or do they cease to exist?

Dr. Stephanie Woolhandler (28:19)

Okay, I, I personally believe private insurance companies should cease to exist because we have tried that and it failed. They run the healthcare system now and look what a mess we have in terms of very high costs and very poor outcomes. Not everybody holds that view and you know, including many single payer Supporters think, well, you could let a little tiny bit of private insurance in there to like get private rooms and TV sets and hospitals. But I think for the core things that everybody needs, you should not be having private insurance. Right? What you can have is private doctors. If they want to be in private practice, they have to accept the fee schedule from the public program, but they can practice privately. You can also have people who practice outside of the system. In Canada there's only a few dozen doctors who've opted to do that, but plastic surgeons, things like that. But you can practice completely outside of the system. But most doctors have been pretty happy in Canada, to be honest. They're very high earners. They earn four and a half times the average industrial wage. That's perhaps a little less than the US but not much. It's very high quality. There's a lot of great Canadian doctors, great med schools, research that comes out of Canada. I'd say this same for most of Western Europe. There's some very, very good healthcare systems in Sweden and the Netherlands, in France, in Switzerland, that are national health programs and still have some aspects of private medicine and private hospitals, but very tightly regulated and with primarily tax funding, with the community getting control of how that money is spent.

Henry Blodgett (30:15)

And does it have to be universal where everybody has it, or can it be an option? Because that's another thing that I've heard election cycles, it's what about the public option? You have the ability to buy it?

Dr. Stephanie Woolhandler (30:25)

Uh huh. Well, the public option never really happened. It was in fact a very bad idea. And what was going to happen was you would have a choice. You could buy private insurance and then there would be a public plan like Medicaid you could buy your way into. The problem with that is a public plan then becomes like a high risk pool. So those very healthy people who are profitable for private insurance would be recruited, they'd be offered the kind of benefits that healthy people want, like gym memberships and things where the sick people would be pushed out and not offered things that really sick people need like free chemotherapy or good wound care. So you end up with all the sick people in the public plan and healthy people in private insurance. And that does not control costs. If anything, it tends to push costs up and it's not particularly fair. So I do think the public coverage should be mandatory. If people don't want to use it, they can pay privately, they can go somewhere else. But that the public insurance should actually be a right of being an American.

Henry Blodgett (31:34)

So why hasn't this happened when this is proposed. What is it that happens that it just doesn't happen?

Dr. Stephanie Woolhandler (31:44)

Well, I think that it's been really opposed by the private insurance industry, which is massively profitable.

Henry Blodgett (31:53)

It's massively profitable and employs millions of Americans, let's say.

Dr. Stephanie Woolhandler (31:56)

Well, the actual, you know, depends how you calculate. But their administrative side, the part that's the insurance side, is about a million. So at this point they're also buying up doctor's practices and employing doctors and nurses. But putting that aside, you would have to find, find jobs for the million or so people who now work for the private insurance industry. But that can be done. You know, to put it in perspective, 20 million people leave their jobs. I think this is in the course of a month, actually, perhaps in the course of a year. But it's a course of a year. Yeah. So 20 million people a year leave their jobs. So 1 million people added to that that could be managed with like a program of income support and job placement. So I'm not that worried about that. That hasn't been the opposition. It hasn't been the clerks there answering the phone. It's really been the shareholders and the companies themselves that have said, you're not taking away our meal ticket. We're fighting you tooth and nail. And a man named Carl Schramm, who used to run the organization, the trade organization for the private health insurance industry, was once asked if he supported single payer. And Carl Schramm answered, no, we completely oppose Medicare for all single payer. This is a life and death struggle for us in the insurance industry. So he's very honest. But of course it is. You're selling health insurance and someone says it's established a nonprofit Medicare for all. You're out of the health insurance business. The other big opponent has been pharma because they make huge profits. And part of that, how they make their profits is with these very complex system of pricing and patents. And if there were single government payer, that single government payer would be in a position to hold down their rate of their profit making. Now we have been making some tentative steps toward controlling the prices of PhRMA, but we're really not there yet. Americans are paying twice as much for are the exact same drugs as people in Canada, Europe. And the way you get those prices down is by having a public program that has the market power to say if you want to sell your drug in our program, we're going to have to negotiate about those prices and get them down.

Henry Blodgett (34:26)

And just one more detailed private market question is why doesn't that Work with the private insurance companies. Why don't they negotiate town and this is the whole idea with well, oh it's run like a business, we'll drive costs down. So why are they so expensive?

Dr. Stephanie Woolhandler (34:40)

Okay, well you've probably heard a lot about the pharmacy benefit managers or PBMs which are the special middlemen who manage benefits and run mail order pharmacies and they get the payments from the, from pharma and they negotiate for the insurance companies. Turns out nowadays the pharmaceutical benefit managers are all owned by, owned by the insurance industry. So they're getting money in deals with pharma through their pharmacy benefit managers that maybe benefit the insurance company but don't lower prices to the consumer. And we've tried this, right? We've tried the pharmacy benefit managers, we've tried the insurance companies trying to get them to actually negotiate and push down prices and it has not worked. And we can come up with a theoretical explanation of why that makes more sense for them to make for the insurance companies and pharma to make a deal that profits both of them than to really fight and push back on each other. Perhaps that's what it is. But whatever the reason is, it really hasn't worked. And the price of a newly introduced drugs is just going up and up and up every year and it's more than tenfold higher than it was a decade ago. So what we're doing is not working. And that's the first point I want to make. Look at what we've got. It's wildly expensive. People can't get the care they need because of the expense, because of the complexity of the system. Patients are wasting time on paperwork, everyone's wasting time on paperwork. It's not working and we need to be doing something else.

Henry Blodgett (36:24)

And so we've got the private insurance industry that's completely against it. We've got pharma, we've got other profit driven companies in the middle of it that are advocating against a change to single payer. What about doctors? You're a doctor and my understanding is that if you are paid by Medicare you make X and if you're paid by a private insurance company for the same procedure you make make 150% of x or 2x if you're a hospital or what have you. Are doctors against single payer?

Dr. Stephanie Woolhandler (36:55)

Well there's actually a division in the medical profession. It used to be the ama. You know, traditional medicine was totally opposed and many of the physicians organizations are totally opposed. That's not true anymore. So many of the physicians Organizations have studied single payer, have said positive things about it. The largest specialty organization in the country, which I've been a member of, is the American College of Physicians has, oh, I don't know, I think about 150,000 members, but they've actually talked a lot about supporting single payer. That's not the only thing they support, but they're definitely not opposed to it. At various times, the family doctors or even the American College of Surgeons has endorsed the idea of single payer. Certain state medical associations have done it. They, they don't have the kind of enthusiasm for it. Let's say that I do. But we don't find a monolithic opposition. The doctors who really are opposed are the real entrepreneurial types, the ones who are building businesses to actually turn into owners and profit makers. And they're opposed because Medicare for All restricts profits both for insurance companies and for that kind of business. But the doctors are doing fairly well in Canada. And most American doctors know Canadian doctors. We meet them at the professional meetings. A lot of them come to the United States to train or to work. Do the Canadian doctors say they want more money? Yes, but in general, American doctors say that too. But in general, the Canadian doctors are pretty happy and do pretty well.

Henry Blodgett (38:39)

And you've said that you personally say that or think that the private insurance companies should cease to exist. I did notice when I looked at Britain and Canada and so forth that there are some private insurance companies. It's an option. You can pay up for it. And given that we just have this incredible need for this and the pragmatic challenge of how to have it, is that a step that would make it easier for folks to agree on single payer? It's like, hey, private insurance companies, you can keep doing what you're doing and you can work with companies and you can sell them plans that they can use as benefits. So we don't, we don't change the system radically. We just create the single payer.

Dr. Stephanie Woolhandler (39:19)

Okay, well, if I go to United Healthcare and say instead of covering 50 million people and making billions and billions in profits this year, you're only gonna be covering 2 million people, they're still gonna fight me?

Henry Blodgett (39:37)

Oh, absolutely. I'm not saying that.

Dr. Stephanie Woolhandler (39:39)

They're not going to say, oh, okay, Steffi, you talked us into it. You take the, you know, we'll lose 48 million people, the business and the premiums. So you're going to actually have to fight the private insurance industry. And I think the Clintons found that they were trying to build Some compromise. You let us cover more people, we'll let you have a big role in administering it. They thought that would work, but it didn't. Private insurance industry walked away from that deal. So I think, is it okay to allow a little bit of private insurance like they have in Canada, where it literally covers your TV set or a private room? Right. That's what the insurance is for. Maybe. And maybe that's a compromise you make, but that's not what I start. That's not what we start with. We start with saying, you know, actually, a private room is a standard of care in 2025. It's not the standard of care to be in a room with four other sick people. And it's not good for infection control, it's not good for sleep. So if we think the standard of care means that everyone who's hospitalized should have a private room, that's what we need to work for. And frankly, I think the standard of care has to be that there has to be some way to entertain someone. I mean, how much does a TV set cost these days? Right.

Henry Blodgett (41:04)

We don't even need them anymore. We have phones.

Dr. Stephanie Woolhandler (41:06)

We have phones, yeah. So, you know, the other thing that's been happening in Canada is they're just in. They have for years covered doctor's care and hospital care 100%, but they were not covering full drug coverage and mental health coverage. And Canada's in the process of expanding their national system to cover what they call pharmacare and mental health care. They're only part of the way there at this point. So some people still have insurance for that. But I think private insurance really ought to be phased out because we ought to be building a public system that's good enough that you don't need it.

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Dr. Stephanie Woolhandler (42:23)

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Henry Blodgett (44:03)

Another point you've made, you made it earlier and you've made in your work repeatedly, is that one of the things that's happened is that the government is sort of outsourcing Medicare and now it's Medicare Advantage. I am, I hate to say, closing in on my own eligibility for Medicare and was looking forward to a system that a lot of people described as, hey, it's good. It's not great, but it's good. It covers what you need and maybe you can get some supplemental and so forth. But now I'm realizing that there is, it's been outsourced to the private companies that are making billions of dollars and taking their profits. So tell us about that, this difference between Medicare and Medicare Advantage.

Dr. Stephanie Woolhandler (44:42)

Okay, so beginning in the 1980s, as part of this let's get profits come in and, you know, market forces. Medicare started subcontracting Medicare coverage to private insurance plans like UnitedHealthcare and CVS. And it had a lot of different names. There was a Medicare plus Choice and the Medicare HMOs, but now it's called Medicare Advantage. And the taxpayers, through the federal treasury, gives a giant premium to a private company, you know, 14, $15,000 a person to cover them for all their medical needs, sometimes as much as $20,000 per person for all of their medical needs. And the Medicare Advantage plan is supposed to provide for them. Of course, the Medicare Advantage plans are profit seeking. And what they've done with a lot of that money is used it for their own overhead and profit. And then when people get sick and want to, you know, say, choose their doctor or choose their cancer center, Medicare Advantage says, uh, can't do it out of network. Um, so consequently the taxpayers have been overpaying Medicare Advantage. Uh, had we just left people in traditional Medicare, we would be saving over $80 billion this year in terms of the cost of the Medicare program. Over the past 20 years or so, it's been more than $600 billion in overpayments from the federal treasury to these private plans. And when the federal government overpays these private plans, as it has been doing, and that's not my data, it's from the official Congressional Medicare Payment Commission, MedPAC overpays them by $80 billion. That raises price to everyone. It raises price to the taxpayers who pay for a lot of the Medicare of that money, but also to folks on Medicare who have to pay Part B premiums that go up when the costs of Medicare go up. So it's now actually widely recognized that the Medicare Advantage has hugely increased the cost to taxpayers and is restricting care in ways that is not actually always in the patient's interest. So they often recruit people. They've been recruiting actually a lot of minority people lately. They enroll those people and then often deny them the care they need. And apparently they find that profitable because they've been selectively recruiting them. They also exaggerate how sick people are because the government payment for each patient is determined by how sick that patient is. So if you recruit a patient and then you just exaggerate how sick they are by piling on irrelevant diagnoses, old diagnoses that aren't active, things that don't even exist. And again, that's been documented in the Wall Street Journal in the organization called STAT by the Medicine Medicare Payment Advisory Commission, piling on those diagnoses to raise the price to taxpayers. And then they do cherry pick still. So if you are a high utilizing person, say you have pancreatic cancer and you're someone who really wants to fight it all the way, and you've got very high costs, they do not want to recruit you because no matter how much you know, they can't exaggerate how sick you are. You're that sick. So the Medicare Advantage plans do tend to push people out who get very high cost diagnoses like pancreatic cancer or who have very high use, for instance, need a lot of home care, a lot of nursing home care. So the Medicare Advantage plans have enriched the private insurance industry. They've impoverished the federal treasury and made healthcare more expensive for everyone. And unfortunately, the Trump administration, as one of its first acts this spring, decided that they were going to double the pay raise for Medicare Advantage to overpay them even more in the coming years.

Henry Blodgett (48:53)

And from a very basic level, how does it work? If I'm a citizen, I get to choose either Medicare or Medicare Advantage?

Dr. Stephanie Woolhandler (49:01)

Yes, when you turn 65, you can choose Medicare or Medicare Advantage, but you will be bombarded with ads from Medicare Advantage companies and from brokers who are trying to sell you Medicare Advantage. And I get, I mean, I'm old enough to be on Medicare, and I do get phone calls constantly, even though they're not supposed to be calling me. I get lots of stuff in the mail. Things come in via the Internet promising me all these wonderful things if I just sign up for Medicare Advantage. Free dental care, free vision care. The problem is, when you go to use that vision care or dental care, it's very, very limited. And the data shows that people with Medicare Advantage are not getting more dental care or vision care than other people. So it sounds good on paper. And maybe if all you need is a tooth cleaning or a pair of reading glasses, you get that for free, let's say, with Medicare Advantage. But if you have the really expensive vision needs or dental needs, the Medicare Advantage really doesn't deliver.

Henry Blodgett (50:16)

And so from a policy perspective, the government basically said, hey, go ahead and compete with Medicare, call it Medicare Advantage. We'll pay you if people opt into that.

Dr. Stephanie Woolhandler (50:26)

Yes, absolutely. That's exactly what happened. And, you know, the private insurance industry lobbied very hard for it. They're still lobbying very hard to maintain. Was a terrible idea from the beginning. They thought, oh, market forces will help. Haven't helped. They've actually raised the cost and in many ways restricted care to folks.

Henry Blodgett (50:47)

So it's not similar to the private prisons, for example, of companies where government is saying, and it seems to be an argument that resonates with a lot of people, hey, government's not good at running things. Let's let companies run things. We'll just select the best provider. And that's how we suddenly have a very vibrant for profit prison system. So it's not that.

Dr. Stephanie Woolhandler (51:10)

Okay, well, you know, government is very bad at running some things. I don't want them running my restaurants or whatever, you know, but they're very good at running Some other things. So the Social Security system, for instance. Actually, my parents died when I was young, so I was supported by Social Security until I was halfway through medical school. So I'm a big believer in Social Security and has overhead that's a tiny fraction of the overhead of private pension funds. And it's secure, it covers people, has cost of living increases. So the government is pretty decent at running universal insurance programs. They do a pretty decent job. That's not the same as saying government ought to run everything. But insurance ought to be run through public agencies. And I think community needs to be in control to have input into how it's run and how the healthcare is delivered.

Henry Blodgett (52:04)

And so you are a Medicare customer and user. How are you? Is it okay?

Dr. Stephanie Woolhandler (52:09)

Well, Medicare's fine. I get to go to any doctor I want. I get to go to any hospital I want. In fact, that's part of why I have it is because I work both here and in Cambridge, Massachusetts, so I move around a lot. And I need to have doctors in both places for emergencies and things. But it's quite expensive. You know, it's got a lot of things that are not paid. And it's not expensive for me because my former employer, Harvard, I'm a retiree from Harvard, pick up a big share of the cost for me. But it's very expensive if you don't have an employer who'll pick it up.

Henry Blodgett (52:50)

Meaning out of pocket.

Dr. Stephanie Woolhandler (52:53)

There's a part B premium and then there's uncovered services that you have to Medigap policy. And that's what I get help with from my former employer. But we need to make Medicare completely comprehensive. And the reason people go into Medicare Advantage is they think they're gonna get more comprehensive coverage. They're often disappointed when they get there. But we need to make the Medicare program comprehensive. We need to improve Medicare and make it cover all of people's needs. You know, you do need eyeglasses and teeth cleanings. So we need to be including things like that into the Medicare program.

Henry Blodgett (53:28)

And so if you factor that in, that we have to improve Medicare.

Dr. Stephanie Woolhandler (53:33)

What.

Henry Blodgett (53:34)

Would this cost the United States to switch to a single payer system or at least have a single payer system?

Dr. Stephanie Woolhandler (53:40)

Well, you can take a society perspective or federal treasury perspective. From a society perspective, first year would cost pretty much what it costs now because you would be transitioning. And so it would cost pretty much what you have now. Over the long run, you're going to have much less cost growth because a single payer is better able to control Costs by controlling bureaucracy and targeting care where it's needed and avoiding wasteful care where it's not needed. So over the long run you're going to save money. The first year you would spend the same we're spending now, which is a big sum. It's close to 5 trillion. The way it works is that instead of your employer paying premiums to a private insurance company, they would pay that to the government. It would be a tax, but it would be at least initially similar in size to what they're now paying for your premiums. Me, instead of paying for Medigap coverage, or former employer paying for Medigap in coverage, I would be paying that not to the insurance company, but to the single payer system. People who now have out of pocket expenditures, about 20% of expenditures are now out of pocket. Instead of paying out of pocket expenditures, there would be a tax equivalent to that amount that they would pay into the single payer. So all of the funds that we're now getting from employers, from individuals, from the taxpayers would go into one pot which we would call the single payer. And in fact there might be be 50 pots for 50 different states. But you get the idea here, one pot in any area and then that pot of money would be used to pay the doctors on a binding fee fee schedule and to pay the hospitals on a lump sum global budget basis and then all the other folks, ambulance drivers and home care workers. But that's the idea. You know, it's not pie in the sky. That's what they do in Canada, you know, and they didn't have this giant dislocation when it went into effect. Because if you do a transition, a gradual transition and try to establish taxes that essentially capture the same money that is now being paid for premiums and privately and send it into that pot, you don't have big shifts in who pays. You know, over the long run we ought to be having more progressive taxes. Wealthier people ought to be paying more. Poor people, people ought to be paying less. But in the short run you would try to replicate the payment streams that we have now.

Henry Blodgett (56:22)

So you've been advocating for this for a long time. It seems from the outside like frustration really has grown in the last few years. And you've talked a lot about trends with private equity taking a big piece of the healthcare industry that it's just seemed the costs seem to be going higher every year. Are you optimistic that we may actually now have the public with.

Dr. Stephanie Woolhandler (56:45)

Okay, well, I'm not expecting to see it this year. There's a lot of other things going on right now, but it does look like healthcare's re emerging as a major issue. And I think the cost is what's really, you know, pushing people's buttons right now, though I think the healthcare system's inadequate in other ways. Certainly when we look at our life expectancy and is four years shorter than people in Europe, we have a lot of other reasons to be unhappy here. Okay? But the big pain point right now is the giant cost increases that are by and large driven by profit seeking, by the disorganization of all these multiple payers and with different rules and billing and things you have to keep up with prior authorization requirements, that kind of thing. So there's a lot of frustration, a lot of electoral unhappiness and that's really the basis for, for rebuilding something. I don't think we should be going back to what we had in 2024. There were still 26 million people uninsured and fairly bad outcomes and a very expensive system. We need to be looking forward to something better, something that's been tried in other countries and found to work much better than what we're doing here. And we need to demand that the American government respond to the needs of the American population and not, you know, the private insurance companies like United Health Care, not the giant pharmaceutical companies like Novo Nordisk and Eli Lilly. We need to be responding to what the American people need and what they actually need is universal, tax supported, but privately delivered medical care under single payer system.

Henry Blodgett (58:31)

Thank you Dr. Woolhandler. It's a privilege to have you. Pleasure to talk to you. Hope you have a great time.

Dr. Stephanie Woolhandler (58:36)

Yeah. Thank you.

Henry Blodgett (58:36)

Thank you. Solutions is produced by Megan Cunane. Jim Mackle is our video editor. Our theme music is by Trackademics. Nishat Kurwa is Vox Media's executive producer of podcasts. Thanks for listening to Solutions from the Vox Media Podcast Network. I'm your host Henry Blodgett. We'll see you soon.

Google Cloud Announcer (59:02)

When will AI finally make work easier? How about today? Say hello to Gemini Enterprise from Google Cloud. A simple, easy to use platform letting any business tap the best of Google. AI retailers are already using AI agents to help customers reschedule deliveries all on their own. Bankers are automating millions of customer requests so they can focus on more personal service service. And nurses are getting automated reports freeing them up for patient care. It's a new way to work. Learn more about Gemini Enterprise at Cloud Google. Com.