Sally C. Pipes discussed her new Encounter Broadside The False Promise of Single-Payer Health Care with our own Ben Weingarten. What follows is a full transcript of their discussion, slightly modified for clarity.
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I think all along, this was President Obama's dream and his goal, that the Affordable Care Act would fail and we would be on our path to a...total government-run system.
Ben Weingarten: I assume that one of the primary motivators for writing this book is the fact that American public opinion on single-payer healthcare has been shifting significantly in recent years. Tell us a little bit about where the American public is right now.
Sally Pipes: Well, it used to be, Ben, five years ago, single-payer healthcare was really a pipe dream. Nobody was talking about it. Bernie Sanders talked about it a bit, and I talked about it a bit. But in the last couple of years, it has really come to the forefront: Bernie Sanders with his “Medicare for All” bill, [which is] very, very expensive, with states, like California [that] had a bill last June that passed the Senate, Rhode Island, New Hampshire, New York, Colorado had an initiative that failed. Definitely, single-payer is on people’s radar screens. And I think, now, we have about 15 Democratic senators supporting the idea. We have many Democrats in the House. And about half of all Americans today are supporting the principle of single-payer Medicare for all, i.e., the government would be the sole payer for our healthcare.
Ben Weingarten: A core philosophical question that gets lost in all of these conversations and debates that we have in America about our healthcare system is a very basic one, and that is, what is it that separates the provision of healthcare from the provision of any other good or service in an economy?
Sally Pipes: Well, it’s interesting. There are two industries in this country that are really run by the government. One is K-12 public education. And the other is healthcare. We don’t really have a market in healthcare. 50 percent of healthcare in the US today is already in the hands of government, through Medicare, the program for seniors, Medicaid, the program for low-income Americans, of which 74 million people are now on Medicaid. We have the Veterans Administration, which is really a single-payer model, and we’ve heard so many catastrophes about that. And last is the CHIP Program, the program for children. So, we don’t really have a market. We had hoped, with the election of President Trump in November of 2016, that “repeal and replace,” which I think Donald Trump and the Republicans who were elected to control the Senate and the House, really thought repeal and replace would happen. But unfortunately, as you know, by late September, it did not pass the Senate, even through budget reconciliation needing only 50 votes plus Vice President Pence.
So, the American people wanted repeal and replace, but it’s probably not going to happen this year. And the debate, the push for single-payer, is something many see as the answer to the problem that Obamacare failed the American people. And I think all along, this was President Obama’s dream and his goal, that the Affordable Care Act would fail and we would be on our path to a government-run, total government-run system.
Ben Weingarten: Proponents of single-payer oftentimes like to laud all the benefits that they claim exist in places ranging from Cuba to the United Kingdom. You spent several decades of your life in Canada. Tell us about your experience with Canada’s single-payer healthcare system.
Sally Pipes: Well, the federal government totally took over the healthcare system in 1984. The system is called Medicare. And back in 1988, at the Fraser Institute in Canada, where I worked, we started a project called “Waiting Your Turn,” a guide to waiting lists in Canada. In 1993, the average Canadian waited 9.3 weeks, just over two months, from seeing a primary care doctor to getting treatment by a specialist. Last year, 2017, that wait had ballooned to 21.2 weeks. That’s over five months, the longest in history.
And I would point out that people here in America are saying, “Well, maybe California should get single-payer, then it won’t happen in other states or across the country nationally.” But in Canada, the Medicare program, single-payer, actually started in the province of Saskatchewan, under a socialist leader, Tommy Douglas. So, you have to be careful because when these programs start, either at the state level or in a provincial level, it takes a while for them to really grow up and fail. And so, by then, many have adopted it. So I’m very worried about those people who, conservatives who say, “Well, California should get single-payer.”
In Canada, today, the average wait for getting an MRI is 11 weeks, for neurosurgery 33 weeks. And 63,000 Canadians, every year, leave Canada to come to the United States or go somewhere else outside of Canada so they can get treatment by a specialist where they don’t have to face these long waits when their health is at risk. My own mother died of colon cancer in Canada in 2005 because as a senior, she couldn’t get a colonoscopy when she thought she had colon cancer — because the waiting times for younger people, who weren’t over 65, were so long that she couldn’t get a colonoscopy. She ultimately got a colonoscopy in the hospital, where she died two weeks later from metastasized colon cancer. It’s much easier to have people wait for care and ration care than it is to provide care, and that’s what happens when a government runs a system, whether it’s Canada, Great Britain, Cuba or North Korea.
Ben Weingarten: Describing this traumatic and horrific experience that you dealt with in your family, I was thinking about the Hippocratic Oath which says “Do no harm.” Is single-payer not doing harm? Is the cure that it seeks to provide not worse than the symptoms that we would have in a market system?
Sally Pipes: Well, exactly, that is the Hippocratic Oath, “Do no harm.” And when you deny people care in Canada, or force them onto long waiting lists…And in fact, a study from the Commonwealth Fund found that the waiting times were the longest in Canada of any of the countries that they surveyed. So, when you deny care, a doctor is not doing no harm because…particularly if you have cancer or stroke, heart attack, any of these illnesses that are very, very severe…Doctors want to treat patients and be able to treat them well. But in Canada, with these long wait times, doctors are actually civil servants. They’re paid by the provincial government. Ben, if you were the best neurosurgeon and I was the worst, we still get paid the same amount of money. And so it really…it’s like K-12 education and teachers, the best are not paid based on their merit. And I think this will really have a negative impact on the best and the brightest kids going into medicine, or moving on to do a specialty, if we get a single-payer system in this country.
When you look at what’s going on in Great Britain these days — the National Health Service was founded in 1948 — it has gone from bad to worse. The stories in the media every day: “Brits should go across the English Channel on Eurostar and get treatment in Calais.” Thousands have protested in London, the National Health Service. President Trump was correct when he said, having read about the protests and the long waits, that the National Health Service single-payer is not a system that would be good for Americans. And, as you know, Americans are impatient. They don’t want to be told that they have to wait five months to see a specialist, and we will have fewer specialists if we get a single-payer system in this country.
It's much easier to have people wait for care and ration care than it is to provide care, and that's what happens when a government runs a system, whether it's Canada, Great Britain, Cuba or North Korea.
Ben Weingarten: And you write that in Canada and, of course, this applies to any centrally planned system, “The country has too few doctors, hospital beds, and diagnostic machines to adequately care for its citizens.” In a freely functioning market, where you have supply and demand, price signals, an incentive structure, the profit motive, would you not have market-clearing “quantities” of all of these resources and goods and services that we so desperately need when it comes to our health?
Sally Pipes: Absolutely. The way to get affordable accessible quality care is not to empower the federal government even more. It’s to open up the system so people can get the kind of coverage and care that they need and they deserve. We need to change the federal tax code because those people who have employer-based coverage, about 170 million in this country today, they get their healthcare tax-free, but if they lose their job or quit their job, go into the individual market, they have to buy their coverage with after-tax dollars. So, we really need to open up the market. There are so many things in America that are great, [including] telemedicine, [and] health savings accounts, which allow people to put money away every month in a health savings account, carry it forward. So, they can pay out of pocket for things that they really don’t need to use their insurance for.
We really have a problem in this country because of the number of people who have employer-based coverage — we have what you call “First dollar” coverage. People who have employer coverage have no idea what healthcare really costs because they’re not paying part of it. It may be they’re paying a small part, therefore they use a lot more of it. So, we need to open up the market. In countries like Canada, where there is a shortage of doctors…in Great Britain, they had a program, last fall, where they were trying to recruit doctors from Canada and the U.S. and other countries to help with the shortage and reduce those wait times. Well, I just read the other day, that they missed their target to get 1,000 new doctors by 500, that’s 50%.
And so, this will be even more of a problem in this country because we’re a large country with a very large population. And salaries, the average starting salary for a primary care general practitioner in the UK, working for the National Health Service, which covers about 90% of Brits, is £22,000, which is about $35,000. The average National Health Service doctor makes about $76,000 a year. If this happened in the US and government sets the rates, would the best and brightest go into medicine? Would those who are already practicing medicine stay in medicine? It’s highly doubtful, in my mind, and that is harmful to people who need to get healthcare to continue to live their lives in a healthy way.
People who have employer coverage have no idea what healthcare really costs because they're not paying part of it
Ben Weingarten: Opponents of government-controlled healthcare will frequently point to a couple of statistics to counter a market-based system. They’ll say, for one thing, that U.S. infant mortality rates are worse than those in developed countries with single-payer systems, and they’ll say the same thing about longevity rates. You challenge both of those assertions. Explain what you’ve found in your research.
Sally Pipes: Right. Infant mortality and longevity are two issues that always come up in debates that I have with progressives. Infant mortality numbers, you have to look at how the statistics are presented. In the United States, we have very highly developed neonatal units, and a child that is born that lives even for 15 minutes is considered a live birth. In other countries, a baby has to live a certain amount of time before it’s considered a live birth. So, that’s a much longer time than it is in the U.S. We also because we have such highly developed neonatal units and procedures that happen, some of those babies that would not have even been considered a live birth in a European country, they die but they’ve had an opportunity to get access to the very best [care]. So, we’re not comparing apples with apples, when we compare live births in the U.S. infant mortality to other countries in Europe because they’re not considered the same.
On the longevity issue…we do not have a homogenous population [like] in many countries like Sweden or Norway or, even to a large extent, Canada. But the issue is, on longevity, because we have such a large population, we have varying, different income levels. We have crime. We have a major problem with obesity. We have, on the per capita basis, the highest number of car accidents. These are issues that have to be factored in to longevity, and they’re not. We need to consider these things when talking about longevity. You also…when you take a look at the statistics coming out of oncology journals, the United States, after five years out after diagnosis from a cancer, such as breast cancer or prostate cancer, we have the highest survival rates of any of these countries that are surveyed, either by the OECD or by the Commonwealth Fund. So, people have to be very, very careful when they’re talking about this.
Why do people come from all over the world to the United States to get care in the very best facilities? And the very best pharmaceuticals are available here because of our research and development. We support innovation, and we hope that that’s not going to change in the next few years. Other countries have price controls on their drugs, so they don’t have access to the drugs that we have. And we want to keep that market alive and open.
And so you have to really think about, when you talk about infant mortality and you talk about longevity, are we comparing apples to apples? And the thing is, we’re not. We have a very large population with many different levels of incomes, many different…we have an African-American large population, a Hispanic population, an Asian population. We’re a very diverse country, but it’s very difficult to compare a country with 330 million people to a country like Norway that has 5 million people and a homogenous population.
So, what good is this program if it's not helping the people that it was designed to help?
Ben Weingarten: To the degree to which Obamacare collapses, as I think a lot of us expect, and as you alluded to as potentially Barack Obama himself anticipated and even perversely hoped for, you talk about, in your book, how Medicare and Medicaid have fared versus the expectations of those programs at inception. And, of course, Bernie Sanders, among others, has advocated for making those systems the primary systems in effect in America, or modeling our healthcare system after those systems. Tell us a little bit about how Medicare and Medicaid have fared versus expectations at inception.
Sally Pipes: When Medicare and Medicaid came into being in 1965, under President Lyndon Johnson, in some ways, and probably for President Johnson, it was a good thing that the CBO, (Congressional Budget Office) that scores things was not around, and yet many times the scores are completely incorrect. But it was said that if there had been a CBO score, Johnson would never have been able to get Medicare and Medicaid through Congress. But these programs did come into being under the Great Society Banner, as I say, in 1965. Medicare, the program for our seniors, in the first year, cost $3 billion. President Johnson predicted that, by 1990, Medicare would cost $12 billion. In fact, Medicare cost $110 billion in 1990, so virtually 10 times what the president and what the administration, at that time, had predicted. And today, one in three new Medicare eligibles is having a hard time finding a doctor, because doctors do not want to take Medicare patients because of those low reimbursement rates.
And so this is a major problem, and the Medicare trustees have said that Medicare Part B, which is the doctor portion of Medicare, will be bankrupt by 2030. So, Medicare should be there for those… we know there are about 55 million Americans on Medicare today…that program should be there for those people who really need it. Someone like Warren Buffett does not need Medicare. We need to means test Medicare today. We need to raise the age of eligibility for Medicare. Back in 1965, the average American lived to 65. Today, they live to almost 80, and so there’s tremendous pressure on the Medicare program because of the cost of it.
If you look at Medicaid, the program for lower-income Americans, people earning below 138 percent of the federal poverty level, doctors are even less likely to take Medicaid patients because they’re reimbursed between 39 percent and 42 percent below what they get paid for treating a patient with private insurance. So, under Obamacare, the Medicaid expansion was part of the program. States could expand their Medicaid programs and get full funding from the federal government for the first couple of years, and that funding would go down. So 31 states and the District of Columbia have expanded their Medicaid programs. But the problem is, even with the federal funds and the state funds, the demand for doctor services is great, is so great, but the reimbursement rates are low. So these people are having a hard time finding a doctor or they are on a waiting list.
So, the result is that emergency room use, under Obamacare for Medicaid patients, is up. Emergency room use is expensive, and President Obama and his wife, Michelle Obama, had said, one of the goals of bringing in a program like Obamacare, or the Affordable Care Act, was that emergency room use would be reduced. But when people can’t…when they have a Medicaid card, but they can’t get a doctor or they have a long, long wait that they think is beyond what is reasonable, they are using the emergency room. So, these two programs need to be reformed. The states need to receive block grants for Medicaid, and they can design their own programs.
One of the good things in the U.S. Supreme Court case from 2012, it was very sad that Justice Roberts didn’t vote to support the full repeal and replacement of Obamacare, but they did say, in their opinion, it was determined that states did not have to expand their Medicaid programs. But just last November, in the State of Maine, Governor LePage had turned down five times a Medicaid expansion bill, he did not sign it. But then last November, there was an initiative on the ballot, and the Maine voters voted to expand their Medicaid program. These programs are very costly and are not the best way to help.
We now have 74 million Americans on Medicaid, those people earning between zero and 138 percent of the federal poverty level. So, what good is this program if it’s not helping the people that it was designed to help? And it’s very, very costly. And I think, in the coming years, you’re going to see, as states have more financial difficulties, their Medicaid programs are going to become even more costly and more people are going to be hurt by being on Medicaid. They should be able to get an opportunity grant so that they can purchase the type of healthcare plan, whether it’s an HMO plan, a private plan or whatever.
I don't think that the American people have any idea what it means for their taxes or what it will mean for their healthcare in terms of pain, suffering and waiting.
Ben Weingarten: The medical outcomes for enrollees have not been what were expected, and as you just noted, the fiscal health of the states who are funding these programs in part is also seriously in question. And you write in your broadside that Medicare alone accounts for one-third of our national debt. What would Medicare writ large in the form of single-payer do to our nation’s fiscal health?
Sally Pipes: This is one of the big issues, particularly in California, where the Senate passed SB-562, the single payer bill, last June 1st . There was no estimate of cost or how it would be paid for. But when the Senate Appropriations Committee costed it out — and California is a very democratic state with the governor, the assembly, and the senate — they costed that program out of $400 billion a year, which, the whole entire state budget in California is $185 billion. A professor at University of Massachusetts Amherst, Professor Pollin, said, “Well, no, that’s inaccurate, $400 billion, it’s actually about $330 billion.” It still would have a huge impact and would have to be funded by further increases in income tax rates and payroll taxes in the State of California.
Under Bernie Sanders, who I call the “Pied Piper of Single-Payer Healthcare,” he’s had a big video teleconference January 23rd in D.C., he’s just pushing single-payer so hard. But when he was running for the presidential nomination in 2016 in the summer, and he unveiled his single-payer plan, he didn’t come up with an estimate. But even the Urban Institute, which is not a conservative free market organization, they costed his plan out at $32 trillion over 10 years. So that would be $3.2 trillion a year, which is exactly what we’re spending in total on healthcare in America today.
So, if a Bernie Sanders-type plan — which is even more comprehensive than the plan in Canada because it covers dental care, vision care, the cost of drugs, long-term care and no referral to seeing a specialist…this is going to be even more costly, I think, than the Urban Institute said, and result in huge tax increases, including income and payroll taxes. These programs are incredibly expensive. And one of the things in Canada, what we do spend…Canada spends about 11 percent of GDP on healthcare. We spend about 18 percent in this country. But one of the ways that Canada controls their spending on healthcare is by rationing care and waiting times.
As just retired Chief Justice of the Canadian Supreme Court, Madam Chief Justice Beverley McLachlin, said, “Access to a waiting list is not access to healthcare,” and that the issue is that when you make people wait, you are reducing your costs. I don’t think that the American people have any idea what it means for their taxes or what it will mean for their healthcare in terms of pain, suffering and waiting. There are huge costs as well for not being able to get the care you need when you need it because you can’t function properly.
So these programs are very, very expensive. Canada had no idea, when Medicare came into being in 1984, that their demand for healthcare would be so much greater than they were able to supply and pay for. So, even if Bernie Sanders’ Medicare for All plan, which then he laid out in his 2017 September bill which…for potential Democratic candidates for president, Cory Booker, the Democratic senator from the state of New Jersey, Kirsten Gillibrand from New York, Elizabeth Warren from Massachusetts, and of course, Senator Kamala Harris from California, they are all supporting this single-payer idea, but the cost and the impact on people’s health will be tremendous.
And when people were surveyed in California, 47% of the people that were polled that support single-payer, when told, “Well, this will mean a tax increase for you,” they were astounded. And also they said, “Well, we support single-payer, but we will be able to keep our employer-based coverage.” No. All private coverage is wiped out. Medicare and Medicaid, the Anthems, the Aetnas, all private insurance, all people who have employer-based coverage, they will all lose their coverage and healthcare will be provided as a single-government monopoly, as is the case with the Veteran’s Administration in this country. And as you know, just reading every day in the paper about our vets who served our country, not being able to get the care that they need, that’s dying on a waiting list, that’s dying in VA hospitals that…actually today, it’s discovered that many docs in the VA aren’t even…their license is not up-to-date. They’re not licensed anymore to practice medicine. They’ve lost their licenses. So, this is a huge problem, and the VA should be a real eye-opener to those American people who are listening to Senator Bernie Sanders’ siren call for single-payer, very expensive and really rationing of care for people.
Ben Weingarten: In terms of the state of Obamacare today, we’ve seen, as you noted, there was no repeal and replace as was promised to the voters. The individual mandate has been repealed, the IPAB Board [Independent Payment Advisory Board], what I consider a rationing board, has been abolished. But what is the state of Obamacare overall today?
And when the CBO says, 'If we get rid of Obamacare and the individual mandate, there will be...23 million people will lose coverage.' Well, under these executive orders, many of these people will have options that they didn't have before.
Sally Pipes: As I mentioned earlier, and you just repeated, Obamacare was not repealed and replaced in 2017. As I said earlier, I think President Obama and the Republicans won the Senate and the House based on the calls, the statements and the speeches they made saying, “Our number one goal will be repealing and replacing of Obamacare,” which is eight years old on March 23rd, 2018. But this did not happen. I think you’re right, the IPAB, the Independent Payment Advisory Board, is a rationing board. It is now in that budgeted deal has been eliminated finally. The individual mandate, which is really a terrible thing, didn’t work. If you weren’t able to show on your tax return that you had medical coverage, then you had to pay a penalty of $695 or 2.5 percent of income, whichever is greater, as a fine. But the individual mandate repeal actually doesn’t go into effect until January 1st of 2019.
But there are some very positive things. I think the executive orders that President Trump signed on October 12th, allowing the emergence of association health plans where small groups can get together and then form a large pool…and that will help people in the small group market get coverage that works and that they can afford, but deductibles that they can afford, too. I think the whole idea of the short-term plans allowing them to be…people could get a short-term plan for just under a year, and it would be renewable, very, very helpful for young people who maybe don’t have employer-based coverage or have lost their job, or just want a basic plan. Those are very good openings.
And when the CBO says, “If we get rid of Obamacare and the individual mandate, there will be…23 million people will lose coverage.” Well, under these executive orders, many of these people will have options that they didn’t have before. That is, in my mind, very encouraging. The following day, on October 13th, President Trump eliminated the cost sharing reduction subsidies that were being paid to insurers, about $7.5 billion a year to cover these subsidies to help insurers cover lower income people, that were not appropriated. Those funds were never appropriated by Congress, so that was a good thing. They are fussing about that right now. Are the CSR subsidies going to come back in the omnibus spending bill? I certainly hope that isn’t the case.
I do think…Senator McConnell said that we’re moving on from repeal and replacement of Obamacare. There are a few people out there right now who are saying, they’re trying to revive the Graham-Cassidy, Lindsey Graham, bill that never made it to a vote last fall, which would give the states the ability to get the funds from the feds, and do their own healthcare reform. I don’t know whether that’s possible right now based on what McConnell has said, based on what [Senator] Thune has said. But I think a couple of things that are probably going to happen, in addition to those executive orders, will be Paul Ryan — Speaker Ryan supported the idea of high-risk pools to have the feds to provide money to the states, so they could build really good high-risk pools for those people who don’t have employer-based coverage. There are about 6 million who have chronic conditions. This would be a tremendous way to help those people who criticize the fact that if you get rid of Obamacare, we won’t be able to help people who have chronic and pre-existing conditions.
This will then make it more affordable for young and healthy people to buy coverage because they won’t be having to cover those people, older and sicker people. I think that’s a good thing. I think getting…there’s talk today of getting rid of the employer mandate. I think there will be a number of things done administratively under the new secretary of HHS [Health and Human Services], Alex Azar, who is a really terrific chap and I think will be a fantastic secretary of HHS. He was very much anti-Obamacare before he was confirmed this year secretary of HHS.
I think there’s a number of things incrementally that can be done. The big issue that really is leading to the demise of Obamacare, which the American people still do not support because of high premiums, high deductibles, very small networks of doctors in hospitals, these things…so, the American people don’t like Obamacare. I think there’s going to be incrementally a number of things that will lead to the demise of, as President Trump had said “disastrous Obamacare.” And this is all good. But right now, I don’t see the Senate bringing in a reconciliation bill, and being able to get 50 votes to do a full repeal and replace. But in politics, as you know, every day is a new day, so one doesn’t know. But that’s as I see it now.