Contrary to popular conceptions, the average medical bankrupt was a 41-year old woman with children, some college education; over half owned homes and over 80 percent were in the middle or working classes.
Our $2 trillion healthcare industry is not only unhealthy, it is unsustainable. Why universal Medicare is the way to get universal healthcare without collapsing the system.

We all know that America's healthcare system is collapsing. Andy Stern has written that America's employer-based health insurance system is "dead." Auto executives troop to the White House complaining that they are not competitive with foreign automakers because they pay $1,500 per car for health insurance. Some of the biggest laughs in movies come when America's healthcare system is ridiculed. Politicians, even Republicans, are offering solutions.

In the Greenberg Quinlin poll of November 2006 voters, 22 percent ranked healthcare as the most important issue; likewise, recently polled its members, received over 100,000 responses, and healthcare ranked as the No. 1 concern.

To add substance to these observations, consider the following: Not only are 47 million Americans uninsured (approximately 18.5 percent of the insurable market), 41 percent of Americans with incomes of $20,000 to $40,000 did not have health insurance for at least part of 2005, up from 28 percent in 2001; 53 percent with incomes under $20,000 lack health insurance.

The number of people without health insurance rose 16.6 percent from 2001 to 2005; average health insurance premiums for a family of four are $10,880, which exceeds the annual gross income of $10,712 for a full-time, minimum-wage worker; lack of insurance causes 18,000 excess deaths a year; people without health insurance have 25 percent higher mortality rates; and, 59 percent of uninsured people with chronic conditions such as asthma or diabetes skip medicine or go without care.

There are additional costs to the haphazard U.S. healthcare system: More than 50 percent of the U.S. population has medical debt problems; between 1981 and 2001, medical-related bankruptcies increased an astounding 2,200 percent and 55 percent of personal bankruptcies are now caused by illness or medical debts, despite the fact that over 75 percent of the bankrupts had health insurance at the onset of bankruptcy and illness.

Contrary to popular conceptions, the average medical bankrupt was a 41-year old woman with children, some college education; over half owned homes and over 80 percent were in the middle or working classes.

But for the insured, the United States has the best quality healthcare in the world, right? Wrong.

A Second-Rate System

The World Health Organization ranks healthcare systems based on objective measures of medical outcomes: The United States' healthcare system currently ranks 37th in the world, behind Colombia and Portugal; the United States ranks 44th in the world in infant mortality, behind many impoverished Latin American countries. While infant mortality in the United States is skewed toward poor people, who have rates double the wealthy, the top quintile of the U.S. population has infant mortality rates higher than Canadians in the lowest quintile of wealth.

Out of 30 developed nations, life expectancy in the United States ranks 21st; life expectancy in the United States is 4.6 years less than Japan, 2.1 years less than France and 2.6 years less than Canada. The United States has fewer physicians, nurses and hospital beds than most developed nations. In the United States, 28 percent say it is "difficult to get care"; in most European countries, Japan, Australia and New Zealand, 15 percent say that. In terms of continuity of care (i.e., five-plus years with the same doctor), the United States is the worst of all developed nations. By every objective measure, the United States has a second-rate healthcare system.

OK, the U.S. healthcare system is not performing very well, but that must be a funding problem, right? Wrong.

The Truth About Healthcare Costs

The United States has the most expensive healthcare system on the planet. Even including the 47 million uninsured, the U.S. healthcare system costs almost double per capita what single-payer systems in Europe, Japan and Canada cost; in the United States, healthcare costs were $5,635 per person in 2005.

By contrast, in Japan, with life expectancy 4.6 years more than the United States (presumably a cost-increasing factor), healthcare costs were $2,139 per person; in the United Kingdom, $2,232; Sweden (the ultimate "welfare state"), $2,520; France, $2,903; and, Canada, $3,001.

And, this is not just an individual problem; this is a national problem. Healthcare system costs in the United States are 16 percent of GNP (and currently increasing 14 percent per year); no other country in the world has healthcare costs which exceed 11 percent of GNP and the average among developed nations is 9 percent. As noted above, these high costs are making the U.S. uncompetitive in many areas.

Why is the U.S. healthcare system so expensive? Administrative costs, marketing and profits account for 22 to 31 percent of the U.S. healthcare dollar (I recently heard Edward Kennedy say these costs were 33 percent, but I have not seen documentation of that number). By contrast, overhead costs in single-payer systems (including Medicare) typically are 3 percent.

In America's for-profit private insurance healthcare system, medical technicians must contend with hundreds of different forms, billing procedures, regulations and requirements from hundreds of insurance companies; U.S. healthcare companies spend money for advertising and marketing; and, the U.S. healthcare system is based on profit. Since 1970, the number of medical doctors in the United States has increased 40 percent, while the number of medical administrators has increased almost 3,000 percent.

We are paying for a massive, inefficient bureaucracy. The increasing cost of prescription drugs also is increasing the healthcare bill, and U.S. drug costs are the highest in the world; Americans pay 30 percent to 80 percent more for prescription drugs than citizens of any other country.

You might think that this excess money goes into developing new drugs, but you would be wrong: Only 13 percent of drug costs go to research and development, and little of that goes for pioneering new drugs to deal with life-threatening conditions; 51 percent goes to marketing, administration and profits.

Recently, one of my adult sons went to a medical office for testing. On completing the tests, he was handed a bill. The bill had two prices: One was the insurance price, $969.25, the second was the "cash pay price," $678.00 -- exactly 30 percent less than the insurance price. What more do you need to know about the excessive cost and inefficiency of the American private health insurance system than that it costs 30 percent more than the underlying medical services are worth?

The public understands this. In the California Field Poll released on Jan. 3, 2007, California voters were asked why healthcare costs are increasing: The No. 1 reason given by voters was "high profits" (65 percent); the number two reason was "waste, fraud and inefficiencies in the current system" (60 percent).

The answer to this problem is not simply "universal health insurance." "Universal healthcare" that does nothing more than bring more people into the most expensive and inefficient private insurance-based healthcare system on the planet would accelerate the total collapse of the system for everyone.

No credible economist thinks America can sustain healthcare costs exceeding 20 percent of GNP (itself a gigantic burden and drag on economic growth) and adding 47 million more people to the current decrepit system would bring the United States to the 20 percent threshold. Since the costs of our private insurance system currently are rising at the rate of 14 percent per year, the system is unsustainable, by any rational economic analysis.

Single-Payer Solutions

Howard Dean recently identified healthcare as an emerging top-tier political issue and endorsed single-payer, saying at a Democracy Alliance conference in Miami, "It is obvious we are going to need to work toward some form of single-payer system, just like every other industrialized nation. In the next two years, we should expand Medicare and Medicaid to cover every uninsured person under 25." Dean is an M.D., by the way.

Surely the healthcare system which every other industrialized nation in the world relies on, which is both less expensive and offers improved medical outcomes, and which many think is the only viable and sustainable healthcare system, deserves serious consideration by American progressives and the public, but, to date, single-payer is not being researched and evaluated in America.

I am not arguing that the perfect must be the enemy of the good; there may be intermediate steps that could be taken, rather than proposing that America swallow the big enchilada in one bite. Clearly, Howard Dean's proposal to cover everyone under 25 is a step down the incremental path, and, as he suggested, probably not even a very expensive one.

What is unacceptable would be to have a political debate which could change healthcare in America for the next 20-30 years, or more -- in the process helping to decide elections -- without sound progressive ideas and input and without serious consideration of single-payer.

The biggest objection to single-payer I have heard from Democrats is not that single-payer is not a good system, or even the best system, but that it will be attacked as socialized medicine and therefore is not politically viable. Of course, a single-payer system is not socialized medicine.

Medicare is a single-payer system -- a very popular one, by the way -- and single-payer systems such as Medicare do not employ any doctors or own any hospitals or medical facilities, let alone create bureaucracies approximating the bloated, inefficient bureaucracy the private insurance model has created in America.

Rather than hundreds of payers (insurance companies) and thousands of different forms, regulations and procedures, there would be one payer and one set of forms and procedures. Single-payer also would offer more choice of medical providers; unlike the current system, where patients are limited to panels of providers, in a single-payer system, patients go to any doctor they want, submit a national health insurance card and the government pays -- just like Medicare.

Single-payer is the simplest, most efficient, system of all. While single-payer is a government-paid program, American taxpayers already pay more than 60 percent of healthcare costs in America (including tax subsidies). With that much money invested, can't we demand a system that covers everyone at reasonable cost and with improved performance? Why should we continue to allow 22 percent to 31 percent of healthcare costs to be swallowed by bureaucratic inefficiencies, marketing and profit?

John Garamendi, formerly California's insurance commissioner and now lieutenant governor, campaigned in favor of single-payer and said repeatedly on the stump: "Are you aware that for 40 years, the United States has had a universal single-payer healthcare system that allows every participant to choose their own doctor, its administrative cost is one-tenth the cost of private insurance and people do everything possible to get into the system (i.e., live to 65). It is Medicare, and no one calls it socialized medicine."

Insurance Industry Wrath

Of course, the real reason people back away from a single-payer system is fear of insurance industry wrath. We all remember the "Harry and Louise" ad campaign the health insurance industry unleashed on HillaryCare 12 years ago. So, is anyone not afraid of the insurance industry? Is anyone willing to challenge insurance industry profits?

The answer, surprisingly, not only is yes, but the person apparently willing to take on the big ugly bear is a pro-business Republican -- The Terminator.

On Jan. 8, California Gov. Arnold Schwarzenegger unveiled his plan to insure all Californians, and while the proposal itself continues to rely on the private insurance model, it provides that insurance companies would be required to spend 85 percent of their revenues on medical services; in other words, insurance company overhead, marketing, administrative costs and profits, would be capped at 15 percent -- roughly half of what they currently are.

Does anyone think the insurance industry is not going to fight this incursion on its profits with all its might? Of course it will, and it will fight a halving of its profits just as vigorously as it will fight a single-payer system.

So, if a Republican, pro-business governor of a major state is willing to take on the insurance industry, should progressives be any less courageous in pursuit of real healthcare reform? In short, a very gifted Republican politician has made a calculated decision that fighting the insurance industry not only is not going to hurt him politically, it is going to get him elected to the United States Senate in 2010. It is good politics.

The other political objection to single-payer I have heard is that it is simply too big an idea and too big a proposal.

While this objection is debatable, single-payer need not be adopted whole in one bite; it can be adopted and implemented piece-meal, just as Howard Dean suggested when he said in the next two years we should work to cover the uninsured under age 25 in an expanded Medicare.

There are other inclusions which could be adopted incrementally, such as expanding Medicare to include everyone with incomes under $20,000 per year, then increasing income thresholds until everyone is covered; or, it would be possible to work in age-based increments by expanding Medicare into ever-younger categories of Americans. Conservatives understand the power and effectiveness of "slippery slope" proposals (banning partial birth abortion is one such "slippery slope").

Let's put the healthcare agenda on the "slippery slope" to Medicare for all, not work toward more private insurance and inevitable healthcare system insolvency -- where most current healthcare proposals (including Democratic) are headed.

Before leaving the subject of political viability, let me briefly address the healthcare proposal put out by the Center for American Progress, which threatens to become the Democratic Party proposal. In general, CAP's proposal would provide coverage for the uninsured through the existing private insurance system, funded by a national ad valorem (i.e., sales) tax. I had a long conversation with CAP's CEO, John Podesta, shortly after it was published, and while John is intellectually honest enough to recognize the advantages of single-payer, his advocacy of the CAP plan was more based on political viability than operational efficiency or effectiveness.

In any case, trying to impose a regressive national sales tax to fund insurance for 47 million people through an expensive, inefficient system not only makes no economic sense, I fail to see how it would be politically attractive, or even politically possible. It would make Democrats look like your daddy's Democratic Party -- you already can hear the Republicans, "Here they go again, another big, costly Democratic welfare program."

By contrast, a single-payer system could cover everyone, including the 47 million uninsured, at a net cost-savings, as the savings obtained by cutting overhead from 22-31 percent down to 3 percent would more than pay for providing coverage for the 47 million currently uncovered. It makes far more sense to approach healthcare reform as an issue which affects everyone, than it does approaching it as an issue that affects only the poor, to be solved by another welfare program, funded by more taxes -- in this case, a regressive tax.

America's current healthcare system works well for no one, and it would be better to seek a genuine progressive fix on the basis that we're all in this together and need to find solutions that work for everyone, rather than special pleading for some at the expense of others. The uninsured have to be covered, to be sure, but let's do it in the context of solving the real problems of American healthcare, not exacerbating the structural problems of the current system.

A System in Collapse

Healthcare is a $2 trillion industry in America, and we are fast approaching a "perfect storm," where individual consumers, voters, business and the government are beginning to realize the current healthcare system not only is not healthy, it is unsustainable. Is the range of discussion of "serious" healthcare proposals limited to proposals that offer only variations on the failed private insurance model? Howard Dean apparently doesn't think so.

If progressives are going to project progressive solutions and be part of this debate, they will need to do so quickly because the system is fast-collapsing and decisions are going to be made with or without us.

Guy T. Saperstein is a Democracy Alliance partner and past president of the Sierra Club Foundation; previously, he was one of the National Law Journal's "100 Most Influential Lawyers in America."