An Open Letter to Rep. Pramila Jayapal Regarding Medicare for All

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Above Photo: Rep. Pramila Jayapal introducing the new Medicare for All Caucus during a Capitol Hill press conference in July of 2018. (Photo: Rep. Pramila Jayapal/Twitter)

We applaud your efforts to improve the legislation from previous versions by including guaranteed access to vital services such as reproductive health and long-term care, but have two serious questions about the future of private insurers and exactly who might be left out of an otherwise universal system

Dear Congresswoman Jayapal,

Thank you for your hard work and leadership as the new lead sponsor of the forthcoming Medicare for All Act of 2019. As health care providers and health justice advocates, we look forward to working with you to grow support for the bill and ensure its future passage.

“There is no place for profit in a humane and efficient national health program.”

We applaud your efforts to improve the legislation from previous versions by including guaranteed access to vital services such as reproductive health and long-term care. However, we have identified two key policy provisions that must be addressed in the final bill: 1) the explicit prohibition and buyout of investor-owned, for-profit health facilities, and 2) the explicit inclusion of coverage for every resident of the U.S., regardless of immigration or citizenship status.

1. As part of a transition to a Medicare-for-all system, for-profit health facilities should be converted to nonprofit governance and their owners compensated for past investments.

There is no place for profit in a humane and efficient national health program. For-profit providers (including hospitalsdialysis centersnursing homes, home care agencies, and hospices) have been shown to provide inferior care at inflated prices and are more likely to bend care to profitability. For-profit hospitals spend less on nurses and other clinical aspects of care, but more on administration and financial management, compared to nonprofits. For-profit nursing homes are cited for quality deficiencies 28 percent more often than nonprofits, and for deficiencies that place residents in immediate jeopardy 53 percent more frequently. Investor-owned home care agencies cost Medicare $752 more per patient than nonprofit agencies, while providing worse care. In addition, investor-owned chains have often been cited for questionable business practices and have been repeatedly  implicated in large-scale fraud.

To achieve a fully nonprofit health system, Medicare for all legislation should include plans for the government to “buy out” investors in for-profit institutions. Researchers estimate the fair market value of investor-owned facilities covered by a buyout to be$150 billion at most. Using Treasury Bill financing over 15 years at the current interest rate of 3 percent would cost the government about $12.75 billion annually, equivalent to about 1 percent of annual hospital costs. Even in the short term, these costs would be offset by eliminating what we currently waste on investor profits. For example, total profits of just three investor-owned firms (HCA, DaVita and Fresenius) totaled more than $6 billion in 2017. For the sake of both patient health and cost savings, we cannot afford to let investor-owned facilities participate in a Medicare for all system.

2. A future Medicare for all program must include everyone living in the U.S., regardless of immigration or citizenship status. 

Aside from humanitarian concerns, excluding anyone in the U.S. from a national health plan only adds waste and unnecessary administrative costs. Immigrants are often used as a scapegoat for skyrocketing health costs, but studies show that instead of draining our health care dollars, immigrants subsidize and maintain our health care system.

“Aside from humanitarian concerns, excluding anyone in the U.S. from a national health plan only adds waste and unnecessary administrative costs.”

Between 2002 and 2009, immigrants contributed$115 billion more to the Medicare Trust Fund than they used in health care. Because of their lower utilization costs, immigrants also heavily subsidize private insurance for U.S.-born residents. A single-payer bill must explicitly include both documented and undocumented immigrants, and not leave eligibility up to administrative whims.

As medical students and physicians, we strongly believe that a single-payer program is the only solution to our country’s failing health care system. However, to ensure the long-term success of Medicare for All, we must get the policy details right, including a ban on for-profit health facilities with a planned buyout of investors, and the inclusion of every U.S. resident, regardless of immigration status.

Sincerely,

Christopher Cai, Medical Student
Isabel Ostrer, Medical Student
Ana Malinow, MD

  • Pat moore

    Excellent analysis. Is there a possibility we could actually join other developed countries in providing good healthcare at a reasonable cost?

  • Mark Fabian

    Reasonable cost? To whom? The “Single-Payer” becomes the Federal US Government, not its citizens. As the exclusive issuer of the US dollar, the US Government can never run out of dollars to spend. “Cost” is a non-issue and a distraction from the only important question that should be asked regarding any Federal spending. “What is the availability of the real resources needed to complete the task?” In the case of an Improved and expanded M4A, will there be enough healthcare professionals to handle the increased patient load? Enough hospital beds, clinics, and long-term care facilities? Are the materials and labor needed to build new and increase existing care space available in the areas needed? And so on.

    In regard to Federal spending, Congress should only be concerned that the results of its spending will grow the economy to produce the goods and services that citizens need, and want, to consume. Currently, the Baby Boomer generation is leaving the workforce. Is Federal spending today going to produce the “stuff” that retirees want and need to purchase with their Social Security checks in five, ten, or twenty years from now?

    The US Government has the operational capacity to spend to the public purpose of providing for the well-being of all citizens, and not just the few. It is our obligation to hold our elected legislators accountable for their choices and to stop being distracted by arbitrary spending limits. Anything achievable is affordable for the Federal Government.

    “The government’s red ink is our black ink, and their deficit is our surplus” ~ Dr. Stephanie Kelton

  • Pat moore

    There are good working models all over the developed world

  • Mark Fabian

    To be clear, Pat, what do you mean when saying, “providing good healthcare at a reasonable cost”? Cost to whom?

  • Pat moore

    Oh, I think we should all accept the
    rationing of care and huge profits by
    drug and insurance industries. Much
    better choice.

  • Mark Fabian

    I am still unclear if you believe that the Federal US Government is financed by its citizens. Your sarcastic reply indicates that you do not understand my comment.

  • Günther Rückl

    Mark, please help me out. I am not an economist and my understanding of how the federal and private financial system works is insufficient. Question: Why don’t other countries print their currencies at will, dependent on their material aspirations. You left out what the potential negative consequences are to print dollars out of thin air.

  • kevinzeese

    The negative consequence is inflation and Modern Monetary Theory recognizes that and see the job of the government to control inflation. The government can only create as much money as the economy can handle so there is a limit. Right now you can see with the massive government debt we have very low inflation. The US is the reserve currency, other countries trade in dollars and therefore the US is in a special situation unlike any other country. US dollar hegemony is gradully ending as countries are bypassing the US dollar and dealing directly with each other.

  • Mark Fabian

    Great question, Gunther! I am not an economist, either. For many years, especially during the Clinton Administration, I had questioned why only social service programs had to be cut in order to be fiscally responsible while trillions were being spent on wars for corporate profits and corporate welfare. No one had an answer and everyone just assumed a Congress that “must know what they’re doing” for our best interests. During the Bernie Sanders campaign, I learned about Modern Money Theory analysis of currency that profoundly changed my perspective.

    So, to your question, please understand that when any monetarily sovereign government spends, no money is printed. I will relate the process to the US Government, but the process is the same for the Canadian dollar, Pound Sterling, Australian dollar, and Japanese Yen, to name but a few governments that issue their own free-floating, inconvertible, fiat currencies.

    The US Govt, for example, is the exclusive issuer of the US dollar and, as such, can never run out of dollars to spend; can never become bankrupt (unless Congress wants it to), and can afford anything denominated in its own currency. The Federal Govt creates new US dollars each time it pays a bill enacted by Congress authorizing the purchase of goods and services from the private sector (everything not the Federal Govt, like you & me) with which to provision itself.

    The Federal Govt spends by authorizing the Treasury to send instructions to the recipient’s bank ordering that bank to mark up the recipient’s account by the number of dollars appropriated in the bill. The US Treasury does this through its central bank, The Federal Reserve Bank. No paper money is printed, only keystrokes on a computer. When the balance of the recipient’s bank account increase, new US dollars have been created.

    With the ability to create new dollars ad hoc by Federal spending, what could be the negative consequences? First, and foremost, are those new dollars being spent to grow an economy able to produce the goods and services needed to sustain its citizenry? If most of Govt spending is going to the Military Industrial Complex, how will that spending provide G&S for those employees to buy with their paychecks? They can’t eat an F-35 fighter jet, nor heat their homes with an Abrams battle tank. Inflation, too many dollars chasing too few goods and services, is the constraint to Federal spending.

    Suppose Federal spending has created a red-hot economy where there is full employment of labor and resources that, like during WWII, created that inflationary situation. How was inflation mitigated? Because of the global war needs, Federal spending could not just stop, but income taxes could be increased and Treasury Bonds (renamed War Bonds) could be sold, and an artificial rationing imposed – all to reduce aggregate demand and cool the economy. Should the economy reach a point of inflation today, the same mechanisms, including a reduction of Federal spending, could be implemented.

    Gunther, there is much to be gleaned from MMT analysis. “MMTers” use the analysis as a lens through which we can see the truth of what is possible. I will provide some links to help you understand the basics. Thank you for your question. I hope I was able to provide an acceptable response.

    http://elliswinningham.net/index.php/the-basics/

    https://www.youtube.com/watch?v=fMe_aE4VxlQ

    https://popularresistance.org/prosperity-through-keystrokes-understanding-federal-spending/?fbclid=IwAR1nO_amTxy9QfKOwUYPNlu1SuZXjnmyNQtwfuz-qHcCORHOek-V2tRjybU

    YouTube channels:
    https://www.youtube.com/channel/UCWXGA051bB7uXlvsiGjvOxw

    https://www.youtube.com/channel/UC1jfVFBZxRUk4M2_3J4ikMw

    https://www.youtube.com/channel/UC2X_Ywepzm46_uGJDfRjYeQ