WASHINGTON (CN) – In a speech to medical doctors Monday, President Obama undercut congressional advocates of single-payer health care like the systems used in France and Canada after the single-payer system was praised by House Democrats last week. “There are countries where a single-payer system may be working,” said Obama. “But I believe that it is important for us to build on our traditions here in the United States.”
He instead expressed support for a system that leaves health care to the private sector, a sector where overhead costs soak up roughly 20 percent of health care expenditures.
“I am open to a system where every American bears responsibility for owning health insurance,” he said, “so long as we provide a hardship waiver for those who still can’t afford it.”
During a congressional hearing last week, Michigan Democratic Rep. John Conyers said the United States remains the only industrialized nation without some version of a single payer health care system and that polls have shown that most Americans and doctors favor such a system.
Dr. Marcia Angell, a senior lecturer in social medicine at Harvard Medical School, testified before the Subcommittee on Health, Employment, Labor and Pensionsaring that insurance companies take fully one fifth of every health care dollar. She called the current U.S. system a “non-system” that is both ineffective and extemely expensive.
A single-payer system typically pays all medical bills from one government fund. Benefits of a single-payer fund are lower administration costs because of the simplicity of one system, and strong leverage in negotiating prescription prices and doctor fees.
In his speech, Obama addressed the problem represented by 46 million Americans who remain uninsured, and claimed, “Insurance companies have expressed support for the idea of covering the uninsured.”
Last month, Obama announced cooperation from medical insurers who he said had promised to reduce the costs of medical coverage. The insurers a week later said no such promise had been made.
Obama also argued in Monday’s speech that businesses should continue to provide health insurance for their employees with some exceptions. “While I believe every business has a responsibility to provide health insurance for its workers, small businesses that cannot afford it should receive an exemption.”
But Obama said that changes in the American healthcare system must be made, pointing to a “ticking time bomb.”
“Today,” said Obama, “we are spending over $2 trillion a year on health care, almost 50 percent more per person than the next most costly nation. And yet, for all this spending, more of our citizens are uninsured, the quality of our care is often lower, and we aren’t any healthier.”
Despite his call for employers to continue to provide health insurance, Obama said that health care costs make American companies less competitive and referred to General Motors “If we do not fix our health care system,” he said, “America may go the way of GM, paying more, getting less, and going broke.”
A White House spokesman argued that the two positions — that business should provide health care and that health care costs put American businesses at a competitive disadvantage — are not contradictory. Reid Cherlin argued on behalf of the administration that, “He’s saying skyrocketing costs of care are crushing businesses. Which is why we need to enact comprehensive reform that brings costs down.”
Obama argued in his speech that reform is vital to the nation’s financial health.
“Health care reform is the single most important thing we can do for America’s long-term fiscal health,” and challenged the argument that reform will cost too much, claiming, “the cost of inaction is greater.”
The cost of health care reform will be “deficit neutral,” he said.
In his list of proposed reforms, Obama highlighted preventative medicine. He used the example of Safeway where employees are tested for high cholesterol and high blood pressure. Those who score well, pay less.
This way, Safeway has cut health care spending by 13 percent and employees have cut their health care spending by 20 percent.
In an interview, Senior Fellow Jeffrey Kling at the Brookings Institute, an independent think tank, said that under the plan Obama is proposing, each individual would be responsible for having health insurance adding, “Some of the uninsured would pay fines for not complying with the mandate.”
But Obama did not discuss the fines in his speech Monday, and instead proposed a waiver for those who can’t pay insurance costs. The range of policy options discussed by legislators and experts along with Obama’s vague pronouncements continue to create confusion over what type of health care reform will ultimately be enacted.