Sally Pipes on the High Cost of Free Stuff
2019-08-18 · Guest: Sally Pipes (President and CEO of the Pacific Research Institute) · 52:20
Implications of Single-Payer Healthcare and Medicare for All
Bob Zadek discusses the implications of single-payer healthcare and “Medicare for All” with Sally Pipes, President and CEO of the Pacific Research Institute. They explore the reality of government-run systems in Canada and the UK, focusing on wait times, rationing, the impact on medical professionals, and the immense financial costs that have led to the failure of similar proposals at the state level in the US.
Topics: healthcare, single-payer, Medicare for All, healthcare costs, Canadian healthcare, NHS, drug importation, medical rationing, Pacific Research Institute
Speakers: Bob Zadek, Sally Pipes, Caller (Eben)
The Political Battleground of “Free” Healthcare [00:18]
Bob Zadek: Hello, everyone. Welcome to the Bob Zadek Show, the longest-running live libertarian talk radio show on all of radio. Thank you so much for joining us this summer Sunday morning.
Single-payer, Medicare for All, free everything, free healthcare—that is going to be one of the major battlegrounds of the 2020 election. And as you know, whenever any candidate, whenever any politician offers something for free, we know “free” is political speak for “very expensive.” The only difference between real very expensive and fake very expensive is in “free,” somebody else pays. It is free to you, but very expensive to society.
Since we are talking and will be talking about Medicare for everybody, healthcare, free healthcare for everybody, gutting the insurance, the healthcare insurance industry, getting rid of healthcare that 150 million Americans enjoy—since that will be the battleground, it is important that as we follow the political debate, we understand the terminology, understand what the politicians are offering us or what they are trying to avoid.
To help us understand the concepts of Medicare for All, free healthcare, free drugs, free everything, eternal life, I’m happy to welcome back to the show Sally Pipes. Sally is the President and CEO of the Pacific Research Institute. It’s a San Francisco-based think tank which does especially good work, and Sally is an expert in the area of healthcare. And as I like to do when there’s an issue that needs to be discussed, I try to find the most knowledgeable person I know of and have heard about, and that certainly describes Sally. So Sally is going to join us this morning and help us understand what’s going on, what’s being offered, is it of any value, is there any way we can get healthcare for all, and if, God forbid, one of the Democrats—Elizabeth Warren, Bernie Sanders, or the others—get elected, what’s in store for life in America? Sally, welcome to the show this morning.
Sally Pipes: Well, thank you so much for having me on again. Pleasure.
Bob Zadek: Now, Sally, you have written extensively on healthcare. In 2018, just a year ago, you published The False Promise of Single-Payer Health Care, and you’re about to release, I think early next year, you’re going to be releasing False Premise, False Promise: The Disastrous Reality of Medicare for All. So help us understand. First, give us the big picture of what those Democrats who are proposing Medicare for All—tell us what healthcare life would be like in America under any of the proposals, because they all have so much in common, we can generalize. What are they offering to us? How is it going to work? And what will be—how will life be different in America from what it is now?
Defining Single-Payer and Medicare for All [04:11]
Sally Pipes: Well, do people have about five, six hours? There’s so many—it’s such a major, large, enormous project. As I like to say, understanding healthcare is similar to unraveling an onion: many layers and many tearful moments.
But I think, Bob, the first thing is to describe single-payer Medicare for All as envisioned by Senator Bernie Sanders, the House member from Washington state, Pramila Jayapal, and Elizabeth Warren, of course, and sometimes the Senator from California, Kamala Harris. Single-payer means there is one payer for all of our healthcare, and that would be the government. And under Bernie Sanders’ plan, under Pramila Jayapal’s plan, there would be the government would be the provider of healthcare, and the only two groups that would be left would be the Veterans Administration and the Indian Health Services. Everything else would be rolled into one giant single-payer healthcare system where the government was providing all healthcare.
This issue, of course, was always out there. I’m Canadian; I grew up under single-payer. Canada bans all private coverage for anything considered medically necessary. And so they have a single-payer system, and we can talk about the long waits, the rationed care, the tax costs later. But under Bernie Sanders back in 2016, when he was running against Hillary Clinton to get the Democratic nomination back then, he really brought the issue of single-payer to the forefront. And of course, then in 2017, he released his single-payer bill, never, ever saying how much it would cost or how it would be paid for. Then in April of this year, he introduced his revised single-payer healthcare system. And just the other day, he came out and said that his plan would probably cost between $30 and $40 trillion over 10 years. And it would be paid for by, you know, tremendous new taxes and higher taxes on the existing taxes that we have.
Elizabeth Warren, of course, Senator Elizabeth Warren, is in Bernie’s camp and is pushing single-payer. And as I said, Kamala Harris, you know, back in Des Moines, Iowa, earlier this year, she said, “Yes, I support single-payer. Let’s get rid of the insurance companies. Let’s get rid of—eliminate all of that.” But then she’s backtracked on that. And in the first debate, when the host asked who supported single-payer, she put her hand up along with Sanders, Warren, the New York City Mayor Bill de Blasio, and herself. And then later that night, she said, “Well, I really didn’t understand the question.” I would say deep down, she does support single-payer in the same way that all of the other—there are 24 candidates in the race—and they either support single-payer like Bernie, etc., or they support what I call a stepping-stone approach to single-payer, such as Joe Biden’s supporting a public option, which would be a public—the government would provide its own insurance company that would compete in the insurance exchanges in the states and healthcare.gov with private carriers. And ultimately, all of these plans that are being talked about now would crowd out private coverage, and ultimately we would all be basked in a single-payer Medicare for All system.
The Reality of Wait Times and Rationing [07:59]
Bob Zadek: Now, Sally, on the ground, if you will, right now, if I have—I don’t feel right, I call my primary physician, and they answer the phone, and I make an appointment, and I’m diagnosed and then sent to a specialist or told, “Go home, there’s nothing wrong with you.” So on the very basic level, I call a physician that I have chosen, that I have made a decision: “This is the best person for me.” So now under single-payer, just tell us: now you’re an American and you don’t feel well. How would it work? And how would you get healthcare? Who would decide who treats you? Just tell us at the most granular level how it would work under single-payer, because these words are global words, they’re complicated, they have all kinds of components. But let’s get down to life in America. Tell us how it would work. And you can speak from experience, not speculation, because I’m asking you how it does work in Canada and in the UK and other countries.
Sally Pipes: Right. So if we got single-payer in the system—healthcare, I think, is going to be the number one issue in the 2020 election. And if for some reason—good grief—if Bernie Sanders defeated Mr. Trump and became the president, he says within four years he would transform the US healthcare system into a single-payer system.
So how that would work is he is telling the American people that, A, it would be free; B, there would be no referrals to specialists—you would just call a specialist if you needed one, like I do today; and then there’d be free dental, free vision, free drugs, and free long-term care. Now, in Canada, where I’m from, the average wait from seeing a primary care doc to getting treatment by a specialist is five months. So, you know, and you can’t call up a specialist. You go to your general practitioner, what we call primary care doctor here, and then that person decides if you’re going to see a specialist or not. And that’s when you have to wait five months for getting your appointment and getting treated.
And what it means is that depending on who your primary care doctor is depends on who is in their network of specialists. So if your primary care doctor, GP, is not, you know, doesn’t have great access to great specialists, you won’t see, you know, who might be the best in the business from a variety of different sources. So that’s a very important point. But when Bernie says there will be no referrals, this just is not possible because people would be calling up specialists all the time. There aren’t enough specialists to deal with every single person that calls up and says they want to see their gastroenterologist or their neurosurgeon or whatever.
And also, this whole—if the government takes over the healthcare system as Bernie and all of these people say, one of the ways they say they will cut costs is by paying providers, i.e., doctors and hospitals, less. So under these plans, they just would be paid Medicare rates, which are about 40% below what they get paid for treating patients with private insurance. And so there’s no question all doctors would be employees of the government, and a lot of docs would retire early from medicine or go into another profession, particularly docs who are in mid-50s and up.
And then the second point is that the best and brightest young people who traditionally in this country have gone into medicine wouldn’t go into medicine because they know they wouldn’t be able to practice the kind of medicine that they would be trained for. And the UK has the same situation with long waits. There are over four million Brits waiting on waiting lists in the UK just this month. And there’s a shortage of doctors. They’ve tried to—in the UK, they’ve tried to incentivize doctors abroad in foreign countries by incenting them with money to come to the UK and practice medicine, and they had very few doctors who wanted to come and practice under Britain’s National Health Service.
Britain is slightly different in that they, under the National Health Service Act, they allow private coverage to run parallel. And about 10 to 15% of Brits actually have private coverage, and they use that when they find out under the National Health Service that the waiting time for them to get treated is too long. Whereas in Canada, they didn’t include any private coverage under the Canada Health Act. And so what happens is if you’re middle income or higher than middle income and you think it’s important that you get an MRI or you have a hip replacement or whatever, you’re in pain and there’s a cost to that, 220,000 Canadians go abroad, either they come to the US or they go to another country to pay out of pocket for treatment that they think is urgent.
And so the Canadians have an escape valve. If we get single-payer and the government is the sole provider, we’ll have the same problem: rationed care, which means that, as you mentioned in the case of my own mother, who died of colon cancer because when she was a senior, she felt that she might have colon cancer, she went to her GP who had an X-ray done, which of course doesn’t show colon cancer. I told her that she needed to get a colonoscopy, and they said, “Well, there are too many younger people on the waiting list for colonoscopies as it is.” And so that was in July, and in November she started hemorrhaging. She went to the emergency room, spent two days there, two days in the transit lounge waiting for a bed in the ward. She got her colonoscopy all right, but she died two weeks later from metastasized colon cancer. That’s called rationed care. And in the US, the same thing would happen to our seniors who are on Medicare today—they would be at the end of the line waiting to be treated.
Impact on the Medical Profession [13:48]
Bob Zadek: So I remember growing up, it was always the smartest kids in the class—it was kind of automatic—they went to medical school. And that was what you did if you were really, really smart. That was the career path, which means the doctors in America were the cream of the crop. And now under single-payer healthcare, when the salaries and the payments and the fees go down, now we are going to get not the people who are the best and the brightest, but people like me in the middle. And when you are being treated for health problems, do you want somebody who was in the middle of their class, who was an underachieving student, or do you want—it’s your life, it’s your health—do you not want the best person who can do it, and are you not willing to reward them for helping you out of a health problem? And under single-payer, the market disappears, and we no longer attract the best and brightest into healthcare; we attract, in effect, bureaucrats who are willing to work for a bureaucrat’s salary.
The Efficiency Gap: Government vs. Private Sector [16:42]
Bob Zadek: Now, Sally, under the Sanders proposal—I’m a finance guy, as my audience knows, I’m a lawyer, I’m a lender, and so finance is always—helps me understand issues. And under a single-payer plan, it’s not clear to me. Sanders is going to raise taxes considerably. So the question always is for me in policy issues: okay, is the ultimate cost of healthcare in the country, the cost of providing healthcare, is it proposed that the ultimate cost to the country will be higher or less? If it’s going to be higher, Sally—and this is a two-part question—if we’re going to end up paying more for healthcare, then who will pay for that healthcare? And if, as Bernie Sanders says, it’s really going to be less because while you’ll be higher taxed, you’ll save it in healthcare costs—so if healthcare costs as a country are going to go down, at whose expense? Who will get paid less money? Is it the doctors? Is it the hospitals? Is it the drug companies? Whose ox will be gored if we end up paying less for healthcare, and can the system absorb that decline in income?
Sally Pipes: Well, I mean, if we do get a single-payer system where all private coverage is outlawed, first of all, a million people who are employed in the insurance industry will lose their jobs. And so the bureaucracy within the federal government will have to increase significantly. And the second point is that we all know that governments are not as efficient at running things as the private sector. So if you look at the Department of Motor Vehicles and how long, how difficult it is to get an appointment to get your driver’s license renewed or do the road test or get one of these new ID cards, there’s no incentive for people in the government to provide efficient service. So if people like the DMV, if they like the Post Office—for example, the Post Office has become a little more efficient because there is competition between DHL and UPS and FedEx. And so people say, “Well, if I want to guarantee something gets to someone quickly, they use FedEx or one of the private services.” If they’re not so concerned, then they will use the US Postal Service.
But under Bernie Sanders and Pramila Jayapal, Elizabeth Warren, all of that, all of the private options will be outlawed for anything considered medically necessary. There’ll be a huge increase in the size of the civil service to provide, you know, to pay the doctors and pay the hospitals and all of that because we will have a care card, but, you know, we won’t be paying at the point of going to the doctor. But the doctors and hospitals have to be paid. And as I said, they’re going to be paid—doctors and hospitals will be paid less. They’ll be paid Medicare rates rather than what they’re paid today.
The Hidden Costs of “Free” Care [18:53]
Sally Pipes: And then the second point is that when people think something is free—and it’s not—the average Canadian family, while Bernie Sanders says healthcare is free and blah, blah, blah, the average Canadian family pays $13,300 in hidden taxes every year for a healthcare system that doesn’t provide them with timely care. So there will be huge tax increases that will be needed.
And then the second point is that when people think something’s free, they demand a lot more of it. And so, you know, just like when Medicare came into being in 1965—Medicare and Medicaid, those two programs started under Lyndon Johnson’s Great Society—it cost $3 billion in the first year, and they predicted—there was no Congressional Budget Office back then—but they predicted it would cost $12 billion by 1990. In effect, it cost $110 billion. So when Bernie Sanders says this will reduce the cost of healthcare, it won’t because there’ll be a lot more demand for healthcare, and so there’ll be a lot more use and the price will go up.
Plus, they’re talking about adding—and they say 11 million illegals will be able to get free healthcare too, and I think that number is probably low. And so we’re going to have all kinds of problems that exist in the UK and Canada. And in fact, as I mentioned earlier in Britain, the National Health Service has the private—there’s a private option there. Canada, North Korea, and Cuba are the only three countries in the world that have a true single-payer healthcare system where private coverage is banned. And that is what Sanders and Warren and Bill de Blasio and I really believe Senator Kamala Harris, what they really want.
I mean, think back when Michael Bublé, the Canadian crooner who is very popular in the United States, he lives in Vancouver where I’m from, and his three-year-old son Noah was diagnosed with liver cancer. And he didn’t go to the cancer agency in Vancouver; they went to UCLA and had his son treated there, paid out of pocket—he could afford it, of course—but he chose UCLA because they have the best facilities and the best treatment for liver cancer, and his son is still alive today. And if you look at Mick Jagger of the Rolling Stones, when he a couple of months ago was diagnosed with a heart problem, he didn’t fly immediately back to Britain and get his heart valve replacement done under the National Health Service. He had it done at New York-Presbyterian. And as his brother said, “Thank goodness that Mick don’t have to stand in line for healthcare.”
And so, you know, the United States has the very best healthcare in the world. People come from all over the world. And if we’re going to turn our system upside down and let the government run it like the DMV, I can tell you the American people need to realize that it’s going to be a disaster. And another point is that 180 million Americans get their health coverage through their employer, and 76% of them rate their employer-based coverage as good or as excellent. But in the latest Kaiser Family Foundation poll, they found that 51% of the people they polled support Medicare for All, which was down from the 56% in April, which I’m hoping that people like myself who are talking about this, it’s causing some of the people to wake up and say, “This is not what we want for our healthcare system.” But when you ask these people, “Well, you know, that means that you will lose your employer-sponsored coverage,” they’re absolutely astounded. Even Democrats are saying like, “What? We think we’d be—we have great coverage and we’ll get to keep it.” No, under single-payer, they won’t. And so the support for Medicare for All goes down to 37% when people are told that they wouldn’t be able to keep their private coverage, their ESI. And it also goes down to 37% when people say, “Well, you’re going to have to pay for this with increased and new taxes in order to cover this government takeover.”
The Illusion of Choice [22:41]
Bob Zadek: Now, of course, that’s because people who hear “Medicare for All,” what they hear in their brain is “Medicare for them, but not for me.” So they don’t personalize it as you had just pointed out. Now, Milton Friedman, in a series on PBS in the ’70s—a wonderful series, still available on YouTube, it’s a wonderful series to watch—the title, and that’s why I’m making the point, the title of Milton Friedman’s series was Free to Choose. Now, “free” and “choice,” two words near and dear to the heart of libertarians and other Americans. Tell us about how choice—selecting your doctor, changing your doctor, getting a second opinion—all of the things that as Americans in a relatively free market society, and certainly pretty free in commerce, how the choice factor plays in. Do we have any choice whatsoever over how we get treated, when we get treated, whether or not we get treated? How does choice fit into it? Because right now, we have the ultimate choice: we can change doctors, we can get second opinions, we can do our own research and say, “This is what I think. What do you think, doctor?” Tell us about the interaction between choice and the system in a single-payer Medicare for All world.
Sally Pipes: Well, Milton Friedman and his wife Rose were the absolute best, and Milton was my mentor. And I just wonder how he would be coping with life as it is today as we’re seeing this big push towards not just government takeover of healthcare, but free college education, free this, free that. And as he knew, there’s no such thing, as he said so often, there’s no such thing as a free lunch. Milton, of course, was very much a fan of choice, competition—that’s the way the market works in most aspects of our lives. The only areas where it’s not working is K-12 public education and the healthcare system.
Milton wrote the foreword to my first book called Miracle Cure: How to Solve America’s Health Care Crisis and Why Canada Isn’t the Answer. If we have universal choice, it will lead to lower cost and more access for everybody. And so that’s why things like health savings accounts, telemedicine are ways we need to open up our healthcare system so that people can get the kind of coverage and treatments that suit their needs and those of their families.
So we have employer-sponsored coverage which, as I said, covers 180 million Americans. That was really the fault of the federal government back during World War II when wage and price controls were in. The government gave employers the ability to provide health coverage to their employees. It was a way to attract people or to keep people. And then the employees, we would get our health coverage tax-free. If you lost your coverage and went into the individual market, you’d have to buy your health coverage with after-tax dollars. So we have employer-sponsored coverage, we have individual coverage, we have PPOs (Preferred Provider Plans), we have HMOs (Health Maintenance Organizations), which as you probably remember was a big way to cut costs back in the early ’90s. And when people found out that they couldn’t get the doctor they wanted or get timely treatment or couldn’t see specialists, HMOs kind of went on their—were turned on their head and PPOs came in.
But we have fee-for-service, HMOs, PPOs, employer-sponsored coverage. And then, of course, under the government, we have 50% of the healthcare in this country is already in the hands of government through Medicare for our seniors, Medicaid for low-income Americans, which of course has been expanded tremendously under Obamacare, and about 72 million Americans are now on the Medicaid program, which pays doctors even lower rates than those who treat Medicare patients. And then we have the CHIP program for children, and we have the Veterans Administration, which of course is a single-payer system. And of course, we’ve read the many, many stories of problems with the VA and how our vets have to sit on long lines, don’t have access to the latest drugs and things. And that is a single-payer system. If that’s what the American people want for everyone, it would be a disaster.
Bob Zadek: Now, Sally, we’re going to go to break for 30 seconds. When we come back, tell us what kind of choice, what kind of freedom we would have in and control over our healthcare under a single payment system. How will choice be diminished? We’ll be back in 30 seconds with the answer to that crucial question: the question of freedom in healthcare and control over one’s body. We’ll be back in 30 really short seconds.
[Break]
Control Over One’s Body and Healthcare [30:12]
Bob Zadek: Welcome back to the Bob Zadek Show, the longest-running live libertarian talk radio show in all of radio. Thank you so much for listening this Sunday morning to my conversation with Sally Pipes. Sally is the President and CEO of the Pacific Research Institute. She is an expert—I almost want to say the expert—in healthcare in America. She grew up in Canada, has experienced firsthand the Canadian pure single-payer system. She has written passionately on a totally informed, data-driven basis on healthcare in America. In 2018, she published The False Promise of Single-Payer Health Care. She’s about to publish a follow-up book, False Premise, False Promise: The Disastrous Reality of Medicare for All.
Sally, welcome back to the show. Now, of course, libertarians care passionately about freedom, the ability to run our lives the way we see fit so long as we don’t harm others in the process or deprive others of that same freedom. Now, I can’t imagine any freedom being more basic to dignity, to humanness, than control over our body and management of our health and well-being. Right now, Americans have a considerable amount of choice, limited only by, of course, financial resources. But we have choice: who will we seek opinions from? Who will we allow to treat us when we are ill, to fix us when we are broken? We have the choice. We can get second and third and fourth opinions. We can change doctors. And we can, through the marketplace, insist that we get treated with dignity, that we get treated fairly, and most importantly, effectively. We have control over our lives. Tell us very briefly how that control would be diminished or eliminated under single-payer. How much will we simply be told what’s going to happen to us, or how much choice will we have?
Sally Pipes: Well, as I pointed out, under a single-payer system where the government is the only provider, care will be rationed. As I mentioned, the story of my mother—older people will have less access. There will be long waiting lists for care because government would set, just as they do in Canada, a global budget on how much is going to be spent on healthcare. So Canada spends about 11% of gross domestic product on healthcare. We spend over 18% of our GDP on healthcare. But we’re a very wealthy country, and Americans demand the very best. And when they want to see a doctor, they want to get a test, they ask for it. Whereas in Canada, by spending 11% of GDP on healthcare, care has to be rationed and waits grow.
And as I said, you have to go to your primary care GP first, and then you get a referral to a specialist, which in 1993, that wait in Canada was 9.3 weeks. Today, it’s five months. So there’s a doctor shortage.
Failed State Experiments in Single-Payer [33:30]
Sally Pipes: Also in the US, taxes would have to go up significantly. Kamala Harris is talking about raising new taxes on the sale of stocks and bonds and things like that, higher taxes on people earning in the top earning brackets. But people need to realize there aren’t that many very wealthy people that are going to be able to provide the tax money for a total expansion of our government takeover of our healthcare system. So there’d be higher current income taxes, there’d be new taxes such as taxes on large financial institutions, taxes on the sale of stocks and bonds. There would be the employer payroll tax would increase significantly.
And remember, Senator Sanders, who is the big proponent of single-payer, in his home state of Vermont, Vermont passed a single-payer system back in 2011. And the Democratic Governor, Mr. Shumlin of Vermont, in 2014, December, had to reverse the bill that he had signed because he said the people of Vermont could not afford a single-payer system. In Colorado, Amendment 69 was on the ballot in 2016. Even John Hickenlooper, the Governor of Colorado at the time, who has just stepped out of the race—I think he’s going to run for the Senate in Colorado under the Democratic ticket—he was the one that told the people of Colorado that they couldn’t afford a single-payer system because it would more than double the state budget. And that went down 79% to 21%. It was a huge defeat for single-payer.
And so, you know, as I say, it was tried in Vermont and it failed. And California, Sally, and California. California made the same analysis and reached the same conclusion. Right. Because back in 2017, the Senate passed a single-payer bill, SB 561, something like that. Anyway, it passed the Senate and it was costed out by the California Senate Appropriations Committee at $400 billion a year, more than double the budget of the state of California at the time, which was at about $190 billion. And so when it went to the House, which was controlled by the Democrats as well, Anthony Rendon, the Speaker, said, “We just can’t afford this. I’m not going to bring it to a vote.” And it was parked.
And then, of course, we had an election in 2018. The Democrats now in California have the gubernatorial—we have Governor Newsom. They have a supermajority in the Senate in California and in the Assembly. But even at that, Gavin Newsom ran on single-payer. He had the support of the very militant nurses’ union. But when it came down to it and when he was elected, he’s doing these sort of little stepping-stone approaches where now California, starting in January, will have the individual mandate, which was removed from Obamacare back on January 1st of this year. Then he’s said that next year the subsidies for people who buy coverage on Covered California, our version of the Obamacare exchange, that the subsidies federally are at 400% of the federal poverty level, declining down as your income goes up. And that’s about a subsidy federally would be on a family earning about $103,000—that would be the maximum. Here in California, of course, it’s going to go up next year to 600% of the federal poverty level. So a family of four can earn up to $150,000 and be eligible for subsidies.
And then the third point is that he increased the age at which illegal immigrants could get Medi-Cal coverage. One-third of the population of California today is on Medi-Cal—13 million out of 39 million. And so he’s increased that from 19 up to the age of 26. He says that it’ll cost $98 million and will cover 90,000 undocumented immigrants. I say that it’ll probably cost a lot more than that. And a number of young undocumented immigrants in other states are going to flock into California in order to get this free Medi-Cal coverage. And we’re seeing more and more middle-income and higher-income people flooding out of the state of California. But I do believe that Gavin Newsom still supports single-payer, but he realizes he has to do it slowly because we cannot—the taxpayers of California cannot afford a $400 billion healthcare bill.
Caller: Naturopaths and Alternative Medicine [37:26]
Bob Zadek: We have a caller. I knew we’d have callers this morning. Eben, welcome to the show this morning. What’s on your mind for Sally?
Caller (Eben): Yeah, according to this health thing, the biggest issue to me is the non-choice between an ND and an MD. So in other words, I’ve only been to a doctor maybe three times in my entire life, and it’ll be another year before me. But I expect to live to 125, and basically it’s because myself, I’m probably knowledge-wise a quarter of a way towards being a naturopath, and I respect their alternative medicine possibilities. And it seems like it’s just not there in the system as a choice for a lot of people.
Bob Zadek: Well, you’ll have no choice whatsoever. Go ahead, Sally.
Sally Pipes: Oh, I was going to say, I mean, all private coverage would be outlawed under a single-payer system. So some people have said to me, “Well, you know, I have a concierge doctor. I pay privately, blah, blah.” Well, that is outlawed in Canada as well. So under Bernie’s plan, under Senator Warren’s plan, there would be no concierge medicine. And the question is, you know, where would Americans go? I mean, it’s just going to result in a decline, as I mentioned earlier, in the best and brightest kids going into medicine.
But we do—there is a role for naturopaths, there is a role for doctors of osteopathy as well, because different people have different views, different conditions, and things. So we need a lot of competition. That’s what makes America great. But by going to single-payer, we’re eliminating virtually everything and putting the government fully in charge of our healthcare system. And they will decide what treatments are possible and what doctors are going to be paid for. And doctors will basically be members of the government union. And you may be—your caller may be—the very best neurosurgeon, I may be probably the very worst and was at the bottom of my class, but we will both be paid the same because under a single-payer system, merit is not figured into how much you’re paid. Everybody will be—all doctors will be paid the same. And a lot of hospitals, of course, will go out of business because the amount that they will be reimbursed—right now hospitals get about 87 cents on the dollar for treating Medicare patients, but those people who have private coverage, we pay more in order to subsidize and keep the hospital in business.
The Criminalization of Private Healthcare [40:02]
Bob Zadek: Now, a couple of observations. Thank you very much for the call, Eben. I’ve been sitting here and my blood is starting to boil because Sally has explained over and over again during our show this morning how she used the word “illegal.” And I’m starting to—my head is exploding because the fact that my selecting a physician to treat me because I trust that physician and I’m willing to reward him for competence and for helping me get better—that that act of me, an adult, selecting a physician, paying them what they’re worth, and being treated, that that will become illegal is just so offensive to me. How could the act of a willing buyer and a willing seller of services, healthcare services, how could that possibly be illegal? How could that be prohibited? It is a transaction between two consenting adults. So at the very core level of personal freedom to select those people who will cure me, that that act is illegal—that alone should cause us to storm the ramparts and say no, no, no to anything that criminalizes my selecting a healthcare professional.
Why Not a Discrete Solution for a Discrete Problem? [42:31]
Bob Zadek: Now, Sally, all of this talk, all of this talk about Medicare for All, single-payer, it popped up in public conversation quite a while ago to cure a problem. And I think it all got blurred. But as I can recall, the core problem that Sanders et al. is trying to cure is that some people are not getting, because they can’t afford it, the medical care that some politician thinks they’re entitled to—“healthcare is a right.” And therefore, to cure the problem of a small subset of the population not having the level of care that a politician decides they are entitled to, we are now going to reshuffle 11 or 14% of the entire economy.
What I don’t understand is, if we feel that way, if Sanders feels that way, why not leave everything in place and just give money to them if that’s what the political system wants? It’s so easy. You don’t have to mess with the rest of us and our private insurance that we like. Just give people who can’t afford it, give them free care if that’s what the political system wants. I don’t understand the need to rejiggle 14% of our economy just to fix a relatively small problem. And also, that same subset of the population who doesn’t get, in the opinion of the politicians, adequate healthcare, they probably aren’t getting adequate food and adequate clothing and adequate housing. We’re not making all housing public, making all food sales public so that the government runs it. We are just giving them in a discrete way—satisfying these needs. So what I don’t understand, Sally, and since you study the political process so much in healthcare, why not just—and I’m not proposing this—but why isn’t the cure for a very discrete problem a very discrete cure? Why do you have to rejiggle the whole medical infrastructure to fix a small problem?
Sally Pipes: Well, you’re absolutely right. And you know, when Obama was the president and he promised the American people he was going to fix the healthcare system if elected president, sure enough, on March 23rd, 2010, he introduced Obamacare, the Affordable Care Act, which of course has proved not to be affordable. Average premiums have gone up significantly—21% in 2017, in 2018, 26%. A lot of the people who had exchange coverage, those who 85% get subsidies, as I mentioned, up to 400% of the federal poverty level. But because of all the mandates and the 10 essential health benefits under Obamacare, a lot of people that had participated early in the exchange found that they couldn’t afford the premiums and that deductibles were so high they couldn’t afford to use the coverage if they’ve had it.
Remember Obama promised the American people also that the cost of care would go down, the average family would see their health premiums go down by $2,500 a year. That is absolutely not the case at all. And we have now about 10.7 million people on the exchanges, either the federal exchange healthcare.gov or some of the states that have their own exchanges like here in California, Covered California. But we’ve turned the whole healthcare system upside down under Obamacare for 10.7 million people. It would have been easier and cheaper to have figured out a way to provide these people with coverage. And you need choice.
Bob Zadek: Well, of course! Of course! And leave the rest of us alone. I don’t understand. As I said, we know and there was in the media about a decade ago, there was allegedly malnutrition in parts of our country, young children were going hungry. Well, give them food! You don’t privatize—you don’t make all the supermarkets public and ban private supermarkets. You give people food if they need it, if that’s what the political system wants. If people are not having healthcare and the political process decides they deserve it—I don’t feel that way, but if the political process decides that—then in a discrete way, without upsetting the rest of the country, just fix that specific problem as we always do. And so the need to rejiggle the entire economy for such a relatively small problem of providing healthcare to people who aren’t getting it—it’s too easy. You don’t have to rejiggle the whole system.
The Pitfalls of Drug Importation [47:19]
Bob Zadek: Now, Sally, we have only a few minutes left, and I just want to cover because you’re such an expert on this. President Trump has floated a measure to allow Americans to buy and import drugs, the same drugs we buy in the US allegedly at a higher price, buy them from Canada. Canada has the same drugs allegedly at a lower price because the Canadian government negotiates low drug prices. And tell us, we have only a few minutes, Sally, but since this is going to be discussed, tell us whether you support or oppose and why Trump’s proposal to allow Americans to buy prescription drugs from Canadian vendors at a lower price than we can buy them here. Do you oppose it, support it, and why?
Sally Pipes: I totally oppose it, and I have—I did a lot of work on this back in 2004 when this became a big issue about importing drugs from Canada. And of course, we found out the situations with counterfeit drugs coming from online pharmacies in Canada. Interestingly, two states, Florida and Colorado, under—well, Florida with a Republican Governor, Ron DeSantis, has signed a bill allowing for importing drugs from Canada. And Governor Polis in Colorado has signed an importation drug—President Trump has said that he will be releasing his fabulous new healthcare plan in September—first it was July, then August, September—and one of the things that apparently is going to be in this is this international price index, which would tie the drug—tie drug pricing to a basket of drugs in other countries. And these would be for patients who are receiving like cancer drugs in doctors’ offices.
But this is a disaster. And even the talk of importing drugs from Canada—Canada is a country with 39 million people. You have, as I said, two states that have signed bills importing drugs from Canada, and there are about 11 other states that want to do the same thing, plus at the federal level. Canada does not have the supply of drugs. And I’m delighted that Canadian officials have come out just recently and said, “We cannot be the drugstore for the United States.” Canada’s drug prices are cheaper because American pharmaceuticals, where all of the research and development is done—it costs $2.6 billion from an idea to bring a drug to market, most of them don’t make it—because Canada has price controls on pharmaceuticals. Our country sells—our pharmaceutical companies sell to Canada and to the UK and to other countries with price controls at these lower prices. But if Americans start importing drugs from Canada through wholesalers, pharmacies, etc., there will be no drugs left for Canadians. And the Health Minister of Canada has said that he’s very concerned about this. And it’ll be a disaster because it’ll destroy one of the biggest industries in the US: the pharmaceutical, the biologic industry where we have all the new CAR-T therapies, all of these new immunology—
Bob Zadek: So the savings that Americans enjoy will be at the expense of the drug companies who will have to cut back on their research budgets, and therefore the supply of new drugs will be harmed by this scheme of Donald Trump.
Now, Sally, in 2020, we have a minute left, in 2020, healthcare will be the issue on the ballot. Your book is going to be released, False Premise, False Promise: The Disastrous Reality of Medicare for All, just in time for the election. Tell us in 30 seconds what will be the premise of your book and why it is a must-read for Americans who are going to vote in the 2020 election. We have 30 seconds, Sally.
Sally Pipes: Well, I will tell everybody—I tell everyone in this book why single-payer is a disaster. I use Canada and Britain as examples. I have a whole chapter on why healthcare is not a human right—you know, that of course all of the Democratic candidates say healthcare is a human right, so I explode that myth. And then I come up with a solution to how we need to reform our healthcare system, which we thought was going to happen after the 2016 election, that Obamacare would be repealed and replaced, and we missed a big opportunity.
Bob Zadek: It’s a must-read. Sally, we’re going to be cut off. It’s a must-read. Everybody who’s going to vote, please read Sally’s book when it comes out in January. Bob Zadek saying so long for now. We’ll be back again next Sunday.