The Pied Piper of State Based Single Payer Initiatives

Like Julius Caesar on the Ides of March, California’s AB1400 “CalCare” bill was killed in the State Assembly without a vote, murdered by its primary sponsor. Its doom was inevitable, and foretold by multiple prophets. Much has been written on why the idea of fighting for universal single payer on a state-by-state basis is ill advised from a conceptual and economic standpoint. What the advocates of this approach may not realize is that it is also terrible strategy. Anyone who believes such a fight can be won at the state level has failed to comprehend the scope of the forces arrayed against such an agenda and the limitations of state government power. The for-profit healthcare industry is a monster of epic proportions that can only be subdued from the high ground of the federal government. If that monster is to be brought low at all, the first blow must also be the coup de gras across all 50 states. High-level federal officials such as Nancy Pelosi are acting in bad faith when they encourage single payer advocates to fight at the state level. They wish to divert momentum to a movement they know will never succeed and away from pressuring them to move forward with the only viable option. Those in positions of power generally know that it’s national single payer or bust, and it’s time for the rest of us to get with that program. 

A glance at the Fortune 500 list can really paint a picture here. It’s hard to miss the fact that the healthcare industry is heavily overrepresented at the top rungs of the ladder. These are not merely large and profitable corporations, they are vertically integrated monopolies and oligopolies. CVS health is CVS-Caremark-Aetna, a giant in health insurance and pharmacy benefits as well as corner drug stores. United Healthgroup is both the mega insurance giant and the owner of Optum Health, which is a pharmacy benefit manager, health data analytics firm, and the owner of a vast network of clinics and practices involved in every area of healthcare. Not far down the list we find Cigna-Express Script and Humana-Kindred, as well as Anthem-BCBS and Centene, all massive holding companies whose operations go far beyond insurance. Also in that very top tier are the nation’s largest drug distributors such as Amerisource-Bergen, McKesson, and Cardinal Health. In that same tier we also find Hospital Corporation of America (HCA), the owner of the largest network of private hospitals in the country. That company happens to belong to the family of former Republican Senate Majority Leader Bill Frist of Tennessee. The degree of vertical integration, vast wealth, and total control these companies wield would make robber barons like Rockefeller, Mellon, and even J.P. Morgan green with envy.  

These are titans of unimaginable scope and power, plugged into critical infrastructure at every level of the healthcare system. To a large degree they aren’t merely part of the healthcare system, they *are* the system. They are the clinics, they are the payment system, they are administrators of public programs like Medicare and Medicaid, they are the hospitals, and they are your health data. They are the distributors of drugs and medical devices, they are the suppliers of medical equipment. Their hands are in the till in half a dozen places for even the simplest of your healthcare visits. The critical mistake of reducing the scope of the fight to the state level is that the vast power of these institutions remains undiminished. Unlike a state government, their power and reach does not end at the state line. They will never stand by and allow single payer healthcare to pull the emergency brakes on their gravy train. The shift to a state-based approach is the equivalent of setting aside a proper umbrella in a torrential rainstorm and attempting to shield oneself instead with a cocktail umbrella. 

The “state-by-state” crowd’s favorite proof of concept is Canadian Medicare, but the US in 2022 is not Saskatchewan in 1948. That didn’t even become anything resembling what we would consider universal public health coverage until 1968. which seems problematic in its own right. It is not even the US in 1945, when Truman’s national health legislation was ruthlessly crushed in congress. The massive corporate and institutional forces that advocates of single payer face today would have been unimaginable to their forebearers back then. The notion that even the most powerful of US state governments can stand against these interests is not at all realistic. State legislators can be purchased quite legally at a far lower price than their federal counterparts, and these corporations and their organized proxies have the ability to funnel astronomical amounts to campaign coffers and PACs through hundreds of subsidiary corporations. They can spend millions on an ad blitz of every major communications medium without making a significant dent in their bottom line. In the unlikely event that a public relations campaign fails, even a low-key capital strike could cripple any state’s healthcare system within days far more effectively than the 1962 Canadian doctor’s strike did. The doctor’s strike took time, coordination, and resources to organize. A single one of these massive corporations could muster a retaliation or countermeasure vastly larger in size and scope with the snap of a CEO’s fingers. Even subtle price increases in various fees and services on the healthcare delivery end, passed off as normal business, can quickly break through the fiscal space created by the new taxes proposed in the CalCare legislative package, forcing a repeal. Unlike the federal government, states have to fund all of their liabilities with revenues which puts a hard constraint with no room for error. That weakness is something these monsters are well positioned to turn to their advantage, and it’s not the only one. 

The healthcare industry has long exploited the physical barriers to state authority as leverage points. That unilateral constraint cripples the ability of any state government to impose its will on companies that can cross state lines freely. Most of these corporations have entire divisions dedicated to exploiting the discrepancies between state regulations to extract profit and pressure state governments to de-regulate, referred to in the business as “regulatory arbitrage”. The use of such limitations to play one state against another has long been a standard practice of large corporations, resulting in a race to the bottom in terms of regulations and taxation. Healthcare corporations, like their counterparts in heavy industry and fossil fuels, generally have massive legal departments well practiced in exploiting the laws of the land to challenge in court any state laws or regulations they find unfavorable to the conduct of their business and can afford to outspend and outlitigate most state governments. Of particular relevance here are elements of the constitution itself that limit the rights of states to impede interstate commerce or to discriminate against people travelling from state to state. Since the early days of this country’s history corporations have used these laws and their own deep pockets to curtail the ability of states to interfere with their ability to do pretty much whatever they wanted.  

The funding of a program like CalCare or Whole Washington is also constrained by state boundaries and residency. The tax base for a state single payer plan is the residents of that state and nobody else. Meanwhile, the Comity Clause in Article IV, Section 2 of the Constitution prevents states from discriminating against or denying fundamental rights to citizens of other states. This means that while residents of a single state would be expected to fund the program, nothing would stop residents from any other state from crossing state lines for their healthcare and leaving straight afterwards. To attempt to prevent such a thing would in any case be morally repugnant to anyone who believes in healthcare as a fundamental human right, but this strategy once again runs up against the problems of hard budgetary limitations for a state as a user rather than issuer of the currency. It would be as though everyone in Europe went to Germany for the free healthcare, but only German citizens were responsible for funding it with their taxes. It also runs up against the more fundamental fact that limiting the size and scope of the solution in no way reduces the size and scope of the problem. 

The leadership of both parties are well aware of this. When powerful California Democrats were encouraging progressives to pursue single payer at the state level it was a pied piper strategy meant to undermine and destroy the movement. Newsom and the state Democratic leadership have a strong financial interest in making sure neither state nor national single payer is ever actualized. He made it part of his platform because he was confident it would not get through the state assembly. Nancy Pelosi, in addition to having a strong party fundraising interest in these giants, has staked her entire career on the Affordable Care Act legislation. She is heavily invested in propping up that failing system and considers the movement for national single payer to be an attack on her legacy. If those two are encouraging a state-based approach it is fair to assume they do not have the best interests of single-payer advocates in mind. They have multiple gatekeepers and fail-safes in place to make sure it never passes, and multiple options to crush it if it ever does. Their priority is to get progressive activists to stop causing PR problems for them. Diverting momentum and popular demand into a doomed-to-fail strategy is an ideal way to achieve that.  

The effectiveness of that strategy is apparent when looking at the fractured state of the single payer activist community. Advocates for state-based initiatives asserted from the beginning that their goal was a national single payer healthcare system, and continue to do so. They insisted that their state-based initiatives were meant to complement rather than replace the national campaign. That “fight on all fronts” claim now appears to have been disingenuous. They have hijacked national single payer advocacy platforms to promote their local agendas, diverted activist energy away from the only viable path forward, and in many cases have been directly hostile to those who chose to continue to pursue action at the federal level. With the critical flaws in that strategy mentioned above, it is hard to imagine them doing more harm to the cause of single payer healthcare if they had been receiving a paycheck from one of the industry giants. 

Anyone who thinks even the most powerful of states can stand alone against the inconceivable might of the forces who benefit from the status quo is not living in the real world. The only way the citizens of this country will see the sort of healthcare that everyone else considers a basic human right is if people across this country in every state and territory band together and demand it from the only source capable of delivering it: the federal government in Washington, DC. It is the only entity in this country and perhaps even the world more powerful than the group of vertically integrated monopolistic giants and the massive wall street hedge funds invested in them. And while these forces may have captured much of government and bent it to their own interests, elected officials are still vulnerable to a truly mass movement of people who refuse to take no for an answer. An unending line of torches and pitchforks demanding “give us healthcare, or else…” can still intimidate even the most unethical of politicians. Federal government is what granted these private sector giants the power to extort vast amounts of money from the public unchecked and is the most important wellspring of their power. Federal government is the only thing that can take it away.  

The primary downfall of previous efforts was the doom of California’s AB1400. Advocates massively underestimated the power of the forces arrayed against single payer in the US. This kind of massive change that would undermine the current power structure to such a degree cannot be done piecemeal or incrementally. The vast resources that would be mustered at the first sign of trouble would stop progress in its tracks before it ever got traction. Only a unified policy implemented simultaneously across all states and territories can get the job done, and only the federal government with its power to deficit spend can pull it off. The one thing that can bring that about is a unified effort across the entire country of all of its people, refusing to be distracted or discouraged, regardless of what state they live in. Such a movement cannot afford to get sidetracked by shiny objects dangled just out of reach. Shrinking the scope of the objective does not in any way diminish the scope of the obstacles. Only together can we generate the momentum to breach those battlements. With the stakes this high and the consequences this dire, we cannot afford to wait another 20 years and hope the powerful acquiesce. With this kind of overwhelming popular consensus we have no business asking politely and waiting on their pleasure, and we have no right to turn away when they respond with refusals or evasions. It is time to start making demands of the people capable of granting them.