By Mark Liebow, M.D.
Rochester (Minn.) Post-Bulletin, Aug. 18, 2011
Well, Vermont beat us to it. The people of Vermont decided correctly that the advances of the Affordable Care Act weren’t enough. They looked at Massachusetts and found that with that state’s plan, which serves as the model for the Affordable Care Act, costs continue to rise and the rate of medical bankruptcies didn’t go down.
In fact, Massachusetts now has the highest insurance premiums of all 50 states. Vermonters pushed their elected officials to pass legislation that aims to set up a state single-payer plan, the first in the United States. We could be next.
The new private insurance that some Minnesotans will buy under the Affordable Care Act will not cover all their medical expenses. They will still face deductibles and co-payments that deter them from getting medical care. Some may be forced to choose between care and food or rent. Insurers will still take a big chunk of the premium for administrative expenses and profits which do not help patients. The flaws in our current system remain. There is a better way.
The Minnesota Health Plan, if enacted, would be a public program that covers all Minnesotans with better coverage and substantially lower administrative cost. The plan will cover all medically necessary services without deductibles or co-payments. There will be no complicated enrollment procedures or eligibility requirements. Health insurance bureaucrats will not stand between patients and their doctors.
The plan will save billions of dollars a year for Minnesotans. Even the non-profit insurance companies we have in Minnesota use 15 percent to 20 percent of the dollars they collect in premiums for overhead. Doctors, hospitals, and other providers also spend a substantial percentage of what they collect on administrative costs. Most of that needless spending will end when the plan is enacted. We can use the savings to lower the cost of services and to improve quality. Beyond that, doctors and patients will appreciate having less paperwork and the end of tedious struggles with insurance companies.
Of course, we’ll have to pay for this. There will be new taxes, which will be assessed based on ability to pay. However, we will stop paying premiums, deductibles, and copayments. For the average Minnesotan, their new taxes will be less than they are paying now. Businesses will no longer have the burden of purchasing health insurance for employees and dependents. This should lower retail prices and lower our cost of living.
The plan will be a big help to Rochester. Covering everyone will allow more patients to come to Mayo Clinic and Olmsted Medical Center. Furthermore, Mayo and Olmsted will no longer need to provide charity care or rack up bad debt from the care given to Minnesotans. Mayo Clinic alone will save hundreds of millions in health care costs for its employees and dependents. Rochester health care organizations will save hundreds of millions more in reduced costs for billing and collections. This will allow them to grow and hire more clinical employees.
We will lose jobs by eliminating health insurance companies, thus making most people in health care organizations doing billing, collections, and negotiations with insurers unnecessary. Many of these workers have clinical backgrounds and can move back into health care organizations as they grow. Others will need retraining. Fortunately, the Plan sets aside money for retraining those who need it and, most importantly, people losing jobs will not also lose health care.
Many at Mayo worry that a single-payer system will not recognize that Mayo sees more complex patients than most practices and hospitals, making its costs higher. They also worry about whether there will be support for research and education. The plan will negotiate annual budgets with Mayo hospitals and can provide the budget that will cover the costs of complexity. It will also negotiate provider fees and can set a higher fee for care provided at academic institutions.
Some have been concerned about “rationing” in a single-payer system. The plan is prohibited from restricting, delaying, or denying care, or reducing the quality of care to save money. Rather, savings come from streamlining our current administrative spending. We already spend enough on health care. By increasing efficiency, we can provide needed care to all Minnesotans.
While the plan can fix how we pay for care, it won’t fix problems in how we provide care, because it was never meant to fix those. We need to study those problems and figure out what we can do for them, since many will see the health care system as broken as long as the delivery of care is flawed. Still, fixing how we pay for health care at the state level would do many good things for Rochester, for Minnesota, and for Minnesotans. Vermont’s new law means we can’t be first, but we still can be the state with the best single-payer system. Let’s enact the Minnesota Health Plan (http://mnhealthplan.org).
Mark Liebow is a Rochester physician.