By Dave Dvorak, M.D., M.P.H.
MetroDoctors: The Journal of the Twin Cities Medical Society, November/December 2015
The 23-year-old young man sitting before me in the emergency department looked ill. Febrile to 101 degrees, he held out his swollen right forearm, revealing a painful abscess the size of a golf ball on its undersurface. A large patch of warmth and redness tracked aggressively beyond his elbow to his upper arm. His symptoms had been progressing for nearly a week.
I noticed several puncture marks on the tense skin surface overlying the abscess.
“That’s where I tried to lance it with a needle to get the pus out,” he admitted sheepishly. “It didn’t work.” The reason he waited for days to seek care, remaining at home as his symptoms progressed: a $3,000 deductible required by his insurance plan. “I just don’t have that kind of money,” he explained.
I suspect most Minnesota physicians have their own stories of patients delaying or forgoing medical care due to unaffordability. A May 2015 Commonwealth Fund study found that 44 percent of privately insured adults don’t get needed care when they’re sick, due to high cost-sharing required by private insurance plans.[1]
Physicians for a National Health Program (PNHP) is a physician organization that finds such a situation untenable. It believes that a civilized country as wealthy as the United States should be able to find a way to guarantee quality health care for its citizens. It argues that the fragmentation and patchwork inefficiencies of the US health care system have led to decades of skyrocketing costs and corporate profiteering at the expense of patients, who continue to struggle with access and unaffordable health care bills.
With over 20,000 members nationally and state chapters across the country (including here in Minnesota), PNHP advocates for a fundamental change in the way we pay for health care. Known as single payer reform, it would create a unified, publicly financed system – while keeping the delivery of health care largely private, as it is now. Such reform, PNHP maintains, would soundly achieve the efficiencies necessary to provide affordable and equitable health coverage for all Americans.
The problem, as PNHP sees it, certainly isn’t a lack of national spending on health care – at 17% of our GDP, the US spends twice as much per capita as other industrialized countries.[2] Rather, it’s how we spend our health care dollars. The organization cites a New England Journal of Medicine study showing that a staggering 31% of US health care spending goes to administrative overhead rather than to actual health care.[3]
In large part, this tremendous inefficiency is rooted in our multi-payer system, with hundreds of profit-driven private insurance companies duplicating the services of one other. As businesses motivated by profit, private insurance companies naturally have incentive to deny or create barriers to coverage, all the while diverting policyholder premiums to advertising, marketing, underwriting, lobbying, exorbitant executive salaries and investor profits – administrative functions wholly unrelated to patient care.
Meanwhile, physicians grapple with the wasted time and frustrations of practicing in a complicated maze of insurance plans, in which every patient has differing coverage. This necessitates significant billing staff labor and huge hospital billing departments. An increasing share of the physician workday is spent seeking prior authorization from insurance companies in order to treat their patients appropriately. A 2011 Health Affairs study found that interaction with private insurance companies costs the average US physician nearly $83,000 per year.[4]
While the reforms of the Affordable Care Act (ACA) have enabled millions of previously uninsured Americans to obtain coverage, such coverage increasingly is proving to be sorely lacking. Ultra-high deductibles – as high as $7,500 – required to be paid before insurance kicks in make patients reluctant to seek needed care, and vulnerable to financial ruin when they do. A July 2015 Minneapolis Star Tribune article portrays the aggressive manner in which the state’s major hospital systems are pursuing patients for unpaid deductibles through debt collectors and lawsuits.[5] Not surprisingly, unaffordable health bills are the leading cause of bankruptcy for American families, accounting for 62% of US bankruptcies.[6]
PNHP backs single payer health reform as the most sensible and equitable solution to our current dysfunctional system. Single payer is universal health care that is publicly funded, yet privately delivered. It preserves our current, largely private health care delivery system, maintaining market-based competition where it matters – among providers. But it replaces our dizzying labyrinth of private insurance plans with a single, unified public financing stream. Individuals pay a premium into the fund according to ability to pay – meanwhile shedding the premiums paid to private insurance companies, as well as deductibles, copays and coinsurance.
The chief strength of single payer lies in its efficiency. It streamlines payment for health services and products by establishing uniform, transparent pricing. It replaces the costly, cumbersome practice of itemized hospital billing with global annual budgeting, removing layers of hospital administrators and bloated billing departments. It provides for bulk purchasing and the ability to negotiate fair prices for prescription medications and medical supplies.
Evidence-based in its approach, PNHP points to multiple studies showing that by capturing the massive waste in the health system and redirecting it to actual health care, single payer can achieve truly universal coverage while reining in health care inflation[3,7,8,9] – something no other type of proposed reform has shown the ability to do. The organization maintains that single payer would guarantee health security for all citizens, removing crippling out-of-pocket copays and deductibles.
As single payer reform at the national level appears unlikely in the current political climate, many state PNHP chapters have focused their efforts on state level reform. The ACA’s Section 1332 State Innovation Waiver will allow individual states, beginning in 2017, to apply for federal waivers to implement their own innovative health care systems. However, the state must demonstrate that it can cover at least as many residents as are currently covered by the ACA without adding to the federal deficit.
As such, the Minnesota chapter of PNHP (PNHP-Minnesota) is enthusiastically backing single payer reform in Minnesota. The organization points to a 2012 study by the Lewin Group as evidence of the economic feasibility of single payer in Minnesota. The analysis found that a Minnesota single payer system would be able to provide comprehensive health and dental coverage to every Minnesotan while saving the state more than $5 billion per year in health spending over its first 10 years9. The median-income Minnesota family would save an average of $3,512 per year on health care. Notably, the savings in the model came primarily from administrative waste reduction and bulk purchasing; provider compensation remained unchanged.
PNHP-Minnesota engages in education and advocacy, providing speakers to hospitals, clinics, medical schools and residencies, churches and community groups. More than 1,000 Minnesota physicians, medical students and health care professionals have signed the PNHP resolution in support of single payer reform (http://tinyurl.com/q2czr8k). Also backing single payer is the Minnesota Nurses Association (MNA), a union of 20,000 Minnesota nurses. Over the past year, MNA and PNHP-Minnesota have joined forces in hosting educational seminars across the state to continue to build support for single payer among medical professionals.
Making single payer health care a reality in Minnesota will require widespread popular support among citizens and medical professionals – as well as the political will of legislators – to counter the natural opposition of profit-driven corporate interests. Legislation authored by Sen. John Marty (DFL-Roseville) would establish universal health care in Minnesota based upon single payer principles. Known as the Minnesota Health Plan, it would replace the current inefficient patchwork of private and public health plans with a single statewide fund that would cover the health needs of all Minnesotans.
The fight for a more sensible, equitable and efficient health system continues. Physicians and health care professionals interested in learning more about single payer reform should visit the PNHP-Minnesota website at PNHPminnesota.org.
Dave Dvorak, M.D., M.P.H., has practiced emergency medicine in the Twin Cities for 21 years. He is a member of the Minnesota chapter of Physicians for a National Health Program.
References
1. The Commonwealth Fund Biennial Health Insurance Survey. “The problem of underinsurance and how rising deductibles will make it worse.” May 2015. Availble at: http://www.commonwealthfund.org/publications/issue-briefs/2015/may/problem-of-underinsurance
2. The World Bank. Health expenditure, total (% of GDP). 2012. Available at: http://data.worldbank.org/indicator/
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3. Woolhandler S, Campbell T, Himmelstein DU. Costs of health care administration in the United States and Canada. NEJM. 2003. 349: 768-775
4. D. Morra, S. Nicholson, W. Levinson et al. U.S. Physician Practices Spend Nearly Four Times as Much Money Interacting with Health Plans and Payers Than Do Their Canadian Counterparts. Health Affairs Web First, Aug. 3, 2011.
5. Howatt, Glen. StarTribune, July 26, 2015 ,“More in Minnesota have health coverage but still can’t afford to be sick”. Available at http://www.startribune.com/more-minnesotans-have-health-coverage-but-still-can-t-afford-to-get-sick/318545021/
6. Himmelstein DU, Thorne D, Warren E, et al. Medical bankruptcy in the United States, 2007: results of a national study. American Journal of Medicine. 2009. Available at: http://www.amjmed.com/article/S0002-9343(09)00404-5/abstract
7. Gerald Friedman, Ph.D., Department of Economics, University of MassachusettsAmherst. Available at: https://www.pnhp.org/sites/default/files/Funding%20HR%20676_Friedman_7.31.13_proofed.pdf
8. Woolhandler, S. Cutting health costs by reducing the bureaucracy. NY Times. Nov. 20, 2011.
Available at: http://www.nytimes.com/2011/11/21/opinion/cutting-health-costs-by-reducing-the-bureaucracy.html
9. Sheils J, Cole M. Cost and economic impact analysis of a single-payer plan in Minnesota. 2012. Available at: http://growthandjustice.org/images/uploads/LEWIN.Final_Report_FINAL_DRAFT.pdf
