PNHP

Single-payer healthcare best choice for U.S., Ga.

Single-payer healthcare best choice for U.S., Ga.

By Jack Bernard
Atlanta Journal-Constitution, August 3, 2019

“Georgians need better options – reduced costs, enhanced access, and improved quality of care’’— Gov. Brian Kemp

I recently read a piece by an M.D. (The Hill, May 17), which advocated abolishing insurance and going back to a direct contracting model. A decade ago, I had an op-ed in the AJC opposite the head of the Georgia Medical Association who was making a similar case.

Frankly, I have also heard this argument made before by physicians I know. I agree that we cannot continue on the present path. But I disagree on the corrective course of action.

We simply cannot go back to the fantasized “good old days” when physicians negotiated prices with each patient. Trading chickens for an office visit is just not feasible in 2019.

I’ve been in healthcare for decades, as Georgia Director of Health Planning, SVP/VP at national healthcare firms, a state Board of Health member and as a health reform columnist. I was also a Republican chairman of a county commission, responsible for obtaining healthcare insurance for our employees.

During my career, the healthcare proportion of the GNP for the U.S.A. has more than doubled, to 17%. The proportion of GNP spent on healthcare for other nations is much lower, for example: Israel, 7%; Italy, 9%; and Canada/UK/Netherlands, 10%.

Per OECD statistics, all these developed nations have universal access while spending much less per capita than the U.S. And, their mortality/morbidity stats are better, not worse.

I’m a capitalist, not a socialist. But if the current multi-payer, for-profit insurance system doesn’t work, there’s an obvious solution: single-payer. It’s one of the few instances where government intervention is not only effective in achieving the goal of universal coverage, it is more efficient.

The only thing lacking is political will. We can thank the healthcare-industrial complex, their lobbyists and bought politicos in both parties for this frustrating situation.

President Trump came into office stating that Obamacare was a “disaster” and that he would provide lower-cost, high-quality healthcare for all Americans. In March 2017, he tweeted “healthcare is coming along great” and last March that the GOP “will soon be known as the party of healthcare.”

Despite these promises, he and the GOP have produced nothing of real value, succeeding only in eliminating the unpopular “individual mandate” which incentivized uncovered people to get coverage. His current “reform” efforts are merely aimed at reducing insurance policy coverage so that people can get cheaper bare-bones policies.

Meanwhile, Trump’s moves have increased the number of uninsured people by 1.3 million from 2016 to 2018 while the number of Americans having access and cost issues has gone up considerably in every category surveyed, according to the Commonwealth Fund.

During Trump’s term, due to cost considerations, more Americans did not fill needed prescriptions, get recommended tests, visit doctors when ill, or get needed dental work.

Further, the number of citizens contacted by a medical collection agency for unpaid bills increased from 25 million to 30 million.

Unfortunately, improving access while restraining cost increases and improving quality (per Gov. Kemp) is virtually impossible under the current scenario. In the meantime, we must live with what we have in our healthcare financing world and attempt to improve upon it.

Gov. Nathan Deal refused to take federal funding to expand Medicaid, even though the first 3 years would have cost the state nothing. Despite his shortsightedness, 450,000 Georgians are now covered by the ACA. Georgia still has one of the highest uninsured populations in the nation.

Kemp is more open to expansion (90% paid for by the Feds, if approved by them) but is apparently planning to make expansion limited, restricting coverage for the poor via cost sharing or work requirements, while increasing paperwork. Other states (Kentucky, Arkansas) attempting to utilize similar federal waiver approaches have had rough waters.

A consulting firm is drafting a federal Section 1115 waiver for Kemp’s consideration. After a comment period, the waiver would then go to the feds before year’s end.

We can only hope that Georgia’s waiver is designed to help more Georgians obtain coverage rather than furthering ideological and political goals.

If not, please make your feelings known.

https://www.ajc.com…

Why Americans can’t afford health care: the history

By Laura Kaplan-Weisman, M.D.
Baltimore Sun, August 2, 2019

As increasing numbers of Americans are unable to afford health care, we must ask: Why does our health insurance system look like this? How did we get here, and how can we move to a health system that works for everyone?

To begin, we must understand that our health insurance system wasn’t designed for economic or ethical reasons. In fact, it wasn’t “designed” at all, but pieced together over the last century.

One hundred years ago — just after the discovery of antibiotics — the average life expectancy was 54 years. Doctors’ fees were low, but treatment options were limited, unregulated and had variable efficacy. Health insurance simply didn’t exist in the U.S.

As we developed new treatments and standards, the quality of medical care increased, but so did the costs. Blue Cross first sold health insurance as a nonprofit in 1929. Their plan cost 50 cents a month and only covered inpatient hospital care. By 1940, only 9% of Americans had health insurance.

During the labor shortage of World War II, President Franklin D. Roosevelt banned businesses from increasing wages, so employers competed by offering benefits such as health insurance, which wasn’t taxed as income. By 1950, half of Americans had health insurance; by 1960, two-thirds were covered, and the system of employer-sponsored private insurance had taken root.

This was also a time of critical change for the health insurance industry, as many insurers converted from nonprofit to for-profit status, changing the concept of insurance — and health care generally — from a public good to a commodity. From then on, insurers had a strong financial incentive to block a national health program.

President Harry Truman proposed a single-payer national health plan in both 1945 and 1948, but it was quickly killed by the combined forces of the Chamber of Commerce, American Medical Association (AMA), American Hospital Association and the major insurers, whose scare tactics included the threat of “socialized medicine.”

In the early 1960s, Presidents John F. Kennedy and Lyndon B. Johnson proposed what we now know as Medicare, a scaled-back version of Truman’s national health program that only covered the elderly and disabled. The AMA and insurance industry fought back, hiring Ronald Reagan as the spokesman for their anti-Medicare campaign. Reagan warned that if Medicare passed, “we are going to spend our sunset years telling our children, and our children’s children, what it once was like in America when men were free.” Fortunately, Medicare was voted into law in 1965 and fully implemented less than one year later, immediately improving health care access for the elderly and disabled. But our failure to achieve a national health plan further entrenched the employer-based and profit-oriented insurance system in the U.S.

In the meantime, every other industrialized nation has since adopted a universal health system, at far lower costs and with far better outcomes compared to the U.S. Even though America spends the most on health care — 18% of GDP and rising — we have the highest infant and maternal mortality rates, the lowest overall life expectancy, and the highest rate of preventable death among industrialized countries.

How do we explain the uniquely American disconnect between high spending and poor health? The main culprit is commercial health insurance, which drains billions of health care dollars in profits and overhead, and requires hospitals and doctors to maintain massive billing departments to deal with hundreds of different insurers, each with their own rules and requirements. Administration eats up more than a quarter (25.3%) of American hospital budgets, compared to 12% in Canada’s single-payer system.

It’s not too late to go back to the drawing board on health care. In fact, we only need to go back to Medicare — an efficient and popular program. We can improve Medicare’s coverage to include vision, hearing, dental, mental health and long-term care, and then expand it to cover all ages. A well designed single-payer system can save $504 billion annually on paperwork and profits, plus $113 billion more on prescription drugs.

As a primary care physician, I see more and more of my patients avoiding care due to uninsurance or skyrocketing copays and deductibles. Each day they postpone care, they get sicker. And each year that we as a nation fail to reform our health system, we will spend more money and watch our nation’s health fall further behind. A majority of Americans and their physicians now support Medicare for All. It’s time for our elected leaders to follow.

Dr. Laura Kaplan-Weisman is a family physician in Gaithersburg.

https://www.baltimoresun.com…

2019 Milliman Medical Index

By Chris Girod, FSA, MAAA, Sue Hart, FSA, MAAA, Dave Liner, FSA, CERA, MAAA Tom Snook, FSA, MAAA, Scott Weltz, FSA, MAAA
Milliman Research Report, July 2019

In 2019, the cost of healthcare for a hypothetical American family of four covered by an average employer-sponsored preferred provider organization (PPO) plan is $28,386, according to the Milliman Medical Index (MMI).

2019 MMI Components of Spending

30% $1,888 Physician
29% $1,864 Outpatient
19% $1,195 Inpatient
20% $1,282 Pharmacy
2% $137 Other

2019/2018 Annual Increase in Spending

3.6% Employer subsidy
4.1% Employee contribution
3.8% Employee out-of-pocket
4.0% Employee total
3.8% Total for employer + employee

http://assets.milliman.com…

Comment:

By Don McCanne, M.D.

For 2019, the cost of health care for a typical family of four covered by an employer sponsored PPO is $28,386. Although that is split between employer and employee contributions, it actually represents the employee’s costs since the employer contribution is paid by forgone employee wage increases. That is an increase of 3.8% over last year, higher than the current 1.6% rate of inflation.

Keep in mind that this represents the relatively healthy workforce and their young, healthy families.

The median family income in 2016 was $59,039. Although this is not the same as the family represented by the MMI, it does provide a perspective that high health care costs remain a major problem, calling for effective health care financing reform. Single payer, anyone?

Clarification:

By Don McCanne, M.D.

Although the cost of health care for a typical family of four is $28,386, the cost for an average individual is $6,348. The table of the breakdown in the 2019 MMI components of spending is for an average individual, not a family.

Stay informed! Visit www.pnhp.org/qotd to sign up for daily email updates.

We overpay for broken health care. Medicare for All would be much better and cost less.

We pay more now than we would under Medicare for All. Not only can we afford it, we can't afford anything else. Our current system is unsustainable.

By Marcia Angell, M.D.
USA TODAY, August 2, 2019

The usual response to Sen. Bernie Sanders’ Medicare for All proposal is: “It sounds good, but how can we pay for it?” But Medicare for All will, over time, actually cost less than the current system, while providing universal care.

The notion that it is unaffordable stems partly from a misunderstanding of government estimates of future health expenditures. The Congressional Budget Office, the official source of these estimates, deals only with expenditures by the federal government, not with out-of-pocket costs. Most people don’t understand that. They naturally assume that when the CBO predicts an increase in health costs, it is referring to total costs. Not so.

In addition to government costs, total expenditures also include huge out-of-pocket costs to American families — rapidly increasing premiums, deductibles and copayments and prescription drug costs. The CBO doesn’t consider these. While income taxes for some people would have to rise to cover higher government costs, in Bernie’s plan those increases would be offset by the elimination of all out-of-pocket costs. Altogether, then, total expenditures would probably be less than in our current system, and they would certainly rise more slowly.

Obamacare didn’t fix costs, coverage 

Most important, Medicare for All would cover everyone. Obamacare has certainly benefited millions of people. But it has left 30 million people still uninsured, and by continuing to rely on the private insurance industry, it has not contained costs or controlled the inflation of costs.

Bernie’s plan is not some wild, disruptive idea. Medicare has been in effect for senior citizens for a half-century, and it is the most popular part of our system. Many 64-year-olds can hardly wait to be 65 so they are eligible. Bernie’s plan would simply extend Medicare to all age groups. Moreover, Medicare for All would not be a “government-run” system or “socialized medicine,” as opponents often argue. It is merely government-financed. The delivery of care by providers would remain private, as it is now for senior citizens. Patients would have free choice of providers, without being confined to networks by insurance companies, and they would not lose their insurance because of job loss.

Many defenders of the current system argue that we should not force people to give up their private insurance, which polls suggest many of them like. But I’ve never personally met anyone who actually likes their private insurance, because it almost always entails micromanagement and onerous out-of-pocket costs. It’s just better than nothing, and they don’t want to lose what they have without being confident of a better replacement. Medicare for All is that better replacement.

Bernie’s plan would improve on Medicare by broadening the benefit package to encompass all health services (including dental, eye and hearing care) and eliminating all out-of-pocket costs. He calls for a four-year transition, beginning with dropping the Medicare eligibility age from 65 to 55, and covering all children. This is different from a “public option,” which would allow private insurance companies to skim off the healthier, more profitable customers while leaving the sickest to the public system. Instead, in the first year, everyone 55 and older would automatically be in Medicare.

Current system is unsustainable

Now, our patchwork system for those under age 65 treats health care as a commodity sold to those who can afford it or whose insurance companies will cover it. Some patients receive excessive care, and some none at all. This market-based system costs more than twice as much as the average in other advanced countries, while the outcomes are generally worse. Overhead costs are among the highest in the world. Private insurance companies, for example, spend about 12% to 18% of their revenue on overhead; Medicare spends less than 2%.

Prices in the health care system consistently rise faster than the background inflation rate because they can. Witness the big drug companies, which charge whatever the market will bear even as their profits soar. The same is true of many for-profit providers and health facilities, such as outpatient imaging centers. As prices go up, payers reduce benefit packages and increase out-of-pocket costs to try to lessen the impact. I believe an important part of Medicare for All should be to move to a largely nonprofit-provider system to curb the incentive to raise prices.

The next time you hear someone say Medicare for All sounds good but wonder how we could possibly pay for it, the answer is that we’re already paying more than enough to cover it. But too little of that money is going for actual health care and way too much for profits and overhead. And the current system is unsustainable. Not only can we afford Medicare for All, we can’t afford anything else.

Dr. Marcia Angell, former editor in chief of The New England Journal of Medicine, is on the faculty of Global Health and Social Medicine at Harvard Medical School and is the author of “The Truth About the Drug Companies: How They Deceive Us and What to Do About It.”

https://www.usatoday.com…

Medicare For All is answer to our morbid health system

By Marcosa J. Santiago, M.D.
The Laconia (N.H.) Daily Sun, August 2, 2019

Medicare, now 54 years old, is the government managed health insurance plan for seniors age 65 and older. Medicare had improved health outcomes for seniors where chronic diseases, and multiple health conditions requiring several medications, are common. A beneficiary of Medicare for 13 years, my initial contentment turned to uncertainty when supplemental, individual, and employer sponsored private-for-profit insurance premiums and drug costs sky-rocketed. The American health care system became a consumer driven, free market, multi-payer, complex infrastructure of private insurance and drug companies. The result is unchecked freedom of private corporate insurance and drug industry to impose excessive price gouging on premiums and drugs. On average, premiums rose 19.6 percent. On the ACA exchanges, older Americans, those aged 50-64 who do not yet qualify for Medicare, but must have coverage, get hit the hardest. Drug examples: insulin maker Novo Nordisk’s Novolog price jumped from $289 in 2013 to $540 this year, and Sanofi’s Lantus from $244 to $431. Unaffordable premiums and drug costs are clearly the principal problem of U.S. health care. When a majority of Americans began voicing opposition and demanding reform to this practice, private corporate insurance and drug industry started vigorous misinformation against true health care reform. The opposition’s intent is to strengthen the private stronghold to pocket more profits instead of providing adequate health care to all Americans.

The most disturbing campaign of the corporate insurance and drug industry which created the dysfunctional, inequitable, and collapsing health care infrastructure is to promote themselves as the solution. The problem cannot be the solution, as in “Obamacare,” where taxpayer-subsidized premiums and enforced enrollment entrenches instead of reduces private insurance and drug companies’ role. The number of Americans with health care insurance increased through taxpayer subsidy and Medicaid expansion, coverage for pre-existing conditions was guaranteed, children could stay on their parent’s plans until age 26 and so forth. This gave an illusion of progress but did not address the problem of health care multi-payer infrastructure. We’re paying more, but get less health care compared to other countries. Shameful results cannot be ignored — increased administrative wastes, continuing plague of millions uninsured and underinsured, bankruptcy due to medical bills, sky-rocketing premiums, drug prices, co-pays, out of pocket expenses, and surprise bills for out-of-network care.

“Go Fund Me,” bake sales, social media begging to pay for medical needs, are praised as American generosity, hiding shameful inequity and inadequacy of America’s crumbling health care infrastructure.

Sugar coating non-existent values of private-for-profit insurance that cost lives marches on. Examples: “Protect Our Care”, a misnamed insurance-industry lobby group; incremental or piecemeal approaches that guarantees the existing situation at the expense of American health care.

Protecting Medicare and expansion to cover all Americans such as “Medicare For All” are no longer muted voices; 70 percent of Americans now support “Single Payer Medicare for All.” As Medicare gained popularity, variations of proposed bills carrying the copy-cat Medicare name blossomed: “Medicare Buy-In”, “Medicare with Public Option,” and others. The latest outright push for private insurance/drug industry grip on America’s for-profit health care system is Kamala Harris’ plan with the copied label “Medicare for All.” Medicare copy-cats try to put blinders on consumers promising: “if you like your insurance you can keep it,” “excellent benefits at a price you can afford,” and “choices.” For the majority of Americans, the price you can afford offers bare-bone coverage; “choices” are severely limited by the “in-network” system.

The American health care system, as it stands, is beyond patching. Failures of the piecemeal strategy should be faced candidly, and plans retaining the private for-profit insurance and drug industries is a strategy to repeat failure.

There should be no compromise in health care. The only sensible solution is abandoning the crumbling infrastructure, and adapting a robust publicly financed, non-profit single payer national health program covering necessary medical care for all Americans. Premiums would disappear, 95 percent of all households would save money. There will be no financial barriers to care such as co-pays and deductibles, freedom of choice for doctor and hospital, insurance would no longer be tied to jobs, coverage is lifelong — no second guessing if the plan you can afford would cover maintenance and unexpected medical needs. Doctors would have freedom to deliver care without private insurance obstruction.

“True Medicare For All” bills have provisions for retraining and job placement for would-be unemployed private for-profit workers.

Now in Congress, are Rep. Jayapal’s HR-1384 in the House, and Sen Sanders’ S-1129 in the Senate. Both are the Medicare For All Act of 2019 that would establish an American single-payer health insurance — the cure for America’s moribund multi-payer health care system.

Call your representative/legislators to support these bills.

Dr. Marcosa J. Santiago is a retired child psychiatrist.

https://www.laconiadailysun.com…

BREAKING NEWS: The private insurance plans are the problem

Upgrading To National Health Insurance (Medicare 2.0)

The Case For Eliminating Obsolete Private Health Insurance

By Leonard Rodberg & Don McCanne
Common Dreams, July 13, 2007

Private health insurance was an idea that worked during part of the last century; it will not succeed through the 21st Century. With jobs increasingly service-based and short-term, the large employment-based risk pools that made this insurance system possible no longer exist. Medical care has become more effective and more essential to the ordinary person, but also more costly and capital-intensive. The multiple private insurance carriers that emerged during the last century can no longer provide a sound basis for financing our modern health care system.

Alone among the nations of the world, the U.S. has relied upon private insurance to cover the majority of its population. In the mid-20th Century, when medical care accounted for barely 1% of our gross national product, medical technology was limited, and jobs lasted for a lifetime, health care could be financed through such employment-based, premium-financed health insurance. But the time for private insurance has passed.

Health care has now become a major part of our national expenditures. The premium for an individual now averages more than $4,000 per year, while a good family policy averages more than $10,000 per year, comparable to the minimum wage and nearly one-fourth of the median family income. As a consequence, though the US spends far more on health care than any other nation, we leave millions of our people without any coverage at all. And those who do have coverage increasingly find that their plans are inadequate, exposing them to financial hardship and even bankruptcy when illness strikes.

If we believe that everyone should have health care coverage, and that financial barriers should not prevent us from accessing health care when we need it, then it has become clear that the private health insurance system cannot meet our needs. Health care has simply become too expensive to be financed through private insurance premiums.

Supporters of insurance companies claim that they create efficiency through competition. However, the truth is that insurance industry is increasingly concentrated, with three national firms, UnitedHealth, Wellpoint, and Aetna, dominating the industry. And the high and rising cost of health care shows that whatever competition there was in the past has not worked to hold down costs.

Supporters of private insurance also claim that it expands consumer choice. However, the choice of plans that these companies offer is not what consumers want; it is the choice of their physician and hospital, exactly the choice that private insurance plans, in the guise of managed care, increasingly deny us.

What has been the response of the health insurance industry to this situation? To protect their markets and try to make premiums affordable, they have reduced the protection afforded by insurance by shifting more of the cost to patients, especially through high-deductible plans. They have also targeted their marketing more narrowly to the healthy portion of the population, so as to avoid covering individuals with known needs for health care. Yet premiums continue to rise each year, increasing by nearly 70% above inflation in just the last six years.

The so-called “universal health care” proposals being put forward by mainstream politicians would simply expand the current system without addressing any of its problems. They would simply mandate that either our employers provide us with coverage or we, as individuals, purchase our own coverage in the private insurance market. These plans cannot work in the face of the high cost of premium-based coverage for even the average person. (Some proposals would offer the option of buying a competing public plan, under the theory that the public program would be more efficient and effective. The flaw here is that the public plan would attract those who are unable to afford private coverage or who are paying high premiums or have no insurance because of pre-existing conditions. Placing these high-cost individuals in a separate government pool would make it unaffordable for most other people. This “death spiral” would cause the public plan to fail.)

The main impetus for renewed interest in health care reform has been the rapid rise in costs over the last few years. Yet, while most of these proposals give lip service to the need to control costs, none actually addresses the problem in a serious way. (The introduction of health information technology and “disease management”, which some of them urge, are mere placebos; they may make politicians feel better, but studies have shown they will do little to reduce costs and may actually increase them.)

Everyone acknowledges that coverage for low-income individuals must be subsidized. But what about the average-income individual and family? If they must now be subsidized as well, we might as well throw in the towel and recognize that a more efficient, more equitable financing system has to be adopted if it has any chance of providing coverage while being affordable to the society. An individual mandate to purchase private insurance cannot provide good coverage while remaining affordable, while employer-provided coverage also can no longer be sustained as the premium costs to the employer become increasingly unaffordable.

The private insurance industry spends about 20 percent of its revenue on administration, marketing, and profits. Further, this industry imposes on physicians and hospitals an administrative burden in billing and insurance-related functions that consumes another 12 percent of insurance premiums. Thus, about one-third of private insurance premiums are absorbed in administrative services that could be drastically reduced if we were to finance health care through a single non-profit or public fund. Indeed, studies have shown that replacing the multiplicity of public and private payers with a single national health insurance program would eliminate $350 billion in wasteful expenditures, enough to pay for the care that the uninsured and the underinsured are not currently receiving.

Such a single payer plan would make possible a set of mechanisms, including public budgeting and investment planning, that would allow us to address the real sources of cost increases and allow us to rationalize our health care investments. The drivers of high cost such as administrative waste, deterioration of our primary care infrastructure, excessive prices, and use of non-beneficial or detrimental high-tech services and products could all be addressed within such a rationalized system.

In sum, we will not be able to control health care costs until we reform our method of financing health care. We simply have to give up the fantasy that the private insurance industry can provide us with comprehensive coverage when this requires premiums that average-income individuals cannot afford. Instead, the U.S. already has a successful program that covers more than forty million people, gives free choice of doctors and hospitals, and has only three percent administrative expense. It is Medicare, and an expanded and improved Medicare for All (Medicare 2.0) program would cover everyone comprehensively within our current expenditures and eliminate the need for private insurance. This is the direction we must go.

Leonard Rodberg is Research Director of the New York Metro Chapter, and Don McCanne, Senior Policy Fellow, of Physicians for a National Health Program, www.pnhp.org.

Comment:

By Don McCanne, M.D.

Breaking news? An article Len Rodberg and I wrote a dozen years ago? Well, watching today’s political intrigue around concepts to address the problems of high costs and inefficient and inequitable performance of our health care financing system might make you think that the political actors have not yet discovered the problems with our obsolete private health plans (not to be confused with the highly regulated individual plans of some other nations).

This article was written at about the same political stage in the process that led to the election of President Obama as we are now in the process leading up to the 2020 presidential election. At that time there was growing support for a single payer national health program, but elements supporting the private insurance industry were being infused into the political process, with considerable support by the media.

The neoliberals who controlled the Democratic Party were already laying down, behind the scenes, the political groundwork to keep single payer advocates out of the process. The private insurance industry moved in, generously providing advice on health policy to the Clinton and Obama camps. There was already some discussion of introducing a public option as an effort to gain the support of those who were advocating for single payer. Barack Obama abandoned his support of single payer and instead advocated for policy proposals that eventually became the Affordable Care Act. Of course he won the nomination, and the election, and then the process was off and running. We are now living with Obamacare, a program that has kept the private health plans in play (at a time that we also have seen growth in the private Medicare Advantage plans and transfer of Medicaid to private managed care organizations).

So where are we now? The same article we wrote then could be written today. In spite of all the hype about the advances brought about by Obamacare and the prospects of, yes, adding a public option, we really haven’t addressed the fundamental flaws with our health care financing system.

But this time it’s different. Sen. Bernie Sanders and some of his colleagues, including Rep. Pramila Jayapal, have provided us with the definitive single payer model of Medicare for All – a vastly superior model that would ensure that health care would be affordable and accessible for absolutely everyone forever. But is it really different now? Just as in 2007, the single payer model is being crowded out by demands that people should be able to keep their private health plans, maybe with the addition of a public option, and the media across the board is supporting that concept. With the encouragement of the insurance industry, some are now even advocating for private Medicare Advantage plans as an option not just for the elderly but for everyone, but this is merely a plot to hijack the Medicare for All label and gift it to the private insurance industry.

Last time we said we wanted a seat at the table, and we weren’t even granted that. No more! This time we need to take over the whole table. We cannot afford to make room for the private insurance industry.

Stay informed! Visit www.pnhp.org/qotd to sign up for daily email updates.

It’s time for Democrats to get their facts right on Medicare-for-all

By Pramila Jayapal
Washington Post, August 1, 2019

In the wake of the second Democratic presidential debate, it is clear that Medicare-for-all has become a defining issue of the 2020 election. Earlier this year, when I introduced our comprehensive, 120-page “Medicare for All Act of 2019,” I expected attacks from big pharma and for-profit insurance companies. But I did not expect misrepresentations from Democratic presidential candidates about what the bill is and is not.

Let’s be clear about the scale of this crisis. The United States currently spends an astronomical $3.6 trillion per year on health care — almost double what peer countries spend — and it is set to increase within 10 years to $6 trillion annually. Pharmaceuticals such as basic insulin cost up to 10 times less in Canada for the exact same drugs. Approximately 500,000 Americans turn to bankruptcy each year because they cannot afford medical costs — and that includes people with insurance.

With so much at stake, facts matter. So let’s get them right.

First, it is a myth that Americans love private insurance. The vast majority of Americans are deeply frustrated with the health-care system — even if they have private insurance. Opponents and pundits often quote polling that suggests support for Medicare-for-all drops when you tell people that their private insurance plan would go away. But when polls accurately describe Medicare-for-all, and explain that you can keep your doctor or hospital, the majority support increases. People are happy to get rid of private insurance; they just want to know they can keep their doctors and hospitals, even if they switch or lose their jobs. Medicare-for-all would let them do so.

Second, it’s wrong to assert that taxes will rise without talking about what health care currently costs Americans in premiums, co-pays and deductibles. The average American family with employer-sponsored insurance incurs more than $28,000 dollars in health-care costs per year, of which about $15,800, or 56 percent, is paid by employers. And many argue they still can’t get the care they need. Americans are smart enough to be asked questions like: Would you be willing to pay more in taxes each month if you saved more money by not paying private insurance premiums, deductibles and co-pays and were guaranteed high-quality health care?

Third, it is simply false that labor unions don’t want Medicare-for-all. Sure, they fought hard for employer-sponsored health insurance plans for their workers. But they, above all others, recognize that the rising costs of insurance premiums are directly related to stagnating wages and, more and more, the pressure of those costs hurts worker power at the bargaining table. Take a look at the unprecedented number of unions that have endorsed our bill, all of which know Medicare-for-all is necessary.

Fourth, comparisons of Medicare-for-all to the GOP’s push to “repeal and replace” the Affordable Care Act are simply unfounded. Republicans are the only ones trying to take away health care. There is absolutely no daylight between leading on Medicare-for-all and fighting to shore up the ACA right now, or stopping the GOP from stripping care away. The Affordable Care Act made profound improvements to our health-care system. But it was never meant to be the end goal, since it does not address the real disease in our system: a profit motive that leaves millions either without access to care, bankrupt or unable to afford medication in the world’s richest country. We can strengthen the ACA and work toward Medicare-for-all at the same time. Even former president Barack Obama agrees.

Fifth, we simply cannot expect to bring down the costs of health care in the United States without taking on the for-profit insurance and pharmaceutical corporations, which are raking in billions of dollars at the cost of American lives. Incremental steps such as a public option might sound appealing but would still leave more than 10 million people without coverage while keeping in place a costly private-insurance middleman that eats up 25 to 30 percent in administrative waste and profits. If we want to achieve true universal health care while containing costs, Medicare-for-all is the only answer.

Finally, Democratic candidates should stop using one-liners from industry front groups and Republican playbooks — such as “Medicare-for-all would shutter hospitals,” or telling seniors that “Medicare goes away as you know it. All the Medicare you have is gone.” These claims — amplified by contributions from the private health-care industry — are designed to incite fear and sow confusion. I’ve spoken with several hospital CEOs who see Medicare-for-all as a lifeline for their hospitals — particularly safety-net and rural hospitals that are barely surviving under the current system. And my Medicare-for-all bill improves Medicare for seniors by adding additional benefits such as dental, vision, hearing and long-term care.

As the debates continue, I hope that my fellow Democrats will take a good look at our bill and get the facts right. The Medicare-for-all movement has overwhelming public support, unprecedented grass-roots organization, and a serious plan that is ready to change our health-care system right now.

Health care is the top issue for voters, and they deserve to know the truth about the solutions we are proposing. I’m willing to debate Medicare-for-all with anyone — but we owe it to all Americans to stick to the facts.

Pramila Jayapal, a Democrat, represents Washington’s 7th Congressional District in the U.S. House.

https://www.washingtonpost.com…

A for-profit company bought, then closed, a Philadelphia hospital. Medicare for All could have saved it.

Hahnemann University Hospital in Philadelphia is slated to close in September, less than two years after a private equity firm bought it.

By Walter Tsou, M.D., M.P.H.
Tarbell, August 1, 2019

Fifty-four years ago, President Lyndon Johnson went to Independence, Mo., to present the first Medicare cards to President and Mrs. Harry Truman and to sign the Medicare Act of 1965.  Said Johnson, “Through this new law . . . every citizen will be able, in his productive years when he is earning, to insure himself against the ravages of illness in his old age. This insurance will help pay for care in hospitals, in skilled nursing homes, or in the home. And under a separate plan it will help meet the fees of the doctors.”  Thus was born the most successful and popular health insurance program in the U.S., Medicare. It was a time of remarkable affirmation of the role of government in offering protections to its citizens – civil rights, voting rights, Medicare and Medicaid, among others – all passed under the signature of President Johnson.

In the ensuing years, we have seen a diminishing role of government in protecting health care and the rise of entrepreneurship and for-profit medical care. Health care news is reported as business, and the majority of Americans are confused by the new business lexicon of health care – “copays, deductibles, networks, prior authorizations, EMRs, etc.”  Everyone agrees that the cost of health care is too high. It is the leading cause of personal bankruptcy – the “crime” of getting sick and being unable to pay your medical bills. And to add insult, the majority of those who go bankrupt have health insurance but have the misfortune of being “out of network” or “denied coverage” or unable to cover copays and deductibles.

The for-profit American Academic Health System bought Philadelphia’s Hahnemann University Hospital and St. Christopher’s Hospital for Children in 2018, keeping them afloat but extracting what profit it could.  In July, American filed for Chapter 11 bankruptcy. St. Christopher’s, a profitable entity, will be sold. Unprofitable Hahnemann appears to be more valuable for its location than as a safety-net hospital to its owners.  After 134 years, the hospital is shutting down, leaving a huge void in the medical care of city residents, particularly the poor.

According to a recent CNN report, as Hahnemann’s shutdown proceeds, another hospital in downtown Philadelphia, Thomas Jefferson University Hospital, is seeing as many as 290 emergency room patients a day, up from 175. Jefferson’s maternity ward, anticipating a delivery rate of 1,800 for the year, now expects to handle about 2,800 births. The hospital’s president told CNN most of these new patients are on Medicaid.

Government has failed here on several levels.  Unwisely, Hahnemann was never zoned as a hospital area, ensuring that any entrepreneur could buy the property, conveniently located near the Pennsylvania Convention Center, and convert it into yet another luxury condominium or hotel.  Medicare and especially Medicaid reimbursement are simply too low. Some say that this is proof that Medicare for All would bankrupt hospitals, but actually it would do the opposite – pay hospitals a guaranteed amount on a global budget and free hospitals from the multimillion dollar expense of hiring hundreds of billing personnel. It is more than likely that Hahnemann would still be operational if it had a guaranteed global budget payment system.

Philadelphia has become not only a destination for college graduates but also for suburban empty-nesters who are moving to Center City for its arts, culture, transportation and, wait for it . . . medical care.  We are getting older, and close proximity to medical care is a huge draw for wealthy retirees who would love to plant their dollars in our city. The current building boom downtown has left the city with plenty of condos but a dwindling number of hospitals.

Medicare’s 54th anniversary reminds us that government once saw its role of ensuring a safety net for its citizens as part of a series of rights:  civil, voting, health. Sadly, the government has deferred its role to the entrepreneurs who have taken over health care, leaving all Americans to fend for ourselves and without a net.  We need to protect those who protect us, and we must do that by prioritizing health care in our zoning, our reimbursements, our regulations and our laws.

Dr. Walter Tsou is a national board advisor to Physicians for a National Health Program; an adjunct professor of family and community health at the University of Pennsylvania; former Philadelphia Health Commissioner (2000-2002), and a past president of the American Public Health Association.

https://tarbell.org…

Medicare for All Explained Podcast: Episode 17

Interview with Jonathan Michels

August 1, 2019

Radiology technician and premed student Jonathan Michels discusses the student-led movement to pressure the American Medical Association to reconsider its regressive stance on single-payer Medicare for All. Hosted by Joseph Sparks. Additional episodes will be uploaded twice monthly. Subscribe in iTunes, or access a complete archive of the podcast, below.

https://medicareforallexplained.podbean.com

After Last Night’s Debate, A Deep Dive On Medicare For All

Interview with Dr. Paul Song

By Larry Mantle
KPCC, AirTalk, July 31, 2019

Last night’s Democratic presidential debates included a discussion on health care reform.

Perhaps one of the most notable moments was when former Maryland congressman John Delaney questioned the feasibility of Medicare for all and Senators Bernie Sanders and Elizabeth Warren came back with sharp responses.

But neither Sanders or Warren addressed Delaney’s criticism of their plan.

To grapple with the various strategies candidates presented at last night’s debates for implementing Medicare for all, Larry sits down with three health care experts.

Guests:

Kavita Patel, M.D., non-resident senior fellow at The Brookings Institution and primary care physician; she served in the Obama administration as director of policy for the Office of Intergovernmental Affairs and Public Engagement in the White House.

Avik Roy, president of The Foundation for Research on Equal Opportunity, a non-profit think tank, policy editor at Forbes and former policy advisor to Marco Rubio, Rick Perry and Mitt Romney.

Paul Song, M.D., radiation oncologist and President of the California chapter of Physicians for a National Health Program.

full audio here:
https://www.scpr.org…

A Medicare for All monopsony would get the prices right

The Opportunities and Limitations of Monopsony Power in Healthcare: Evidence from the United States and Canada; NBER Working Paper 26122

By Jillian Chown, David Dranove, Craig Garthwaite, and Jordan Keener
National Bureau of Economic Research, July 2019

Abstract

Perhaps more than any other sector of the economy, healthcare depends on government resources. As a result, many healthcare systems rely on the use of government monopsony power to decrease spending. The United States is a notable exception, where prices in large portions of the healthcare sector are set without government involvement. In this paper we examine the economic implications of a greater use of monopsony power in the United States. We present a model of monopsony power and test its predictions using price differences between the United States and Canada – a country that represents an example of a “Medicare for All” style system. Overall, we find that wage differences for medical providers across the two countries are primarily driven by the broader labor market while price difference for prescription drugs are more directly the result of buyer power. We discuss theoretical reasons why a Canadian monopsonist may be more willing to exploit its buyer power over prescription drugs rather than provider wages and why a U.S. monopsonist might not be willing to do the same.

From the Introductory Comments

Health care spending varies markedly across countries. It is widely accepted that at least a portion of spending differences results from the willingness and ability of governments to exercise monopsony power when purchasing healthcare goods and services. Broadly speaking, governments that finance healthcare services often use their buyer power to push down the prices paid for healthcare inputs such as pharmaceutical products, medical devices, and the wages of medical providers. Differences in the willingness and ability to exercise buyer power certainly contributes to the considerable healthcare price and wage dispersion across countries. However, the degree to which these price differences across countries are the result of buyer power as opposed to other economic forces is an open question that we explore in this paper.

At an aggregate level, the United States stands at an extreme of a relatively parsimonious government role in the financing of healthcare services, a limited use of government buyer power, and a relatively large percentage of its economic activity occurring in the health sector. Concerned about the rising cost of U.S. healthcare, many policymakers have proposed that the federal government make greater use of its buyer power. Proposals include various “Medicare-for-All” policies that would expand existing public insurance systems to cover more than simply the elderly, poor and disabled, as well as more limited proposals, such as requiring Medicare to use its size to negotiate lower pharmaceutical prices. The economic effects of a greater use of monopsony power obviously depend on the specifics of the proposed policy reform. While proponents have offered a variety of “Medicare-for-all” alternatives, we will use the term in this paper to refer to a truly single payer system where no private insurance options exist. Under this option, which has been proposed by numerous policymakers, the federal government would be the single purchasing agent for all Americans.

The potential savings from implementing such a single payer system would primarily come from two sources: (1) decreased administrative costs resulting from a single firm providing health insurance and (2) the exercise of buyer power to reduce input prices. We will briefly discuss the former before moving on to the latter, which is the main focus of this paper.

Centralizing insurance in a single entity would certainly eliminate some duplicative administrative functions. In addition, a single insurer that lacked competitive pressures would likely have lower marketing expenses.

While administrative expenditures are a potential source of savings, a single payer aiming to meaningfully reduce spending would, by necessity, follow the proverbial “Willie Sutton” rule of health spending and target the prices paid to healthcare inputs such as medical providers and pharmaceuticals. These input prices represent the bulk of U.S. healthcare spending with labor costs comprising approximately 60 percent (Kocher and Sahni, 2011) and pharmaceuticals accounting for an additional 15 percent. A government payer could cut both of these prices either by directly reducing the fees paid to physicians, other medical personnel, and pharmaceutical manufacturers or by reducing payments to hospitals and other institutions, which would then have to reduce their costs (i.e., cut wages and reduce other medical inputs) to remain financially viable.

Proponents of an expanded use of government buyer power frequently cite the experiences of other developed countries that have both far more extensive government involvement in healthcare and lower health spending. Within these comparisons, the Canadian system is perhaps the most similar to Medicare-for-all. In Canada, provincial governments offer health insurance and finance care delivery under rules established by the government, but medical services are mostly provided by private providers in privately owned and operated facilities. The similarity of the Canadian system to many U.S. proposals for Medicare-for-all can perhaps be most clearly seen in Senator Bernie Sanders (I-VT) explicit statements that the Canadian system is a model for his widely discussed universal coverage proposal (Kliff 2017). Thus, the decisions of Canadian insurers provide perhaps the best evidence of the potential optimal savings available from the creation of a single monopsonist in the United States.

In this paper, we present a simple theoretical model to predict the optimal decisions of a healthcare monopsonist such as Canada. We then use price data across the U.S. and Canada to empirically test the predictions of this model to help understand the scope of savings optimally available to a similar monopsonist in the United States.

The predictions of the model suggest the optimal exercise of market power will differ based on both the relative size of the monopsonist in the relevant market and the resulting elasticity of supply it faces. We test the predictions of this model using U.S. and Canadian price data for two key inputs of healthcare services: prescription drugs and medical providers.

Given our model predicts a different response based on the monopsonist’s relative market size (and therefore the respective elasticity of supply), it predicts different exercises of market power across these two input markets. Specifically, our model predicts the Canadian monopsonist would exercise more of its market power for pharmaceuticals than for labor.

We find evidence that the Canadian monopsonist does exercise buyer power with respect to drugs. Using highly detailed pricing data that has not been previously studied for this purpose, we estimate that for a consistent basket of pharmaceutical goods, Canadian consumers pay 54 percent less than Americans.

Our analysis finds that Canadian drug prices are 54 percent lower – a difference that is far greater than for other goods and services. We interpret this as evidence that Canadian provincial governments are willing and able to exercise monopsony power over drugs to a greater degree than in the labor market – which is consistent with our monopsony model’s predictions.

The fact that Canadian wages for highly skilled employees show limited evidence of an exercise of buyer power while prescription drug prices indicate a large role for the public payer’s negotiations suggests that Canadian policymakers carefully consider the potential consequences of exploiting monopsony power in healthcare markets. For products where Canadian consumers represent a relatively small part of the market, such as prescription drugs, policymakers have the freedom to exploit buyer power without meaningful consequences – and they do. In contrast, in labor markets, Canadian policymakers must contend with the fact that if they use their negotiating power to push down input prices it could have large and potentially harmful short and long term consequences for healthcare labor supply.

From the Conclusions

In this paper, we examine the role of monopsony power in healthcare markets by comparing prices and quantities of healthcare inputs in Canada and the United States. We provide a theoretical framework and empirical evidence for the optimal behavior of a monopsonist. We focus on two critical inputs to the healthcare production function that illustrate key features of the theoretical model – labor and prescription drugs. In line with the theoretical expectations we outline, we find that the Canadian monopsonist is more willing to exploit its market power over prescription drugs than provider wages.

Examining a market basket of prescription drugs, we find that prices in Canada are 54 percent lower than in the U.S. This price differential is much larger than the general cost-of-living differences between the two countries, which we interpret as evidence that the Canadian monopsonist is willing to use its power to lower the cost of this particular medical input. This is in line with our theoretical expectations: because Canada represents a small share of the global drug market, policymakers are able to exploit their buyer power without incurring broader consequences, such as reducing innovation.

In contrast, we find that the differential in provider wages between the U.S. and Canada can largely be explained by differences in the prevailing labor market conditions, implying that the Canadian monopsonist is not willing to exercise the full scope of its buyer power for this input. In particular, we find that Canadian medical workers earn about 24 percent less than their American counterparts. If this was solely the result of profligate U.S. health spending, we should expect that U.S. providers would not only be paid more than their Canadian counterparts but also relatively more than other highly skilled professionals in the United States. This is not the case. We primarily attribute differences in wages for U.S. medical providers to the structure of the broader labor market; i.e., U.S. providers are paid more than in Canada because all highly skilled U.S. professionals are paid more than in Canada. In particular, high skilled healthcare workers in Canada make about 26 percent less than similar workers in the United States, while high skilled non-healthcare workers make 22 percent less. Thus, the vast majority of the 26 percent wage differential likely reflects overall labor market conditions. The remaining 4 percentage point differential between healthcare and other professional wages may reflect a variety of factors—potentially including inefficiencies in the U.S. system that provide excess wages to healthcare providers or a choice by the Canadian monopsonist to exploit some of its market power.

Our findings are consistent with the idea that the Canadian monopsonist believes that a substantial reduction in the wages of physicians and other healthcare workers could cause a reallocation of talent across the economy. This is true even conditional on similar individuals receiving medical training. These individuals have a number of opportunities beyond clinical practice, and there are some reports physicians are increasingly choosing these options (Mostue 2017). Perhaps more concerning would be a reallocation of talent out of medical training altogether. For example, if the U.S. took steps so that its physicians were paid the same as Canadians, this would move physicians from the second highest paid profession in the U.S. to the eighth highest paid profession — situated just above computer engineers, mathematicians and biomedical engineers. This change in relative pay could push many talented young individuals considering medicine into entirely different fields. Given this concern, it should perhaps not be surprising that even the Canadian monopsonist does not appear to have chosen to meaningfully exercise its wage setting power. In Canada, as in the United States, physicians and surgeons are among the highest paid employees in society.

Taken together, our findings should temper the expectations of anyone who believes that Medicare-for-all will drive U.S. health spending to Canadian levels. Most health spending goes toward labor expenses. Returning to the Willie Sutton analogy, while labor is “where the money is,” a U.S. monopsonist might find, just as in Canada, that it is not worth “robbing the bank” by lowering labor expenses, as this would drive highly skilled workers into other fields. And while the U.S. monopsonist could drive down drug prices to levels at or below those in Canada, it might be tempered by concerns about disruptions to long term drug supply, a problem not shared by the much smaller Canadian monopsonist.

https://www.nber.org…

Comment:

By Don McCanne, M.D.

In the debate over the proposal for a single payer model of Medicare for All, the claim is often made that giving the government that much power to set prices (functioning as a monopsony – a single purchaser of health care) would drive physicians and hospitals into insolvency thus decreasing access to health care. This NBER paper is important because it shows what is actually happening in Canada under its single payer model of health care financing and what might happen in the United States under a single payer Medicare for All monopsony.

Many studies have shown that much of the administrative waste that characterizes the health care financing system in the United States would be recoverable under a single payer system. But a single payer would also have the monopsonistic power to drive down prices, potentially saving even more funds. So how has Canada, with its Medicare for All-like system, utilized its monopsonistic power?

Canada has driven down drug prices so that they are 54 percent lower than in the United States. They have been able to do that since their drug market is only about one-tenth of that in the United States, thus there is no fear that lower profit margins would have any impact in suppressing new drug innovation. This fear of suppressing innovation has been expressed repeatedly in the United States considering our very large drug market, but other factors not addressed here suggest that the costs of drug innovation do not justify the price gouging that is taking place in the U.S.

What is particularly striking in this paper is that Canada is not using its monopsonistic power to drive down wages and salaries in the health care industry to levels that are comparable to those in our traditional Medicare program. Rather they are pricing health care wages based on prevailing labor market conditions.

In the United States, Medicare has exercised its monopsonistic power to drive prices down to levels that some claim to be below costs. It is the private insurance sector that has been complicit with driving prices up, and Medicare has been able to offset some of the excessive pricing through its monopsonistic leverage.

Private insurers have at least two incentives to drive up prices. Revenue in excess of medical losses (costs of patient care) are retained by the insurer to fund their own administrative costs and to provide profits. Their primary product is administration and the more administrative services they can sell, the better for them. So private insurers contribute directly to high health care costs in the U.S. both by driving up prices and by generating ever more administrative waste.

But in Canada, the public stewards are pricing health care at a level that ensures an adequate health care labor supply yet not wasting taxpayer funds on excessive prices. Further, through the administrative simplicity of the single payer model, they are not wasting financial resources that are better used for patient care,

In the United States, we are now seeing a softening of the demand to enact single payer Medicare for All while at the same time we are seeing the manipulation of public opinion in support of ensuring the preservation of the option to choose private insurance plans. This is backwards. The private insurers are in the business to increase their revenues (waste our funds) whereas publicly financed and administered systems are public service systems that have a mission to provide us with the greatest value in health care. They can do that with a monopsony that gets the prices right by balancing legitimate costs with patient needs. The private insurers will not do that for us.

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The challenges of a Medicare public option for the private insurance market

How a Medicare Buy-In or Public Option Could Threaten Obamacare

By Reed Abelson
The New York Times, July 29, 2019

It seems a simple enough proposition: Give people the choice to buy into Medicare, the popular federal insurance program for those over 65.

Former Vice President Joseph R. Biden Jr. is one of the Democratic presidential contenders who favor this kind of buy-in, often called the public option. They view it as a more gradual, politically pragmatic alternative to the Medicare-for-all proposal championed by Senator Bernie Sanders, which would abolish private health insurance altogether.

A public option, supporters say, is the logical next step in the expansion of access begun under the Affordable Care Act, passed while Mr. Biden was in office. “We have to protect and build on Obamacare,” he said.

But depending on its design, a public option may well threaten the A.C.A. in unexpected ways.

A government plan, even a Medicare buy-in, could shrink the number of customers buying policies on the Obamacare markets, making them less appealing for leading insurers, according to many health insurers, policy analysts and even some Democrats.

In urban markets, “a public option could come in and soak up all of the demand of the A.C.A. market,” said Craig Garthwaite, a health economist at the Kellogg School of Management at Northwestern University.

And in rural markets, insurers that are now profitable because they are often the only choices may find it difficult to make money if they faced competition from the federal government.

Some insurers could decide that a smaller and uncertain market is not worth their effort.

If the public option program also matched the rates Medicare paid to hospitals and doctors, “I think it would be really hard to compete,” Mr. Garthwaite said. Even leading insurers do not have the leverage to demand lower prices from hospitals and other providers that the government has.

The A.C.A. is now a solidly profitable business for insurers, with several expanding options after earlier threats to leave. For example, Centene, a for-profit insurer, controls about a fifth of the market, offering plans in 20 states. It is expected to bring in roughly $10 billion in revenues this year by selling Obamacare policies.

In spite of stock drops because of investors’ concerns over Medicare-for-all proposals, for-profit health insurers have generally thrived since the law’s passage.

But a buy-in shift in insurance coverage could profoundly unsettle the nation’s private health sector, which makes up almost a fifth of the United States economy. Depending on who is allowed to sign up for the plan, it could also rock the employer-based system that now covers some 160 million Americans.

Some experts predict that private insurers will adapt, while others warn that the government could wind up taking on the sickest customers with high medical bills, leaving the healthier, profitable ones to private insurers.

One variant of the public option — letting people over 50 or 55 buy into Medicare — is often depicted as less drastic than a universal, single-payer program. But this option would also be problematic, experts said.

This consumer demographic is quite valuable to insurers, hospitals and doctors.

Middle-aged and older Americans have become the bedrock of the Obamacare market. Some insurers say this demographic makes up about half of the people enrolled in their A.C.A. plans and, unlike younger people who come and go, is a reliable and profitable source of business for the insurance companies.

The aging-related health issues of people in this group guarantee regular doctor visits for everything from rising blood pressure to diabetes, and they account for a steady stream of lucrative joint replacements and cardiac stent procedures.

Several experts said that designing a buy-in program that is compatible with the existing public and private plans could be daunting.

“You’d have to do it carefully,” said Representative Donna Shalala, a Florida Democrat who served as the secretary of health and human services under President Bill Clinton.

Linda Blumberg, a health policy expert at the Urban Institute, a nonpartisan think tank, agreed. “The idea of Medicare buy-ins was taken very seriously before there was an Affordable Care Act,” she said. “In the context of the A.C.A., it’s a lot more complicated to do that.”

Blue Cross plans could lose 60 percent of their revenues from the individual market if people over 50 are shifted to Medicare, said Kris Haltmeyer, an executive with the Blue Cross Blue Shield Association, citing an analysis the company conducted. He said it might not make sense for plans to stay in the A.C.A. markets.

Siphoning off such a large group of customers could also lead to a 10 percent increase in premiums for the remaining pool of insured people, according to the Blue Cross analysis. More younger people with expensive medical conditions have enrolled than insurers expected, and insurers would have to increase premiums to cover their costs, Mr. Haltmeyer said.

Dr. David Blumenthal, the president of the Commonwealth Fund, a foundation that funds health care research, said a government plan that attracted people with expensive conditions could prove costly.

“You might, as a taxpayer, become concerned that they would be more like high-risk pools,” he said.

Jonathan Gruber, an M.I.T. economist who advised the Obama administration during the development of the A.C.A., likes Mr. Biden’s plan and argues there is a way to design a public option that does not shut out the private insurers.

“It’s all about threading the needle of making a public option that helps the failing system and not making the doctors and insurers go to the mat,” he said.

While Ms. Shalala supports a public option as an alternative to “Medicare for All,” she is clear about how challenging it will be to preserve both Obamacare and the private insurance market. “You can’t do it off the top of your head,” she said.

https://www.nytimes.com…

Comment:

By Don McCanne, M.D.

To many, the debate about health care reform does not seem very complicated. Prevailing thought seems to be that we should leave employer-sponsored plans alone, allowing people to choose them if they want. We should also allow individuals to purchase a newly-created Medicare public option if that is their preference. Some would still prefer single payer Medicare for All as a plan that covers everyone since that would resolve health care coverage issues forever, though the KFF poll released today shows that 55% of Democrats would prefer building on the existing Affordable Care Act whereas only 39% would prefer replacing is with a national Medicare for all plan, whereas 62% of Republicans oppose even a public option. So it seems that we should use the democratic process to see which route the majority prefers and then go with that.

But the message in Reed Abelson’s New York Times article shows that it is not that simple. The policy considerations behind the various approaches are very complex. They mostly boil down to the fact that fragmenting the health care financing system introduces inefficiencies, inequities, and profound administrative complexities which divert an inordinate amount of funds from actual patient care, and leave many without the care they need.

What is somewhat instructive are the separate views of Jonathan Gruber and Donna Shalala, both of whom have had considerable experience with our health financing system. They both express the view that reform should preserve the role of private insurers (but why?). Gruber says, “It’s all about threading the needle,” whereas Shalala says, “You can’t do it off the top of your head.”

Preserving the private insurance sector creates a tremendous policy challenge that can be negotiated only by compromising on efficiency, effectiveness and equity, while agreeing to greatly expand our health care spending – already by far the highest in the world.

Why does the policy community keep trying to sideline the definitive model that would work best for all of us – single payer Medicare for All? Are people really that enamored over their private plans that nobody is able to keep over the decades anyway (60 million people leave their jobs each year)? Why are we bending over backwards to keep such a dysfunctional system in place?

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