By Ed Weisbart, M.D.
St. Louis Metropolitan Medicine, Commentary, June/July 2020
In the 1940s, Winston Churchill is rumored to have said “Never let a good crisis go to waste.”1 If he did say this, he was referring to the unlikely trio of himself, Stalin and Roosevelt creating opportunities in the midst of a global crisis. The world was changed by their combined capacity to imagine a better way forward.
Another global crisis is upon us, and once again we need to imagine a better way forward.
The pandemic has unmasked the hazards of linking health insurance to employment, along with our health care system’s long-standing inefficiencies, poor outcomes and injustices and disparities.
The same war that drove Churchill to seek such unusual bedfellows also drove American businesses to attract and reward employees with access to lifesaving medical care through employer-sponsored health insurance. Decades later, we are still locked into a failing system of job-based coverage. For many workers, losing that job for any reason—your own underperformance, your own entrepreneurship or a major change in the economy—jeopardizes your continued access to health care.
Our strategies to address COVID-19 must also address these systemic faults with our system. Let us do that by building on the successes of Medicare, improving its obvious shortcomings, and providing that to all of us.
Why Base a Solution on Medicare?
Medicare is far from perfect, but even in its present state it brings tremendous value.
Medicare patients may worry about surviving the pandemic, but they have the peace of mind that their health insurance will be there even in the worst of times. If Medicare already covered all Americans, the pandemic would not require emergency legislation to ensure access to affordable screening, prophylaxis and treatment for coronavirus. Even in the most desperate days of Italy’s catastrophe, Italians were not afraid to seek treatment due to cost, or worried about personal bankruptcy from medical bills.2 Universal health care is not a panacea and certainly did not shield Italy from the coronavirus, but it did shield Italians from some of the worst economic consequences.
Traditional Medicare offers a national network including virtually every hospital and 93% of non-pediatric primary care physicians.3 I know octogenarian Floridians on Medicare who have flown to St. Louis for world-class subspecialty care, never having to ask for permission from their insurance company. Every American should have the freedom to choose their own health care.
Even outside of a pandemic, Medicare has a favorable impact on Americans’ health. After worst-in-class mortality rates for the first 65 years of our lives, American mortality rates quickly improve to the best in the world upon reaching the age of Medicare eligibility. (Fig.1) This should make us enormously proud; it’s only possible because we have many of the world’s best physicians, nurses, pharmacists, hospitals and the rest of the delivery system. We just don’t let everyone in until age 65.
Medicare also reverses racial disparities in life expectancy. In Missouri, African-American lives are 3.3 years shorter than those of whites.4 Nationally, 86% of the causes of these premature deaths are from conditions amenable to medical prevention and treatment.5 That suggests that part of the life expectancy gap is related to the fact that African-American Missourians are 40% more likely to be uninsured than are white Missourians (14% vs 10%)6 along with a broadly different mix of insurance products.
We have clear evidence that Medicare coverage reduces and even reverses racial health disparities. For example, every American who needs dialysis can enroll in Medicare regardless of age. Once on dialysis, African-Americans enjoy the same insurance as all other Americans and survive longer than whites on an age-matched cohort.7
One argument in favor of our private insurance industry is the proposition that it makes health care more affordable. But private health insurance has shown an unimpressive track record of controlling costs. Over the past decade, the cumulative growth in per-enrollee spending in Medicare has increased 21.5%; the comparable figure for private health insurers is 52.6%,8 a relative difference of 244%. (Fig. 2)
Medicare has provided American seniors with decades of success, more individual freedom, better health outcomes and greater economic efficiencies. Each of these attributes of Medicare could be available to all of us.
Improved Medicare for All is a public-private partnership without the waste of today’s corporate insurance middlemen. Proposed legislation, HR1384 and S1129, would improve the flaws with traditional Medicare and provide that to Americans of every age. With such robust universal insurance, the niche for commercial insurers virtually disappears, simplifying both the patient experience and independent medical practice.
Medicare for All would:
- Provide first-dollar coverage of all medically necessary care, funded by an equitable tax model;
- Include all essential benefits like dentistry, optometry, audiology, pharmacy and long-term care;
- Transition hospitals to global budgets instead of today’s complex schemes, reducing their operating overhead and aligning their business interests with the public health imperatives of their communities;
- Streamline physician reimbursements with fee-for-service, salary or capitation. Every physician and medical group would be free to select the model they prefer. Rather than having to accept employment in a large system, physicians would find the business of running a practice far less onerous and be more able to retain their independence if that were their preference;
- Adopt one clinically based formulary with ready access to evidence-based medical exceptions;
- Include many more features as defined by the Working Group on Single-Payer Program Design.9
Despite all of these benefits for patients and physicians, I would not be on board with Medicare for All were I not convinced that it is the most prudent strategy. Hundreds of independent economists,10 including dozens of the most prestigious,11 all came to the same conclusion: the U.S. would either break even or, more likely, have considerable economic savings by switching to Medicare for All. These studies do not even account for the indirect benefits, such as savings on workers’ comp, improved health or increased productivity.
The two strategies that drive the economics of Improved Medicare for All are the same two strategies employed by most successful businesses: structural efficiency and meaningful price negotiations.
Medicare operates with an overhead of 2.3%, as compared to the 12-18% overhead of commercial insurers.12 Medicare achieves these low levels of overhead because—unlike private insurance companies—it does not need legions of staff for sales, advertising, account management, aggressive utilization management, redundant information systems, eight-figure executive salaries and shareholder profits.
Some critics claim that Medicare for All would hurt physicians and hospitals financially. However, neither Medicare for All bill proposes using the current Medicare fee schedule. Instead, the bills establish a “physician practice review board to assure … fair reimbursements for physician-delivered items and services.”13 These boards would be regionally representative and also bear responsibility for quality assurance and cost effectiveness.
Three recent studies (Mercatus, 2018; Rand, 2019; and Urban Institute, 2016) projected payments to physicians would remain close to the current $688 billion; their estimates under Medicare for All were $681 billion, $673 billion and $774 billion respectively.
In fact, Medicare for All would provide hospitals with tremendous savings. Today, hospitals in the United States spend 25% of their total budget on administration and billing, more than double what is required at comparable institutions in single-payer nations.14
Similar excesses exist in American physician office overhead; U.S. physicians spend two to three times as much as our Canadian colleagues on billing.15 The overall average Canadian clinical payment per physician in 2018 was $344,978; in family medicine $280,763; psychiatry was $278,069; dermatology was $384,786; ob-gyn was $391,743; ophthalmology was $768,958.16
Malpractice insurance costs are far less onerous in Canada. The Canadian Medical Protective Association reports that 2019 malpractice premiums for family medicine in Quebec were $1,583; in British Columbia and Alberta, the rates were $3,420.17 The 2019 average internal medicine premium in Missouri the same year was $13,425.18
Perhaps the most telling and quantifiable measure of the impact of single payer on medical practice comes from an analysis of the average number of characters per ambulatory progress note in electronic medical records. Epic, one of the world’s most common EMRs, is implemented differently in every institution around the world. Epic carefully optimizes each unique installation in every institution, optimizing the software to meet the particular needs of the specific setting. In 12 other modern nations, these notes average 1,000 characters. In the United States, the average is 4,000 characters.19 Here, our charting is structured to optimize reimbursement and protect against malpractice claims. Elsewhere, it is primarily focused on meeting the clinical requirements of a medical record.
When faced with an opportunity to relieve many of the pressures on medical practice, let’s ensure that every American can get all medically necessary care, and reduce the economic drain that has taken over our national economy. The imperative to move forward with Medicare for All is clear.
Ed Weisbart, MD, CPE, FAAFP, is chair of the Missouri chapter of Physicians for a National Health Program and an assistant professor of clinical medicine at Washington University School of Medicine. He can be reached at email@example.com.
- Quora.com. https://www.quora.com…
- Speri A. Why I’d Rather Be in Italy for the Coronavirus Pandemic. The Intercept. March 12, 2020. https://theintercept.com…
- Boccuti C, Fields C, Casillas G, Hamel L. Primary Care Physicians Accepting Medicare: A Snapshot. Kaiser Family Foundation. Oct. 30, 2015. https://www.kff.org…
- Lewis K, Burd-Sharps S. The Measure of America 2013-2014. Measure of America. http://www.measureofamerica.org…
- CDC, MMWR, May 2, 2017.
- Uninsured Rates for the Nonelderly by Race/Ethnicity. Kaiser Family Foundation. 2018. https://www.kff.org…
- Norris K, Mehrotra R, Nissenson A. Racial Differences in Mortality and End-Stage Renal Disease. American Journal of Kidney Disease. Aug 2008. https://www.ncbi.nlm.nih.gov…
- Gaffney A, Woolhandler S, Angell M, Himmelstein D. Moving Forward from the Affordable Care Act to a Single Payer System. American Journal of Public Health. June 2016. https://ajph.aphapublications.org…
- Partners for Dignity and Rights. More than 250 Economists Sign Letter Backing Medicare for All. May 21, 2019. https://dignityandrights.org…
- Kahn J., et al., Economists conclude that Medicare for All (M4A) could be considerably less expensive than the current healthcare finance system. The Hopbrook Institute. Feb. 20, 2020. https://www.hopbrook-institute.org…
- 2018 Medicare Trust Fund Report, and SEC filings for 1st or 2nd quarters, 2019. Note: Overhead here is defined as 1 – (medical benefits/premiums)
- HR 1384 of the 116th Congress. Sec 612(b)
- Himmelstein D, et al. A Comparison Of Hospital Administrative Costs In Eight Nations: US Costs Exceed All Others By Far. Health Affairs. Sept. 2014. https://www.healthaffairs.org…
- Song Z, Ji Y, Safran D, Chernew M. Health Care Spending, Utilization, and Quality 8 Years into Global Payment. NEJM. July 18, 2019. https://www.nejm.org…
- Canadian Institute for Health Information. Figures are pre-tax in Canadian dollars. https://www.cihi.ca/en
- Canadian Medical Protective Association. www.cmpa-acpm.ca
- Gallagher Healthcare website. https://www.gallaghermalpractice.com…
- Downing N, Bates D, Longhurst C. Physician Burnout in the Electronic Health Record Era: Are We Ignoring the Real Cause? Ann Intern Med 2018; 2018;169(1):50-51.