By Ida Hellander
Health Affairs blog, June 7, 2013
Dana Goldman and Adam Leive’s effort to discredit the single payer, Medicare-for-All model of financing health care — or as they put it, make “any conclusion decidedly more nuanced” — is sorely lacking in nuance, defined by Merriam-Webster as “made or done with extreme care or accuracy.”
Acknowledging Medicare’s greater success at controlling costs than private insurance plans, Goldman and Leive raise the specter of “underprovision of services” and doctors leaving the system if Medicare were universal. But Medicare patients are significantly less likely to have problems with access to care and medical bills than non-elderly adults with private insurance, according to a recent study by The Commonwealth Fund. The same study found that Medicare beneficiaries are also more satisfied with their coverage than people with private insurance. Only 6 percent of beneficiaries in traditional Medicare rated their coverage as fair or poor in 2010, compared with 20 percent with employer-sponsored private insurance.
Among physicians who treat Medicare patients, 90 percent of all physicians and 96 percent of specialists are accepting new Medicare patients according to the Medicare Payment Advisory Commission. In contrast to the limited networks of doctors available to the privately insured, and the appalling “underprovision of services” to those left uninsured and underinsured by today’s for-profit, market driven system, a Medicare-for-All system would expand choice and access.
Distinguishing current Medicare from Medicare for All. Goldman and Leive confuse today’s Medicare program (not a single payer but just one plan in a marketplace of multiple public and private plans) with Medicare for All (single payer), and imply that negotiating fee schedules with doctors is the only way a single-payer system controls costs. On the contrary, other proven-effective cost-control methods, such as globally budgeting hospitals, negotiating drug prices, and planning capital investment are made possible by expanding the program to everyone and eliminating the private insurance middlemen. Canada’s spending on the elderly under its single-payer program has grown much more slowly than U.S. spending on the elderly since 1980, despite a 1984 law in Canada banning co-payments and deductibles.
Goldman and Leive make note of single payer’s greater administrative efficiency (e.g., traditional Medicare’s overhead was recently pegged at 1.4 percent), but criticize Medicare for not doing more to reduce fraud. But they offer no figure for how much fraud the insurance industry suffers from, or how much of the extra 16 percent of premiums devoted to private insurance overhead is spent on fraud detection as opposed to expenditures on marketing, underwriting, CEO salaries, profits, and utilization review aimed at denying care to their enrollees.
Furthermore, private insurers are not the scrupulous conservers of scarce resources that Goldman and Leive imply. Practices like “upcoding” (making patients appear sicker on paper so insurers can collect higher premiums) and “cherry picking” by private Medicare Advantage plans raise the cost of caring for their enrollees 14 percent higher than under the traditional Medicare program, according to MedPAC.
The poor US performance on preventable mortality. The United States ranks last out of 16 countries in deaths that might have been prevented with timely and effective medical care, leading to an estimated 91,000 excess deaths annually. In this context, Goldman and Leive’s claim that high U.S. health spending is buying more effective treatment of breast and prostate cancer compared to other countries is of questionable significance as well as accuracy. Earlier diagnosis from greater screening improves survival times for cancers, especially at five years, but has very little impact on mortality. At any rate, Medicare for All would not reduce spending on cancer treatment. The whole point of single payer is to shift resources we are squandering on bureaucracy (including the administrative burden on physicians and hospitals) into clinical care, increasing the amount available to care for patients by about $380 billion annually, according to the authors of a landmark New England Journal of Medicine study.
As it currently stands, Medicare needs to be improved to eliminate cost-sharing, and cover medications and long-term care as part of the basic program. A properly designed single-payer system would also have these attributes.
As Goldman and Leive note, the Affordable Care Act will not control rising costs. In addition, the Congressional Budget Office estimated last week that even after it is fully implemented, the ACA will leave 31 million Americans uninsured. The support of Nobel Prize-winning economists like Paul Krugman and Joseph Stiglitz, the former chief economist at the World Bank, along with Professor Robert Reich, the former U.S. secretary of labor, reflects a broad consensus that the only way to provide universal coverage and control costs is a single-payer system.