The only big losers are the private insurance companies – and that’s okay with me
By James G. Kahn, M.D., M.P.H.
The Mercury-News, April 2, 2019
How to achieve universal health insurance in California? In our super-progressive, supermajority Democratic state, that’s the health policy question of the day. Not if we should lead the way on universal coverage, but how.
Recently, UC Berkeley economists proposed a solution, dubbed California Dreamin’. Expand current insurance to cover the uninsured, using up to $17 billion in new taxes. That’s a 5 percent bump in health spending. Problem solved, right?
No. While the goal is admirable, the Dreamin’ approach adds a Rube Goldberg appendage to a Rube Goldberg health care financing system. It layers cost and complexity upon cost and complexity. Our insurance system will continue to underperform.
We need to revamp our insurance mess. We can do this with a well-known and proven solution: single-payer.
Also known as improved “Medicare-for-All,” single-payer has these core features: everyone is covered cradle to grave with the same comprehensive benefits package; health care is financed by a single entity; payment is greatly simplified; patients freely choose among doctors; and doctors focus on providing care.
These features aren’t fantasy, they’re standard among wealthy democracies (such as Canada and Australia). They’re captured in the 2017 Healthy California Act, in U.S. Sen. Bernie Sanders’ bill, S1804, and in Rep. Pramila Jayapal’s new HR1384.
Single-payer solves what ails the insurance system in a way that Dreamin’ can only dream about. Here are high points:
Effective insurance: Our current system leaves 5 percent to 10 percent uninsured, and many more underinsured – facing high deductibles, other cost-sharing, and restrictions on covered services. The Dreamin’ approach could fill the uninsured gap but leave millions underinsured, which we know leads to skipped and delayed care.
Some ask, “I like my private insurance. Why give it up?” Just because insurance works well today doesn’t mean it will tomorrow. Most private insurance is employment-based – laid off, lose your insurance. Plus, each year, private insurance deteriorates, with rising cost-sharing and shrinking provider networks. In single-payer, everyone has the same health plan, assuring ongoing shared commitment to quality coverage. Politically, this is critical, as individuals realize the advantage of single-payer over unstable private insurance.
Administrative efficiency: The United States spends 12 percent of health care dollars on excess billing paperwork, from contracting all the way to appealing underpayments. That’s about $1,400 per person per year in administrative bloat, about half at insurers and half via the burden placed on providers. Single-payer captures this 12 percent and puts it into patient care.
Prices: U.S. drugs cost several times more than in Europe. Single-payer would use price negotiations to get a fairer price, with 30 percent savings in drug costs overall.
Affordability: Providing more effective insurance increases costs, by about 10 percent. Reducing administrative waste along with drug prices decreases costs, by about 15 percent. Net costs drop by about 5 percent. Repeating slowly: Net. Costs. 5 percent. Down. Over time, savings grow with global budgets and better data on clinical practices to identify and reduce ineffective practices.
Clinical focus: Freed of distracting reimbursement paperwork, doctors and patients focus on each other! This is what medicine is supposed to be about.
Smart social contract: Perhaps most exciting, single-payer unites us in a just and prudent communitarian undertaking. Single-payer is the poster child for benevolent and smart policy.
It’s benevolent because it truly solves the problems of uninsurance and underinsurance, fulfilling the human right of access to health care. Smart because it saves money – using clever and proven methods to efficiently translate our financial commitments to desired health care. To riff on the venerable advertising slogan: costs less, more filling.
Everyone is in single-payer together – rich and poor alike. This social contract isn’t a good-enough compromise, it’s an improvement for us all. From our fragmented and dysfunctional insurance, step up to universal access to care.
The only big losers are the private insurance companies – yes, they’d really have no role, and that’s okay with me. It’s not un-American; it’s part of the new American dream.
Dr. James G. Kahn is a professor emeritus of Health Policy, Epidemiology and Global Health of UC San Francisco and is past president of Physicians for a National Health Program-California.
By Don McCanne, M.D.
This article has that special combination of explaining clearly single-payer health policy in terms that the general public can easily understand, written by a noted health policy wonk who knows how to communicate. It should be shared widely so people have a better understanding of the health care system that we could have if we select government stewards who would support this social contract that ensures health care for all of us.
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