By John Caccavale, Ph.D. A.B.M.P.
National Alliance of Professional Psychological Providers, The Clinical Practitioner, March 2020
This election year sees healthcare reform as the major issue confronting the American elective. While political issues wax and wane over election cycles, healthcare reform consistently remains as the top issue among a majority of Americans. However, most elected politicians and media pundits do little to provide any satisfactory answers that are based upon the objective data about what we know and what we don’t know about which, if any, reform policy could resolve the continuing crisis in healthcare.
As for the major political parties, the Democratic Party supports bolstering the Affordable Care Act that was passed in 2010. The Republican Party is intent on destroying ACA, and has offered no plan to replace it. What this does is leave the American people in a holding position because the two political parties are recommending that we either accept the Democratic position that is totally inadequate and flawed or the Republican position that essentially means more illness and death. People need healthcare and the Republican position is unacceptable. Likewise, although the ACA has provides care to many millions of people who formerly did not have coverage, a significant number of people remain uninsured.
While some of my statements above may be seen as political, it is not my intent or motivation to advocate whether the ACA or Republican No should be adopted. My intent, as a clinician, is to talk about why I think a single payer system or, “Medicare For All” as many call it, is the best choice both for patients and providers. I don’t think any advocacy for MFA can be made unless we have the objective facts about it. Chief among any discussion of MFA is the cost. Almost everyone who opposes MFA points to the “excessive” cost to provide healthcare to everyone is the USA. So I think it natural to start with the facts that we have to evaluate the costs for universal coverage under MFA.
What The Data Show About the Cost for Universal Coverage Under MFA
Although advocates and those who oppose MFA throw out numbers galore about the cost of MFA while not citing any objective data to support their claims, at the low end we hear that it would cost about $35 trillion dollars over a 10-year period. At the high end, opponents cite closer to $50 trillion dollars. According to a recent study 1 published by CMS, the official administrator for the Medicare, program, total expenditures for healthcare in 2018 was $3.5 trillion dollars. They project that national healthcare expenditures will grow at an average rate of 5.5 percent per year and will reach nearly $6.0 trillion by the year 2027.
The chief proponent for MFA is Senator Bernie Sanders who is currently is running for president. His campaign website and previous statements puts the cost at $35 trillion dollars for his MFA program over a 10-year period. Some of his competitors and some in the media cite a $50 trillion price tag. The data clearly supports Senator Sanders’ position in two major ways. Firstly, his $3.5 trillion dollars annually for the cost is in line with CMS’s cost projections. Secondly, Sanders and other proponents cite significant costs savings under the MFA system. A very recent study 2 calculates that MFA will save more than 13% annually in healthcare expenditures. This amounts to $455 billion dollars, which more than offsets the 5.5% annual increase that CMS cites. This is similar to the estimates that other studies cite. So, clearly, if we look at the available data from the agency that administers the most efficient healthcare system, MFA will not only provide coverage to everyone but will also provide significant savings over the current system.
My experience as a clinician, who is also a trained healthcare policy analyst, the typical savings cited for MFA may be on the low side. For example, a few years ago NAPPP sent me to meet with several members of the Congressional Mental Health Caucus in Washington, DC. We provided them data showing how savings of $220 billion dollars over a 10-year period could be had simply by controlling the over prescribing of four classes of psychotropic medications. There are many other ways to reduce expenditures including the low administrative costs associated with MFA and the relationship of predatory pharmaceutical practices to cost and by the elimination of third-party insurers who contribute not a single penny of value to the system.
In a 2020 study, Hammelstein, et al 3 cites that the administrative costs for healthcare, comparing the single-payer system of Canada to the US system, was about 16% in Canada but was 34% for the US. Their study was based on 2017 data, but is much higher for 2020 going forward. CMS reports that their administrative costs average only 2%, annually. Objectively there is no comparison. I suggest that the data
should be our guide and not political or industry posturing.
Taxes Will Go Up Under MFA?
Yes, the Medicare tax currently paid and deducted from paychecks will increase. Overall costs to consumers, however, will significantly decrease. The average cost of healthcare insurance for a family is about $12,000 per year. The average increase for MFA is estimated to be about $4,000 per year per family. This means that a family would gain $8,000 per year in actual dollars. The overall cost to consumers far exceeds any increase in Medicare tax. Employers will also see a significant decrease in their healthcare costs as there will be a shift into MFA. Employees may be able to get higher wages as employer costs essentially are eliminated. The beware of tax increase argument simply is not valid if the increase in taxes for healthcare is offset by the average annual cost under the present system.
MFA Is Socialism and Americans Do Not Accept Socialism?
If socialism is defined as a government run or funded function than Americans do not only accept socialism but actually may love it. Ask anyone if they could provide or pay for the healthcare needs of their elderly parents if Medicare did not exist. I’m sure they are not against this type of socialism. We already have government run and funded healthcare through Medicare, Medicaid, and a host of other healthcare related programs for all ages of Americans. The ACA itself is mostly government run and funded. The twist is that taxpayers are subsidizing private corporate healthcare insurers who are receiving the largest share of government largess.
Aside form healthcare, government funded tax breaks for corporations far outstrip the costs for any of the government’s expenditures for healthcare. Subsidized payments to farmers is pure socialism. Government run utilities that are run by cities and states is socialism. No private utility company can compare with these entities. I can go on and on, but I think the point is clear: there are a multitude of socialistic program in the US and whether or not people recognize them as such does not change the fact that they are. Moreover, despite some issues about efficiency that many opponents cite, government is not a business. Business exits to make a profit. Government exists to provide services to its people. Perhaps this is what has been lost. Healthcare is much
too important to leave in private hands and the current system continues to provide proof that it cannot serve the needs of the majority.
It’s Important to Keep A Private Based Insurer System?
I’m not sure why this is the case and if there are any significant arguments to support a private based system. By any accounts a private based insurer system is responsible to shareholders and not patients, the primary stakeholders. When profit becomes more important than life and death issues, profit has no justification to prevail. Prior to the late 1970s, healthcare insurers were not publicly traded companies. By law they were non-profits. At that time, the system functioned fairly well. People who did not have employer-paid insurance had access to government hospitals and clinics. Hospitals didn’t gouge patients and medication costs were relatively low.
When the law was changed to allow healthcare companies to become publicly traded companies, the emphasis changed to profit making. Costs at all levels increased and have continued to do so. As profits soar so do costs, and because these companies must show a profit every three months to satisfy their shareholders and Wall Street fund managers, there is a neverending upward spiral. Providers supply profits by low reimbursement. Patients supply profits by paying high premiums, high deductibles, phantom panels that decrease access, and the uninsured with death and decease.
I might be cynical, but after many years of being a practitioner I do not see the importance of a private based system that is the primary provider of a healthcare system to one that is centered on patient care. There is, however, a role for a private insurer market. The sale of optional secondary insurance where people can purchase insurance for services not covered by MFA may be warranted such as insurance
for cosmetic surgery that is not medically necessary. I’m sure there are other examples, but the point is that these companies should not be the primary provider for healthcare.
Providers Cannot Be Treated Fairly Under MFA?
As a clinician I understand that many providers have not fared as well as others under Medicare and similar programs. However, low reimbursements are more a function of the private based system than on Medicare. A little history: prior to the implementation of Medicare in 1964, organized medicine and the Republican Party fought to defeat President Johnson’s signature social policy. However, when it became
clear that Medicare would pass the Congress, the very night before the passage of the bill, physicians, as a whole, increased their rates for services. Why? Because they knew that rates after passage would be the starting point for negotiation. Now, all these years after the passage of Medicare, few physicians and other healthcare-related practices can exist without Medicare.
Psychologists, in particular, have fared worse under Medicare for several reasons. When Medicare was implemented, the APA refused to have psychologists included as physicians in the bill. APA academics, under the presidency of Jerome Bruner, were against psychologists becoming paid therapists and rebutted the efforts of Dr. Nicholas Cummings to include psychologists as independent practitioners under Medicare. Hopefully, we will not make the same mistakes. The way things are going, however, with APA transforming psychology from a doctoral-level to a masters-level profession, I fear clinicians who are not politically active may further set us back if MFA becomes a reality, which I think will come sooner or later.
Another major reason that psychologists have not fared well over the past decades is precisely due to the privatization of healthcare. It is the healthcare companies that have skewed reimbursements downward. Industry practices to increase profit and
decrease costs are major factors. CEO pay is another major factor. If anything, some of the savings from MFA can be pointed to higher reimbursement rates.
All providers will benefit with MFA, but psychologists will benefit more than others will. Increased access to mental healthcare will substantially increase practice. Decreased bureaucracy, reporting, billing, and deductibles under the Sanders’ plan will translate into higher practice revenues. More important is the fact that psychology is a healthcare profession and this means we are advocates for greater and quality patient
care. These goals and values are not attainable under a privately-based insurance system.
With millions of people who have no insurance and millions more who are under insured, people are being denied mental health coverage as well as other important services. MFA is a patient-centered and provider-centered solution to a major national crisis. This is why I urge psychologists and other healthcare professionals to support MFA. The data shows this is the right thing to do.
- Under current law, national health spending is projected to grow at an average rate of 5.5 percent per year for 2018-27 and to reach nearly $6.0 trillion by
- Galvani AP, et al. Published: February 15, 2020. doi: https://doi.org/10.1016/S0140-6736(19)33019-3
- Himmelstein DU, Campbell T, Woolhandler S. Health Care Administrative Costs in the United States and Canada, 2017. Ann Intern Med. 2020;172:134–142. [Epub ahead of print 7 January 2020]. doi: https://doi.org/10.7326/M19-2818