By Merrill Goozner
Modern Healthcare, March 16, 2018
Healthcare providers and insurers are gearing up to oppose Medicare for All. No surprise there. Insurers can’t look kindly on legislation that would put them out of business. And providers are deathly afraid of losing the high rates from private insurers that cross-subsidize government-funded patients.
But at the same time as they mobilize to defeat M4A, shouldn’t they be outlining what they support?
Here’s what M4A advocates want to achieve. The first is universal coverage. Sadly, we’re again moving away from this basic human right due to actions by the Trump administration to undermine the Affordable Care Act. They want lower prices. Insurance premiums for employers and out-of-pocket expenses for individuals and families continue to rise faster than wages or economic growth.
Finally, they want an end to the frustration engendered by a system that erects roadblocks between physicians and patients. These range from insurer rules requiring prior authorization to seemingly arbitrary limits on what doctors can perform or prescribe.
Is M4A the only way to solve these problems? Of course not. When it comes to covering the uninsured, the ACA worked just fine. Massachusetts, the first state to implement an ACA-like program, had an uninsured rate of 2.5% in 2017. That’s not the 0% of most Organisation for Economic Co-operation and Development countries, but pretty close.
Politics are at the root of the ACA’s failures—not its Rube Goldberg design. The Supreme Court allowed states to opt out of the Medicaid expansion. And when the GOP-controlled Congress eliminated the individual mandate, key to making rates on the exchanges affordable, it reduced sign-ups, raised premiums and stopped the expansion dead in its tracks.
How about service prices? M4A would set prices at Medicare rates, which are well below private insurance rates but higher than Medicaid rates (both Medicaid and the Children’s Health Insurance Program are eliminated in Sen. Bernie Sanders’ M4A bill). But that’s not where most of its savings come from.
According to a sympathetic analysis from the University of Massachusetts at Amherst, half of M4A’s savings come from reducing provider and insurer administrative overhead. Another quarter comes from lower drug prices.
But these are one-time savings that will do little to stop the upward spiral of hospital and physician costs, which account for two-thirds of all spending. That’s where we get to the third issue supposedly addressed by M4A: the administrative hassles and limits imposed on obtaining care.
These aren’t eliminated by an expanded public system. They simply transfer the policing of waste, fraud and abuse from private hands to public hands and change the motivation from padding profits to protecting taxpayers. In the past, Medicare has done a better job than private payers for one simple reason: it can impose price controls. Providers have responded by shifting much of the shortfall to their private-paying patients.
There are alternatives for achieving M4A’s goals. They include private companies offering exchange policies with well-defined coverage rules and strict limits on out-of-pocket costs; all-payer rate-setting or global budgets to slow the rate of price increases; merging Medicaid with Medicare (leaving long-term services and supports to the states), which would give private employers and families rate and tax relief; and establishing all-stakeholder oversight councils to develop medically appropriate utilization rules.
There’s more. The point is that in the post-Trump era, the U.S. will once again begin moving toward a healthcare system that is universal and affordable with high-quality care for everyone.
A multipayer approach could be like Germany and Switzerland, which rely on private insurers that are regulated to a much greater extent than currently exists in the U.S. Or it will be a single-payer system like Canada, Great Britain or France. Each delivers better results at a lower cost than the U.S.
I’m agnostic on which way to go. I’m still waiting for providers and insurers to articulate their vision.
Comment posted at Modern Healthcare:
By Don McCanne, M.D.
Put all the facts on the table and there should be no room left for agnosticism. A well designed, single payer, improved Medicare for all system does the following:
- It is truly universal in that everyone is included automatically, for life.
- It dramatically reduces profound administrative waste, recovering enough funds to pay for care for the currently uninsured and underinsured.
- It addresses the problem of excessive prices by using publicly administered global budgeting and price negotiation, covering legitimate costs while eliminating gouging.
- It improves equitable allocation of our health care resources through central planning and separate budgeting of capital improvements. Everyone would have reasonable access to care.
- It makes the financing of health care equitable by replacing premiums and cost sharing with progressive taxes based on ability to pay. The financing of the universal health care risk pool is totally separated from the delivery of health care such that nobody is ever denied care because of the inability to pay for it.
- Publicly administered programs are much more effective in reducing the trajectory of health care costs to sustainable levels (compare Canada’s spending curve to ours), ensuring that, well into the future, health care will be affordable for each of us and for society as a whole.
- Our current system has twice the average per capita costs of other wealthy nations while we fall short on universality, effectiveness, equity, resource allocation, access, and quality. The Affordable Care Act left this extremely inefficient system in place, so building on it or compounding its complexity with the addition of a public option (expanding Medicare to the few who can afford it) cannot begin to correct the profound, expensive dysfunctions in our system.
Do we want a public service model designed to take care of patients, or shall we continue with a private business model designed to enrich the vested interests? There should be no question that it is time to end equivocation and get on with enacting and implementing a model that actually would work: Single Payer Medicare for All.
By Don McCanne, M.D.
With the surge in popularity of the single payer Medicare for All model of reform, there understandably has been a groundswell of opposition by stakeholders who stand to lose and by ideologues on the right. The media is busy providing what they profess to be balanced reporting on this activity. Unfortunately, they seem to have bought the concept that Medicare for All is only an “aspiration” that can be dismissed because it doesn’t mesh with the machinations of the political system in this country. Thus they concentrate on the status of the Affordable Care Act and the supposedly politically feasible public option in the form of Medicare for the few who can afford to purchase it, as if this represents the only realistic pathway to reform.
I have followed Merrill Goozner’s journalistic efforts for quite a few years and know him to be a person of integrity. I understand why he mentions systems in other nations that work better than ours that are not single payer systems, thus concluding that Medicare for all is not the only way to go. I have to admit that I do get a little edgy when he says that he remains agnostic as to whether we should use a multi-payer system or a single payer system because he is “still waiting for providers and insurers to articulate their vision.”
Well, the realistic vision of health care nirvana has already been articulated in the single payer, improved Medicare for all model advanced by Physicians for a National Health Program and other organizations. Just a few features that make this model an imperative are listed in the response to Goozner’s editorial above. There should be no room left for agnosticism. The vision of single payer Medicare for All is based on solid health policy science.
It’s time to move forward with fine tuning the Jayapal Medicare for All bill in the House and the Sanders Medicare for All bill in the Senate. As the politics realign, we should be able to complete the legislative process by early 2021, and finally have heath care for all, effective January 1, 2022. Or maybe we should aim for July 1, 2021.
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