AMA Argues Against A Single Payer System

Medicare For All is a hot topic. To be clear, this is not a health care provider debate. It’s how health care is paid for, a single-payer system. These are two different (though related) things.

The AMA is against Medicare For All. The primary reasons for their opposition as they stated are:

Lack of choice for patients

Higher costs (taxes)

Choice.

The vast majority of us do not have choice in the current system. Our insurance companies dictate to us who we can see, what they can do, and how much we pay. In many places, we do not even have a choice of insurance companies. For our family, the only company in our area is BC/BS. That’s it.

We don’t really have a choice of services. When my doctor said I needed a brain MRI and a neurologist, I had to wait for a week before the insurance company to evaluate and give permission, then I could schedule the MRI. Think about that. Even our doctors’ choice in the course of diagnosis and treatment is subordinate to an insurance company’s dictates.

Cost

Taxes will go up. They’d go up as a replacement for our premiums. For our family, our premiums have just about doubled over 3 years, and we cover one less person. The argument against Medicare for All based on the idea that a single-payer system will cause an increase in costs assumes that costs have been steady with insurance companies. For most people, they haven’t. And for many that have, stable costs are the result of their company increasing the support, not stable prices.

In addition to skyrocketing premiums and higher deductibles, surprise medical bills are appearing all over the place. Some small, some huge.

Costs have been going up for decades. Since the ACA, insurance companies have had a stranglehold on our medical payment (and decision) process

If the AMA doesn’t want a single payer system, that’s fine. Their organization, their policy. But to argue that we’d “give up choice” when we don’t have any choice, or that costs will increase when they’ve been increasing dramatically under the current system rings hollow.

 

https://www.chicagotribune.com/business/ct-biz-american-medical-association-medicare-for-all-20190610-story.html

Administration changes formual for drug payments. Its not enough.

The Government, despite being the largest payer for meds, does not negotiate price. We simply agree to pay the average going rate in the U.S.

We passed laws that prevent the Government from negotiating drug prices in Medicare and Medicaid. Guess who pushed that law?

Since the U.S. has the highest drug prices in the world, the Gov pays a lot (we pay a lot).

The Trump administration says it plans to change how Medicare pays for some expensive drugs to bring the costs more in line with the prices paid in Europe. This is a good first step.

But, we are only factoring in their costs, not trying to meet or beat it. For a country that says “we always win”, this sounds like we’re giving up pretty easily.

This has been going on for decades now; Rep and Dem administrations and Legislatures. The drug companies got their law, and “our” representatives seem fine with it. Yes, they complain about drug prices, but they don’t take the very simple step of overturning the 2003 law (or at least part of it) and allow the biggest payer of drug prescriptions to use its power to lower the cost.

“For decades, other countries have rigged the system so that American patients are charged much more,” President Trump said Thursday

While the president says other countries “rigged the system” (in his tendency to play the victim), the reality is that the U.S. removed itself from the equation a long time ago.

The proposed changes are small but more than we’ve done before. I only hope it leads to someone taking up the next step of letting the government negotiate the cost of the drugs for which we all pay.

Healthcare: In the absence of perfection, choose nothing.

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There are differences in philosophy about how much the government should do for its citizens.

Politics and Healthcare

Libertarians will tell you that government should have no place in our day to day lives; no welfare, Medicare, Medicaid, unemployment, regulations of any sort. They are pushing for even more draconian legislation with regard to the ACA repeal effort.

Republicans, (or Libertarians who want to get elected), will espouse a role for government that is severely capped; generally, if you are on hard times and need assistance, they’re inclined to blame you for your problems (it seems cancer is on the list of problems for which you are to blame). They consistently chant that big business is our salvation, and the Government is ALWAYS the problem.

Democrats want to support you until you’re on your feet; unfortunately, the solutions Democrats have is to force the middle class to give a lot of money to Insurance companies, then give insurance companies a fat part of our tax dollars, and then have them cover poor people.  Their allegiance to Insurance companies above citizens is a fair subject for debate. Of course, insurance companies return some of those tax dollars to the politicians in the form of campaign donations.

Progressives want to take away as many worries from citizens as possible; front and center is healthcare and their desire for a single payer system. Philosophically, this is a challenge to the old American adage “if they can’t pull em selves up by their bootstraps, f*!k em.” They are, perhaps, overly fond of government solutions, but their hearts are in the right place.

No Path To A Real Solution To Healthcare

In the past (40+ years ago), these differing philosophies competed but the people who held them at least tried to work together. They compromise, debated, amended and created laws that were intended to make a better country.

Despite any rhetoric to the contrary from Washington, I think most Americans believe the politicians don’t give a darn about us. After they get done throwing smoke at us about how much they care about Americans, they head back to their chambers and plan the demise of the other party. Today the Democrats have not presented any alternative to the Republicans and instead just berate Republicans for their “terrible bills”. During the previous eight years, the Republicans did exactly the same thing.

Neither side cares about finding a solution. You can’t convince me otherwise. The Republicans are about to throw 22 million people off health insurance and the Democrats have done nothing to present a solution to the skyrocketing insurance rates that are chewing away at the income of the middle class.

The fact is, it doesn’t really matter if the Republicans succeed or not. The system is being pelted from so many angles that will fail. From Republicans withholding subsidies promised to the insurance companies, to the President preventing the enforcement of mandatory participation, to the lack of true cross-state-line competition, the rates are going to go beyond most people’s ability to pay.

In our area, there is literally only one carrier and their rates are 60% higher (minimum) with virtually no cost-sharing until a family is out of pocket $35k. It’s just going to get worse.

From corrupt institutions paying politicians to stick to the status quo to politicians so focused on party loyalty they’re will let people die (literally), to a general public that doesn’t really care until it impacts them directly, there is no path to a solution.

Unless it is perfect, run perfectly, by perfect people, we will always find excuses not to solve this problem. While we decry government waste of millions, we will let corporations bilk us for billions.

If we can set aside ideological predispositions, we’d see that a single payer system, though imperfect, is working better in the rest of the developed world than the capitalistic system we have running in the U.S.

 

We won’t ever get there.

The latest Senate Bill will put 22MM off insurance. (https://www.nytimes.com/2017/06/26/us/politics/senate-health-care-bill-republican.html)

Medicare For All Option

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It is not a secret that I believe that a single payer system to cover healthcare costs is in our best interest. One of the struggles is how to pay for it. There is a proposal out there to expand Medicare. I think it is worth exploring.

Administratively, Medicare is already in place. A single administrative body to coordinate the processing and payment of medical expenses. The greatest advantage of this is that it eliminates administrative overhead. Based on a study in the New England Journal of Medicine, the amount of expenditures related to Health Insurance overhead is significant. Consider the few examples that would not need to be part of the process.

Hospital and doctor compliance and monitoring. Doctors don’t just send a bill to the insurance companies. They first have to work with the companies (multiple companies) to understand the terms of the agreement. Then they have to have staff and processes to comply with each one of those companies.

Payement. As with compliance, each company has it’s own process for payment and reconciliation of payments. Each medical practice must manage to each of the insurance companies processes.

Each insurance company has its own administrative overhead to establish, maintain, and manage compliance, accounting / payments. The reason there has been so much consolidation in the industry it that the companies themselves agree there is too much redundancy and recognize the power of consolidating. The problem is that this gives them too much power to dictate terms with doctors, hospitals, and patients.

Employers higher specialist simply to manage and comply with insurance requirements.

Take a look at the study and you will see other areas where we add cost to healthcare but do not add any value. Non-treatment costs for healthcare go upward of 30%.

The supposition of medicareforall.org is that we can drop all private insurance, increase the payroll tax associated with medicare from about 1.4% up to 5% and cover everyone through medicare. The initiative assumes a pretty significant cost reduction through the implementation of a single payer system.

While I think the assessment of 5% may be low, compared to the cost of insurance, which can easily exceed 15-20%% of HHI, even if we double that amount, it will be less for the average household than the cost of insurance.

While our preference is a capitalistic solution, it simply has become untenable. If we believe everyone who needs health care should be able to get it, then a single payer system is the only viable answer. Private insurance adds no value to the equation and in fact adds monetary and significant emotional cost to the process.

If you feel that poor people should not have access, than tens of thousands of people should be ‘allowed to die’, or that families should have to decide between homelessness or medical treatment (families lose homes over medical expenses), the private insurance for some at the expense of others is the better option.

Is healthcare in the United States only for those who can afford it?

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For healthcare we have to answer one fundamental question:

Is healthcare in the United States only the for those who can afford it, or is it a right for all regardless of their ability to pay?

The current system is setup for those with the ability to pay.

ACA’s failing was trying to make the current system something it’s not. The current system is designed to provide healthcare to those with the money to pay for insurance, not ensure healthcare to all. ACA tried to make it do both.

The GOP plan only makes the insurance more affordable for some people by dropping other people from coverage, or putting coverage out of their financial reach.

We had this prior to ACA. 40,000+ people died each year because they lacked the ability to pay.

Again, the question for us as Americans, is that okay?

We can’t obfuscate this with talk about our system being better. It’s simply not. When I looked into the stats, I was compelled to write about what I found: http://smilinganyway.com/a-case-for-a-single-payer-healthcare-system/ .

Capitalism is heartless. It is designed for one thing, to make a profit, as large a profit as possible. We get mad at drug companies for gouging. We get mad at insurance companies for dropping unprofitable regions or people. But these companies are doing exactly what they are suppose to do… maximize profits. Scorpions will always be scorpions. If they don’t maximize profits, then they are doing shareholders a disservice.

If we believe everyone has a right to coverage then we have to take capitalism out of the healthcare insurance equation.

There are many examples around the world of well functioning single payer systems. There is not just one option, but several to model a plan for the U.S.. It is up to us whether we believe people deserve healthcare or not.

Another example of why capitalism and healthcare don’t mix.

aetna

I made, what I think, was a pretty rational argument for a Single Payer Healthcare system. There are plenty of quantifiable reasons to go that direction – outcomes, costs, efficiency, etc. But when the corporations work over the public as negotiation leverage, it affirms my belief that capitalism and healthcare are a bad mix

Our family had Aetna insurance last year. Near the end of the summer we received a letter from Aetna telling us they were dropping coverage in our market. This left just one insurance company to cover us. Just one.

In the process, we had to change doctors for our son. The new insurer wouldn’t cover the current doctor. He’d been with the same pediatrician for about 10 years. Without going into detail, it was good to have a doctor who knew him as well as his medical history. Now that connection is severed, because of insurance.

The Threat
When it’s proposed merger with Humana as challenged by the DOJ, Aetna threatened to drop our county along with 16 others. Throughout the conversations with the DOJ, Aetna was clear that if not approved, they would dump us. As soon as the DOJ filed it’s challenge, Aetna dumped the people it was covering.

Aetna went further, minimizing the paper trail by directing employees to have conversations via phone and not email, and classifying basic business correspondence as protected under client-attorney privilege.

It’s good business. That’s the problem.
The thing is, while I think CEO Bertolini doesn’t care about customers, he doesn’t have to. Its business, and that is the crux of the problem.

As a CEO, his obligation is not and never will be to the customers (patients). It is to the shareholders. Customers are just a conduit to put money in the pockets of the shareholders. That is the way businesses are and should be run. And that is exactly why it is bad for patients.

Paul Ryan justified the elimination of the ACA by citing Aetna’s decision to pull out of the exchange… It’s bad for businesses.

I’ll see Ryan’s position, and raise him.

Aetna’s decision shows why we need to replace health insurance. Its bad for Americans.

Choose your constituency Mr Ryan.

Profit motivated health insurance is good for business.
A Single Pay System is good for Americans.

Who do you work for?

A Case For A Single Payer Healthcare System

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Where do we take our healthcare from here? We have had free-market, ACA, government programs and uncovered citizens. We have a very patriotic dedication to our current system of care and an ideological leaning toward capitalistic medicine. Our aversion to government involvement shuts down alternatives as we quickly discount examples from other nations. To figure out what’s next we need to be open to an assessment of the current system and a consideration of alternatives absent preconceived judgements.

Are we really as well off as we think? Do we truly have choice, freedom of care? Are systems with heavy government involvement inherently flawed? To evaluate a system that may be better, we need to take an objective look at our current system and challenge some of our more closely held beliefs.

U.S. Healthcare vs others
Healthcare quality can be hard to judge. Outcomes are never guaranteed, diagnosis often comes to an inexact process of deduction, and the patient’s behavior can have as big an impact on treatment as the efficacy of the treatment itself. Looking at the United States in isolation to assess how good or bad the system is provides no benchmarks, no way to judge the potential upside or downside of alternate systems. To determine if the United States healthcare system is as good as it could be, we can look at international studies.

The primary arguments for maintaining the American healthcare system are

1) it is the best in the world
2) driven by market forces, it is the best way to drive innovation, reduce costs and improve service.

On both counts, the U.S. healthcare system falls behind other nations.

In the latest Commonwealth Fund study, the U.S. Ranks Last in the top 11 industrialized nations in healthcare for efficiency, access and equity. The U.S. did do well in the area of access to preventive care and patient centered care. Essentially, we get the attention we want from our healthcare providers but the outcomes are not improved as a result.(1)

Despite having the highest per capita spending on healthcare of over $9,040 in 2015(3) (45% higher than the next highest) the U.S. consistently falls behind other nations in outcomes.

2015 Infant mortality in the United States ranks about 38th in the world. Measured as deaths / 1000 births, the UN ranks us behind countries like Iceland, Norway, Sweden and other Northern European members. But, we are also lagging behind countries like Slovenia, Cuba, Malta, Croatia(5). The CIA projection for 2016 is no better, placing us 56th out of 225 countries(6).

Cancer survival rates in the U.S. vs 7 industrialized nations were on par. Where the U.S. excelled was in breast cancer and prostate cancer survival rates; these two cancers have extensive (non-profit promoted) early detection programs in the U.S., allowing for earlier intervention, increasing the chance of survival. In areas where we are not “promoting” early detection, like childhood leukemia, the survival rates are lower than other nations.(7) This indicates that our treatments are not superior, but our ‘marketing’ is.

The life expectancy in the U.S. is eighth in industrialized nations(3).

The U.S. has not been ranking well in the WHO as far back as 2000, the U.S. ranked 37 out of 100 countries.

Wait time perceptions
Often we hear wait times in other countries being cited as too long, because of universal healthcare systems, when compared to the United State. This too is a false perception. The U.S. has wait times just as other countries do.

Based on the 2013 Commonwealth Fund Survey, 26% of U.S. adults waited 6 or more days to see a doctor when they were sick or needed care. This is 8th out of 10, with Canada being 10th at 33% & Norway being 9th at 28%. In the 8 other countries surveyed, they ranged from 4% (UK) to 22%.

The metrics for wait times on specialist are tricky in that it was dependent on the area and specialty being sought. The U.S. generally did well with 78% of the respondents saying it took 4 weeks or less. Switzerland and the UK were better than the U.S., all others fell behind (Canada was the weakest at 39%.).

The reality is Americans are paying a significant amount more for healthcare and receiving less than people in other nations, with outcomes that are no better and often worse. Contrary to our excuses for the status quo, we are neither better nor more efficient.

The illusion of choice: The futility of consumer driven healthcare in the current system

The United States has experimented with Health Savings Accounts (HSAs) and High Deductible Insurance (HDI) as a way to invigorate the system with a new breed of buyers. With the elevated responsibility for costs, healthcare consumers would be more diligent about their care, shop for services and ultimately have market forces drive down costs. This did not work.

While there are many factors in the failure of HSAs to contain costs, not the least of them was the fallacy that consumers were able to negotiated and shop for service. With HDI, consumers were still tied to health networks contracted with the insurance companies. Out of network expenses would not apply to deductibles. As such, consumers could not truly shop for their services.

In the situations when consumers did try to shop for their services, the health provider networks and the insurance companies had previously negotiated rates; the consumer could not negotiate the rate. In other words the price had been set. Often these rates were kept private between the carriers and the providers. Even when a consumer was liable for the cost under their HDI, providers and carriers considered the rates proprietary information. Quite literally healthcare consumers would not know the cost until the bill arrived. Not logical, but real.

As long as insurance companies and healthcare networks control the negotiations of the transaction, and insurance companies dictate the terms of coverage, there can be no individual consumer affecting the cost of services. The system is capitalistic between large corporations, not the end consumers.

The scenario above plays out in the data. According to The National Library of Medicine (8), spending reductions occurred in the area of prescription medications; consumers decided not to fill or refill medications. For medical services, there was no cost reduction for HSA vs non-HSA patients. The provider and the carrier predetermined the cost and the allowable treatment.

The profit motive

Written into the Affordable Care Act, Insurance companies must pay out at least 80% of the premiums collected in care coverage; they keep a 20% margin. Perversely, when insurance carriers negotiate lower rates, they negotiate away their profits. There is little motivation to get the lowest cost.

The simple math of insurance
For $200 in medical service, the cost of insurance (to cover at 20% margin) is $250 billed to the patient in the form of the monthly premiums. The insurance carrier keeps $50, or 20% of the premium.

When the insurance carrier negotiates the rate down to $100, the most they can charge in premiums is $125 (20% margin). Same transaction, same labor cost. $25 less profit.

The system is not set up for insurance carriers to negotiate the lowest rates. It is set up so that they seek to collect the highest premiums consumers will pay.

If carriers are trending below 20% margin, they tighten the eligibility requirements for service.

There is nothing about insurance that incentivizes the carriers to negotiate low rates. Even without regulatory maximum margins, every dollar difference between the negotiated rate to the healthcare provider and the price of insurance to the consumer is a premium for care. Through insurance, people collectively pay up to a 25% premium (the equivalent of a 20% margin for carriers) for their healthcare.

Cost of no healthcare Insurance
As flawed as our healthcare system is when compared to the other Industrialized nations (and even many developing nations), lack of access to healthcare insurance was the cause of up to 45,000 deaths per year prior to ACA(4). The Harvard Medical School study is on the high end of the calculations vs. studies from 10 years prior. The risks associated with not having health insurance were growing prior to ACA.

The breakdown of the capitalistic healthcare philosophy
The notion of a truly capitalistic healthcare systems has a nice philosophical ring to it. We each are responsible for our own health, decide our own services and pay our own bills. To the pure capitalist, this sounds great.

Among the many problems, and perhaps the most concerning, is that healthcare consumers are not in the market by choice. It is not a house they decided to buy that they can’t afford, or a car they bought but can’t handle the payments.

Asthma, cancer, heart attack. These are not choices. These happen to people without their input or consent.

Capitalism requires two willing participants, the buyer and the seller. For healthcare, at least one of those participants is coerced by forces beyond his or her control. Even the most adamant free-market enthusiast must acknowledge the imperfect fit with true capitalism.

Private health insurance systems can’t cover everyone
The very nature of insurance is to spread the financial risk of any single event over a wide group of payers. As long as there are not too many simultaneous events, the system works.

For property insurance, this makes sense. The premium paid is directly related to the value of the property protected. If the premium is too high, either find a lower value item (car, home, etc), or risk losing the item.

Health insurance is not tied to an item’s value. The risk factors are not based on controllable factors for the individual (smoking is the exception). Yes, people can and should eat well, exercise and get the proper rest. But, the nature of our bodies, and our lives are such that the big expenses for healthcare may have nothing to do with these factors.

Pneumonia, meningitis, cardiac diseases and others ailments strike the seemingly healthiest among us. It is flip, dismissive, and ignorant to simply assert that people just “need to take care of themselves.” Except in the extremes, this is not the issue.

Lower income people simply cannot afford “their share” of the risk.

Philosophically, we have to make a choice:

Either our values compel us to care and therefore cover these people, or our values allow us to dismiss them and consign 45,000 of them to die each year(4).

With private insurance, the only way to cover the lower income people (about 25MM), is to force insurance companies to cover them. To do this, carriers must raise the rates on all other insured. While not necessarily motivated to negotiate lower rates, insurance carriers do recognize when the cost of premiums becomes too much. They must begin to implement draconian policies to contain costs as much as possible.

This has lead carriers to drop entire areas of the country. In some geographies, there is only one carrier, a monopoly. Premiums are surging while coverage requirement are becoming more strict. Patients are forced to drop the caregivers when insurance companies decide to drop markets, or renegotiate fees with new networks and exclude previous networks.

For those of us who were buying private insurance before the ACA, we saw the trend starting over a decade ago, only to be exacerbated by the the ACA.

The single payer system
Anecdotally we can point to situations in which one system failed while a corollary scenario in another succeeded. But this is not about the media grabbing story, or the headline that supports our preconceptions. This is about our ability to maximize our chances for successful medical outcomes while reducing our costs. Looking beyond the ideology, beyond the ‘news’ anchors and into the real world lives of people around the globe, it is difficult to present a comprehensive argument for capitalistic medicine. In the data, it simply has not proven to be better than other systems.

In a single payer system, patients relationships with their doctors are not disrupted when carriers change.

With a single payer system, efficiencies can more easily be built into the administrative systems. The U.S. pays more than any other country to ‘process’ a medical claim and payment(9). Despite the efficiency of capitalism, we have the most inefficient use of funds.

A person’s access to healthcare is not tied to their financial resources. If our moral compass allows us to let people die because they are poor, then this may not be a compelling argument.

The financial stress related to healthcare is removed. Even insured U.S. residents are saddled with the stress of affording and paying for medical treatment.

A person who is ill is not a willing participant in the ‘purchase’ of healthcare. The very fundamentals of capitalism are not present when one person is coerced by circumstances to ‘make the purchase or die’.

I believe a single payer system is at the very least one to be seriously considered. We have examples across the globe to model, and we have seen that they provide equal or better outcomes to our current system. The only thing keeping us from accepting this path is our inherent dislike of government (not totally unfounded) and our desire to see capitalism and free-market forces as the driver of all things good.

It is time to let compassion and reason direct our decisions rather than blind faith to ideology. It’s time for a single payer system.

For information on how to move  Single Payer Healthcare forward, visit https://www.healthcare-now.org

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Sources:

(1) http://www.forbes.com/sites/danmunro/2014/06/16/u-s-healthcare-ranked-dead-last-compared-to-10-other-countries/#7e209c81b96f
(1) http://www.commonwealthfund.org/publications/fund-reports/2014/jun/mirror-mirror
(2) https://mha.gwu.edu/blog/us-health-care-vs-the-world-2016/
(3) http://www.commonwealthfund.org/publications/press-releases/2015/oct/us-spends-more-on-health-care-than-other-nations
(4) http://www.pnhp.org/excessdeaths/health-insurance-and-mortality-in-US-adults.pdf
(5) http://www.un.org/en/development/desa/population/theme/mortality/
(6)https://www.cia.gov/library/publications/the-world-factbook/rankorder/2091rank.html
(7)https://www.cdc.gov/cancer/dcpc/research/articles/concord-2.htm
(8) https://www.ncbi.nlm.nih.gov/pmc/articles/PMC2910568/
9) http://www.commonwealthfund.org/~/media/files/publications/in-the-literature/2013/nov/pdf_schoen_2013_ihp_survey_chartpack_final.pdfs

other text
The Social Progress Index 2014 rates the U.S. as 70th among 132 nations in health and wellness.

USNews article:  http://www.usnews.com/opinion/articles/2014/05/30/no-the-us-doesnt-have-the-best-health-care-system-in-the-world