Nixon Went to China. Can Trump Go to Single Payer?

Nixon Went to China. Can Trump Go to Single Payer?

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There is an old Vulcan proverb saying that only Nixon could go to China. Only a man who used to work for Joseph McCarthy could set America on a path to better relations with a virulently Communist country. A few years after Nixon went to China, Menachem Begin, the Israeli Prime Minister who represented people believing that the state of Israel should start at the Nile and end at the Euphrates, gave Egypt back all the lands conquered in a recent war and made a lasting peace with Israel’s largest enemy. They said back then that only Begin could make peace with the Arabs.

Today, I want to submit to you that only Trump can make single-payer health care happen in this country. Only a billionaire, surrounded by a cabinet of billionaires, representing a party partial to billionaires, can make that hazardous 180 degrees political turn and better the lives of the American people, and perhaps the entire world as a result. Oh, I know it’s too soon to make this observation, but note that both Mr. Nixon and Mr. Begin were deeply resented (to put it mildly) in their times, by the same type of people who find Mr. Trump distasteful today. The liberal intelligentsia back then did not have the bona fides required to cross the political chasm between one nation and its ideological enemies, or as real as death immediate foes. The liberal intelligentsia today lost all credibility in this country when it comes to providing a universal solution to our health care woes.

Free health care (and free college) are not solutions. These are rabble rousing slogans to gin up the vote, slogans that end up in overflowing trashcans left in ballrooms littered with red white and blue balloons after everybody goes home to get some sleep before the next round of calls to solicit funds from wealthy donors for the next campaign. Providing proper medical care to the American people is a monumental enterprise that engages tens of millions of workers from all walks of life, every second of every day, in every square mile of habitable land, littered with the hopes and fears of hundreds of millions of invisible men, women and children who call this great country their home. This is not something that can be made free. Nothing is free in our times, not even sunshine and fresh air.

For the jaded, the cynically inclined, and those who are simply too afraid to jump off this cliff, and therefore argue that single-payer is not politically feasible, I have a simple question. Did you all think a couple of years ago, that a President Trump is politically feasible? Okay then. Here is what I believe could be a relatively plausible scenario enabling this one-of-a-kind administration to use its unconventional political capital (if you can even call it that) to get us on the road to making health care great again, greater than ever before.

Step 1: Disaster

The current system, held together with string and duct tape must undergo a seismic shock, preferably a moderate shock and one that does not involve war and famine. The way things look now, the most likely implosion will be the Obamacare individual market. If the Trump administration holds back ransom money from insurance companies (a.k.a. CSRs), or engages in other mischievous behavior, and the individual mandate is not enforced, we may very well have a minor disaster on our hands. In addition, the President’s Commission on Combating Drug Addiction and the Opioid Crisis is requesting that the President declare the opioid epidemic a national public health emergency. Put these two together and you see how lots of people are, or will shortly be, in dire need of medical services not currently available to them via existing “insurance” channels.

Step 2: Relief

The opioid crisis will need much more than providing care for its current victims, but we will need a coordinated effort to provide all necessary medical services to people addicted to opioids who are uninsured, or whose insurer is refusing to pay for the extensive programs needed for recovery. People who were able to afford insurance under Obamacare without, or with minimal, subsidies and are now left hanging to dry will also need a solution, and if they are sick, they will need immediate relief. This would be the perfect time to cut through the red tape and institute the Disaster Relief and Emergency Access to Medicare (DREAM) program. The DREAM will open Medicare to the victims of Obamacare and the victims of the opioid epidemic. This will be put in place as a temporary disaster response program, subject to extension of course, until a more permanent solution can be found. I doubt too many people in Congress could vote against such measure.

Step 3: The DREAM

No matter how short lived, all government programs including temporary ones need rules and regulations to execute now, and to be replicated in future emergencies as needed. Besides, any respectable bill needs more than just a title. How do we define opioid addiction? How do we define Obamacare victim? How do they sign up? What do they get? How much will it cost?

Opioid Crisis

  • Congress will appropriate $45 billion for this program for a period of five years to cover administrative costs, medical costs and program analysis costs.
  • Emergency funding will be provided to Federally Qualified Community Centers (FQHCs) to set up a process for opioid addiction screening. FQHCs are non-profit clinics, funded by the Federal government to serve low income populations regardless of ability to pay. All physicians and staff are salaried. The funding will be administered by the Health Resources and Services Administration (HRSA) and defined by the Secretary of Health and Human Services (HHS).
  • Any American citizen or lawful permanent resident will be eligible to access any FQHC and undergo opioid screening as specified by the Secretary at no cost. Individuals eligible for relief, based solely on clinical criteria, will need to provide information about their insurance status. Upon receipt of consent from the individual or legal guardian if the screened individual is a minor, eligibility results and insurance information will be sent from the FQHC to CMS for enrollment in the DREAM program.
  • If the eligible person (EP) is currently covered by commercial insurance, CMS will contact the EP’s insurance plan and require that the plan contacts the EP or legal guardian and obtains proper consent to transfer the EP’s coverage to the DREAM program. Following EP consent, Medicare will become the primary payer for the EP. Medicare at its sole discretion may discontinue eligibility for the EP and the commercial plan must reinstate coverage for the EP at that time. All subsidies paid by the Federal government to the insurance plan, if any, will be paid into the Medicare trust fund for the duration of DREAM participation.
  • The EP will pay to Medicare premiums equal to the last monthly amount the EP paid to the commercial plan. Medicare will cover all opioid related services with zero deductible and zero copay. For other services the EP deductible and copays will be equal to those of traditional Medicare beneficiaries (parts A, B and D). Medicare will end DREAM eligibility for an EP who missed 3 consecutive monthly payments.
  • If the EP is insured, or eligible to be insured, through Medicaid or any other public program, Medicaid or any other public program, will transfer into the Medicare trust fund estimated monthly premiums as calculated by the Secretary for the duration of DREAM participation. Medicaid will become the secondary payer for EPs previously enrolled, or eligible to be enrolled, in Medicaid.
  • If the EP is uninsured and not eligible for public insurance, the EP will be enrolled in Medicare (parts A, B and D), under the same terms as beneficiaries 65 years or older for the duration of DREAM eligibility, except that all opioid related services will be covered with zero deductible and zero copay.

Obamacare Crisis

  • Congress will appropriate $45 million for this program for a period of five years to cover program administration, evaluation and analysis. All other program costs, if any, will be absorbed by CMS budgets.
  • Any American citizen or lawful permanent resident who is not offered employer sponsored insurance, and is not eligible for Medicaid or another public insurance plan, and is not eligible for Federal subsidies on the Obamacare exchanges equal to at least 50% of total costs of the current benchmark plan, or resides in a county where no Obamacare plans are available on the exchange on the first day of the open enrollment period, will be eligible to enroll in Medicare parts A, B and D, at an annual rate of average Medicare spending per beneficiary (MSPB), adjusted for EP age.
  • The Secretary shall publish a list of DREAM premiums for three age bands, 0-21, 22-45, 46-64, no later than one month before the first day of open enrollment for the Obamacare exchanges. All DREAM rates will be assessed and billed for each individual EP. No family rates will be available and no Federal subsidies will be given to DREAM enrollees.
  • The EP, or a legal guardian if the EP is a minor, is responsible for premium payments to Medicare. EP deductible and copays will be equal to those of traditional Medicare beneficiaries (parts A, B and D). Medicare will end DREAM eligibility for an EP who missed 3 consecutive monthly payments.
  • For each program year the Secretary shall conduct and publish comparative analyses of Federal spending on Obamacare exchange enrollees and DREAM program enrollees to inform Congress and the public on the merits of each program.

Step 4: Consequences

See? Wasn’t that bad now, was it? Defining the program is relatively easy and the above is just an abbreviated example. Other details will need to be added, removed or changed, but the main idea here is to open Medicare in the short term to people who are hurting and are underserved by the commercial health insurance markets. There will of course be consequences. First, the Obamacare exchanges will most likely go bust, and we will have to expand the DREAM to allow enrollment of people who will bring their subsidies with them. Second, employers may decide to fund Medicare premiums instead of dealing with health insurance in house. Third, the folks who don’t qualify for the DREAM program may start chomping at the bit, seeing how DREAMers get to choose pretty much everything without breaking the bank.

Yes, yes, I know. I’m being too clever by half, but surely someone who professes to be the voice of the forgotten men and women, could see his way clear to make this happen. It will, after all, lead to a complete repeal and replace of Obamacare. And for all timid liberals enamored with the poetry inscribed at the feet of Lady Liberty, let’s help the President erect a statue of liberty at the gates to Medicare.

 

 

 

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55 Comments on "Nixon Went to China. Can Trump Go to Single Payer?"


Member
Steven Findlay
Today 6:16 pm

I’m way late to this dialogue…but what good fun to ponder and debate single payer. Another great provocative blog by Margalit.
No time to read all the comments so I’m jumping off of Palmer’s point just below: why not amend/loosen up Sec 1332 of ACA to allow states to experiment with single payer more easily with fed support, with the trade off being that Republican governors get a smoother path to try their stuff out—-like shifting costs to consumers.
That permits state experimentation that could help inform the national debate down the road when there might actually be a chance for single-payer/Medicare-for-all/ Medicare/Medicaid-buy-in legislation. Say around 2024 when Dems regain presidency and Congress….

Oh….and Trump will most surely NOT pull a Nixon-goes-to China on this. For too many reasons to enumerate here, but not least because he is losing political capital by the hour….

Member
William Palmer MD
Aug 11, 2017

I would say that if we are going to try a single payer that we try it in a small jurisdiction like a county or a hospital district first, We have to sharply define what we are trying to do medically. We have to get the money somehow and this needs realistic planning. Its leaders have to lose something if it fails; at least their identities have to be known to the voters…so that we have accountability. We have to decide who we are going to declare as beneficiaries. Are we going to allow illegal Dream kids or not, e.g. We have to decide how we are going to handle drugs and drug prices. On and on, we are going to need perspicacious executive efforts.

In other words, we have to present a smart astute business plan to the people.

We can’t leave vague our plans to treat long term care patients, drug addiction and rehab, mental health, precision approaches to cancer, etc. I.e., we can’t have mush.

Just deciding “what to cover?” has shown to be an enormous problem for essentially every extant health care system.

This is why we have to try this in a small sandbox with sharp boundaries. You can’t just say you are going to have “Medicare for all”…when Medicaid is picking up some of the premiums for 40% of poor seniors on Medicare.

We are dealing at present with an immense ball of tangled string…about as complex as any human creation. You can’t just jump into this armed with only with good intentions.

Member
Steve2
Aug 8, 2017
Member

Yes, when Bain Capital deals in your health care, you now it’s pretty much over. Also venture capital from the saintly Silicon Valley is investing in “innovative” primary care “organizations”, some of which already went belly up.
Either way if single-payer, or something like single payer, set prices their joy ride is over..

Member
William Palmer MD
Aug 6, 2017

Margalit, Your intuitive desires seem to be monopsony purchasing (single payer) vs monopoly providers (physicians’ union). This is 180 degrees away from a free market, which has many buyers and many sellers. This is like the government vs GM and Chrysler during the 2008 recession. I’m not sure why you feel this remarkably heavy hand needs to be taken.

Member

It’s really not. I actually think that this is the only way to have a semblance of free market. What we have now is most certainly not a free market, and as more and more physicians become employed by larger and larger health systems, negotiating prices in secret with even bigger insurers, we are moving away further and further from a market where either doctors or patients have anything to say about what they sell or what they buy.

If systems were smaller and physicians were small businesses and government role was to regulate, and guarantee payment of, a base price and ensure that all people have access to that market, physicians could compete on price and quality safely knowing that the base price they negotiated is always there as a fallback. Patients would finally have the freedom to pick and choose (no networks, no restrictions).

What I am suggesting is good for doctors and patients. Not so much for anybody else. Think about a type of Medicare (not Medicare Advantage, just Medicare) where you can charge more, or less than the fee schedule, you can run your business as you see fit, you can offer value-added services, you can treat people as you think they should be treated without cray mandates, incentives, penalties and all that. That’s what I want to see. For that to happen, we need to remove large corporations from the driver seat and give physicians the power to balance the government power. It’s not a traditional labor union and it’s certainly not like GM because it’s thousands and thousands of small businesses with just enough regulation to keep things that way..

Member
Allan
Aug 7, 2017

Margalit, it sounds like you are trying to create a system from top down believing that it would then grow organically into a free market system. Somewhere along the line I am losing your train of thought. We agree that what we have today is not a free market system and I believe no free market existed since WW2 when wage and price freezes led to the creation of employer sponsored healthcare. Admittedly government interference in this method of insurance at the onset was low, but gradually increased demonstrating that what might appears to be benign government involvement can suddenly eveolve into a monster.

Member

Alan, there are two major influences in our health care system that make it untenable. One is indeed government and its massive regulatory power, which can be good, but it is misapplied in so many ways that it has become a burden to all, including the government itself.
The second is unbridled profit taking. This has no place in health care. It has no place in any other health care system that works relatively well anywhere in the world. It has got to go, or we will not be able to fix anything.
We live in a capitalist society and that’s a good thing, but some things cannot function based on Gordon Gecko’s philosophy, simply because if they do, they will drag the entire capitalist economy down with them. It is to protect the capitalist system that I suggest excluding most of health care services from it. Financing health care should be a utility. Only government intervention can make it so.
Am I concerned that government won’t be able to do the right thing? I sure am. Hence the need for that mythical physician’s union, the AHA and a completely private delivery system. I frankly don’t see any other way that will maintain health care freedom for patients and professional freedom for doctors, both of which are being clobbered under our current system.

Member
Allan
Aug 7, 2017

“unbridled profit taking”

Off the top of my head unbridled profit taking occurs basically under three conditions.

1) Government laws and regulations which I think you recognize.
2) Monopoly which incentivizes others to enter the market.
3) Unconscionable contracts which can be voided by a judge.

The solution is a freer marketplace with a lot less government intervention and subsidies to those that absolutely need them.

Member

Would have been a long time ago. It’s too late now. The players are too big and too few. If you remove whatever restraints government has on them at this point, we’ll end up with a “single-payer” that cannot be voted out office and 40% GDP on health care.

Member
Allan
Aug 7, 2017

I believe that as a rule government and the largest entities are working more in concert than against one another. Throughout history the regulators all too frequently were protecting their own interests. Look at the history of railroad long haul vs short haul.

Member
Barry Carol
Aug 6, 2017

I’m wondering how much drug and alcohol treatment costs these days in a decent well run facility and how long does the typical treatment program last? My perception is that it can easily cost $30K for 30 days in the equivalent of a three star facility and far more in the types of places the celebrities typically go to when they need treatment. How much does Medicare and commercial insurers pay now and what is the maximum number of treatment days they will pay for?

An NP tells me that residential drug treatment is only successful about 10% of the time on the first try. Addicts really have to want to fix their problem themselves. That includes changing their phone number, dropping their previous drug using friends and maybe even moving to a different place at least within the region. Just being forced to go to treatment by law enforcement or family members often doesn’t work. More often than not, it turns out to be an expensive version of leading a horse to water.

With respect to mental health treatment, the key issue is often the difficulty of measuring progress. We can easily tell if blood pressure or cholesterol medications are working. For mental health counseling with a psychiatrist, not so much as treatment can continue for years at high cost. We can’t afford to give everything to everyone. The line has to be drawn somewhere. Doesn’t it?

Member

No, it doesn’t. This is a national emergency Barry. We can’t afford to draw lines. We can’t afford to be penny wise and pound foolish. We need to throw the kitchen sink at this one.

And the idiotic arguments some are making (not you) that because we mishandled other issues in the past, we should also mishandle this one to avoid the appearance of discrimination, is just that, idiotic.

Member
Allan
Aug 4, 2017

“Nobody on the Right gives a [bleep] about opioid victims”

Bobby G, I’d say people on the right are taking action. The Trump administration is stopping Opiods from enterring in from Mexico something Obama was very lax about.

Drug Cartels Fuming at New U.S. Policy Screening 100% of Mexican Cargo Trucks
AUGUST 01, 2017

In a major shift from lax Obama-era regulations, the Trump administration is finally allowing customs officers to screen all cargo trucks entering the U.S. from Mexico and sources on both sides of the border tell Judicial Watch Mexican drug cartels are fuming. U.S. Customs and Border Protection is using X-ray technology and other non-intrusive tools to screen 100% of cargo trucks crossing the southern border after eight years of sporadic or random screening permitted under the Obama administration.

“We felt like we were the welcoming committee and not like we were guarding our borders,” said veteran U.S. Customs agent Patricia Cramer, who also serves as president of the Arizona chapter of the agency’s employee union. “The order was to facilitate traffic, not to stop any illegal drugs from entering the country,” Cramer added. “We want to enforce the law. That’s what we signed up for.” Cramer, a canine handler stationed at the Nogales port of entry in Arizona, said illicit drugs are pouring in through the southern border, especially massive quantities of fentanyl, an opioid painkiller that the Drug Enforcement Administration (DEA) says is more potent than morphine.

Continued at:
http://www.judicialwatch.org/blog/2017/08/drug-cartels-fuming-new-u-s-policy-screening-100-mexican-cargo-trucks/

Member
Peter
Aug 5, 2017

“In a major shift from lax Obama-era regulations, the Trump administration is finally allowing customs officers to screen all cargo trucks entering the U.S. from Mexico”

“Drug Cartels Fuming”

Right wing Judial watch claim that has been cut and pasted by every other right wing nut job publication – mostly false.

http://www.politifact.com/texas/statements/2016/dec/05/roger-williams/mostly-false-roger-williams-claim-lot-trucks-not-i/

Member
Allan
Aug 6, 2017

Peter, the difference between you and Judicial Watch is they document everything they say. You probably hate them because they said things your probably disagreed with only to find out later that what they said was in black and white or in emails all obtained with FOIA requests.

Member
Member
Allan
Aug 7, 2017

Peter, what in your article demonstrates that “In a major shift from lax Obama-era regulations, the Trump administration is finally allowing customs officers to screen all cargo trucks entering the U.S. from Mexico … is using X-ray technology and other non-intrusive tools to screen 100% of cargo trucks crossing the southern border after eight years of sporadic or random screening permitted under the Obama administration.”

What in your http tells us that the above isn’t true? Nothing. Why did you post it? You like the spin CNN provides even if what they say is blatantly untrue.

Why don’t you tell us why Obama didn’t screen all of the trucks since drugs in large quantities were passing through the border.

Member
Peter
Aug 7, 2017

Your contention was that Trump cares about opioid addition because he told the border to inspect all trucks – mostly false. Not sure how you stop and inspect all trucks without massive congestion. Why not inspect all cars going across the border as well.

The CNN report tells a much different story about his purported caring about the issue. He doesn’t back any of his tweet concerns with the funds and action necessary to actually do anything. The issue is more than a Tweet, although I doubt the Trump “brain” can get any deeper than tweet thoughts. He likes to grandstand and walk away to the applause from his mindless supporters.

There’s a good quote (supposedly made by Mark Twain) that, “it’s easier to fool people than to convince them that they have been fooled”

Works for Trump supporters.

Member
Allan
Aug 7, 2017

The problem is that CNN didn’t address a true fact nor anything else that Judicial Watch mentioned. CNN has barely mentioned Debbie Wasserman Schultz’s problems with her Pakistani computer whiz who was arrested while leaving the country.

CNN leaves out a lot of things and doesn’t deal with facts unless those facts agree with their spin. Therefore, what you say is blatantly misleading unless you can show that CNN took into account what is actually being done and proves its case.

I think many people realize that CNN is a joke, even those that are not on the right. Perhaps that is why their ratings are so poor.

Mark Twain was talking about you in his comment about fooling people and people being fooled..

Member
Steve2
Aug 5, 2017

We have been working with our county officials since Vivitrol is being aggressively pushed in our area. At least in our area we have seen no change in the availability or cost of narcotics. Really, this is just a continuation of the War On Drugs. If there is any war that has failed, this is the one. Since you are a Trump fanboy you are convinced that it will work this time. It won’t. There are a lot of other things that might help. One of those is the lack of mental health and addiction services. In our research we have found that most small to medium networks have very few or no addiction experts. Look at the number of people dying, look at the number who don’t but are filling up ICUs and EDs, then explain that.

Steve

Member
Allan
Aug 6, 2017

“If there is any war that has failed, this is the one.”

Our approach to drugs isn’t realistic and our leaders are protecting their own interests. Recidivism and thievery runs ramplant.

Member

Maybe if we enroll them all in the flagship of health insurance and pour in everything we’ve got, we could make a difference….
This is a national problem. It needs a national solution.

Member
Steve2
Aug 4, 2017

“but surely someone who professes to be the voice of the forgotten men and women”

That was just to get their votes. By his actions, there is no evidence that he actually cares about those people, and in particular it is pretty evident he has little interest in health care. My prediction, the last time you said Trump was going to fix things, was that he would defer to GOP leaders and the only thing we could be sure about was big cuts to Medicaid. At this point we either get some version of the existing House or Senate bill with big Medicaid cuts, or we get some face saving effort. Don’t expect Trump to pass something that does not benefit, or actively help his real constituency, himself, his family and fellow financial elites.

Democrats would of course sign up for your version of Medicare for everyone. Then you need at least a dozen Republicans. Who would those be? Murkowski has an interest in protecting Medicaid since she is from Alaska, but she is actually quite conservative and can’t see her going for this. Collins? Maybe, but that is about it. Any senator who supports this loses in their next primary.

Steve

Member

I guess it depends on how you frame it. That’s where the opioid crisis comes in. Maybe we start with just that. I can’t see how people vote against helping with this and win any election after that. My guess is that the narcotics problem is only at its beginnings and it will get much worse in a year or two. This may very well be one of the defining issues of 2020 (all other things being equal). If every disaster is an opportunity, then that’s a pretty big disaster, so the opportunity should be equally huge.
Democrats as a group do not want single-payer any more than the GOP. If that ever came to a serious vote, it would split the party as much as the Medicaid issue split the GOP. Most Democrats in Congress take money from the insurance lobby. That’s the real reason why we have to pay all this money to entities that serve no particular purpose.

I will let the Trump stuff slide, except for pointing out that the Medicaid cuts didn’t become law, and that “mean” stuff ended up going nowhere. Was it incompetence, or was it by cunning design? Also, substance abuse has been a major theme of his campaign. He seems to be bothered by it and by bad things happening to children. And, before the election up to the beginnings of his campaign, he was very comfortable with single-payer (and Planned Parenthood by the way).until GOP crazies had a conniption over that.
I don’t know if he’ll try or not, but if he does, it could work.

Member
Aug 4, 2017

Nobody on the Right gives a [bleep] about opioid victims, with the exception of AG Jefferson Beauregard Sessions III, for whom they’d make nice customers for his newly authorized private prisons.

Member
Peter
Aug 6, 2017

Why are we calling them “opioid victims” and wanting to spend billions on care? What did Sessions call crack cocaine users?

Member
William Palmer MD
Aug 4, 2017

Do you really want the CMS to be controlling the financing of all health care? LTC? Disabled? Autism and developmental disorders? Capital investments in hc infrastructure? Does this control need to reach back into the medical schools and nursing schools? …after all, these are the input factors of production of the hc sector. .

All this would be a needless upheaval and I don’t think you really mean a single payer for the whole shebang.

Talk about your real boundaries.

Member

Well, I do understand the concern, but I don’t want CMS to control much more than they are already controlling between Medicare and Medicaid. Medicaid is controlling pretty much all of those things you mentioned at the start, although I am not sure that “control” is the right term to use. They pay for these things. The fact that states pay for some of it doesn’t make me feel warm and fuzzy, seeing how positively mean some states have been, and not just red states…I also don’t quite see how CMS can reach into infrastructure and medical schools (and residencies) more than they already do.

I am not suggesting upheaval either. All I want is to see a large insurer in the market that has absolutely zero interest in increasing revenues and is to at least some degree accountable to the public, as in we can fire the boss of the boss every four years.

I am not suggesting free Medicare. People, except the poor and afflicted, should have to pay full ride, just like they pay now. If they prefer to pay Anthem twice as much for narrow networks and no accountability, that’s fine too. I want people to have choices. Isn’t that what we all want?

But there is more…. I want Medicaid dismantled (there is only one M in CMS so that should work just fine 🙂 ). I want Medicare to be allowed to negotiate prices for everything. I want doctors to be allowed to unionize and negotiate base fees. I want statutory limits of regulations CMS can impose on its 100% private contractors (e.g. physicians, hospitals, etc.). For example, I want physicians to have the freedom to bill more or less than the base fee. I want commercial payers to be forced to compete for real (because right now they are just faking it), and as a result fracture and splinter into much smaller and less powerful entities. Maybe they end up being just TPAs for large employers, and purveyors of supplemental insurance for Medicare, and nothing more.

How does that sound?

Member
Steve2
Aug 4, 2017

Medicaid covers a lot of the disabled. Fridays are my disabled and mentally challenged kids day. Have a fair number of challenged adults now on the other days. Almost all on Medicaid. Not sure I see a lot of difference in having Medicare covering these people with disabilities rathe than Medicaid, except maybe we get paid more.

Good luck with getting insurers to compete. They work pretty hard at avoiding that. However, in the states with lots of insurers, you then face the possibility of providers having excessive market power. Left to the markets, this has not spontaneously resolved itself very well anywhere that I can think of offhand. Are you proposing to actively dictate the number of insurers in a region? Would you intend to break up networks to avoid too much market power on their part? Same with physician groups?

As, likely, one of the very few people here to have ever belonged to a union (Teamsters), I am not all that keen on unions, however I still have my guitar and collection of songs from the 60s and 70s that will go over great on the picket lines!

Steve

Member

I think getting paid more is paramount. It’s hard to get referrals for Medicaid kids, especially psych.

Oh they’ll compete like crazy for the crumbs. If there is a Medicare option in town, they will be forced to play by those rules. How do you sell a stupid narrow network, when people can cross the street and get no networks and no restrictions for the same price? How do you restrict doctor practice or charges if the big gorilla doesn’t? That’s why they don’t want a public option. They can’t compete in a free market. They are only good at collecting rent.

Hospital systems should be broken up too. Everything that is too big to fail in a given market should be broken up, should have never been allowed to exist in the first place.

As to unions, I do agree that they fell victims to corruption. But this is different than a traditional labor union, because members are business owners, not employees, at least half and I assume more as things start to change. It could work. I really think it could… 🙂

Member
Steve2
Aug 5, 2017

Suppliers give discounts to large networks. Networks are able to concentrate sicker patients in their tertiary centers. Concentrate pediatric care in one facility. We are not a huge network, only about $3.5 billion in revenue, but I can tell you based on our stats that patient care suffers absent the resources of the larger central hospitals.

If doctors are going to get paid a lot more, I assume this will apply to other providers. Hospitals will get paid more. How is this all getting paid for?

Talk with young docs. I think it pretty safe to say at least half and probably most would rather be employed.

Steve

Member

Suppliers will have to price stuff as their market can bear. Besides hospitals have a long history of banding together for purchasing purposes. No need to merge just for that.
I’m not sure I understand why would large hospitals not be there…. There will be central ones and less central ones, like we had before they bought each other. Perhaps I’m missing something here?

Doctors will get paid more than Medicaid and perhaps less than commercial payers pay. All in all, they’ll probably be paid the same, except I hope they find a way to pay primary care a lot more, but that’s another subject.

Of course they’d rather be employed now, because the deck is stacked against private practice, but if that changes, wouldn’t they change their mind? It’s kind of nice to be your own boss….

Member
Steve2
Aug 6, 2017

Since you don’t work in a hospital would take longer to explain than I have time right now, but let me give a brief example. Most of those smaller, rural hospitals or the less well off urban ones have limited staff resources. They typically have docs who trained at tier 2 and 3 residencies. Then, it is more difficult to keep up on latest developments and have access to the latest tools. In some ideal world they do, but in reality it just doesn’t happen. Within a network, where the docs will belong in the same group, you can rotate docs (others also) to the smaller places which helps to keep them current. Helps to find problems.

Having taken over several small hospitals now, each time we have gone to those places we have found things happening that ranged from bizarre to just bad medicine.* We fix those things. Equipment gets updated, actually saving money sometimes, and then we expect this places to work to network standards, given the level of care possible. Then we continue to help them achieve that. So tomorrow, just to give an example, at a tiny hospital in a rural area we are sending a fellowship trained doc from what is generally considered a top 5 program. 6 years ago they had someone who trained at a residency I had never heard of, and after being involved in recruiting for a long time, that was hard to do. 6 years ago their morbidity and mortality numbers were bad. Now, they are much better than the average critical access hospital. (This goes way beyond physicians for that matter. One of our smaller hospitals is redoing one of its clinical areas. To help make sure it goes well they are “borrowing” the best nurse manager with whim I have ever worked to make sure it goes well.)

Can you do this kind of stuff absent a network? Beats me, but not sure where you get the resources.

Also, even with buyers groups, there are still items you need to buy outside of them, often the capital intensive stuff. Within a larger network you can often get the reps to throw in some extras that they would not do for a single hospital, or get even deeper discounts.

Steve

Member

I understand that. We have a few systems here that own rural hospitals in addition to the big city ones, and I assume they do similar stuff (used to work for one years ago). But how big do you need to be? Is it really necessary to own dozens of hospitals in dozens of states? I understand the benefits of being affiliated with a large hospital that attracts the best, but surely there is some limit after which, it’s just too much, no?

Member
Barry Carol
Aug 7, 2017

Margalit, since you’re from the St. Louis area, I assume you’re referring to Ascension Health though they’re certainly not the only healthcare system (network) that owns hospitals and clinics in more than one or two states. Dignity Health, formerly Catholic Healthcare West, in CA is another. Both are non-profit so there is no shareholder value that has to be maximized. Why is it so terrible for these hospital systems to be big but if government controls 100% of the market in terms of what’s covered and prices paid, it’s a great thing?
I like the sorts of innovation that can be brought to smaller hospitals that are part of a larger hospital system that Steve2 describes. I also know that academic medical centers that train the next generation of doctors get the best prices on expensive medical devices and equipment not just because they buy more units but because they train the next generation of doctors who may be more likely to use the devices that were used during their training when they go out into private practice.
I don’t think there is much wrong with the current system that can’t be fixed with (1) price and quality transparency, (2) reasonable protections against how much can be charged for care that must be delivered under emergency conditions where price shopping is, by definition, impossible and there is no meeting of the minds between patient and provider on price, and (3) extending coverage to everyone with significant help from subsidies as needed to ensure that nobody pays more than 10% of pretax income for health insurance.

I note that in Switzerland, roughly 45% of the population qualifies for a subsidy. As a taxpayer, I would be more than willing to support higher taxes to ensure universal coverage through private insurance including Medicare Advantage and Medicaid managed care. I think insurance companies add significant value in working with providers on care delivery innovation ideas and payment models and I prefer to see them continue to do that. I don’t want a single payer system controlled by politics. Even liberal expert Ezekiel Emanuel opposes it, in part, because it’s likely to have a significant adverse impact on medical innovation.

Member

In Switzerland Barry, insurance companies are nothing more than TPAs for the very generous basic benefits. They are not allowed to profit from that. They are not allowed to restrict access to “networks”. They are not allowed to “negotiate” (collude on) prices with humongous health systems. They are not allowed to collude with PBMs to keep drug prices high and volumes through the roof. And they are not allowed to deny care or ration care under the guise of “managed care”. We tend to ignore those differences for some peculiar reason. Same is true in Germany.

If you superimpose a Swiss system on our for-profit or for-revenue system, you will have to pay 80% in taxes and even that won’t last very long. We need to eliminate the profit and empire building motives from health care. I’ll go for the Swiss system, or the German system, or the French system (which is actually regarded as being better), if you can do that. I don’t think asking our behemoth insurers or our Kaisers nicely will do the trick though. Hence my alternative suggestion..

Member
Barry Carol
Aug 7, 2017

Swiss insurers are much more than TPA firms because they absorb actuarial risk. They must cover their expenses with revenue from insurance premiums. U.S. insurers who process claims, negotiate reimbursement rates and provide a network for self-funded employer health plans are more like TPA firms as they simply charge the employer a per member per month (PMPM) fee for their services. The employer absorbs all of the actuarial risk unless it separately purchases reinsurance.

While you’re correct that Swiss insurers can’t make a profit from selling the government mandated benefits package, roughly 35%-40% of the U.S. non-Medicare and non-Medicaid health insurance market is controlled by non-profit insurers, mainly the Blues other than the 14 owned by Anthem. The aggregate profits earned by health insurance companies are pretty small in the context of total healthcare costs.

Swiss insurers negotiate as a group with providers who also negotiate as a group to determine reimbursement rates. While all insurers pay the same rate for a given service, test or procedure, we would need an anti-trust exemption in the U.S. if we wanted to try that approach and such an exemption is unlikely to be forthcoming anytime soon.

As for drug companies, many foreign governments control drug prices and, in effect, free-ride on the U.S. market as they don’t pay for their share of R&D. Moreover, even a lot of the drug research that takes place overseas has the unfettered U.S. market in mind as companies determine which projects to pursue. If the U.S. tried to control drug prices in the same way, it’s likely that drug companies would convince foreign governments that they had to charge more in those countries so U.S. payers could pay less. Failing that, we would see a significant decline in drug research and innovation. As for PBM’s, you’re just plain wrong about collusion. While rebates are a function of the list price of a drug, PBM’s don’t raise drug prices. Drug companies raise drug prices. Also, generic drugs are actually cheaper on average in the U.S. than elsewhere and the near term trend is down as evidenced in the recent disappointing earnings reports from the three big drug wholesalers.

With respect to profits in healthcare, insurance companies will tell you that their medical claims costs fall into three buckets which are 40% for hospital care, both inpatient and outpatient combined, 40% for physician and clinical services and 20% for prescription drugs. Given all of the consolidation in recent years including hospitals buying up physician practices, imaging centers, physical therapy centers, etc., it’s quite likely that as much as 60%-65% of medical claims wind up as hospital system (network) revenue. If you want to know where most of the profits are, look there even if they aren’t reported as such. There are loads of ways to bury profits within hospitals some of which are beneficial to patients and some aren’t. It’s also worth noting that doctors make significantly higher incomes than their counterparts in other developed countries. Money to pay them has to come from somewhere, namely higher reimbursement rates.

Member

Barry, whether for-profit or for-revenue makes no difference to me. I personally think that no business that makes over 1 million in revenue should be exempt from taxation. Insurers have zero interest in keeping prices down because they get to keep a fixed percent of revenues. The higher the prices, the higher the revenues, the higher the stated profit and the higher the not-stated profits and executive compensations. You could argue that lowering prices and premiums is necessary because the market can only bear so much, but that is not how things work. If the market can’t bear their prices, as is the case now, they do two things: dump more “responsibility” on patients and then turn around and sue the Federal government for failure to subsidize their insane fees. This is not sustainable. This must end.

I am not absolving hospital chains either, hence the need to break them up to a more manageable size. As to PBM see the latest in ProPublica (Charles Ornstein) on how PBMs and insurers collude to increase brand name utilization.

Innovation is nice, but I seriously doubt that it has much to do with allowing pharma unchecked ability for price gouging. Their R&D budgets are rather small by comparison, federal money is responsible for lots of research, and frankly re-purposing old stuff into “new” stuff just so they can charge more is not quite the innovation I would expect and neither is the constant price increase for everything they sell in this country, including stuff that’s been around for decades.

Yes, doctors are paid more and I think some specialties need to be paid less while others need to be paid more. That’s a separate issue, as is the fact that our “education” is more expensive than in other places and malpractice is another thorn in this story. These things should be bundled and solved together.

The thing Barry is that nobody other than the government and the people have any interest in controlling prices. And by that I mean unit pricing, not utilization. Everybody is hellbent on rationing and social engineering, but before we do that, I’d like to see corporations take a major haircut. If we still need to limit what patients can have after that, in the richest country in the world, with a record breaking stock market and huge global corporations that pay no taxes, but lobby day in and day out for more slave labor importation, and supper billionaires who buy the government they need to become trillionaires, then yeah, I’ll consider that option. But not now and not until we tried everything else.

Member
Barry Carol
Aug 7, 2017

Margalit, I strongly disagree with your premise that insurers have no interest in mitigating healthcare cost growth because they make more profit from higher healthcare prices and higher healthcare utilization. For our largest health insurer, UnitedHealth Group, their public business already exceeds their private commercial business. Their average margin on Medicare business is 5% pretax and on Medicaid, it’s 3% pretax. Healthcare prices are basically dictated in both cases. On the commercial side, 73% of members are in self-funded plans now where United assumes no actuarial risk but just provides administrative services including claims processing, providing a network and negotiating reimbursement rates. PMPM fees don’t increase with either utilization or contract reimbursement rates. It only has 565,000 members in the individual insurance market out of something like 30 million total members. It is keenly aware of the affordability issue for both employers and individuals alike.

It’s interesting to note that United continues to get more deeply involved in providing healthcare services as well as insuring healthcare costs. It now owns MedExpress, a chain of urgent care clinics and recently acquired Surgical Care Affiliates, a chain of ambulatory surgery centers. It owns Southwest Medical in Las Vegas, an HMO. Its Optum unit provides behavioral health services and data analytics and Optum Rx is both a PBM and a provider of drug insurance coverage.

I read the article about what you call collusion between drug manufacturers and PBM’s. The fact is that the vast bulk of PBM negotiated rebates are passed on to both self-funded employer and insurance company payers. You can read Adam Fein’s Drug Channels blog for more on this subject. While the problems encountered by people with high deductible plans being exposed to the full list price of a drug if they’re still within their deductible is a legitimate issue, the primary driver of the PBM’s strategy is to save money for payers. Yes they take a cut just as drug wholesalers take a cut as they distribute drugs to pharmacies.

Under the current system, people with Medicaid and VA care pay nothing or almost nothing for their healthcare. Those with Medicare pay a tiny fraction of the actual operating cost of the program notwithstanding what they may have paid in over their working lives when they took nothing out. People with employer coverage may be paying plenty for their health insurance but they PERCEIVE that they are paying relatively little because their employer nominally covers most of the cost though it’s really part of total compensation which employees pay for in lower wages than they would otherwise be paid. Those most dissatisfied with the current system are those in the individual market who are healthy and resent paying for the ACA’s required benefits package and those who can’t afford coverage even with subsidies.

If we went to a single payer system, the percentage of the population who would perceive that they are now paying more in taxes than they are receiving in benefits would increase astronomically. Those who work for large employers and in the public sector have comprehensive coverage and would likely see Medicare for all as a step down. Those who already have Medicare aren’t interested in paying higher taxes. There aren’t enough rich people to soak ad infinitum so everyone else can have a free ride. It may not work all that well for hospitals either. I just think it’s a bad idea period.

Member

Why more taxes? As I said in the previous piece, we don’t need more money in the system. We have $3 trillion. That’s more than enough to cover everybody. We just pay whatever we’re paying now (or not paying now) to a central location, which then distributes the money to contracting utilities to reimburse providers of care.In other words traditional Medicare. We can use the surplus created by this efficiency to care for all the people that are not covered now, or are covered by crappy managed care junk.
I am not suggesting we do this tomorrow in one swoop. It would be way too traumatic to all involved. Start with a few, see how it goes, add some more if it works. Otherwise we can always stop and continue to pay protection money to insurers, PBMs, wellness contractors, managed care organizations, Lloyd’s of London and whoever else has installed a little maple syrup tap in our health care system.

Member
Barry Carol
Aug 8, 2017

Margalit, I keep having a problem with the notion that the $3.4 trillion we currently spend for healthcare according to the National Health Expenditure data would all be available to finance a single payer alternative to the our current health insurance system. What’s really available, in my opinion, is the sum total of what we currently spend for Medicare (including beneficiary premiums), Medicaid, VA, employer sponsored insurance and individual market insurance. For this year, Medicare and Medicaid will probably spend approximately $1.2 trillion combined including beneficiary premiums which the federal government accounts for as offsetting receipts. That’s to cover roughly 125 million beneficiaries or 115 million people net of the 10 million that are eligible for both programs. Employer sponsored insurance will likely spend roughly $1 trillion to cover 150-155 million people. The VA and individual market will spend a combined $200 billion or so to cover 20 million people though there could be some duplication within that group.

That’s $2.4 trillion. Throw in perhaps another $300 billion paid out of pocket by individuals a big chunk of which is probably for long term custodial care. Where is the other $700 billion? Providers already claim that Medicare rates don’t fully reimburse them for their costs and Medicaid doesn’t come close. Claimed administrative costs are low but there is plenty of fraud partly because neither program spends enough on analytics to defect problematic bills before they are paid. States that are hiring private insurers to provide managed Medicaid insurance plans are doing it because it saves the states money. Low income seniors especially like Medicare Advantage plans because they don’t have to spend $200 per month or more for a supplemental plan which most of them can’t afford.

That leaves roughly 30 million without coverage including illegal immigrants who would presumably have to be covered via single payer probably at a cost of around $5,000 each or $150 billion. Most of the supposed savings from a single payer plan that would help pay to cover the currently uninsured would come from lower reimbursement rates than commercial insurers currently pay and there will be some savings in administrative costs albeit at the risk of more fraud. To accomplish this, you will have to tell the 150-155 million people who currently have employer sponsored insurance and like it for the most part that we’re going to take that away from them, make them pay more in taxes, and try to assure them that the new system will be better than what they have now. Even the ultra-liberal Paul Krugman admits that would be a mighty tough sell. If we were starting fresh, the health insurance system would look a lot different than it does now but we aren’t starting fresh. We need a system that reflects our values and our culture. Single payer isn’t it.

Member

First of all, since you mentioned him, Paul Krugman is a hack. I used to read his stuff religiously and then it all became just sheer craziness, but I digress.

As to the “transition”, because there will have to be one and it may take many years, if it’s ever completed. I am not proposing to take anything away from anybody and I am not proposing any new taxes. Yes, we do indeed have a system and we will have to work with it.
I am suggesting we open Medicare to people who can no longer find insurance in the current system. People will have to pay to Medicare just like they pay currently to Anthem or whatever insurer dumped them most recently. It’s not a freebie. I would have preferred that when Obamacare decided to subsidize folks, it would have made subsidies available exclusively for buying into Medicare to keep the money in the house, so to speak. But that didn’t happen. So I would like to reverse that decision slowly and incrementally as private payers exit the individual market.

Second, I suggest that people afflicted by the black plague of our time, be allowed to also purchase their way into Medicare, if they so desire, and make Medicare the hub of opioid treatment. If the addicted person has employer insurance or any other insurance the private payer will be forced, by the patient, to transfer coverage and funds to Medicare.

Sure, there are kinks here and those will need to be worked out, but I am not going all out to cover illegal aliens or the uninsured in general. I am not suggesting that we add or expand another entitlement. Just moving the chairs on the Titanic, because we are not running into an iceberg. The load is grossly imbalanced, that’s all, and moving chairs will help right the ship.

Member
Barry Carol
Aug 8, 2017

Margalit, it sounds like what you’re suggesting is for Medicare to be an insurer of last resort or, if you like, a high risk pool. People who haven’t been able to buy insurance in the current system either can’t afford it because they don’t qualify for a subsidy or qualify for an inadequate subsidy or are healthy, don’t think they need insurance and don’t want to pay for it. Illegal immigrants are a separate issue.

I’m not sure how Medicare would price its policies to people younger than 65 who want to buy into the program. Medicare currently spends an average of $12K per beneficiary and disabled beneficiaries younger than 65 are among the more expensive to serve. If Medicare is required to price its policies high enough to cover its claims costs plus administrative costs and if there is no mandate to purchase insurance and people can just wait until they’re sick to buy coverage, I don’t see how it can work. It would just be another adverse selection fiasco financially.

If we went back to medical underwriting so healthy people could buy cheap coverage or none at all and a Medicare buy in served all the sick people who couldn’t pass underwriting, it would be even worse. If we provided subsidies sufficient to ensure that nobody paid more than 10% of pretax income for health insurance with the rest of the premium covered by taxpayers, it would be expensive and would require new taxes or a still higher deficit for our kids and grandkids to pay off.

Separately, I’m curious about why you think Krugman is a hack. I read his column and think he comes across as a socialist who wants us to be like Sweden. He extolls the benefits of a comprehensive social safety net while he downplays the high tax burden that even middle class taxpayers have to pay to cover the costs. If he thinks these socialist countries are so great, maybe he should move to one of them. The American middle class doesn’t want to pay 50% of its income in taxes including a VAT and social insurance “contributions.”

Member

Regarding Krugman, that, and the insane reaction to electing Trump and his barely concealed disdain for people who voted for him, which are after all the people his “magnanimous” policies are supposed to be for. If he hates the people, I don’t trust his much professed good intentions.

As to Medicare, yes last resort is a good term, but not necessarily because you are uninsurable. The disabled have Medicaid at this point, so keep that for now (later on we can move them, for the same money we spend now). In the individual market there are people who want to have insurance, but are being priced out, or are severely hurting financially because the subsidies are too small or non-existent for them. These people are not necessarily sicker than most. Let them buy Medicare. It would take some doing to calculate the rate, but I am certain it would be below commercial, by a lot. And no, I don’t think people should be able to wait until they are sick. There are ways to fix that without a mandate (open enrollment periods, waiting periods, etc.).

Point is that Medicare is already a huge pool of high risk patients, a few more won’t have the same adverse effects as they have on the minuscule pools in the individual market. Also, I bet there will be an influx of healthy and maybe even wealthy ideological buyers…. 🙂

Member
Barry Carol
Aug 8, 2017

Pricing would be a challenge. I wouldn’t have a problem with Medicare doing as you suggest if I could be confident that it would compete on a level playing field with private insurers which means it would have to cover medical claims plus administrative costs solely from premium revenue.

I don’t think that model would be sustained even if it started out that way. I don’t want to see deliberate under pricing with unlimited access to federal funds with the specific objective of unfairly driving private insurers out of business. People like choices and government should have to compete too just as Medicare compete with Medicare Advantage insurers now with Medicare Advantage steadily gaining market share..

Member

They are not competing with Medicare Advantage. They are contracting with Medicare Advantage and losing their shirts doing that. Not to mention the billions in fraud perpetrated by MA plans…. but again, that’s another subject.

I agree with you that the under 65 crowd should not cannibalize the trust fund or the general revenue allocated to 65+ folks. But I don’t want a level playing field. I want Medicare to negotiate with drug companies and use its muscle to make premiums cheaper. Same for physician and hospital fees. I could be wrong, but I don’t think any commercial plan would be able to stay in the game if it continues to operate the way they have grown accustomed to (huge salaries and bonuses, huge administrative complexity to hide real profits, all sorts of venture capital adventures, huge dumping of expenditures on members, those horrific narrow networks and wheeling and dealing with health systems, just to name a few).

I am sure you disagree and obviously there are no guarantees, so why not try on the small scale I suggested above, or another small scale, and see what happens? If it fizzles out, we go back to the drawing board…. This is not a new “entitlement”, no new subsidies, so it shouldn’t be a problem to roll it back if it fails.

Member
Barry Carol
Aug 8, 2017

Medicare will not be able to negotiate lower drug prices unless it is prepared to refuse to cover certain drugs deemed too expensive. If politicians require Medicare to cover every drug that won FDA approval, negotiation will be useless. The VA gets relatively low drug prices because it’s a comparatively small and sympathetic group. It also has a highly restrictive formulary which most Americans, especially seniors, won’t accept.

Medicare spending for the first 10 months of fiscal 2017 is only up about 3% adjusted for timing differences of certain payments and is roughly in line with the growth of the number of beneficiaries. Medicare Advantage is popular with beneficiaries. I don’t know why you think Medicare is “losing it’s shirt” contracting with MA insurers.

I also don’t know how Medicare insures significant numbers of under 65 enrollees without significant subsidies if they price their policies to accurately reflect actuarial risk. Subsidies will be required which means a new entitlement.

Finally, Medicare Part B requires a 20% copayment on all covered services with no out-of-pocket maximum liability. There is a roughly $1,200 deductible for each hospitalization and a significant donut whole with Part D drug coverage. This is hardly the comprehensive insurance you claim it is. MA plans, by contrast, have a reasonable out of pocket maximum liability. I’ve been on the regular Medicare program since 2012. I can tell you that supplemental plans are expensive and they get more expensive each year until age 75 independent of inflation. Medicare Advantage eliminates the need for those.

Member
Steve2
Aug 7, 2017

I think you make a good point about how big systems need to be to accomplish the good things that networks can accomplish. I don’t know wha the cutoff is, but I would agree that at some point there is no social utility in the increased size of networks.

Steve

Member

I wish someone would d a study about this… It would be very useful to know, just in case they really try to fix something… 🙂