OP-ED

Would a Single Payer System Be Good for America?

Brian-KlepperOn Vox, the vivacious new topical news site, staffed in part by former writers at the Washington Post Wonk Blog, Sarah Kliff writes how Donald Berwick, MD, the recent former Administrator of the Centers for Medicare and Medicaid Services and the Founder of the prestigious Institute for Healthcare Improvement, has concluded that a single payer health system would answer many of the US’ health care woes.

Dr. Berwick is running for Governor of Massachusetts and this is an important plank of his platform. Of course, it is easy to show that single payer systems in other developed nations provide comparable or better quality care at about half the cost that we do in the US.

All else being equal, I might be inclined to agree with Dr. Berwick’s assessment. But the US is special in two ways that make a single payer system unlikely to produce anything but even higher health care costs than we already have.

First, it is very clear that the health care industry dominates our regulatory environment, so that nearlyevery law and rule is spun to the special rather than the common interest. In 2009, the year the ACA was formulated, health care organizations deployed 8 lobbyists for every member of Congress, and contributed an unprecedented $1.2 billion in campaign contributions in exchange for influence over the shape of the law.

This is largely why, while it sets out the path to some important goals, the ACA is so flawed.

Understood in terms of its probable returns on a nearly $3 trillion current annual health care spend over, say, 25 years. the lobbying investment was a drop in a very large bucket. The negligible opportunity cost will generate returns for the industry for many years to come.

Second, every health industry sector – brokers, health plans, physicians, health systems, drug and device firms, health IT firms – has demonstrated and continues to demonstrate a willingness to employ institutionalized mechanisms of excess, most of them variants on over-treatment and stratospheric unit pricing, that allow them to extract more money than they are entitled to.

This is why US health care costs double what it does in other developed nations.

It’s not that our people are sicker, but that we now accept distorted care and cost as normal. These practices unnecessarily expose patients to physical peril and cost purchasers double, displacing spending on other critical needs. Unfortunately, ACA does little to disrupt this waste.

Admittedly, employers and unions have so far failed to galvanize and mobilize their aggregated purchasing strength to demand greater health care value. But in a system in which the regulatory environment has been captured by health care, purchasers remain our most promising counterweight to the health care industry’s unrelenting cost growth.

Imagine what might transpire if employers and unions were removed from the equation, except for their contribution through taxes. The purchase of health care coverage would move from groups, who have latent but considerable power, to individuals, who have little to no power against monolithic health care organizations.

In the curious dynamic that has evolved, only non-health care business and labor leaders could work collaboratively, serving as a counterweight to the health care industry’s excesses and holding their health care partners accountable. They could use their considerable purchasing leverage to reward organizations and professionals with good clinical and business practices and, frankly, punish those with bad ones.

But under single payer, we’d all be at the mercy of what occurs in the transactions between our Congressional Representatives and the health industry’s lobbyists. If the past is prologue, there would be little opposition, and the industry would have open field running.

Brian Klepper is a health care analyst and the new CEO of The National Business Coalition on Health.

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ron poormanSam CWilliam Palmer MDplaton20Balboa Recent comment authors
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ron poorman
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ron poorman

Yesterday, I saw something that is quite common and at the same time, quite disturbing. It was a fundraising announcement for a 25 year old girl in my community. She was in an accident and suffered catastrophic injuries. Her friends and family were trying to raise money to help cover the cost of her medical expenses. She has insurance. People who pay premiums month after month, year after year and have to hold fund raisers during the worst time of their lives and may still go bankrupt from medical bills. The health insurance industry is a greedy, money eating, evil… Read more »

Sam C
Guest

I think that any solution that is driving at Affordable care is worth while. However, I think to adapt a single payer healthcare system is NOT what the United States needs to help with costs. From what I have seen the excess that this sector sees is from a lack of accountability. I would like to think if they were accountable to free market forces they would be better able to adjust costs and operations. With almost 50% of healthcare being funded by Medicare and Medicaid I don’t see how this sector is operating more efficiently in tangent with the… Read more »

Perry
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Perry

Bob,

What you experienced reflects the insanity of our system. I would expect a little more cost for an ER considering higher overhead, more staffing, etc., but a cost of $1400 vs. $125 is outrageous. If your son had had a CT or MRI, you can double or triple that. And that is also the problem with ERs, there is a tendency to want to rule out everything in one visit (likely a function of liability).

Bob Hertz
Guest

Actually, Platon20, the insurance companies would sell supplementary coverage under a single payer plan, just as they have sold Medigap supplements for years. And they can make a lot of money doing so. Probably with fewer employees and much smaller reserves, but big deal. Note; it does not affect our debate much, but your suggestion that I walk away from the emergency room is idiotic. Even if I could have found out the price – which no ER clerk at midnight could give me — my family and my son would never have forgiven me if he did turn out… Read more »

platon20
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platon20

Single payer healthcare is a vote to outlaw/ban private insurance companies. Overnight with the stroke of a pen, any kind of single payer plan will wipe out private insurers. Considering the fact that they have BILLIONS in their warchest to buy off politicians, who in their right mind thinks that the insurance sector is just going to stand by idly while politicians vote their business out of existence? Hell the ONLY way Obamacare passed was because the insurance industry threw their weight behind it — they were guaranteed paying customers for life and they will make out like bandits under… Read more »

platon20
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platon20

The same nonsense about rich doctors gets trotted out every year by Klepper, Kliff, Klein, and Yglesias. Every year, without fail. Of course, they ignore Uwe Reinhardt’s research, who knows a hell of a lot more about healthcare economics than they do. Physician take-home income accounts for 10% of total healthcare spending. It is a fact. Do a google search and see for yourself. Since 10% of total healthcare spending goes into doctors pockets, that means that a 50% reduction in doctor income only results in 5% decrease in healthcare costs. So where are you going to get the other… Read more »

William Palmer MD
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William Palmer MD

The present system has to stop. The stratospheric prices will cause it to grind to a halt. Accordingly, I think we are going to see fewer people enter the system and then a watershed collapse. [A friend had a TUR, one night in the hospital, total charge minus surgeon $38,000] I would like to see free district-wide single payer hospital care paid for by refundable tax credits, local taxes and portions of Medicaid. And leave ambulatory care alone. Hospital would have no billing department and no billing records, only medical records. All professionals and administrators on salary. Help the poor… Read more »

Barry Carol
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Barry Carol

I had a TURP ten years ago at a New York City academic medical center. The total hospital bill was about $5,400 which my insurance paid in full. The surgeon billed $6,000 for a 45 minute procedure and was paid $1,751 by insurance. The anesthesiologist, who was not in network, billed $1,680 and was paid that amount. What a system!

Bob Hertz
Guest

Barry, I am tres skeptical when hospitals say that reimbursement does not cover their costs. I suppose the problem is the difference between marginal costs and total, loaded costs. When my son was in the ER last year after a fall, the marginal cost of checking out his reflexes over 20 minutes of care was not $1400. Twenty minutes of a doctor’s time and a nurse’s time (and no drugs or diagnostic tests) would cost $125 in a minute clinic. (We went to a minute clinic first, but there was a danger of hearing loss so we had to go… Read more »

platon20
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platon20

You state that your son’s care was too expensive and not worth what you paid.

But you said that AFTER you had been examined. You didnt say that beforehand.

Why not?

It is YOUR responsibility to ask about costs up front. If they cant give you an answer, or you dont like the answer, you WALK AWAY.

After all, you said that the $1400 in the ER wasnt a valuable use of money. If that’s true, take your chances and shop around.

Barry Carol
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Barry Carol

Bob, Shortly after World War II, the U.S. had 10 inpatient hospital beds for each 1,000 of population. Now the number is about 3 and the long term trend is down. On the outpatient side, I think we will see more and more imaging and labs move out of hospital owned facilities for people who are not inpatients already. When I had my most recent colonoscopy two weeks ago, I noticed that it wasn’t as busy as it was in the past. I asked one of the nurses about it and was told that some of the doctors moved at… Read more »

Balboa
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Balboa

The current trajectory is not so bad:

Exchanges work enough -> large group is added to the exchange -> employers give money for employees to shop on exchange -> costs continue to rise -> health plans lobby for higher deductibles and pt. resp. -> patients demand more price visability -> hospital margins are narrowed -> hospitals go bankrupt -> cities and states buyout hospitals

Is there a system with private insurance, private doctors and public hospitals? Kind of like a reverse Canadian model?

Perry
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Perry

Per a Medscape article, now there’ s this to consider:
http://www.medscape.com/viewarticle/824914

Barry Carol
Guest
Barry Carol

I wonder how well the generalists think they would fare financially if they were paid Medicare rates by or on behalf of all patients with no uncompensated care. At the same time, they would also have to live with Medicare’s documentation requirements, including its RAC’s, and the rest of us would have to tolerate Medicare fraud levels. Every time I’ve asked hospitals in the past whether or not they could sustain their business model if they had to accept Medicare rates from all comers, the answer is always no. They claim that, relative to costs, rates for outpatient care are… Read more »

bob hertz
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bob hertz

According to one of the great recent articles by Elizabeth Rosenthal in the NYT, a German dermatologist is paid about $30 for treatments that are billed at $1,000 or more in the USA.

A financially solvent single payer system would have to adopt a German style fee schedule and enforce it rigorously.

The greatest enemy of single payer (besides the fast food and retail industry, which will resist payroll taxes) might turn out to be the richer doctors.

Given that fact, I wonder if the well-meaning single payer advocates at PNHP are all generalists, not specialists.

Brian Klepper
Guest

Perry,

Unfortunately, primary care is in the situation its in precisely because of the lobbying by specialty medical societies and the health care industry. See information about the AMA’s RBRVS Update Committee (RUC) at http://www.replacetheruc.net.

Brian

Perry
Guest
Perry

Brian, The AMA doesn’t really speak for Primary Care, for sure. And even though I am a member of the Academy of Family Practice, that organization has been so all over the map trying to position itself politically, that I don’t think it knows what it stands for any more. I think many primary care docs would just be happy to take care of patients for reasonable reimbursement, if we allowed them to do more patient care than other BS required by the government and insurance companies. If single payer would do that, I wouldn’t be against it. Because of… Read more »

Perry
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Perry

Given the way the current “reform” has been handled so far, I have serious reservations about the Federal Government administering a single payer system. This is a huge undertaking with everything from payment schedules to manpower to EHR to be coordinated. Britain wasted almost 12 billion pounds on their EHR system. I think you’re right that so many players in the health care industry with different “needs and wants” putting lobbyists in play will hinder anything meaninful being done. I will say that there may be some high paid specialty physicians with their hands in the pie here, but Primary… Read more »

Shane Irving
Guest

Interesting article… It may not be in our lifetimes but I don’t believe it’s a question of “If” but rather “When” and “How”.