At the Health Affairs Blog Billy Wynne outlines a single-payer system for the United States:
My goal with this post is to demonstrate that a “unified†(punchline: It wouldn’t truly be single payer…), market-driven, federally regulated, privately delivered system need not possess any of these objectionable attributes. In fact, the parameters of such a system are all but staring us right in the face. I call it: Medicare Advantage Premium Support for All (MAPSA).
While any flavor of single payer may be the last thing that comes to mind when contemplating bipartisan initiatives, just as the far left and far right share some libertarian (and other) commonalities, we may have indeed finally come full circle in this tiresome, so-far-futile debate. By combining two shots of conservative orthodoxy with one overflowing progressive one, and stirring slowly, it is not at all far-fetched to envision an endgame cocktail for our health care system that covers everyone, decreases costs, and can pass Congress. Cheers.
I find his assumptions excessive at the very least. Here are the three most important assumptions:
If you remove employer and household spending from the equation for the moment, which means both elements would contribute nothing (you’re welcome), that leaves about $1.5 trillion or $5,371 per person available to fund the new system.
Now, Medicare spent about $11,642 per person in 2015, but keep in mind that these beneficiaries are aged or disabled, much less healthy, and more expensive to care for than the average American, which includes children, young invincibles, and so forth. If we take health plans and actuaries at their word, an “age rating band†(or ratio between what we charge the oldest and youngest members of the insurance pool) of 5:1 is appropriate. This is also, I’d note, the ratio advanced by Republicans in the AHCA.
This suggests that $6,985 is the average cost of coverage if we use Medicare spending as the benchmark (that is, calculating premiums at a 3:1 ratio if 5:1 is Medicare’s $11,642). That may be too high, because for this exercise we are actually excluding current Medicare beneficiaries, so the fifth quintile of the rest of the population would actually cost less, on average, to cover.
When contemplating health care reform I think there are several things to keep in mind:
- Canada’s administrative expenses are about 15% of the whole.
- U. S. administrative expenses are about twice that.
- Once you’ve realized your savings by trimming administrative expenses, you’ve realized your savings. At the present rate of increase in health care costs, the savings realized by cutting administrative expenses would be offset in just a few years. That’s not a lot of headroom.
- Cost savings beyond that can only be realized by cutting reimbursements, something we’ve shown little willingness to do, cf. “doc fixes”.
Mr. Wynne is less cynical than I. I think that if Medicare covered Americans for the first 18 years of life rather than the last 18 years we’d have the highest paid obstetricians and pediatricians in the world and med students would be jostling one another to get into those specialties.
I continue to believe that cutting costs, not just cutting the rate of increase but actually cutting costs, is the sine qua non of health care reform. Until we’re willing to do that anything else is just waste motion.
I don’t think a Canadian-style system is a particularly good fit for the U.S. Not least because Americans won’t tolerate waiting in line to see a doctor due to chronic underfunding and lack of consumer choice.
I may have mentioned this before but I think a model similar to Germany’s, a single-payer that behaves as a multi-payer by utilizing market competition, is a much better fit.
A better fit yet would be a system that’s state-based, like Canada’s, supplemented with block grants from the federal government, awarded by number of legal population.
But I think that a commitment to cost control is a prerequisite. Without it no system will be sustainable.
I did only pediatric cases today. (Nice group of kids today.) If I did those at Medicare rates I would have made about half as much. The primary payers for kids are commercial payers and Medicaid. The latter pays poorly and the former pays very well. Well, actually it is (as is always the case) much more complicated than that. Medicaid, depending upon the state, often pays the hospital and the obstetrician pretty well, they just don’t pay anyone else very well.
So, in order for obstetricians and pediatricians to be paid so well, Medicare would have to pay much better rates than do the commercial payers, not happening, and Medicaid (possible).
Steve
Generally speaking, costs, for anything, don’t go down unless the consumer is involved in paying some of those costs.
Silly you, Jan. Don’t you know that health care is “different” and basic human behavior doesn’t apply?
Much better to begin all fixes by calling in Rube Goldberg.
Drew, I know you already understand this – but rarely do costs decrease until more consumers experience first hand at least a partial responsibility for the cost of any service.
For instance, if every meal a person eats is “free,” there will be little price discrimination practced nor discernment relating to waste. The same goes for medical care. Why lose weight, stop smoking, consider preventative health measures, weigh the benefit of various diagnostic testing available, or choose walk-in care facilities vs more expensive ERs when dealing with common ailments, not relating to emergency care?
Fundamentally, if there are no incentives given for thoughtfully maintaning one’s health, nor some personal investment coupled with choices made when seeking health care, there will also be little indvidual consideration as to the value or cost of health care in this country.