The Congressional Budget Office has produced a report on the considerations in implementing a “Medicare for All”-type program. The report is here. Here’s the report’s own quick summary:
The transition toward a single-payer system could be complicated, challenging, and potentially disruptive. To smooth that transition, features of the single-payer system that would cause the largest changes from the current system could be phased in gradually to minimize their impact. Policymakers would need to consider how quickly people with private insurance would switch their coverage to the new public plan, what would happen to workers in the health insurance industry if private insurance was banned entirely or its role was limited, and how quickly provider payment rates under the single-payer
system would be phased in from current levels. Although the transition toward a single-payer system would require considerable attention from policymakers, this report does not focus on the transition process.
At the Washington Post Amy Goldstein adds:
The political hurdles also were quickly evident from industry reaction to the report. Charles N. “Chip†Kahn III, president of the Federation of American Hospitals, called a single-payer system “a high-stakes gamble†asking, “Is it worth the risk of upending health care for every American when the law on the books already contains a road map to universal coverage?â€
Here’s my question. According to The Centers for Medicaid and Medicare Services, Medicare spending per beneficiary is over $20,000 per year. According to the Kaiser Family Foundation, the average employer contribution for employee health care insurance was $5,477 (82% of the total). How do you reconcile those two facts with a plan than in theory would cost no more than is being spent at present, particularly if M4A is to cover an additiona 10% of the American people? What will not be covered?
Interesting times ahead but after re-election is secured they might deign to give those trivial details to us.
The position of advocates of M4A seems to be that, since the rates for procedures under Medicare are much lower than those under private insurance plans, M4A charging at Medicare rates will necessarily be less expensive than private insurance. Since M4A replaces private insurance and what would have been paid to providers via employer coverage would now be paid to the government which in turn would pay providers, it would necessarily be cheaper.
I have two concerns (at least) about that.
1. That assumes that Medicare reimbursement rates would be retained which I doubt.
2. Most people with employer-provided insurance don’t actually have insurance at all. Their employers are self-insuring.
You want details as to how it will work? You don’t need no stinkin’ details! How dare you ask for details! You racist! You bigot!
“According to The Centers for Medicaid and Medicare Services, Medicare spending per beneficiary is over $20,000 per year. According to the Kaiser Family Foundation, the average employer contribution for employee health care insurance was $5,477 (82% of the total).”
I think part of the answer is that old people are expensive. That $20k per year average likely includes that hugely expensive end-of-life hospital stay that many elderly people get before they die.
I doubt anyone knows what the actual costs will be, so I’m skeptical when advocates claim huge costs savings. In my experience (defense, an admittedly much different animal) government programs almost always cost more than initially projected.
I think that you have listed total spending, not Medicare spending per enrollee. Medicare spending per enrollee is probably about $11,000. I trust it doesn’t come as a surprise that older people use more medical care. What surprised me is that private insurance costs so much since so many of their people are healthy and generate minimal costs.
https://www.kff.org/medicare/state-indicator/per-enrollee-spending-by-residence/?currentTimeframe=0&sortModel=%7B%22colId%22:%22Location%22,%22sort%22:%22asc%22%7D
Steve
Also, the following CBO paper is nice to keep in mind. Please note the marked increase in spending per enrollee as people age. I dont have the data for younger people, but am fairly sure that it maintain the same pattern and decrease as we go into the lower 60s.
https://www.cbo.gov/sites/default/files/114th-congress-2015-2016/workingpaper/51027-MedicareSpending.pdf
Steve
The question is whether spending per enrollee increases as people age because that is what is needed or because that is what is covered. In other countries, e.g. Britain, France, Germany, the increase is not nearly as sharp—I’ve published those statistics in the past.
I think it’s probably some of both. I suspect there are providers who potentialize revenue.
I think it is also cultural. Americans dont seem to handle end of life issues well so they tend to default to “do everything”. I can tell you that we have gotten more sensitive to docs who are potentializing income at the end of life. It is very demoralizing for those of us in the OR and for the staff on the floors caring for those patients when that happens. We actively encourage people to report it if they think it is happening.
” I suspect there are providers who potentialize revenue.”
That is what our system is set up to do. The more market oriented the health care system the more that will happen. So, we have the combo of a system that incentivizes more procedures and care at all levels, a population (old people) who can use increasing amounts and a culture that does not want to talk about the dying process.
Steve
“Americans dont seem to handle end of life issues well so they tend to default to “do everythingâ€.â€
You would know, or have a larger experience set, than I. However, we are dealing with my father in laws end of life issues. On no uncertain terms, the institutions involved and the physicians involved are reacting to legal concerns and regulatory mandates. He feels woozy? Has the shakes? An ambulance ride and 2-3 days in the hospital. $5000. This has happened 5 times. No adverse medical findings. We tell the parties, just let him be. He does this in part just to get attention. No way. The facility MUST call an ambulance. The doctors don’t believe we won’t sue. The man is 89 and has dementia. It’s crazy. But the bills just keep rolling in on the taxpayers dime. And that’s the real problem, it’s the faceless, no voice taxpayers dime. People exposed to cost don’t behave the same way.
I can’t imagine this isn’t repeated all over America countless times a day.
I think that’s certainly true and a topic about which I’ve written in the past. Statistically, Catholics are less likely to pursue heroic end-of-life measures than other groups. Catholic hospitals have been pioneers in palliative care programs, for example.
Drew- Have you tried contacting hospice people? They are usually pretty good at helping to avoid this stuff. People tend to think of them as only being appropriate for terminal cancer (or similar) patients but they also help with these kinds of patients. The same thing happens with younger terminal patients who have private insurance just so you know, so I dont think this all because faceless taxpayers are paying for it. It really could be fear of being sued, it could be out and out bad behavior on the part of the facility (we saw this quite a bit when we lived in Florida which I thought was a pretty scummy state when we lived there when it came to nursing home care) or other things. If he is like a lot of people with dementia and seems to be more with it during daytime hours and actually likes going to the hospital it will be more difficult but I know our palliative guys have worked with this before. Good luck. Will add him to our church prayer list. Dementia is such a painful and prolonged death.
Steve
Steve
Hospice is not yet an option. His mental decline is racing ahead of his physical decline. But yes, he is in that phase where he can temporarily rally and be lucid. And then he is incoherent. As for Florida nursing home/dementia care, I share your view. A racket.
However, to your point, as my mother was in end stage lung cancer, hospice honored her wishes – treat the pain and just let me go. 6 weeks from diagnosis to death. Not costly at all. I paid the facility. Hospice came by each day to administer medication.
Thanks for the thoughts.
Last year in July was the end of Alzheimers for our mother at 92 years, It was noticeable for four years but after a hip fracture accelerated very rapidly. Thank God for hospice.
Her 6 week nursing home stay ended up being all self pay, under Medicare regs, no coverage because she couldn’t co-operate with P T.
(physical therapy)