By Arthur Z. Schwartz
In the raging national debate about health care, Sen. Bernie Sanders is the only presidential candidate able to give a short answer: “Medicare for all.”
In a world of Obamacare, managed care plans, health-savings accounts, insurance exchanges, silver, gold or platinum plans and health care organizations, he dusts off a proposal from the 1980s: universal coverage by a single payer—the federal government.
Hillary Clinton and her supporters say it’s “too radical” and could never come to pass. But could Bernie actually be right?
Our current system of multiple payers (insurance companies) is supposed to foster competition, which in turn is supposed to make health care more affordable, more accessible and have higher quality. Could the government as “single payer” ever improve on that? I say: easily.
First, multiple payers multiply the complexity for patients. Sure there are many choices, but patients may not understand the tradeoffs involved—often because they have incomplete information before choosing a company (like exactly who is in-network and how easily that can change). While there may be some who enjoy all these choices, and the intellectual challenge of parsing through insurance plan details, they are overwhelming for many. On top of this, not all doctors take all insurance plans. Some charge you $15 if they are “in” (your insurance company’s) network, and some take no insurance at all. Some take one type of plan from an insurer but not others from the same insurer.
And for those who might be eligible for Obamacare’s financial assistance based on income, simply determining their eligibility can be difficult. (What will your income be next year, and what if you make more than your estimate, or less?) These hassle factors loom particularly large for those who have little immediate motivation to care about insurance or spend time navigating the process—the young—the very group who the system needs to participate if it is to work. Many of them have not signed up; the bulk of the millions who have signed up are on Medicaid.
With a single payer (like with Medicare) these complexities disappear: everybody is in, nobody is out. All doctors have the same plan and the same requirements.
Second, multiple payers multiply the costs for doctors, which they pass on to patients. In addition all this complexity requires a small army to explain, sell, enroll and manage—not to mention the need to determine participant eligibility for subsidies. Hospitals and doctors require their own small armies to deal with the different billing systems and requirements imposed by multiple payers. The result: higher administrative costs for providers. This is in addition to the administrative costs of the insurance companies and their profit margin.
And there’s more: Different plans have different performance measures purporting to measure value and quality. While many might question the validity of these measures, no one questions their immediate effect: providers need more staff to demonstrate that they are meeting the various measures of value and quality.
A single payer system would drastically reduce costs and promote a more rational system. Simply moving to a single uniform insurance claim form has been estimated to save billions in administrative costs.
Third, multiple payers obscure overall system performance. Multiple, incompatible databases—most of which are proprietary—make it hard to know what is actually going on in American medicine. This is important for more than simply monitoring prices and utilization, it’s important for monitoring safety.
The ability to monitor the safety of new drugs, new procedures and new devices is a critical function for any health care system. An example: The United States had to learn about the high failure rate of metal-on-metal hip implants from the United Kingdom. While many complain about the FDA’s ability to do post-market surveillance—the Institute of Medicine cited “substantial weaknesses”—few point out the system’s principle weakness: the balkanization of data. A single payer provides a single data system—making transparent egregious prices, utilization hot spots and innovations that have gone awry.
Finally, multiple payers have too little power to deal with the really big players in health care. Big pharmaceutical companies, manufacturers of medical devices and diagnostic technologies, biotech firms, and now Google and Microsoft are all part of a vast array of investor-owned businesses with a shared interest in increasing health expenditures. Aptly dubbed the medical-industrial complex some 35 years ago by the editor of the New England Journal of Medicine, these businesses are in the business of maximizing their sales and revenues.
Our current fragmented system is fertile ground for this group. Trivial, or nonexistent, advantages can be parlayed into dramatic increases in prices via aggressive marketing—as happened with Vioxx before it was pulled off the market. More concerning is their interest in creating new markets: producing new patients by creating new diseases (like testosterone deficiency, aka Low T) or selling the idea that the path to health requires testing yourself for various diseases.
A single payer system would rein in the medical industrial complex. It would impose discipline in the introduction of new interventions by requiring that they be tested prior to widespread adoption. It would then have the market power to ensure genuine innovations were fairly priced.
Fact of the matter, a single payer system really is not that “radical.” In most of the rest of the “developed world” and “developing world” health care is a government run system: Canada, England, France, the Scandinavian Countries, and even Germany, have single payer systems.
What is “single payer?” It is just like Medicare, with greater benefits. Everyone is in, all hospitals doctors would bill the new entity and be paid by it. With everyone in the same system, prices could be forced down, medical research would be enhanced and medical inflation held in check.
Arthur Z. Schwartz is Democratic District Leader for Greenwich Village and is the NY Counsel Attorney for Bernie 2016.
