Could Medicare for All solve your healthcare cost problem?

You can’t afford other stuff because healthcare is so expensive. Would Single Payer/Medicare for All fix that?

I’m revisiting the topic so we can better understand the many variations of SP/MFA, how they are different, how those variations might work, and whether some version is a) politically viable and b) would solve the cost/access/quality conundrum.

Last week I made the case that voters want healthcare solved, and they don’t much care about the details and nuance. We also showed that employer-sponsored health insurance is a mess.

Can private insurers solve the healthcare cost problem? Well, on one level they get dinged if they control costs. A key point about for-profit insurers – the stock market loves and rewards revenue growth. In health insurance, revenue growth is overwhelmingly driven by higher medical costs. So, medical cost inflation = higher revenues = higher stock prices (yes, this is simplistic, but also mostly true).

Over the last two years insurers have kept premium increases low, but that’s due in large part to cost-shifting to members. In contrast, Medicare can’t cut costs by shifting them to you – benefits are set by law and rarely change significantly.

The big increase in Medicare 2000s was largely drive by the new Part D drug program; focus on per capita costs to account for changes in membership


As we’ve noted previously, facility prices are the biggest driver of cost inflation – and that’s where Medicare outperforms commercial payers. Of course commercial payers will say that’s because Medicare can force payers to agree to its prices – which, although true, begs the question – why can’t commercial payers do the same?

One main reason – in many areas, provider consolidation has given health systems market power – health providers have more leverage so they have an advantage in negotiations.

In 43% of markets, providers are super-concentrated, vs only 5% of markets for health insurers

But – in over half of the markets, insurers are highly concentrated – which means they have significant market power.

Reality is health insurers have failed to control members’ healthcare costs. There are lots of reasons – including provider market consolidation, but as one of my rowing coaches once said to me; “I don’t want to hear why you can’t, I want to hear how you will”.

What does this mean for you?

If for-profit health insurers had done their job – controlling costs and delivering better outcomes and patient satisfaction – you wouldn’t be reading this.

Medicare has a better track record controlling cost – which is by far the most important issue in healthcare.


Iowans aren’t buying Medicare for All

There’s a big problem with Sen Bernie Sanders’ Single Payer plan. [I think it is Sen Warren’s plan too, but she’s dithering these days.]

Nope, not the cost, not the “gubmint taking over my Medicare”, not the pharma or physician lobbies.

It’s a job killer.

The impact of Single Payer on Iowa’s economy would make the Dust Bowl look like a summer zephyr.

Polling is showing voters’ concerns with Single Payer; here’s the data on the impact on jobs… [Sanders’ version of Medicare for All is pretty much identical to Single Payer]

Somewhere between half a million and 800,000 Americans work for health insurance companies. Most would lose their jobs under Single Payer.

In Iowa, one out of eight workers are in healthcare; a lot of those are clinicians and direct support (med techs, nursing aides etc), most are doing administrative work.

A couple examples of the impact of Bernie Sanders’ Single Payer program on Iowa are helpful.

Wellmark Blue Cross employs 1878 people – adding up the admin costs plus commissions, about $290 million is spent on stuff besides direct healthcare costs – spend that would go away under Single Payer. Sure, some goes to IT, some goes to building maintenance, some goes to paperclips and travel. But much of that $290 million – and 1878 jobs – goes away under Bernie’s plan.

Another 800 folks work for other health insurers;  that’s about $130 million in wages…

Another metric – total healthcare employment. While it’s not possible to tease out the precise number of healthcare administrative jobs – billing clerks, coders, managers, IT support, claim handlers and the like – at least 30,000 Iowans are working in healthcare administration, earning a total of about $1.2 billion.

Some are likely medical billing clerks – the folks who figure out how to bill you and your insurance company for services you receive (these folks); total income for the 5000 Iowans doing billing is just under $200 million.

All this to say there are tens of thousands of Iowans who would lose good-paying, stable jobs if Bernie Sanders’ Single Payer becomes law.  And if they do, those billions in paychecks disappear.

What does this mean for you?

Single Payer is a great idea – if you are starting a healthcare system from scratch. Which we aren’t.


Proof – health insurance saves lives

Having health insurance reduces your risk of dying.

Intuitively, this makes sense; you get cancer diagnoses and treatment, colon cancer screening, access to drugs and behavioral health treatment and flu shots.

You can read the details here, but the net is individuals who received a letter from CMS telling them they’d paid a penalty for not enrolling in health insurance were more likely to sign up than a control group that did not get a letter.

And, those who signed up had a lower mortality rate.

From NYTimes:

gaining coverage was associated with a 12 percent decline in mortality over the two-year study period (the first months of coverage seemed to be most important, presumably because people could get caught up on various appointments and treatments they might have been missing). [emphasis added]

This is the first conclusive, unequivocal research showing health insurance impacts your chance of dying.

From the Treasury Department’s study; the control group did NOT get the letter:

Two things of note.

  1.  The Trump Administration has cut the healthcare outreach budget by 72 percent.
  2. Republicans killed the individual mandate which forced people to get health insurance or pay a penalty.

What does this mean for you?

One can argue whether it is government’s role to provide or ensure coverage, one cannot argue this: more people will die due to this Administration’s policies.


Americans can’t afford healthcare

Gallup just reported a quarter of Americans have put off treatment for serious medical conditions because they can’t afford it.

They can’t afford it because:

  • US physicians make twice what docs in other countries do
  • Drug costs are much higher here than elsewhere
  • Hospitals are making bank
  • Administrative costs are twice what they are in other developed countries.

Data from Commonwealth Fund

Average physician income by specialty from FierceHealthcare.

US life expectancy is now 43rd in the world.

We pay twice as much as other developed countries for healthcare, and our outcomes are measurably worse.

What does this mean for you?

Until and unless we fix healthcare, your family and friends will face increasing costs and declining access; it’s highly likely some aren’t getting the medications, surgeries, tests, or therapies they desperately need.


Three reasons we’ll have major healthcare reform by 2025

Middle class voters can’t afford healthcare.

Total health insurance cost for the average family with employer-sponsored coverage is over $22,000 annually.

Even families that have coverage are being crushed by costs not covered by insurance.

lawsuits keep the “Debt and Collections” courtroom in Poplar Bluff busy. (Michael S. Williamson/The Washington Post)

Hospitals and health systems are going out of business, leaving towns and rural areas with reduced access healthcare.

Health systems and hospitals have a Hobbesian choice – force families into bankruptcy or go bankrupt themselves.

Tennessee and Texas lead the nation in hospital closures, with one-fifth of the Lone Star State’s rural hospitals already closed or close to it. Just north, a grassroots movement in Oklahoma driven by closure of a half-dozen rural hospitals, is gaining traction.

While Becker’s reports all but one of the hospitals going belly up are in states that didn’t expand Medicaid.   While there’s no question the problem is much worse in non-expansion states, facilities’ fiscal problems aren’t all solvable by Medicaid. Hospitals from Philadelphia to Chicago are facing bankruptcy, leaving behind massive unpaid bills and huge gaps in the provider landscape.

Improved access to care has big economic benefits.

Growing evidence indicates Medicaid expansion has been a big positive for expansion states:

Medicaid expansion was associated with improved hospital financial performance and significant reductions in the probability of hospital closure, especially in rural areas and areas with higher pre-ACA uninsured rates.

A study in Louisiana found that the injection of federal expansion funds created and supported 19,195 jobs (while creating and supporting personal earnings of $1.12 billion) in sectors throughout the economy and across the state as of SFY 2017. A study in Colorado found that the state supported 31,074 additional jobs due to Medicaid expansion as of FY 2015-2016

Another Louisiana study found that as a result of the federal infusion of Medicaid expansion dollars into the state’s economy, Louisiana derived an additional $103.2 million in overall state tax receipts (which exceeded the state dollars budgeted for the Medicaid expansion program by close to $50 million) and local governments derived an additional $74.6 million in local tax receipts. A study in Montana found positive financial effects for businesses due to infusion of federal dollars to fund health coverage for workers

The net is this – People want their kids to be covered, to be protected from medical cost bankruptcy, to have access to care.

Politicians who offer solutions to these problems are finding receptive audiences, even in red states and states where Medicaid expansion was turned down. Louisiana, Kansas and Maine are three states where healthcare was a significant factor in gubernatorial elections – all have expanded, or working to expand Medicaid.

Voters will drive healthcare reform, and politicians will follow. More coverage = a healthier economy.

What does this mean for you?

It’s going to happen.


You can’t handle the truth about healthcare

Which is this:

We want access to the best doctors and hospitals, low insurance premiums that cover every treatment and drug, doctors making shipload of money, we don’t want any rural hospitals shutting their doors, and we don’t want anyone to pay higher taxes.

Oh, and we want to stuff our faces, ignore doctors’ orders to exercise, smoke, not take care of ourselves and then expect someone else to pay the bills for our diabetes, hypertension, cardiovascular disease and cancer.

There’s a reason politicians aren’t being honest with us – we want to have our cake, eat it too, and not get fat.

But there’s plenty of blame to go around; a huge barrier is the power of the healthcare industry – real healthcare reform means doctors, pharma, device manufacturers, most healthcare investors and the rest of us will make a LOT less money.

Did I mention doctors will make a lot less money?

Yes, Medicare for All would allow all of us to see whatever doctor or we want, and deductibles and copays will be a LOT lower.

But the money has to come from somewhere – which means a tax increase, and lower payments to healthcare providers.

Pretty much everyone in the healthcare industry will earn less, likely a good deal less.

How much less depends on how much we raise from taxes.

Please don’t tell me private insurers have the solution – they don’t.  If they did, we wouldn’t be in the mess we are.

As I’ve reported here, the average family with one member in poor health “pays” about $23,500 for healthcare thru direct payments, insurance premiums, what their employer pays for insurance, and taxes for Medicare, Medicaid, and other government healthcare programs.

The good news is about $5,000 of that would be stripped out; that’s my best guess at how much administrative expense would be eliminated if healthcare providers and payers didn’t have tens of thousands of people on payroll fighting each other.

Oh, those tens of thousands of people will lose their jobs.

What does this mean for you?

Fixing healthcare is going to hurt you and me. A lot. There are NO solutions that get around this.

Anyone who tells you different is lying.



The CBO’s Single Payer Report and worker’s comp

The CBO’s 34-page analysis of Single Payer is out, and there are no references to workers’ comp or occupational injuries/illnesses. 

That doesn’t mean there aren’t plenty of ways Single Payer would affect work comp.

Briefly, Single Payer is a very broad term that over-generalizes a bunch of very different approaches to universal health insurance coverage. As defined in the CBO report, in Single Payer programs “people enroll in a health plan operated by the government, and the receipts and expenditures associated with the plan appear in the government’s budget.”

When you recall that work comp accounts for about 1% of total US medical spend, it’s no wonder the CBO report ignores us. But, how Single Payer would affect comp depends on two core issues:

  • whether care for occupational injuries/illnesses is covered by Single Payer, and
  • whether there is a universal fee schedule.

If WC care is included under Single Payer, it is likely work comp would evolve to an indemnity-only system. This currently exists in several other countries, and seems to work pretty well.

If WC medical care is NOT included in Single Payer, the impact would be driven largely by the presence – or absence – of a universal fee schedule. 

Without that universal fee schedule, providers would likely continue to do their revenue maximization thing, although they’d supercharge those efforts. Why? Because reimbursement from all other payers would drop significantly, and providers would look to comp to replace as much of that lost income as possible.

What does this mean for you?

The healthcare system is the elephant, and workers’ comp is the mouse.


“Sharing ministries” are NOT health insurance

To those who took my April 1 post on the Administration’s decision to use “sharing ministries” as the basis for their new health reform plan for fact – I’m kinda sorry. 

The April Fool’s post has been a tradition here; this year’s effort caught more folks than most of the previous ones. But after I stopped high-fiving myself, I realized that what was most disturbing was it’s kind of believable.

As in, the knuckleheads in the current Administration might actually think “sharing ministries” are the answer to our healthcare crisis.

Ha! you say; no one is that naive.  To that I say, well, hundreds (ok, maybe scores) of readers thought the post was real, mostly because we’ve been numbed by the endless stream of lies, twisted facts, made-up statistics, and idiotic policy proposals coming out of Washington.

So, yeah, ditching insurance for “sharing ministries” is about the worst “solution” one could come up with. I say this despite the 18 commenters who responded to the post, many happy with their decision to dump insurance and pay into some form of “sharing ministry”.

While I appreciate that people of faith may trust others who appear to share their same views, I’d strongly encourage anyone – especially the million of so Americans who already are enrolled in one of these plans – to reconsider their decision. Like, NOW.


Because while legal under the ACA, these plans are NOT insurance, can dry up and blow away at any time, are NOT regulated, are NOT legally required or obligated to pay any claim, and are NOT required to keep enough money on hand to actually pay claims. (graphics from Commonwealth Fund)

What does this mean for you?

The net is this – when you NEED health insurance, you REALLY need it. And there are NO guarantees these sharing ministries will be there.



Another reason Single Payer is inevitable

Earlier this week President Trump called for the GOP to become “the Party of Great Healthcare.”

He wants three Senators to come up with a “terrific, beautiful” healthcare plan.

What Trump is actually doing is accelerating the day when Single Payer becomes reality.

In one tweet, here’s why:

Stick with me here. The President doesn’t know the difference between tax policy (deductibility) and healthcare benefit design (deductibles). Unless, of course, he was referring to the deductibility of health insurance premiums, which many think is “ridiculously high”. Except, of course, Trump wasn’t.

Many may say, “yeah, that’s just a typo”, or “doesn’t matter, we know what he meant”.

And those many are dead wrong.

Trump  – and his gang of three who are supposed to come up with a new Great Healthcare Plan – don’t know anything about the healthcare problem in this country, what’s driving it, how financing works, how people are affected, what the tradeoffs are, or anything else.

Healthcare is enormously complicated, accounts for 1 of every 6 dollars in our economy, employs 16 million Americans, and is deeply personal. The GOP has never come up with any plan that remotely addresses the problem with healthcare, namely prices are too high, many can’t afford insurance and quality is spotty at best.

Their go-to solution – the free market – is no solution at all.

In the “free market”, no insurer is ever going to insure your pre-existing condition, nor will it ever  cover your kids to 26, nor will it pay for all your care no matter how sick you are or how expensive it gets. 

About 5 minutes after Trump’s gang of three starts working on their Great Healthcare Plan their heads will explode. They have no idea what they are doing and a real solution requires them to abandon long-held fictions about healthcare and the economy.

Which is why Trump’s Great Healthcare Plan will make Single Payer reality.

To quote Winston Churchill;

You can always count on Americans to do the right thing – after they’ve tried everything else.

(here’s a very funny infographic on TrumpCare)


Friday catch-up

Another crazy busy week is coming to a close, and its time to catch up on what I missed, didn’t get to, or just figured out.

I know what you’re doing this weekend…you’re going to be poring over NASI’s annual report on workers’ compensation which just hit the virtual newsstand – and you need to get a (free) copy. For those unfamiliar with the report, it is the only comprehensive, national report that provides detailed, state-by-state financials on medical and indemnity spend by type of payer. Along with a treasure trove of other great info.

The big news – total work comp medical paid in 2016 dropped (!) 0.3% from the previous year. Work comp spent just over $31 billion on medical in 2016.

What’s driving the decrease? I say a big contributor is reduced spending on pharmacy, which I’ve been tracking for 15 years.

Notable – WorkCompCentral’s William Rabb teased out one major issue – the worker-unfriendly government in Michigan’s efforts to cut benefits for workers resulted in a 15% drop in benefit payments. Ouch.

Kudos to Accident Fund’s United Heartland for talking about the good work they do helping patients recover. I’ve had the honor of working with folks at AF and United Heartland in the past – they are good people focused on doing the right thing.

Work comp bill review and case management company Genex’ acquisition of Priority Care Services will cause a bit of disruption in the specialty services sector. Sources indicate PCS will be the “home” of specialty services in the Genex/Mitchell operation, with everything but IME and Pharmacy consolidated under PCS.  More on this later, as there are repercussions…

Healthcare costs are almost $20,000 per family. While premiums in the ACA marketplaces have stabilized, the reality is premiums would be significantly lower if the Administration hadn’t stopped making cost sharing payments and Sen. Marco Rubio R FL hadn’t cut off the funds needed to help start-up insurers compete with the big boys. Rubio’s action singlehandedly killed off several new insurers founded to offer competitive insurance…so much for the “free market”!

Last, this drives me NUTS – managers, execs, supervisors who use the “I” word all the time. There is no “I” dammit. There is only “we”.  This is not about you, your feelings, your work, your anything.  It is about everyone working towards the same goal, and when you say “I did this” or “My results were X” you denigrate the contributions of others, make them less likely to work to achieve future goals, and send a signal that you have a fragile ego that needs stoking.