Vol. 178 October 1, 2017 What is Single-Payer Health Insurance?

October 1, 2017

Now that Bernie Sanders is again firing up the discussion about single-payer health insurance, it might be a good idea to review this complex issue. So, here’s a short self-test for you to gauge your understanding of what Bernie, and a lot of other people, are talking about.  The correct answers are supplied right away, so you won’t stay confused for long. Since this is an internet-based test, YOUR ANSWERS, of course, WILL BE COMPLETELY ANONYMOUS. Nothing will  be recorded by NSA , Equifax, or the Russians.

 

“Single-payer” means:

  1. socialized medicine
  2. 100% of health care costs are paid for with taxes
  3. Pop-Pop picks up the dinner bill for everyone
  4. none of the above

Answer: 4. none of the above – In socialized medicine health care facilities and providers are owned by the government. “Socialized medicine” is a pejorative term which is now irrelevant since at least 70% of U.S. healthcare costs are already met by tax dollars  from Medicare, Medicaid, or the Veterans Administration. “Single-payer” is just an insurance scheme for public or privately owned services. In countries with universal health care insurance 77%-87% of costs are met by taxes. In the U.K. private insurance pays for about 13%. Pop-Pop gladly picks up the dinner bill for his children, but health insurance is still on them.

The number of countries with universal health insurance are:

  1.  1
  2.  2
  3.  3
  4. 58

Answer: 4. 58 – Germany in 1883, France in 1945, UK in 1946, Australia in 1975, Canada in 1984, Israel in 1995.

A basic tenet of single-payer insurance is that everyone will be covered without regard to income level:

  1. true
  2. false
  3. true, but …

Answer: 3. True, but … it will take years to bring everyone in the U.S. under “Medicare For All”.  Each year or so another decade of ages will be added to the coverage. States will need to coordinate their income-based Medicaid programs with “Medicare For All”.  Some states could request and receive waivers from the national program. Etc., etc., as incrementally we always go.

Universal health care insurance in other countries is administered:

  1. nationally
  2. regionally
  3. locally (municipalities)
  4. all of the above

Answer: 4. all of the above – Germany has 1100 public and private “sickness funds” with a national standard level of coverage. In the Netherlands health insurance is administered by municipalities that levy local taxes to pay the costs. This  apparently enhances transparency and both taxpayer and patient satisfaction. Conclusion: If you have seen one system of universal health coverage, you have seen ONE. By the way, isn’t “sickness fund” a much more honest name for insurance which pays for medical care and does not necessarily buy “health”. (Leave it to the Germans to say it like it is).

Universal health insurance is based on which basic insurance principles:

  1. spread the risk over the greatest number of people
  2. use education and regulation (i.e.. fire laws) to reduce the highest risks of loss
  3. if you win (stay healthy), you “lose” (your premiums). If you “lose” (get sick), you win (care is paid for)
  4. use excess premium revenue to build fancy office buildings and pay for expensive lobbyists .

Answer: 1-3 (see subsequent question for further information on #4)

Single payer health insurance will cost less to administer than our present system:

  1. true
  2. false
  3. true, but …

Answer: 3. true, but… maybe not as much reduction as we hope. Administrative costs for the individual provider will probably remain the same because “meaningful criteria” compliance, complex diagnostic coding, need for medical necessity justification, and need for data showing that quality is not being eroded will continue to require significant personnel time and computer capability. Remember also that Medicare is currently administered in large part by “fiscal intermediaries” like Blue Cross. That probably won’t change. Some predict that because of continued pressure on a single-payer to reduce costs, it may, if fact,  get even more complicated for providers to get paid for their services. Of course, the huge consumer advertising, employer marketing, and lobbying expenses of private health insurance companies will be greatly reduced when the market share of private insurance is reduced to 10-15% as has occurred in other countries. If only we could get Visa to run Medicare’s fraud protection system!

Why not “Medicaid For All”;  could individual states institute universal health insurance so that we wouldn’t have to wait for a national consensus?

  1. no
  2. yes
  3. yes, but…

Answer: 3. Yes, but … the hallmark of universal health insurance in other countries is a consistent standard of coverage for all residents. Medicaid programs are state-specific and coverage is extremely variable, as is provider payments. If you see one, you have seen one. Attempts to waive the Obamacare national standards by those wishing to repeal it spotlighted the potential glaring inequities. But, Massachusetts has done it for 90% of its population, and there are bills in its legislature to do it for all. California is attempting to do it. Most California families and businesses, a University of Massachusetts study has said, would pay less for health care than they do now, even with the new taxes, because they would no longer pay premiums, deductibles or co-pays. As Samantha Bee recently noted: “You don’t have to be racist anymore to believe in States’ Rights .”

Why is a single-payer sometimes described as a “double-edged sword”?

  1.  a single-payer could have much greater negotiating leverage with both suppliers (drug companies) and providers (doctors and hospitals)
  2. a single-payer would be perched on the sharpest edge of the cost-quality equation
  3. the standardization of payments by a single-payer could dampen innovation and hamper medical progress
  4. all of the above

Answer: 4. all of the above – More leverage against the drug companies is “good”. More leverage against the providers could be “bad”.  Despite studies that show that good quality care is less costly, many still see a dichotomy between cost and quality. Concern about hampering innovation (“new ways of doing things”) with excessive standardization (“the old ways”) was one reason Obamacare created a Center for Innovation within Medicare as part of the ACA .

Who is in favor of single-payer health insurance?

  1. 60% of those polled
  2. 38% of those polled
  3. depends on the nature of the poll
  4.  all of the above

Answer: 4. all of the above – The 60% in favor of single-payer health insurance dropped to 38% when the question was tied to one about increased taxes. The most recent Harris-Harvard poll (9/17/17) showed that 52% were in favor of single-payer insurance. 69% believe that it would provide more coverage, including 54% of Republicans. . Most of the other questions about a governmental single-payer were 50/50 pro and con. Some physicians, hospitals, and other providers are in favor of single-payer insurance.

What are some of the barriers to implementing single-payer, universal health insurance in the U.S.?:

What does President Trump think?:

 

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Vol. 147 May 1, 2016 Why UnitedHealth Group Is The Poster Child For What’s Wrong With Our Health Care

May 1, 2016

Hub thumbnail 2015

UnitedHealth Group, the nation’s largest health insurer, said Tuesday
that in 2017 it will exit most of the 34 states where
it offers plans on the Affordable Care Act insurance exchanges.

                                                          –Washington Post, April 16, 2016

 

The creation of state health insurance exchanges were incentivized by the Affordable Care Act (ACA) in order to encourage the offering of health insurance policies at competitive prices to individuals not covered by employer plans. Individuals that earned just enough to be ineligible for Medicaid coverage (aka “the working poor”)  could apply for federal subsidies to help pay for exchange health insurance policies. Health insurance companies anticipated that many uninsured people would become premium-paying people resulting in a significant revenue increase to the health insurance companies.  Like any insurance scheme, all the companies had to do was to set “competitive rates” (based on their actuarial estimates) that would bring in more revenue than the expense of what they would pay out for claims.

UnitedHealth Group (UHG) is withdrawing from 34 state health insurance exchanges because the company lost $650-720 million on their exchange policies (aka “marketplace polices”);i.e. claims for medical care received exceeded the premium revenue. Speculations about the reasons for this include:  the companies priced their policy premiums too low in response to the competitive nature of the exchanges (“They screwed up”);  the people who took out these policies were inherently “high-users” of medical services; or the higher than estimated use of medical care represented a backlog of unmet need for medical care.

The fact that the ACA has decreased the uninsured and underinsured in America by 36 million is uncontested.  About 12 million or 33%  of these people gained access to medical services from policies available from the health insurance exchanges.  Close to 87% of those were eligible for and received partial subsidies for the cost of premiums. Most of the rest of the increased access came from expanded state Medicaid insurance subsidized by the federal government under ACA. But 11 million individuals remain uninsured,

“…Depicting the Affordable Health Care Act as a “slippery slope” to single payer is bizarre, given that it relies on private insurance.” (1) Health insurance policies have tremendous influence on medical care delivery by determining who is eligible for what medical service and where. Differential rates, deductibles, and co-pays can favor one type of delivery site (hospital bed, ER, ambulatory center,  provider’s office, home care, or nursing home) and even the type of provider (MD, NP, or PA). Specific coverage for selected medical services (named and unnamed when you buy the policy) can be denied. Coverage of prescribed drugs and even procedures can be unilaterally changed annually by the insurance company simply by mailing to policy owners a fine-print booklet that lists what will be available and at what price for the coming year. In a more positive vein, one study showed that in states that expanded their Medicaid programs under ACA the number of newly diagnosed cases of diabetes increased by 23% as opposed to less than 1% in states not choosing to expand Medicaid. Early diagnosis can be life-saving and cost-effective in a chronic disease with effective treatments like diabetes .

The effect of UHG’s withdrawal will have little real effect on the insurance offered by the exchanges. Premiums for policies from the remaining companies may only increase by 1% or $4 a month. But the UHG withdrawal brilliantly spotlights the profit motive as the basic driver of our health insurance system. Private health insurance has a place in any medical care system, and does exist in most, if not all, of the state-based universal health insurance programs in other developed countries, but only in the U.S. do the profit-motivated health insurance companies have such profound influence on to whom and how medical services are delivered.

Despite what some members of my Monday night pool group may say of me,  I think capitalism is great. It has produced multiple “wonder drugs”, nurtured the widespread distribution of fantastic medical technologies, and can provide the best medical care in the world… for many… but not all.   I also think that is silly to think that profit-motived health insurance will ever be able to provide universal access to medical care, a universal access that could enhance the continued physical and economic good health of our country.

References:
1. The Virtues and Vices of Single Payer Health Care, NEJM 374;15, April 14, 2016; 1401; J. Oberlander, Ph.D.

 

 

 


Vol. 44 May 1, 2011 Why Can’t Medicare Be Like Visa?

May 1, 2011

Last week I made two purchases on the same day with my Visa card, one for $293 and one for $273, but the two transactions could not have been more different.

I spent $293 for three pieces of metal to repair line cutters on the two propeller shafts of my boat. The $273 was for a shot of the shingles vaccine, Zostavax.

At the marina, I told the parts manager what I thought I needed, and after a brief exchange he went back into the large storage area, brought out what I needed, showed me how to install them, and swiped my Visa card. I left with the parts, the receipt, the confidence that the parts would solve my boat problem, and the certain knowledge that the charge would appear on my Visa statement next month.

At the doctor’s office, I filled out the short registration/information form, was greeted by the nurse who ushered me into a small exam room, gave me the injection, and sent me back out to the front desk to sign out. And that is where all semblance to my other purchase ended. The receptionist began a little speech which sounded well-rehearsed but only because she delivers it 20 times on a vaccine day,

 “If you have Medicare Part D we can not bill your insurance. You may pay today with check, Visa, or Master card, and we will give you written instructions on how to be reimbursed by your insurance carrier. Here is the detailed receipt for today’s service that you will need to send in to your insurance carrier. Also, here is the list of the numbers they will require you to provide; our tax ID number, the physician’s  NPI number, the procedure code, and the National Drug Code number of the vaccine. Please note that there are 6 physician NPI numbers on this list, and we have circled the one you should submit as the supervising physician for today’s injection. You will need to go to your insurance carrier’s website to print out a claim form, complete it, and mail it in for your reimbursement of today’s charges. Don’t forget to include todays’ detailed printout even though you have provided much of the same  information on your carrier’s claim form. Keep copies of everything that you submit. Usually the carrier will reimburse you in about 60 days. Any questions?”

I had two…no, three immediate reactions.
1) what the hell?,
2) what is so special about this service that I need to do this instead of them?,
3) what if once a year all doctor’s offices did this for all their services to all their patients?
Boy, wouldn’t that be an eye-opener for patients!  Talk about transparency! A taste of the reality of what doctors’ offices go through every working day to get paid by multiple insurance carriers with different forms, review procedures, and deadlines might jumpstart a consumer campaign for single-payer health insurance!

But, I kept quiet and handed her my Visa card. She swiped it, had me sign the slip, and gave me a copy along with a detailed encounter printout, a page of instructions, a page with the required numbers, and a wish to “Have a nice day”. I went home printed the claim form on my carrier’s website, completed it (9 digits for practice tax ID#, 10 digits for NDC#, 10 digits for physician’s NPI#, two 5-digit procedure code #, and two 5-digit diagnosis code # ). There was no line to record one of the numbers, so I just wrote it on the bottom of the form. I attached the doctor’s office printout (being careful to follow instructions to NOT staple or paperclip any of the pages together), copied all the pages, and mailed it. The carrier’s website told me to expect them to take at least 30 days to process my claim. There was no note about when I could expect payment.

By the way, $46 of the $273.21 charge that day was for the physician. The rest was for the vaccine.

Why can’t that medical service transaction be as simple as the one for my boat parts?

Medical Services are too complex, and there are so many of them?
Have you ever seen a marina chandlery or more commonly an auto parts store? Shelves stacked with myriad parts, big and small, rising right up to the ceiling and a countertop piled high with catalogs and specification books that make the ICD-9 code books look like magazines. All  sharing space with a computer terminal usually on a swivel to make it easier for the customer to help spot the picture of the one part for the boat or car model he wants. No, complexity of inventory can’t be the barrier. Just think Amazon.com.

Fear of fraud?
By the patient? My doctor’s office staff knows me by sight, but I still have to confirm my date of birth and Medicare number every time I go in. On the very first visit I had to show a picture ID. By the doctor? In 30 days I will “audit” the charges on my Visa bill. I could do it the next day on-line if I wanted to. If I don’t agree or think that something is amiss, an email or a phone call to Visa will put it on hold. If I didn’t challenge or question the charge within 30 days, Visa could let Medicare know and Medicare could transfer the same amount as a credit to my Visa account. I’ll get to see the correctness and timeliness of that credit in my next Visa bill. If several patients reported charging problems with the same physician or office, Visa would be all over them.

If  Visa can call me within 24 hours to verify my purchase of diesel oil at a marina two states away from my home state where I had purchased oil just two days previously, I would expect them to be able to set up programs that would flag potential physician fraud. Certainly the current government and insurance carrier computer programs that have missed millions of dollars of fraudulent charges, in Florida alone, are nothing to brag about.

Too expensive?
The 7%  that Visa charges merchants and retailers for conducting transactions seems like a real bargain to me. If Citizens Bank can make enough profit on the $20 pre-payment “float” of Fast Lane, Visa could probably make an acceptable profit on the “float” from a $50 annual fee for health insurance transactions.

Lack of standard pricing?
Visa seems to be able to handle that quite well now among different airlines, hotels, catalog stores, and everyone else with a weekly special, redeemable coupons, and the like. Of course, a national standard, or at least a regional one, for health services pricing might make everyone’s life a little simpler, and easier to monitor.

Inertia, or fear of changing how we do things now?
Many hospitals, physcians and more than half of consumers currently favor a single-payer system, not because they are social liberals, or muddle-headed do-gooders, but because they are exhausted by and fed up with our current complex, inefficient, and bureaucratic payment system that is so easily manipulated by the insurance companies for their own benefit.

WHADDAYA THINK?    Take this poll to let me know.


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