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Universality is The Goal: Incremental Movement Toward Single Payer Options Makes Political Sense.

Posted on | September 1, 2017 | No Comments

Mike Magee

As Trump continues to dabble in undermining the ACA, Democrats are pushing forward on an internal debate over the future of Obamacare. And although tactics and strategies are up for debate, there is close to a consensus on one issue – our government should guarantee universal health insurance coverage for all citizens. Our Code Blue campaign contains five core principles, listed below, that provide common ground in the debate.

The weaknesses of our current approach are now well-established including:

1. Not Universal: A CBO report predicting 27 million remaining uncovered by 2026.

2. Reporting Requirements: “Mind numbing” and time consuming requirements for documentation and reporting.

3. Administrative complexity:  Robs time with patients.

4. Limited comprehensiveness: A trend toward “skinny plans” which are little better than no coverage at all. Physician and hospital panels are narrowing.

5. Underinsurance: A tripling of deductibles and “punishingly high copayments” paid by consumer.

6. Failure to Control Costs: ACA “has elicited ubiquitous gaming of risk adjustment and quality measure” incentives, spawning giant moves toward hospital and insurer consolidation.

7. Market-Based: “Any method of payment can create perverse incentives in a market-based system.”

The tension points in the internal debate were drawn into sharper relief when Sen. Brian Schatz (D-HI) released a new plan that would allow anyone in participating states to extend the opportunity to “buy-in” to their state Medicaid program. Essentially this would create open enrollment. According to Schatz’s vision, reimbursement rates for doctors and hospitals would rise to match Medicare rates insuring broad provider panels. Currently Medicaid reimburses at 72% of the rates of Medicare. Of course, states that passed on ACA Medicaid expansion (29 states under Republican governors) might pass on this offering as well.

The competing Democratic approach as outlined in a bill sponsored by Rep. John Conyers (D-MI) would go all-in on a national single-payer system. This has the virtue of actually achieving universal coverage since all individuals would be mandated to participate. The downsides include a predicted political firefight, massive disruption of the private insurance market (which would be relegated to providing supplemental insurance plans only – though back door involvement through plans mirroring Medicare Advantage might survive), and tax increases in the area of 10% likely to help finance the effort.

Schatz’s plan is not brand new. The Nevada legislature passed just such a plan this year, but Republican Gov. Brian Sandoval vetoed it. Way back in 1965, when Canada endorsed a single payer approach for all Canadians, Americans did the same – but only for those over 65. We called it Medicare, and while it has had issues over the past half century, Americans long ago decided they couldn’t live without it. Of course, until now, they also consented to widening income disparity and health inequality based on a system of “have’s” and “have-not’s” when it comes to the good fortune (or lack of the same) of possessing health insurance.

Medicaid expansion under the ACA celebrated a new approach (within the corridors of defined eligibility) of universality, access, health planning, portability, and integration with other social service programming. 18 of the 31 participating governors were Republican and liked the fact that the Obama expansion program was well funded, that the benefit package was broad (not a sham like the HSA induced high deductible/ empty benefit products proliferating everywhere), and that they preserved the flexibility within bounds to set the priorities on spending and defined how best to advance the overall health of their state populations. Add to this CHIP, a federal offering likely be extended, that provides coverage to economically needy children who find themselves slightly above poverty levels. In the wake of failed Repeal and Replace efforts, the remaining 19 hold-out Republican governors must now reconsider their ideologically driven stances. Some at least will reverse their stands.

The governors who have participated already have learned that centralized administration of a universally available health insurance offering carries distinct cost savings. Specifically, governor guided single payer health delivery under Medicaid came in 22% less costly than privately insured comparators. Governors like John Kasich of Ohio were left to wonder what might be the economic impact on Warren Buffett’s belief that health care was a “tapeworm on the American economy”. Analysts evaluation of single payer back office administration combined with state controlled and planned integrated health delivery shows a potential immediate 15% savings on our 4 trillion plus annual bill simply by consolidating management of coverage and payment systems. 

Governors also could see that the human resource implications of such a move. Our purposefully complex program, which now threatens to break the American economy in much the same manner as reckless military spending collapsed the Soviet Union, has spawned 16 non-clinical jobs in health care for every one clinical role. A shift toward availability of single payer, if poorly planned and transitioned, could carry with it massive unemployment. But if you look at innovators like Kasich, what you see is the potential to reassign jobs by skill in a manner that could advance the strength of the social service network in areas like housing, nutrition, education, transportation and the environment.

Today’s Medicaid Numbers? 74 million or 20% of Americans currently covered; 11 million added under ACA; 40% of children covered; 50% of all births covered; 10 million disabled covered; 2/3rds of nursing home patients covered; 16% of health care spending nationwide; only 13% of citizens oppose Medicaid expansion.

Sen. Schatz recognizes a fundamental and permanent shift at work. He notes, “One of the unintended consequences of the Republicans trying to cut Medicaid is they made Medicaid really popular. This conversation has shifted. There was a time where Medicare was really popular and Medicaid was slightly less popular. What this ACA battle did was make both of them almost equally popular.”

The Code Blue Campaign endorses five core principles:

1. Universality: Health coverage and quality accessible health services are a right of citizenship in the United States.

2. Public Administration: Administration of basic health coverage is organized in the most cost-efficient manner possible with central oversight by the government. Incremental steps allowing the option of public sponsored plans to those already insured should be encouraged. 

3. Local Control of Delivery: The actual delivery of services to ensure quality and cost effectiveness is provided by health professionals and hospitals at the local and state levels.

4. Health Planning is a Priority:  Creating healthy populations is a high priority for each state governor. Working to establish health budgets and priorities, leaders must integrate health services with other social services, advance prevention planning and manage vulnerable populations.

5. Transparency: Providers submit bills. Government ensures payment of bills. Patients focus on wellness or recovery. Not all services will be covered. For uncovered services, those with the means to pay will be encouraged to purchase private supplemental insurance.

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