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Words Matter in Health Reform: Part II – “Single Payer” or “Single Oversight”

Posted on | October 25, 2018 | 2 Comments

Mike Magee

In Part I of this 3 part series, “Words Matter”, we learned that the Canadian system is not technically a “single payer” system, in that provision of insurance (set to national standards) and the delivery of the care is the responsibility of individual provinces, not the national government. A more accurate label for their system would be “Single Oversight/Multi Plan”.

The single authority is Health Canada which provides formalized government health planning as well as insurance standards and oversight. Approximately 24% of the funding for defined “essential benefits” in the Canadian plan is provided by federal taxes, while provincial taxes make up the rest. The national government is the guardian of universality and (often overlooked) simplicity. Providers provide. Provincial government pays. Patients concentrate on health and wellness, and are not plagued by insurance gamesmanship and endless bill bickering on the local level.

On the most fundamental level, the U.S. has no such governmentally-directed, national health planning apparatus.

Service levels and reimbursement vary widely across a endless range of private and public offerings that have devolved into a “free-for-all.”

Employers historically have been heavily involved in offering tax-incentivized health benefits and lately funding their own health insurance plans, though the extent of benefits and number of employers underwriting health care is highly variable and in decline.

Physicians and hospitals in the U.S. are paid according to set rates and formulas for various government sponsored programs like Medicare and Medicaid. Physician payments rely heavily on a relative value scale (RBRVS) pricing controlled primarily by the AMA. But they also negotiate their participation and fee schedules with countless other private insurers. Fee-for-service remains the rule for non-hospital based physicians though over half of all physicians are now employed by large health care firms.

Hospitals rely on bundle payments for episodes of care under the DRG payment system  for Medicare, and through mirror offerings from most private insurers. Fraud in coding is not uncommon. Hospital and insurance execs engage annually in often hostile negotiations making long term planning neigh impossible.

Hybrid public/private “Medicare Advantage” (Medicare Part C) plans provide a broader array of services than traditional Medicare in return for patient acceptance of restrictions in physician and hospital choices. Incentive payments to manage complex patients have been subject to abuse.

Supplemental Medicare plans are heavily marketed by associations like the AARP which quietly splits profits with its private partner United Healthcare.

Medicare Part D plans cover a portion of the pharmaceutical costs of Americans over 65. Rates of coverage (governed by tiers) vary widely from one participating insurer to the next, and also increasingly direct the patient to only use approved pharmacy outlets.  Rules on individual medicines covered change constantly, drug to drug, making yesterday’s wise consumer decision today’s big mistake.

Long term care and nursing homes receive significant financial support through the Medicaid program. Under the Affordable Care Act, nearly 20 million uninsured Americans received coverage mainly through expansions of state Medicaid in participating states, and are  heavily subsidized by federal dollars.

Patient co-pays, co-insurance, and deductibles are ubiquitous in the U.S. system (fewer than 5% of consumers understand these terms), and are further complicated by a series of legal kickbacks and opaque financial inducements and conflicts of interest managed by Pharmacy Benefit Managers (PBMs) – offshoots of insurers, drug manufacturers and retailers – that secretly cross the collusive boundaries between medicine, industry and governmental bodies.

Privatization has become more aggressive of late with moves to syndicate vertical integration (like CVS/Aetna, Cigna/ExpressScripts) and realize outright ownership of supply chains of providers and services that will likely restrict patient choice further without delivering lower cost or resolving patient confusion and complexity.

In short, our health care system, strictly from an economic standpoint, is an intentional complex mess that now consumes 1 of every 5 American dollars.

What are our current assets upon which we might build a comprehensive national health care plan that provides  “Single Oversight/Multi-plan” simplicity?

That’s next.

Comments

2 Responses to “Words Matter in Health Reform: Part II – “Single Payer” or “Single Oversight””

  1. Frances Tobin RSCJ
    October 28th, 2018 @ 3:06 pm

    Helpful and clear article. Any chance that the USA will consider parts of the Canadian plan?

  2. Mike Magee
    October 31st, 2018 @ 10:30 am

    Frances-

    I remain optimistic. Canada has opted for a single authority and oversight of a multi-plan system administered by their provinces and territories. We see elements of this approach in our Medicare and recently expanded Medicaid system under the Affordable Care Act. Public opinion in majorities now supports these moves. In addition, gross inefficiencies and profiteering now support a wasteful system that has cornered 1 of every 5 dollars – an unsustainable destructive force undermining our entire economy. The case for meaningful reform at the end of the day will be both humanistic and economic. (see Part III of this series.) Best, Mike

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