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benveniste

September 2017

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[personal profile] benveniste
I just got back from my annual check-up, so by current standards that makes me qualified to chime in on the great health care controversy, right? Well, no, but here goes anyway.

I’ll start by saying that for once, I find myself in agreement with Paul Krugman. Now is not the time to be campaigning for “Single Payer” healthcare. For one thing, the Democrats lack the political power, the leadership, and the coherence of message to get any traction with such a proposal. In the meantime, the Republicans are in a trap of their own making. They’ve been forced into a “we must do something” position. But any proposal which raises the deficit would require Democratic votes they won’t get. They’ve promised their wealthy contributors that they’ll repeal the ACA-imposed Medicare taxes. They’ve promised their rank-and-file voters that they’ll repeal the individual and business mandates. Any plan which does all three will leave millions uninsured, which isn’t sitting well with those few Republicans which can think beyond party dogma.

A properly functioning legislature would create a compromise which gives everyone something. That would allow all Congresscritters to go back to their district and proclaim “I didn’t get everything we want; send me back and I’ll work for the rest.” But as long as the Congressional leadership on both sides equates compromise with surrender, the country will be stuck with either a dishonest GOP plan that masks cuts and/or spending or with an ACA desperately in need of repairs for both the original flaws and those which time and experience have exposed.

So while I’m enough of a pessimist to believe that either result leaves things horribly broken, I’m enough of an optimist to believe that the political climate will eventually change. And when it does, a “Single Payer” option should be on the table. I also believe that if Progressives put together an honest proposal, don’t oversell it, and are willing to commit to a multi-battle campaign, we as a country will be better off as a result.

Note the word “honest” above. Unfortunately, “Single Payer” is, at best, a euphemism. So is “universal insurance.” Let’s strip away the platitudes and call the scheme what it is; healthcare funding through taxation. The term “single payer” creates the illusion that someone else is doing the paying. Until you have funding sources, you don’t have a viable proposal. And as some Democrats are finally learning, the “we’ll just tax the rich” message isn’t playing very well at the polls. Nor should it be – it’s one of the two most oversold ideas in American Politics. Single payer means everyone pays either directly or indirectly.

But here’s the key point that most people miss. Everyone is already paying. We pay in lost productivity because people postpone treatment in hopes “it’ll go away.” Every medical bill is padded to make up for money lost through non-payment. We pay massive administrative costs, not only to the insurance companies but in overhead on the provider’s side. A typical practice or clinic can spend 2-4% of its revenue just to figure out the codes and magic chants needed for different insurance providers.

Government process and bureaucracy is not always more efficient or cost effective than for-profit process and bureaucracy. This was one of the arguments made for the ACA exchanges, including by Paul Krugman. In fact, overall administrative costs have increased under the ACA, and taxpayers picked up the lion’s share of that. A “single payer” system, on the other hand, should be able to simplify most transactions and yield cost savings as a result. Well, at least for a while, since there’s a natural tendency for all regulatory systems to grow in complexity over time with a commensurate increase in compliance costs. It should also go a long way to eliminating the lack of transparency in those charges.

Now here’s the bigger challenge. Getting people to accept that a “single payer” system can and will only provide a certain standard of care, and figuring out what that standard should be. The usual mantras proponents give are things like “everyone should get the best care possible” and “set fair reimbursements and apply them equally.” Not only are these contradictory, but each is impossible in its own right.
Doctors and healthcare providers vary in quality. Not everyone can see the top specialist in their ailment, and it makes no sense to pretend otherwise. Hospitals are regularly ranked in their success rate in treating various maladies. Nor is any society willing to pay for all potential possible treatments. The Charlie Gard case in the U.K. is a very public reminder of this.

So what’s a “fair reimbursement?” If you set it to the value given by the “best care” provider, you are creating a windfall for lesser providers. If you set it to a lower value, you aren’t rewarding excellence. But the challenge is actually much worse than that. Despite the availability of state-funded public schools, there is still a market for private schools. The same was and is true for healthcare, even in countries where publicly funded healthcare has existed for decades. Private clinics and insurance or “medical tourism” meets that demand. When countries such as the USSR outlaw private practice and emigration, a system of bribes and black market operations takes its place.

Even in the U.S. today, there are so-called “opt-out” or “non-participating providers” who can either refuse to accept Medicare at all, or who will only accept assignment on a case-by-case basis. As long as this is done in a way which doesn’t violate discrimination laws, they not only can legally do so, but they can charge the Medicare patients which they do accept up to 15% above the “fair reimbursement” rate. I see no scenario where the same wouldn’t extend to any “single payer” scheme no matter what “fair” rate is set.
So as a society, we have to do the Cold Equations and decide what level of healthcare we are willing to pay for. In many countries with universal health care, rationing is achieved through waiting times. In March, for example, the UK had to abandon an 18-week waiting time target for non-urgent operations. In Canada, you can expect to wait 11 weeks for an MRI. And of course, here in the U.S. we’ve had multiple scandals over care and wait times in the VA system. Not only is this a horribly difficult task, it’s a horrific one for any caring human being. Currently, we make such decisions by a combination of seemingly arbitrary insurance company rulings, court cases, public appeals, and old fashioned favoritism. Yet any attempt to formalize that process under government control will be attacked as a “death panel.”

Above, I mentioned that “tax the rich” is one of the two most oversold ideas in American Politics. The other is American Exceptionalism. By almost any health metric, though, other rich countries with some form of universal coverage receive better overall value for their healthcare spend. I don’t expect a U.S. “single payer” system to be perfect. People will continue to die because they can’t afford the “best possible care.” But for basic monitoring, treatment of common ailments and injuries, and maintenance drugs I think it can do a hell of a lot better than today. But unless some people a lot smarter than I can put together the full package, and people a lot more persuasive than I can sell it to the American public, I fear that we’re going to be stuck with ever increasing overhead costs and a constantly changing sequence of half-assed (fill-in-the-blank)care “solutions.”
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