Designing the Health System We Need
On the lack of political vision
If twenty-first century progressives had been leading the nineteenth century abolition movement, we would still have slavery, but we would have limited slavery to a 40-hour work week, and we would be congratulating each other on the progress we had made.
In earlier eras of U.S. history, progressives believed they could fight injustice and move society forward, and they did so—in the abolition movement, in women’s suffrage, in social security for the elderly. Today, however, many progressive-minded people seem to have lost faith in our ability to bring about significant change. Many believe we must be content simply to tinker with problems.
Health Care Should Be Covered Like Police and Fire
Nobody goes without police and fire protection—nobody has to apply for new “police and fire coverage” each year, nobody has to worry that they may no longer be qualified, nobody has to worry about a $3,000 deductible before the fire department will come. Nobody has to worry that the local sheriff won’t accept their “police insurance” plan. And nobody gets a letter informing them that their police or fire coverage is being terminated at the end of the month, for any reason.
A civilized, humane society that takes care of its people with universal police and fire coverage needs to do the same with health and dental care.
How do we design a health care system?
The American political system has never taken the time to spell out goals and design a health care system to meet them. Consequently, discussions about health care reform get wrapped up in ideology and efforts to score political points. The debate—pro and con—over the Affordable Care Act is a case in point. People put so much energy into the politics and the political strategy that they forgot what they were hoping to accomplish.
The result is a hodgepodge of policy that doesn’t make a lot of sense and has significant holes. The extent of dysfunction in our system is so great that one business executive quipped, “If you tried to design a health care system that didn’t work, you couldn’t have done a better job.”
Before starting out on a trip it is important to know where you are going: focus on your goals and where you are headed. The same is true for designing a health care system. Instead of simply trying to reduce costs or cover more people by tinkering within the current system, we should begin by laying out the requirements that we expect the system to meet. Only after spelling out the parameters is it time to design and implement a system to meet the goals.
A logical health plan should be comprehensible without lawyers and accountants
In contrast to the thousands of pages of legislation required to create the ACA, the simplicity of the MHP requires legislation that takes only a few dozen pages and is readily understandable without requiring lawyers and accountants to interpret it. By eliminating existing government health care programs and the complex insurance system we currently have, the Minnesota Health Plan would remove literally thousands of pages from Minnesota law books.
Enrollment as simple as Medicare back in 1966
Similar to the start of Medicare back in 1966, the Minnesota Health Plan would be simple to enroll in, with a straightforward one or two-page enrollment form. It would be simple because all Minnesotans are eligible regardless of income, employment status, age, location or number of family members, and there is no need to choose a bronze, silver, gold, or platinum plan. It would be as quick and easy to enroll one’s family in the MHP as it is to enroll one’s child in the local elementary school.
It is not an overstatement to say that the MHP would eliminate the hassle faced by most families in selecting the appropriate plan. It would eliminate the hassle of determining whether a clinic or provider is “in network.” It would eliminate the hassle of guessing how much care one will need in the coming year for pre-tax medical expense accounts. It would also eliminate the hassle of guessing whether additional insurance is needed for things not usually covered by standard health insurance plans, like dental care or nursing home care.
For seniors, one could view the MN Health Plan as Medicare Plus—it would cover all Medicare benefits, plus dental care, plus long-term care, plus all of the benefits that currently require supplemental coverage, plus it would eliminate co-payments and deductibles. Plus, it would give those same benefits to people under age 65 as well.
Delivering Flu Vaccinations through School Nurses
Compare the way we deliver flu shots to children now and how we could. Currently, parents need to make an appointment, take time off work, go to their children’s schools, drive them to a clinic to get the shot, return them to school, then return to work. In contrast, with a nurse in every school, delivering flu shots to students would require nothing more than sending consent forms to parents and providing the nurse with sufficient vaccines. With far less cost, far less disruption of the school day, and far less disruption of parents’ work days, we could deliver vaccinations to significantly more young people than we do now.
What would health care look like for people on the day that the new health plan took effect?
The change would be easier than the transition when people switch to Medicare on their 65th birthday. There would be little change in how health care is accessed: Minnesotans would continue going to their medical providers and setting up future appointments with their doctors, dentists, optometrists, physical therapists, and clinics, as needed. However, there would be a big change in how health care is funded: Minnesota families stop paying deductibles, co-pays, co-insurance, and premiums to other health plans, and begin paying premiums to the MHP, which would provide all payments to providers.
The System we currently have
Powerful financial interests framed the Affordable Care Act
During the six years prior to passage of the Affordable Care Act, Senator Max Baucus, received $3.8 million in contributions from insurance and health industry donors. Baucus, Chair of the Senate Finance Committee which ultimately drafted the 2010 health care legislation, refused to even hear testimony from doctors and nurses who were pleading for universal health care.
After passage of the ACA, Baucus singled out Liz Fowler, his chief health advisor, as the person who put together his health team and who wrote the document that “became the basis, the foundation, the blueprint” for the ACA. Fowler was a former vice president for WellPoint, one of the nation’s largest health insurance companies.
It is not surprising that the end result of the ACA legislation reflected goals of those powerful financial interests more than the goal of affordable, universal health care.
A costly bureaucratic nightmare
Contrast the expense and difficulties faced by the insurance exchanges to the enrollment of seniors in Medicare five decades ago. Using file cabinets and index cards—they had no computer technology—Medicare was able to enroll virtually all 19 million American seniors in a matter of months because the system was simple. They didn’t have to deal with multiple insurers with multiple plans offering multiple benefit sets and differing provider networks; instead, Medicare enrollees had one high quality plan that covered everyone over age 65.
Per enrollee, it cost at least ten times as much to enroll people in the ACA exchanges as it cost to enroll people in Medicare!
With or without insurance, many people still cannot get the care they need
Even though the ACA has expanded coverage, almost 5% of Minnesotans remain uninsured. There are a number of other barriers to care post-ACA as well. Many among the 95% who have insurance still cannot access needed medical care because of high deductibles, co-pays, gaps in their coverage, and limited networks.
Many people with serious mental health, addiction, or other chronic health conditions, are struggling just to survive. Getting health insurance is not always on their agenda, even though they are the ones most in need of health care. On top of that, those who most need health care are often the people who have the worst coverage. Dental care is, for many who need it, a separate, expensive insurance plan that is not included in their health insurance.
These multiple gaps in access to health coverage cause, or aggravate, many health disparities. The only way to stop people from falling through the cracks is to eliminate those cracks and make health care available to all.
The entire political debate about whether the ACA would take away “choice” presumed that the concern was over a choice of insurance plans. The real question that people care about is: “Will I be able to determine the type of care I receive and can I choose which doctors I use?”
The debate over “choice” of insurance plan is ridiculous: Minnesota seniors have over two dozen options for prescription drug coverage under Medicare Part D. Seniors don’t want a choice of prescription drug insurance plans—the choice they want is the ability to access the drugs that they need when they need them and to be able to choose whether to pick them up at their local pharmacy or have them shipped through mail-order.
Economics of the current system vs a logical health system
Won’t it cost more to cover everyone?
Despite covering additional people and providing comprehensive benefits for everyone, numerous studies and the actual experience of Medicare show that a health care system like the Minnesota Health Plan is actually less expensive than our current system due to administrative savings, more efficient delivery of care, savings from price negotiations, and other factors.
The clearest evidence of this counter-intuitive reality is a comparison with other nations. The U.S. is the only wealthy, industrialized nation on the planet that doesn’t provide universal health care, the only one where millions of people are uninsured and millions more are under-insured, and yet we spend almost twice as much as any other industrialized nation.
Cost studies of proposals that replace the multi-payer health insurance model with a single plan to pay medical bills—often referred to as “single-payer” systems—have consistently concluded that a single-payer plan will cover all people at less cost than the current system. These results have been reached by the Lewin Group, a research firm owned by United Health Group, the nation’s largest health insurance company. The Lewin Group is clearly not biased in favor of a single-payer system, because such a health care system would displace the business of its parent company.
Our health care system overcharges for many medical products and services
A December 2015 paper reported that hospital prices for a basic knee replacement ranged from about $3,400 at the lowest price hospital to about $55,800 for the same procedure at the highest price hospital. A sixteen hundred percent variation in pricing is evidence of a dysfunctional market!
If public schools were funded the way we fund hospitals
If schools were funded the way we fund hospitals, each teacher would need to spend time calculating how much time they spent with each student, along with the amount of supplies each student consumed. Then, the school would need to allocate a portion of janitorial costs, facility costs, and administrative overhead to each student.
Also, the school would need a billing office to bill each student’s family or their “education insurance plan.” Each family’s plan would pay for different services at different rates, with different co-payments. Not all families would have “education insurance,” and many families would struggle to pay. As a result, the school would spend more resources to collect the payments.
Funding schools the way we fund hospitals would cost much more and absorb a significant portion of each teacher’s time, while doing nothing to improve the quality of education.
Under-use? Over-use? – How about appropriate use of medical care?
Health care reform should not focus on reducing utilization, especially when many people already do not get the care they should have. The goal should be to focus on appropriate utilization. Americans visit doctors and hospitals less often than people in many other countries.
The myth of “Skin in the Game” to avoid unnecessary use of health care
Co-pays and deductibles are a poor means of encouraging people to get appropriate care. They clearly discourage people from accessing care even when the care is needed and even when that care may prevent the need for more expensive treatment later.
For a wealthy individual, a co-pay of hundreds of dollars might be mere “pocket change” and have no impact, while a $3 co-pay can prevent a low-income person from picking up needed medication.
Co-pays and deductibles do not lead to more appropriate use of care; to the contrary, they prevent 2 out of every 5 Americans from getting the care they needed.
Despite spending about twice as much on health care per person than other industrialized nations, this high cost is not because Americans are always running to the doctor for unnecessary care. The average American visits the doctor 4 times per year. In contrast, Japanese residents average 13 doctor visits; residents of France 6 visits; Germans, 10; and Norwegians, 4 visits. Our costs are driven not by overuse of health care, but by a bloated, administrative system that fails to give appropriate care when it is needed.
Reducing Welfare and Crime Costs
While chemical dependency treatment is expensive, there are numerous studies showing even greater savings as a result. By reducing the use of costly detox and emergency rooms, and by helping preserve families and reduce costly out-of-home placements for children, the savings can be huge. A 1993 CalData study showed that the money spent on chemical dependency treatment had better than a 700% rate of return. It saved taxpayers $7 in reduced crime, health care, and human service costs for each dollar spent, just within the first year of treatment.
Closing Down the Insurance Exchange
Minnesota spent $189 million in federal grants to establish MNsure, the state insurance exchange, which is essentially an online “shopping center” for insurance plans. By replacing health insurance with health care, there would no longer be any need for people to shop for health insurance. Consequently, there would no longer be a need for MNsure.
This creates an additional permanent, on-going savings: Minnesotans would save $44 million per year by eliminating the operating costs for MNsure.
Prior health care reforms have not saved money
Prior reforms increased administrative costs
There is one clear result from all of the health care reforms of the last 40 years: a huge growth in health care administrators: Since 1970, the number of health administrators has grown by almost 30-fold.
“Quality” payment systems are expensive and counterproductive
Even if it were possible to accurately grade providers, there is no evidence that value-based purchasing would save money—certainly not enough to pay the enormous costs of conducting the measurements and administering the payment system.
Calling those administrative costs “enormous” is not an exaggeration. The title of a March 2016 study summarized the scope of the costs: “US Physician Practices Spend More Than $15.4 Billion Annually to Report Quality Measures.”
Evidence-based health reform is needed
We rightly talk about the need for “evidence-based medicine,” but it is equally important that we use evidence-based health policy. As the health care system continues to rapidly implement and expand ACOs and other alternative payment models, it is not sufficient to simply call for robust evaluation. Instead, we should stop all expansion of these bureaucratic, complex payment systems until proponents can show evidence that they will not make the system worse.
Politics of health care reform
What are the chances of winning support in conservative rural communities?
In small towns and farm communities, where health insurance is most expensive, it is an easy political sell to support health care for all, instead of trying to explain a complex program which requires people to buy insurance and creates a marketplace where they can buy insurance policies. Even now that the health insurance exchange is working better, success in shopping for a reasonable policy does not end concerns about whether one will be able to afford out-of-pocket costs, and it does nothing for families whose medical needs are dental problems, nor does it help those who need nursing home care.
What about rationing?
Health care should not be rationed by either government or insurance companies. The reality is that people, when their doctors and providers have a chance to discuss options with them, tend to be very good at “rationing” their own health care. Just because various tests and treatments are available doesn’t make people want to go to the doctor and have more work done.