Medicare for All

Evolution vs. Revolution

We’re getting more insight into as to where political and business leaders are looking for ideas to help lower the cost of healthcare in the US. 

LA Care came up this week because it’s a public option currently available on the California exchange that competes for members with insurers offering plans in the same service areas. It is operating similarly to how a Medicare public option would be expected to operate. 

Many leaders see LA Care as evolutionary because since inception the plan has been slowly improving the health and welfare of their members and reducing the cost of healthcare. The biggest issue that remains is healthcare reimbursement.

LA Care utilizes county resources as well as physicians and other healthcare providers contracted with commercial payers. Consequently, the plan hasn’t been able to lower their contracted rates and cost of healthcare enough to make their model truly transformative.

The Medicare public option could be revolutionary but it is unlikely to get industry support given that many of the largest healthcare companies are publicly traded and have a financial responsibility to their shareholders.

Change is going to happen whether you want it or not.

~Ed Catmull, Co-Founder of Pixar

A Radical Challenge

If you subscribe to the Weekly Rush then you know, I have been reading Creativity Inc lately. One of the stories that the author Ed Catmull shares in the book is about giving his creatives at Pixar a radical challenge to lower the cost of their production. No easy task given the talent and complexity of the processes involved.

Ed was surprised by the positive response to the challenge. Reportedly, his creatives took it on and took the challenge to a whole new level once they understood how they fit into the bigger picture.

60% of Americans don’t necessarily want a single payer system but they want to pay less for their healthcare. Rather than fighting against the use of Medicare rates, as an industry we should embrace it as our radical challenge to lower the cost of healthcare.

The opportunity to address a problem is often missed because we don’t get to the root cause and understand all the implications to fix it. Instead we often layer on more solutions and consequently, more cost.

Vendors don’t help matters because they don’t want to address staff reductions as a benefit of their solution. It’s a sensitive issue and often a roadblock to closing a sale.

To embrace the challenge, we need to need to look at everything we do with a fresh lens and question:

  • Does the task still need to be done?
  • Does the process/system work well? If not, what’s the problem?
  • What needs to change or what could be changed to fix the problem or streamline the process to make the task even easier?
  • Could a vendor change the user interface or packaging to make the process easier?
  • If you eliminate the task or make a process easier, how do existing resources get redeployed?
  • What is the impact on total cost and revenue?

If you’re saying there is no way to reduce cost and make money if you only receive Medicare rates. Ask yourself why not? Make a list of all your reasons and challenge every single one.

It’s not about just improving what we do now. Constraints challenge people to think about what they are doing and to create better ways to do it.

2020 Reform

Americans have a huge opportunity to get healthcare right in 2020.

The current system is broken. Access is limited by the lack of coverage and/or the cost of healthcare.

Medicare for All would make healthcare more accessible to all American even though access has yet to be defined in terms of who and what.

Getting who and what right is the first opportunity. If the benefits are too rich, the system will become unsustainable. Reportedly, Canada is spending 60% of all tax dollars on healthcare and have reached their maximum budget. They too are trying to address the rising cost with the triple aim.

The Republican concerns are real if other measures are not taken to curb the cost of healthcare.

Expanding access helps reduce the cost/person if people use the system to better manage their health and thereby reduce the need for expensive medical intervention.

For the theory to work:

1/ Self-Care: Americans need to take a more active role in managing their health and wellbeing.

2/ Primary Care: PCPs need to engage as health coaches rather than just as gatekeepers to specialists and pharmaceuticals.

3/ Coverage: Insurers need to cover self-care apps + devices.

The opportunity in 2020 is to present a new system that focuses on health and cares for the sick when needed.

Medicare for All?

Medicare for All vs. Single Payer System

62% of Americans support the idea of “Medicare for All” even though it’s not clear what it would cover, who it would cover or how it would be administered.

So what are people finding so appealing about it? The number of people supporting a single payer system is lower. Reportedly, only 48% of Americans want a single payer system even though the two are similar in concept.

Is that people understand Medicare coverage because they have had some experience with it or in their minds is there a fundamental difference?

Single payer systems are often plagued with access issues because all the resources are being consumed by older and sicker beneficiaries. However, if something is urgent and life threatening, it gets taken care of quickly. In short, it’s reactive care. That’s probably the scary part of a single payer system for most.

However, what few realize is that many of the single payer systems around the world have a commercial layer that provides access to complimentary care providers who help keep people healthy. Interestingly, the plans are often provided by employers and include luxury benefits like massage therapy.

Single payer vs. Medicare for All: What’s the difference to you?

Universal healthcare

Is it the end of employer-sponsored healthcare or the beginning of employer-driven healthcare?

When I posed this question to my Linked In network, many people viewed the post, some followed up for links to sources but no one commented even though healthcare is top of mind right now for many Americans.

Healthcare is an emotional topic. It’s something that everyone wants and needs but most Americans are struggling to pay for it. The healthcare jobs boom is still going strong which means the total cost of healthcare is continuing to increase. While there doesn’t seem to be a rolling average cost of healthcare per GDP publicly available to see the impact, the math is pretty simple  – more jobs means there is more healthcare being delivered which means more cost.

The total cost of healthcare will not decrease until we curb demand. 

Consumer Driven Healthcare initiatives failed.

Consumer driven healthcare initiatives such as high deductible health plans curbed demand in the short run but resulted in more costly healthcare outcomes. Americans simply couldn’t afford to pay their premiums and the patient portion of healthcare services under those plans. Consequently, they didn’t seek treatment until their health issue became a big problem. In simple terms, big problems cost more to treat. Other consumer initiatives such as pricing transparency never really saw the light of day.

Employer-Driven Healthcare

Employer-Driven healthcare is a new theory and consistent with the Republican trickle down economic policies. The assumption is that if the Republicans can tweak policies enough to get the economy to full employment, every American or at least nearly all Americans will get a job with healthcare benefits. In theory, all employers will offer benefits that are rich enough to ensure timely access to healthcare services.

Some employers are taking initiative to implement on-site and near site clinics, lower deductibles and implement wellness initiatives even though there is a perception that wellness doesn’t work.

There are ways to make wellness programs work better but the key words for an employer-driven healthcare system to work is ALL and SOME. If only some employers offer rich benefits, many Americans will continue to be underinsured or uninsured.

Medicare for All

The idea of “Medicare for All” was endorsed this weekend by former President Barak Obama. The initiative is gaining traction due to the economics and financial condition of Americans.

1/ Healthcare is becoming a bigger portion of the take home pay of low and middle income Americans which means they have less money to spend on housing, food, clothing and other life essentials that affect their health and wellbeing.

2/ The middle class is eroding to the point that it needs to be supported with social wealth-fare spending. Reportedly, $1 in every $7 is now spent to subsidize the middle class.

3/ Republicans are working to privatize Medicare. More health plans are getting into the Medicare and Medicaid business. According to the press release for Oscar Health, it is a more “lucrative” segment. Oscar [co-founded by Jared Kushner’s brother, Joshua] historically sold individual and family plans on the exchanges. Many of the people purchasing policies on the exchanges were sicker and needed more healthcare than expected.

4/ New Medicare Advantage plans are now addressing social determinants and covering many basic living costs. Bankruptcy filings are increasing in the senior population.

5/ Koch brother sponsored study reports “Medicare for All” saves $2 Trillion.

What does this mean for healthcare?

If we just look at the economic condition of many Americans and how the financial strain is impacting their health, it’s clear that we need a new universal healthcare system.

If we consider the changes underway to Medicare and the momentum of the “Medicare for All” movement, it looks like Medicare will be the underpinning of the new universal system. It’s a good thing for you because all or nearly all healthcare providers participate in Medicare, it has well established coverage standards for medical care along with a fee schedule and excludes bad actors from participation.

If we factor in everyone’s deep seated emotions about healthcare, we need a system that offers choice.

What we end up with is a two tiered system offering basic coverage for all Americans and enhanced benefits for those who choose and can afford to purchase additional coverage.

Simplicity wins:

There are plenty of models in other first world countries that can serve as a framework. The key is choosing a framework that simplifies the healthcare system for all to navigate and understand. Not only will it make it easier for all Americans to access care when they need it rather than when they can afford it. It will also reduce the cost. The administrative burden of the current system alone is estimated at 30% of the total healthcare burden in America.