Single Payer

Single Payer System

A Single Payer System will help “Make America Great Again”.

I am convinced healthcare in American needs to become a single payer system with an option to purchase private insurance. Why?

Many American are still slipping through the cracks of the current system because it’s so fragmented. With health insurers pulling out of the exchanges and the uncertainty of CHIP, even more Americans are likely going to slip through the cracks in 2018.

While reading Option B this weekend, I learned that 46% of Americans cannot afford to pay $400 in the event of an emergency. It’s no wonder hospitals are seeing an increase in bad debt. The average deductible in 2016 was just shy of $1500. With more Americans trying to lower their premiums, it’s reasonable to expect deductibles will continue to increase. Higher deductibles and out-of-pocket maximums means many Americans are underinsured and exposed to excessive financial risk.

Illness is a factor in more than 40% of bankruptcies and there is evidence that people with cancer are more than 2.5 times as likely to file for bankruptcy. Even relatively small unexpected expenses can have disastrous consequences: 46% of Americans are unable to pay for an emergency bill of $400. ~Option B by Sheryl Sandberg and Adam Grant

People need a certain level of support to shift into growth mindset which is essential to return America to greatness. Healthcare is an essential part of that support. As Sheryl acknowledged in Option B, paid family leave, quality healthcare and mental health coverage make the difference between people falling off and hanging on. In other words, they are essential to life.

Many leaders are acknowledging now that capitalism is not working for the vast majority of Americans. The fundamental goals of business and the welfare of Americans are misaligned.

I fully agree that the capitalist system as we know it with regards to compensation is severely out of balance when you compare the growth of executive level compensation with that of labor….The U.S. Middle Class is shrinking compared to the base of 1962 and is now about 47% of the population from about 62%… These are the kinds of trends that lead to social and political upheaval. ~ Fortune, CEO Daily

What’s clear is that we’ve tried to make universal healthcare coverage work and we’ve allowed things to get so far off track that we need to do something dramatically different. It’s time for Option B in healthcare.

We should consider a single payer system as the base of the American system. Access to healthcare should not depend on where people live or who they work for because it’s an essential service for the health and welfare of all Americans.

A single payer system is going to be expensive but to “make America great again” we need to reinvest in all people rather than just lining the pockets of the 1%. Warren Buffet one of the wealthiest people in American is onboard.

 

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About the Author: Shannon Smith is a healthcare strategist with over fifteen years of experience helping companies achieve greater success. She is also the founder and CEO of Hello Workout.

 

No Easy Answers

There are no easy answers when it comes to healthcare.

Healthcare is something everyone wants because it’s an essential service for sustaining a healthy life. However, the cost of healthcare is what makes it a difficult service to provide to all Americans. Politicians are continuing to struggle with what to do.

Changes to the ACA are still up in the air …“the president has no interest in bailing out insurance companies.”

Proposals to sure up the insurance options available on the exchanges require subsidies for low-income consumers. The GOP is willing to authorize the subsidies but there is a catch. Republicans want states to have more control over the implementation of the ACA – which essentially means health insurance available to Americans will vary state to state. Consequently, Democrats have expressed their concern for the consumer protections which were a fundamental part of the ACA.

Insurers are threatening to pull out of the exchanges if the funds for subsidies disappear. Lindsay Graham is suggesting block grants to states if all else fails which no one seems to like either because some Americans will get generous benefits and others not enough.

There is one thing they agree on:

Either way you slice it both Republicans and Democrats seems to be pointing to the complexity of the current healthcare system as a problem.

Republicans are making a case for a free market system that makes patients behave as healthcare consumers. The thought behind it is that consumers will only pay for what they need if they know the price. In theory, healthcare becomes a cash business which negates the need for the complexities of the current healthcare billing and collection industry. The problem is healthcare consumers may not have the cash for needed care.

Democrats on the other hand are making a case for a Single Payer system which will place the financial burden on the tax payer. A single payer system would provide a basic level of coverage to all Americans regardless of their ability to pay. The challenge is in defining the basic level of coverage because when someone else is paying most people think more always seems better – even if it isn’t. Bernie Sanders plan will be presented on Wednesday.

Healthcare billing and collection cost providers approximately $52 billion/year. Either strategy will put pressure on the Revenue Cycle industry providing billing and collection services because the healthcare payment processes will likely be simplified.

Bernie’s Plan

Labeled “Medicare for All” but is really “ACA Coverage for All” paid for by the tax payer. Hence a non-starter plan even though it is backed by 15 Democratic representatives.

The cost would likely exceed any cost savings even if the government “negotiates” all the prices with providers and drug companies. But let’s wait for the white paper that explains the savings and funding before we judge.

Moral Obligation?

Is it a moral obligation to provide healthcare to all Americans – or not?

That is the question that as Americans we need to answer. It’s clear now that many voters did not understand that it was the question they needed to answer for themselves before voting to “repeal and replace ObamaCare” when voting for Trump. In fact, Trump himself may not have even understood that given his comment about the Republican healthcare bill being “mean”.

If you haven’t been following the development of the latest Republican healthcare bill, here is a simple explanation of the differences between ObamaCare and TrumpCare. You’ll get a good idea how it affects you as well as why at least some consider the policy to be mean.

The policy problem became crystal clear to me this week when I listened to an interview given by the former CEO of Aetna. He spoke briefly about how ObamaCare is based on incompatible policies. On the one hand, the Democrats wanting to provide everyone with “good insurance” similar to the policies provided to our elected officials. On the other hand, the Republicans wanting everyone to behave as healthcare consumers which is a cornerstone of their free market economic philosophy.

The Republican policies already in ObamaCare are the marketplaces created to sell health insurance, the high deductibles to ensure individuals have more “skin in the game” [that means more money from their own pockets], the marketplaces to sell healthcare services and enable “shopping” etc. Many of these consumer initiatives have failed to engage Americans as healthcare consumers or reduce total healthcare spending. That’s essentially why we are having the healthcare debate all over again.

What’s different about TrumpCare now?

The changes in coverage requirements for employers, the penalties for not having insurance and coverage reductions for pre-existing conditions. Forcing people to pay for something that doesn’t meet their needs is a tax.

From my perspective it is time to start calling it a tax and treat it as such especially if you believe healthcare is a moral obligation. There are more costs that can be rung out of the healthcare industry if we simplify it.

Single Payer

What I have also discovered recently is that many Americans don’t understand what a Single Payer system is or how it could help them. We don’t need to look to Canada or elsewhere for a good example. Our best example is Medicare. A lot of thought and work goes into that program and in many respects it is used by the private sector as a coverage and payment framework. The core of Medicare has 2 parts: Medicare Part A (Hospital Coverage) and Medicare Part B (Medical Coverage). Part A is covered with tax dollars and Part B is paid with premiums.

A national framework similar to Medicare that is paid with a blend of tax dollars for medically necessary services [i.e. no Viagra coverage] and premiums for services that increase quality of life [i.e. Viagra coverage] would work for Americans and the healthcare industry. People are being needlessly scared by the thought of rationing and long lines for healthcare if America moves to a single payer system.

Why now?

A single payer system is the one change that can make the biggest impact for Americans now. It would give all Americans peace of mind that they will be cared for when they are injured or sick.

Basic Income

Silicon Valley leaders are recognizing the need to provide people with a “basic income” as more jobs are automated. Basic income means that industry leaders are expecting more Americans to drop in socioeconomic class. The working class [low and middle income Americans] will be impacted the most by the Republican healthcare bill. So over time it could mean that even more Americans may not have healthcare coverage or access to healthcare services.

Hospitals are required to stabilize everyone who enter their doors regardless of their ability to pay and often in good conscious provide more service than that now. If there is not enough people who can pay, the cost goes up for those who can pay or those who can’t pay go without. That’s the reality of a free market system.

Pricing Regulation

California AB 72 has been signed into law. It limits the amount patients can be billed when treated by a non-contracted provider in a contracted facility.

For example: Let’s say you have surgery at your local hospital. Your surgeon and the hospital is in your health plan’s network. The fees are reasonable for the services being provided because they are discounted to the contracted rates. However, after services are provided you discover the anesthesiologist was not in-network. Now, unless the anesthesiologist has made an agreement with you prior to service, your liability will be limited to an estimate of a contracted rate. The bill limits the total amount due from you and your health plan to the greater of the average contracted rate or 125% of the Medicare fee schedule.

For healthcare providers, it impairs their ability to negotiate contract rates that reflect the “fair market value” of their services. It’s effectively like a company adopting a pay scale that has no exceptions for knowledge, skill, experience and performance. Everyone gets the same pay. That’s a step toward developing a single payer system.

Medical Risk

I attended a Designing for Behavior Change event recently. The one statistic presented that really shocked me was that 90% of the people at risk for chronic health conditions like heart disease and diabetes related to obesity don’t know it. One third [33.3%] of the American population is obese which means their BMI > 30. How is that possible after having an increased focus on wellness? It makes you wonder what exactly gets communicated to patients about their health status.

I have spoken with clinicians [doctors and nurses] as well as health plan administrators and most have little faith that they can change the obesity trend. Most feel that their words of warning are falling on deaf ears. It’s sad because when you combine that trend with America’s aging population Medical Risk has the potential to skyrocket.

That’s probably why budget conscious Republicans [also referred to as the far right] want to pull back on Medicaid funding and why we all as Americans need to make the decision about whether healthcare is a moral obligation or not. All of us — even those currently covered by employer based insurance — will be directly impacted by your decision.

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About the Author: Shannon Smith is a healthcare strategist with over fifteen years of experience helping companies achieve greater success. She is also the founder and CEO of Hello Workout.

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