2020 Will Be The Year Of Single-Payer Healthcare

The Current Tensions Are Leading to The Inevitable Debate
By Paul Keckley

Last week, the Senate Health, Education, Labor and Pensions Committee wrapped up hearings focused on stabilizing the individual insurance market leaving unresolved an issue that separates Democrats and Republicans on the committee: Just how much freedom states should have in managing their insurance markets.

            At issue are the Section 1332 waivers which allow states to reduce essential benefits in health insurance policies, thus allowing insurers to sell policies that cover less with lower premiums.

Also last week, Republican Senators Lindsey Graham and Bill Cassidy offered what they called the “last chance” for Republicans to repeal and replace the Affordable Care Act. Their bill would repeal the individual and employer mandates and replace the ACA’s tax credits, Medicaid expansion, and cost-sharing payments with block grants to states so governors would have more flexibility and authority in managing their Medicaid programs and insurance markets.

            But arguably more media attention was directed at Sen. Bernie Sanders’ proposal to replace the current employer-sponsored health insurance system with “Medicare for All” which would be phased on over four years and be funded by increased employer payroll taxes and higher taxes for those earning more than $250,000. What appeared to garner the media’s attention was the cadre of 15 Democrats in the Senate and 117 in the House who endorsed his proposal, though its price tag is unknown.

            The notion of Medicare for all, or a single payer system, is not a new idea. Public opinion is mixed. A Kaiser Family Foundation poll in June found 57% of Americans favor the concept of Medicare for All. An Economist/You Gov poll in April reported that 60% of Americans think “Medicare should be expanded to cover everyone.”

             Here’s my take:

 

The concept of a single payer system is gaining in popularity and will be the centerpiece of the 2020 Presidential election. The public’s not happy with our current system and it’s clear in polling that we’re a soft target. Insurers are not trusted, drug companies are considered greedy, hospitals are thought to be wasteful and physicians appear more concerned about their incomes and control than their patients. Those on Medicare are happier with their coverage than those with private coverage and employers are shifting more costs to their employees directly or suspending benefits altogether. And after seven years of contentious debate about the Affordable Care Act, there’s a fundamental divide in our land: Half believe healthcare a right that the federal government should guarantee and the other think the federal government, if given more control, will ruin it.

            Tracking polls by Kaiser, Harris, Pew and others show consistent increases in the numbers of citizens who think the current system is broken—too expensive, too complicated and too focused on profit—and the majority want something better. Public opinion polls by Deloitte and others show healthcare systems in Switzerland, France, Canada, the United Kingdom and others get better grades from their citizens than does ours. So, the notion of a single-payer system, though not understood, will gain momentum as a defining issue in Campaign 2020 especially among Democrats who aspire to be in the White House one day.

            Acceptance of the trade-offs inherent in a single payer system will spark fierce debate. For most Americans, understanding what exactly a single payer system is and how it might work is not deep.

            In some single-payer systems, like the Canadian system, private hospitals and doctors contract with the provincial government to provide care for patients. In others, like the U.K. National Health Service, providers are employed by the NHS to provide services to patients with allowance for outside work with private patients. And there is wide variety in single-payer models among the developed healthcare systems in Europe, North America and South America, parts of Asia and the Mediterranean.

            The U.S. debate will center on two issues: The relatively high prices we pay for the drugs, devices, technologies, services and facilities we use, and the medical necessity for many services provided for which evidence shows no benefit. What happens to innovation if the federal government uses its muscle to ratchet down what it pays for services and who decides what’s necessary or not? And what’s the administrative expense necessary to managing our $3.4 trillion expenditure? Senator Sanders’ Medicare for all has not been costed by the Congressional Budget Office but most expect it to cost more than the status quo.

            Structure: in developed single payer systems, primary and preventive health is the front door to the system. Physicians and mid-level providers authorize access to specialists acting as gatekeepers. Coordination of social services with medical care is formalized adding 3-5% to the total costs of care. A government agency/board determines priorities for the system and allocates funding accordingly. Rationing of services and programs is standard operating procedure and end of life care is less institutionalized.

            The issue will be whether and how primary and preventive health will be elevated in a U.S. single payer model and how specialty and long-term care are impacted long-term. If the appetite of American taxpayers is for modern facilities and unfettered access to specialists at will, there will be tension.

            In the interim, the Affordable Care Act will be the law of the land, though with tweaks resulting from executive orders and administrative actions that address its primary aims: To change incentives from fee-for-service to value and to increase access to insurance coverage for those without. But attention to the allure of a single-payer replacement will increase, and with it public debate about how it should be structured and what it should cost.

 

Paul Keckley is a Nashville-based healthcare consultant. A version of this article originally appeared at The Health Care Blog.