As the election nears, the conversation concerning “Medicare for All” is being deeply debated. In a country that historically loathes government interventions into our lives, this is quite a significant shift. What is leading to many feeling single-payer is the way to go? If we step back and review many of the issues, we have in healthcare today; multiple constituents believe a single-payer system offers the right solutions. However, as no system is perfect, there are numerous references to the issues of single-payer systems seen in other countries like lengthy weight times and potential rationing of healthcare.
Considering this, we may be better served thinking about how we “fix” the problems at hand rather than focus on who the payer is.
As taxpayers, we are responsible for a large portion of the cost of healthcare, both fiscally and with relation to our societal needs. When one takes into account Medicare, Medicaid, CHIPS, VA, and the tax incentives for employer-sponsored plans; we (meaning taxpayers) are already funding the majority of care today. If there is a desire for universal coverage, a single-payer is definitely a model that will allow for coverage expansion. With the current solution where private payers implement the expanded coverage under regulatory oversight, disliked by countless people, the pendulum may swing in a direction that is less desirable by the same constituents that are so against the present situation. Indeed, it is usually better to fix something than throw it out, considering one never knows how the replacement will look.
Reporting on quality, administrative duties, and the encouragement for transparency continues to increase. Unfortunately, here is where, working with multiple payers who magnify the investments in such activities, can be challenging, because of an inherent lack of consistency between them. Differences in benefit designs also complicate the delivery of care since they require systems and people to keep them straight. Moreover, this added work and cost brings no value to those we serve and can account for dollars that are not usable to improve quality, service, and care.
In fact, this increase in provider overhead passes through as higher unit costs for services. Of course, interoperability and consistency between health insurance carriers can solve this dilemma without such a radical intervention, but as it stands, these types of solutions and partnerships do not exist. Both providers and payers are spending money and time on their own solutions independently.
Approximately 12% of an insurance premium goes towards payer administrative overhead costs. Once again, this is dollars not going towards care. If we put time into developing efficiencies, better standardization and integration would allow us to shift dollars towards care. Unfortunately, since this is not occurring, many believe the only way to fix the challenges is through a radical shift such as a single-payer system.
Consolidation of purchasing power is another benefit of a single-payer system. Unfortunately, this already exists in theory without implementation. Additionally, it is essential to calculate the impact on the entire economy. Concerning this latter point, many economists believe that, over time, there will be the absorption of any loss of economic growth by other sectors or new development will occur. However, there will be a period of economic adjustment that has complicating factors.
Stating the advantages and disadvantages for movement to such a model allows us to understand the problems better. Undeniably, there is a tremendous risk in swinging the pendulum too far one way or the other. We are a country steeped in innovation, so it behooves us to focus on optimizing both interdependent sides – the financial value of a single-payer system and the freedom of choice and capital-based business models. Focusing on the benefits of both sides will only lead us to a better model, remembering that at a basic level, healthcare is deemed to be a social right in our country.