In December I wrote an article about a movie presented by The Alliance for Health at its First Friday Forum regarding the state of U.S. health care. In the discussion that followed, there were suggestions on what could be done to improve our system, but no clear consensus was presented. So I conducted a survey of 14 possible options.
The idea garnering the most support was to move to a single-payer system.
What does that mean and what are the implications associated with it? In general, a single-payer health care system is one where all payments for service are made by a single organization, usually the government. In this country that could be a state or the federal government.
Of course, when someone is paying for the service, they have to have funds to do so. How they get the funds and how they distribute them has to be part of the discussion. This leads to application of the Golden Rule — which in most situations means that those who have the gold make the rules. This seems to make people nervous, so they resist giving that control to some organization, which when you think about it is a bit silly, as this has been going on for some time in multiple situations.
Let’s look at the current situation. People say they don’t want to change things because they have to give up control. Do they have control now? About 67 percent of the health care costs in the United States are paid for under some government program. For the remaining people who have coverage, the majority is provided through a dozen or so insurance carriers with some small portion through self-insured plans. So the ability of individuals to influence or demand the design of their plans is pretty limited.
Why are people in the U.S. resistant to a single-payer system? They see the value coming from big providers in manufacturing of products and retail organizations. They see huge organizations like Amazon, Apple and Microsoft bring innovation to the marketplace. So the issue shouldn’t be size alone. Perhaps it is a general distrust of government to do the expected job. However, agencies like Social Security, NASA, FBI and branches of the military all seem to do a pretty good job. Yes, all can make improvements, but small governmental organizations often don’t do things as well as big organizational units. So this fear that we couldn’t have an effective single-payer system is irrational in many respects.
If you look at the countries around the world that have such a system, the people in those countries aren’t clamoring to dump it — just the opposite: They don’t want to give it up. They may want improvements, but we all do.
Maybe our fear is based on losing the “great” system we have. That system currently has us ranked near the bottom of effective health care systems in developed countries, spending better than twice what other countries do for similar circumstances. Regarding change to our health care system, perhaps it can be said: “We have nothing to fear, but fear itself.”
We should look at how other single-payer systems operate and then design something that builds on their good parts, just like each new product begins with what others have made and then adds other features. What are some of these issues we could deal with? The big one is cost. A single-payer system could eliminate billions of dollars of administrative costs. If you eliminated the annual enrollments at each work place, the savings would be staggering. Then add to that all the complex records documentation on plan enrollees and information submissions for all the insurance that each provider has to deal with. The cost savings are phenomenal.
If we moved away from our current strategy of fee for service to a results-based reimbursed system, we would be placing the emphasis on the patient. We would likely reduce the services sold or used to gain income or protect the provider from malpractice suits, minimizing associated insurance costs that are passed on to the patient or whoever is paying the bill. It is obviously more complicated than this, but it would be quite feasible to design a physician-based pay system that put everyone on salary with recognition of qualifications and then provide add-on pay incentives for performance over time for health improvements in patients using accepted baselines by standard illness classifications and severity.
These physicians (and other health care providers) could easily work for hospital systems or health organizations that provide the culture, mission and employee benefits that suit their needs. However, the single-payer organization pays everyone in the same way, at the same levels and with the same documentation practices. Much can be decided by a “cross-sectional blue ribbon panel” on a periodic basis.
Funding the system means collecting the revenue to pay for services. In simple terms, it becomes a combination of the type and amount of services used and the number of eligible people obtaining services (expense) and direct payments (insurance premiums or co-pays) and indirect payments (taxes). The tax has to be on a sliding scale of all income earned, including investment income. The direct payments have to be based on unit count (family, single, etc.) plus service co-pays to prevent use abuse.
Like any plan change of great magnitude, the implementation plan is a critical element. Just as we saw with the Affordable Care Act rollout, this is very important. But it can be done if all the horses are pulling in the same direction. We would have to avoid all the foolishness of the ACA implementation. But it can be done.
Ardon Schambers is president and principal of P3HR Consulting & Services in Grand Rapids.