As with prior articles, this is not a partisan piece and does not look at or address political ideology. Our goal is to evaluate these on the basis of financial impact to the country and healthcare providers since these are our clients. (For recent articles on Republican attempts to repeal ACA, click here.)
Bernie Sanders introduced new legislation on September 13 called called “Medicare for All”. We believe this is a mistake on many levels.
Bernie Sanders is advocating for universal coverage.
The Plan Summary
- Eliminate deductibles, copays, and premiums
- Phased in to cover everyone at all ages, not just 65+
- Moves all patients including employer provided commercial plans, Medicare, and Medicaid to new program
An increased payroll tax is suggested to pay for it.
There are about 28 million Americans still uninsured1. The plan switches 160 million from commercial plans to a new program, and even switches over 100 million Medicare and Medicaid patients. In total about 300 million people would be moved to this new program. This would be outrageously difficult at best and potentially disastrous with major ramifications to the American economy.
If the goal is universal coverage, why not just provide a program that covers the uninsured 28m?
Lower Administrative Costs
It is often claimed that Medicare has much lower admin costs (as low as 2%) and that therefore this would pay for the change. This claim is erroneous. The actual costs are widely debated since Medicare’s actual costs include hidden costs like the Soc Sec admin, tax breaks, as well as free access to capital market through the Treasury. Admin costs on % basis can be extremely misleading since Medicare beneficiaries are much higher cost and some estimates put the cost per covered member to be lower with commercial carriers. 2
Many commercial insurance plans actually reimburse lower than Medicare for some services. And stories of outrageously expensive toilet seats in government procurement abound, so government being able to negotiate better rates is not a widely accepted belief.
This would never pass a Republican government and there is little chance it could pass a Democrat controlled one.
You would be putting the trillion dollar commercial health insurance industry out of business. It would likely fight to the death to preserve itself an inordinate amount of money convincing consumers this is bad. Anyone remember “death squads” or cigarette marketing that killed legislation?
Good for Providers
More Americans with health insurance helps providers like doctors and hospitals. It is easier to get money from insurance companies than patients.
There is also wide consensus among the provider and RCM community that Medicare is less challenging in medical billing than many commercial carriers.
Beyond a Waste of Time
This Bill would be opposed by Republicans, would be expensive, would be difficult or worse to implement, would be fought viciously by insurance, and it does nothing to solve the underlying economic problem, namely the high costs to consumers and the impact on the economy.
Spending political capital and time on a quixotic mission doesn’t just waste time, it prevents action on a plan that would actually materially improve our healthcare system and the healthcare economics of the United States. It takes our eye off the ball – namely how to materially improve healthcare in the US and address the costs of an aging population, end of life care, unhealthy behaviors and chronic conditions, as well as malpractice Insurance, defensive medicine, and the inherent problems of a 3rd party system.
At the 2017 HBMA conference, healthcare futurist David Houle posited that a single payer system is inevitable, with the stated rationale being he hadn’t heard anything better yet. We disagree not only that it is inevitable but that it is even beneficial.
About Apache Health
Apache Health is a revenue cycle management (RCM) analytics, benchmarking, and auditing company. The founders of Apache formerly ran a large RCM company that was acquired by a private equity group in a rollup. Apache’s predictive analytics will benchmark billing performance and project exactly how much more revenue you should earn from your existing volume of patients. Using many factors and a blend of artificial intelligence and specialty specific benchmarks, the model projects whether changing the billing process would improve collections for your particular mix of procedures and payers. Apache Health can help you evaluate whether to outsource the billing, determine which billing company to select to maximize performance, or track in-house billing performance improvement over time. For more information contact:
1Kaiser Family Foundation