Nicole Gaudiano reported that Sen. Bernie Sanders is now seeking “citizen co-sponsors” for a “Medicare-for-all” health care bill he plans to introduce in a few weeks.
While pledging to fight GOP efforts to repeal Obamacare, the Vermont independent told supporters in a Wednesday email that the ultimate goal is a single-payer system, a federally administered program that would eliminate the role of private insurers in basic health care coverage. He suggested a Medicare for all system.
He asked supporters to sign on as citizen co-sponsors because — in a reprise of his 2016 presidential campaign’s clarion call — “getting there will require nothing short of a political revolution.”
“It is time to wage a moral and political war against a dysfunctional health care system in this country,” he wrote. “When I introduce the legislation, I want it to be clear that the American people believe health care should be a right in this country.”
Republicans say the single-payer approach to health care is a “government takeover” of insurance that will cost trillions and be financed on the backs of taxpayers. They point to an Urban Institute study of Sanders’ proposal during his presidential campaign that said it would increase federal expenditures by $32 trillion over 10 years, though a Sanders aide says the forthcoming bill will cost less than the campaign plan.
Sanders, in his email, said the system would save lives and “hundreds of billions” in annual health care costs.
“The savings for businesses would be astronomical and allow them to compete on equal footing with companies in Europe,” he wrote. “And for the millions of Americans who are currently in jobs they don’t like but must stay put because of health care access, they would be free to explore more productive opportunities as they desire.”
But is it really the answer and do we really want it?
Why Bernie’s Universal Healthcare System Would Be A Disaster
The Staff at TWD and Associates wrote that this past week, Senator Bernie Sanders of Vermont proclaimed in a New York Times op-ed that the time has come to create a program of “Medicare for all,” a government-run single-payer healthcare system that would over a four-year period displace all existing private healthcare plans, Newsweek writes.
His new program, rightly denounced as delusional, purports to provide to over 325 million Americans coverage that would be more extensive and costly than the rich benefits supplied to the 55 million Americans on Medicare—which itself teeters on the edge of insolvency.
Sanders proposes to fund his new plan with a variety of heavy taxes on productive labor and capital, without noting that his program will cut into the very tax revenues needed to support such a system. Incentives matter, even in la-la land.
None of this matters to Sanders, for whom noble aspirations cure all technical defects. He believes that the United States, like all other modern states, should “guarantee comprehensive healthcare to every person as a human right.”
In his view, the simplification of administrative costs should remove frustration from a beleaguered citizenry constantly at war with its insurance carriers, while simultaneously slashing the expense of running a healthcare system.
It is fortunate that the odds of getting this plan enacted soon are low, notwithstanding that his position is swiftly becoming mainstream in the Democratic Party. Of greater import is the catastrophic consequences that would follow its enactment.
Most fundamentally, Sanders and his many acolytes never ask hard questions about what the term “comprehensive” means. Many public healthcare plans, like that of Great Britain, wrestle with this challenge, knowing that aggregate demand for expensive medical services explodes whenever these are offered for free.
The extra services demanded cannot be supplied from existing personnel and facilities, so finding additional resources is expensive, given the inevitable diseconomies of scale. It is only possible to survive the onslaught by defining protected benefits relatively narrowly.
These systematic shortages are aggravated as the existing supply of medical goods and services shrinks, with the government imposing caps on salaries, drugs, and procedures. These shortages impose high costs as services are rationed by queuing, not money.
These queues spawn intrigue: the rich (who under the Sanders plan would be barred from paying private providers of goods and services) go either overseas or into the black market in order to obtain vital goods and services that less fortunate individuals cannot afford.
This grim picture is no idle abstraction. These incentive effects are so powerful that they will swamp any effort to improve national healthcare by government fiat.
It is conceptually indefensible and politically naïve to assume that healthcare is somehow “special” and therefore follows economic rules that don’t apply to other markets. In housing, it has been known for decades that rent control only aggravates shortages by creating massive distortions in housing markets.
In agriculture, ethanol subsidies for gasoline have wrecked the operation of both food and energy markets. In transportation, endless queues formed when price controls at the pump created systematic gasoline shortages. The lesson is that basic economic principles apply to all goods and services, no matter their elevated position in the social discourse.
We already have good evidence of the destructive effect of regulation on healthcare markets. The individual mandate of the Affordable Care Act (ACA) does in miniature exactly what the Sanders plan will do in the aggregate.
By mandating benefits and coverage formulas, it requires huge public subsidies to keep the program alive and then makes matters worse with its system of community rating. The combined effect of these initiatives is to contract severely the insurance market for individual healthcare policies.
The failure of central planning to work should lead people to shy away from universal healthcare, which will only magnify the same set of dangers. But instead, the constant refrain one hears today is that the public wants single-payer to ease the frustration and complications of the current healthcare system.
This common position makes the disease the cure. But there is another way: deregulation. Removing regulation can do two things that a national healthcare system cannot.
First, it reduces administrative costs by removing the role of government in decisions insurers should make about what goods to supply and what prices to charge.
Second, it increases the level of choice in the selection of healthcare coverage. There is no reason to think that every American needs exactly the same set of benefits regardless of age, health, sex, and income.
Choice is generally regarded as a virtue in markets that deal with food, transportation, housing, and other goods. It is a fatal conceit to think that healthcare is so unique that a central planner can decide at a low cost which of the thousands of permutations of goods and services belong in the one comprehensive nationwide healthcare plan, especially after dismantling the private sector—which would take away the essential information needed to best allocate scarce resources.
In contrast to central planning, markets tend to bring supply and demand into balance, as higher prices draw in more suppliers in case of shortages, while lower prices draw in more consumers in case of surpluses.
Price controls for healthcare services operate just like price controls everywhere else: the shortages they create ripple quickly through the entire economy. Delays in the provision of healthcare allow serious medical conditions to fester until emergency care becomes necessary, but prompt access to such treatment is far from certain.
Bernie Sanders misses the point because he lives in a Pollyannaish universe in which these fundamental structural principles somehow do not apply. Accordingly, he finds it all too easy to pin the breakdown in the current healthcare system on the villains of “the medical industrial complex.”
In so doing, he foolishly assumes that the high salaries paid to executives are unearned and should be plowed back into better services for the population at large. Wholly foreign to his way of thinking is that people who command these salaries function in a competitive market in which few players long prosper if they do not deliver to their customers benefits in excess of what they receive in exchange.
Unfortunately, Sanders starts from the Marxist premise that all contracts are forms of exploitation. He thus finds it hard to fathom the essential truth that markets work precisely because of the gains from trade that follow from voluntary exchange.
In 2016, Pfizer, for example, offered its CEO a compensation package of over $17 million, which is small potatoes against its nearly $53 billion in sales that year. On a daily basis, the CEO and his team have to make high-stakes decisions that go straight to the bottom line.
You pay top talent top dollar because complex businesses are exceptionally hard to run, especially in today’s regulatory environment. Perhaps Sanders thinks that every compensation committee in the land is afflicted with some deep confusion concerning the worth of its key officers.
Perhaps he also believes that institutional shareholders, to whom this information is disclosed in a myriad of ways, are duped just as easily.
Indeed, when he writes that the United States should negotiate down the prices of key drugs, he ignores the well-established point that a cut in prices will necessarily lead to a decline in pharmaceutical innovation. The large payments to drug companies would be a proper source of concern if they resulted from some improper use of monopoly power.
But under competitive conditions, these prices reflect both the high cost of getting drugs to market through the approval maze set up by the Food and Drug Administration, and, once some drugs run that gauntlet, the huge benefits they provide by stabilizing chronic conditions, responding to acute illnesses, and eliminating costly surgeries and other forms of intervention.
There is much that can be done to fix the American healthcare system. All sides of the debate agree that it costs too much to operate and supplies too few benefits. But there is no way that a system can control costs while catering to unlimited consumer demand. The law of unintended consequences applies to all social activities, healthcare included. It is this message that has to be hammered home in the upcoming debate over healthcare reform.
Maybe we should be getting away from the Medicare for all and consider other single payer ideas.
Democrats push ‘Medicare for All’ bills, but not all in the party are onboard and with the Mid Term elections almost upon us what should we expect?
Hunter Walker a correspondent for Yahoo wrote that Minnesota Rep. Keith Ellison, who is also a vice chair of the Democratic National Committee, became the lead sponsor of the House single-payer health care bill on Wednesday. The legislation has detractors among his fellow Democrats, but Ellison said he’s eager for a “debate” on the policy.
“Our movement is ascending, but the truth is that, for many years, people weren’t there,” Ellison said of the “Medicare for All” push in an interview with Yahoo News on Sirius XM’s politics channel, POTUS. “So more and more people are coming on every day, but not everyone is on. We have to convince them, we have to talk to them, we need to engage in a respectful, fact-based debate about which systems are the best.”
Ellison’s House colleagues voted unanimously to let him assume leadership of the bill, which is officially named “The Expanded & Improved Medicare for All Act” (H.R. 676). It was originally sponsored by Rep. John Conyers, D-Mich., who stepped down late last year amid allegations of sexual misconduct. The bill would establish a universal health care system akin to the Medicare program that currently exists for senior citizens and includes coverage for prescriptions, primary care, emergencies, and long-term care.
“Everybody would get a card, and you can get the care that you need, not unlike what they have in Canada right now. And truth be told, every major industrial country has a universal system; many of them have single-payer systems,” said Ellison.
Conyers first introduced the bill in 2003 with 25 co-sponsors. As of this writing, there are 121 co-sponsors of the bill, all of whom are Democrats. In the Senate, a separate Medicare for All bill has also been introduced by former Democratic presidential candidate Sen. Bernie Sanders, I-Vt.
No Republicans have signed on to the idea of Medicare for All, and the plan doesn’t enjoy universal support from Democrats. In the House, there are 72 Democrats who do not back the measure and 31 of the Senate Democrats don’t support Sanders’s bill in the upper chamber.
Polls show a growing number of people support a government-run health care system. The country is essentially split between those who want a public program and those who prefer private insurance.
Critics note Medicare for All would come with tax increases to pay for the trust fund that finances the program. “It would essentially be paid for through some taxes. One would be a 5 percent tax on high-net-worth individuals that just got a major tax cut a few weeks ago, so they got it,” Ellison said, adding, “There would be a financial transactions tax, and it would be a very small payroll tax to cover everybody.”
And overall, Ellison argued the program would “save a lot of money” by bringing down health care costs for individuals, including premiums, co-pays, deductibles and the price of medicine. “It would save the nation more than $500 billion a year, in large measure because of preventative care,” Ellison said.
Along with cutting down on expensive health emergencies due to lack of preventive treatment, Ellison claimed the bill would lower administrative costs associated with health care. Sanders has cited a similar $500 billion figure tied to those costs. Politifact called that claim “half-true” and said the number may be a high estimate, though there could still be “pretty substantial savings” of at least $300 billion.
Another sticking point for Medicare for All critics is the question of what might happen to people who currently have private insurance and are satisfied with their policies. Ellison did not answer directly when asked if he could make the infamous “if you like your plan you can keep it” promise that dogged President Obama following the implementation of the Affordable Care Act. However, he said there would be room for private insurance policies to exist under his plan.
“You would be able to take out private insurance policies for certain things,” Ellison said. “It’s not inconceivable that single-payer systems and private systems coexist. They certainly do in England right now, so it’s not really that big of a problem.”
While Ellison points to programs in Western Europe and Canada as exemplary models, some critics respond by noting that those programs are plagued by long lines and lower standards than the U.S. system. Ellison said health outcomes in this country have “lagged behind” other nations, a claim backed by some experts. He also pointed out Canadians are largely satisfied with their public health system and want to see it expand.
“I’ve never met a Canadian that wants to switch their system for ours,” Ellison said. “They like their system. Do they complain about it? Yes. Because guess what? People complain about stuff no matter where they live. … But I can tell you that people who live in Canada and benefit from that health care system, they like it.”
With all 435 House seats and 35 spots in the Senate up for election this year, Medicare for All has become a major question for Democrats on the campaign trail. The issue is in some ways emblematic of the divide that emerged in Sanders’s presidential primary race against Hillary Clinton and Ellison’s campaign for the DNC chairmanship, between the party’s progressive base and the establishment.
One Democratic candidate who has taken heat from progressives for not embracing Medicare for All is Talley Sergent, who is running to represent West Virginia’s second congressional district. Sergent also appeared on Yahoo News’ SiriusXM broadcast on Wednesday, and described Medicare for All as “an option.” We asked what she’d say if she won her race and Ellison called her up to ask her to sign on to his bill.
“Well, I’d appreciate the congressman calling me up, but I’m going to listen to the folks across West Virginia and make sure that it makes sense for people here,” Sergent said. “That’s who I care most about, and what they think and what they say.”
With his dual role as one of the top backers of Medicare for All and a leader of the DNC, Ellison is in a unique position. However, he said he doesn’t believe the party needs to take a side, and he thinks Democratic candidates can succeed regardless of their position on his bill.
“I think people can win for all kinds of things … all over the country. This is not a doctrinaire movement where we’re going to litmus-test people,” Ellison said.
Single payer: Yes! Well Maybe! but Medicare for all: No!
Shannon Tapia wrote last April that thankfully, the GOP did not pass Paul Ryan’s repeal and replace bill for Obamacare. Immediately after, she saw a headline hopefully concluding, “Medicare for all may be next.” In Medicare’s current form, this would be devastating for the health of America. I am a young geriatrician; I know a heck of a lot about Medicare. Most people don’t. They just see it as a great perk of turning 65 in America and the social healthcare we offer to elderly and disabled. I did too until I became a physician who only sees Medicare patients.
Medicare originated in 1966 in recognition that we needed to do a better job as a nation at caring for our aging and disabled who could not get employer-provided insurance. In 1989 the Omnibus Budget Reconciliation Act established a fee schedule for Medicare payments. This assigns “relative value units” or RVUs to everything we do for our patients in medicine. The formula that determines RVUs disproportionately favors procedural care to time-based care. Essentially, Medicare pays and incentivizes medical providers to do things to patients and actually disincentivizes physicians from taking their time with patients.
If you wonder why the doctor-patient relationship is not doing well right now, wonder no more. Trust takes time. Even family doctors who take Medicare have to turn their practice into a patient or low-risk procedure mill to make ends meet. Medicare will pay a physician between $70 to $80 to freeze off a wart, a procedure that takes about 2 minutes to do, and 1 minute to document in an EMR.
In contrast, I can spend an hour with an elderly patient with multiple complicated issues, addressing their concerns, reviewing and adjusting their many medications, and coming up with a plan and then having to take 30 minutes later to document what happened and get paid essentially the same amount (about $80) had I just spent 3 minutes removing a wart and sending them out the door. Is it any wonder that geriatrics is a dying field?
There was a time, however, when despite the RVU working against physicians who primarily use their time and knowledge to diagnose and care for patients, physicians still did it because they could make a decent living while being fulfilled in the solace they were helping. But times have changed. My father is a geriatrician. He went to the equivalent of his state medical school from 1978 to 1982 for $5,000 a year in tuition. No loans needed. Had I gone to my state school (same as his) from 2006 to 2010, in-state tuition would have been $25,000 per year. I came out of medical school with roughly $200,000 in debt at anywhere from 7 to 15 percent interest that accrues quarterly, and I’m lucky.
The physicians today in their fifties to seventies truly cannot comprehend the financial sacrifice new physicians make when committing to primary care today. But, it’s not all about the money. There is far more paperwork, tracking of useless data, non-patient care related work that we are forced to do that merely detracts from the already limited time we have to see patients and develop a relationship. And we have to deal with this burden from day 1 of our practicing lives. Many of the older docs have moved into administrative roles yet still remember clinical practice how they experienced it. In turn, they create detrimental policies and regulations to feed metrics in the name of “quality” all while being clueless as to what it is like to actually treat patients in the modern era.
Some might argue that by expanding Medicare for all, it would cover less complicated patients so the current model shouldn’t be a problem. I’d also beg to differ on that one. Doing things to people, even prescribing medications, is dangerous and should not be taken for granted. Medicare still incentivizes doing more invasive things for the least complicated patients. Say we expand it to everyone, and a 22-year-old comes in with a cough she’s had for five days. It’s viral. Viruses are the worst. There is no treatment other than time and support. But convincing patients of this when they know I have the power to prescribe a Z-pak and they always get better on the Z-pak (20 percent of the effect of any treatment is placebo) takes a long empathetic conversation.
You know what is quick and easier? You got it, just writing the darn script and moving on to the next person so I can get paid more. And then we have massive bacterial resistance to azithromycin (the Z-pak) and C. diff is on the rise.
The numbers on all accounts point to the reality that Medicare’s RVU system of paying providers is causing worse outcomes, is unsustainable in cost and is not attracting young talented physicians to the most needed primary care fields. I wonder how many of the new family docs will inevitably succumb to 10-minute visits with high procedures and more referrals to costly specialists or ultimately opt-out of Medicare and insurance for direct primary care? Medicare spent 650 billion dollars in 2015. An underestimate suggests 200 billion dollars (or 30 percent) was spent on beneficiaries in their final year of life. That means we as a medical community, despite probably knowing the patients were dying, kept doing procedures and tests and more treatments to people because that is what we are paid to do.
American culture indoctrinates us that death is optional. It’s really not. But why would a physician take the time explain to a patient and family the reality of their situation, a conversation that is exhausting and challenging for everyone involved, when they are paid about 5x more to just offer another procedure or test and move on? And then we spend billions of dollars doing things while ignoring the essentials that require time, and we get the worst outcomes. The current Medicare, if expanded to all, will only exacerbate the costly failures of our current system.
A single-payer universal coverage system? Maybe! But, not Medicare as we know it. Heed the geriatricians now and the patients covered by Medicare while you still can. They are the most needed physician endangered species.
More on Single Payer Healthcare Systems to follow!
And the announcement- Our book is finally available from the Sentia Publishing Company: The Search for Excellence in Clinical Practice, A Handbook on Clinical Process Improvement for Providers. ISBN 978-0-997890-6-9.