Making Sense Out of the Universal Health Care, Single Payer, Public Option Debate

Defining Terms

First things first: let’s get some definitions out of the way. Universal health coverage, universal health care, single-payer and the public option are only interchangeable until we get a clue what the terms actually mean. Typically, what’s meant by “universal health care” is  universal health coverage, which means a health care system that pays for the health care of all residents of a society. Countries may provide national health care coverage for a defined set of benefits (not necessarily all benefits) through a variety of mechanisms. One possibility is to have one government funded single-payer plan. That’s not the only potential mechanism for covering the cost of medical care. Another possibility is to establish a public option, short for public health insurance option. That’s a government operated (public) health insurance agency that is made available for enrollment as an alternative to private insurances (hence the modifier “option”). A public option health insurance may be financed through premiums with or without subsidy from the federal government. Each proposed health care payment model has nuanced differences that place control in the hands of distinctly dissimilar stakeholders. Note none of these terms specifies what amount of care is covered, with the exception of a single payer system, in which all health care would be included, since all payments for medical care come from one source.

Our Current Reality

The US Health Care System currently operates under the Patient Protection and Affordable Care Act (aka ACA) which was signed into law in March of 2010 by President Barack Obama. The nickname Obamacare was initially attached to it by opponents as a pejorative descriptor to invite ridicule for the measure. In fact, other than causing initial mild confusion, that eponym is now popular with patients and generally understood to be synonymous with the ACA. The law, which was an attempt at a comprehensive overhaul of all federally funded health care coverage, is complicated and multifaceted to say the least, but here are the highlights that relate to the present discussion. Just over twenty million more citizens and permanent residents were covered by health insurance than were previously insured in the US through a combination of provisions that expanded eligibility for Medicaid (low-income individuals, families and children, pregnant women, elderly and the disabled) and major changes to private insurance providers. The cost to the government for this increased coverage was largely offset by new taxes and cuts to Medicare provider rates and to reimbursement for managed care programs that were already capitated. Many of the reforms stipulate an increase in clinician driven services, including patient satisfaction, the creation of electronic health records, increased contact with caretakers or clinicians. (Remember this as we go forward to examine which entities are most adversely affected by cost cutting measures and which changes can be passed on to patients). Private insurers were made to accept all applicants at the same rates (i.e. the same cost for premiums) regardless of sex or pre-existing conditions, as well as required to cover a set of minimum essential health benefits. In order to offset the increased risk pool, a requirement was included for taxpayers to have to purchase insurance or pay a penalty known as popularly as the “individual mandate.” However, this provision was repealed in 2017 as part of legislation on tax cuts passed by congressional Republicans. Private insurers have predictably reacted by increasing premiums. Less predictably, many clinicians have reacted by selling individual practices, going into early retirement, consolidating into larger management groups, becoming employees of large hospitals or health systems or simply going bankrupt and out of business.

The Debate: Public Option

Having covered the general advantages of a single payer system in my last post, let me begin by looking at the concept of the public option. After all, that is what we were heading for with the ACA (aka Obamacare). Some argue one of the immediate advantages of the public option would be averting abrupt tax increases. The program would continue to phase in over the next decade or so and cost savings would continue to be increased efficiencies and limiting payments for care provided. The argument being that  since the public option is a government-run non profit insurance company it services everyone more effectively and provides a model to be followed by the rest of the industry. Among the major problems with this reasoning is the following:

  1. We all understand no government program runs except through increased taxation.
  2. We lose clinician providers to micromanagement, higher administrative costs, and onerous oversight restrictions to the unencumbered practice of medicine.
  3. There has not been concurrent medico-legal reform commensurate with the demand for reduction in cost demanded for increased efficiency as clinicians providing care are increasingly scrutinized for resource utilization. This evolution constricts physician and patient choices for management options and safe care while increasing exposure to liability.
  4. Premiums continue to rise as private insurances pass on costs to consumers and the middle man (insurers) maintain rising revenue margins, and model reigning in costs demanding more proof of services, requiring more attention and time for documentation from providers while applying lower reimbursement rates.
  5. Relatively minimal impact is realized on the cost of devices, products, pharmaceuticals and interventions (or the cost of hospitalization for that matter) under the current model.

The Debate: Single Payer

As mentioned previously, Medicare is, in fact, a single payer system for those over the age of 65. Rather than expanding Medicare coverage in a piecemeal fashion, imagine the risk pool advantage of covering everyone for birth to death. These are major aspects of the cost savings realized by single payer health systems of countries such as the UK and Spain where doctors are employed and hospitals are run by the government. However, Canada has a modified version: a comprehensive publicly funded healthcare system that allows private providers to bill the local province directly without involvement of patients and with simplified and minimal administrative process.

A single payer system eliminates the need for insurance companies of any type as well. US expenditure for health care is currently estimated at roughly $20 trillion. Over $6 trillion of that cost is attributed to the insurance industry. Eliminating the middle man means payments go directly to the clinicians. Because facilities and infrastructure are paid from a single source, oversight is federally mandated as are minimum standards of quality. Consider the cost savings to individuals who are currently insured: no longer co-pays, deductibles or premiums, and no out of network charges. Physicians can direct and refer patients to wherever they judge their patient will receive the best care.

A single payer system would eliminate the need for employer incentives to subsidize health insurance premiums in order to purchase insurance. Lower cost would allow them to pass on gains in the form of increased salaries to offset increase in tax base to fund the program. Additionally, a single payer would have greater leverage to negotiate cost of products like pharmaceuticals drugs.

The public option has the potential to negatively impact the relationship between clinicians and patients while perpetuating the cost of insurance bureaucracy, so that cost savings are reduced along with goodwill. Because they are focused on limiting the function of professional practitioners, cost is increased to compel the achievement of improved health. Some would argue that in the current political climate, legislatures are unlikely to endorse a single payer system and only consideration of an expanded public option is palatable. However, it is possible that beyond lobbying power of insurers and other interested parties such as big pharma, insufficient public knowledge of where the largest costs lie and the highest return on health states resides is the real culprit.

Causes of Controversy and Confusion

As mentioned in prior posts, corporations are not equivalent to providers and convoluting the terms creates an opening for self interested parties.  Hospitals and private insurers nor corporate entities of any kind should ever practice medicine or frame their roles as providers of care. They often assert that the professional judgment of clinicians is not interfered with at any time. Yet experienced physicians and other clinicians know that when debates arise over which entities are authorities in the quality care delivery, they often convolute their roles with that of practitioners. In fact, part of the confusion and controversy in the healthcare reimbursement debate stems from the fact that physicians-administrators serve entirely different roles with regard to patient care depending on their roles in various organizations. Though some maintain a lesser degree of patient contact in order to justify the claim that they “still see patients,” the bulk of their salaries come not from the care they provide, but the care they oversee. Subterfuge can be created by conflicting interests and patient advocacy versus increased patient turnover are primary examples of how incentives make the focus profit over patients.

This may affect their perspective on the healthcare debate as they become, primarily, advocates for private insurers, multinational pharmaceutical companies and large cap hospital networks and healthcare systems. The average patient may not be aware that the physician they see on a web site, magazine or ad espousing positions on the best system of medical care coverage may essentially represent a conflict of interest to their health and most cost effective care. Historically, top managers have more easily circumvented the usual avenues of compliance and oversight and ethical breaches are usually applied at the lower levels of the enterprise. Increasingly, solid leaders are trying to reverse that trend. Those that do not will no longer fool any of you reading this blog of course.

Enter Physicians for a National Health Program (PNHP)

Not all physicians went in to medicine with the same goals. Many went into the field because they feel a genuine passion to help cure disease, reduce pain and suffering and comfort the sick, regardless of the patient’s income bracket. Now an increasingly visible group of these US doctors, medical students, residents, and activists have organized to advocate to put patients before profits. Their goal is to see patients not paperwork and computer screens. They want to see Medicare expanded to cover all residents and comprehensive coverage for every patient. They envision a single payer system in which patients have free choice of doctors and hospitals without co-payments, deductibles, premiums or middle men. They are the ones that would have been voted least likely to run a shiny car dealership though they understand most folks need a decent vehicle to commute. We can all appreciate living in a country where we have the freedom to purchase a vehicle that costs five to ten times as much as the one we need to get around, but a $250,000 Lamborghini won’t increase your safety or reflect your wisdom to make a prudent investment. Fortunately, the vision of many healthcare professionals is also the only realistic chance we have at an affordable and sustainable US Healthcare System.