Single payer system as alternative to the ACA?

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A little intro to ACA alternatives, from Harvard:

Single payer healthcare: Pluses, minuses, and what it means for you

POSTED JUNE 27, 2016, 9:30 AM
Andrea S. Christopher, MD, Contributor

As someone who researches inequities in health care, I’ve diligently followed the debate about healthcare reform. However, most of my friends (and I suspect most Americans) wonder exactly what single payer healthcare is and how will it affect them. In a New England Journal of Medicine perspectivepiece, Jonathan Oberlander, PhD, a professor of social medicine at the University of North Carolina in Chapel Hill, expounds on the history and obstacles facing calls for single payer healthcare reform.

Problems with the current U.S. healthcare system

Oberlander points out that the impetus for reorganizing the entire healthcare system has to do with the regrettable state of healthcare in the United States. Currently, the healthcare finance structure is made of an impressively complicated network of multiple payers, involving both private and government health insurance options. Despite spending more on healthcare than comparable countries, the U.S. has the lowest life expectancy and performs poorly on a variety of health outcomes. Thus, our complex network of insurance plans is wasteful — in large part due to high administrative costs and lack of price control.

Inequity is another major problem. The United States remains the only developed country without universal healthcare. The Affordable Care Act has made important gains toward improving and expanding health insurance coverage. However, it was never designed to provide universal healthcare and 30 million Americans remain uninsured.

What is a single payer healthcare system?

In a single payer healthcare system, rather than multiple competing health insurance companies, a single public or quasi-public agency takes responsibility for financing healthcare for all residents. That is, everyone has health insurance under a one health insurance plan, and has access to necessary services — including doctors, hospitals, long-term care, prescription drugs, dentists and vision care. However, individuals may still choose where they receive care. It’s a lot like Medicare, hence the U.S. single payer nickname “Medicare-for-all.”

Proponents advocate that a single payer system would address several problems in the U.S. system. Universal health coverage would be a major step towards equality, especially for uninsured and underinsured Americans. Overall expenses and wasteful spending could be better controlled through cost control and lower administrative costs, as evidenced in other countries. Furthermore, a single payer system has more incentive to direct healthcare spending toward public health measures. For example, targeting funding towards childhood obesity prevention programs in elementary schools and daycares reduces the rates and complications of obesity more effectively and at lower costs than paying for doctor visits to recommend healthier diets and increased physical activity.

At the same time, we must also recognize the potential tradeoffs of transitioning to a single payer system. Lengthy wait times and restricted availability of certain healthcare services (such as elective surgery or cosmetic procedures) are important criticisms. Thus, despite its advantages, single payer will not ease the constant tension of balancing access, quality and cost in healthcare. However, Oberlander suggests these issues are much smaller in countries with single payer healthcare when compared to the current U.S. system.

How could single payer be successful in the U.S.?

Oberlander implies the major obstacles to adopting Medicare-for-all are political, rather than actual practical problems within the single payer structure. Stakeholders who stand to lose — such as health insurers, organized medicine, and pharmaceutical companies — represent a powerful opposition lobby. Public opinion needs to be redirected to focus on how the net benefits of a single payer system outweigh the tradeoffs discussed above. Furthermore, despite the individual level savings, behavioral economics predicts the general public will wince at the notion of transferring healthcare spending from employers to higher taxes managed by the federal government. Additionally, despite long term savings projected from moving to a single payer system, the upfront costs of the transition are also politically unpopular.

A way forward

If the major barrier to implementing single payer healthcare in the U.S. is a matter of politics, the pathway forward will require mobilizing public support. A recent poll suggests 58% of Americans support Medicare-for-all. Interestingly, whereas a majority of physicians support transitioning to single payer, they are less likely to believe their colleagues share this opinion. This raises an interesting question of whether the “conventional wisdom” that it is too difficult to reorganize the healthcare insurance system overshadows actual public opinion.

Multiple strategies to continue to push for Medicare-for-all have been proposed. This includes individual states implementing a single payer system as a demonstration of feasibility, which failed before implementation in Vermont but will be on Colorado’s 2016 ballot. An alternative proposes implementing a single payer system on a federal level by lowering the Medicare qualifying age every few years. Through education of the general population about the merits of single payer, perhaps eventually the public will vote politicians into office willing to overcome Medicare-for-all’s political barriers.

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Fox News political commentator Charles Krauthammer predicted Thursday that healthcare in the U.S. is headed toward a single-payer system. “The terms of [healthcare] debate are entirely on the grounds of the liberal argument that everybody ought to [have insurance] -- once that happens, you're going to end up with a single-payer,” Krauthammer said on Fox News’s “Special Report with Bret Baier.” “Republicans are not arguing the free market anymore,” he said. “They have sort of accepted the any commodity. It's not like purchasing a steak or a car. It is something people now have a sense that government ought to guarantee."

Krauthammer: ‘We will be in a single-payer system’ within 7 years | TheHill

Oberlander points out that the impetus for reorganizing the entire healthcare system has to do with the regrettable state of healthcare in the United States. Currently, the healthcare finance structure is made of an impressively complicated network of multiple payers, involving both private and government health insurance options. Despite spending more on healthcare than comparable countries, the U.S. has the lowest life expectancy and performs poorly on a variety of health outcomes.

Thus, our complex network of insurance plans is wasteful — in large part due to high administrative costs and lack of price control. Inequity is another major problem. The United States remains the only developed country without universal healthcare. The Affordable Care Act has made important gains toward improving and expanding health insurance coverage. However, it was never designed to provide universal healthcare and 30 million Americans remain uninsured.

Single payer healthcare: Pluses, minuses, and what it means for you - Harvard Health Blog - Harvard Health Publications

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Total costs are lower under single-payer systems for several reasons. One is that administrative costs average only about 2 percent of total expenses under a single-payer program like Medicare, less than one-sixth the corresponding percentage for many private insurers. Single-payer systems also spend virtually nothing on competitive advertising, which can account for more than 15 percent of total expenses for private insurers.

The most important source of cost savings under single-payer is that large government entities are able to negotiate much more favorable terms with service providers. In 2012, for example, the average cost of coronary bypass surgery was more than $73,000 in the United States but less than $23,000 in France.

Despite this evidence, respected commentators continue to cite costs as a reason to doubt that single-payer can succeed in the United States. A recent Washington Post editorial, for example, ominously predicted that budget realities would dampen enthusiasm for single-payer, noting that the per capita expenditures under existing single-payer programs in the United States were much higher than those in other countries.

But this comparison is misleading. In most other countries, single-payer covers the whole population, most of which has only minimal health needs. In contrast, single-payer components of the United States system disproportionately cover population subgroups with the heaviest medical needs: older people (Medicare), the poor and disabled (Medicaid) and returned service personnel (Department of Veterans Affairs)..

Why Single-Payer Health Care Saves Money - The New York Times

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We'll get there in the end..

Munger, who is a Republican, railed against the current US healthcare system at Berkshire's annual meeting on May 6, and in subsequent interviews said the country should shift to single-payer. "The whole system is cockamamie," Munger said in an interview with CNBC's Becky Quick on Monday. "It's almost ridiculous in its complexity and it's steadily increasing cost and Warren is absolutely right. It gives our companies a big disadvantage in competing with other manufacturers. They've got single-payer medicine and we're paying it out of the company."

Single-payer health care gains steam as Dems rally around it - Business Insider

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But of course there is always Larry Kudlow, who thinks the only thing that spurs economic growth is tax cuts for the rich

Larry Kudlow, the economist and former adviser to President Ronald Reagan, said the economic agenda spearheaded by Senate minority leader Chuck Schumer, D-N.Y., will be a "disaster," if Medicaid is any guide. “A government plan is not going to work. Medicaid, which is a disaster and has spiraled out of control and has expanded and expanded and expanded with no eligibility requirements anymore – that’s the perfect example,” Kudlow said on CNBC. “If you want a Democratic program that is going to be government-run, single payer – take a look at Medicaid, which has been a disaster.”

Larry Kudlow: Democrat Plan for Government-Run Healthcare a 'Disaster'

Well, for starters, there really are eligibility requirements as not everybody can sign up for Medicaid. Secondly, let's compare the growth of Medicaid to that of private healthcare

Medicaid spending projections
According to CMS, Medicaid spending growth slowed significantly from 9.7 percent in 2015 to a projected 3.7 percent in 2016. CMS said the slowdown largely resulted from slower Medicaid enrollment growth. The agency predicted that Medicaid enrollment growth declined from an average of 8.4 percent from 2014 to 2015 to an average of less than 2 percent by 2017.

CMS also attributed the slowdown in Medicaid spending to slower growth in hospital spending under the program. CMS predicted that Medicaid hospital spending growth fell from 9.5 percent in 2015, when many states had implemented higher Medicaid reimbursement rates, to 4.5 percent in 2016.
However, CMS projected that Medicaid spending will accelerate over the coming years, growing by an average of 5.9 percent from 2018 to 2019, largely because of increased intensity and use of care.

Private health insurance spending projections
CMS estimated that private health insurance spending growth slowed from its peak of 7.2 percent in 2015 to 5.9 percent in 2016.
However, CMS projected that private health plan spending growth will average 6.5 percent in 2017, compared with 5.9 percent in 2016. CMS said factors contributing to the projected increase include:

• Higher expected spending on prescription drugs;
  
• Acceleration in premium growth for ACA exchange plans, which stemmed from insurers "underpricing" premiums in previous years; and
  
• The elimination of the ACA's risk corridors program.
  

Basically, Medicaid grows at a similar rate compared to private health insurance spending, apart from a few years where coverage was expanded under Obamacare. One should note that this is actually quite exceptional, as Medicaid covers much poorer and sicker people compared to private insurance.

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In fact, Medicaid, rather than being a disaster has brought disasters to light, like the Flint water crisis:

That’s when Dr. Mona Hanna-Attisha, a pediatrician and public health researcher at the city’s Hurley Medical Center, started pulling blood testing data from the hospital’s electronic medical records. Those records showed that the number of children with above-average lead levels had risen by more than 100 percent since Flint switched its water source, with particularly high increases in certain zip codes.

The data existed because of Medicaid ― specifically, because of the program’s Early and Periodic Screening, Diagnostic and Treatment, or EPSDT initiative, which requires and finances extra medical testing for low-income children. Congress added EPSDT to Medicaid in the late 1960s, shortly after the program’s creation, because both Head Start programs and Vietnam draft boards were reporting high incidences of health problems that had gone undetected and untreated.

Lead, a toxin that causes severe, irreversible damage to the developing brains of young children, is precisely the sort of hazard EPSDT was designed to detect. Hanna-Attisha’s research drew national attention to the crisis, and after briefly attempting to deny her findings, state officials finally admitted she was right. “Without that data,” Hanna-Attisha told HuffPost recently, “I have no idea where we would be.”

And in a very useful primer on Medicaid, we can also read this:

Because the Medicaid expansion opened care to any adult living under 138% of the poverty line, it has become a major tool in providing drug treatment and continuing care for those suffering from the opioid crisis.

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Indeed, from the Kaiser Foundation:

Key Facts

• Medicare spending was 15 percent of total federal spending in 2016, and is projected to rise to 17.5 percent by 2027.
  
• The Medicare Hospital Insurance (Part A) trust fund is projected to be depleted in 2029, one year later than the 2016 projection.
  
• Medicare’s actuaries project that the Independent Payment Advisory Board (IPAB) process will be triggered for the first time in 2021, four years later than their 2016 forecast.
  
• The share of Medicare benefit spending on hospital inpatient services fell by one-third between 2006 and 2016, while spending on Medicare Advantage private health plans doubled.
  
• Average annual growth in Medicare per capita spending growth was 1.3 percent between 2010 and 2016, down from 7.4 percent between 2000 and 2010.
  
• Medicare per capita spending is projected to grow at an average annual rate of 4.5 percent over the next ten years, slightly lower than the growth rate for private insurance.
  

So what disaster are we talking about. Again, it has to be stressed that Medicare people are, on average, less healthy so per capita spending should rise faster, not slower compared to per capita spending in private health insurance.

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Single payer? Not necessarily, says Krugman:

What’s Next for Progressives?, by Paul Krugman, NY Times:

...If Democrats regain control of Congress and the White House, what will they do with the opportunity? Well, some progressives — by and large people who supported Bernie Sanders... — are already trying to revive one of his signature proposals: expanding Medicare to cover everyone. Some even want to make support for single-payer a litmus test for Democratic candidates.

So it’s time for a little pushback. ... Look at the latest report by the nonpartisan Commonwealth Fund, comparing health care performance among advanced nations. America is at the bottom; the top three performers are Britain, Australia, and the Netherlands. And the thing is, these three leaders have very different systems. Britain has true socialized medicine: The government provides health care directly through the National Health Service. Australia has a single-payer system, basically Medicare for All...

But the Dutch have what we might call Obamacare done right: individuals are required to buy coverage from regulated private insurers, with subsidies to help them afford the premiums. And the Dutch system works, which suggests that a lot could be accomplished via incremental improvements in the A.C.A...

Meanwhile, the political logic that led to Obamacare rather than Medicare for all still applies. ... The ... 156 million people who currently get insurance through their employer ... are largely satisfied with their coverage. Moving to single-payer would mean taking away this coverage and imposing new taxes;... you’d have to convince most of these people both that they would save more in premiums than they pay in additional taxes, and that their new coverage would be just as good...

This might in fact be true, but it would be one heck of a hard sell. Is this really where progressives want to spend their political capital? What would I do instead? I’d enhance the A.C.A., not replace it, although I would strongly support reintroducing some form of public option ... that could eventually lead to single-payer.

Meanwhile, progressives should move beyond health care and focus on other holes in the U.S. safety net. When you compare the U.S. social welfare system with those of other wealthy countries, what really stands out now is our neglect of children. ... I have nothing against single-payer; it’s what I’d support if we were starting fresh. But we aren’t: Getting there from here would be very hard... Even idealists need to set priorities, and Medicare-for-all shouldn’t be at the top of the list

Economist's View: Paul Krugman: What’s Next for Progressives?

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Lessons from Canada, the system, while not perfect, (what is?) works, but values are quite different..

“It was interesting to talk to patients who said, ‘We believe health care is a right,’” Sanders responded. “I think if you walked out in the street and you talked to people, they would find it inconceivable that somebody would not be able to get the health care they need because they don’t have that money.” Sanders brought American doctors on his learning door, to see how the Canadian system works. Cole Burston for Vox Sanders is pointing toward a genuine chasm in the values that separates America from Canada. Recent Gallup polling finds that 52 percent of Americans believe the government should guarantee access to health care and 45 percent disagree.

What Canada taught Bernie Sanders about health care - Vox

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$32 trillion. That is how much federal spending would increase over 10 years under Bernie Sanders’s Medicare-for-all bill, according to a brand-new estimate from the libertarian-leaning Mercatus Center at George Mason University. Before you question the source (like Sanders did), you should know the left-leaning Urban Institute came up with the exact same number in 2016. It sure sounds like a lot of money, and conservatives hopped all over the figure on Monday morning. But there are a lot of ways to think about $32 trillion — and one might be that it’s actually kind of a bargain.

Mercatus is projecting a $32 trillion increase in federal spending, above current projected government expenditures, from 2022 to 2031. In terms of overall health care spending in the United States over the same period, however, they are actually projecting a slight reduction. There is the rub. The federal government is going to spend a lot more money on health care, but the country is going to spend about the same. “Lower spending is driven by lower provider payment rates, drug savings, and administrative cost savings,” Yevgeniy Feyman at the right-leaning Manhattan Institute told me. “It’s not clear to what extent those savings are politically feasible, and socially beneficial.” (One concern is whether cuts to prescription drug spending would discourage medical innovation. It’s simply hard to know — Mercatus projects a $61 billion drop in drug spending in one year, but there would still be hundreds of billions of dollars spent annually on medications.)

When you consider a universal single-payer program would 1) cover every single American, eliminating uninsurance and 2) provide much more robust benefits, covering more services than get covered right now, then it starts to look like a good deal. More people covered. More services covered. Same price, more or less.

Bernie Sanders’s Medicare for All costs $32 trillion. That’s a bargain. - Vox