My Issues with Single Payer

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Jul 1, 2010 1 Comment ›› Sam Young
These points apply to a Vermont Only “single payer” system.  It is a very different discussion when we talk about a national system.

Many confuse single payer with universal coverage , universal access or affordable health care.  These are different  things. One can have universal coverage and universal access without single payer.  One can have single payer without universal coverage,  universal  access or  affordable health care .   Single payer is  about  who pays providers.

Vermont insurers have admin. Costs of 7.1-12.3% not the 30% quoted by single payer advocates (BISHCA 2009).

JFO has estimated that a single payer system would include only 37%-50% of hospital revenues.

We will spend nearly $5Billion on health care in Vermont this year.

Hospitals estimate an administrative savings of  $2.9million from a Vermont only single payer across all Vermont Hospitals. There would be some savings in private physician offices not owned by hospitals but many physicians are hospital employed in Vermont and already included in this estimate.

Single payer would be a misnomer. The system wouldn’t include New York and other out of state insurers which account for nearly 20% of hospital revenues. The system might not include Medicare…they have not previously issued a waiver for this purpose.  Veteran’s Administration, Federal workers  and military insurance would not be included.  There is disagreement about whether self insured systems such as IBM could be compelled to join.

Hospitals and physician offices would need to maintain enough billing people to deal with 14 insurers from New York, as well as the others listed above.  The expensive and time consuming portion of the billing process, coding claims and follow up on denied claims, would still need to be done. 

If  a Vermont  “ single payer”  system included Medicare and Medicaid Vermonters would have tremendous financial risk or the system would need to purchase expensive reinsurance.  Presently we spend 50% of healthcare dollars on just 5% of people.  For these expensive patients on Medicare presently, the Federal Government assumes all the financial risk.  For Medicaid the Federal Government now assume 60%-70% of the financial risk. If  these extremely high cost patients were in a Vermont   “single payer”  system  Vermonters might  assume all of the financial risks and burdens.

If just a small number of very high cost patients moved to Vermont , the system could be bankrupt.

Most Medicare patients are quite happy with Medicare.  How will the nearly 20% of Vermonters on Medicare react  to us taking away their Medicare and starting them on a Vermont only experimental insurance.  It is not “Medicare for all”, that would require a Federal program not a one state program.

Presently many  working Vermonters receive a Federal and State subsidy of their insurance premiums.  These are paid as an employment benefit with pre tax dollars.  No other system limited to Vermont would continue to help working Vermonters in this way. Individuals now  buying health insurance outside of employer plans pay with after tax dollars. We can’t change Federal tax law so working Vermonters could be big losers in the new system. Everyone would pay for insurance with after tax dollars.

Medicare is in essence a single payer for those over 65 years old.  Medicare has not controlled the increase in health care expenditures.   Medicare spends  over three times as much in some locations as in others with no improvement in outcomes and no differences in the underlying  health of the populations. We are now looking a 21.5% cut in Medicare reimbursements to providers.  If a Vermont only system made this kind of cut for all payments doctors would leave the state in droves.   Vermont Single payer is about who pays the providers, not about how much we spend on health care. To me,  Vermont only single payer is a distraction from the real issue of controlling health care spending. 

No developed country, single payer or not, has a health care system on a sustainable economic trajectory.  All countries’ health care costs are rising faster than GDP’s. 

We need universal access  and we need universal coverage for all Vermonters.  We are required to have a functioning insurance exchange by 2014.  I believe we need a  competitive and viable “public option’. What we need most is to continue down the path of a fully integrated health care system where the incentives  do not reward just doing more.  We need a system that stresses prevention of  diseases as well as prevention of complications from chronic diseases.  We need a system that rewards good outcomes and efficient care not just more care.  I believe the key is integration of the system, not who writes the check to providers.

Again these points apply to a Vermont only system.  A National system is an entirely different issue.

As always I’m willing to be convinced to change my opinion if someone can show me real and applicable data.  I don’t believe data from other entire countries is applicable as they do not face the same issues of cross border usage and large portions of the population which will not be included in their single payer system. 

george till 7/2010