That’s the question every healthcare organization is asking. It’s a hot topic in the political arena and is certain to get more attention as Campaign 2020 unfolds. Per Kaiser Family Foundation, a majority (62%) of Americans say they favor it over the status quo but is it a done deal? Probably not. Here’s why.
The terms Medicare for All, universal coverage, and single payer healthcare are often used interchangeably but they’re not the same:
Medicare refers broadly to a federally-funded health insurance coverage currently available to all seniors older than 65 years (since 1965) and to disabled adults (since 1972). It is a popular program: member satisfaction with Medicare is higher than satisfaction rates for private insurance (Deloitte). It currently enrolls 55.5 million including 20 million who access Medicare through private Medicare Advantage plans. Medicare for All supporters envision that the Medicare program could be expanded to include younger U.S. populations over time.
Universal coverage and single payer refer to a country’s policy whereby healthcare services are provided to citizens through a central government agency aka Ministry of Health. Per the World Health Organization’s analysis of its 194 members, it is the predominant model worldwide. Most countries budget between 2% and 12% of government revenues to their health programs, with developed countries budgeting 6-12% and others significantly less. Voluntary payments by individuals represent less than 5% of funding in most countries offering universal coverage and have not been shown to reduce utilization, improve health or reduce costs per WHO research.
Interest in Medicare for All (M4A), therefore, is rooted in a belief that healthcare is a fundamental right, not a privilege (Pew Research Center). It is associated with Medicare, which offers universal coverage to seniors and the disabled and is valued by its enrollees more highly than enrollees in any other public and private health insurance plans.
PUBLIC SUPPORT FOR M4A APPEARS TO BE THE NET EFFECT OF FOUR TRENDS:
Growing lack of confidence in the U.S. medical system. The public’s trust in the U.S. medical system is at a 40-year low (Gallup).
Growing consumer concern about healthcare affordability. 28 million are uninsured, 41 million Americans are underinsured, 34% have unpaid medical bills and 25% say rising healthcare costs is their number one fear. (Harvard T.H. Chan School of Public Health, Monmouth Polling Institute)
Growing media attention to industry profitability. Theranos, Mylan, Turing, Valeant are among brands prominently discredited for drug price gauging. In each sector of the industry, bad actors face heightened scrutiny about their profitability, CEO performance, pricing strategies, culture and board oversight. And major public health issues, like opioid addiction, are being linked to industry’s failure to police itself.
Growing antipathy toward capitalism. Antipathy toward capitalism, the bedrock of U.S. healthcare, is growing. It’s evident in our pop culture. Showtime’s Black Monday, which dramatizes the stock market crash of 1987, is the latest of many popular shows chipping away at the status quo. It follows Sorry to Bother You, The Big Short, Succession and Billions and other pop culture offerings that depict corporate greed harshly. Surveys show growing public concern that capitalism falls short in balancing profits with purpose. (Harvard Institute of Politics 2018). While “government-run healthcare” is a concern to the majority, a large and growing minority is open to an alternative.
Clearly, discontent about the status quo is growing. Clearly, public support for Medicare for All is building, though the public’s level of understanding about specifics of legislation remains low. Not surprisingly, legislation advancing M4A is prominent today as candidates gear up for the 2020 campaign cycle. In the 115th Congress just ended, 8 M4A proposals were on the table, each differing on eligibility, funding, what’s covered and timing. Others will follow including state referenda in Blue states like California, Washington, Colorado and possibly others. But the debate about M4A is heating up.
THE MEDICARE FOR ALL DEBATE: KEY CONSIDERATIONS
Presuming eligibility for Medicare for All extends to wider populations (a debate in and of itself), the debate about Medicare for All will likely center on three issues:
What services Medicare for All covers and by whom. There is no widely accepted model for Medicare for All. There are several. All proposals cover medically-necessary services plus dietary, nutritional and other social determinants of health. All presume delivery through private hospitals, physicians, long-term care facilities and others. All assume a larger role of the government in determining what’s medically necessary and what’s not. And so on. But aggressive utilization management is a hallmark of managed care: denials for services that are deemed medically unnecessary or delays in receiving timely care are a frequent complaint in government-run programs. Details about how M4A will work, how its providers are chosen and compensated, the mechanisms that insure scientific evidence is the basis for care and who is in charge of these processes will prompt fierce debate.
How Medicare for All is funded and how much it will cost. Funding for healthcare in the U.S. system is complex, resulting from our pluralistic set of public programs (like Medicare and Medicaid), private insurers (group and individual plans) and “other” sources. Comparisons of healthcare spending in the U.S. to other developed systems are misleading. Health spending in the U.S. is regrettably bifurcated: spending for hospitals, doctors, drugs, devices, insurance, post-acute care and over the counter spending are treated as healthcare costs while social services programs are lumped into other buckets. In other countries, social services programs are more closely integrated with healthcare programs. Most M4A proposals presume consumers will have out of pocket costs. Some presume funding will be from taxes only. And estimates of how much Medicare for All will cost vary widely depending on how many are covered and the services that are provided. Therefore, the price tag for Medicare for All will spark fierce debate between budget hawks already facing fiscal deficits and those advocating investment in M4A as a social obligation.
How the public responds. The majority of the U.S. populace prefers private solutions over government-run programs. Medicare Advantage (Medicare Part C) is a classic illustration. It is a federally funded managed care program offered by private insurers. This year, the average Medicare enrollee will have 24 plans from which to choose. Each covers the basics plus enhancements that improve the health status of members while lowering their health costs. It’s widely popular with seniors (20 million members), it’s profitable to insurers (5% profit margin) and competition among the 2734 Med Advantage companies is sparking clever solutions. Might Medicare Advantage be the bridge from traditional Medicare to Medicare for All? It’s likely. Will the federal government flex its muscles using the Medicare Advantage model to expand its leverage beyond the 127 million it already insures? After all, it’s directly responsible for 49% of spending in the system today. Medicare for All would expand its leverage over providers, suppliers and others in the system but not without industry pushback. Medicare for All would mean lower payments to providers over time prompting many to deny access. How the public might respond is an unknown. But it’s certain to be an issue if M4A is perceived to cost more, limit access or add hassle to the ordeal of getting healthcare services when needed.
The transition from the status quo to Medicare for All is predicated on acceptance by the public. Historically, major changes in healthcare have faced resistance from consumer groups who fear the unknown more than they resent the status quo.
Is Medicare for All inevitable? Despite polls showing the majority favor it over the status quo, it’s not inevitable. It might not happen if:
strong, private integrated systems of health that manage total costs of care and assume accountability for outcomes become effective managers of risk. Offering a full-range of acute, post-acute, wellness and healthy living services at scale in tandem with insurance programs customized to the clinical and social needs of populations might alter the trajectory of Medicare for All.
hybrid insurers like Oscar, Devoted, Lasso and incumbents like Humana, United and others create innovative ways to manage health that’s person-centered and less costly. Certainly, the success of Medicare Advantage makes a strong case that private insurers operating under federal oversight can reduce health costs, generate profits and improve the wellbeing of their members.
physician organizations quickly transition to team-based care coordination and replace volume-based incentives with realized savings and outcome improvement.
New York Times’ writer David Brooks recently wrote “Americans have lost faith in the big institutions of society. Many fly off to extremes, to the Donald Trump right or the Bernie Sanders left. Most of the rest of us feel adrift, gloomy and politically homeless. But people figure it out. New ideas emerge. Old ideas are put together in new ways.” (David Brooks “A New Center Being Born: The market and the welfare state go together.” New York Times December 20, 2018).
That’s the case for Medicare for All. It’s certain to be the centerpiece for the forthcoming national debate about the future of the health system. But it’s inevitability as the health system’s future is uncertain, especially if the price tag’s too high or restrictions too burdensome.
PS Today is MLK Day. It’s well-chronicled that the U.S. healthcare system has fallen short in addressing the diverse needs of its citizens. We’re making progress, but there’s more to be done.
“Compare Medicare for All and Public Plan Proposals” Kaiser Family Foundation October, 2018 www.kff.org/interactive/compare-medicare-for-all-public-plan-proposals/
“Public Opinion on Single-Payer, National Health Plans, and Expanding Access to Medicare Coverage” Kaiser Family Foundation October, 2018 www.kff.org/slideshow/public-opinion-on-single-payer-national-health-plans-and-expanding-access-to-medicare-coverage/
“How do consumers navigate the health care frontier?”Deloitte Center for Health Solutions October 2018 www2.deloitte.com/insights/us/en/industry/health-care/healthcare-consumer-patient-segmentation.html
Health Financing Policy Framework, World Health Organization www.who.int/health_financing/policy-framework/en/“Medicare Advantage” Center for Medicare and Medicaid Services, Washington DC www.cms.gov/Medicare/Medicare.html
“Confidence in Institutions 1973-2018” Gallup https://news.gallup.com/poll/1597/confidence-institutions.aspx
“Americans’ Health and Education Priorities for the New Congress in 2019” Harvard T.H. School of Public Health January 2019 www.hsph.harvard.edu/horp/politico-harvard-t-h-chan-school-of-public-health-polls/
US Bureau of Labor Statistics Consumer Expenditure Survey www.bls.gov/cex/
Rasmussen Reports http://www.rasmussenreports.com/public