This blog is not intended as a political commentary. But it is intended as a healthcare information site and one that will inform you on healthcare issues being debated by our politicians.

Now that it appears Vice President Kamala Harris is the intended nominee of the Democratic Party for President, her views on healthcare should be known. Harris is a supporter of Senator Bernie Sanders’ views on socialized medicine. When Sanders promoted changes in our healthcare system he called Medicare for All, Harris supported his bill in the Senate. She has called for the elimination of private health insurance in favor of a socialized system where government controls all healthcare. What would that mean?

When Senator Sanders promoted Medicare for All, in 2018, I wrote a two-part series on the subject. Since this subject is sure to be discussed in the election campaign soon, In Part I of this series I re-published Understanding Medicare for All – Part I. Today I am re-publishing Part II.

Understanding Medicare For All – Part II

Robert S. Roberts, M.D.

9/10/18

Today we continue an explanation of the proposed legislation of socialist Senator Bernie Sanders entitled Medicare For All. Healthcare economist John C. Goodman gives us ten fundamentals you need to understand about Medicare and what it means if it were the only healthcare system available to everyone, as Senator Sanders promotes. Last post we looked at the first seven and today we pick up again with number eight.

8. The real cost of Medicare includes hidden costs imposed on doctors and taxpayers.

In number seven, we learned that Medicare For All would be costly. Charles Blahous of the Mercatus Center has estimated the cost at $32.6 Trillion over the first ten years – and probably more thereafter. Blahous also estimates that the administrative cost of private insurance is 13%, more than twice the 6% it costs to administer Medicare.

Single-payer advocates often use this administrative cost comparison to argue that universal Medicare would reduce healthcare costs. But this estimate ignores the hidden costs Medicare shifts to the providers of care, doctors and hospitals, including the enormous amount of paperwork required in order to get paid.

The Obama administration forced doctors and hospitals to implement electronic medical record system – a costly change that appears to have failed to deliver promised increases in quality or reduction in costs or medical errors. In fact, it has made it easier for doctors to “up code” and bill the government for more money. Also to be considered are the costs of collecting more taxes to fund Medicare. Some estimates put these costs as high as 25 cents on every dollar.

A Milliman  & Robertson study estimates that when all these costs are included, Medicare and Medicaid spend two-thirds more on administration than private insurance spends. Using the most conservative estimate of the social cost of collecting taxes, economist Benjamin Zycher calculates that the excess burden of a universal Medicare program would be twice as high as the administrative costs of universal private coverage.

9. Not a single problem in ObamaCare would go away under Medicare For All.

All of the difficult questions posed by ObamaCare would remain. Who would pay what? Would the premiums be actuarially fair? Would there be subsidies? Would the premiums vary by age? By health status? By income level? By health living choices?

How would employers be affected? Economists tell us that employee benefits are substitutes for wages and are therefore “paid for” by the employees. Under Medicare For All, would employers get off scot free?

Would there be an exchange? There is one now for Medicare – that’s how people enroll in Medicare Advantage plans. Like the ObamaCare exchanges, the Medicare Advantage exchange has subsidies for private insurance, mandated benefits, annual open enrollment and no discrimination based on health status.

The ObamaCare exchanges, by contrast, have been a disaster. Premiums and deductibles are skyrocketing, there are higher charges for chronic patients who need specialty drugs, and plans exclude more and more of the best doctors and hospitals. Expect more of the same with Medicare For All.

10. Medicare is already on a path to healthcare rationing.

Medicare is already in trouble. It is already on an unsustainable path with future promises made that far exceed expected revenues. When the Affordable Care Act (ObamaCare) was passed in 2010, the Medicare Trustees estimated the unfunded liability at $89 Trillion! Yet at the next trustees’ report that figure had dropped to $37 Trillion. How could that happen?

Passage of the ACA theoretically put the government’s healthcare spending on a budget. Goodman says that for the past 40 years, per capita healthcare spending has been growing at twice the rate of growth of real per capita income. At that rate it won’t take long to run out of money.

The Obama administration tried to “solve” this problem by creating an enforcement mechanism to control spending It was called the Independent Payment Advisory Board (IPAB). It was to be tasked with reducing fees for doctors and hospitals to cap spending. This unelected and unaccountable board would be able to restrict what treatments your doctor could provide with the stroke of a pen! Fortunately, IPAB was abolished this year in a bipartisan budget deal.

Goodman says expect Medicare fees to providers to continue to fall behind private sector fees in the future. This means one of two things must happen:

• Providers will respond to lower fees by providing less care to seniors
• Providers will shift costs to non-seniors in the form of higher fees, higher insurance premiums and higher state and local taxes.

The first of these options means Medicare will become more like Medicaid. Doctors will restrict access by offering fewer appointment options for Medicare patients just like they currently do for Medicaid patients. Hospitals may respond by reverting to the use of open wards instead of providing private rooms. Expensive treatments will be unavailable as cost-reducing takes precedence over patient care.

Medicare For All is socialized medicine and similar healthcare systems in other parts of the world, including Canada, Great Britain and Sweden always are plagued by restricted access and declining quality of care. Expect the same in this country.

 

This blog is not intended as a political commentary. But it is intended as a healthcare information site and one that will inform you on healthcare issues being debated by our politicians.

Now that it appears Vice President Kamala Harris is the intended nominee of the Democratic Party for President, her views on healthcare should be known. Harris is a supporter of Senator Bernie Sanders’ views on socialized medicine. When Sanders promoted changes in our healthcare system he called Medicare for All, Harris supported his bill in the Senate. She has called for the elimination of private health insurance in favor of a socialized system where government controls all healthcare. What would that mean?

When Senator Sanders promoted Medicare for All, in 2018, I wrote a two-part series on the subject. Since this subject is sure to be discussed in the election campaign soon, I am re-publishing that two-part series here:

Understanding Medicare For All – Part I

Robert S. Roberts, M.D.

9/10/18

It is the duty of every American voter to be educated on the issues. As we rapidly approach another election day in November, many Democratic candidates are touting “Medicare For All” as a solution to our failing healthcare system.

Vermont Senator and avowed socialist Bernie Sanders introduced his version of healthcare reform in 2016 when he campaigned for the presidency touting a new single-payer system he calls Medicare For All. Other Democratic candidates have jumped on Bernie’s bandwagon as a growing number of mostly young Americans favor socialism over capitalism.

Today I begin a series of posts to help readers understand what Medicare For All really means to the healthcare of Americans. To assist me in this analysis I will be relying on the excellent work of healthcare economist John C. Goodman.

Ten Things You Need to Know

Goodman gives us ten fundamentals you need to understand about Medicare and what it mean if it were the only healthcare system available to everyone, as Senator Sanders promotes.

1. Medicare is not really government insurance.

Although Medicare is mostly funded by taxpayers, it is not strictly a government system. It was formed originally by providing a standard benefit package offered by Blue Cross in 1965. It has always been privately administered, mostly by Blue Cross, that continues to provide private insurance to non-seniors. In recent years, one third of all seniors are enrolled in plans offered by private insurers such as Cigna, Humana, and United Healthcare under a cooperative program called Medicare Advantage.

2. The most successful part of Medicare is run by private insurance.

This refers to the above-mentioned Medicare Advantage program. Studies have found this program delivers higher quality care at less cost than traditional Medicare. (Choice of doctors, however, is more limited.)

3. Medicare is often the last insurer to adopt innovations that work.

Medicare started prescription drug coverage only after all the private insurers had been doing that for years. It still doesn’t pay for doctor consultations by phone, email, or Skype. It won’t pay for house calls at night or on weekends, even though the cost and the wait times are far below those of emergency rooms.

4. Medicare has wasted enormous sums on innovations that don’t work.

Medicare has spent billions on pilot programs and demonstration projects trying to find ways of lowering costs and raising the quality of care. Yet instead of finding places in the healthcare system where these techniques work (private Medicare Advantage plans), Medicare set out instead to reinvent the wheel. Medicare frequently has regulations that are counter-intuitive and wasteful, such as requiring patients to be hospitalized before they can receive home physical therapy.

5. Most seniors in conventional Medicare are participating in stealth privatization, even though they are unaware of it.

There are over 32.7 million patients enrolled in a managed care program called Accountable Care Organizations (ACOs). The Obama administration started this practice without telling seniors they were participating in a grand experiment. Not only that, but it is illegal for an ACO to tell a senior they are enrolled! Furthermore, ACOs are not achieving their intended purpose – they are neither saving money nor are they improving the quality of care.

6. There is nothing Medicare can do that employers and private insurers can’t do.

For many years the Physicians for a National Health Program argued that a single-payer health insurer would be a single buyer in the market for physicians’ services. They reasoned this would give the government the power to bargain down the fees paid to physicians. Reality, however, is that Medicare doesn’t bargain with anyone. They simply put out a price for services and doctors can either accept or reject it. Private insurers have been doing the same thing for years. This is currently bringing doctor fees down in the ObamaCare exchange market – which is why the best doctors and hospitals avoid these plans.

7. Medicare For all would be costly.

There is no such thing as a free lunch. This is one of the first lessons of adulthood. Even Bernie Sanders admits this, but only when pressed. A study by Charles Blahous of the Mercatus Center has estimated the cost at $32.6 Trillion over the first ten years. This would necessitate a minimum of a 25% payroll tax – but only if it is assume doctors and hospitals provide the same amount of care they provide today. Since Medicare rates are 40% or more below private rates, a realistic assumption is that doctors and hospitals would increase the amount of care to make up the difference. This would then require at least a 30% payroll tax.

(This post will be continued next time.)

A recent birthday and a vacation trip to New England made me realize how much our world has changed. Indulge me as I reminisce for just a minute.

Many years ago when I was sixteen, I took my first airline flight to visit my brother who was a student at the University of Colorado. I dressed up in my best coat and tie, like church, because that’s what everyone else was wearing on the plane. There weren’t many passengers younger than me and certainly no infants or “service animals.” The flight attendants, called stewardesses at that time, were young women no taller than about 5 feet nine and no heavier than about 150 lbs. The airline regulations made sure of that! Meals were served in both first class and coach. It was a serious business for serious travelers only and it was a pleasant, even exciting experience.

Today, the contrast couldn’t be greater. Most people show up in clothes more suitable for the beach than church, wearing flip flops and carrying a back pack. Passengers are of all ages, including fresh out of the oven, and animals abound – some of them “service animals” and some clearly not. Flight attendants come in all shapes and sizes, all ages and genders, including some not easily identified. It’s more of a cattle car than a serious method of transportation. It’s far from pleasant and you’re relieved just to get to your destination in one piece on the same day.

At the airport, we stopped for breakfast at a well-known fast-food restaurant. In the old days, you could talk to a cashier who would take your order in a minute or two. Usually, there are five cashiers to handle the early morning rush at the airport. This day, the cashiers had been replaced by three kiosks to take your order.  It seems that demands for higher minimum hourly wages has eliminated the cashiers. The usual one or two minutes/customer wait was now five to ten minutes as people struggled with the digital technology. The resulting line seemed to go on forever.

In New England we encountered new challenges to our ability to use modern technology. I tried to park our rental car in a large, open parking lot before we embarked on a Windjammer harbor cruise. We arrived with plenty of time, but little did I anticipate the trouble I was about to encounter with the simple task of paying for parking. No attendant was available to pay the parking fee (minimum wage laws again?) and no meter would allow us to put in change. A kiosk required we scan the QR Code (you’d better know what that is!) so we could pre-pay for the parking. When that didn’t work, I tried using a credit card but 30 minutes later and despite help from the ship’s receptionist, I still couldn’t make it work. I was reassured the car wouldn’t be towed before I got back from my cruise!

Parking became an issue again later in our trip in Portsmouth, N. H. We hoped to enjoy a casual lunch with a view of the harbor. There were zero free parking spaces provided and the same kiosk payment was required. Fortunately, this time the technology worked, but the rates started at $28 for two-hours minimum. We lost our interest in lunch quickly!

We finally settled on a fast-food burger chain out of the downtown but once again encountered zero cashiers willing to take our order. Fortunately, we had already gained valuable experience with the kiosk system earlier so we managed to order in record time of eight minutes! The food was eventually delivered but the dining experience wasn’t memorable.

Our next challenge was on the toll road where the traffic was so heavy and the signage so poor that I drove through the “E-Pass” booth without the transponder because I couldn’t get into the cash lane fast enough. I tried to go back and pay the attendant at the toll booth but he wouldn’t take my money. He gave me a slip with a website address where I could pay the toll online in the next 7 days to avoid a penalty. Once again, I was forced to depend on the use of online technology to pay a $0.75 cent toll. Cash wasn’t good enough.

My advice to folks my age is be sure you travel with a smart phone and a credit card (cash is worthless) and take classes in scanning QR Codes! Either that or take along your grandchildren to handle the technology you don’t understand. It’s a different world out there!