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Universal health care

What can health care for all really look like in the U.S.?


Universal health care

What can health care for all really look like in the U.S.?


By Allison Evans, assistant managing editor

According to the World Health Organization (WHO), universal health care is a system by which all people receive quality health services without suffering financial hardship. A 2019 study by the American Cancer Society found that 56% of American adults — or 137 million people — face medical financial hardship, including incurring medical debt, struggling to pay medical bills, and forgoing care because of cost.

Health care coverage for every single person in the United States may seem utopian. However, the current economic and political climate is ripe for change, said dermatologist Elizabeth Rosenthal, MD, a member of the executive committee of the Board of the New York Metro chapter of Physicians for a National Health Program.

“We have learned by this pandemic that health care linked to employment does not work. Here, if you get too sick to work and lose your job, what do you lose with it? Your health insurance — just when you need it.”

Yet, questions remain as to how much change will occur and what the impact of these changes will be on physicians and the health care system at large.

While a single-payer model is often touted as the path toward universal health care coverage, it’s also possible to achieve the goals of universal coverage through a mixture of private and public options. Bills proposing a national health care system in the United States have been written since the early 20th Century, although they’ve been dealt swift blows.

This month, Dermatology World explores the possibility of achieving universal health care in the U.S., including a single-payer system, combinations of public and private options, as well as potential modifications to the Affordable Care Act (ACA).

Medicare for All?

The phrase “Medicare for All” — a juggernaut of the 2020 Democratic primary season — has come to mean different things to different people. In this article “Medicare for All” refers to the Medicare for All Act of 2019 companion bills in the House and Senate — HR 1384 sponsored by Rep. Pramila Jayapal (D-Wash.) and S 1129 sponsored by Sen. Bernie Sanders (I-Vt.), respectively — which propose a federally run system of national health insurance. These bills would provide universal coverage (see sidebar for covered services) to all residents of the United States as determined by the secretary of the Department of Health and Human Services (HHS).

According to the bill authors, under a Medicare for All plan, patients would have complete freedom to choose their doctors, hospitals, and other providers with no cost sharing, including premiums, copayments, and deductibles. The bill authors claim that patients would have no out-of-pocket costs except for prescription drugs. In these bills, Medicare for All is more generous than single-payer plans in other countries, which often exclude dental and vision care and require some form of payment when seeking services.

While both of the bills are called Medicare for All, both bills would sunset nearly all federal health insurance programs, including Medicare and Medicaid, the federal and state exchanges created by the ACA, the Federal Employee Health Benefits Plan, TRICARE, and more. It would, however, preserve the Veteran’s Administration and the Indian Health Services system. In addition, unlike the Medicare program, Medicare for All legislation would prohibit employers from offering plans to compete with the government-run plan, and it would prohibit private insurance from covering core benefits covered by the government-run plan.

For and against

In January of this year, the American College of Physicians (ACP) came out in support of a single-payer system. Its series of policy papers, “Better is Possible: The American College of Physicians Vision for the U.S. Health Care System,” challenges the U.S. not to settle for the status quo, but to implement systematic health care reforms. (Read the call-to-action and policy papers at http://annals.org/aim/article/doi/10.7326/M19-2411.)

Jamie Weisman, MD, a dermatologist who practices in Georgia and author of As I Live and Breathe: Notes of a Patient-Doctor — a memoir on her experiences as a physician with a genetic immunodeficiency — indicated that prior to the ACA, even though she had health insurance through her husband, she maintained an extra plan that cost $20,000 a year with a $10,000 deductible in case her husband lost his job or worse. “Our unjust health care system has affected pretty much every choice I’ve made as an adult. I could afford to pay this high cost (though people should consider what a disadvantage that is when saving for retirement and my children’s education).” Dr. Weisman was grateful for her understanding of the medical system, but she argues that many others could have difficulty, and even doctors find it challenging.

A CMS report shows that national health expenditures grew 4.6% to $3.6 trillion in 2018, or $11,172 per person, and accounted for 17.7% of GDP. A Kaiser Family Foundation report states, “Two out of three bankruptcies in this country — affecting an estimated 530,000 families in 2019 — are due to medical bills,” Dr. Weisman added. “Half of those bankruptcies were those who had insurance.”

On the other hand, when considering a national single-payer health insurance, Bruce Brod, MD, chair of the AADA’s Council on Government Affairs and Health Policy, indicates that there may be concerns for the potential for coverage decisions to become politicized.

Additionally, arguments against a national-single-payer health system highlight the potential for the elimination of physician-patient choice when it comes to drugs and treatments, as a federally run system has to prioritize the provision of universal coverage which could come at the expense of narrowly defined formularies and wait lists for surgeries.

Yet, the medical community is divided over how best to tackle health care reform. The American Medical Association (AMA) policy continues to be one of opposition to a single payer plan, but last summer, the AMA House of Delegates (HOD) considered a move to overturn its long-held opposition to single payer health care, signaling that there may be an openness toward single payer among some physicians. The vote to change AMA policy failed with 53% of the AMA HOD voting to maintain the AMA’s opposition to single payer, while 47% of the HOD supported a change in policy that would allow the group to re-consider and debate a change in the AMA’s position.

Reimbursement

In the current system, physicians get a say in determining cost through the RVS Update Committee (RUC), which is a volunteer group of physicians who advise Medicare on how to value physicians’ work.

Christine O’Connor, the AADA’s associate director of congressional policy, inquired to legislators about how the RUC would play a part in a Medicare for All system. The responses indicated that payment models would be derived from nationwide data collected by the new system, which would allow for more data-driven decisions about payments for services and balancing that with the needs within the overall health care budget. In short, the role of the RUC in this new system, if there is any, remains unclear.

A single-payer health plan would set one price for each service. Medicare for All would use current Medicare rates as the new standard price for medical services in the United States. This idea is problematic for physicians because Medicare typically has lower prices than those charged by private insurance plans covering Americans under 65. On average, Medicare pays hospitals about 53% of what private insurers pay, according to a 2017 Congressional Budget Office report.

With regard to reimbursement, “it is certainly possible that specialists will make less money,” said Dr. Weisman. “Seven-figure salaries would probably not happen. However, with medical consolidation under hospitals and private equity, universal health care represents an opportunity to preserve private practice with guaranteed payment. Countries with universal health care also have lower rates of midlevel provider care.”

A state experiment: Vermont tries single payer

In 2014, Vermont, led by then-Gov. Peter Shumlin, attempted to create the nation’s first single-payer health system. After three and a half years of brainstorming, local legislators outlined a vision of their health plan, Green Mountain Care, which was signed into law.

After determining that the government-run plan would increase payroll taxes by 11.5% and income tax by 9%, the vision was abandoned. Even though Vermonters would no longer have paid for private health plans, there was a risk of “economic shock,” Gov. Shumlin explained.

“What I learned the hard way,” Shumlin said in a 2019 Washington Post article, “is it isn’t just about reforming the broken payment system. Public financing will not work until you get costs under control.”

Ultimately, predictions and promises of decreased health care spending in the face of the realities of skyscraping tax hikes is unproven in the United States, making single-payer plans untenable at the state level (Colorado tried in 2016 and Massachusetts has passed local ballot initiatives more than 20 times). According to health policy researchers, if a single-payer system could be achieved at the state level, Vermont would have been one of the best options since the state has one private health plan and low rates of uninsured people.

After Green Mountain Care was a non-starter, Vermont decided to build on the ACA instead of replacing it. In October 2016, Gov. Shumlin released the first draft of the Vermont All-Payer Accountable Care Organization (ACO) model, which moves all payers (Medicare, Medicaid, and commercial) toward a prospective, value-based reimbursement system holding providers, operating through one or more ACOs, and the state of Vermont, accountable for population health outcomes. While Vermont is still in year three of the program, initial results show promising signs of delivery system reform, such as Medicaid beneficiaries making greater use of primary care and behavioral health services. More detailed analyses of how the model has performed will soon be made available on the Green Mountain Care Board website (gmcboard.vermont.gov).

Private insurance: Is there a role?

“The current Medicare for All health care bills, especially the House bill, severely restrict or even outlaw private medical insurance and may keep physicians out of the conversation about how services are valued,” Dr. Brod said. “Medicare for All would prohibit physicians from privately contracting for any service the federal government would offer,” O’Connor said. The Academy’s Health System Reform Principles (see sidebar) oppose this possibility: “Any new insurance coverage option must be voluntary for physicians, pay physicians fairly, and compete on a level playing field to prevent crowd-out of existing plans. Physicians and patients should be able to continue to enter into private contracts for the provision of care without penalty.”

Cost vs. administrative burden

An argument often made in support of a single-payer system is that it would reduce administrative costs. However, “low administrative costs shouldn’t be confused with low overall health costs. There could be other hidden costs within a government-run health system that we haven’t accounted for,” said Dr. Brod.

There is an administrative expense to having multiple payers, explained Katie Keith, JD, MPH, a law professor at Georgetown University. On the other hand, in many instances you do get the leverage to negotiate with private payers, she said. Reports have estimated the cost of Medicare for All to be about $34 trillion over a decade — about 75% of the federal budget.

Dr. Rosenthal suggests that those alarmed by such a high cost should simply compare that to the trillions that Americans are now spending in a decade. Additionally, “any physician salary loss could be offset by the savings from streamlined billing and fewer staff focused on billing,” said Dr. Weisman. “When you go to a doctor’s office today, are there more people taking care of patients or are there more people dealing with the payments?” added Dr. Rosenthal. “I think it will make practicing dermatology much more satisfying and pleasant by eliminating all the time and hassles spent trying to extract payment from private insurance companies. Physicians could see more patients and have lower overhead costs.”

The Academy has been very active in advocating, within the current system, for uniformity in many areas, such as prior authorizations and appeals for expedited approvals for step therapy, Dr. Brod said.

Medicare for all who want it

“There are major differences between a Medicare for all who want it plan (coined by former South Bend, Indiana Mayor Pete Buttigieg) and the former Vice President Joe Biden health care plan, which is to build upon the ACA,” said Keith.

Democratic presidential nominee Biden and former presidential candidate Buttigieg both back public options that anyone can buy into. While Biden and Buttigieg share similar visions for health care reform, Biden has no intention of razing the ACA, but rather, continuing to enhance it and offer an alternative to private insurance. Buttigieg, however, has expressed a hope that his Medicare for all who want it might eventually transition to a Medicare for all system as more Americans find a government-run option more comprehensive and affordable.

Within our current health care system, we have multiple options, including employer-sponsored health insurance, Medicare, Medicaid, ACA exchanges, and the Veteran’s Administration as well. “Have we reached a utopian system? No. There are still gaps in coverage,” Dr. Brod maintained. “We should always be thinking about how to address those gaps...and we should continue to have physicians very heavily involved in the conversation.”

“Some of the other health care bills are still very ambitious, but more incremental than a single-payer system. Some allow employers to buy into Medicare or give the employee the choice to opt into a Medicare-like program,” Keith said. “Most proposals, except true single-payer proposals, leave quite a bit of flexibility. You would still have a multi-payer system in which physicians and practices could negotiate for levels of reimbursement.”

Changes may come

In addition to a single-payer system, other ideas have been floated to improve the current system — providing expanded and more affordable coverage options. One of the options embraced throughout the election primary season and in bills introduced in Congress is revamping the Medicare program by lowering the age to enroll in Medicare or allowing anyone to enroll in Medicare, or a Medicare-like option. Biden supports a similar system in which he would lower the Medicare age to 60 years old in addition to having a public option that anyone could choose, including employer-sponsored coverage options.

There will likely be a lot of opposition to Medicare expansion because the program is projected to be insolvent by 2026 (without reflecting the effects of the COVID-19 pandemic), O’Connor said. Traditionally, Medicare beneficiaries have been wary of lawmakers proposing changes to Medicare that have the potential to reduce their benefits or raise their costs. Expanding the pool of participants to a program that is financially challenged will likely alarm a very reliable voting block of current Medicare beneficiaries, she said.

Another alteration, that is also part of the Biden plan, is to offer more generous subsidies, Keith said. “The subsidies are really good for those who are 100% to 250% of the federal poverty level, but they’re not as generous for those in the 250% to 400% of the poverty level.” Currently, you can only get tax credits if your income is below 400% of the poverty level. There is talk that we should get rid of the ‘subsidy cliff,’ Keith explained. “What’s really the difference if you’re 405% of the poverty level versus 395%?”

Where do we go from here?

If the COVID-19 pandemic has taught the country anything, it’s that our current system has been woefully unprepared, Keith said. After physician practices have had to adapt to monumental losses in revenue and the inability to employ full-time staff, it could be that some physicians may want a system with salaried doctors for more financial stability, she said. “This is a real moment to rethink how the health care system is structured and whether it works well. While some people argue this is a black swan moment, and that we shouldn’t make major decisions based on it, the gaps we’re seeing in health care are going to influence health policy going forward.”

As for the likelihood of changes to the country’s health care system, O’Connor notes the importance of the 2020 election. “If the Senate and White House flip, health care bills may start moving.” If the administration stays the same, there will be continuous attempts to undermine and strike down the ACA.

Ultimately, Keith believes that there will be coverage expansions over time, but she argues that it will most likely be a mixed private-public payer system. “Most Medicaid coverage is now through private insurance companies. A lot of Medicare is delivered by private companies, either through Medicare Advantage or the entire Medicare Part D prescription drug program. Even the ACA uses private health insurers to expand the individual market. If you look at the history, we’re getting more and more people covered over a long period of time, but it does tend to have a mix of public and private payers,” she said. “From the polling data, we know that many people don’t want to give up what they have. While there’s a chance the system could be better, there’s a chance that it might not be. Fear overwhelms people and leaves us with a lot of inertia in the health care system.”

For physicians, patient access to care remains front and center. “The perspective from which we should be looking at this is that people should have access; access to care is really the important thing,” said Dr. Brod. Dr. Rosenthal adds, “Health care is simply too expensive for many people in this country and they die for lack of care. Our system is also very inefficient, complicated, inequitable, and difficult to navigate for patients and physicians alike.”

Additionally, if other wealthy countries can figure out a single payer system, so too can the United States, said Dr. Rosenthal. “We treat health care as a commodity upon which to make a profit. In this country people get the health care they can afford which is not always the health care they need. In other countries health care is treated as a social need and people get the health care they need.”

“Whatever system we have, it’s really important to preserve the ability of dermatologists to practice, and to provide care in a number of different models that would flourish within that system,” Dr. Brod continued. “We need access to small and nimble practices that tailor services to the needs of various populations — whether urban, suburban, or rural. It’s also important to make sure academic medical centers can thrive so we can provide complex care and have a haven for research.” All told, “There is no perfect system,” said Dr. Weisman. “However, there are degrees of imperfection, and right now we are knee deep in a mess of high regulatory burden and billions of dollars funneled out of health care to shareholders and CEOs of health insurance companies.”