Healthcare Efficiency

There are many calls to  change US healthcare by moving to a single payer system.  Many of these calls come from advocates of disadvantaged groups--the uninsured or the homeless .  But some physicians are also on that bandwagon.   It’s one of those things that gets more complex the closer you look.  The World Bank published an excellent paper for those who want all the facts. (  As usually discussed in the US, single payer means getting the feds to pay for all healthcare.  Now, they pay for over half, in one way or another.  Why not move all the way.  Just move all the uninsured into Medicare.  Another too good to be true solution.  

It used to be said that anyone who wanted the government to control healthcare had never mailed a letter.  That no longer holds for two reasons:

1. The Post Office isn’t really run by the government.
2. They’ve cleaned up their act and actually do a pretty good job now.  
   

But that doesn’t mean the Post Office could run healthcare.  

We do have some examples of single payer systems within our quasi-system.  Medicare is a classic example.  They must be the primary payer for anyone over age 65 (plus some other groups.).  So, how do they do on the critical issues:

1. Control costs.  Congress just voted down the effort to control physician payments (as they have done every year.)  The OMB regards Medicare as the single greatest threat to the survival of the US economy, because of projected cost increases.  The prices they pay for services have gone up every year at about the same rate as those for commercial insurance.  OK, let’s look at something else.
2. Patient satisfaction.  If Medicare is so great, how come everyone buys a supplemental policy?  If you want an adventure sometime, try calling Medicare to ask about a payment or reimbursement.  It’s easier to call the IRS, and the rules are equally complex.  If you’re 65, you MUST sign up for Medicare.   If you’re still employed, that’s required only for part A, or is it part B.   And which is what?  Then when you retire, you must remember to sign up for the other part immediately, or you can never do so.  If you need healthcare, does Medicare actually pay for anything?  Or does your employer’s insurance pay?  Only on Tuesdays.
3. Provider satisfaction.  Many patients are complaining that they can’t find a doctor, because no one will accept Medicare anymore.  Even universities have opted out.  The issues are mainly reimbursement rates, but delays in payment also figure here.  There was a time when Medicare automatically rejected every other claim in order to delay payment.  (Some private insurers did the same thing.)
   

Some of these arguments are specious in that if Medicare were the only payer, they would then have pricing power and could control the means of production.  It is rumored that there are more CT scanners in Detroit than in all of Canada.  You just can’t get a CT in Toronto.  There’s no one to do it for you.  Doctors know this, so they don’t order them.  Patients don’t expect them.  And the government doesn’t have to pay for them,  so healthcare is cheaper in Canada.  Unless you know better, you’re happy.

The Veterans Administration is another example of a single payer, albeit for a defined subset of the population.  They get a budget from Congress to take care of this group--they don’t get paid according to what they do.  A major difference from Medicare is that the VA owns the means of production--the hospitals and the providers.  The system has the reputation of being chronically underfunded, and their facilities leave a lot to be desired.  In spite of this, however, they do a pretty good job on the sharp edge of patient care.  They wrote the book on patient safety.  Their electronic patient record system was a first in the nation and still a shining example.  Drugs are cheaper there, because (unlike Medicare), they have used their purchasing power to get better prices.  So, how about just signing everyone up for VA healthcare?  First, the VA couldn’t handle the workload, even if Congress would appropriate more money.  (Dream on.)  The Walter Reid fiasco was a bum rap--you can’t tell a system to close a hospital then send more patients there and expect good care.  Still, the leaders were asleep, but that doesn’t reflect on the entire system.  The model doesn’t fit our existing system, and that move is just not going to happen.

There are some private examples also.  Kaiser is the largest.  They compete in the DC area for federal workers with other insurance-only plans.  Their prices are not different, and fed employees are not flocking to Kaiser.  In sum, they can compete but offer no special advantages that blow others out of the water from the employee perspective.

As the paper from the World Bank concludes, “Countries vary greatly in their priorities.”  Americans place a high priority on choice and on having all the technology available.  That’s what makes our healthcare expensive, and no one has found a way to change that yet.  Anyone want to be President?