The Democrats are spending a great deal of time promoting Medicare for All. There are now nine separate Medicare for All plans that are being considered. I have shared some information about those in a previous post and will update with more details as they emerge from the legislative process.
When I look at this it seems so apparent that there is a much better way of doing what I think we all want. Since the politicians are completely polarized and entrenched in their camps it is unlikely that we will see a healthcare solution that is actually in the best interest of the American people.
For those who have read my blog before you know this is always my focus and I could care less about either political party or their agenda. After spending 40 years in the US healthcare system I have seen a lot and learned a lot. When this concept of Medicare for All surfaced in the 2016 Presidential Campaign, I could not help but think that the proponents were missing the point.
As I have said before we do not have an access problem with US healthcare we have a cost problem. Since approximately 85% of the healthcare cost is driven by providers (doctors, hospitals, pharmacies, drug companies, etc.) this is where we need to focus. Hundreds of efforts have been made to curb these costs over the decades. Surprisingly most have come from the insurance industry or the government but few from the providers themselves. Since our costs are the highest on the planet and our health outcomes are at best "acceptable" we have a big problem.
All nine Medicare for All type proposals rely on one common factor - cutting provider payments. Whether it is an expansion of Medicare or Medicaid they all assume that the current payment levels in both programs will be maintained and providers will have to adjust accordingly. We are not talking about small numbers here. Since most Americans get there health insurance through their employers or on the health exchanges, their plans pay providers significantly more than Medicare or Medicaid (often over a 100% more). If half the patients in America start paying providers 100% less than they are getting now what will happen? Catastrophe!
This is one of the big issues none of the Medicare for All proponents are talking about. While we must cut our healthcare costs we cannot send the system into cardiac arrest. All the proposed plans would create some significant issues for providers.
Since providers will never voluntarily cut their fees enough to impact our overall healthcare cost problem we have to do it for them. I have avoided saying this for the majority of my career as I have always believed there would be another solution. I am now convinced there is not. However, I do not think these Medicare for All proposals are the right answer.
I think the best way to curtail provider costs is to use the Medicare pricing system as the back bone of a new pricing system while maintaining our public/private healthcare system. Giving the government full control of the largest industry in the US is a very bad idea. We have a pretty well balanced system today with about half the population in a government program and half in employer or individual programs. This balance keeps everyone honest and most participants in each like their coverage.
So you probably think I am contradicting myself. Actually I am not. What I am proposing is we use Medicare as the pricing mechanism for private and public healthcare. Today most employer plans use a PPO to drive their healthcare pricing. Most of those PPO's are anywhere from 100-400% higher than Medicare. Additionally every few years those contracts get renegotiated upwards by the providers. If we eliminated all networks (PPO, EPO, HMO etc.) and just use Medicare as the base we would accomplish a number of critical things:
When I look at this it seems so apparent that there is a much better way of doing what I think we all want. Since the politicians are completely polarized and entrenched in their camps it is unlikely that we will see a healthcare solution that is actually in the best interest of the American people.
For those who have read my blog before you know this is always my focus and I could care less about either political party or their agenda. After spending 40 years in the US healthcare system I have seen a lot and learned a lot. When this concept of Medicare for All surfaced in the 2016 Presidential Campaign, I could not help but think that the proponents were missing the point.
As I have said before we do not have an access problem with US healthcare we have a cost problem. Since approximately 85% of the healthcare cost is driven by providers (doctors, hospitals, pharmacies, drug companies, etc.) this is where we need to focus. Hundreds of efforts have been made to curb these costs over the decades. Surprisingly most have come from the insurance industry or the government but few from the providers themselves. Since our costs are the highest on the planet and our health outcomes are at best "acceptable" we have a big problem.
All nine Medicare for All type proposals rely on one common factor - cutting provider payments. Whether it is an expansion of Medicare or Medicaid they all assume that the current payment levels in both programs will be maintained and providers will have to adjust accordingly. We are not talking about small numbers here. Since most Americans get there health insurance through their employers or on the health exchanges, their plans pay providers significantly more than Medicare or Medicaid (often over a 100% more). If half the patients in America start paying providers 100% less than they are getting now what will happen? Catastrophe!
This is one of the big issues none of the Medicare for All proponents are talking about. While we must cut our healthcare costs we cannot send the system into cardiac arrest. All the proposed plans would create some significant issues for providers.
Since providers will never voluntarily cut their fees enough to impact our overall healthcare cost problem we have to do it for them. I have avoided saying this for the majority of my career as I have always believed there would be another solution. I am now convinced there is not. However, I do not think these Medicare for All proposals are the right answer.
I think the best way to curtail provider costs is to use the Medicare pricing system as the back bone of a new pricing system while maintaining our public/private healthcare system. Giving the government full control of the largest industry in the US is a very bad idea. We have a pretty well balanced system today with about half the population in a government program and half in employer or individual programs. This balance keeps everyone honest and most participants in each like their coverage.
So you probably think I am contradicting myself. Actually I am not. What I am proposing is we use Medicare as the pricing mechanism for private and public healthcare. Today most employer plans use a PPO to drive their healthcare pricing. Most of those PPO's are anywhere from 100-400% higher than Medicare. Additionally every few years those contracts get renegotiated upwards by the providers. If we eliminated all networks (PPO, EPO, HMO etc.) and just use Medicare as the base we would accomplish a number of critical things:
- We would lower provider costs (billions over time)
- We could do the adjustments for pricing by geo region, provider type and over time
- We would avoid all the catastrophic fall out from a straight Medicare for All system
- We would preserve the private/public systems we have today
- We could save millions in administrative and PPO access fees
- We could decrease the cost of health insurance significantly which would increase enrollment
- Increased enrollment would decrease our uninsured population (a goal of Medicare 4 All)
- Since Medicare controls the pricing and its inflation the government would have a bigger role in healthcare (another goal of Medicare 4 All)
If we implemented it slowly, gradually taking healthcare prices down over several years, we could maintain quality, avoid provider shortages, avoid provider brain drain and keep most of our hospitals open. As the savings come in we could demand (legislate) that insurers/health plans use some of the savings for improving/lowering administrative costs and a lot of the savings for lowering premiums.
To keep this readable and understandable I have stayed away from all the details but I am happy to provide those to anyone who wants to examine them. In addition to this new pricing model I have several other healthcare adjustments that can be made to improve outcomes and lower costs further. The entire package is a process I call the CURE. Look for further ideas from the CURE in the coming weeks and months.
Till then - Walk Good