FURTHER THOUGHTS ON SINGLE PAYER
There are already many different models for single payer in this country – Medicare, Medicaid, the VA, public hospitals and Kaiser Permanente. If you prefer a single payer model which one do you want? What features do you prefer?
Medicare for All?
Medicare covers seniors and the disabled; it's a single payer system dating back to the mid 60s. It sets rates for hospital care and doctors. It offers a broad choice of any willing provider. It has copays and co-insurance out of pocket responsibilities for patients. It was originally set up to pay for doctor and hospitals bills; it covers limited long-term care services and does not cover dental care. Its Part D coverage for prescription drugs has a large donut hole where seniors must pay 100% of the costs of drugs ‘til they reach the next level of coverage with limited copays. Part D is contracted out to insurers who in turn manage the costs of prescriptions via contracting; Medicare itself is barred from contracting or setting reimbursement rates for pharmacy services. Medicare is a fee for service system, which pays “reasonable and necessary costs” to providers. For those who prefer private insurance; there is a choice among Part C private insurers; in California many seniors and the disabled opt for Part C private insurance; this may restrict your choice of providers, more carefully manage the costs of your care and offer lower out of pocket responsibilities. Medicare is a federally run program, partially financed by payroll taxes from workers and employers as well as the federal General Fund taxes and subscriber premiums.
Medicaid for All?
Medicaid covers the poor (or some of the poor, depending on your state). It’s a single payer system for its subscribers. It has nominal copays and no deductibles. In California, it covers a full range of health care, but not typically alternative health care like Eastern Medicine. It covers long term care in the home and in nursing homes. It covers dental care as well as prescription drugs and wheelchairs and other forms of durable medical equipment. It has special programs for the mentally ill, for those with developmental disabilities, children with special health needs and those individuals with substance abuse addictions. The state sets the rates it will pay providers; often these are based on the Medicare reimbursement formulas. Some doctors choose not to participate in the program, saying the reimbursement levels are not adequate to pay their costs. It is financed by federal and state taxes; the state pays a match ranging from 17% to 50% depending on its relative wealth (in California, the match is mostly 50/50). Each state decides its own level of benefits and who is eligible and how much to pay providers, subject to federal maximums and minimums. For example, under federal law doctors must be covered, but not dentists; hospitals must be covered but not nursing homes. States may choose to enroll their subscribers in HMOs and other managed care plans, and California has chosen to do so. Some plans are run by commercial insurers, and some by local public entities.
VA for All?
The VA system is the long-standing single payer for America’s Veterans. The federal government finances it. Care is delivered by federally employed doctors and nurses working in federally owned facilities. It negotiates the best prices on prescription medicine. The VA has some of the best care for severely wounded veterans and was a pioneer in developing electronic health records. It has also been plagued by a series of scandals in which veterans could not get urgently needed care because the system is overloaded, excessively bureaucratic, underfunded and underperforming. Some veterans can access private doctors and facilities for their care if they live more than a certain distance from the nearest facility.
Public Hospitals for All?
Public hospitals are the single payer for the uninsured. They are run by cities, by counties, by hospital districts and by local universities. Historically, they are financed by local governments through local property taxes. However in California, they are now primarily financed by the federal and state governments. Care is delivered by doctors and nurses employed by local governments in local governmentally owned facilities. They provide some of the best training residencies in trauma and emergency care and in Los Angeles operate one of the best Rehabilitation Hospitals. Many public hospital systems have underdeveloped primary care networks to support their inpatient services although San Francisco, Ventura and Riverside may be exceptions. Some believe in their mission, but see their cumbersome Civil Service, unionized workforces and politicized governance structures as obstacles to their successful spread.
Community clinics are the single payer for primary care to the uninsured in many underserved communities. These are non-profit facilities heavily dependent on federal, state and local financing. They employ doctors and nurses. In some low-income rural and underserved urban communities, they are the bulwark of primary care. They are highly decentralized, mission driven and autonomous, and have real obstacles to integrated and coordinated care.
The British National Health Service is one of the highest ranked, best performing health systems in the world and is built on publicly owned facilities and publicly employed doctors. It is possible to envision a model of collaboration of community clinics and public hospitals providing excellent service in medically underserved communities across the state of California. There would be huge turf wars over the governance and management of such collaboration. Local public managed care systems could serve that role if all the concerned stakeholders so chose.
Kaiser for All?
Kaiser Permanente is a high performing, long established HMO offering care and coverage to workers and their families throughout California. It is the exclusive single payer for those who choose it. It employs doctors and nurses and owns its own facilities. It is financed by premiums from Medicare, Medicaid and private insurance subscribers that choose its integrated delivery system. It combines the dual roles of insurer and provider and thus has unusual incentives to keep its subscribers healthy at the most efficient costs. It’s a non-profit that must successfully compete with all comers for patient choice and loyalty. One model of single payer would offer all subscribers a choice among competing local Kaiser style systems. The competitive model may offer the best opportunities to improve quality and lower costs, but plan competition under the ACA may be rewarding provider agglomerations rather than transparent improvements in provider quality and reductions in costs to subscribers envisaged.
Prepared by: Lucien Wulsin