THE FINANCIAL CASE FOR SINGLE-PAYOR
O
DOCTORS' LOUNGE
AUTHOR Michael Flynn, MD
ne of the benefits of a single-payor
health care system would be that
most of the complexity and inef-
ficiency of the current for-profit
health-insurance-company-driv-
en-system would be replaced. The
high unaffordable health insurance
premiums, the deductibles, the copayments,
the surprise medical bills, the uncovered ser-
vices and the denial of coverage would either simply go away or be
reduced so much that they would not cause the financial ruin of the
average American. The over 70 million uninsured or underinsured
Americans as of 2017/2018 would no longer be vulnerable to medical
debt and bankruptcy (1) . Medical bankruptcy would no longer be an
issue for the hundreds of thousands of US families (2, 3) . An exact
number of medically initiated bankruptcies in any specific year is
difficult to pinpoint; the range can vary from 200,000 to 800,000 (3) .
The Epic EMR that we have all grown to know and love is insanely
more complex in this country compared to other countries using
the same vehicle because of US billing issues and requirements (4) .
There are over 1,000 for-profit health insurance companies in this
country, each with 25-30 different plans. This creates an administra-
tive nightmare for medical practices. A medical or surgical clinical
practice must hire multiple staff members to navigate the process
of justification of insurance coverage, the details of any specific
plan, the pre-authorization process, the limits of coverage in any
plan and the endless hassle of eventually getting paid for the service
provided, often many weeks or months after the billing date. Under
the Canadian system, a surgical practice employs a fraction of the
staff needed in this country (5) . There is minimal hassle regarding
imaging studies and tests. The bill is sent to a single source, and the
payment is received in two to three weeks.
By definition, single-payor health care would be a government
run health insurance program (6) . The health care delivery process
would not change. The hospitals, physician offices, pharmacies, etc.
would continue as they do today. Depending on the final product
of the political process, a single-payor system could be run by the
federal or state government or some combination. All residents
of this country would be eligible for medically necessary services.
Generally accepted medically necessary services include hospital
and physician care, preventive care, long term care, mental health,
reproductive care, dental, vision, hearing, prescription drug and
medical supply costs. The exact definitions of medically necessary
services, and which of these options might be covered, would also
be subject to the political process.
One of the major issues of a single-payor system is how it would
be funded. The 2018 single-quarter profits of the top 85 publicly
traded (for-profit) health insurance companies was $47 billion (7) .
Multiplied by four, this represents just under $200 billion paid to
insurance companies as premiums for health care coverage which
is not used for health care—rather, simply kept as profit. Another
recent study shows that comparing the Canadian single-payor system
with the US profit-dominated system, there is a $812 billion price
tag related to the costs of the insanely complex administrative re-
quirements in order to accommodate the for-profit health insurance
companies (8) . A huge amount of money is being extracted from the
health care system in this country either because of the inefficiencies
of the current system or the unconscionably high profit margin.
The end result allows a small number of executives and investors
to get rich off the backs of US citizens by cheating them out of the
health care that they are paying for, often with outrageously high
premiums. Everyone expects these premiums to cover their health
care costs, but instead they get bills for deductibles, out-of-network
emergency care, etc.
The reality of a single-payor system is that some taxes will be
raised. The 2017 tax bill provided major tax reductions for corpora-
tions and the rich and exploded the deficit. There are large amounts
of money sloshing around Wall Street that are either not taxed or
under taxed. If the hedge fund managers and brokers were working
in Haiti or the Central African Republic, it would not be possible
for them to be as successful in making money as it is in this country.
Therefore, it is not unreasonable to expect that these companies and
individuals contribute to the infrastructure and public welfare in the
country that allows them to get rich. On the other side of the coin,
the health insurance premiums, the copayments, the deductibles,
the surprise billings, the uncovered services, the service denials, the
medical debt and medical bankruptcies would all go away. Getting
cancer would not mean going broke.
At the end of the day, the details and the funding of a single-payor
system would be the outcome of political negotiation. The negoti-
ation to pass the Affordable Care Act (ACA) allowed the for-profit
health insurance companies to keep 20% of the premiums paid for
health insurance as profit (Medicare has a 2% administrative cost)
and precluded a public option. If a single-payor health insurance
plan becomes a serious consideration, the final product remains
to be seen.
Should either a public option added to whatever is left of the ACA
or a single-payor health insurance system become a serious consid-
eration, heads will explode in the corporate offices of the for-profit
health insurance companies and the pharmaceutical industry. They
will mount a very well-funded anti-change campaign, with all the
usual dog whistles, “Socialism/communism, government takeover,
death panels, massive tax increases, lose your doctor, etc., etc.” This
will be an interesting insight into the members of the political ruling
class who are feeding at the trough of the corporate generosity of
the for-profit health insurance and pharmaceutical industry.
(continued on page 32)
MARCH 2020
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