The one insurance plan that people actually like after using private insurance programs is Medicare. That is an enormous positive vote.
1
Some of the costs could be classification, for example, if Medicare pays MDs $50 extra per month to "coordinate care" and Private Plan hires its own nurse practitioner for $50 per month to do it, only the latter might be tallied as Admin Cost.
Medicare in addition has NO upper level management making millions a year.
3
Umm. OMG. This seems to have missed the largest administrative costs that will be far FAR less with Medicare for all. The administrative cost that providers (hospitals, physicians, labs, etc.) spend navigating the many disparate and complicated coding and referral and claim submission requirments of the discordant and confusing array of ever changing insurance plans. That's why a doctors offices have more support staff than care providers and have staff dedicated full time to keeping track of insurance rules and getting paid. US providers waste so much time and energy (and money) on dealing with private insurance plans. That's where the big administrative savings will be. That's a huge oversight of this article.
5
@Avid NYT reader That's because "Medicare for All" isn't the same as "Single Payer". What is being proposed is not to do away with private insurance in favor of Medicare. The proposal is that all citizens, regardless of age, would have the ability to enroll in Medicare - which means that the multitude of submission requirements and money spent trying to collect reimbursement for services rendered really isn't impacted all that much.
@Michael Good point. In practice though most Americans would sign up for Medicare because it's the best deal out there by a very wide margin. Even now those over 65 don't have to sign up for it, but almost no private plan is nearly as good so almost all do choose Medicare. Some get private versions of Medicare (so called "managed Medicare" or "Medicare Part C") but they've proven less efficient and in many ways emulate key coverage aspects of Medicare anyway. So even the minority who'd choose private plans instead of Medicare would find themselves in plans that emulate the coverage rules of Medicare so administrative overhead for providers while not eliminated would be drastically reduced with a very meaningful impact. For some, the newly huge majority Medicare population would lead them to simplify and accept only Medicare patients (i.e. not bother to participate in private plans that complicate their practices). Good point still that it wouldn't be truly single payer - but the majority of the population would be Medicare.
Administration costs will always be high when the politicians constantly withhold and release funds and do anything they can to sabotage the system.
1
Since we just cut taxes AGAIN for the top tier, expanding medicare is utterly impossible. US taxes are about 1.8% of GDP, which places us among the lowest in advanced nations. (We run close to Turkey.) Republicans seem to be proud that we do not fairly tax corporations and rich elites. (So much easier to shaft the middle class cuz they can't buy legislators.) The GOP has made it impossible for us to meet current medicare and medicaid commitments, let alone expand them. As one of the many who has heavily contributed towards these Earned Benefits, I'd like my benefit to be there. Term Limits for all these clowns in Washington -- and may they enjoy exactly the same expensive healthcare as the rest of us. And NO Pensions.
6
As a medical services consumer this is what I’d like:
1) Focus on preventative care with managed care- pay for my health not procedures
2) Transparency to see what the real costs of care or medications are – even with a modest co-pay for a prescription/service, people should be asking, “What does this cost?” Stop thinking that the insurance company is paying for it – YOU are paying for it.
3) Consumers need to have some skin in the game. When you’re paying a portion of your bill you are more likely to question billing errors (or was the “error” intentional???) and use medical services more thoughtfully.
4) Increase the number of health care providers by lower educational costs for people going into medicine.
1
@MSalmon
"Increase the number of health care providers."
Many writers mistakenly assume that increased competition would lower costs, but medicine doesn't work that way because doctors don't compete on price, they just charge what everyone else is charging.
And it isn't because of a lack of transparency. Most fees are determined by what Medicare will pay, since private insurance usually pegs its rates to Medicare rates, and pays Medicare plus a certain percentage - usually around 10%. Since Medicare patients make up at least 60% of the practice of most physicians who serve adult patients, very few doctors can do without Medicare patients.
"A final critique of Medicare’s administrative costs is that they’re inefficiently low because the program doesn’t spend enough on anti-fraud efforts. This is hard to prove or disprove."
Actually, it is not. "June 04, 2018 - HHS made approximately $90 billion in improper payments to Medicaid and Medicare programs during 2017 and may require updated payment evaluation procedures to address improper payments, a new Government Accountability Office (GAO) report found."
https://healthpayerintelligence.com/news/hhs-made-nearly-90b-in-improper...
As Canadians, we have a simplified “Medicare” plan, each province having their own version. Some offer dentistry, BC does not, except for small children and a very basic plan for the poor. Prescription drugs are covered with an income based deductible. Premiums are being phased our, now $75 per month for a couple, children free. Glasses restricted. Hospitals fully covered unless cosmetic.
Not so perfect, but affordable. Most medium or larger companies offer additional drug, dentistry and optometry coverage for their employees, sometimes on a cost shared basis.
Bottom line, you are sick, you go to the doctor of your choice, you are admitted to the nearest hospital offering the best care for your needs. Ambulances have very modest fees.
Hospitals specialize to prevent duplication of services. Example, Victoria has two major hospitals, but only one has maternity, the other traits cancer and complex heart surgery - but both have emergency and general surgery. All major hospitals have helipads, and helicopters are used as air ambulances. One hospital in Vancouver specializes in Children’s health.
Perhaps not the Cadillac service you might get in the US but good quality, efficient, and available to all.
I think Canada is considered about tenth in the world for cost/value. With new treatments available everyday, it seems that all countries should all be thinking outside the box on improving care, promoting healthy choices, and truly affordable health care,
4
The article missed another important factor that private inusrers do - they negotiate favroable rates which shows up as evil profits or under administarive costs. In a compettitive market there are general incentives to keep high quality and lower cost not present in a public program.
Example: The same wheechair costing $5,000 under Medicare may cost only $3,000 to a United Helathcare.
Would the $2K savings show up as an admin inefficciency under Medicare? Nope, nt at all. There is no category for costly ineptness.
1
@Alex Schaefer
Sorry to tell you this, but Medicare "negotiates" lower rates when Congress lets it do so, by simply saying "this is what we will pay, take it or leave it." Since they are the elephant in the room (60% of adult care), few if any providers can afford to leave it.
But in one glaring example, drug prices, Medicare is forbidden by Congress to negotiate lower prices, because the Republican Congress is in thrall to Big Pharma.
3
Health insurance should not be tied to employment in a capitalist country. Free movement of labor to highest demand right? Let's make having Medicare as your insurance plan an option and See how it does.
5
Private insurance is often a lot worse than it is made out to be.
Try to get to see a specialist, and you can wait for months.
The billing system is a nightmare.
Costs are not transparent and hence outrageous at times.
Out-of-network huge charges often are slipped in.
The amount of time spent by patients and their families figuring out bills, dealing with the insurance company, the doctors, the labs and other providers, referrals when they are needed, who is in-, and who is not in-network, and the run-around when one part of your care system points the finger at the other as responsible and the patient is left unable to know who is billing for what, -- all this causes added stress and wasted time (money).
There should be either private Medigap or Medicare Advantage (MA) Plans supplementary plans, not both. Having both leads to confusion. MA undercuts Medigap, and costs the public too much.
A public system, one that was able to control the abuses of the pharmaceutical industry, no longer allowing the advertising of drugs - which not only adds to their cost, but leads to untold hours of discussions by patients and doctors over these ads for mostly not-needed drugs and leading to a public hypochondriac syndrome , and the wasting of everyone's time, (and drug company reps coming to doctors' offices pushing drugs), would allow doctors to regain their place at the center of health care.
And a system for all would reduce the disparities of the present system.
5
Let's assume that the cost for buying into Medicare Part A (hospitalization) is about $150/month. Medicare Part B currently costs $134/month. The Medicare Part B Supplement costs about $200/month. Medicare Part D costs $40/month. That comes to $524/month.
Medicare is paid for individuals -- not families. So multiply $524 by the number of members of your family. And don't forget that the Part B annual deductible is applicable to each member of the family too. A typical family is likely to find itself as financially-stressed by Medicare for All as it is by ACA.
Remember, though, that you and your employer will no longer being paying premiums out of your paycheck. My premium for myself and one child is $600 per month with large deductibles ($7000) and copays. I don't think Medicare for all will be cheaper but I think it will be more cost effective as we will have stronger negotiating power with pharmaceutical industries, hospital systems, etc. There is no logic to a profit-driven health care system as we now have - the motivations of the insurers, pharma and hospitals are to maximize profits for their shareholders. Patients are NOT the customer - they are the product!
2
@DJ I think single payer is the only alternative to this crazy-quilt hybrid system in which private insurance companies fix prices that the government then has to pay.
Thanks to the Clinton Era Medicare legislation and to ACA, no one can afford to pay for healthcare out of pocket anymore. You must pay for protection against financial destruction, and it costs the average person the equivalent of a home mortgage.
Medicare for All isn't a compromise ... it is an extension of the current unacceptable system.
@Sequel
You're forgetting the most important impact on costs. Medicare covers only the oldest, and therefore sickest and most expensive Americans, and can't spread the cost to younger, healthier people the way private insurance does.
You can't extrapolate what "Medicare for all" would cost from what you are now paying.
One reason that Medicare administrative costs are so low is that traditional Medicare does no preauthorization, commonly done in commercial plans and HMOs. Several years ago Medicare released individual physician billing data, and my local specialty society was shocked at the blatant overutilization of expensive testing by one of our members. We are talking about a factor of 10 compared to other members. Yet Medicare does nothing and this pattern continues. If audited, it is easy for a physician to claim his/her patients are sicker than others. Physicians may gripe about HMO's overbearing oversight, but they would easily spot such abuse. And that oversight results in increased overhead but yields great savings.
1
Could someone please tell me why we are so intent on paying he health bills when no one ever asks why we are sick in the first place. Why are 22 countries healthier than we are? Why are we the world leader in obesity? Why do we administer to infants twice as many vaccine injections as the average of the 12 richest countries in the world do? Why does adult onset diabetes occur in children?
In short what is it that we are doing that is destroying our health?
ps see:
http://apps.who.int/immunization_monitoring/globalsummary/countries?coun...
3
Surely Dr. Frakt has tongue in cheek when he suggests that "care management" and "better providers" are benefits that derive from private plans' higher administrative expenses. "Care management" equals the vast efforts and manpower that insurers put into denying care, even when providers insist it is life-saving. These create huge externalities -- i.e. costs of insurers doing business that others pay for -- which burden the health system, providers and patients. And better providers? Most of my best providers take Medicare. The ones that don't could negotiate much lower cash charges if not burdened by having to hire people and waste his own time on the time wasting our private insurers generate with the games of non-paying they play.
5
Those added services you speak of - care coordination for chronic conditions and physician networks? Don't need 'em. Don't want to pay for them.
1
universal healthcare, taxpayer funded. no stipulations. and yes, we can pay for it: lower defense spending by 8%, scrap corporate welfare, and charge a 1¢ fee for all stock transactions—personal or institutional.
and no need to raise taxes. done.
5
Yes, by all means let's ask someone who profits greatly from the status quo to critique the current system and offer alternatives. Wonder why we get a lot of description of the problems with the current system followed by reasons why all of the available solutions would be *possibly* worse?
4
Medicare for All is the obvious answer for people who study health policy. But, as demonstrated in your article, it requires some work to get deeper into the analysis that clearly supports this conclusion. No matter what the cost of the issue at hand, we are at a place in our country's history where a lot people (living in electorally strategic states) are not interested in facts and prefer to make all decisions based on emotion and bias. This is dumb but it is real. Medicare for all, with negotiated drug prices (currently allowed for Medicaid but not for Medicare) is the way to go. But it depends on who makes the proposal. "Obamacare" was originally a Republican idea. Until a black Democratic president adopted it. That pretty much tells you all you need to know about the prospects of Medicare for All.
3
Of course Medicare for all is the way to go, like every other advanced country. But oh, just think how hard it will be to get there, with Republicans blasting every form of media with torrents of lies. Then once M.F.A. is established, more lies to gain control of the government again, which just might work considering the aversion to anything new shared by most of the populace. Then they will do everything they can dream up to sabotage it. Getting M.F.A. will be extremely hard and worth it, but why does one of our parties have to be so awful?
3
We don’t need insurance, we need health care. Our country would be a better place for everyone if all had the health care we need. One service for all except for active duty military and a small number of top governmental office holders. Call it Medicare if you want, but present Medicare allows for far too much waste.
3
All countries with universal healthcare coverage have much lower costs and much better results ( perinatal mortality,life expectancy,price of prescription drugs,accessibility and affordability to healthcare services) than the United States .
America healthcare has to move away from the vultures of Wall Street and Medicare for all would be the right way to bring America healthcare system to the level of the other industrialized countries .
Now America ranks 43 ( !!!! ) in the pro capita healt costs / life expectancy in the latest Bloomberg research , and it has maintained the same third country level in many previous statistics.
Quite shameful and immoral.
7
Trying to be fair to both side is difficult in the case of Medicare. And Mr. Frakt's column shows the strain. Why, one wonders, does he leave out the numbers when writing about private plans?
1
If so many other advanced nations can successfully provide (all) their citizens with comprehensive healthcare, which yields better metrics: lower infant mortality, lower disease rates, older life expectancies, etc., at about half of what we Americans pay, then what exactly IS going on? We could examine the other programs, and pick the best proven parts they each have to offer. But no, we hobble together a new, untested thing, bound to fail or be inefficient, so that the monied interests can keep gouging from us every last penny possible. After all, they pay our elected officials well to make sure this happens. It is all about the money involved, and keeping Americans poor, sick, and, most importantly, ignorant of what everyone else in the world is doing better and cheaper. And hey: it works. For them, not us.
5
Medicare for all is a must. The only other proposal on the table is high cost, low benefit insurance for healthy people and nothing for people with pre-exiting conditions.
The money in medicine has become a completely overwhelming moral hazard for doctors, hospitals, pharma, medical billers, amd bill collectors.
The next GOP target is to get rid of ALL “entitlement” programs: medical, SS and VA. McConnell was very clear about this earlier today. The GOP wants people to die, people of color most of all.
In a nutshell I don't care if some features might be missing, the fantasy that there would be more or better choice is just that fantasy.
We also need a complete overhaul of the perverse incentives that have caused the problems in the first place. But to do that we need to get big pharma to quit paying their senators and representatives to vote against the best interests of the people in their districts.
3
Re “Is Medicare for all the answer to sky-high administrative costs” (health, October 16):
Your focus on administrative costs is incomplete. The health system is dysfunctional—Medicare and private—on many levels that are ‘hidden’ from public scrutiny.
For example because physicians feel vulnerable to frivolous suits they practice defensive medicine—by ordering more tests and consultations than are needed in hopes of warding them off.
This adds greatly to administrative costs.
One way to reduce defensive medicine is to deal with medical liability in special health courts that operate similar to workers compensation.
It is likely that patient would accept health courts as a trade-off for Medicare for all.
4
This article misses one major point. "Private" Medicare plans -- Medicare Advantage plans -- don't participate out of the goodness of their own hearts. In many areas, health insurance companies make a good profit from Medicare Advantage. Any determination of adminstrative or other costs needs to take into account what "costs" are actually profits for these companies.
9
@ms, Under Obamacare, private insurance companies are not allowed to be very profitable. There is a cap on profits.
2
Austin Frakt writes: "private plans ... engage in care management, which could help coordinate care for people with chronic conditions. Private plans also establish networks of physicians, which could help steer enrollees to higher-quality providers."
"could ...could." And the moon could be made of green cheese. Care management "could" be run in order to deny coverage and otherwise minimize costs in every way possible; and networks of physicians "could" help steer enrollees to doctors with the least experience and the lowest prices. Which "could" scenario seems more like Real World, USA?
13
@GordonDR, it is obvious to me that insurance companies steer people to networks of their chosen doctor's because these doctors are willing to accept lower payments. In my opinion, it has nothing to do with having better doctors or more qualified doctors.
7
Insurance is gambling by both the insurance company and the insured. No one cares if insurance is efficient because with this gamble the house stacks the odds in its favor and always wins. People do care that their health care and outcomes are in their favor. When everyone is covered by a single entity regardless of any qualifier, then this is no longer insurance. The most conservative and cost effective way to assure good health outcomes is through preventive care and health management. In the end, no one gets to beat the house upstairs, but the system can be rigged favorably to stack the odds in favor of the longest and healthiest life for all and in turn for a more productive and happier society. Life is too short to treat health care as a casino.
7
@Mark
"The most conservative and cost effective way to assure good health outcomes is through preventive care and health management."
Unfortunately, this statement perpetuates a common misconception. In fact, preventive care is a societal good because it can save lives, but it almost never saves money. All the preventive colonoscopies and prostate exams are far more expensive than an early death from cancer of the colon or prostate that is discovered too late to treat.
Sorry to tell you this, but as a doctor, I'm telling you the facts. Death is always cheaper than expensively treated life.
Existing Medicare serves the 65+ population, so costs related to pregnancy, childbirth, infants and children and other medical issues relating to a younger population are not part of the current Medicare framework. Covering this new population will increase Medicare costs, how could it not? Are the people clamoring for Medicare for All willing to have higher Medicare taxes deducted from their pay? Certainly the premiums will increase.
Contrary to popular opinion, Medicare is neither cheap nor free, covers only 80% of medical services, does not cover prescription drugs unless you opt for Part D (extra cost), and does not cover dental or vision.
4
@Lynn in DC And just look at all the younger people (many chronically ill and running up big bills) coming into the Medicare system in their 40s and 50s after qualifying for Social Security disability benefits. Their numbers have skyrocketed in the last 15-20 years. Have taxes been increased to account for this population?
1
@Lynn in DC
Cost of medical care for over 65 aged is much much higher than those under 65. So, Medicare for all will be even more cost effective and offers better and more healthcare. Health INSURANCE is an abomination.
2
@Lynn in DC
"Are the people clamoring for Medicare for All willing to have higher Medicare taxes deducted from their pay?"
That is not an argument for being against MfA. The current Medicare taxes only benefit you when you turn 67 years of age or become disabled. Pre-Medicare you are already paying thousands of dollars for health insurance and easily denied. I don't see how increasing the Medicare taxes would be any different than paying premiums and deductibles. Everyone would be covered and you'll have health insurance that won't deny you.
"...so costs related to pregnancy, childbirth, infants and children and other medical issues relating to a younger population are not part of the current Medicare framework."
Also not a good argument. You know who insurance companies are quite willing to insure at lower premiums? Young people. They won't be that much of an extra cost burden to the Medicare system for the benefit of lifetime insurance.
And I have never understood why this country does not consider dental, eye, and hearing care part of medical care. Our teeth, eyes, ears, and yes feet, are part of our bodies and on occasion they require treatment or preventive care.
The problem with our current system and with the ACA is that it forces us to do all the work. We are forced to choose new plans each year, answer questions to determine if we qualify for subsidies, notify the state if our economic status changes. For a technologically advanced society we sure don't make it easy for people to have access to medical care or to be charged appropriately for the premiums.
We need a single payor system already. It's time we joined the rest of the civilized world when it comes to medical care. Our system does not encourage continuity of care, getting preventive care, receiving ongoing treatment when it's needed. What it does make simple is dropping out, mix ups and tragic mistakes, and denial of care. The problem is that our politicians encourage our distrust of the government by the way THEY are ruining things. We have to vote them out.
23
@hen3ry It doesn't consider dental eye and hearing part of our care because it's not insurance for health care. it's insurance for profits.
2
An important article, generally factual, with a mildly progressive axe to grind. Private insurance companies, hospitals, and doctors are not without blame; in fact, regrettably, one hand washes the other. Private payers suffer this unholy symbiotic group (far from gladly) given the absence of alternatives.
Fraud is more of a problem than this article suggests. Medicare pays providers quite promptly, to anyone with a provider number, generally easy to obtain. This is a honeypot for fraudsters. Big money results for successful schemes, yes risky, just like major drug dealers ... yet less likely to be discovered and prosecuted.
I'm not against medical insurance for all American citizens. Unfortunately, our progressive friends want to provide medical insurance for everyone who shows up anywhere on U.S. borders. When a country has a welfare state mentality, and all non citizens are welcome, then frankly we are doomed because two plus two doesn't equal 22.
2
@Stew R
Really?
You are totally mistaken! No, we don't want to provide medical insurance! We want to provide healthcare by removing "insurance" from it.
@SR
Healthcare for whom? U.S. citizens? Anyone who crosses our borders, legally or illegally?
At what cost to whom? If you tax the 1% at 100% of their incomes, that won't cover the cost. Who do you propose should pay for this healthcare?
@Stew R
Don't be silly. All taxpayer funded, government services are understood to be for tax-paying citizens. Do a few illegally game the system? Sure.
Can the 1% be taxed for 100% of their income? No—not only would it be politically impossible, it would also be amoral: everyone should pay their fair share, but no one should pay more than their fair share.
The solution is reprioritizing what our government spends our tax money on: I say no to corporate welfare and no to excessive defense spending. Minimize those, and MAYBE EVEN a 1¢ transaction fee on stock trades (gasp, how will the rich survive?!!!!!) and we've got universal healthcare covered. Period.
US healthcare is 17% of GDP.
In every European country it is 10 to 12%.
Our OECD numbers are dismal.
It is not possible to spin a legitimate narrative that results in the conclusion that "Medicare for all" is more expensive than the Byzantine system of private opaque bureaucracies that exist in the US today.
Also, health care for profit is evil. Denying healthcare based on pre-conditions, or having caps, etc are simply evil.
For-profit motivation does NOT create slick, efficient, less expensive delivery of healthcare. It actually achieves the opposite - fat, bloated bureaucracies with everyman for himself, each guy building little fiefdoms within the hierarchy. Climbing the hierarchy matters far more than any stinking patient. For a textbook example, examine Florida's governor Rick Scott.
Get rid of the middlemen, the huge bloated, opaque private bureaucracies. The government's Medicare bureaucracy is far more efficient and transparent.
17
Given the results of private insurance’s “health care management” and “provider networks”, I will happily forego those “benefits” for a nationwide health care system such as Medicare.
9
When has anything the U.S. government handled not had sky high handling costs?
3
@KH
The government Medicare bureaucracy is far less expensive and more efficient than any private insurance bureaucracy you can name. Please prove me wrong.
14
Unfortunately, the government is very efficient at transferring my tax dollars to support the southern states and their populace who knowingly elects congressional delegations to ensure government will not work for anyone.
2
With Republicans 100% against Medicare for all, all of you who want it should be voting Democratic in the midterms.
11
‘Medicare for all’ is what the rest of the western world has. The total cost is far,far less than your system and provides excellent care. In Australia we have the option of topping it up with private insurance which again is far cheaper than your system.
If you condemn Medicare for all you are frightened of something about which you are ignorant
10
@Oleh, I respectfully disagree. Many people who support Medicare for all do not understand that in countries with socialized medicine such as Great Britain or Canada, the entire system is radically different. Medical providers in these countries are paid far less then their American counterparts. In the United States, a person can easily pay $300,000 or more for the college and medical school education. In many countries with socialized medicine the cost of an education is significantly less. In the United States, doctors pay tens of thousands of dollars a year or more for malpractice insurance. In many countries with socialized medicine, there has been tort reform so medical providers to not pay such large bills for malpractice insurance.
One of the biggest questions about Medicare for all is how will we pay for this? Studies have shown that income taxes in the United States would have to be doubled or worse. Many people in the United States support medicare-for-all until they realize at this program will not be free. The money has to come from somewhere.
I could go on and on.
3
@Fatso Yes you could go on and on and you would just be more wrong than you are now. How do you pay (and how much do you pay) for your healthcare now? I guarantee that if you could buy into Medicare right now, your cost would be lower and your coverage (not to mention outcomes) would be better. But go ahead and defend the right of corporations to increase profit by increasing misery.
@Fatso
Quite right. Will Doctros accept lower payments? no PCP in westchester would dream of working for $150k as in Great Britain. The average is $250K here.
Geezus. We can AFFORD it. Stop giving the 1% and .01% tax cuts. Stop over-spending on defense - we can kill the world 10x over with the weapons we have and we're killing everything with climate deniers anyway. Stop allowing Congress to give itself raises AND healthcare. If you want to spend some money, spend it on healthcare for WE THE PEOPLE who supposedly the government works for.
19
@PC
Thanks; good points. I would add that an unhealthy lifestyle is encouraged / supported by society in many ways. A person with a minor leg problem is subscribed drugs for the pain instead of being encouraged to do 20 minutes of stretching ... Children see reality on a rectangular screen because it's too dangerous or inconvenient to go out and play ... Diabetes begins early because 'convenient' processed food which is not called 'desert' still contains sugar and/or corn sweetener, so children become addicted ... Suburbia creates an extreme dependence on automobiles so parents need to drive their children everywhere - reaching the age of 17 or 18 means 'freedom' merely because they can drive ... Appears to be changing but too slow, and many lives are impacted in ways that often cannot be reversed. On and on, you probably have more examples ... I recently read that for the first time, today's young people are predicted to have a lower life span than the previous generation. That's progress? Maybe it's just one more chapter in Darwin's ' Survival of the Fittest' epic.
I have the so called advantage plan. and part D drugs which should protect me rather well, don't you think? They promote it as providing drugs with just a small fixed deductible of a few dollars or a negligible small copayment of 1% (whichever is greater) . But first I must reach that point by paying about $10,000 to get through the "bubble" and reach catastrophic every year. But that's all there in the fine print, and I am careful. And the deductible sounds manageable, you may agree. So all that might not bankrupt me I suppose. Although all that is annually but what the heck.
I'm in the catbird seat and feeling pre-e-e-e-e-ty good, á la Larry David.
Ha! Just one of my drugs costs $144,000 annually. My deductible seems still manageable and small. But when you get down to real money, I don't qualify for the small fixed deductible because that tiny percentage is greater. Still no problem. Except that 1% is $14,400 a year. Medicare for all? Read the fine print and be sure to add up real numbers And remember it's the expensive drugs that you're worried about. Aspirin you could pay entirely. When the drug is really expensive you really are on your own. There are no drug plans without this "small" deductible.
1
Still better than any other choice in the US.
As much as I’d love to see Medicare for all, I’m not holding my breath. If Congress was forced to use it, then we might see it become reality. As it stands now they just see $$$ from insurance companies.
7
Another failed article. The problems with Medicare are directly related to Congress adding chains to changes (DME and drugs) and allowing all manner of for profit lobbyists to run Medicare. make the patient the focus, not profit. Start by not calling Medicare an entitlement. I paid for it and so do others.
12
Why do members of Congress get free medical, dental, and vision for life paid for by taxpayer dollars? Why do they get pensions paid for by taxpayers? Why don't WE THE PEOPLE have those same benefits?
10
@Humble Beast According AARP, since 1984 all members of Congress pay into Social Security and are eligible for the same benefits that all participants receive. Members elected after 1984 pay into and are covered by the Federal Employees Retirement System (FERS) and become vested after five years of participation.
Prior to the ACA, members of Congress received the same medical benefits as other employees. Since January 2014, members and staff purchase health insurance through the District Of Columbia’s small business health options program. They receive the same subsidy (72%) as federal employees who purchase health insurance through the Federal Emplyees Health Benefits Program (FEHBP). (Source: snopes.com)
In retirement, members of Congress are covered by Medicare, Part A.
I'll play your little game. Why should “federal employees” (Congress) receive free / subsidized healthcare at taxpayer expense, but taxpaying citizens nation do not?
We are the only advanced nation in the world that doesn't provide universal health care for its citizens.
1
You just proved my point.
1
We need Medicare+. No more private plan supplements, Part D, etc. Take out the administrative costs, pay doctors what they're worth (yes, that's a lot. They went to med school and specialized). Take the money out of the bloated off-budget wars and the defense budget. Keep the politicians out of it.
10
None of the other first world countries that embrace single payer (all of them) would swap for the US for profit system, the worlds most expensive. None of them would tolerate outrageous drug prices, complex opaque billing, perverse incentives, insurance skullduggery, a trail of medical induced personal bankruptcies, millions uninsured and millions more unable to afford out of pocket costs.
Many articles like this, including one recently in the WaPo, are penned by paid stooges for private sector healthcare racketeers, intent on scaring or confusing the long suffering American public, petrified the gravy train will end with an empowered progressive surge. Approach with caution.
10
Did I miss the part of the analysis that addresses the costs born by providers for an infinite number of plans, with different pay rates, different co-pays, deductibles, different formularies, different reasons for killing or delaying a claim?
Practices waste a lot of time resubmitting claims, verifying and collecting co-payments, re-issuing prescriptions written in a format that is accepted by the company ( 90 day instead of refills) or substituting medications for ones not covered. They waste time getting prior auths for tests, procedures, surgeries, from different companies who have different criteria.
One payer? One set of rules covering all transactions. Oh wait a minute... scotch that, ignore this comment. I might lose my job if we fixed it - we wouldn't need so much staff.
21
My wife is a physician. Although Medicare reimbursement rates are not always adequate, Medicare is a far more reliable payer. By this I mean it is not uncommon for commercial insurers to agree to pay for something and then refuse to do so. This triggers appeals which is obviously the insurer’s game plan. The fear many people have, and I am one of them, is we would actually end up with MEDICAID for all which is not the same thing at all.
20
"Medicare for all" perpetuated by Bernie is profoundly a misnomer. Bernie should know better. He belongs to the Medicare population. It follows that outside this population requires health care, rich or poor. Despite its presumed deficiencies, ACA gives this option to the population beyond the Medicare universe. Anyone can crunch the numbers to GOP's delight but ACA, a proxy to socialized medicine, is like to defy a geometric axiom that straight line is the shortest distance between points A and B.
I assume that the average age of those with medicare is significantly higher than those with private insurance funded health care. It is factual that as one ages his medical costs increase, thus medicare will show higher costs.
In addition, the obvious answer to the cost of private plans that offer Medicare benefits is to eliminate this cost distorting situation. Getting insurance companies' involvement in health care would do this.
2
We are not likely to get “Medicare for all” any time soon. Health insurance is a HUGE industry and we need to start the changes in relatively moderate steps. Having the option for people under 65 to buy in at rates that cover their costs could be step #1.
8
I propose Medicare at 50 as an alternative. Age 50 is about the time of life when people get more acquainted with the health delivery system, and at same time it would take pressure off the rest of the market and make Obamacare much more affordable.
9
One partial solution to the health care crisis is direct primary care, where patients pay cash out of pocket for day-to-day medical care, thereby saving very significantly on medical administrative and insurance costs, while at the same time having much greater control over their care. Insurance makes economic sense only for catastrophic care, and should be used only for wraparound catastrophic care policies.
6
The problem with that is the cost of ANY medical care nowadays. I have pretty good insurance through my job. I also have a thyroid condition that requires monitoring. I recently had a blood test for only my thyroid that I paid $120 for. You do realize that for many families $120 means either paying the lab bill or paying the rent.
3
@Sandi, yes, for lower-income patients, day-to-day care would have to be covered by the government. For everyone else, direct pay would lower costs by creating a transparent and rational market where costs reflect reality, something we don't have today.
This sounds good but people avoid routine preventive care if they have to pay for it.
Medicare is not free. Only Part A is free. People who want Part B pay $125 a month & up for that. People who want prescription drug coverage pay extra for that. People who want coverage above some of Medicare's limits (like the 20% Part B doesn't cover) pay yet more for a Medigap plan. Even a cheap Medigap plan like mine (High Deductible Plan F) costs $70 a month (& kicks in only after I have paid the first $2200 in Part A & B copays & coinsurance).Other Medigap plans cost more.
And Medicare does not cover dental or routine vision care. So people have to budget for that. "Medicare Advantage" plans that offer dental/vision provide only bare bones coverage.
What I think I would prefer to "Medicare for All" is access for all to the excellent Blue Cross medical/hospital plans that cover members of Congress, plus access to their vision & dental plans. People who couldn't afford to pay the same premiums members of Congress pay would be eligible for the same type of subsidies they get under the ACA.
I also think it is absurd that while we continue to reduce taxes for the wealthy we also continue to raise threshold levels on deductibility of medical expenses. It is not unusual for an elderly person to have expenses not covered by Medicare et al in the $15000 - $20,000 range. Personally, I think all medical, dental, home care, etc. expenses above the threshold should be a tax CREDIT, not a deduction, and if this doesn't apply to all, it should at least apply to the elderly.
12
Socialized Medicine removes the profit motive which is what makes Health Care in the US so expensive. In Europe, there are no TV advertisements for Prescription Drugs which are now ubiquitous in the US. Just from watching the TV commercials, an outsider would have to assume that that US is the sickest country that ever was or could be.
28
@DILLON
It is the sickest "rich country" measured in terms of infant mortality and life expectancy. As for the sickness of the mind displayed by its leaders - I'm sure the US is sickest.
The decrease in administrative costs to run Medicare compared to private insurance is only one half of the coin. The other half comes in the significant administrative savings that will occur in hospitals and your doctor's office for the paper work that is involved with multiple payers and multiple levels of coverage. Also, your family doctor has less chance of burn out if you remove the insurance companies from his office.
20
@ErnestC, paying for day to day primary care out of pocket would remove all of these costs entirely and result in very significant savings for everyone. Insurance should be used only to cover medical emergencies, and it would then be much cheaper.
If you are a Medicare recipient and have any doubts about the fact that the government can run a health system more efficiently than private insurers, just look at the monthly premiums you pay to the government for coverage of 80% of your care versus the much higher cost of supplemental private insurance for the remaining 20%. And if you think the private, government-sponsored Medicare Advantage programs are a bargain, I advise applicants to first see if all of your regular doctors are in the network. I think you’ll be in for a rude awakening.
I can’t imagine that the billions that Americans now pay to private insurers in premiums and co-pays would not be enough to fund a robust public health system. The keys would be to place some sort of price controls on greedy health providers and find jobs for all the out-of-work private insurance bureaucrats who now relish the idea of denying us coverage for legitimate procedures and services.
11
Conceptually, single payer, one stop, full access HAS to lower admin costs.
When I go to my doc's office, there are at least 8 people behind the desk and behind the scenes figuring out appropriate co-pays for each patient, filing claims with various different insurers, responding to ICD-and procedure coding questions. I once had an oral surgeon who had an employee whose SOLE job was to find ways to make sure or get the best chance that the procedure would be covered by that person's insurance.
While I'm sure there is huge opportunity to streamline and take costs out of the current Medicare admin system, eliminating the need for providers to connect and interact with hundreds if not thousands of different insurers all with different coverages and terms presents an opportunity too.
Walk in to a provider, you're covered, much less fuss, muss and questions....and Americans are healthier as a result. fuss, no.
6
@EBD, what would remove these costs entirely, is if everyone (except for very poor) would pay cash out of pocket for day to day primary care (direct primary care model). Using insurance to cover medical emergencies only would result in highly significant savings for everyone.
@EBD When I go to my doctor's office, there is he, the secretary who makes appointments and provides you with any prescription for medicine that the doctor has prescribed, and the nurse who measures your blood pressure, does inoculations, etc. that don't require the doctor's intervention. That's it: no "administrative" costs at all! (And it's alot quicker, too.)
3
Seniors over 65 get Medicare Part A without charge and Part B for a nominal charge. So do disabled people of any age although this wasn't part of the original plan. Presumably this has to do with seniors having paid into the system for years. If everyone is now eligible for Medicare who is going to pay for it? All these progressive programs sound great until it's time to figure out who is going to pay for them.
1
Profits for health insurers are included in those administrative costs. What is the value judgement about whether those costs are worth it?
2
I have been in the health care business since 1968, both as an administrator and a health plan consultant. I will not opine on Mr. Frakt’s article and its conclusions, except that it leaves out the opportunity for increased quality and lowering costs.
With the full implementation of ERISA, most commercial coverage is provided by self insured or some similar types of payments. This means that the providers are subject to anti trust laws. So there can be no rationalization of services or consolidation for efficacy. This leaves excessive duplication of services and the need to use and bill for these services.
Medicare for all would eliminate that barrier to access and improvement. That is where the savings is. The president is being steered by big health insurance to make his silly statements (Pence perhaps?). Medicare for all would eliminate the big money going to political parties and their associated hacks (Like Harvard).
17
I deal with my 87 year old Mother's medical issues and costs. She has Medicare and a BCBS Medigap plan and I have been quite satisfied with both. She was in a fairly severe car accident a year ago last August. It took about 2 months to get Mother home from the hospital and rehab and there were lot of expenses (ambulance & first responders, ER, hospitalization, and rehab) and it was a bit of a hassle to figure out which insurance paid for which expenses (i.e. car insurance, Medicare, and Medigap). But, after 12 months, pretty much everything got paid except for about $250 which wasn't covered by anybody. All in all, I am pretty happy with it.
The Medicare Part D is a minor irritation, however. I think it is ridiculously complicated with that "donut hole" thing and I am very offended that Congress specifically forbade Medicare to negotiate with the Pharma companies to reduce drug costs. [Just another example of a corrupt Congress not working in the best interest of the general public.]
21
@Engineer Part D was passed under George W. Bush. They could not have passed it if Pharma didn't go along. Pharma has a very powerful lobby, and gives lots of $ to congress critters. Hence the provision that Medicare could not negotiate. If congress got rid of this provision--even in the absence of Medicare for All--it would save a ton of money.
At the expense of some very nice jobs, heavily concentrated in NJ and PA.
5
Medicare does not have some costs that private plans have. It doesn’t pay agent commissions and doesn’t have an extra charge for profit. These could easily increase total costs by 5%.
8
I am wondering to what consumer's demands the private insurances respond? The main demand, the a cheap comprehensive medical insurance, is not addressed by the private insurance. I also doubt the value of a net of specialists. Insurance doesn't coordinate the health care. It has a net of doctors who agree with the insurance conditions, but that's about it. Moreover, just because the doctor's name is on the list , it doesn't guarantee that he is still in the net. You have to double check if you don't want unpleasant surprises. I swap all these "valuable" features for low premium any day of week.
8
I wouldn’t worry about it. There soon won’t be any kind of Medicare. Andy Gump, I mean Mitch McConnell, said today that we need to make changes to entitlement programs, that is get rid of them, to make up for the deficit caused by the tax cuts. It’s everyone for themselves.
5
This is a good article with a rather dishonest conclusion. Advantage plans are tweaks to Medicare to keep insurance companies in the picture. This article, after producing overwhelming evidence of the efficiency of the single payer approach, puts forward Advantage plans as evidence for something of great value that would be lost. No evidence is presented for the significance of the lost features or of the impossibility of dealing with them in the single payer context. That 1/3 of people choose Advantage plans proves little, since feature comparisons of plans are so arcane that selection reflects advertising more than reason.
The conclusion, that reasonable people might differ about single payer, comes down to sleight-of-hand. The whole article has been about efficiency, and there is in fact nothing to argue about on that subject. On efficiency single payer has won hands down. But instead of saying that, we switch subjects and start talking—without any specifics—about features that might be lost from Advantage plans. It would be perfectly fine to have an article about plan features and how to deal with them, but that’s not this article. This article is about efficiency, and it does the public a disservice by covering up its own results.
19
@Jerryg
Agreed. Medicare Advantage under Medicare administration.
1
Keep ALL profits out of healthcare, period. No more "private" anything. The so-called "non-profits" actually reap plenty in the form of tax breaks and money in the bank, and have administrative structures identical to for-profits. Why are we subsidizing the greedy capitalist-corporatists at the expense of our citizens' health?
24
@Threedog - Amen to that. Watching from Canada it seems you have a really complex system. Just take the profit out of it and you would have a better system that would include everyone. Isn't that what is best or the most number of people?
2
Let's get employers out of the health insurance equation so they can focus on their real businesses. Our current system puts American employers - especially small businesses - at a competitive disadvantage because of the tremendous time and resources needed to successfully navigate the health insurance marketplace. And it restricts employee mobility to the detriment of both employers and employees.
It is time to decouple health insurance from employment and implement Medicare for All. I am surprised that business people are not clamoring for this type of change.
27
I sincerely hope we achieve universal healthcare coverage and hope we can make improvements in costs. Universal coverage will require trade-offs. I don’t feel strongly about any particular means of achieving universal coverage.
I do however have concerns about administrative costs. Over the last 3-4 decades there has been an explosion of administrators working in healthcare the outstrips by far the expenses and numbers of those actually caring for patients. I don’t think the cited administrative costs capture this phenomenon. By and large these numbers serve the growing complexity of navigating rules and laws of third party payors. And I don’t think typically cited administrative costs include the documentation and data collection duties foisted onto doctors and others that provide care.
5
You should do an up to date comparison to the Canadian system. Many decades ago Walter Cronkite did a special comparing similar hospitals in San Francisco and Vancouver. The SF hospital had a 5 story building with 250 employees for billing, while the Vancouver one had only 5 people. Every insurance provider has it it’s own set of forms. For a major operation, in the US they generated a thick folder of bills; from the surgeon, his assistant, the anesthesiologist, for the supplies, for the operating room, etc., etc.; in Vancouver only a single page. In the end $.05 of every dollar in Canada have went torward administration, while in the USA it was $.20.
In Canada, most expectant mothers get prenatal care and so the number of premature babies is far lower than in the United States. At a time when neonatal intensive care costs something like $200,000 per infant this is a significant savings. The cost of the prenatal care is only around $400.
Of course the Canadian system is not perfect, and decisions are made on how much to spend and what to spend it on. This is true of all systems. For the most part Canadians are much more satisfied with our healthcare system than Americans are.
20
The sweeteners given to Kaiser, Aetna et al to incorporate Medicare patients into their HMO-style plans onviously added overhead. The convenience of having salaried MDs and an integrated system has been appealing. But continuity of primary care relationships and more individualized healthcare decisions are often sacrificed as a firewall against providing care (managed care oversight) helps reduce the best medical practice. Colonoscopy, for example, could be restricted in an HMO plan while a basic cancer screening offered in classic Medicare coverage.
Take away some of the perks given to Medicare Advantage plans and develop better fraud protection.
Meanwhile, the profiteering, CEO salaries, advertising and window-dressing now part of major hospital empires could be trimmed.
Medicare4All could reduce the high cost of delayed care, ER visits by the uninsured and the huge cost of the last 10 days of life. Use of the inhumane ICU setting for a terminal patient could be reviewed. Rather than give CVS the job of primary care physician/nurse practitioner- help people form a long term relationship with their doctor- a major help in reducing error and improving early interventions that save money.
Universal coverage is simply the best way to save money & improve health. Look around the world at the most advanced industrialized countries.
12
This is interesting stuff but kind of misses the big picture.
If $8.1 billion in administrative costs are 1.1% of the puzzle, that leaves 98.9% or $728 billion in payments to providers.
The "Advantage" in Medicare Advantage is that unlike Traditional Medicare, it includes a substantial annual deductible and an annual out-of-pocket cap as well as narrow networks and other "managed care" features. The result is lower utilization of services (that's the 98.9% part).
My Medicare Advantage policy costs only $134 a month, and includes a gym membership worth about $40 a month. And I don't need any supplemental Medi-gap insurance. I do pay more out of pocket for the first few thousand in any bills and then zero after.
But all Medicare (and Medicaid) also set the prices for treatments at a level far lower than private insurance, which means it is subsidized by higher prices for private insurance.
Its hard to imagine that our health care system could survive in its current form with Medicare-For-All. But the current medical pharmaceutical complex may just be unsustainable anyway.
Big change is coming to US health care.
2
If we had Medicare for all it would eliminate a very important problem many patients now encounter.
Many physicians refuse to accept Medicare or, for that matter, Medicaid patients because of payments. If everyone in this country had the same insurance, there would no longer be any financial incentive for them to do so.
Insurance is worthless if you can't find a physician who will accept it.
3
@Steve, so in other words you are suggesting that there be a monopoly on payments. The only game in town would be Medicare or Medicaid. if the government decides to pay doctors $10 per office visit, too bad.
What you call Financial incentive, I call earning a living. If the government had a monopoly on pain doctors and hospitals, many would be driven out of business. Very few talented and intelligent young people would be willing to pay hundreds of thousands of dollars for a college and medical school education to become doctors. A Medicare for all program would eventually lead to a shortage of doctors, medical equipment and innovation.
1
America's healthcare system has an excessive cost problem that no private insurance plan can fix. Medicare for all has the best, perhaps only chance of breaking the cycle of excessive profit taking at all levels of the healthcare industry. Medicare for all would put an end to the moral hazard between private health insurance companies and healthcare providers in charging higher rates and providing more, often unneeded, tests and services to return higher profits to themselves and to the insurers. Medicare for all could also effectively set reimbursement rates to break the abusive cycles of surprise out of network fees that many hospitals and ER providers are using to enhance their profit margins today. Medicare for all could also negotiate with Big Pharma to set reimbursement rates for drugs to be no higher than the average of those paid by the OECD nations. Why should Americans subsidize the drug industry for the rest of the world. The American healthcare system is presently rigged to maximize profits for all involved at the expense of the individual under care. Medicare for all would break the multilayered cycles of collusion that sustain this cruel, cynical system.
5
The largest private (i.e., for-profit) health insurer in America continues to generate huge shareholder dollars, while providing zero health care for any American:
http://www.startribune.com/unitedhealth-group-profit-jumps-28-percent-be...
Every year when the local newspaper lists the local executives with the highest salary, options, and benefits compensation, guess whose CEO is always at or near the top of the list: UnitedHealth Group.
There are dozens of other, smaller health insurers that are also generating profits for shareholders while providing no actual medical care. How can anybody possibly argue that this system is more efficient and lower cost than a single-payer "Medicare for all" system that removes these middle men and their profits?
If we instituted a truly comprehensive Medicare for all that covers drugs and the other factors that the author clearly and fairly states make the current comparison un-equal, these efficiencies would become all the more obvious. Only in America are private profits more important than public health.
21
One reason that administrative cost are lower for Medicare is that private insurers are paid to process many of the claims for the government programs. This is done on systems developed for private plans and the government claims can be processed without the expense of building a system from scratch. I’m a former private insurer employee.
2
@Beth Boam. Good for you. So none of the readers realize that the big insurers fight madly to administer Medicare?? And that Advantage care has signifany DISadvantages and again administered by the big insurance megatrons? The naïveté is so telling.
Not sure what your point is, I was only pointing out that if the government had to build and maintain the systems to administer claims, the administrative cost for Medicare would be higher.
If Medicare paid it’s fair share that would be a change. In rural America with the young people are moving to cities the hospitals are more dependent on Medicare than before they are closing in record numbers.
This would likely be the first step to rationing. If the government decides not to pay for certain things based on an algorithm then it will become unavailable. In the UK now a dual system has occurred with large numbers having private insurance and able to skip the queue.
We would need change in the tort system to eliminate suits for many items as availability of service would eventually become a problem. The government traditionally makes promises that become too expensive and then rather than pay, cuts back in one way or another rather than paying the true costs.
1
True, there are things to be worked out. However, when you talk about rationing, we essentially have that now, whereby people with uncommon conditions can’t afford the medicines that will keep them alive or healthy.
5
@James Krause What I understand has most hurt Medicare financing is the large number of disabled younger people coming into the system -- people in their 40s and 50s with long-term, chronic illnesses. They are among the heaviest users of Medicare and by and large didn't pay nearly as much into it as seniors under Medicare.
I believe it is the same thing under Social Security. I have heard actuaries say all of Social Security's problems would be fixed if we just increased the small part of SS contributions designated to disability benefits, as the number of people claiming those benefits is skyrocketing.
1
Whether Medicare for all would solve the significant problems of healthcare in America is all but irrelevant. It will never be adopted.
It would be a boon to the environment, to our individual health, and to the cost of living in the US if we nationalized the fossil fuel energy industry in the US. We could close down the super-polluting coal industry completely, phase out oil and gas in favor of renewable sources of power and public transportation, reduce the costs of transportation for individuals and shippers, require greater efficiency where fossil fuels are unavoidable, etc., etc.
Does anyone seriously believe that the energy industry could be nationalized? They are already close to “owning” the federal government. They are not going to let that change; and neither are the growing medical care giants and insurance monsters going to give up their power and profits.
The Republicans will never be able to make America white again.
The Democrats will never be able to adopt Medicare for all.
Let’s repair and improve the ACA while it’s still possible.
4
Medicare for All, Affordable Care Act, Obama Care, Medicaid - Pick on and work together to make it easy, comprehensive and universal. There will continue to be high levels of fraud and abuse no matter which name is used. Despite grass roots efforts and a desire for affordable care we'll continue to have a divided House/Senate that will be unable to create one bipartisan plan.
Medicare is incredibly profitable for insurers and providers. Not sure where NYT get's their figures. Could be the siloed programs and challenges jump through the hoops for basic medicare, donut holes, Part D plans, Co-Pays, referral hoops, etc.
1
Another administrative expense of Medicare Advantage Plans is in the piles of unwanted solicitations by mail that I receive from them every year. Wasted paper and trees destroyed.
6
The notion that investors should make a profit on health care is simply obscene. Medicare has been a great program, and don't be fooled by Medicare Advantage plans. They shift costs to the consumer.
Example: on Medicare + my former employer-funded secondary insurance, two maintenance drugs cost $32 per month as a copay. On my former employer's Medicare Advantage plan, those same two drugs cost $164 per month. In all, drugs on the Medicare Advantage plan would cost me upwards of $200 more per month. And my choice of physicians is much more limited.
My former employer has caught wise, trying to shift all retirees to the Medicare Advantage plan because it saves the company $2400 per year per retiree. The retiree makes up the difference.
5
@Wilton Traveler You should consider yourself very lucky that your former employer provides ANY retiree medical coverage. Many, if not most, provide none.
Think of how much money businesses would save by not having to deal with employee medical benefits!
Oh wait, that's not a feature for the businesses...
2
I can't believe Mr Frakt is having this discussion. It would be like if this country was discussing whether to end slavery since the rest of our peer countries have done it.
Let's go over it again, what just about every one of our peer countries has figured out and many others too.
1-Our health care system(pres ACA) is viewed as de facto criminal by most of the rest of the world and many in this country. It's motto is be rich, don't get sick and/or don't have a bad life event while billionaire big HMO and PHRAMA execs get rich off of the illness of others.
2-Just about all of our peer countries have a universal, national, quality health care system. They range from socialist ones like in England to more private ones like in Canada. Any one of these plans is light yrs. better than our de facto criminal one. There is room for discussion as to which one of these plans is better but again they are all light yrs. better than our de facto criminal one.
3-No peer country is clamoring to go back to our current plan. It would be like returning to slavery.
21
Ah yes, thanks to its low administrative costs, Medicare won't go belly up any time soon. No wait, what?
1
Medicare for all would be much cheaper, but requires shifting employer funding of private health plans to Medicare.
Private plans have better fraud detection and more efficient administrative processes. But when their business model is sustained by denying care, avoiding payment or by shifting costs to other parties, everyone suffers and pays more. Medicare for all should mean leaving private insurers behind.
7
"Private plans also establish networks of physicians, which could help steer enrollees to higher-quality providers."
This has to be the most absurd thing I've ever read. What private plans do is limit access to high quality providers, sometimes to the point that people cannot find the specialist they need within a reasonable distance. Medicare allows one to see any doctor, and as in my experience this is crucial to care, I will not be using a Medicare Advantage plan when I turn 65.
20
Americans might try to compare doctors' and even nurses' salaries in the US with health care salaries in other countries to begin understanding why health care is so expensive in the US.
5
@me:
Yes, US doc earnings/salaries are higher, where the 10 or so yrs of training are paid for by the govmnt, vs here, where it is largely funded by personal/family debt. Some debate whether that debt “forces” docs to go into higher paying specialties, but in the US, they generally do, regardless of why. Since specialists are better paid for seeing a new patient, it’s usually easier to get an appointment with a specialist, whether a cardiologist, orthopedist or GI, than it is to see your reg internist or family doc for a follow-up visit (even for a new problem). Even if your specialist is the most ethical, evidence-based doc, they have certain hammers in their toolbox that they will use sooner than your PCP, who may tell you to try this or that medicine, or try exercise or a better diet (for which they get no extra payment). The specialist will likely order/perform that angiography/colonoscopy/arthroscopy for 10 times the cost of an office visit at some point. That’s what drives higher costs (and doc salaries) in the US. The answer is to flood the system with (low paid) highly educated and ethical PCPs who will advocate 4 pts & guard the gates to the higher cost specialists. That’s how “single payer” countries are able to lower their costs. We tried it when HMOs first got popular in the 90s, but since it was the companies bottom line that was largely driving the gate-keeping, neither docs nor patients trusted the process, and the specialists hated it, so it failed.
2
@me
Ok, but those salaries are only 10% of our health care costs and those providers payed their education costs.
Also let's compare all salaries like politicians, athletes, postal workers, state police, between the USA and other countries.
Former MN Congresswoman Michele Bachmann once made the bizarre assertion that a "public option" for health insurance was a bad idea because "everyone would want it" and all of the private, "free-market" insurers would be driven out of business. In Bachmann's world, government should exist to help businesses but not the consumer.
One suspects that while many Republicans share this anti-consumerist view, few are willing to state it so openly. Most of them have more sense.
A Medicare For All need not be a program that is mandated for everyone. It could be a public option where customers buy in at cost. If the free market can offer better, cheaper options, more power to it. If it can't, why would we want to offer it life support?
14
@WmC: careful what u ask 4. Medicare Advantage plans discussed here are the private sectors answer to straight MC. They advertise to lure healthier clients & keep costs lower, they add low cost freebies like gym memberships (which also helps attract healthy folks) and eye care, then “manage” care by limiting doctor, hospital & medication options & denying claims.
2
Until the prohibition on negotiating drug costs is removed no comparison is worthwhile. Scale and parity with drug costs in other first world single payer drug and insurance plans needs to be the standard and the argument for central government plans.
8
The moral aspect of this is mostly settled: healthcare is a right.
All that we need do is study what social democracies have done, take the best of that, and bring it here. Quit dancing around in fear of the fact that it will be socialized, national healthcare.
And it will be better than the madness we have now.
11
I am all in favor of single payer but let us have an honest discussion. It would mean all doctors work for fees set by the government and the end to private, plans that mainly benefit employees of governments and large business!
4
To say that " Private plans also establish networks of physicians, which could help steer enrollees to higher-quality providers" is ridiculous. After years of having to constantly switch my providers because of 'no longer being in the network', I've never found it to be because of quality standards, it was always to design networks to lower cost.
17
Medicare Advantage plans were a gift to the insurance companies, whose ultimate goal is to make a profit. If more and more people are forced to utilize those plans, ultimately the term "Medicare" will just come to mean the insurance-driven health insurance senior citizens have to navigate, similar to all the other insurance plans they navigated throughout their working lives. I believe the answer lies in expanding and strengthening traditional Medicare, and making some sort of basic Medicare for all plan available to everyone. It won't have all the bells and whistles that private insurance promises but doesn't always deliver, but it would provide basic protection. Best of all, the entity that runs it--the government--wouldn't regard its delivery as primarily a profit-making opportunity. Canada got it right. Why can't we?
17
@me Not sure where you got your facts. We have retired friends from Canada who winter in FL. Thye love their healthcare. When the wife needed a doctor in FL she called back home. They gave her the name of a doctor in FL that would take Cnanadian insurance. She was taken cars of and all was paid.
As for "rationing", most times if you need a specialist appointment there is a wait time, sometimes of months. If that is rationing, we have it.
If "forced euthanasia" means not extending of the "life" of comatose, terminal patients I don't see that as bad. Knew a woman who was going into hospice. When her daughter found out that hydration would not be administered IV, she threw a fit and her mother's coma was extended about two weeks at taxpayers cost.
2
@JKile These are human beings you're talking about. Who are you to decide a helpless human being's life is not a life? Some people actually love their family members and something as simple as holding a loved one's hand matters and conveying love matters to them. Apparently love don't understand that.
The debate over administrative costs obscures a more fundamental issue. Currently for many recipients of public health insurance accountability and responsibility are fragmented. The separation of Medicaid and Medicare creates arbitrary distinctions in a patient's care -- one covers the home and doesn't really care about the hospital, the over is the opposite, for example. What is really needed, whether it's one or many payers, is single responsibility for the total care of a person, with payments and reimbursements, carrots and sticks, oriented towards optimizing that complete care. Until we have such single source oversight, patient care is destined to be far less effective than it could be.
3
Like most physicians, I see the tectonic plates of public opinion moving toward Medicare for All (MfA) Medicare is very popular with patients and it's easy to use. No matter how sick you are, the coverage is good and accepted everywhere in the U.S. In the debate about MfA, everyone forgets that the sickest among us - the poor, disabled, and the elderly- are already covered by Medicare and Medicaid. That accounts for over 50% of health care payments (and rising). The rest of us are covered by profitable private insurance companies that have no incentive to reduce costs. In contrast, Medicare is a public monopoly, that sets national prices under tight federal scrutiny. That's the way to control costs. Sure, Medicare has flaws--like arcane billing rules and low payment. The latter is because the government absorbs most high cost patients, allowing the private market to prosper. Without a new model of federal insurance, the high cost of private insurance will make health care unaffordable to the average family.The result will be more government subsidy and/or more uninsured. Why not do this with a large federal heath insurance program? If we can put a man on the moon, we can figure out how to make MfA work. The biggest hurdle will be convincing Congress that health care is the responsibility of government, not the free market.
53
@MAK I agree, and would add: the high cost of private insurance already makes it unaffordable to the average family. The number of bankruptcies in this country due to inability to pay medical bills (often, for those who are insured) shows the complete failure of our current system.
11
@MAK
Its worth mentioning that private insureres supplement teaching hospitals. When the teaching hosputals lost hundreds of millions in federal subsidies they simply demanded higher paymnets ofrm private insurers. Health Insurers are already operating as defacto giverment system with profit caps in place. They provide efficiencies non-existent in a goverment system.
Mak, would you accept a 30-50% cut in salary? NO PCP IN NYC metro area would work for $150k like in gbr the average is $250K here.
There are a lot of great points here about what will, won't and might work. And they all dodge a bigger point:
Why, is this even a topic?
And more to the point, why, in the richest nation on earth, do we not already have some type of cradle to grave healthcare like virtually all other developed nations?
The answer to both is, Because we have a government that represents not the people, but corporations and special interests, in this case insurance companies and Big Pharma.
I'm on Medicare and healthy, but I worry about those who are not. Seems that in America we could do better. I spend a portion of the year in Canada. My friends there are shocked at the US healthcare system, especially what it costs. Sure, they pay for their system in various taxes, but it still costs a lot less than what we pay here.
8
I usually agree with Prof Frakt, but in this column he avoids data that is more relevant and overwhelmingly in favor of Medicare for All.
Canada has a program like Medicare for All, and its bottom line health care statistics are better than ours in spite of a worse climate. We paid $9506.20 per person for health care in 2016. In Canada, they paid $4643.70. If our system we as efficient as Canada's, we would save over $1.5 TRILLION each and every year. This is money that can be used for better purposes.
If one uses the bottom line statistics, we see that both Canada and the UK (real socialized medicine)do better than we do:
Life expectancy at birth (OECD): Canada- 81.9, UK - 81.1, US - 78.8
Infant Mortality (OECD)(Deaths per 1,000): Canada - 4.7, UK - 3.8, US - 6.0
Maternal Mortality (WHO): Canada - 7, UK - 9, US - 14
The reason that these statistics are more relevant is that many of the saving come from the fact that under Canada's plan ALL people are treated the same. There are no complicated interactions between Medicare and private insurance companies.
As to the benefits provided by private insurance provides, the plans put forward provide many of these and still save huge amounts of money.
I finally I tried Medicare Advantage for a year. NONE of my 6 physicians would take it. I had to pay them out of pocket.
23
@Len You could have changed physicians and found one covered by your MA plan. Millions LIKE MA and we don't appreciate your attempt to take it away from those who enjoy it.
1
I wonder how many Canadian/UK participants have 6 physicians...
@Rob - I am 80.
Frakt overlooks the administrative overhead for providers (not to mention the frustration for customers) of managing the paperwork for such a Rube Goldberg administrative contraption the private system has become.
The current system is also porous enough so that fraud detection, efforts to deal with malpractice and cost controls are ineffective. Complex systems are subject to failure.
6
Apples and Oranges? What would the administrative costs be if the Government did not pay Medicare Advantage Plans to provide drug benefits and managed care but did it as part of the medicare program.
Methinks it would still be lower.
The problem would come, according to some analysts, from overutilization. The would require putting into place low cost medical screening - more money for Primary Care, nurse managers, telemedicine and other ways of providing the right care to the right people.
It can be done.
11
Medicare's estimates of program overhead are laughably understated. They do not include the imbedded costs in hospitals, physician practices and other providers of complying with Medicare's billing and quality reporting requirements, as well as compliance with the program's conditions of participation, including accreditation. These costs are many times the $8.1 billion cited in Austin's article. And that is costing the clinicians' time in checking all the boxes and providing for all of Medicare's documentation time at zero. These costs dwarf the "official" federal overhead cost estimate and will not disappear if private insurance were abolished by a Medicare for All legislative program.
@Jeff G. True, but for an honest comparison we would also need to factor in all the unpaid administrative time spent by providers on the convoluted and time-consuming authorization requirements of private insurers as well (above and beyond the cost of enormous billing departments). As a healthcare provider, I can assure you they are more than equal to the Medicare requirements.
7
@Jeff G. - And the compliance costs associated with the 1,500 different private insurance plans are chopped meat?
Just talk to your doctor, Jeff.
2
baloney. I do the submitting of claims to mostly Medicare patients as well as a few who have been forced into medicare
advantage plans by their former employers. I submit to Medicare electronically and magically the patients get reimbursed 80% of the allowed fee within 15 days and 2nd insurers pay the rest a month later. with Medicare advantage I submit paper and just yesterday I got a letter asking for codes. I keep copies and the codes were there and also the correct id was not in the letter some lame excuse and directions to fax the claim. wish me luck. another example,, Medicare pays the technical fee to the company that supplies our Holter equipment. Medicare advantage does not and so the patient has to pay. we call it Medicare disadvantage. we do accept Medicare advantage if patients can choose an out of network doctor, but some plans do not and we have regretfully said goodbye to a longtme patient. Medicare for all. yessss
7
Medicare for all is a simple answer to a complex question. While it may cut the Gordian knot by providing a concrete solution to the problem of rising insurance premiums, it fails to address the underlying cause of these rising premiums -- the ever rising costs in health care itself. These costs are a direct result of rising charges for medical services, pharmaceuticals, medical equipment and testing, alongside an aging population increasingly beset by chronic illnesses. As the demand for health care goods and services rises and the prices for these goods and services rises simultaneously, we have an upward spiral of costs that someone must bear. Reducing administrative costs has no effect whatsoever on this process.
Because politicians, would-be medical reformers, the media, and the public at large continue to struggle to grasp this basic fact, I have created an organization, Dynamis Integrative Health, which aims to reduce health care by decreasing demand for services and reducing the costs of services. The latter would be accomplished by focussing selectively on those treatments which are both effective and cheap. In our current system, where we are all "covered" there is little incentive to make choices based on economic incentives. This helps to perpetuate the upward cost spiral and makes us unwitting contributors to our own health care economic problems. Initiatives based on cost and efficacy are likely to solve our health economic problems, not a shell game.
2
@Samantha - I applaud your initiative, but how do you intend to get physicians and hospitals to adopt your policies? One of the great advantages of Medicare for All and, indeed, other government run plans, is that there is one organization with the power to gather data, analyze it, and make recommendations as to which medical procedures are effective.
8
The best way to pay for healthcare is cash. I just got a quadrivalent flu shot at Costco for $19.99 with no Costco membership. Anyone can use their pharmacy without a membership. This is why I’m against Medicare for all. Why go through an insurance system for something like that? It's a big waste. I think it’s best for younger people to pay cash for most of their healthcare, unless they have a chronic condition or a serious accident. I think a hybrid system would be best where younger people who have sufficient income can pay out of pocket for their healthcare until they reach a certain point or have a diagnosis for certain conditions.
2
@Mark - So the answer, to you, is paying $20 in cash for a shot that's covered by insurance that you'd pay nothing to get? You're looking at premiums and co-pays throughout the year, I take it.
People know it's time for a flu shot because of advertising blitzest. They probably don't know it's time for blood tests, pap smears, prostate exams, eye exams, colonoscopies, and other routine screening necessary for maintenance. All that is covered by insurance and would be part of Medicare-for-all.
Preventative measures are cheaper that treating most conditions, as is early treatment. Health benefits are offered at places of employment to ensure that people are available work. The nation has that requirement, too. That, at the heart of it, is the bottom line, not individual cash out of pocket for ONE health event like a single flu shot.
5
@mark
Good luck getting your knee replacement from Costco for $19.99, just sayin’
4
@Mark So how does that work when those young people find they have a major disease, such as cancer, MS, diabetes, etc. Or they shatter their leg skiing, or climbing, or wreck a knee playing sports, or fall and hurt themselves.
Life and health is not all about flu shots at Costco. Young get sick, get injured, develop conditions also and insurance is better than lifetime debt.
3
The solution is not Medicare for all- it is universal health care for all. Overhaul everything and let's just get it done already!
12
@moi - SHHHH, don't tell anyone, but that's the goal of Medicare-for-all, universal healthcare for all without scaring people into digging in their heels about the change. It's branding and name recognition during the transition. It's like people who HATE Obamacare but LOVE the ACA or Kentucky Kynect.
People understand and are comfortable with Medicare, the program and the name. They can understand expanding users of Medicare but won't consider doing the same thing with a different name.
2
There is only one glaring problem with Medicare for All, the pervasive corruption of our government by big money interests that have managed to buy our government for pennies on the dollar. There is no way that such a titanic piece of legislation could be passed without being loaded down with inefficiencies designed to payoff campaign money obligations. Until we can do something about our bribery problem, MfA just won't work. Even without the burden of corruption, it will be difficult to craft a system that works. We have to fix corruption first. Otherwise we cannot thoughtfully deal with the growing list of existential problems that are pushing us to the brink of ruin. Publicly fund federal elections. Ban public officials from becoming lobbyists.
10
it is a thoughtful analysis but it ignores fundamental economics of healthcare.
Providers including hospitals have no choice (in most circumstances) to participate in medicare.
But medicare reimbursements are too low to sustain the costs of the system.
Essentially private insurance subsidized medicare patients (and uncompensated care).
It’s not all about efficiency...medicine uses a lot of high technology and is very labor intensive...and that is expensive..
Medicare reimbursements will not allow us to have institutions like the Mayo Clinic, Sloan, MD Anderson; not will they allow high tech gene therapies...simply not...
Too often analyses try to make it good versus bad...medicare does it right/private insurance wrong; etc
but the fundamental problem is high tech very intensive care..,that people want is expensive...
making the system medicare only means a different system...ultimately care will have to be rationed...there will not be enough money to pay for it all...
what i say is not judgemental about rationing, the value of medicare, etc....it is the simple empirical fact...
1
@mdb288 writes:
"But medicare reimbursements are too low to sustain the costs of the system.
Essentially private insurance subsidized medicare patients (and uncompensated care)."
Prof Frakt has exploded this myth.
I can agree that private insurers pay more to hospitals for a given procedure than does Medicare. You believe that because Medicare does not pay enough, the hospitals are forced to shift the cost to private insurance. i.e. there is causality. I do not believe in this causality because if there were such causality, then hospitals with a greater percentage of income from Medicare would have to charge private insurers more than those with a smaller percentage. So there would be a correlation between the percentage of income from Medicare and the fees to private insurers. But there is MedPac data that shows no such correlation exists. Some hospitals with lots of Medicare billing charge bill private insurers less than other with less Medicare billing. It appears (this is a subjective statement) that hospitals charge private insurers as much as they can, and the larger and more prestigious ones can charge more. This is independent of Medicare billings.
4
Private insurers don’t steer patients to higher quality doctors and hospitals. The insurers all enroll with all the doctors. They might negotiate fees, but they’ll allow any willing provider to participate.
2
After being on traditional medicare for a few years, I cannot fathom why anyone would sign up for a Medicare Advantage plan.
There is virtually no paperwork, you choose your doctor, can visit a specialist if needed, there is no network, no arguing about denial of coverage. To make Medicare perfect, however, the government needs to be able to negotiate drug prices.
Traditional medicare for all would be a wonderful thing for this country. It would provide cheaper, and better, care for all Americans.
14
@ACS Some people can't pay the co pay that Medicare leaves, and MA plans cover that. Medicare for all WILL hurt seniors, who will be shunted to the absolute back of the line for treatments. That's inevitable, and Medicare for all proponents are not being honest about this.
1
Statements like "Private plans also establish networks of physicians, which could help steer enrollees to higher-quality providers..." need backing with data. From my own experience, there is no basis for this perspective. The steerage that I have experienced as often resulted in the need to choose to seek care outside of the network at my own cost and as a result of a higher level of ineptitude on the part of providers who just standing in place at the end of the assembly line. (My experience is in an employer provided private plan.)
11
Thank you for the clear analysis.
There is a question I have that seems not to get brought up much in these discussions.
Medicare for all would enable people to carry their coverage uninterrupted from one employer to another. It seems to me this would greatly simplify administrative efforts, and presumably costs, for employers as well. The healthcare deduction would be a simple line item on the payroll, like SS and unemployment insurance deductions. Employers would not need to be negotiating with private insurers for their health insurance programs. Nor would they have to be re-evaluating them annually.
It seems to me this would be a major benefit to employers. I'd like to see some exploration of that aspect of the insurance issue.
18
Medicare for all terrifies me.
I was self employed for a 48 year working life, and paid my own health insurance to protect my home and retirement savings if illness struck. Even with excellent health, coverage was hard to find. It was assumed that nobody healthy would voluntarily pay. Insurance for the self employed cost more and offered less coverage. I chose the highest deductible Blue Shield policy for its wide choice of doctors. This minimal insurance became so expensive as I got older that it became a hardship.
I counted down the years, months, and days to Medicare. That same year Obamacare took effect, and I was even more grateful for Medicare.
Under Obamacare self employed people who make too much to be subsidized pay for every body else. I would have been paying far more for a policy with an even higher deductible, with a very limited choice of doctors, that could change each year.
Obamacare places the burden of subsidies on the successfully self employed. But it's all of us, including those with employer paid policies, who should subsidize those who need it. It does not address the problem of the bloated cost of healthcare in America.
Although I'm on the Bernie Sanders side of politics with most issues, I dread the chaos Medicare for all might bring. Older people need the protection of Medicare, and are much more vulnerable. Develop something equally excellent for everybody else that also addresses the excessive cost of healthcare.
6
@Elisabeth, Having a central agency to gather data, analyze it and decide what is medically (not cost) effective would put us on a path to reining in our inefficient delivery system. This is an important feature of health care in other developed countries which get at least as good health care at much lower cost.
3
@Elisabeth Seniors WILL be harmed, many fatally, by Medicare for All, and Democrats are not being honest about this.
Allow Medicare to negotiate drug prices.
The VA is allowed to and pays considerably less than does Medicare for the same drug.
40
This article had me waiting anxiously for the big reveal.
What features of private insurance plans would be lost in a medicare-for-all world?
What does all that administrative overhead actually pay for that I might miss?
Turns out... "care management" and "establishing panels of physicians - networks" which means - in terms of things which actually benefit patients (not insurance companies) nothing.
Still waiting for what I might miss.
Holding ... my ... breath
45
@Victor Lazaron, MD - Just look to the north at Canada. They have better bottom line public health statistics than we do, and they do it at much lower cost.
2
Lots of points of view and persuasive arguments here.
Here are only my personal results.
I retire in two weeks. I enrolled in Medicare about this time last year.
Prior to enrolling in Medicare I paid about $370 per month for company provided insurance. I have no preexisting conditions. For my Medicare plan I pay $134 per month.
It can be argued, and I'm sure someone will, that my company provided health care offered more of some service. However, as it stands I'll get all the care I need for about a third of my previous company provided health insurance.
I can only imagine that is because any health costs I may have in the future will be based upon costs negotiated by someone using the weight of the government.
And that seems like the start of a very good, significantly lower range of medical costs to me.
So that's my experience.
35
@David Clark Your costs as a Medicare recipient tell us nothing about cost-effectiveness, since Medicare is subsidized by a direct tax of 2.9% on all paychecks.
@Gary Here are some figures:
www.pnhp.org & www.oecd.org & especially https://www.oecd-ilibrary.org/social-issues-migration-health/data/oecd-h...
Here are the bottom line per capita figures for health care costs in 2016 in PPP dollars:
US - 9507.2
Austria - 5227.3
Belgium - 4839.8
France - 4500.4
Germany - 5550.6
Luxembourg - 7462.8
The Netherlands - 5385.4
Switzerland - 7919.0
Sweden - 5487.5
Denmark - 5199.3
UK - 4192.5 (socialized medicine)
Canada - 4643.7 (Medicare for All)
OECD Average - 4003
As Einstein said,
"The difference between genius and stupidity is that genius has its limits."
The problem is out of control health care costs. Government created partial monopolies for the health care industry so that private market forces do not work to control costs. For example, we pay 2 to 3 times as much as Canadians do for the same medicines. The Government approach is aimed at health insurance to make it easier for patients to pay the too-high health care costs. This approach is inflationary. It only makes the already high health care costs even higher. The health care industry loves the insurance approach, regardless of whether it is private or public insurance. The obvious solution is to regulate the health care industry, but neither political party will stand up for the people against the health care industry.
9
I tell you what, I went about 40 years without medical care except for a couple of ER visits that I never paid for. Now with Medicare/Medi-Cal part B I see one clinic doctor yearly with referrals to specialists no problem. That's one doctor in a city of 80,000, which is one doctor more than I've had all my life.
3
A factor not reflected in the analysis is that traditional Medicare automatically processes all claims for services, whether or not they are necessary or likely to be helpful to beneficiaries. A couple of examples: audiologists go into nursing homes and test the hearing of patients, despite the fact that traditional Medicare does not pay for hearing aids or hearing enhancement devices. So the audiologist gets paid for 50 hearing tests. Although it might be useful for the nursing home staff to be aware that some of their patients are hard of hearing, that could be divined without paying a contractor $150 times 50 for a day's work. And then repeating the work in six months.
A similar thing happens when a physician visits a nursing home facility once a week. There are some patients who need to see their physician, but Medicaid does not question when it gets a bill for five patients which includes treatment, prescriptions, etc. and 15 other patients who may not even have been seen by the physician but are on his roster for the facility.
When Medicaid pays for services that are not provided or are not useful or necessary, the denominator of their calculation of overhead is inflated, which make the overhead percentage to be falsely deflated.
One hundred dollars of overhead divided by $10,000 of medical cost is 1% overhead; $100 overhead divided by $12,000 medical cost is 0.8%. But if $2000 is inflated costs, isn't the "real" overhead $2100/$10,000 or 21%?
3
@ebmem Aren't nursing home patients on Medicaid, not Medicare?
@me only those with no other financial resources....you might want to read up on that deal.
Any decent Medical For All plan will be "Enhance Medicare for All." It will be quite a bit different that existing Medicare, much more robust and comprehensive. It will absolutely not be a case of just allowing people to sign up for the existing system. That's why the signs in the photograph say "Improve It." People pushing for Medicare for All know in needs to be much better. There will be no private options in it, not if we want it to work. Believe me, many people are studying closely just what is needed to make this work, because we are closer than ever to seeing it happen. At the same time, private companies are gearing up a big push to cast fear, uncertainty and doubt all over the idea. We can do it.
19
I'd question whether being associated with a network of doctors is a significant advantage. In most of the country, medicine is now dominated by two or three large consortia of providers, hospitals and specialists. It has actually become difficult to find any independent doctors, especially specialists, who are not part of one of these networks. Similarly, if you want to have a primary care doc who coordinates you care and to whom you go to first with any medical problems, it's easy enough to find one, whatever type of plan you're in.
4
"Average Medicare spending per beneficiary is just over $12,000 per year; for an average worker in a private plan, it’s about $6,000."
Medicare recipients are the oldest age group requiring the most health services.
Average workers are all younger, healthier, require less health care services.
Insurance companies are merging to form mega insurance companies in order to increase the size of their risk pools.
Medicare for All would be the largest risk pool possible. And the millions of people coming into the program would all be younger, healthier, and less costly.
Plus, Medicare for All should be able to negotiate much cheaper (and consistent) pricing for drugs and services.
It would also get companies out of the business of managing health insurance policies for their workers, allowing them to focus on their core business.
The money these companies now spend on premiums is written off at 100%. Redirecting this cash flow to Medicare for All would also be written off at 100%. It would be a net positive, make that a big net positive for hundreds of thousands of businesses.
And it would provide individual workers guaranteed certainty of medical coverage for them and their families. Coverage they would not lose when moving to another job, or having to switch to an entirely new provider.
43
@medianone
Average Medicare spending of $12,000 per participant is what the federal government is paying through Medicare. It does not include the 20% co-pay with no out-of-pocket maximum, nor does it include the state/federal contribution through Medicaid for low income participants. Each Medicare beneficiary incurs $20,000 per person in medical costs: $4000 in copays with no out of pocket maximum, another $4000 divided between the states and the federal government via Medicaid and another $12,000 from the Medicare accounts.
If you examine what is paid in favor of beneficiaries, 10-12% is for drugs, split between what the government and the beneficiaries pay. Americans pay a 20% premium because of government involvement as well as the opaque pricing by passing premiums through insurers who add 20% for overhead an profit as well as the markup, unrestrained, imposed by the pharmacy benefit managers. Fixing that could easily cut drug costs by 20% for all Americans, not just Medicaid by separating drug insurance from health insurance. That gets you a 2% drop in Medicare spending.
The other $17600 per beneficiary that is spent is paid to big medicine cronies who already have price controls on their services, but manage to game the system to get a minimum of 20% extra payments for services not necessary, not provided, or not beneficial. Expanding a system that costs 20% more than the value received to the population of the country is not going to cut costs.
@medianone Much of Medicare's current spending is for all the disabled people coming in once they qualify for SS disability benefits. These are often people only in their 40s and 50s and often with chronic long-term problems (and frequently related to obesity) . If you think the expenses of a 75 year old are high, just imagine what the expenses of these folks are going to be like over the next 30 years. The number of disabled under SS/Medicare has skyrocketed over the last 15-20 years.
In New York State, where I live, there has to be some relationship between claims and premiums in private insurance, or the state will order the insurer to refund money to participants. I have been covered by the Medigap plan known as High Deductible Plan F for 6 years, since I turned 65, and in those 6 years premiums have only DROPPED ( and this despite a number of participants that can only drop, not increase, because 5 years ago Blue Cross stopped selling this plan due to lack of profits).
1
ALL Canadians have medical expenses paid for by the Government. No fees or charges - NOTHING! The system in the USA is based on a business approach. Every business should be making money. A government , on the other hand should be working on lower expenses. The government sets the fees for doctors, nurses, hospitals etc etc. Is our system perfect? Heck no! but it is a lot better than what is available to Americans
77
@Rick
The Canadian healthcare system does not include prescription medications; the Canadians do, however, negotiate much lower prices on prescriptions, which is why I get my most expensive Rx filled across the border in Canada.
While I'm in favor of some form of universal healthcare in the US, Medicare may not be the solution. I doubt that any one-size-fits-all system will work for cradle-to-grave healthcare.
The cost stats for Medicare do not include the costs of supplemental coverage or Medicare Advantage plans (which are already administered by private health insurers).
Medical care costs vary widely from state to state and region to region. A uniform cost/benefit structure nationwide would be unfair without regional price/benefit provisions.
We're still a long way from a feasible Medicare-for-all system.
3
I would further recommend we allow a private system to operate independently aside from the public system. Those with means or priority should be able to access a higher level of care if they are willing to pay for it. This preserves the dynamism gained from the private sector. We know from other countries that our costs could be 50% less or even more and with much better outcomes. But we have to think outside the box constructed by a Reagan deregulated healthcare system and his accomplices in the insurance industry.
7
@Dave
Our sad experience from the Clinton administration's tobacco settlement game and the Obama family connections to the contractors for Obamacare website set-up tell us that the worst-prepared people in the marketplace would be chosen simply out of political connections or pay-offs.
Since the taxpayers will be paying the ever-increasing costs of this the process must be MORE transparent than anything the Democrats could be trusted with.
3
@L'osservatore
Just wondering but are you reciting a conspiracy theory?
1
It is interesting that when we say 'Medicare for all' the analysts (all of them) seem to fail to recognize the possibility of creating a much cheaper health care system, both in administrative costs but also in many other structural ways. In other words they compare apples to oranges. Consider a universal system paying one rate for each procedure and item, no need for Medicaid and Public Health because everyone is covered by Medicare. Also we can realize a significant savings from a reduction of overall spending in the VA Healthcare system, a system set up for access for any veteran with an honorable discharge and not just for combat or service connected disability. A real waste, a second health care system all to itself for a minority of the population just because they served and not necessarily in combat. If we designed the system to allow for subrogation of claim for treatment associated for liability the price becomes even cheaper as we would gain a reduction in liability costs.
7
@Dave
Medical costs in the US vary widely depending upon where you live. How would Medicare for all compensate for these differences in cost/value received?
And there are many different Medicare plans to choose from, with different premiums and benefits. What happens with those distinctions with Medicare for all?
@Dave Instead of Medicare-for-all, why don't we just propose voluntary participation in VA-care-for-all. Let some bureaucrat calculate an appropriate government premium for VA coverage, and let people who don't want private insurance to buy onto the VA system? The premiums can send additional cash to the VA system to accommodate the new participants, whether or not they have service or combat related disabilities.
Current spending for VA is not going to vanish if the VA is dismantled and the facilities privatized, it will simply move into other buckets. Wouldn't it be better to expand the VA single payer fully socialized medicine regime to anyone who wants to join it? Infrastructure is in place, and the new premium revenue would increase its scale and economies. It captures all of the desired price controls for the Medicare-for-all proposals.
@ebmem - Not to mention the fact that the VA has an efficient electronic medical records system that permits me and my providers to access the results of every visit, test, procedure and medication. When I need prescription refills, I log on to myhealth.va and order them. I've never waited more than 6-8 hours for a reply to a question. My flu shot was available at a drive-up trailer, no wait and they give you an apple (fruit, not computer) for your participation. Some things like non-emergency dental care take longer but on balance the system works.
I still use a private cardiologist but reaching him, even for a needed clearance for a surgical procedure has been difficult while I obtained an appointment with my VA pulmonologist for that purpose within a day of the consult being sent.
Granted I'm just a single data point, but a highly satisfied one. A scaled-up VA Medical System would be, IMHO, a viable option for providing universal healthcare for our country.
The surest way to reduce administrative costs is to reduce what health insurance covers. A system that combines high deductible policies managed by individuals using HSA's to track payments, backed up with a single payer/M4All for chronic and catastrophic illness would remove between $500B and $1T of spending from having any administrative overhead at all while shrinking the administrative costs for catastrophic and chronic coverage.
Here is an executive outline for such a system.
www.theintelligentHSA.com
Such a system is pragmatic and workable. Since it contains the best elements of a real free market and single payer it could attract political support from the middle out, from moderates, conservatives and liberals while depolarizing this contentious debate.
2
@Randy Jacobson
How does this serve those who earn too much for Medicaid but cannot afford large deductibles or accrue substantial HSA balances? And they will still pay a premium to a usually private insurer. The administrative overhead will still be there at the insurer.
So where is the benefit? This just shunts the expenses for chronic and catastrophic illness to the public.
1
As in so many other ways, "conservative" approaches to health care spending is simply financially stark raving insane. No other country in the world treats medical spending as the US does. There's a reason for that.
As for the anti-Medicare for All arguments made by President Trump, let's remember that he also suggests that journalist Jamal Khassoggi" was murdered by "rogue killers."
Huh? Who knew that Khasoggi is dead? I guess the president does.
6
As our current medical system stands, tens of millions don't have access to it, another tens of millions cant afford to use it, and another tens of millions are afraid to use it cause of expense and hassle.
It's. Not. Working~!!!
Bankruptcy, pre-existing conditions, changing policy's, and a plethora of different billings and collecting for months/years after said service.
There are lots of examples with better outcomes, cheaper service and accessible to all.
As our healthcare system stands in America today, it is a failure.
Even Trump praised Universal healthcare with Australia's Prime Minister. Saying that their system is much better than what we currently have.
https://www.businessinsider.com/trump-australia-health-care-bernie-sande...
M4A is a step in the correct direction and necessary for our democracy.
8
If you had Medicare for all the first thing to happen is every provider would have their revenue reduced a lot. Medicare has strict rules as to how much you can charge. Would supplements be available? We should focus on improving care including making it more financially effective. Administrative costs could be reduced by traditional methods used by business much easier than Medicare for all. Just foolish idea of progressives who believe in government for everything.
2
@vulcanalex Debate related to the relative fees paid to providers under different systems can be left for another article. This article deals directly with relative administrative costs. Consider that medical loss for private insurers is 20% for individual plans and 15% for group. Compare that to 1.1% for medicare.
Private insurers cover a market of roughly $2 Billion dollars. A 14% savings there would amount to $280 Billion a year or $2.8T over 10 years. That is almost double the amount of the recent tax cut.
If we want to save money in the system this is the low hanging fruit.
7
@vulcanalex
The free market has already failed. How much more data do you need? The "traditional methods" have already proved to be be inefficient and even producing more costly and less successful outcomes than comparable systems.
1
Analyzing the administrative costs of health care is an interesting nuanced exercise; I claim no expertise to confront this analysis. However, I look at health care from a somewhat ‘global’ perspective and not limited to ‘administrative’ costs. Consider the World Health Organization’s figures regarding the percent of GDP spent on health care. Using 2014 figures the US spends 17.1% of its GDP on health care; THAT’S 1.5 AS MUCH AS ANY OTHER COUNTRY & nearly TWICE the OECD AVERAGE. The largest part of our GDP is attributed to the private sector. Can someone explain to me why citizen health - a fundamental part of life, liberty, and the pursuit of happiness - is recognized by most other nations and seems so neglected in the US (perhaps the most powerful and dominant country in modern history)?
4
@Gordon Silverman It is simple, first life, liberty, etc. is not part of the constitution so it is irrelevant related to legal rights. Next we pay far more to almost every individual in our health care system, we also have the most expensive treatments first. We also believe in people being responsible and accountable more than government. These easily explain, but we also have a very unhealthy and diverse population that almost no other country can match. Simple!!
@Gordon Silverman
We are the richest and have the most discretionary wealth available to pay for our health care. We also have no visibility to quality or cost because of massive government intervention and crony involvement n regulations that favor themselves. Our costs increased after Obamacare expanded the labyrinth to further benefit the cronies while reducing transparency of both costs and quality.
It is one of the reasons why it needs to be repealed. There is no tinkering that can address its structural flaws.
An alternative would be to insist that we have nonprofits and and not for profits.
The profit incentive is creaings too big a moral hazard for too many people. Too many medical bills are simply fictitious and represent an intense desire on the part of the bill collector to move as much money out of your pocket and into theirs as possible.
8
@SW
Non-profit hospitals charge the same as for-profit hospitals, despite the fact they pay no income, property or sales taxes. A charity hospital in Chicago paid Michelle Obama $350,000 per year as the wife of a Senator for a part time gig. CEOs of non profit hospitals and insurers are paid seven and eight figure salaries. It's hard to comprehend how a charity justifies such expenditures, but I guess if you are paying a politically well connected sinecure $350,000, anything goes.
But you missed a lot of added costs. For example, providers have to deal with multiple claims systems, multiple medical policy requirements, multiple provider services customer service and internet service platforms and so on.
Private insurers also have thousands of permutations of difference plan designs and "products" such as HMOs, PPOs, EPOs etc. And all of those plan designs have to be filed with the state, approved and are impossible to kill.
And all of these plan designs were foisted on consumers because employers needed a way to reduce their premiums so they dumped the cost and risk to consumers. So this is not about "consumer choice". Consumers just want to see a doctor not pay an arm and a leg for it.
But the biggest impediment is how much private insurers over pay for services. Most pay over twice Medicare. Here is something to read on that subject:
Seibold, M.F. Int J Health Econ Manag. (2018). https://doi.org/10.1007/s10754-018-9249-9
13
The last place you want to place one sixth of the entire economy is the government due to its inherent lack of efficiency which comes from its mandate to "please all people". There is no faster way to fail to please the majority than this simple mandate; ask anyone who has actually worked for the government not some starry eyed idealists who just want the other's guy's money. Having said that I completely understand the byzantine system that exists today to keep it mostly in private hands.
3
@Bob Sutton The problem with this argument is that single-payer systems, and other systems of government-regulated universal care used by countries like France, produce far better outcomes at far less cost. You may think that government would be less efficient in theory, but actual facts show that it can be far more efficient in this area.
48
Bob,
Gee, on behalf of the 45,000 Americans that die each year 'cause of lack of access to our healthcare, on behalf of the 1.5 million Americans that declare bankruptcy from medical costs, on behalf of the tens of millions that are afraid to use said healthcare and are sick and hurting, we're sorry to inconvenience you.
Just step over us please, as we die in the streets. Wouldn't want to displease you.
35
@Jon So their populations are similar to ours, their health care systems are similar, and their governments are similar as well? The answer is NO to all of these. So your "actual facts" are irrelevant to the US.
I'm glad "Private Plans" is the new name for "Health Insurance". It's a start for addressing reality. Frankly, Insurers have no business being in healthcare. Insurance is applicable to reducing the risk of a single catastrophic event of Property and Life (P&L). Since post-WWII, Insurers gained access to ensuring our healthcare via life insurance policies. Life and Healthcare risks are now combined into a single insurance business entity. Consider, the losses Insurers now pay for entail millions of healthcare events per day! This is parasitic.
Bottom line: We do not need a "middleman" that controls pricing, terms, conditions, and profits of our National Healthcare System. Make access to healthcare "A Right" like other advanced nations. A highly regulated Single Payer System, sans Insurers, will make that reality. None the less, Private Insurance should remain available to those who have the money to pay for it out of their own profits. This would be similar to private education.
15
@John Kominitsky Actually, very few life insurers are in the health insurance business.
@John Kominitsky Great just add that to the constitution, and then find a way to pay for it. Good Luck with either of those things.
@vulcanalex We already are paying for it.
1
Keep in mind that Medicare comes in two very different flavors - Original Medicare and Medicare Advantage (aka Part C). Original Medicare is not full coverage unless you get Medigap insurance (aka supplemental insurance) which, if you get Medigap Part F (the most comprehensive), you are essentially completely covered with no deductibles, no co-pays, no bills. And perhaps most important is the fact that you can get healthcare anywhere they accept Medicare including the best providers in the U.S. like Mayo Clinic, Cleveland Clinic, Johns Hopkins, etc.
Medicare Advantage is much more akin to the health insurance people are already struggling with including innumerable complicated bills with mistakes and hidden costs, and limitations as to where you can go for medical care.
8
The for-profit health insurance industry contributes nothing but advertising, excessive administration costs, and criminal executive payouts. William W. McGuire of United Health Group got a golden parachute of $286 MILLION. From 1989 until 2006, McGuire received compensation from UnitedHealth in the form of stock options that eventually became worth around $1.6 billion. His successor, Stephen J. Hemsley made $101.96 MILLION in2010; in late 2011, Hemsley's annual compensation was estimated by Forbes at $48.8 million. We pay these bizarre salaries. We need single payer health care.
19
Medicare Advantage is a scam. and the NYT should know this It has been proven to offer no real advantages for Medicare recipients and is nothing more than a tax-payer funded subsidy for the for-profit health insurance companies. Additionally, the companies arbitrarily refuse coverage for services to maximize their profits. A universal health plan like in every other civilized/industrialized country saves money collectively and individually, improves outcomes, and offers universal coverage. A reduction in individual psychological stress surrounding healthcare coverage and it's confusing jargon and changing rules is also a very important component.
32
These discussions tend to happen in a vacuum, as if the US was the only country on Earth. Every other rich country has figured out how to provide universal health care at significantly less cost per patient as the U.S. does.
It is only through our insularity -- and heapings of corporate-funded propaganda (including that spewed by our politicians) -- that Americans put up with this nonsense. Enough already.
51
Look in the latest Medicare Trustee Report.
It states the average benefit for ALL Medicare beneficiaries CMS expense as ~$13K per beneficiary.
Table II.B1.—Medicare Data for Calendar Year 2017
It states the average benefit for just Medicare Advantage beneficiaries CMS expense is ~$10.6K per beneficiary.
Table IV.C3.—Incurred Expenditures per Private Health Plan Enrollee
So Medicare Advantage beneficiaries being ~1/3 of all Medicare beneficiaries results in just Traditional Medicare beneficiaries CMS expense is ~$14.2 K per beneficiary.
Focusing on overhead misses the Medicare Advantage savings in efficiency and competency resulting in lower waste, fraud, and abuse expenses of Traditional Medicare.
https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Tren...
1
@Are Buntz Clearly a deeper dive into insurance administrative costs, (medical loss), is called for here. Insurer overhead is the 800lb gorilla of medical costs bankrupting America. We need to discover exactly where if insurers are spending more money to spend less money per person then we need to know exactly how that works and why and then use that information to better manage Medicare. But the differences in medical loss are to big, too consequential to ignore.
1
@Are Buntz - Look at https://www.nytimes.com/2017/08/07/upshot/medicare-advantage-spends-less...
" research published by the National Bureau of Economic Research provides context.
The study, released in January, found that the revenue Medicare Advantage plans received in 2010 exceeded the amount they paid out for medical care by a hefty 30 percent"
So while Medicare Advantage plans spends less on benefits, they cost government (taxpayers) more because so much is gobbled up in profits.
Is that what you want?
2
"Medicare for All" will cost more than the current system(s) because it will cover a hundred million more people, perhaps even more.
Leave it my fellow Democrats (and, of course, the rabid socialists like Bernie and Alexandra) to propose a program that will dip even deeper into taxpayers' pockets.
As Margaret Thatcher so aptly put it, "Socialism is great until you run out of other people's money."
3
@Ro Ma - Since Medicare for ALL will be much more efficient, it will cover everyone at much lower costs. It has been estimated that it would save $1,5 TRILLION each and every year.
www.pnhp.org
Also you can compare costs with Canada which has Medicare for ALL
2
How do dozens of other nations do it? Mr. Frakt should compare/contrast --since he’s “director of Evidence-Based Policy and at Harvard School of Public Health.
GOP/Fox News and big election donors have long labeled health care for all as too left wing. End of story. Our media talk has stayed within narrow limits, not informing the public of what is possible. The terms of the debate have been set by a profit centered medical industry.
The nation that so values 'free speech' is the least informed.
Please comment -- from the True Cost Blog—dates when countries started h/c for all:
Norway 1912 Single Payer
New Zealand 1938 Two Tier
Japan 1938 Single Payer
Germany 1941 Insurance Mandate
Belgium 1945 Insurance Mandate
United Kingdom 1948 Single Payer
Kuwait 1950 Single Payer
Sweden 1955 Single Payer
Bahrain 1957 Single Payer
Brunei 1958 Single Payer
Canada 1966 Single Payer
Netherlands 1966 Two-Tier
Austria 1967 Insurance Mandate
United Arab Emirates 1971 Single Payer
Finland 1972 Single Payer
Denmark 1973 Two-Tier
Luxembourg 1973 Insurance Mandate
France 1974 Two-Tier
Australia 1975 Two Tier
Ireland 1977 Two-Tier
Italy 1978 Single Payer
Portugal 1979 Single Payer
Greece 1983 Insurance Mandate
Spain 1986 Single Payer
South Korea 1988 Insurance Mandate
Iceland 1990 Single Payer
Hong Kong 1993 Two-Tier
Singapore 1993 Two-Tier
Switzerland 1994 Insurance Mandate
Israel 1995 Two-Tier
The next column should be: How do these countries finance this, supported by all citizens?
48
@Meredith It is very simple. First their populations are less diverse and healthier than ours. Next their providers get paid less as well. That is most of how they do it.
1
@vulcanalex An unpersuasive argument:
Perhaps the reason the populations are healthier is simply the system they have had.
Since we are dealing with humans, I am not sure what more or less diversity has to do with it. Certainly some non-diverse nations such as Russia have poor public health outcomes due to drinking and smoking excessively.
A case can be made for generally paying providers less (but sometimes more) if they had lower overhead and predictable revenue due to a single-payer system.
I find the comments more helpful than this piece. Perhaps Mr. Frakt has considerations that are sensible, but what he does here is the typical superficial comparison motivated by justifying the status-quo.
10
Good article but....This country will not solve the issue of healthcare costs - the highest in the world - until they accept the fact that "for profit" solutions are the cause of the high costs. Get rid of all the insurance companies and their high paid executives and move to a single payer solution funded by federal taxes and we might have a chance.
53
Excellent description and explanation. We need more dimension and clarity like this - politicians, please take note.
2
@Jack Schmedeman Politicians won't take note because it isn't in their best interest to do so. Think of all the health insurance folks that would get laid off if medicare for all was available. Those are non-government tax payers that would no longer be paying taxes. And those health insurance companies would have fewer funds to pay to lobbyists. Sure, it would be in the interest of politicians constituents, but when was the last time a politician did anything for his or her constituents?
5
@qisl If we can't take this step when unemployment is under 4% then when?
1
At some point - economists are going to have to focus on where the big dollars are. Administrative costs associated with Medicare (both public and private) ain't it.
The real administrative burden is employer sponsored insurance - where the average employee tenure is just over 5 years and 'open enrollment' (tied to corp/individual tax schedules) is annual.
This constant churning of about 150 million Americans (largely to support inelastic and tiered pricing) is the real fiscal burden - and it's a lot more than just administrative costs.
Single-payer healthcare isn't necessary, but single-pricing absolutely is. http://hc4.us/PriceNotPayer
9
@Dan Munro
We are the only developed economy that ties health insurance/health care to (typically) full time employment for people between the ages of 26 and 65. It must be cultural - if you are not breaking your back working for "the man" - you must be a parasite on the system. Ridiculous.
11
@Dan Munro In the $2T healthcare market administered by private insurers profit + administrative costs are 20% for individual and 15% for group. That's about $300B - $400B / year. Those numbers don't even include the costs that provider incur billing through multiple insurers. Perhaps another 8%-12%.
If we want to save money without impacting care then administrative costs are exactly the right place to look.
3
the average cost of a health plan for an individual is $7,800 per year. From 30 years of age to 65 years of age I paid into an insurance company and during that time period, I never made use of my plan. if my average payment was $4000 a year my total payment to the insurance companies was $140,000. From 65 till 85 I have been on Medicare. In that time period, I have had a heart attack, cancer, and surgery. so how do you calculate Medicare cost? If I had deposited into Medicare my $140,000 for the first 35 years would that have not washed out the cost of my present day medicare?
31
@berkshire doc
but you did pay in to Medicare ( did you not ? )
We don’t need Medicare for all we need single payer as provided to every other citizen of developed nations. Medicare as it is is controlled by private insurance, a supplement is a must if you have any assets whatsoever, a brief illness even with a “ supplement” can have a devastating financial impact on those with few assets which if government statistics are to be believed are most of us. Medicare was arguably better before the A.C.A., and I am not saying the A.C.A. doesn’t have good points, it’s just that Medicare was negatively effected to fund it to the point that many M.D.s no longer even meet with Medicare patients you are shuttled off to nurse practitioners particularly in rural areas, the amount being paid to physicians was reduced to cover the costs of those with pre existing conditions so as to make it unprofitable in the eyes of many physicians to treat Medicare patients, typically the elderly who have more problems, this was done to protect the financial interests of big insurance companies and the thousands of their employees who earn enormous amounts of money for what is essentially a very basic business model, collect as much money as possible from people and give back as little as possible in the way of service rendered or claims filed. Single payer was possible instead the insurance interests and big pharma were allowed to dictate terms of the A.C.A. skyrocketing premiums and reduced benefits are the result. Single payer not “for profit insurance”.
10
@Ted
We do need Medicare for all because you have choices as to how to use it and you can go to any doctor. Single payer plans tell you how top use it and in other countries there are waits for service. Medicare already has an administration in place and workers who know what they are doing.
3
@Ted I notice many commenters believe Medicare for all to be a panacea , it is not. I recently attended a Medicare symposium sponsored by Blue Cross it was informative however obviously the intent to sell you a policy may have been. Traditional Medicare leaves you liable for various percentages of some very high cost issues, easily large enough to bankrupt the person or family involved. Americans need single payer, there is a huge difference unless traditional Medicare rules were rewritten to eliminate any costs to recipients other than their tax contributions or as an example in Europe there was I believe an enormous tax on gas to pay for healthcare, a great idea in my opinion , get these rich bankers and Silicon Valley types out of their Range Rovers or at least have them pay a bit of taxes, the loopholes created for them have pretty much made paying taxes for the rich an option, read The Times excellent story on Jared Kushner and become nauseous while understanding how someone earning hundreds of millions pays zippo in taxes, pathetic, welcome to the banana republic of America, a nation of small minded leaders with a big military for hire all at the expense of the former middle class.
8
@Janet Kutny: Janet with all due respect I have been waiting three YEARS to get an internist( not a twenty two year old nurse practitioner) in the rural town I now live in on the Oregon Coast. It has been made very clear to me by neighbors who are retired physicians that M.D.s don’t want anymore Medicare ( with a supplement) patients than they are mandated by law to take, so they have you fill out a ten page questionnaire and then politely tell you via the mail that they are unable to take you at this point. My friends and relatives in France Germany, Canada and Great Britain all prefer their system over ours with the exception of the very wealthy ones I know in Florida who have “ concierge service” wherever they might be, which can range from a few thousand to a hundred thousand a year to insure personal service and a Doctor that will actually speak to you on the phone. Single Payer is the only good option for most people and should be obvious considering we are the lone developed nation not offering it yet our costs are double and our results some of the worst. See Merediths’ chart among the comments on this article the facts are stunning.
1
I don't profess to know the inns and outs of the American healthcare system. But, I believe, that all medicine should be free at the point of delivery and quibbling about the cost of administering it. whilst not simultaneously complaining about the high cost of medical insurance and the salaries of the directors of health assurance companies together with shareholders bonuses seems a bit of a red herring. Health is one of the top priorities for most people and providing it will cost a few %, so what, you are paying, in part, for the administration every time you buy a train ticket !
6
@Vernonya Fine for you, but here someone has to pay or else. Every decent analysis of providing health care to everyone shows it costs so much it bankrupts those states that even consider it. If you make something free here people will use a lot more of it, perhaps your culture is different.
1
@vulcanalex - Define "decent analysis"? Does that mean ones that verify your conclusion.
Look at www.pnhp.org for many decent analyses that contradict your statement
Why are we still hashing this out as if any of these scenarios are likely. We have been barely able to keep the cobbled together affordable care program . The real issue is whether we as a society believe in health care for all . Only when we agree with that concept will the conversation become about cost and benefit . Right now there are too many people involved whose interests are profit, some weird resistance to helping other americans , and the massive flow of money into politics.
71
@Peter Many of us insist that health care or insurance is not a right unless it is in the constitution. So it is not a "right" under the federal government. Some state or states can try it and if they make it work others could follow.
@vulcanalex: But why? Why is the truth not held to be self-evident that we "are endowed by our creator with" the unalienable right to receive modern medical care and not have to choose between life (including the life of our children) and bankruptcy? The implication of the Declaration of Independence is that certain rights (including life) exist whether they are in the U.S. Constitution or not.
1
@vulcanalex - Ever heard of the General Welfare" clause? If heath care is not part of the General Welfare, what is?
2
The payments that doctors and hospitals receive from Medicare is substantially lower than what other plans pay. They are willing to accept Medicare, because most of their revenue comes from non-Medicare patients.
However, if we had 'Medicare for all', then doctors and hospitals would have significantly lower revenue. Since they have large fixed costs, this might result in negative cash flows, which the government would be obliged to make up in order to prevent widespread bankruptcy.
1
@Jonathan
Not necessarily. A lot of doctors' office overhead goes to staff who have to deal with myriad and incompatible forms and procedures for getting reimbursed from all the different private plans out there. Some doctors won't even bother, leaving it to the patient to collect themselve's after paying them first. Of course, many patients do not have that kind of upfront money when it can take up to 2 months to get reimbursed, which means people go without care, further cutting into doctors' business (not to mention health outcomes of patients).
There are multiple savings at all ends of Medicare for All.
58
@Scott Baker - Exactly! My small-town, single-practitioner MD has one full-time employee whose job is to sort through the morass of unique, conflicting "rules" of competing private "insurers" and attempt to get them to pay up. One small claim from an office visit took 11 months (Yikes!) to get paid. Sheesh!
1
@Scott Baker
I can assure you that if you pay the doctor first, and attempt to collect from your insurance company, all claims will be denied and you will never be reimbursed. Been there done that. It is very hard to take on $1 billion industry with all the money already in their pocket. Never ever pay before the insurance company. Armed with a prior bad experience about paying a bill and then attempting to be reimbursed, I no longer pay bills prior to the insurance company issuing their automatic claim denial, and then appealing that denial. Recently an insurance company deliberately delayed their processing of an appealed claim trying to force me to pay the claim by letting it go to collection. Apparently they had in their records (information which had to have come from another insurer) that I had paid bills in the past and they wanted me to do it this time and then for me to wait to get reimbursed. I refused. Ultimately they did what they should have done in the first place and paid it but I had to go through a really bad experience and enlist the help of the company‘s HR department, in order to get them to do that. I am absolutely certain that had I paid it, I would never have received a penny of reimbursement. What the policy said about benefits was completely irrelevant to them.
1
This article does a good job of attempting to rationalize the "benefits" of private insurance while at the same time showing exactly how the private plans are a lot less efficient.
50
This is the most exculpatory description of private "Medicare" plans that could possibly have been written. I guess Mr. Frakt had his marching orders from the editorial board.
The reason Medicare costs increase so much when the private plans are taken into consideration is that the private plans are far less cost-effective than Medicare.
If permitted by Congress, Medicare could provide all the services of the so-called "Advantage" plans at much lower cost.
The "private" Medicare plans were carved out of Medicare in order to make it less effective for its customers.
The Republicans who created Medicare Advantage want their private industry campaign donors to be rewarded with plunder from the public's trough.
134
The issue with Medicare for All is not lower administrative costs.Democrats advocating Medicare for all are doomed to fail. They ignore the first concept of the Hippocratic oath, which is to “first do no harm”, to a complex system that emphasizes individual choice, with Medicare a costly subsidized entitlement.
As economists in both political parties will attest, our nation’s entitlement programs, including Medicare, are quickly on their way to going broke. The idea that Medicare could be expanded into a single-payer system is attractive to the far left, but totally unworkable. Politically, the GOP will remain in power as long as Democrats try to cram down a single-payer system on all Americans.
Instead, Democrats should offer voters a clear, feasible choice by designing a Medicare option for all Americans at actuarial cost with non-profit accounting.
Start by offering Medicare as an individual option for all Americans between the ages of 50 and 64, with the premium fixed at the average cost for that age cohort based on actual experience this group alone This provides a safe harbor to older Americans outside the employer-based system of group medical insurance. There are at least 10 million citizens in this group alone. By focusing on them first, the bugs can be worked out of the billing and payments system, and the Medicare staff can be expanded rationally to make the service system work without flooding it with new enrollees all at once.
10
@GCM I agree that expanding Medicare to age 55 would be a natural way to begin to implement Medicare for all. It should also assist employers in removing a perceived barrier to hiring employees over age 55 who then would not need an employer's self-funded health care plans (if those plans continue to exist).
I disagree that Medicare is a "costly subsidized entitlement". The "fake" crisis of Medicare going broke is easily fixed by raising the wage limit on taxes to include upper income tax payers who certainly do utilize Medicare when eligible. Medicare keeps citizens who qualify and have access to health care providers healthy unlike the other age groups who have a choice between bankruptcy and medical care. Americans who pay the taxes which pay for Medicare during their working years are also the ones most likely to use Medicare once they no longer have wages.
The problem with Medicare for the future is the appalling immigration policy of the Trump administration which is restricting the people needed to work in the US economy from entering the US even though nearly all citizens who can work, are skilled in the job requirements, live where the jobs are and are the age of needed workers are employed. Drug use, living without transportation to jobs or without affordable housing where jobs are, lack of education and other barriers have reduced the number of citizens who can fill jobs. Immigrants are increasingly needed now and for future jobs in many states.
5
@GCM That is a good idea, but when it comes out for each person to be say 800 per month who will be able to afford that? The wealthy only.
@vulcanalex
You premium cost won't be $800 per month, compare to other countries and you can see it is much less per person, Canada which has a diverse population much like ours pays 50% less
This is silly. Of course it would be cheaper. But it would mean a loss of thousands of insurance company dollars.
Dems should run on a platform of expanding it by reducing the age of Medicare to 55. Or maybe 50.
This would keep private insurance in business while handling the vast majority of chronically ill patients.
30
@paul
This would hurt insurance companies? I am sorry for the people employed in the insurance company but I am not concerned with the future of the insurance industry and their fat cat salaries.
3
Medicare is good. Medicare Advantage is a scam. How do I know this? Because my husband was on it for a year and got caught up in "out of network " nonsense, and ended up getting bills for thousands of dollars ! ( he appealed it and won )
BEWARE of Medicare Advantage . He switched back to traditional Medicare ( you only get ONE chance to do this -another scam ! )
KEEP CONTROL OF YOUR MEDICARE , don't hand over your power, thats my advice. The whole system needs simplification , but of course then all the " middle men " would not get their cut ...
114
@L. Finn-Smith - I had a similar experience. None of my 6 doctors would take my Medicare Advantage plan.
5
@L. Finn-Smith
Best advice ever...from a nurse who knows.
1
@L. Finn-Smith
It depends on the plan. I have had an Advantage plan for over 3 years (the same one my husband had for 8 years) and have never had an problem with them despite
using multiple specialist MDs, and different clinic/hospital systems.
All your columns, and analysis, of how to lower the cost American health care ignore the central problem of American health care—cost. We have no “system” other than a rigid protectionism of pricing by the big businesses and wealthy providers that are rampant, random and unmatched anywhere else in the world. Analyze that.
76
The challenge with all single payer systems is that they tend to forget the private insurers. We cannot just wipe away their business without ignoring the larger impact on the economy. The loss of jobs, stock market value, the impact on local economies. One of the strengths of Obamacare is that it considered these realities. Maybe the answer is more regulation and control over the current system instead of scrapping it
2
@Martin
That Obama was forced to preserve a role for private insurers is the Achilles heel of the ACA. We can most certainly wipe away their businesses, which contribute almost nothing to healthcare and impose enormous costs (⅓ of total healthcare spending). The economy will hardly notice, as that wasted spending is rerouted to more productive and beneficial uses. The loss of their economic value will hardly be a blip. Improved Medicare for All is the only viable answer.
9
@Martin - Ah yes. Do what we do best - address the symptoms rather than the underlying problems. Slap more band-aids on our broken Rube Goldberg medical insurance system in order to provide employment in the insurance-scam industry that provides little, if any, valuable service beyond bloated executive salaries and passive returns to insurance company investors.
1
The 2 percent administrative cost of traditional Medicare increases to 6 percent when only one-third of the Medicare beneficiaries are enrolled in private Medicare Advantage plans. The waste of the private plans is diluted by the efficiency of the traditional program.
More importantly, the administrative excesses permeate our entire health care delivery system because of the highly fragmented, dysfunctional financing system which also places a great administrative burden on the providers of health care. When people ask where we are going to get the funds tp pay for Medicare for All, they should be reminded that hundreds of billions of dollars are actually recoverable by merely changing to an efficient Medicare for All public financing. That would still leave hundreds of billions for essential administrative services.
Regarding whether or not the private Medicare Advantage plans are providing value for their administrative excesses, the answer is clearly no. Their intrusive care management has been directed more at upcoding to increase profits rather than providing much in the way of truly beneficial services.
It would be much more efficient to roll the extra benefits of Medicare Advantage, retiree plans, and Medigap into the traditional program, creating an improved Medicare for All. The administrative savings along with negotiated pricing is the key to providing affordable health care services to absolutely everyone.
90
@Don McCanne
Thank you for your comments.
7
I don't think the author adequately considers the cost of fraud to the Medicare program. The link he provides regarding Medicare anti-fraud activities merely notes activities Medicare was PLANNING to implement. The same reference states that Medicare fraud may be as much as 10% of expenditures. Of course as the author notes, the total extent of fraud is hard to prove or disprove since we only know about fraud that is detected and much more may go undetected.
5
@J. Waddell The current governor of FL and senator hopeful Rick Scott was a factor in Medicare fraud by his company HCA prior to his convenient resignation to run for governor by funding his own multi-million dollar campaign.
Until the large players in Medicare fraud who are big donors to both parties (although admittedly more wealthy fraudsters donate to Republicans)can be punished, stopping Medicare fraud is just a political campaign slogan.
1
I am totally fine with this concept as long as the users are willing to pay for the actual cost. We pay into Medicare for 30-40 years to fund it when we need it and many still far outspend what they paid in. My father kept tabs and the government paid almost $1 million of his bills before he died. He did not pay $1 million into the system needless to say. We don't need another program that will not pay for itself.
2
@Anita
Medicare is a type of health insurance. If your father consumed $1 million, his high utilization after age 65 was offset by someone else who had spending much lower than the $12,000 per person average. Health insurance is not intended to be a savings program (or HSA) in which the beneficiary saves current dollars to spend on future medical and pharmacy bills. When you imply that Medicare should pay for itself, what scale are you considering? The individual person for any given year or over a lifetime? Or the program as a whole over a given period of time?
41
@Anita
Adjust payments into Medicare so that they are matched to the inflation rate in the years of his death. Let us know.
There are others who make payments but die suddenly, never collecting any benefits from Medicare.
6
Did you use present day dollars in you calculations or inflation-adjusted dollars? The results are dramatically different.
7
Trump's blather is bunkum once more,
"No private insurers?" He'll roar,
All great Nations but us
Without fuss or muss
Universal health care takes the floor.
We're getting less bang for the buck,
Large groups are simply out of luck,
Less talk and more action
Will mean satisfaction
And Medicine unmired by muck.
25
Of course Medicare for All would be cheaper. Eliminate the profit margin that sustains the private plans, & more of our premium dollars will be spent on your medical care while less is spent on marketing. It's easy to see why the insurance industry hates the idea; they want to make money at the patient's expense.
As a provider, I would happily accept Medicare for All & gladly do away with the confusing hodgepodge of private insurance plans.
166
@Doctor B Prior to retirement I was briefly involved with trying to enlist providers to work together to lower costs by agreeing to regional standards. Then it was a fight for providers to "give up independence". Now most providers are willing to look at the best practices for their specialties and agree on standards just to eliminate all the hassles of so many different "choices" of plans.
For people over 65, the need for choice is similar to Doctor B's willingness to work with multiple plans: Too much hassle for too little benefit.
4
@Doctor B. Hear, hear. I’m with this provider, and the medical provider is one of the ONLY two important entities that matter in the overall healthcare equation: doctor and patient. All else is nonsense, of no matter, and of smoke & mirrors (geared towards generating profits for the wealthiest, i.e., top 10%). Back to basics, people. The nurses marching in D.C. on the 50th anniversary of Medicare’s inception are the ONLY ones with the right idea: Mcare 4 ALL, period!
8
Austin Frakt fails to take account of the forest for the trees. American health care costs are nearly double the next most expensive developed country's medical costs. So the notion that somehow there is an "argument" to be made that medicare-for-all, a national health care system for every American run by the government, would not be cheaper is nonsense.
Austin Frakt points to higher costs for private sector Medicare plans. What he doesn't point out is that those private plans were created by George Bush, and heavily subsidized by the government, in order to destroy the Medicare system and privatize it.
Medicare for all would be dramatically cheaper, and everyone knows it.
189
@Sean
What the writer's groups keep failing to mention -- "boomers" have paid into Medicare for ~50 years.
Anything that might disrupt today's Medicare is an absolute non-starter with most boomers, an immediate way to start protests that they would never-ever forget.
Further -- they make such proposals with nothing directly invested in such a process.
If they did .. and actually had to manage it -- IMHO, in a few months, they'd go MAGA. Being on the front lines of medicine is 10,000% harder than from a faculty lounge. Their "work" is very profitable -- their payor plans are gold-plated and funded by taxpayers.
And anyone who thinks USA taxpayers are going to approve a 200% increase in federal g overnment spending for such theories has, IMHO, lost any grip on reality and real-politik. Such proposals have already been essentially defeated in Colorado, Vermont, and California.
Directly to the point: costs from smoking, heavy drinking, illegal drugs, over-eating, and "wild living" would have paid for 2+ PPACAs.
Democrats ought to take a hard look in the mirror and ask "why should non-smokers, et al., pay for personal choices?"
Finally -- medical and health staff expect to be paid, look at the number of threatened strikes. Just saying "we'll find the money, trust us" is like looking for unicorns -- waste of time and money.
@Sean
I agree with Sean and feel Dr. Frakt is off base on many points. During the 1980s I was a Director in the largest HMO in Florida and the first in the nation to introduce what is now known as Medicare Advantage (private Medicare plans). At the time, we received 90 % of the average Medicare cost per patient in each zip code we covered throughout Florida. Under Bush II, that amount was raised to 110 %. Private Medicare providers have tacked exorbitant deductibles and copays. Medicare Advantage is great if one never needs medical care, but how many seniors are in that boat?
1