By: Ron Peck, Esq.
In case you missed it, there is a movement afoot. It’s found some real purchase in California, but you hear rumblings everywhere. A call for a single payer system. Medicare for all. I’m going to avoid discussing the pros and cons of this idea, as it relates to patients, employers, and us – the folks tied into the benefit plan industry. Instead, I’m going to focus on (*gasp*) the provider community. I was researching this topic when I stumbled upon the Physicians for a National Health Program (“PNHP”) website. Interesting stuff! While there, I saw a massive “FAQ” page; (http://www.pnhp.org/facts/single-payer-faq). Looking at the first few lines, I suddenly realized how far apart some people are from each other. For instance, consider the following: “Question: Is national health insurance ‘socialized medicine’? Answer: No. Socialized medicine is a system in which doctors and hospitals work for and draw salaries from the government. Doctors in the Veterans Administration and the Armed Services are paid this way. The health systems in Great Britain and Spain are other examples. But in most European countries, Canada, Australia and Japan they have socialized health insurance, not socialized medicine. The government pays for care that is delivered in the private (mostly not-for-profit) sector. This is similar to how Medicare works in this country. Doctors are in private practice and are paid on a fee-for-service basis from government funds. The government does not own or manage medical practices or hospitals. The term socialized medicine is often used to conjure up images of government bureaucratic interference in medical care. That does not describe what happens in countries with national health insurance where doctors and patients often have more clinical freedom than in the U.S., where bureaucrats attempt to direct care.”
Stop. Wait. This seems to indicate that providers are free to charge whatever they want, and Medicare (blessed, generous Medicare) pays the bill. Yet, whenever a private benefit plan offers to pay Medicare PLUS 20%, 40%, or even (sometimes) 200% of Medicare, they are laughed at by the hospital. They are told that if the hospital accepted what Medicare pays (or even double what Medicare pays), from its privately insured patients, they’d go bankrupt! Why? Because Medicare has the size (steerage), clout, and statutory backing to set its own prices. So, despite the aforementioned FAQ, Medicare DOES dictate what is paid, and DOES control what hospitals and doctors receive. Imagine how much MORE power Medicare would have, to dictate what is and is not payable, if they WERE THE ONLY PAYER IN THE NATION!!!
This, then, is my point. Support for a single payer / Medicare for all model is out there… and it is growing. If this became a reality, forgetting all the other issues, as it relates to providers – hospitals wouldn’t be getting Medicare “plus” anything. In fact, once Medicare (or whatever the single-payer called itself) literally holds ALL THE PURSE STRINGS I imagine the payable rates would drop BELOW the current Medicare payable rates. Ouch!
So… doesn’t it benefit these hospitals to preserve private benefit delivery systems? Shouldn’t they be scrambling to retreat from a single payer? Given what balance billing hospitals say to me about “Medicare based payments,” I should think so. Yet, every time a private plan or carrier is charged 1,000% or more of what Medicare pays, that payer is being pushed one step closer to financial ruin. If that happens, and we are stuck with a single payer, I am convinced it will end badly for my friends in the health care delivery community. Thus, every time a provider refuses to work with a private payer, to find common ground… it is a prime example of biting the hand that feeds you. You may be able to squeeze a few more bucks out of the plan today, but mark my words, those dollars will cost you exponentially when the legs are kicked out from under our system and we’re stuck with a single payer. Trust me. It is a simple economic truth that when there is one, and only one customer – that customer controls the pricing.
The time has come to play along, for everyone’s sake.