The AMA and single payer policies
Reference Committee highlights
AMA House of Delegates
2007 Interim Meeting
Reference Committee J
The AMA adopted several principles to guide in the evaluation of state health system reform proposals. Health insurance coverage for state residents should be universal, continuous and portable. Coverage should be mandatory only if health insurance subsidies are available for those living below a defined poverty level. The health care system should emphasize patient choice of plans and health benefits, including mental health, which should be value-based. Existing federal guidelines regarding types of health insurance coverage (e.g. Title 26 of the U.S. Tax Code and Federal Employees Health Benefits Program regulations) should be used as references when considering if a given plan would provide meaningful coverage. The delivery system should ensure choice of health insurance and physician for patients, choice of participation and payment method for physicians and preserve the patient/physician relationship. The delivery system should focus on providing care that is safe, timely, efficient, effective, patient-centered and equitable. The administration and governance system should be simple, transparent, accountable, efficient and effective in order to reduce administrative costs and maximize funding for patient care. Health insurance coverage should be equitable, affordable and sustainable. The financing strategy should strive for simplicity, transparency and efficiency. It should emphasize personal responsibility as well as societal obligations.
Reference Committee K
The AMA adopted a recommendation in Council on Medical Service Report 2 to reaffirm policy supporting the principle that risk-related subsidies, such as those for high-risk pools, reinsurance and risk adjustment, should be financed through general tax revenues rather than strict community rating or premium surcharges. The AMA also adopted a recommendation to support the principle that health insurance coverage of high-risk patients be funded through direct risk-based subsidies such as high-risk pools, reinsurance and risk adjustment, rather than through indirect methods that rely heavily on market regulation. The AMA also will support state-based demonstration projects to subsidize coverage of high-risk patients through mechanisms such as high-risk pools, reinsurance, risk adjustment and other risk-based subsidies.
http://www.ama-assn.org/ama1/pub/upload/mm/469/refcommhighlightsi07.pdf
Comment:
By Don McCanne, MD
The AMA proposal for reform depends heavily on providing choice of private health plans and using tax credits for lower-income individuals. Such an approach is more expensive than enacting a universal national health program, and falls short on important goals such as universality and comprehensiveness.
Although the AMA has rejected the single payer model of reform, they have approved the support of important policy goals that would be very difficult to attain through their proposal for reform but would almost be a given if single payer were to be enacted.
The AMA calls for coverage to be universal, continuous and portable. Those goals would be automatic with a single payer system, but they would be almost impossible to achieve with a fragmented market of private plans that change their benefits frequently and enter and leave various markets at their own discretion. The only person who can say that he or she has the same continuous, portable plan for the past forty years is a 105 year old Medicare beneficiary.
The AMA states that coverage should be mandatory, but only if health insurance subsidies are available for those living below a defined poverty level. The problem with this concept is that adequate insurance plans are now no longer affordable, not only for those in poverty, but also for average-income individuals. The subsidies required would have to be close to the amount of premiums now paid by employers for their employee health benefit programs. The subsidies would be so great that they would likely be enough to fund the balance (over our current tax spending for health care) that would be required for a single payer system. There would be no reason to waste funds on the highly inefficient, fragmented system of private plans. But one important health policy principle implicit in this recommendation is that the AMA recognizes that health care financing must involve progressive tax policies.
Their emphasis on patient choice of plans and benefits is not rational for two reasons. No individual can possibly predict his or her own future acute or chronic medical needs; everyone needs comprehensive coverage. Also, an effective insurance program requires pooling of all risks in order to effect a transfer from the many who are healthy to the fewer with health care needs; the healthy need to contribute equitably to a pool that provides full benefits for all participants.
The AMA states that federal guidelines such as the Federal Employees Health Benefits Program (FEHBP) should be used as references when considering if a given plan would provide meaningful coverage. Although the FEHBP plans fall short of benefits that would be covered under a single payer model, most of the FEHBP plans are far better than the newer innovative, underinsurance products. The AMA does acknowledge that meaningful coverage requires at least a minimal standard as set by the federal government. Skeletal insurance won’t do.
The AMA states that the system should ensure choice of health insurance and physician. But the majority of private plans today limit the choice of physicians, which is the choice that patients actually want. If the plans were to grant unlimited choice of physicians then they would lose the only real function that they serve: controlling fees through exclusive contracting. Without this function, private plans would be truly superfluous.
The AMA calls for providing care equitably. Although a single payer system would be only the first step toward achieving equitable access, at least it does remove the inequitable financial barriers that are characteristic of the private plans.
The AMA calls for reducing administrative costs and maximizing funding for patient care. No contest here. That is precisely what a single payer system accomplishes, whereas the private plans and the burden they place on providers are the sources of these inefficiencies.
The AMA states that health insurance coverage should be equitable, affordable and sustainable. Again, those are characteristics of the single payer model that the private insurance industry cannot provide.
The AMA states that the financing strategy should strive for simplicity, transparency and efficiency. Once again, the single payer model beats the private insurance industry hands down on these measures precisely because that is inherent in the single payer design.
The AMA supports the emphasis on personal responsibility as well as societal obligations. Everyone agrees that individuals should assume a personal responsibility to take good care of their own health. But we also have a societal obligation to see that the health care needs of everyone are met. That is the purpose of a single payer system, whereas private health plans deliberately establish financial and administrative barriers to care.
The most difficult issue in reform is how to pay for the 80 percent of health care that is used by the 20 percent of the population with greater health care needs. The AMA supports the principle that risk-related subsidies, such as those for high-risk pools, reinsurance and risk adjustment, should be financed through general tax revenues. They recommend against indirect methods that rely heavily on market regulation. Wow. Leave the private plans alone, but shift the real costs of health care to the taxpayers. Obviously, with a massive, tax-payer funded risk pool, we would have a de facto single payer system and would no longer need the private insurers.
It is amazing how close the AMA is to supporting the single payer model. It’s too bad that they don’t yet realize it.