ACA won't control health care costs

By Henry J. Waters III
Columbia (Mo.) Daily Tribune, March 8, 2014

Recently a group of physicians sponsored a visit by a University of Massachusetts professor of economics who goes about the country touting the advantages of single-payer health care, using numbers as his forte. Gerald Friedman appeared at the University of Missouri School of Medicine at the behest of the Missouri chapter of the Physicians for a National Health Program.

His thesis: the Affordable Care Act, otherwise known as Obamacare, does a lot of good things but does not control costs. The answer is a single-payer system in which the government acts as insurer.

I have made the same argument here based on the obvious premise health insurance can operate most efficiently and inexpensively only if the risk pool includes the entire population. We are seeing problems inherent in the hybrid ACA approach. For political reasons, elements of the old system are being preserved while tomorrow's fix is held at bay.

We know the better model. Often referred to as Medicare for all, the best new system will operate like the familiar and popular Medicare system, expanded to include people of all ages and means.

Models in other nations show continuing roles for private insurance companies but not as designers of universal coverage. Indeed, universal coverage is contrary to the economic principles of private health insurance, which profits by maximizing revenue and minimizing costs. The role of government in a national health system is the opposite, resulting in more effective care at lower overall cost, which Friedman regards as a hugely important economic boon.

In years past, physicians and other health care providers have not wanted to lose the fee-for-service system, but growing numbers now look forward to a more rational system. They are tired of private insurance hassles and recognize fee-for-service to put profit over best-care practices. Of course, they should be well compensated, but with a nationally managed system, providers can be incentivized to emphasize wellness and health outcomes rather than proliferation of services and procedures.

As Friedman points out, the substantial money saved in a single-payer system can go back into the economy. Health care costs can be reduced by billions. He cited numerous examples of lower costs and superior health outcomes in other countries.

"Get the profit out of health care, and everybody wins," he says.

Well, not everybody. Sellers of insurance, drugs and other health care products and services have profited through the years with the disappearing system. You can't blame them for working the territory and wanting the status quo to last, but by now evidence is clear the United States should join the other developed countries of the world with a better system. Examples are everywhere, including in our own country.

Let's call it Medicare if we don't like "single-payer," but let's get on with it.

Henry J. Waters III is editor at the Columbia Daily Tribune.