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A cost-effective alternative for U.S. health care

By Ken Lefkowitz
Courier Post (Cherry Hill, N.J.), September 15, 2018

If someone paid $1,000 for a service they could purchase elsewhere for $512, you’d think they were quite foolish. Yet, that's the situation facing healthcare in America today.

Our current system for financing healthcare has been ineffective in controlling costs or providing the highest-level quality care. In 2016, the U.S. spent 17.2% of its GDP on a system that still leaves tens of millions of Americans uninsured or underinsured. In contrast, Canada spent 10.6% of GDP for universal coverage while the United Kingdom spent 9.7%. The nations of the European Union spent an average 8.8% of their GDP on healthcare1 (i.e. $512 for every $1,000 spent here). Despite the high cost, the U.S. ranked only 5th of 11 wealthy nations in quality.

American healthcare is financed through a free market. But free markets require transparency, so that buyers can compare the price and quality of competing products. Healthcare simply doesn't lend itself to these comparisons. The dizzying complexity of both medical care and insurance plan design precludes the consumer from making informed choices. The average person cannot be expected to have knowledge of illness or treatment options, and primary care physicians strongly influence or dictate choice.

For example, you might select an insurance plan as an individual, or one offered by your employer, because it has a low price and includes your doctor in its network. This feels like an informed choice. However, when you become ill and require surgery, your doctor (probably not you) selects the hospital you go to. Much to your surprise, the anesthesiologist and radiologist are not “in-network” and, as a result, you incur huge bills. Transparency did not exist beyond choosing your plan and primary doctor. This is but one example of many in our complex system.

While the Affordable Care Act introduced many needed reforms, it too relies on market forces to control costs.

There is an alternative worth considering. A single-payer system can deliver both cost-effective and high-quality care.

One model of a single-payer system, H.R. 676, the Expanded and Improved Medicare for All Act, if enacted, would fund all necessary care including dental, vision and prescriptions, with no co-pays or deductibles. Patients are free to choose any doctor or hospital since the delivery of care continues to remain in private hands. A study by Professor Gerald Friedman of the University of Massachusetts estimates H.R. 676 could cover everyone in the U.S. while yielding $592 billion in gross savings annually. These savings are mostly achieved by eliminating the duplicative administrative and marketing costs of our profit-based insurance industry, and allowing for the negotiation of medical services and pharmaceuticals on a national level.

Single-payer systems can provide additional savings by emphasizing evidence-based medicine, preventive care and improved health outcomes, vs. our current method of fee-for service. Additionally, single-payer will reduce the high cost of care for those uninsured citizens using hospital emergency rooms for their healthcare. Focus on quality of care, and early disease intervention resulting from eliminating co-pays and deductibles, can lower costs even further.

Research I have spearheaded demonstrates that a single-payer system would be a boon to businesses by reducing absenteeism and increasing labor productivity gained through a healthier workforce, all while lifting employers’ burden of providing healthcare, allowing them to be more competitive in today's global economy.

According to the Pew Research Center, 60% of Americans currently believe the government should be responsible for ensuring health coverage. And the government is already heavily involved in financing healthcare. In fact, a 2016 study found taxpayers fund 63% of U.S. healthcare through Medicare, Medicaid, Veterans Affairs, government employee benefits, and tax subsidies for employer plans.

Our current system has failed us. Americans need to understand the evidence for more cost-effective financing of healthcare and further support a single-payer program like Medicare for all.

Ken Lefkowitz is a former senior director of benefits and compensation for several major corporations. He is a member of the Physicians for a National Health Program and the New Jersey Universal Healthcare Coalition.

https://www.courierpostonline.com...