I’m not sure that single payer would mandate that the smaller hospitals stay in business; it’s not the post office (and shouldn’t be), and any single-payer solution should be VERY careful about any sort of SLA type care guarantees. That sort of thing could get as expensive as what we have now, only out of the government’s pocket instead of the people actually using it.
I don’t view it as that simple, though.
For decades, big HC insurers were extremely reluctant to cover preventive care. Didn’t the ACA really create the first giant step forward on that ?
A couple of decades ago, an industry insider family friend and I were talking about it: the paradox that insurers could actually save money by emphasizing and broadly covering prevention.
His well-informed position was that US insureds tended to change health care insurance providers with such frequency that – shortsighted though it obviously is – the individual insurance companies felt that they wouldn’t reap the benefits of those savings.
And the concept of reduced malpractice being the right kind of incentive for physicians ? Fear can be a powerful motivator but I wouldn’t call that optimal.
I’m not one that believes that we need ‘tort reform’ for things like MedMal – largely because I’m aware of the statistics regarding how those cases – even those found to truly have merit – tend to go.
Sounds like they attached a boilerplate letter that they send to everyone.
It’s nice when you wind up at an in-network hospital but one or more specialist is OON. You don’t always know that is even a possibility, up front. One horror story when my daughter was born: I joined list for parents of preemies. One parent’s kid was in such-and-such hospital, which was in-network - but the neonatologists who served that hospital were NOT. It’s not like it was easy for them to hospital shop. I don’t know what happened in their case (this was 20+ years ago).
As far as single payer reducing overhead (in the example mentioned upthread: dentist, assistant, receptionist, billing person): you’d still need someone to handle the billing in that case - possibly the receptionist would be able to manage it, possibly not - but the staff member would not have to spend half her time on the phone with any of 20 different insurance companies. S/he’d just need to document what the doctor did, then submit that through a single portal.
I was about to say, for decades insurers would refuse to underwrite pre-existing conditions. It’s a different field today.
~Max
Some mentioned McDonalds, so here is the situation now. You go into McDonalds and there are no prices listed. What you don’t know is that the owner negotiates beef prices with suppliers, and depending on market clout one owner can pay 5x more than another. You, the purchaser, eat your burger and then get told how much it costs.
True capitalism requires open markets with information about pricing freely available. For instance rules on information for stock sales. That’s what we don’t have for medical pricing.
That was the point.
I think that’s part of what seems so profoundly broken about it all: that damned perverse incentive.
It’s controlling, and it always militates toward the same dynamic: we do the right thing … only when every single other thing has failed, and/or when we’ve been legally required to (and the pain associated with transgression outweighs the pecuniary advantage of not complying).
I’m a former corporate VP. One of my best friends is a retired surgeon. I remember talking with him about crime/punishment in the US.
I told him that – if it were my job to be a VP for a for-profit corrections company – I’d aim for three things:
- Make more things criminal
- Increase sentences for any and every infraction you could
- Decrease services to the correctional facilities
[pretty much what they do now]
I asked him what he thought my job would be if I was a Sr. Executive at virtually any large-sized actor in the health care industry.
It was rhetorical 
The industry’s infinite complexity also creates a high level of functional opacity and information asymmetry that’s horribly vexing.
It reminds me of a thread that I started that makes a compelling case that US wealthy really don’t pay anywhere near their fair share of taxes (or what we’re led to believe they pay), and they have control over a) the quantitative and material data, and b) the levers and knobs that allow them to keep the basic effective tax rate constant, almost no matter what.
And health care – IIRC – keeps taking an ever-larger share of our GDP, year after year.
And our outcomes, generally, really aren’t world-class.
Broken.
Well, there are some innovations with at least the intention of changing the perspectives so as to benefit society more.
I’ll speak to my industry. Affecting health providers, the MACRA from 2015 is a first step in changing Medicare providers from fee-for-service to performance-based payment. Under that law and subsequent regulations we have MIPS (and alternates) which replaces the previously optional Meaningful Use and PQRS measures. Were it not for the pandemic, providers today would face a percentage cut or bonus to their Medicare payments based on quality of care measures reported to CMS two years prior. Unfortunately while a step, it is a baby step. Quality measures only correspond to a fraction of the score that ultimately affects payments, and physicians can pick and choose (usually) their six best performing measures out of a large retinue, not all of which are truly “clinical” outcomes.
But in that pool of measures you will see things like,
- Percent of asymptomatic patients undergoing Carotid Endarterectomy (CEA) who are discharged to home no later than post-operative day #2.
- Percentage of patients aged 18 years and older with a diagnosis of primary open-angle glaucoma (POAG) whose glaucoma treatment has not failed (the most recent IOP was reduced by at least 15% from the pre-intervention level) OR if the most recent IOP was not reduced by at least 15% from the pre-intervention level, a plan of care was documented within the 12 month performance period.
- Percentage of patients who died from cancer admitted to the ICU in the last 30 days of life.
- Percentage of patients, regardless of age, who gave birth during a 12-month period who delivered a live singleton at < 39 weeks of gestation completed who had elective deliveries by cesarean section (C-section), or early inductions of labor, without medical indication.
etc.
Evaluations under the Medicare Quality Payment Program are publicly available for each provider and in theory commercial payers could use those results in rate negotiation.
~Max
I’m not sure who the “providers” from that study are, but they aren’t front line doctors. The highest level of care that I bill for, a new patient visit with complicated problems (CPT code 99306 for those who are curious) pays me about $60. I’m not getting rich by billing patients four or five figures for a simple visit. I don’t know of any of my colleagues* making seven figures a year. Even the neurosurgeons and orthopedic surgeons I know only reach the high 6 figures. Those doctors do it by working hard, being in the OR several days a weak, working 10 or 12 hour days in the office, taking call at night and on weekends, etc. The idea some of the public seem to have is that doctors work a few hours in the morning then go have a three martini lunch and play golf all afternoon. I’ve never known a doctor living that lifestyle. The people making the huge dollars are the big corporations that own the hospitals, not the doctors or any other front line providers.
*. The only exception is one internist I know who does a lot of self pay cosmetic care. Botox, juvederm, body sculpting, those sorts of things.
The article was very specific to hospital/inpatient care. With 99306, isn’t that for nursing facilities? The situation may be different.
My practice doesn’t make more than $250 from a new patient visit (CPT 99205), and those are the really complicated ones with an hour+ of face time. We don’t code up to level 6, not that I’ve seen…
~Max
Yes, that’s for nursing home care. I do see a few hospital patients, doing medical clearance for patients being admitted to the psych hospital. The highest level I bill is 99223, which pays me $55.
To be brutally honest I am told our doc did exactly this on Fridays in the early 'oughts. Half day, then golf or whatever with various other docs who have Friday pm off. We still close at 3pm on Fridays as a holdover, but his golfing days are through.
~Max
Note what I said:
a broad term that encompasses lots of large companies
Note also that hospital services represent one trillion alone of the provider costs, which is a significant portion.
The degree to which costs are driven by individual physicians, or small physician offices, is more complicated and beyond the scope of the article or the PDF I linked, and would likely require extensive study.
However it should be understood there is a lot of money in providing medical services–trillions in fact. Not all of it is well linked with underlying costs. There’s hospitals that you go into them and they literally look like palaces, with literally millions of dollars in art work on the walls, florist / gardening contracts for the grounds that probably run to seven figures etc. I am not trying to extrapolate the entire medical system from a few visits I’ve had to world class facilities with “gucci” decor, but the people running those hospitals are millionaires, paid 7 figure salaries in many cases in line with for profit corporate CEOs in some cases (and many of these world class facilities, like MD Anderson, are technically non-profits.)
You won’t find hospitals like that anywhere in Britain or Canada for what it’s worth, and that doesn’t mean Britain and Canada don’t have good hospitals, but it does mean we have hospitals that extract massive profits from society and those would need a significant haircut–and would receive a significant haircut in a single payer system. There’s a reason these people have fought reforms since the 1940s, as I mentioned the guy who basically invented our private insurance system was a hospital CEO in Texas in the 1920s.
There’s always significant pushback to talking about it because people are uncomfortable with addressing the simple reality that our healthcare providers–which again, is a huge class of entities from a country doctor making $110,000 a year and running a very small practice on a shoestring budget, to medical groups with billions of dollars in revenue, provider services at rates that are vastly out of line with the norm in any other OECD country. Those costs must be controlled to ultimately lower healthcare costs as a share of GDP, to bring America more in line with the costs seen by other countries. Simply flipping a switch to single payer doesn’t change much, you then have to give all thes entities right now that are sucking far more of the economy into their orbit than is the norm for other Western countries, what will amount to a haircut.
For what it’s worth I’m highly skeptical any such dramatic cutover ever occurs. What is more likely is we continue along on our base of glacial reform, and maybe over time it slows the growth in our healthcare costs, which might eventually bring us more in line with other OECD countries, due to the stakeholder pushback I very seriously doubt we’ll ever see a dramatic slashing of costs generated from the core providers of medical care in the system.
~Max
I have a cousin who works at MD Anderson, and he would be the first to tell you their priorities are totally at odds with their public mission.
What stakeholders are you thinking of? The most profitable hospitals are, as your article says, nonprofits with no stakeholders. Insurance companies have stakeholders, pharma companies have stakeholders, many physician groups have stakeholders, but the hospitals featured in that article notably do not.
~Max
I was in medical school during that time period. My understanding is that things were more like that back in the day, maybe the 1970s and 1980s. Things slowly started getting away from that for whatever reason. Now if a doctor has the afternoon off, it’s likely that they spend it catching up on charting, making phone calls, and things of that sort.
ETA. I’m not saying physicians are underpaid. I am saying that the fat in the system isn’t in the salaries of front line doctors.
Any true single payer system is going to either impose cost controls, or see costs spiral hilarious out of control. This was part of the politics around Obamacare “death panels”, a political attempt to scare Americans to the simple reality that part of controlling healthcare costs is making decisions about where money and resources should not be spent.
Again, I’ve made note that I do not believe any dramatic, “flip the switch” moment from moving America from a private insurance based system to a single payer system will ever occur, so we’re getting into what I consider a hypothetical scenario. But in such a hypothetical scenario you would immediately see major pressure on all the providers to cut costs in a huge number of areas. I don’t even know how much of the cuts, % wise, would be in salary, but it’s likely some cuts would happen there–and salary is possibly the easiest to hypothesize about because of how straightforward it is to find the data there.
There is no real equivalent in the NHS for example of someone who is “CEO” of a hospital making 7 figures. There’s various ranks of hospital administrators who I think max out at less than USD $100,000/yr. The average U.S. specialist makes $223,000 more than their British counterpart, but holistic cost savings are a lot more than just cutting doctor salaries. The way patients are treated would have to change. The willingness to perform surgeries that probably aren’t medically necessary would go down, the classification of procedures as “medically necessary” would probably become much more rigorous, with more things being considered cosmetic or non-required at least, which in many single payer systems the system will not pay for routinely. There would likely be some increase in waiting times, as you would build out less testing machines and surgical centers to save costs etc etc. It’s really systemic the differences between how the U.S. runs its healthcare system versus other OECD countries, it isn’t as simple as just cutting wages.
The stakeholders have largely made themselves known right? Who does the AMA and AHA represent? They have been a major force against a move to single payer for 75 years.
Thanks for pointing me toward something new to me (and, doubtless, exceedingly complex).
If I’m reading this correctly, it may even be worse than you describe:
In order to comply with 2021 reporting requirements, most eligible clinicians must report on six quality measures, including one outcome measure.
[bolding mine]
I’d really have to dig into this, but “quality measures” seem to reinforce that effort is as valuable as outcome. 1/6 being outcome based seems suspect to me.
In health care, effort is … nice. Outcomes are everything.
[see: “The operation was a complete success. Unfortunately, the patient died.”]
Broadly, I think I’m hesitant to tear into this MIPS thing too much because:
- It’s on the CMS side. While they swing a heavy hammer, they are on one side of a cage match against the for-profit insurance industry (and all other HC actors) who wield tremendous lobbying clout. CMS doing something is better than doing nothing, but …
- I go back to my comment about federal income taxes, standard deductions, and marginal tax rates: I think it’s mostly performative and has a negligible effect on bottom lines – in this case – achieving the patients’ goal of being healthy(ier).
[It’s also self-report ? Do I have that right ? Is there an audit plan ?]
Back to the concept that there’s “no money in healthy people --” part of the issue with which the US struggles is getting (younger and) healthier people into the risk pool. It’s hard to get people to write checks for things they can’t dream of needing.
We’re not just losing their tendency to bring aggregate costs down. We’re also losing the ability to keep them well.
But that also – to state the obvious – puts patients in a position to be reactive vis-a-vis their own health, rather than proactive: having to pay exorbitant costs all out of pocket.
Which, of course, puts far too many of them into Emergency Department$ far too often.
And we still have nearly 30M uninsured [SOURCE] .
The system is designed around disease. It’s often referred to as a disease management model rather than a health care model.
Having basically every single industry-side actor profiting (in a big way) from misery is a rotten model. This isn’t European exotic sports cars. This is basic functionality – as much a part of the “common good” as anything.
We (all) need this, and we need it to work great and be reasonably priced.
This is what I mean about perverse incentives. It’s analogous to the for-profit corrections industry saying “as long as you don’t touch our reimbursement rates, or rejigger what’s a crime, or sentencing, we’ll serve fresh peas instead of frozen in our facilities.”
I think there’s way too much of a ‘rearranging the deck chairs on the Titanic’ thing going on here, in service of protecting that 16-18% of our GDP that HC represents.
And I think as long as neither broad category of metrics really changes materially – % of GDP and the laundry list of quantitative metrics that OECD, Commonwealth Fund, et al, use to evaluate nations and their HC systems – US patients are losing.
In a big way.
If I’d passed on that glass of Pinot Noir, this post would have been … maybe … maybe 1/8th as long
@Martin_Hyde : in terms of physicians, there’s an artificial scarcity component to that, too (for any who may not be aware):
And you constantly read about (if you pay attention to such things) states that want to expand the practice of mid-level practitioners (ie, Nurse Practitioners and Physician Assistants) only to be strong armed by the AMA, et al, with cries that these mid-levels will kill everybody they see.
ETA: that NP/PA part is also covered in the linked article (available through no end of other sources, too).
Broken.
Yes, this.
It’s worth first conceding that UHC is not a panacea in terms of costs. Healthcare systems the world over are suffering spiraling costs for various complicated reasons but probably including 1) Ageing populations 2) More procedures becoming possible and now of course 3) covid.
However, even within an environment of spiraling costs, US healthcare still stands out as an extreme outlier with considerable scope for cutting costs. Indeed, urgent necessity to cut costs, as the system is now creaking.
And yes, I’d include doctors’ salaries. I know they work hard and deserve a high pay. But double the salary of the next country, even before we start talking about gifts and other (deliberately) intangible benefits?
I know some would argue that “Hey, that’s the free market” but is it? The OP correctly points out that the costs are hidden and can be set essentially at payment time according to ability to pay. Plus just how difficult it would actually be for a patient to manually choose different providers for every aspect of their healthcare.
But before doctors’ salaries of course the bigger costs are all the profit-making layers in the US healthcare system (insurance and related services), incentives to perform unnecessary scans and prescribe branded drugs, and the aforementioned opaque and unfair pricing.