The Physicians for National Healthcare Program (PNHP), an organization of single-payer advocates, is out this week with a pretty circular argument for single-payer healthcare insurance. Naturally the crazy logic is being treated as serious scholarship by the nutty left wing, and even by less left-wing web sites such as the Washington Post Wonkblog (it looks like WaPO just threw a PNHP chart up on its blog without reading the underlying article).
PNHP’s argument is a bass-ackwards argument for single payer. It says (paraphrased)
“Medicare for seniors in the U.S. would be wondrous if it were part of a single-payer approach for everyone like they have in Canada because everyone of all ages would be treated alike from an insurance perspective.”
I personally have nothing against single payer especially because as a retiree I won't have to pay the 20%-25% Massachusetts income and sales taxes it would take to make it happen here in Massachusetts. Note that the Canadian system is provincial – not national like our Medicare – so I have to think of it in terms of “my state.”
However PNHP makes many at least misleading statements about the U.S. Medicare system.
I'm basing that statement on the context of excerpts in various left wing blogs, not based on reading the PNHP article, which -- as usual for left-wing gobbledygook -- is gated behind a payment wall.
The lefties say PNHP says:
"It’s true that traditional Medicare is relatively efficient – only about 2 percent of its budget goes to administration..."
Actually that's not true on two levels:
- At the wonky level, the 2% claim does not compare the cost per beneficiary, the correct way to measure such things, nor does the 2% claim properly account for traditional Medicare Part A/B administrative functions performed in other parts of the U.S. government or by providers.
- On the easy-to-understand level, the "Medicare is efficient" claim requires the analyst to forget the 25%-30% fraud/waste/abuse in traditional Medicare Part A/B spending (source: former unconfirmed Medicare Director Berwick).
"Medicare is only one of many health care payers in the United States."
That's true but misleading when discussing U.S. Medicare. In fact, Medicare is only one of many health care payers just in U.S. Medicare Part A/B itself. Many seniors have three or more insurers counting the insurance companies that administer their traditional Medicare Part A/B benefits. 95% of seniors on traditional Medicare Part A/B depend on multiple private insurers for
- their catastrophic or near-catastrophic coverage
- more affordable health care services (traditional Medicare has almost prohibitively expensive co-pays and deductibles) and
- coverage of many other health care services such as annual physical exams and medicine not provided by traditional Medicare Part A/B.
The number of such seniors needing multiple insurers is decreasing as a percent of the total however (projected to be 30% in 2013 up from 6% in 2006) because of the increasing popularity of Part A/B/C Medicare health plans. Strangely the PNHP authors criticize Part A/B/C health plans as privately run even though Part A/B/C health plans are no more or less privately run than traditional Medicare Parts A and B.
In fact I would think the PNHP authors would want to get everyone on a capitated, accountable-care single-payer Part-A/B/C-Medicare-like health plan given what the lefties say PNHP says about the simplicity of the single payer payment process, the administrative burden of the traditional Medicare Part A/B fee for service payment process, and the importance of primary care, etc.
Finally, the lefties say PNHP says a person on a capitated single-payer Part A/B/C Medicare health plan will cost the government 25% more than a person on traditional fee-for-service Medicare1 Part A and B in 2012. This 25% number is based partially on a disproven theory that cherry picking takes place in Part A/B/C health plans (see Journal of Managed Care, September 2012; article by Harvard professor Song et al) I personally think there probably was some cherry picking prior to the George Bush reform of Part A/B/C in 2003 but it is not likely now because of risk adjustment formulas and because so many people are now on the plans with guaranteed issue.
-- Dennis Byron
1 The expectation according to the Medicare trustees is that on average people on Part A/B/C will cost 7% more than people on Part A/B only (including some only on Part A, which makes these comparisons very apples to oranges in favor of fee for service Medicare). But that 7% bump includes the special incentives used by CMS to get health plans into rural areas and into the inner city to help the poor. The vanilla HMOs that make up most Part A/B/C Medicare health plans and that most Part A/B/C health plan members use cost the government 5% less than fee for service Traditional Medicare Parts A/B. (The trustees report on this subject does not count the incentives given under a CMS bonus demonstration project that has been ruled illegal by the Government Accountability Office.)