Friday, November 02, 2007

SM / SP / MA

“Any government-run program proposed by a Democratic presidential candidate might be quickly tarred by conservatives as ‘socialized medicine.’” That’s from the New York Times, October 20, 2007.

End of story, right? Not so fast.

Socialized medicine (“SM”), sometimes described, perhaps more palatably, as single-payer (“SP”), and, still more palatably perhaps, as Medicare-for-all (“MA”), may be a third rail for presidential candidates, but what about ordinary, everyday state legislators?

After all, if the Portland School Board can approve, as it did on October 16th and by a seven-to-two margin, a measure (having to do in a general way with public health) that absolutely horrifies the bulk of the public, even including many of those who consider themselves liberals, then mightn’t there be just a possibility that our state legislators will get it into their heads that we’re going to have SM/SP/MA never mind the widespread shock and outrage?

In fact, our legislators would be able to point to no less a personage than Mitt Romney as their inspiration. Romney, whenever he gets pinned down as to why, as a presidential candidate, he opposes the very same measures to extend coverage that he ushered into law in Massachusetts as governor, says that he “…prefers to let the states experiment with different ways of expanding coverage.”

Suppose the unthinkable came to pass. What would happen next?

Of course, what would happen next would be a referendum on the statewide ballot at the earliest possible date and presumably that would be that. (Such a referendum would in fact be the polar opposite of the petition to hold a vote in favor of SM/SP/MA that was to have begun circulating come Election Day in November.)

But, what would happen from the point of view of public health? And what about the economic impact?

What most people would notice first would be that they no longer had health insurance premiums to pay or to be deducted from their pay. They would also cease to be burdened by direct payments to doctors, hospitals and other health care providers for procedures and services not covered by their policies.

This would certainly be a nice break for all those who struggle each month with their household budgets, but would there be a piper to pay for this windfall?

Perhaps not, but before exploring that question, let us consider the next development that would surely attract widespread notice in Mainers’ daily lives.

Suddenly, all of the thousands of doctors’ visits that we make each day would be free of the insurance process. No more insurance cards (except perhaps the MaineCare card), no more forms, no more explanations of benefits, just a manageable copayment (perhaps waived for the indigent). And there would be no reason to restrict patients’ choice of doctors, since all health care would be covered by the new SM/SP/MA program.

Would this new regime cause people to descend on doctors and hospitals for every minor complaint, overwhelming the system, or would it free people to seek out early, preventive care and so not end up in hospital emergency rooms?

This is another point for further debate. I will return to it later, but the reader is invited to begin pondering his/her own response to an open care environment, perhaps drawing conclusions about the likely public response.

The third of the immediately noticeable changes concerns our state’s thousands of employers, both large and small. Suddenly, they too would be freed of health insurance costs and the associated administrative burden. If you are an employer reading this column, please stop and give some consideration to what this change would mean for your business. Even if you do not subsidize a dime of your employees’ group health insurance coverage, consider how the administration of health insurance complicates payroll accounting and tax filings.

Please also note that health care providers – doctors, hospitals, labs, clinics – in addition to reaping the employer administrative benefits will realize a far more important savings in terms of the resources they now devote to filing claims.

Each of these three changes in everyday life – the household budget windfall, the end of insurance gatekeepers, and the simplification of employers’ administrative burden – would take effect before the repeal referendum and, more important, before any of the other much talked-about fiscal consequences.

Before voting to repeal the SM/SP/MA measure, the public would have a good opportunity to experience what life would be like were the measure to stand.

And now, what of those fiscal consequences?

True, there’ll be a piper to pay in return for the beneficial changes that households, employers, and health care providers will experience. If patients no longer remit anything more than modest copayments, employers no longer remit a hefty portion of their cash flow to private insurers, and private insurers no longer remit for claims, then the health care providers have to recover their costs (but not profits – bear in mind that almost all of Maine’s hospitals are not-for-profit) from – yes, that’s right, the state government.

And the money for the state government’s remittances to health care providers can only come from one place. Yes, that’s right, from taxpayers.

But wait a minute. Didn’t we conclude that, to begin with, right up front, households would see savings on insurance premiums as well as direct payments to health care providers because of high-deductible policies, policy exclusions, and other coverage gaps? Didn’t we reach the same conclusion about employers, that their health insurance subsidies would no longer be necessary nor would the associated administrative work? Wouldn’t every health care provider see an even more substantial reduction in administrative time and expense?

So, on the one hand, the state government would have to step in as payor, and the state government gets its money from taxpayers (households and businesses), but, on the other hand, all of the households and businesses have seen money freed up as the first consequence of instituting the SM/SP/MA system.

Where does this come out on balance?

“Therein lies the rub,” some would say, making much of the fear of change that so often deters us from a course of action, be it action for our own personal account or for our collective account as Maine citizens.

The actual dollar amounts of the savings to households and businesses and of the costs to the state government have been the subject of a multitude of studies, estimates, and debates, but, of course, the net balance of savings versus SM/SP/MA costs is simply not possible to determine in advance.

Because it is indeterminate, should we refrain from ever taking a chance on it?

Most would probably agree that we should “never say never” but how then to make a decision?

I would invite you to take a closer look at the consequences of adopting an SM/SP/MA system. Compare the system that we would have to the one that we already have.

For example, we have established that a great deal of administrative work would no longer be necessary. This is an indication of cost efficiencies, is it not?

Administrative cost efficiencies ought to swing the balance in favor of SM/SP/MA.

I have alluded to increases in doctor visits once SM/SP/MA removes the barriers, and I have also made the suggestion that ease of access to health care providers ought to promote preventive care, which in turn ought to help head off the number of acute cases that end up being treated in emergency rooms.

If more health care is happening on a preventive basis and less is happening in emergency rooms, would this not mean that care will cost less to render?

If care costs less to render, ought that not also swing the balance in favor of SM/SP/MA?

I hope you will agree that, even without making sophisticated cost estimates, it’s possible, simply by comparing the way things would work under an SM/SP/MA system to the way they work today, to reach some conclusions about which kind of a system costs more.

Is there any consequence of adopting an SM/SP/MA system that would push costs higher?

The answer is “yes” because an SM/SP/MA system would give access to care where it is now denied entirely. More people would have access to doctors and hospitals, and that’s surely going to have to be paid for, by the state government.

Should we reject an SM/SP/MA system because it means the state government will have to come up with the money to care for people who have no access to health care under the present system?

Now we are at the heart of the matter. We have pared the issue down to the core question of deciding to stick with a system in which some people do not get care.

Is that what we want? I don’t think so.

So tell your state legislator: pass an SM/SP/MA bill, pronto. There is no reason to fear such a system. It will save money because it is more efficient. It will get care to people who do not now have it.