What single-payer healthcare would mean to doctors

May 25, 2016

Senator Bernie Sanders has revived debate, but experts say it remains an unlikely dream in the United States.

Health insurance is again in the political spotlight as Democratic presidential candidate Bernie Sanders promotes his version of single-payer that he calls “Medicare for all.” He says it will improve care, reduce administrative burdens and allow physicians to focus just on practicing medicine. Dissenters say it’s a pipe dream that will only lead to rationed care, lower reimbursement rates and long waiting lists.

 

Related: Sanders' Medicare-for-all' plan gets mixed reviews by physicians

 

Single payer is held up by supporters as the ideal egalitarian healthcare model. If other nations can provide expansive medical care for their citizens, they ask, why can’t the U.S.? Opponents disparage the idea as anti-choice; they predict the implosion of the healthcare system and demise of physician autonomy. 

Could single payer be the boon to medical practice its supporters insist? Or would we end up with a system that limits care and ignores best practices in favor of the bottom line? Who’s right?

The short answer is, both sides are.

Why single payer?

While the Affordable Care Act insured more people, single payer advocates say it has done little to relieve the administrative burden on physicians, and may have even made it worse. They point out that the legislation has precipitated new regulatory requirements, new practice models and reimbursement structures by both government and private insurers.

A nationwide Physicians Foundation Survey of 20,000 doctors revealed common physician complaints of increased paperwork and overhead, too many different rules and rates from too many different payers and too much time spent arguing about coverage instead of delivering care.

Many physicians worry that patients cannot comply with care plans because high premiums and deductibles prevent them from getting necessary medications or follow-up care. Moreover, they say, too much time is spent on insurance-related bureaucracy. That same survey found that 20% of provider time is spent on non-clinical paperwork.  More than two-thirds (69%) feel that their autonomy is sometimes or often limited and their decisions compromised. Additionally, physicians feel pressured to keep up with demand, but a vast majority (80%) report being at full capacity or overextended.

The U. S. spends more on healthcare per capita than all other Western countries, except for Norway and the Netherlands, according to a 2014 Commonwealth Fund report. Although many Americans gained coverage under the Affordable Care Act, the U.S. is the only industrialized nation without a true “universal” system. Despite the high level of spending, most health performance measures are only average, and many are worse than those of other industrialized nations. 

“We spend about $3.2 trillion on health and about a third of that is on administration,” says Robert Zarr, MD, president of Physicians for a National Health Program (PHNP). The organization, which includes some 20,000 physicians, medical students and other health professionals, has been pushing for a single-payer national health system since 1987. Zarr gave up his private pediatric practice to work at a Washington D.C.-area clinic, which he says allows him to spend more time with patients instead of paperwork. He contends that a move to
single payer could cut about 15%, or over $400 billion, from total health-related expenditures, just through administrative savings.

Next: Single payer vs. medicare for all

 

 

Single payer versus medicare for all

Single-payer proposals have been floated at least since the 1950s, according to Gerald Kominski, PhD, director of the UCLA Center for Health Policy Research. “Medicare for all”-which significantly expands existing Medicare coverage and eliminates all cost-sharing-is just one approach to a single-payer option.

Single payer is not the same as “socialized medicine” or “universal healthcare.” Single payer refers to system financing
under which both the collection of payments from patients and reimbursements to providers is carried out solely by the government. However, physicians can still be in private practice and work for public or private facilities, and hospitals can be public or private.

In contrast, under socialized medicine, such as in the U.K., the government owns the health delivery systems and physicians work for the government. Alternatively, universal healthcare provides every qualified citizen of a country with health insurance. That could be a public system, like Canada’s, or a mix of public and private coverage, such as in Germany. Insurance can be paid for through various combinations of payroll and general taxes and community-rated insurance premiums. 

Under a true single payer system, such as those in Canada and Taiwan, physicians would not have to worry about multiple contracts, fee schedules, different standards for different procedures or obtaining prior approval of services. Instead, there is a single set of payment rates and standards around what services are covered. Such a system might be simpler to deal with, says Stephen Zuckerman, PhD, health policy fellow at The Urban Institute. 

To Kominski, the “Medicare for all” proposal being floated by Sanders sounds like a return to a traditional fee-for-service model, an approach the Centers for Medicare & Medicaid Services (CMS) has been trying to move away from in favor of value-based care.

But it goes several steps further. It would allow patients to see any doctor, any time, without copays or deductibles. Vision, dental and mental health services, along with prescription drugs, equipment, supplies and diagnostics would be covered. This would lead to a measurable increase in demand for healthcare, which Kominski sees as a potential problem. 

 

Blog: Administrative costs are killing U.S. healthcare

 

“There’s a tremendous body of scientific evidence in the last 30 years to indicate that people do respond to copayments, so if you eliminate them, use will increase,” he says. States would likely have to expand scope of practice rules for allied professionals. Medical practices would need to reorganize in ways that allow them to use non-MDs as primary care providers.

There’s also no apparent role for managed care under the Sanders plan. His idea is closer to Medicare when it began in 1965, and before there were models designed to control spending. Kominski says that in the 50 years since Medicare was enacted, there has been dramatic growth in efforts to restrain health spending, including more restrictions on doctors and hospitals. The Sanders proposal might do away with those restraints.

Next: What's in it for doctors?

 

What’s in it for doctors?

Single payer could allow physicians to spend less time on administrative tasks and devote that time to actual patient care, says health economist Peter Hussey, PhD, a senior policy researcher at the RAND Corporation and director of the Health Services Delivery Systems Program for RAND Health.

 

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“It’s one less thing to worry about–if they’re going to have access to the drug you prescribed, or the referral you made,” Hussey says. Concerns about types of insurance, covered services, deductibles, different requirements and rates would disappear.

PHNP’s Zarr projects that single payer would bring about a “dramatic” reduction of administrative overhead costs. The resulting savings would mean more revenue for practices. It could also potentially lower malpractice premiums by ensuring greater continuity of care and government assurances to pay for future costs of additional care. “We’re spending a lot of our time doing things we’re not well adapted to do. Doctors should be providing care, not on the phone arguing about the value of an MRI that should be covered in the first place,” Zarr says.

But administrative simplicity will come with a lot of tradeoffs, experts say.

 

Downsides of single payer for physicians

Since the government sets prices in a single-payer system, doctors are left with little choice but to accept those rates or not participate at all. Critics contend the government will also dictate what services and treatments are covered based on financial considerations rather than medical necessity. That could reignite the “death panel” debate, allegations made by Republicans during the crafting of the Affordable Care Act, which claimed incorrectly that an anonymous panel would determine whether some sick people would receive health care as a way to control costs.

 

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Physician compensation would almost certainly drop, according to Hussey. While an apples-to-apples comparison is difficult, he points out that in Canada, which has government-set payment rates, physicians earn less than their American counterparts. Over the long term, he wonders if this could change how medicine is practiced. “Would it make it harder to be a physician and get by financially?” he asks. 

Kominski predicts a significant backlash should the U.S. try to hold down costs by reducing payments to physicians and hospitals. It will be difficult to persuade the medical profession to agree that for the good of the country they should start accepting lower payments for their services. “If it were easy to achieve we would have done it by now,” he says.

Michael D. Tanner, senior fellow at the libertarian-leaning Cato Institute, has argued that in nations with universal healthcare, “attempts to control costs through governmental fiat have led to problems with access to care, either delays in receiving care or outright rationing.” He advocates more competition among insurers and providers within a free market system to generate cost savings.

He has warned previously that an unlimited single payer model could bankrupt the country.

Political, not medical, decisions will drive healthcare should single payer come to pass, predicts Robert E. Moffit, PhD., senior fellow at the conservative Heritage Foundation’s Center for Health Policy Studies. When unlimited demand collides with limited supply, “government officials will determine who, and under what circumstances, patients receive care,” he says. 

Basic economics dictates that the government cannot control demand, but it can control supply through a global budget or price controls on services. Under that scenario supply does not keep up with rising demand. At best, Moffit says, quality of care suffers. At worst, there will be unnecessary deaths. “And let’s not even get started on how it will further intrude on doctor-patient relationships,” he says.

Next: Could it happen here?

 

Moffit points to overcrowded hospitals, long waiting lists for simple procedures and poor quality of care under Britain’s National Health Service as examples of what can happen when healthcare becomes an unlimited entitlement. As for reduced paperwork, “CMS issues tens of thousands of pages of rules and edicts. The idea that physicians could escape paperwork is fantasy.”

Increased demand, combined with reduced access will fuel more dissatisfaction among patients. That, in turn, could lead to more complaints and malpractice claims, Kominski says. He’s also concerned about the overall impact on patients’ health. Sanders’ plan in particular lacks detail about what will happen to value-based care or patient-centered care-models that CMS is promoting to improve outcomes and keep patients healthier. 

“I don’t want to see those advances thrown out the window because we have a single payer system and are basically saying you can go to any doctor or hospital you want,” Kominski says.

The American Medical Association does not support single payer, but other organizations, including the American College of Physicians (ACP) and the American Medical Students’ Association, do. The American Academy of Family Physicians supports universal coverage but advocates a blend of fee-for-service, care coordination fees and a patient-centered medical home model.

Zarr brushes aside doomsday scenarios. He contends that care delivery will largely stay in the hands of the private sector. He says single payer actually provides plenty of choice and gives physicians the freedom to practice how and when they want. He calls it the most important step for providers in “taking away the shackles” of the commercial insurers and allowing physicians to provide care that’s appropriate in a manner that’s appropriate.

In addition, he predicts that single payer will reduce physician burnout and frustrations with the current system, where patients can’t afford to comply with care plans, and physicians end up providing less-than-optimal care.

According to Zuckerman, the question becomes whether healthcare should be treated as a free market or a regulated utility. If you want everyone to be able to get it, like electricity, perhaps there needs to be more regulation of the process, and that means less competition, he says.

 

Could it happen here?

Politics aside, would a single-payer system ever be feasible in the U.S.? Private insurers would disappear or become nothing more than bill processors, says Zuckerman. “Generally the transition would be incredibly difficult and it might be more than anyone is willing to tolerate because people who have health insurance don’t want to see it disrupted.”

Next: Are we ready?

 

It would also mean the demise of a $696- billion industry that employed 588,000 people in 2014, according to an IBISWorld analysis. While Zarr says many employees could be retrained for work in a single-payer environment, Kominski isn’t convinced that would happen without significantly affecting the economy.

Other health economists are also skeptical. Brookings Senior Fellow Henry J. Aaron, PhD, a proponent of a more incremental approach, says in Newsweek that the Sanders single payer proposal is a radical idea unlike any other piece of legislation ever put forth in the U.S. and one that leaves many open questions.

Left-leaning economist Paul Krugman reasoned in the New York Times that if we were starting from scratch, single payer would likely be the plan of choice, but not now, because of the political and economic climates. Krugman prefers revisiting the “public option” that was dropped from the Affordable Care Act.

A move to universal single payer such as Canada’s would be very disruptive and probably more difficult than most patients and providers are willing to tolerate, Zuckerman says. He thinks building on the current structure of the Affordable Care Act to bring it closer to true universal coverage will be less troublesome and more achievable. 

As for the Sanders “Medicare for All” plan, Hussey believes it’s likely not in the cards in the foreseeable future. “We haven’t signaled as a society,” he says, “that we’re ready to do that.”