administrative costs

Had I written this only a couple of days ago, I would have been arguing for a single-payer system. I like the simplicity of a single-payer system and  I like the fact that insurance companies would be taken out of the loop. Finally, I love the idea of taking all of that money that was being used for administrative costs, used to deny claims and used to figure out who was or was not in the plan and use that money actually taking care of patients. I like the way that sounds. BUT… it will not work (I did more reading). The single-payer system should have a lot of upfront cost savings. The problem is that the savings from consolidation are not sustained over the long term. Also, in any system that has one payer in control of that much money, folks will figure out how to game the system. Then costs increase.

I have a problem with the way that physicians get paid. It seems to me that family practitioners and surgeons are different animals. The FP/internist seems to be positioned to really prevent problems. Surgeons intervene when problems occur. Should they get paid the same way? It seems that there should be different incentives for these two different groups of physicians. The FP/internist-type physicians should get paid to keep their patients healthy. Surgeons probably keep the system that we already have: fee for service.

Anyway, back to the overall program. I reluctantly think that any plan will have to be some type of hybrid. The single-payer system does not deliver the long-term savings and cost control that we need. Insurance companies need to be forced to compete. The basic plans that insurance companies offer must be the same and there should be no premiums for any American. No deductibles. Small co-payments. No one can be denied. Insurance companies can offer additional coverage.

There must be a government organization that oversees the insurance companies and runs this insurance exchange. A National Health Board. This is the centerpiece of the book Healthcare Guaranteed by Ezekiel Emanuel.  I think this is the most thoughtful and intelligent system I have come across. It seems to contain everything. Costs are controlled by a few mechanisms: competing insurance companies, encouraging physicians to push healthy lifestyles and forcing drug companies to keep costs down. Also, everyone is covered. Everyone still has choice. Many, if not all of the programs that help deliver healthcare today (Medicare, Medicaid and SChip) will be rolled into this new program overtime. What’s to complain about? (How to pay for it. More on that later.)