Billy Wynne has written a Health Affairs essay on the desirability of a Medicare Advantage for All design. I am methods agnostic towards the goal of universal coverage at a decent actuarial value level and reasonable costs. I think Medicare Advantage for All is a good concept. It is a concept that, if all of the relevant decision makers agreed on the core problem in the US healthcare system is a lack of affordable coverage for everyone, policy wonks, legislative language writers and relevant private sector stakeholders including high level systems architects could lock themselves in a nice beach front resort with several kegs of very good beer and come out with a workable design once the kegs were empty. But this essay does not lay out a well thought out case.
I have several issues with this piece on a political level and a pragmatic level. Politically the issue that I see with this piece is an underlying assumption that everyone with power in Washington agrees on the fundamental problem definition. In this article, the fundamental problem definition that all stakeholders agree on is that uninsurance is a bad thing. From here, the essayist reduces the problem to a neat set of mechanics.
And then I have a serious issue with the mechanics. This section is driving me nuts:
the starting point for considering how much will be paid for health care services under MAPSA is the weighted average of the rates all of these various payers currently provide; that is, what providers and other stakeholders currently receive.
So a key weakness of single payer, under this approach, becomes one of its greatest strengths. Reimbursement for health care services remains strong but the cross-subsidizing acrobatics that providers currently perform to balance their finances would go away. For example, commercial rates are hiked, often stratospherically, to compensate for typically insufficient Medicaid reimbursement.
There are access (and moral) implications here too: Historical Medicaid enrollees will now be able to see the same doctors and go to all of the same facilities as those who currently have generous employer plans. There will no longer be any perverse incentive for providers to turn them away.
Finally, if you’re like me, your provider friends (and maybe spouses…) have complained interminably about their frustration with the current multipayer system. This is not just an issue with varying claims requirements and payment delays; it’s about caregivers being pulled in several different directions by multiple quality reporting and value-based purchasing programs that can often incentivize conflicting behaviors and clinical standards.
While the Medicare Advantage market would need to be expanded to ensure adequate consumer choice and plan competition, having all payers participate in a single, unified program will substantially alleviate this redundancy and frustration in our current system. Now, please stop asking me to fill out a paper-based intake form every time I come see you.
As soon as I see someone make a cost shifting argument ( “commercial rates are hiked…” ) I get suspicious.
This is Austin Frakt’s bailiwick so I’ll just let his New York Times link fest do this justice:
some hospital executives tell it, they have to make up payment shortfalls from Medicaid and Medicare by charging higher prices to privately insured patients. How else could a hospital stay afloat if it didn’t?
But this logic is flawed.
Study after study in recent years has cast doubt on the idea that hospitals increase prices to privately insured patients because the government lowers reimbursements from Medicare and Medicaid.
Indeed, one recent study found that from 1995 to 2009, a 10 percent reduction in Medicare payments was associated with a nearly 8 percent reduction in private prices. Another study found that a $1 reduction in Medicare inpatient revenue was associated with an even larger reduction — $1.55 — in total revenue….
Another weakness of the cost shifting theory is that it runs counter to basic economics. Hospitals that maximize profits, or even maximize revenue to fund charity care, would not raise private prices in response to lower public ones. In fact, such a hospital would already be charging the highest possible prices to all payers. And, instead of raising them to one insurer if another paid less, they’d do exactly the opposite. Prices charged to two types of customers would move together, not in opposition, for the same reason it does so in other industries….
The second major area that just strikes me as wrong is the entire digression into networks. Some Medicaid networks are super skinny and painful to use. Some are fairly broad. When I worked at UPMC Health Plan, our Medicaid network including the leading pediatric hospitals and the major academic medical center. As I left, they were trying to get more hospitals into the network in more areas with reasonable success.
Network size varies in Medicare Advantage as well. Some Medicare Advantage networks are massive, others plans have super skinny networks. My parents will most likely buy a nationwide Blue Cross/Blue Shield Medicare Advantage policy to get coverage from Massachusetts to North Carolina and everywhere in between as they do the grandkid visiting tour multiple times per year. Medstar in Washington DC offers a Medicare Advantage plan that only has two hospitals in network within the district. Access is an issue as Medicaid pays too little but satisfaction is nearly identical between people covered by Medicaid and people covered by far more expensive employer sponsored insurance.
Network is a major differentiators that drives premiums. People who are buying a Medicare Advantage for All plan will still be dealing with networks unless they buy a plan that has no network beyond all Medicare registered providers. Every patient will still be receiving a website that may or may not be updated frequently and accurately enough and telephone book sized directories will be mailed on request with stale data. It will still be confusing for patients and it still will be confusing for providers except that their billing will be more straightforward as this proposal is effectively all payer rate setting like that already occurring in Maryland.
Doctors and hospitals will have to hit their Medicare Advantage quality metrics so this will be a bit simpler. But every carrier will ask for their own data elements too. Every carrier will think that they have an analytics edge and some special sauce that their unique variables will allow them to unlock massive savings. I worked for a carrier where there were many nerds committed to that end. I interviewed, received and turned down an excellent offer from a carrier that is betting big on its analytics as its key asset. Providers will see a simplification in degree but not a simplification in kind as the total number of plans are reduced but the proliferation of metrics continues even if they are slightly culled.
I am only looking at 11% of his essay because this is a chunk where I have specific knowledge and experience. I am seeing major claims made that are contradicted by the best available evidence. I am seeing massive assumptions about networks that are not realistic. A better argument is needed for the plumbers to not cringe in horror at trying to reconcile top level claims with actual implementation.