Please note that I am not bashing the good people of Minnesota, rather I am trying to point out that solving the health care problem is not merely expanding coverage or waiving a magic legislative wand that makes health care affordable. Moreover, it is simply not fair when you do not tell people the full consequences of what you are proposing.
Like several other states, Minnesota has a group of interested citizens pushing for a state single payer system. Legislation is gradually working its way through the system in Minnesota. The following information about the proposed system is taken directly from the website of the: Minnesota Universal Health Care Coalition • 2469 University Ave W, Suite W 150, St. Paul, MN 55114 651-641-4073. http://www.muhcc.org/
The Minnesota Universal Health Care Coalition is dedicated to establishing comprehensive single-payer health care for all Minnesotans through advocacy, education, lobbying, and community organizing.
We believe that health care is an essential human need and that unequal access to health care is an injustice. A single-payer system is the only system that can provide comprehensive, affordable, high quality health care for each and every person.”
Well, I am not disappointed because there is my favorite word again “affordable.” Health care must be the only service or commodity around where you can make it comprehensive, where virtually all the decisions are left to the seller, you can have the highest quality and provide all this to every person and still have it “affordable.”
Following are several questions from the MUHCC website; these questions are reflective of the well intention naiveté of Minnesota’s health care reformers.
My comments follow each of the questions and answers. I have placed in bold italic words within the Q&A that are of particular relevant to my comments. Remember, this is not about the good people of Minnesota or their efforts, it is about the false assumptions that all the problems of the health care system go away simply because a government bureaucracy runs it or that the problems are due in large measure to the big bad inefficient, claim denying insurance companies.
“What services are covered under the Minnesota Health Plan?
All necessary medical care is covered under the MHP.
Under the Minnesota Health Plan, medically appropriate care is completely covered, including primary care, dental, mental health care, hospitalization and prescription medication. Medical equipment, skilled nursing home care, home health care, substance abuse care, prescription glasses and hearing aids are also covered.
Elective cosmetic procedures are not covered.”
Observation: Medically appropriate or medically necessary care is always covered under a health plan; the controversy arises when there is a disagreement as to what is medically necessary. Without that review, costs skyrocket because frankly there is a lot of care that is not medically necessary even though the treating doctor says it is. When an independent third party reviews these disagreements, the failure to substantiate medical necessity is frequently sustained in favor of the health plan, under the Minnesota plan that determination is the responsibility a government board. Does anyone think that costs can be maintained at the illusive “affordable” level without following exactly the same procedures used by health insures (and Medicare) today?
In addition, completely covering services clearly subject to abuse and questionable medical necessity such as some mental health care, hearing aids and some dental care is a prescription for out of control costs that cannot be managed. There is good reason why such services are closely monitored by health plans and it is not merely “the vast bureaucracy devoted to denying care.” It is in fact, to help keep the plan “affordable.”
“How does the Minnesota Health Plan control costs?
The MHP controls costs by cutting waste, not by denying care to patients.
The MHP controls costs through:
- Administrative efficiency and elimination of the vast bureaucracy devoted to denying care, billing and paying out claims for care at different rates and with different coverage for the same procedure, elimination of insurance marketing and administration.
- Increasing access to preventive services and early intervention for everyone, preventing costly emergency room and hospitalization expenses.
- Bulk purchasing of drugs and medical supplies at lower, negotiated prices
- Allocation of medical infrastructure and resources (like hospitals and surgical centers) based on a region’s needs
- Annual budgets for health care facilities, rather than the current method of itemizing each pill dispensed, and each individual expense, and then billing them at different rates to different insurance companies for each patient treated.
- Negotiation of provider fees
- More efficient delivery of care (use of school nurses to administer flu shots instead of sending each student individually to an outside clinic, not sending patients by ambulances to more distant hospitals because closer hospitals are not in “network”)”
Observation: One wonders how a government agency of any kind operates without a bureaucracy, yet health care reformers seem to think that is the case. While I admit there are efficiencies to be achieved in the current system, replacing a government, system for the private system will not do it. Who determines medical necessity? On top of that, there is no impact on the continuing rise in health care costs. Preventive services and early intervention increases costs at least in the short run and perhaps entirely, especially within an environment where “there are no co-pays or deductibles.” Allocation of resources based on a region’s need, that is a good idea, but let us makes sure we tell people what that means, like traveling an extra ten miles for that MRI. Annual budgets for health care facilities; this is a biggy. What happens when the budget allocation is reached? Can you say long delays in receiving care; can you say rationing or being forced to go to a facility within budget that is a few miles further away? Negotiated providers’ fees, been their done that, that is why a benefit is in or out of network, unless of course every doctor in the state is forced to accept a designated fee and cannot be outside the government plan. Not sending patients to hospitals that are more distant because a closer one is not in network and that happens how often. Here is a thought, the one in network is a cheaper and that is why it matters.
“Who will run the health care system under the Minnesota Health Plan?
The MHP is governed by a public board appointed by locally elected county commissioners from every region of the state. The board will include health care providers and consumers.
The MHP Board runs the MHP and negotiates doctor fees and hospital budgets. It is responsible for health planning and the distribution of expensive technology, as well as working with the University, other higher education institutions, and local communities to ensure sufficient providers in every community. The budget for health care is set through a democratic and transparent process.”
Observation: This budget process is probably the most disturbing of all the principles of this and similar proposals. It sounds good; the state will never pay more than X in a year after the budget is established and future budgets will not increase by more than Y percentage. Look at how that works in Canada. Does democratic mean that when limits are reached care that cannot be provided will be democratically denied? On the other hand, how does the state control the increases in health care costs projected for the following year or in reality are they simply ignored, or fees cut, or additional technology denied or cost sharing increased? Just tell people how that works.
“How is the MHP paid for?
Revenues for the MN Health Plan would come from the same sources they do now – government, businesses and individuals. Individual and business contributions to the fund (premiums) are based on ability to pay. There are no co-pays or deductibles.
Currently, government is the largest payer of health care services. Individuals are asked to pay an ever-increasing amount in the form of premiums, co-pays, and deductibles – if they have insurance. Those without insurance and those who are underinsured face devastating medical bills. For most individuals the premium payment for the MN Health Plan would be less than they are paying in premiums to insurance companies, co-pays at the clinic, and deductibles of the insurance company.”
Observation: Based on ability to pay; some people pay very little or nothing perhaps, no co-pays or deductibles, no direct patient involvement in cost or the frequency of services, no disincentives to over utilize, in fact, quite the contrary. That means that costs will not be controlled or some oversight body will control utilization-meaning rationing. Most individuals will pay less than they are currently paying; where does the rest of the money come from? Oh, I get it from the administrative savings taken from insurance companies (and replaced by a government bureaucracy). However, 70 million Americans are covered by employer-based self-insured plans and I suspect that at least some in Minnesota. Those plans have low administrative costs based on fixed per member per month costs and those administrators are without any incentive to deny legitimate claims and still they struggle with controlling costs.
“Is the Minnesota Health Plan socialized medicine?
No. Socialized medicine is a system where the government employs all healthcare providers. In the MHP, like in Medicare, health care is publicly financed but delivered through existing doctors, clinics and hospitals.
Some opponents claim that under a single plan, the government will make the medical decisions. But in the MHP, medical decisions are left to the patient and doctor. Under the Minnesota Health Plan, doctors and hospitals that are in the private sector remain in the private sector.”
Observation: You see leaving medical decisions to the patient and doctor cannot work. It did not work with HMOs, it does not work with fee-for-service and it will certainly not work in a government-based system. That implies that whatever the doctor orders or the patient requests of the doctor is covered and paid in full, that means that the issue of medical necessity cannot apply, that means that there can be no monitor to assure quality care and it means that over or under (mostly over) utilization will be rampant. These words sound good when selling something because they resonate with patients, but they do not work when trying to operate an “affordable” health plan. We hold Medicare up as a model of efficiency, yet in testimony before Congress in 1997, an HHS Assistant Inspector General summarized the problem of fraud this way: “One source of vulnerability is the design of the benefit categories and reimbursement criteria themselves. Our audits, investigations, and evaluations often reveal patterns of unintended incentives, inherently ineffective controls, poorly defined eligibility criteria, excessive reimbursement rates, unmeasurable outcomes, baselines premised on inaccurate assumptions, and other such design weaknesses.”
Today fraud under Medicare is estimated to be at least $60 billion a year. Medicare is in the process of adding investigators meaning they need to increase administrative costs, justifiably so. Fraud is so rampant in a government program simply because it is so large and bureaucratic it is easier to accomplish fraud and harder to detect. When dealing with government money it is easy to rationalize cheating a little (you know like on income taxes).
We tend to develop a mindset for what we receive from government programs as being “free.” So perhaps we have our illusive definition of “affordable,” it free!