Why parts of a single-payer system might not be so bad
I completely understand why health plans aren't in favor of creating a single-payer healthcare system. There's certainly enough doom-and-gloom chatter about how a single-payer system wouldn't benefit insurers and could potentially cause problems like increased taxes, a deflated marketplace, and inefficient healthcare, just to name a few.
Vermont, which created the nation's first single-payer health insurance system based around a publicly-funded insurance pool, faced a heavy round of negative attacks and opposition throughout its legislative process. "Vermont ... hasn't even figured out how they're going to finance this. No matter what happens, the costs are still there whether individuals are paying for health insurance premiums or the state pays for it with taxes. The costs are not going away," said AHIP spokesperson Robert Zirkelbach.
But maybe, in the name of trying new things, health plans can at least get behind a few elements of a single-payer system and learn from Vermont's plan to help improve the nation's healthcare, regardless of whether universal coverage is ever provided.
In a recent Health Affairs journal article, Harvard economist William Hsiao, who helped design Vermont's single-payer health law, outlined two important components of a single-payer system that could benefit other state's programs. For example, insurers could support states' creation of a comprehensive all-payer claims database with records from all private payers, Medicare, and Medicaid. This would allow states to create a complete profile of each provider and patient and would greatly improve their ability to detect fraud and abuse. That's always a good thing, right?
"Paired with administrative agencies capable of analyzing data in real time and acting to recapture the payments made for fraudulent claims and gross abuse, this feature alone could save up to 5 percent of total health spending," Hsiao writes.
States also could create a so-called single-pipe system of payment with uniform payment methods, rates, and claims processing. Such a payment system could be constructed by requiring that all claims be processed centrally by a separate entity.
Insurers could benefit from standardized payments because it would help states police providers' attempts to game the system. When some insurers pay on a capitation basis and others pay on a fee-for-service basis, for instance, providers can exploit their market power and maximize revenues without necessarily improving the quality of care. In fact, Hsaio says there's "ample evidence" that providers in Massachusetts are using their market power to extract higher prices, with no apparent increase in quality.
Hsaio's suggestions clearly don't solve the overall problem in the healthcare industry, and could potentially even create more challenges for some insurers operating in multiple states with differing state requirements. But at least someone is talking about ways to deconstruct the single-payer idea to apply small solutions to some large healthcare challenges. If his recommendations do nothing more than spark an intelligent, fresh conversation about health reform and single-payer healthcare, then I think it's a success. - Dina
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