Will the US health care system be tiered forever?

[eridani]

http://economix.blogs.nytimes.com/2013/12/20/the-economics-of-being-kinder-and-gentler-in-health-care/

Rather than embracing a single-payer system, the United States is more likely to stumble, in fits and starts, toward something resembling officially sanctioned tiering of the American health care experience by income class, as follows:

FOR MEDICAID BENEFICIARIES AND THE UNINSURED, a budget-constrained system of public hospitals and public clinics. It would allow politicians to ration health care (through tight budgets) without ever having to acknowledge that they were doing so. In other words, it would reduce the price of being kind.

FOR THE EMPLOYED MIDDLE CLASS, a mixed system with defined contributions by employers, private health insurance exchanges and reference pricing by insurers. Under a restructured Medicare program also based on a defined contribution model, reference pricing would be likely to apply to Medicare beneficiaries as well. Depending on how it is operated – e.g., if it were solely based on cost, in abstraction of quality – reference pricing also permits tiering of the health care experience by income class, without anyone having to say so openly.

FOR THE UPPER-INCOME GROUPS, boutique medicine, which is already growing in the United States. Here the sky will be the limit.

Comment by Don McCanne of PNHP: Uwe Reinhardt, an astute observer of the U.S. health care system, does not see single payer in our future, but rather sees an “officially sanctioned tiering of the American health care experience by income class.” We already have the three tiers that he describes, but the middle tier is rapidly evolving in a way that may provoke a renewed and more intense interest in single payer.

The lowest tier - Medicaid beneficiaries and the uninsured - have never had much of a political voice. Nevertheless, even the most heartless of politicians recognize that we must provide care for indigent pregnant women and children. Thus we have the chronically underfunded Medicaid program plus safety net hospitals and community health centers. Some states also have included other low-income adults, though they still make up the largest percentage of the uninsured. Except for the most basic of primary care services and care for events that threaten life or limb, access to health care for this sector is limited, especially for specialized services. As Professor Reinhardt indicates, politicians are able to ration health care for Medicaid beneficiaries and the uninsured without admitting that they are doing it, merely by placing restraints on the budget. Since it is unAmerican to ration health care, they would never do that, but rather they merely refuse to budget spending that we can’t afford. (Of course, inadequate funding of health care is rationing, and we actually can afford to pay for health care for all, though we do need more efficiency in our financing system.)

The highest tier - the upper-income groups - have never had problems with gaining access to the best care available. That is true now, and will be true no matter what health care financing system we will have. Some have expressed concerns that in a truly egalitarian system, such as a single payer system, the wealthy would have to give up some of the finer amenities of health care and stand in line with the rest of us, but that will never happen. The wealthy are not hampered by noblesse oblige when it comes to moving to the front of the line for health care. Besides, a well designed system should not have an excessive queue anyway.

The middle tier - the employed middle class - will see greater changes in health care access and affordability, changes that have already begun. Although the plans to be offered in the state exchanges will include many of these changes, employers are already following by modifying their plans to reduce their own exposure to costs. Higher deductibles and other forms of cost sharing are shifting more costs to the pockets of those who need health care. Although ten categories of benefits will be required under the plans, the insurers have considerable flexibility in the composition of benefits within each category and will leave out selected benefits that some individuals will need, especially some of the more expensive benefits. Insurers are reducing their networks of physicians and hospitals, further limiting patient choice of their health care providers, unlike the traditional Medicare program, which allows free choice. Patents may still face catastrophic losses since the maximum out-of-pocket expenditures apply only to covered benefits provided within the networks. Care unavoidably obtained out of network and health care services not included as a plan benefit can result in costs that threaten personal bankruptcy. Even the allowed maximums would create a hardship for many. Employers are beginning to switch to defined benefit contributions to health plans that would be selected from private (not state) health exchanges. This voucher approach allows employers to shift the future increases in health care costs disproportionately to the employees. Reference pricing is the process of setting a low price for given health care services and requiring the patient to pay the full difference in prices if the patient selects a more expensive provider. This is another method of shifting more costs to the patient, not to mention that it further limits choice of providers since these extra costs may be truly unaffordable. A shift in control of Congress and the White House to conservatives may well result in premium support of Medicare (vouchers - a defined contribution), thereby allowing Medicare to adopt some of these same policies that shift more costs to patients in need.

The obvious point is that the exchange plans and now even employer-sponsored plans will cause the employed middle class to become quite dissatisfied with our health care financing system. Once they or their families and friends have enough negative experiences with our health care financing, and once they understand single payer - an improved Medicare for all - it will be the middle class workers that will be the loudest in demanding change.

In the meantime, under our present three-tiered system, we will be able to obtain a basic level of care for Tiny Tim, just not the specialized services that he really needs. And Ebenezer Scrooge will be able to access his boutique providers, with the sky as the limit. But what about the people of the village? Once Scrooge gains control of the insurance industry, will he further advance the current agenda of making health care more expensive to increase profits, and less accessible to reduce costs? Will another visit from the Ghost Of Christmas Yet To Come be adequate? Or will he be hardened enough to carry on, as Reinhardt writes, “the age-old reluctance among many of the nation’s haves and the healthy to help purchase for America’s lower-income families and the chronically ill the super-expensive health care that the haves enjoy themselves.”

Though should we really expect a different outcome? We now have a society that when Bob Cratchit pulls himself up by his bootstraps and runs for mayor, we elect Ebenezer Scrooge instead.

[MADem]

1. Like it or not, the road to single payer winds through Obamacare.

Just like the road to marriage equality wound through DADT, repeal of DADT and a number of states exerting their "rights" to ignore DOMA until the Supremes called that a load of hooey.

It would be nice if we could just go directly to the sensible solution, but we can't. We don't. It's some sort of "rule" that we can just never make it easy on ourselves. We have to crab and carp and fight and whine and complain that "others" are "getting over" and receiving "entitlements" to which they are not, ironically enough "entitled," at least according to some.

When we finally get the spirit, though, it doesn't take us long to adapt. That's a good thing.

[eridani]

2. The most important thing about the ACA IMO is--

--that it broke the logjam around doing anything at all about health care.

[MADem]

3. Yes. And we've only been striving for this since before HRC got beaten to a pulp when she tried to

fire up a conversation about it--as First Lady.

Once people realize that the ACA is working for people, they'll want more. And there will be a critical mass of people who back "more" because they'll know it can be made to work.

[Nye Bevan]

4. The systems in both the UK and Canada (which many DUers hold up as a model) are tiered.

Everyone gets free healthcare in the UK. But if you need something that is not considered urgent, such as a hip replacement, you will be placed on a waiting list that can be many months long. If you have money and are willing to pay, however, you can be treated without delay. In Canada it's a bit different; there, to skip the line you need to be prepared to pay to travel to the US and then pay for private healthcare once you are there.

I think it's pretty unrealistic to aspire to a system where Warren Buffet is treated identically to someone with no money. But I would be ecstatic if we could have a tax-funded single payer system that gave everyone in the country something like an Obamacare Bronze plan for free, where people could pay money to upgrade to a higher level of plan if they wished.

[Lydia Leftcoast]

5. NO deductibles is a must

The rationale that the weasel insurance companies give for deductibles is that it discourages hypochondriacs. Yet what percentage of the population is hypochondriacs who just love to go to the doctor?

What REALLY happens with deductibles is that people avoid seeking health care unless they're desperate.

[Hoyt]

10. You can purchase very low deductible plans now, if you can pay for it.

Last edited Fri Dec 27, 2013, 10:29 AM - Edit history (1)

I don't think deductibles are going away. Heck, Medicare has them, and significant coinsurance. Unless you opt for private insurance offerings, there is no out-of-pocket cap with Medicare. Would love for it not to be so, but it ain't going away here.

[eridani]

11. If civilized countries don't need deductibles, then we don't either n/t

[Lydia Leftcoast]

14. "It ain't going away here"

It will if enough people want it to.

There's too much of this treating human-designed systems as natural law in this country.

I don't know of any other country that has deductibles. Japan has co-pays, yes, but they are subject to an annual cap.

Yes, I know you can purchase a low-deductible plan, but the people who need them can't afford the monthly payments.

Doesn't that seem just a little bit cruel?

[Hoyt]

16. I agree, but deductibles aren't going anywhere. Even Medicare has them.

Until major/huge changes are made in our delivery system, it will not change. Providers and patients will have to change their expectations.

The only way around deductibles now, is to end up on Medicaid.

Not saying it is right, but one might as well say people shouldn't have cancer.

[Lydia Leftcoast]

18. But cancer isn't a system designed by humans

Humans designed deductibles, and they can undesign them.

The Dems dropped the ball on this one. Really seriously dropped the ball. Instead of making the Blue Dogs submit to the larger Progressive Caucus, they made the Progressive Caucus "take one for the team."

If they had banned deductibles, I would have been an enthusiastic supporter of the ACA.

Now I'm just lukewarm.

"Better than nothing" is tepid praise indeed.

No better example of "the tyranny of low expectations."

We're like battered spouses, so grateful for every box of candy after a beating.

[Hoyt]

19. Yeah sure, Obama barely got anything passed. If there had been no deductibles or coinsurance, the

projected cost would have been 3 to 4 times what was finally passed. The whole thing would have been defeated, and it would have been another 20 years before any politician would touch health care just like after Hillarycare was defeated in the early 1990s. Again, it would be nice -- as would full dental insurance, a good job for everyone, guaranteed income, etc. Will not happen in this country in our life-time. I think we are better off working within the obvious constraints for something better.

[Lydia Leftcoast]

20. When have the Republicans ever worked "within the obvious constraints"?

Hell, they decide on their own what "the obvious constraints" are.

And the Dems buy into it. How about setting up some of their own "obvious constraints," such as not tolerating any more attacks on social programs or even THINKING about compromising (i.e. caving) with the Republicans?

Obama barely got the thing passed because he kept trying to buddy up to the Republicans, who weren't going to cooperate no matter what. The process was also very non-transparent. There was NO easily available information about the proposal, which let the Republicans run wild with horror stories from British tabloids, even though the Obama plan had nothing in common with the British system.

Here's what a hypothetical leftist Ronald Reagan would have done to introduce single payer. He would have gone on TV, outlined single payer in five sentences or fewer, and told the audience to call, write, or e-mail their Congresscritters if they supported the plan. He would have sent out all the Democratic Congresscritters to talk up the plan in their home districts, using the same five points in town hall meetings and on local media.

Reagan always got what he wanted, and that's how he did it. Just substitute "rightist" for "leftistL and "Republican" for "Democratic."

Obama had a further advantage, which he totally blew. He had millions of eager, idealistic young people (to an extent I have not seen since the days of Robert Kennedy) who would gone door to door and leafletted for health care if he had only asked them.

I voted for Obama, but I lost a lot of respect for him when he didn't even meet with single-payer advocates but met with insurance company executives behind closed doors. I was on DU when Cheney met with the energy company execs behind closed doors, and there was universal indignation and suspicion that he had something nefarious in mind, otherwise, why not have a public meeting? But it was OK for Obama to meet in secret with the insurance company execs? Sorry, but that's blind loyalty. Prioritizing the wishes of the corporations is bad no matter who does it.

[eridani]

6. I don't count that as tiering

No one in the UK or Britain cares about rich people buying extra bells and whistles. That's like caring that Bill Gates can afford a fire alarm and sprinkler system that few others can afford. Why don't people care about that? Because in the event of fire, they get the same fire engines. To me, tiering is analogous to providing the latest fire engines for the rich and horse drawn wagons for the poor.

[cherokeeprogressive]

15. That's fine and dandy...

Right up until they both live miles from a fire station.

[eridani]

17. There is no relationship between income and closeness to fire stations

Ask any insurance company--their rates take those distances into account, as well as the value of the property insured.

[cherokeeprogressive]

7. Of course. "Single Payer" is and will always be for those who either don't want to or can't afford

to pay for their medical care by any other means.

Point to a SINGLE country in the world where the well-off can't decide the terms of their own care.

[eridani]

12. Irrelevant

No one in the UK or Britain cares about rich people buying extra bells and whistles. That's like caring that Bill Gates can afford a fire alarm and sprinkler system that few others can afford. Why don't people care about that? Because in the event of fire, they get the same fire engines. To me, tiering is analogous to providing the latest fire engines for the rich and horse drawn wagons for the poor.

[seattledo]

8. As long as you can pay for healthcare with private funds...

we're always going to have two systems.

[eridani]

13. Not really

No one in the UK or Britain cares about rich people buying extra bells and whistles. That's like caring that Bill Gates can afford a fire alarm and sprinkler system that few others can afford. Why don't people care about that? Because in the event of fire, they get the same fire engines. To me, tiering is analogous to providing the latest fire engines for the rich and horse drawn wagons for the poor.

[awoke_in_2003]

9. Yes...

because we are a backwards country.