Comments in Vox on the Sen. Brian Schatz’s Medicaid-based “Public Option”

Yesterday, Vox’s Sarah Kliff and Jeff Stein described Sen. Brian Schatz (D-HI) new Medicaid buy-in proposal, based on an exclusive interview.  As they wrote:

In an interview with Vox, Schatz revealed that he’s preparing a new bill that could grant more Americans the opportunity to enroll in Medicaid by giving states the option to offer a “buy-in” to the government program on Obamacare’s exchanges.

Today, Jeff and Dylan Scott published the opinions of seven health policy people on Schatz’s bill, including yours truly.


Healthcare News Week in Review

The ACA Repeal 

Multiple outlets reported on the release of the Senate’s Obamacare repeal bill, named the Better Care Reconciliation Act (BCRA).  Like the House bill (the American Health Care Act, or AHCA), BRCA would wind down federal funding of the Medicaid expansion, albeit over a few years.  In the long term, however, it would actually cut the program more deeply by reducing the rate of growth of Medicad’s new per capita payments, beginning in 2025.  Like the AHCA, it would repeal almost all of Obamacare’s taxes, mainly benefiting the rich and healthcare corporations.  Also like AHCA, it would eliminate both the individual and employer mandate, although unlike it there would be no penalty for being uninsured, as well as no risk rating.  It would additionally broaden Obamacare’s waiver program, which would allow states to fundamentally restructure their individual insurance market, for instance they might choose to eliminate the requirement that health plans cover all essential health benefits or have a particular actuarial value.  I described the bill in a negative light in the Guardian, where I compared it to cyanide, a vampire, and (you’ll have to read it) water crackers.

Vox [06-19-17, Dylan Scott] interviewed almost 20 lobbyists and other healthcare experts, and reports that the healthcare industry has deliberately chosen to not strongly oppose the Obamacare repeal, as seen by the absence of any sort of PR blitz, unlike with previous legislative healthcare fights.  In part the industry wants to continue to be able to influence the Trump administration’s agenda, and in part it does not want to provoke its wrath, Scott suggests.  Notably, the repeal of Obamacare means different things for different healthcare sectors, though many sectors stand to gain from tax breaks contained in both the House and Senate bill.

Modern Healthcare [06-22-17, Shelby Livingston] describes how the BCRA could prove highly profitable for many insurers, insofar as it repeals the ACA’s taxes on insurers, increases the age band (allowing older individuals to be charged higher premiums), temporarily extends cost-sharing subsidies, provides some $112 billion to stabilize insurance markets, and permits states to set the set their own medical-loss-ratio (potentially allowing insurers to spend a lower percentage of premiums on healthcare).  On the other hand, the law could hurt insurers who mainly are in the business of insuring low-income individuals via Medicaid HMOs.

Reuters [06-22-17, Lewis Krauskopf] reported that healthcare stocks—including insurers—shot up sharply in the wake of the release of the Senate Obamacare repeal bill, BCRA.

Vox [06-23-17, Nicholas Bagley] carried an article exploring the potential implications of BCRA’s “crazy waivers.”  According to Bagley, a provision in BCRA would widen the waiver clause of the ACA enormously, essentially giving any state the ability to obtain a waiver as long as it doesn’t improve the deficit.  As he describes, this could allow states to eliminate all sorts of insurance protections, including out-of-pocket maximums and essential health benefits; additionally, it could also potentially effectively eliminate annual and lifetime limits of insurance coverage, not merely in the individual market in one state, but for everybody—throughout the country.

Vox [06-23-17, Dylan Scott] reported on how the insurance industry is reacting to the ongoing Obamacare repeal.  Scott notes that there are many things that insurance companies like about the BCRA, particularly its repeal of the ACA’s taxes and the money provided for a stabilization funds.  Although there are some provisions that could be bad for insurers’ bottom lines, Scott quotes from investment analysts who describe it as a positive.


Single Payer

 The Washington Post [06-18-17] had an editorial arguing that single payer had an “astonishing” price tag, and could only generate real savings cuts by reducing “standards of access and comfort” for patients, reducing physician pay, and closing rural health facilities.

I wrote a response to the Post’s editorial in Jacobin].



STAT [06-23-17, Damian Garde and Adam Feuerstein] report how the Food and Drug Administration’s approval of betrixaban (trade name: bevyxxa) despite a failed phase 3 trial might signal the beginning of a laxer era at the agency, now headed by Scott Gottlieb.


Blog: A Brief Response to Dave Kamper’s “Taking Single Payer Seriously” in Jacobin

Yesterday in Jacobin, Labor organizer Dave Kamper had a good article arguing that single-payer supporters need to have a more robust plan ready to deal with the expected displacement of administrative and billing workers that would result from implementation of a Medicare-for-All system.  As he puts it:

Medicare for All wouldn’t just scrap Obamacare — it would uproot the entire industry. It would be a huge efficiency savings. But it would also be devastating in the short term for hundreds of thousands of working people whose only crime was getting a job at an insurance company, and the hundreds of thousands more who work as billing specialists for clinics and hospitals…

And Kamper is correct here.  The elimination of administratively inefficient private health insurers, the transition to global budgeting of hospitals, and simplified billing requirements for physicians’ practices would translate into huge efficiency savings, which is part of the very raison d’etre of single-payer.  The latest number on administrative savings from David Himmelstein and Steffie Woolhandler, published in the Annals of Internal Medicine, is $503.6 billion/year.

This clearly would result in job losses for billers, coders, and insurance workers on a significant scale, and so a concrete plan to deal with this displacement is necessary.  Now, as Kamper notes, Representative John Conyers’ HR 676 “Medicare-for-All” bill does have an explicit plan for this: it would provide these workers with salaries for two years as well as prioritized job training.  Perhaps that is not enough, as he contends.

But I would take slight issue with one aspect of Kamper’s argument, which seems to suggest that efficiency savings in single-payer would result in job losses beyond administrative workers to the larger healthcare workforce (he notes, as one example, that we may need fewer MRI machines).

This issue actually relates to the broader debate about the costs of single-payer healthcare that is currently ongoing.  I and others argue that in the short term, we should not expect major net savings from single payer.  Yes, there will be large savings on administration and on pharmaceutical expenditures, but at the same time, we are going to be providing more healthcare overall, not less.

Currently, 28.6 million people in America lack health insurance coverage.  The uninsured are going to use more care, more medications, and more services of every type (potentially including more MRIs!) once they are insured (although there are supply constraints that limit this on the system-wide level).  And the elimination of cost sharing for the rest of us—together with the inclusion of new benefits that today are often uncovered, like universal dental care and long term care—are also going to cost money and require a larger, not a smaller, clinical workforce (points made here and here and elsewhere).

The idea here is that efficiencies balance new costs, not that we suddenly slash overall US healthcare expenditures as a percent of GDP to Canadian levels (although moving forward, cost growth can certainly be better controlled on single-payer, which may be the most important issue, and does not have the sorts of workforce implications under discussion here).

In other words, while we need less billers and coders and clerks, we will most likely need more clinical workers.  Retraining non-clinical healthcare workers to be clinical healthcare workers may not always be possible, but it is not impossible either.  And with overall healthcare spending remaining roughly unchanged during the transition to single-payer, there would no reason to predict disruptive changes to the communities that are based around large healthcare delivery systems.

I agree with Kamper “that any attendant growth in federal employment would need to be funneled back into the same communities that shed jobs.”  However, the transition to single-payer will simply not be akin to the fall of manufacturing in the neoliberal era: think more of a deliberate, thoughtful transition from fossil fuels to green energy than the gutting of an entire industry.