National Health Insurance the Only Sustainable Option for the United States

Finance reform is the biggest unresolved problem plaguing the US healthcare system.

In a recent article in Family Medicine, John Geyman, MD, discussed the limited progress made by the Affordable Care Act of 2010 (ACA) and said that, ultimately, switching to a single payer universal healthcare system will be the only financing option the United States has to preserve quality care and reduce costs.

From 2013 to 2015 under the ACA, there was a net gain of 16.9 million insured lives in the United States, including 6.5 new Medicaid enrollees and 3 million children and young adults under the age of 26. Insurers can no longer impose annual and lifetime limits, nor deny coverage because of preexisting conditions, Geyman noted.

As of 2015, however, 33 million Americans remained uninsured, compared with 50 million before the ACA, according to a Rand report. Insurers still find ways to discriminate against the sick with benefit designs, cost-shares, narrow networks, restrictive drug formularies, and deceptive marketing practices, according to a 2014 letter to the Secretary of Health and Human Services from over 300 patient advocacy groups.

Geyman went on to list many more failures of our fragmented, multi-payer system. His basic argument was that after 5 years, it is now clear that the ACA only accelerated earlier trends toward the corporatization of healthcare. This may come as no surprise since corporate interests hijacked the political process for healthcare reform, the author said.

These trends can be observed in the privatization and consolidation of hospital systems, gaining near-monopoly market shares and now employing a majority of physicians, according to the article.

Employers are shifting from defined benefit to defined contribution systems of health insurance coverage, Geyman said. This, plus rising insurance premiums and out-of-pocket costs, shift profits toward stockholders and risk toward beneficiaries.

All told, the healthcare service ethic of years past has been replaced by a business ethic, Geyman argued. He said indicators that the ACA did not disrupt this trend include recent surges in healthcare stocks (up 40% in 2013, the highest growth sector in the S&P 500), capital investments in health technology companies, and for UnitedHealth group, the nation’s largest insurer, profits are up 375% since 2010.

Meanwhile, 1 of 3 Americans struggle to pay their medical bills despite being insured, the report said, and administrative and healthcare costs more than doubled for private and public payers in the first 3 years of the ACA.

These trends prove that 3 decades of consumer-directed healthcare (CDHC)—based on the unproven premise that patients with “more skin in the game” will drive cost reduction—have not worked, Geyman said.

How Has Quality of Care Been Affected by the ACA?

The report said that the ACA ushered in a “quantum leap in bureaucracy and hassle factor” for physicians and their daily practices. Doctors now spend an average one-sixth of their time on administration, wrestling with multiple insurers, formularies, and electronic medical records. Geyman noted that frustration levels are high because quality and continuity of care has suffered as physicians continue to lose clinical autonomy to hospitals and insurers.

Three Characteristics of Successful Healthcare Financing Systems

Successful healthcare financing systems in every other industrialized nation have 3 characteristics in common, according to Samuel Metz, MD, activist for healthcare reform: (1) universal access without discrimination; (2) patient care without financial penalty; and (3) “financing by publicly accountable, transparent, not-for-profit agencies.”

Three Alternative Futures for Healthcare Financing in the United States

The report said that healthcare financing in the United States will continue in 1 of 3 ways. (1) It can continue as is under the ACA, pending a Supreme Court decision and repeal efforts. (2) An alternate plan from Republican legislators likely would intensify the effects of privatization and corporatization. Or, (3) national health insurance (NHI) could offer improved Medicare for all, combining a not-for-profit single payer with a private delivery system.

How Would National Health Insurance Work?

Evidence suggests that NHI would sharply reduce bureaucracy and overhead, “saving about $375 billion a year,” according to the report. Under NHI, reimbursements to physicians for primary care and other time-intensive specialty services would be improved. Investor-owned hospitals would be transitioned over 15 years to not-for-profit. Government would control prices by negotiating global budgets for healthcare services, prescription drugs, and medical devices, the author said.

An economic study of a bill proposing NHI, HR 676, The Expanded and Improved Medicare for All Act, estimated that a single payer system would save $592 billion annually, including $476 billion in unnecessary private insurance costs and $116 in unnecessary prescription costs, bringing prescription spending to European levels. “In 2014, these savings would have been enough to cover all 44 million uninsured and upgrade benefits for all other Americans, including dental and long-term care,” Geyman said. Financing NHI with progressive taxes, 95% of Americans would pay less than they do now for health insurance and receive far better coverage.

How Would NHI Affect Quality of Care?

The report concluded that one structural change in financing would restore a service ethic to healthcare, making patients and families the focus once again. Less administrative bureaucracy would allow physicians to devote more time and energy to direct patient care. Small group practices would become more viable, and the continuity of primary care would be restored, the author said.

Geyman encouraged family medicine providers and anyone else interested in supporting healthcare reform to seek more information from Physicians for a National Health Program at www.pnhp.org.